Tracy Samilton

Auto Reporter/Producer

Tracy Samilton covers the auto industry, business, and the business response to climate change for Michigan Radio.   She began her career at Michigan Radio as an intern, where she was promptly "bitten by the radio bug," and never recovered.  She took over the auto beat in January, 2009, just a few months before Chrysler and General Motors filed for bankruptcy.  Tracy's reports on the auto industry can frequently be heard on Morning Edition and All Things Considered, as well as on Michigan Radio.   Her coverage of Michigan's Detroit Three automakers has taken her as far as Germany, and China. 

Tracy graduated from the University of Michigan with a degree in English Literature. 

Chrysler lost $650 million in 2010, primarily as a result of high interest payments on its government loans.

It's a far different result from the other automaker that received federal bailout loans, General Motors, which posted a healthy profit in 2010.  And GM paid back a significant portion of its loans from cash reserves and proceeds from its Initial Public Stock Offering.

But Chrysler is a much smaller company than GM, and its sales were still weak last year.  That means less revenue to lower the debt burden.   

Chrysler's CEO Sergio Marchionne says, "We’ve got more than a billion in interest costs a year, which are effectively chewing up the operating profits that we’ve got."

Marchionne  says he hopes to secure private loans to pay off the federal loans by the end of this year.

On the plus side, Chrysler has entered the new year with 16 new or significantly remodeled vehicles, just as U.S. auto sales are improving.

Despite not being able to turn a profit, Marchionne says the company met or exceeded all of its targets last year.  He says everyone pitched in to help Chrysler refresh its vehicle lineup in record time, and implement a new cost-saving manufacturing system. 

"I think it would been absolutely inexcusable on our part not to recognize what our people have done," he said during an earnings conference call with analysts and media.

The publication Automotive News reports Chrysler UAW workers will get payments of $750 each.

GM workers are expected to get actual profit-sharing checks.  GM releases its fourth quarter and full 2010 year results later in February.

Ford workers will get an average $5,000 each after the company posted its best profit in 11 years.

Analysts say U.S. car sales were at least 15% better in January than the same month last year.  Part of the reason is the deals.

Credit is more available than it was last year, and many car makers are offering low to 0% financing on last year’s models, as they try to clear room for the new models on the way. 

George Augustaitis is an analyst with IHS Automotive.  He says those new cars could keep the momentum going as the year progresses.

Ford is introducing the new Focus, Hyundai will launch the new Elantra , and Honda has a new Civic on the way.

"This is really going to drive buyers back," says Augustaitis.  "And a lot of these vehicles already have a large following."

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Ford Motor Company announced this morning that it had its best annual performance in more than a decade. Ford earned $6.6 billion last year as sales jumped by 20 percent. Revenues rose 3 percent to almost $121 billion.


UPDATED:  11:40 a.m.  Ford CEO Alan Mulally says salaried and hourly workers will share in the good news in the form of profit-sharing checks.  Hourly workers will get average payments of $5,000.



"To be able to share the wonderful work, the wonderful success of this, with everybody's that's worked on quality, on fuel efficiency, on safety -- it's a tremendous day for all of us," says Mulally.


Ford made $7.2 billion dollars in 1999, but it sold nearly twice the number of vehicles to get that result compared to 2010.  Mulally says the company is benefiting from what he calls a "home improvement loan" of $23-billion, taken out in 2006, that financed the company's effort to slash operating costs and improve quality.



"You think about back then (1999) and now, this is a complete transformation of Ford," he says.


Mulally says the biggest challenge this year is not specifically a Ford problem.  He says the U.S. needs to exercise sound fiscal policy so the economy continues to recover.


Ford Motor Company is forecasting higher profits in 2011 than 2010. 


The company's stock dropped Friday morning, however, as investors reacted to Ford's fourth quarter results.  The company's profits were lower than expected because of costs associated with restructuring some debt.


Mulally says the company has made swift progress in paying off that "home improvement loan."  Debt was reduced 43% in 2010.


http://www.house.gov/levin/

A Michigan Congressman says U.S. automakers need more help to sell large numbers of electric and hybrid vehicles.

The Obama administration has set a goal of one million plug-in hybrid vehicles on the road by 2015.

There’s already a federal tax credit of $7,500 to help defray the cost of buying a hybrid or electric car.   But there’s a cap on how many of the credits are available to each automaker. 

General Motors is saying thanks but no thanks to more federal loans.  The Detroit automaker is withdrawing its application for more than 14-billion dollars in low-cost loans from the Department of Energy.   

Many car companies including Ford have received DOE loans, which are intended to help auto companies revamp factories to build more fuel-efficient cars and trucks.  GM applied for loans through the program shortly after emerging from bankruptcy.  But the automaker says its financial situation has improved since then. 

Gerry Meyers is a professor at the University of Michigan Ross School of Business. He's also a former Chairman of American Motors Corporation.  He says taking the loans would have given GM more debt.   And the automaker told prospective IPO investors late last year that it would avoid going deeply into debt.

It’s quite clear that they’re trying to clean up that balance sheet and also get the government out of the business, so it’s just another step in that direction and I think it’s wise.

Meyers says the next step to GM’s recovery is to stop the revolving door at the top executive level.  The company has had four CEOs in two years.   

Kordite


U.S. Secretary of Transportation Ray LaHood met with Ford CEO Alan Mulally on Tuesday to discuss the "epidemic" of distracted driving, as LaHood calls it.


LaHood’s self-described rampage against distracted driving has mostly focused on cell phone use in cars.  But the Secretary has also angered many people in the car business for criticizing profit-driving car technologies like Onstar and Sync. 


Many studies show that using a cell phone in the car is distracting.  And so are a lot of other things, especially if they pile up.  Let’s say you’re driving and there’s a kid in the back seat crying.  That’s distracting.  If you remember the Ed Sullivan show, you can think of that as one plate spinning on top of a pole.

Zuu Mumu Entertainment / Flickr

The Detroit Symphony Orchestra agreed to meet with striking musicians on Thursday. Musicians walked out on October 4th. The last time the two sides met to resolve the contract dispute was late November.

Meanwhile, patrons are hoping for a resolution soon. Jean Cranston has attended DSO concerts for the past 15 years.  She says missing out on the concerts is like “losing a friend.”

Cranston lives in the suburbs now – but she was born in Detroit.

"It made me have some connection with the city -- which I feel I don’t have too much of any more," says Cranston.  "And it also gives you hope when you go down there that things can revive in the city."

The DSO lost nearly $9 million last year. Management recently increased its wage offer to musicians. But the DSO also wants work rule changes that musicians oppose.

There’s more than one kind of hybrid vehicle. But most people only know about electric hybrids that use batteries.

The U.S. Department of Energy has poured several billion dollars into helping companies develop advanced lithium-ion batteries.  But to hear Chrysler CEO Sergio Marchionne describe the effort, that's tantamount to picking a technology winner, before the race is finished.

The big problem with advanced batteries, says Marchionne, is they're really expensive. A big battery can increase the cost of a vehicle by a third.  

"And I don’t think we should prejudice the discussion by saying electrics are the answer," Marchionne said at a press event held at the U.S. Environmental Protection Agency's National Vehicle and Fuel Emissions Laboratory in Ann Arbor.  "They may be part of the answer."

Enter hydraulic hybrids. They tap into energy stored in high pressure canisters filled with fluid and nitrogen. They’re cheaper than electric hybrids, and already used in some big rigs and garbage trucks.

Now, using technology developed by the U.S. EPA., Chrysler will build and test a set of hydraulic hybrid minivans. The company hopes to see the same improvement in fuel efficiency as battery hybrids - about 30 to 35% -  but at a much lower cost.

General Motors

For people who follow the car business, the big news coming from the North American International Auto Show on Monday was no surprise.    

Still, GM employees enthusiastically cheered and applauded the announcement.

The Volt is GM’s extended range electric car.  GM has big plans riding on the electric car’s small frame.  In fact, the Volt is more than a car for GM. It’s an entire strategy.

 Toyota Motor Corporation has launched a new $50-million dollar safety research center in Ann Arbor, as the company seeks to recover from last year’s massive recalls of millions of cars. 


The money will pay for research on ways to reduce driver distraction, and better protect the most vulnerable passengers including children.  Chuck Gulash is senior executive engineer at Toyota Technical Center in Ann Arbor. 

user mariodo / wikimedia commons

The winner of the coveted North American Car and Truck of the Year Award will be announced Monday morning at the North American International Auto Show.

The awards are unique in the United States because -- instead of being given by a single media outlet -- they are awarded by a coalition of automotive journalists from the United States and Canada who represent magazines, television, radio, newspapers and web sites. 

The finalists for North American Car of the Year are:

Another survey, another big improvement for Ford Motor Company.

Consumer Reports says its subscribers ranked Ford second only to Toyota as the best brand this year.  It’s a notable reversal of fortunes for both companies.

According to Consumers Reports, subscribing car owners perceive the Ford brand as nearly equal to the Toyota brand, and on the key factors of safety, quality and value, they rank Ford better than Toyota.  

Ford also was rated best non-luxury brand in a recent J.D. Power survey on initial quality. 

"This was long-term planning that is now paying off," says Jesse Toprak, an analyst with TrueCar.com.

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