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. 

Fears that China is destined for dominance of the electric vehicle and advanced battery industry may be overblown, suggests a new study by the management consulting firm PRTM.

Yes, the Chinese government is strongly committed to the electrification of cars and trucks.  After all, China is even more dependent on foreign oil than the U.S.  And its cities are fouled by pollution caused in large part by internal combustion engines.

And yes, China has spent five times more than the U.S. on helping its electric car industry.

Battery electric cars like the Nissan Leaf and Chevy Volt count the federal government as a good friend these days.  The government has spent two and a half billion dollars in just a few years to boost battery technology. 

But there’s another way to propel an electric car– with hydrogen.  And proponents are making a last-ditch effort to convince the Obama administration that fuel cell cars are ready for prime time.  

Take Honda’s fuel cell electric car, the FCX Clarity.  It can go about 240 miles on a tank of hydrogen fuel.  About 60 miles to the gallon if you want to compare it to gasoline.  The only emission from the car is water so pure you could drink it

(Here's a video of me taking the FCX Clarity for a test drive)

There are emissions from the process used to create hydrogen, from natural gas.  But the emissions are about 60% less than comparable emissions from cars using internal combustion engines.

Many hospitals lost both money and patients in 2009, according to Michigan Health Market Review.

In 2009, Detroit hospitals lost $58 million, with the biggest losses at Henry Ford, St. John, and Trinity Health Systems. 

Allan Baumgarten publishes the review.

He says the hospitals lost the money on their investments in the stock market, rather than patient care.

"And when the market crashed at the end of 2008, that had a really harmful effect on several of these hospitals."

Baumgarten thinks hospitals will show a profit in 2010 and this year because the stock market has recovered. 

All is not well in other areas, however. 

Fewer patients are using Michigan hospitals.  That"s because many people lost their health insurance -- or their employers switched them to high-deductible health insurance plans.

Baumbarten says high-deductible plans cut down on surgeries for conditions that are not life-threatening. 

"If the doctor says, 'I'd like you to have this scoping procedure on your knee, it will improve your golf game,' a couple years ago, somebody might have said, 'well, it will only cost me $100 out-of-pocket, so why not?'  But if I've got a high-deductible health plan, this procedure might cost me $2,000 out-of-pocket."

Revenue at thirty-three other hospitals across the state also dropped in 2009, led by losses at the University of Michigan and several other health systems which lost large amounts in their stock market portfolios.

The Detroit Three are poised to create new auto jobs for the first time in years.  But an expert at the Center for Automotive Research warns that auto manufacturing jobs will never recover to their former levels. 

Ford, GM, and Chrysler closed a lot of plants over the past ten years, so many of the remaining plants are working at full capacity as new car sales improve. 

Sean McAlinden is an economist with the Center for Automotive Research .

"Almost the last layoff at GM and Ford have been recalled," says McAlinden, "so any additional production through the summer requires new hiring."

McAlinden says the Detroit Three will likely hire 35,000 people in the next five years.  

But that’s only about a third of the people who lost jobs with the companies in the past few years.   

McAlinden says auto jobs will plateau after 2015, which is why Michigan still needs to diversify its economy.

Toyota will shut down its U.S. factories five extra days this spring because of parts shortages – and warns its American dealers to expect inventory shortfalls this summer. 

Rick Hodges is General Manager of Victory Toyota in Canton, Michigan.   It’s bad news, especially in the wake of last year’s recall crisis. 

"When the weather breaks, March all the way through August is normally when we’re going to sell 2/3 of all of our vehicles," says Hodges, "And it’s going to hurt our sales, sure."

Fiat could increase its ownership stake in Chrysler this week. 

Eventually, Fiat hopes to own a majority of the Detroit automaker. 

In 2009, the federal government agreed to give Fiat 20% of Chrysler in return for taking over management of the Detroit automaker.  The deal also set up incremental steps by which Fiat could reach 51%.    

Fiat CEO Sergio Marchionne says he expects Fiat’s stake to grow to 30% this week, after meeting a requirement to increase sales of Chrysler vehicles outside North America.  

Hundreds of auto workers will be assembling Chevy Sonics and Buick Veranos at GM's plant in Orion Township in just a few months. 

Every one of those workers will go through a simulated work environment training exercise before getting anywhere near a real car. The power tools and the bolts are real, but the cars and parts are made of wood. 

GM recently invited a group of auto journalists to take part in the exercise, to get a taste of what building a car is like.

The press is divided up into teams. Team 3's leader is Sabrina Wills, a member of UAW Local 602. She instructs us how to do the work, with each step meticulously standardized.

"Once the line starts moving, if the line moves at a normal pace, you’re gonna find yourself in the hole," she says.

Joanne Muller of Forbes asks, "So what do we do then?"

Wills:  "You’re gonna pull for help.  Pull your andon cord."

Team 3 will install the headlights, taillights, and bumpers. Wills says dropping a nut is par for the course when you’re new to the job. But the cardinal sin is dropping a part. In real life, that means it’s scrap. 

She drops a part on the cement floor to make a point. The sound reverberates through the big factory.

"You’re gonna hear the part hit the floor.  So don’t try to hide it under the line, because we don’t wanna put that broken headlight on a car."

As we wait for the line to start, Joanne Muller – who, by the way, has red hair – brings up that classic "I Love Lucy" episode. The one where Ethel and Lucy fall behind on the assembly line in a chocolate factory.

Pity the poor minivan. 

It hauls the family on vacations, never complaining.  

Carries the kids to school and soccer practice.  

Ever ready for a spontaneous trip to the hardware store, but does it get any respect? Nope. 

It gets called names. 

"Loser cruiser."

"Road slug."   

Well, if you make minivans, you can get mad.  Or like Toyota, you can embrace the situation with a tongue-in-cheek rap -- “The Swagger Wagon”  sung by an unhip, white, yuppie, suburban couple, with their two kids jammin' to the beat, next to a Sienna minivan.

"We rock the SE not the SUV, and it's true if I were you I'd be jealous of me, in the swagger wagon, yeah, the swagger wagon, I got the pride in my ride in the swagger wagon...."

Chrysler invented the minivan 27 years ago.  But after being wildly popular for years, the segment has lost customers, first to SUVS, then to crossovers. 

The people who design minivans are the first to admit they’re fighting an image problem.  And they’re doing something about it.  Chrysler has an optional all-black leather interior it nicknamed the “Man Van. “  All four of the biggest players – Honda, Chrysler, Toyota and Nissan – got minivan makeovers this year.  There’s more sculpting, more chrome, more creased sheet metal.  Even jaunty little fins.  Sage Marie is with Honda.    

"If you think of what makes a sports car compelling, it’s that its low and wide, that's what makes it emotionally exciting.  So from a styling standpoint we tried to do that with the Odyssey."

In your FACE, sports car owners.  And cue another tongue-in-cheek song about minivans, this time a Beach Boys-style parody by the Austin Lounge Lizards.

"Hey, little minivan, we're going to the grocery store!/She's got an automatic tranny with overdrive and the radio's tuned to Magic 95/ She gets 30 miles on a gallon of gas and  I can schlep all the girls to gymnastics class/Hey little minivan, we're goin' to the children's museum!"

Well, upping the cool factor may help.  But people really buy minivans for comfort,  convenience, and practicality.  The sliding doors, all that space.  And the seats. 

Minivan designers take fierce pride in their seating configurations.   Honda’s Odyssey has a second row middle seat you can slide really close to the front seat.  That puts the baby within arm’s reach of a parent.  For Chrysler, the bragging point is “Stow and Go seats,”  which, in a matter of a few seconds, can be neatly folded and pushed into a compartment in the floor.

Fold all the seats down and there’s enough room for a refrigerator or two.   But one company thinks some customers could be willing to downsize a little, especially as gas hovers around $4.00 a gallon.  Ford Motor Company’s new small people-mover, the C-Max, will seat seven.  It will have sliding doors.  But Ford’s Paul Anderson says it will get car-like fuel economy.  Just don’t call it a minivan.

Republican state senator Rick Jones says many schools may soon demand that teachers pay at least 20-percent of their health insurance premiums. 

Jones has introduced a bill that would keep a school’s per-pupil funding intact, if teachers agree to the cuts. 

But he says teachers shouldn't be the only one making the sacrifice.

"I learned that senators and representatives pay anywhere from 5% to 7.6%, and I thought, how is that fair that we’re paying that and teachers are being asked to pay 20%?"

Jones says his new bill would require state legislators to pay 20% of their health insurance premiums. 

He has also introduced a bill to alter the lifetime health insurance that legislators receive after serving only six years, calling it “obscene.”

The bill would phase in the benefit, beginning at ten years of service.

A bill pending in the state legislature could speed up adoptions in Michigan. 

State law requires all adoptions be approved by only one person – the superintendent of the Michigan Children’s Institute.

That leads to delays of up to two months in getting an adoption finalized.

Maura Corrigan is Director of the Michigan Department of Human Services.

She says the superintendent should be able to choose people to act in his stead.

"We’ll be able to have the adoptions approved locally by one of his designees, instead of every local case going to Lansing and be looked at there," says Corrigan.

There are more than 4,000 children eligible for adoption in Michigan.

The University of Michigan’s selection of Governor Rick Snyder as its Spring commencement speaker has sparked a protest.

U-of-M Senior Rick Durance, a history major and progressive activist, started an online petition asking University Regents to withdraw the invitation.  As of 6:15 p.m. Tuesday evening, 3,759  students have signed it.

Durance says Snyder is a poor choice because he wants to make deep cuts to state funding for K-12 schools and universities. 

Durance says it appears the Governor is only interested in helping business people. 

"This in fact is not the proper person to be speaking for us or representing us at this particular junction of our lives," says Durance.

University of Michigan spokeswoman Kelly Cunningham says it's a time-honored tradition since 1967 for the newly elected governor to present the commencement address.

She says the school is very pleased that Governor Snyder, a three-time alum of the University, was able to accept the invitation.  

Durance says there will be a 1:00 rally on Wednesday on campus against Snyder as commencement speaker. 

But he doesn't favor a commencement boycott, should the petition fail in its goal.    He says students who oppose Snyder should join protests in Lansing.  But at commencement, students should act with decorum.  

"I've already invited people, my parents are going to be there.  I want to be there.  I would not miss my own graduation for the world."

Most people think their dealerships are being honest about recommended repair and maintenance work.  That’s  according to an annual survey by J.D. Power.  

J.D. Power says only 7% of people say their dealer tried to sell them maintenance or repairs they didn’t need.  The practice is called “upselling.”

Research director John Obsborn says customers’ satisfaction with dealerships has been steadily improving for a decade:

" Unfortunately there are many stereotypes out there about the dealers -- but our data indicates that they provide high levels of satisfaction both in the servicing of vehicles and the selling of vehicles."

Osborn says vehicle quality has also been improving for the past ten years – and that tends to increase people’s satisfaction with their dealerships, who don’t have to give customers bad news in the form of high repair bills as often.   

The survey found little difference among perceptions of upselling between brands, luxury and non-luxury vehicles, or between men and women. 

Younger customers were, however, more likely to think their dealership was trying to sell them an unnecessary repair or maintenance.

Many car plants in Japan remain closed as a result of the massive earthquake and tsunami. 

Japanese carmakers say it’s too early to know if the disaster will hurt their exports to the U.S. 

Toyota, Nissan, Subaru and Honda suspended most of their operations in Japan after the disaster, and many plants remain closed today.

Nissan says small fires broke out at two plants but the fires were quickly extinguished. 

One Honda employee in Japan was killed when a cafeteria wall collapsed at Honda’s Research & Development Center in Tochigi. 

More than thirty Honda employees were also injured in Honda facilities in Tochigi due to ceilings collapsing and other damage that took place during the earthquake.

Exports to the U.S. are threatened not just by damage to plants but damage to Japanese ports. 

There could also be parts disruptions from damage to Japanese suppliers.

Michigan’s research universities could have a lot at stake in the outcome of a Stanford University lawsuit before the U.S. Supreme Court.

The ruling could affect who gets the rights to nearly two billion dollars’ worth of patents that are developed as part of university-private partnerships.

Stanford sued after drug company Roche claimed the rights to a lucrative medical test.

A Stanford researcher developed the test using research techniques he learned at a private company later acquired by Roche.

Spacing Magazine / Flickr

Updated:  5:59 p.m.

Outgoing GM CFO Chris Liddell says he only began wrestling with whether to leave GM in the past few weeks, and he and boss Dan Ackerson have been discussing the subject only for the past week.

Liddell says he has no announcement to make as to his next job, but he thinks it will not be a chief financial officer position.

GM CEO Dan Akerson says the transition, from Liddell to his successor, current GM Treasurer Dan Ammanns, should be "seamless."

Akerson says he's committed to remain at the helm of GM for the next five years.  Dan Ammanns also stresses his plan to stay for the long term.

Investors in GM's initial public offering in November had been assured that GM's leadership would stabilize. 

Sheldon Stone is with Amherst Partners, a restructuring consultant firm.

Stone says some investors will likely be concerned about Liddell's departure.

"He (Liddell) was part of that road show, that went out pitching the IPO," says Stone.  "He had his fingerprints all over it. 

Stone says GM needs change.  But this may be too much change.

GM has had four CEOs in the past year.  Several senior executives have left GM in the past year.  And the deck of senior management has been shuffled and re-shuffled several times.

Ken Elias is an analyst with the consultant firm Maryann Keller & Associates. 

He says Liddell, formerly CFO of Microsoft, was brought to GM by former CEO Ed Whitaker, with the understanding that Liddell would be groomed as Whitaker's successor.

But months after Liddell began his new job at GM, Whitaker stepped down as CEO.  GM's Board chose Board member Dan Akerson to lead the company. 

Elias says that could account for Liddell's decision, after the IPO was completed, to leave GM.

 

---------------------------------

General Motors says its Chief Financial Officer will step down as of April 1st. Chris Liddell will be replaced by Treasurer Dan Ammann. The Associated Press reports:

Spokeswoman Noreen Pratscher said Thursday that Liddell accomplished his goals of finishing an initial public stock offering and returning the company to sound financial footing. She says Liddell did not say anything about his plans for the future.

Under Liddell, GM posted four straight profitable quarters.

Spokeswoman Noreen Pratscher said Liddell accomplished his goals of finishing an initial public stock offering and returning the company to sound financial footing. She says Liddell did not say anything about his plans for the future.

The 52-year-old Liddell joined GM in January of 2010, about six months after it emerged from bankruptcy protection.

Chairman and Chief Executive Dan Akerson said Liddell was a major contributor to GM during a pivotal time in the company's history.

"He guided the company's IPO process and established a good financial foundation for the future," Akerson said in a statement.

GM reported net income of $4.7 billion last year, fueled by strong sales in China and the U.S. as the global auto market began to recover. It earned $2.89 per share on revenue of $135.6 billion.

It was the company's best performance since earning $6 billion in 1999 during the height of the pickup truck and sport utility vehicle sales boom.

Chrysler is recalling a quarter million crossovers and minivans for ignition switch problems that can cause stalling. 

The recall involves 2010 model year Dodge Journey crossovers and Grand Caravan minivans and Chrysler Town and Country minivans. 

The company says in some of the vehicles, ignition switches can slip out of the “run” position while the vehicle is being driven. That could shut off the engine. 

At least two rear-end collisions have been reported due to the defect.   

The Grand Caravan and Town and Country minivans are top-sellers for the company. 

The automaker is struggling to increase sales while many of its Chrysler, Dodge and Jeep brand vehicles remain at the bottom of many quality and reliability surveys.

Spacing Magazine / Flickr

Snowstorms in February didn’t seem to dampen car sales.  Sales were up 32-percent at Nissan, 42-percent at Toyota, and 46-percent at GM.

GM’s gain is for several reasons. Last February GM’s sales were weak, so this February looks much better in comparison. The company increased incentives in February. And it’s easier for GM customers to get financing now that GM has its own finance arm, GM Financial.

Don Johnson is head of GM’s U.S. sales.

"With their entry into the market, our penetration of the sub-prime business is above the industry average," says Johnson.  "We’ve also got GM Financial growing their prime lease business."

February sales were up 13-percent at Chrysler and 14-percent at Ford.

Sean_Marshall / Flickr

Flint’s state representatives could introduce a bill that would permit the city to ask Flint residents to approve an increase in the city income tax.   

The city faces a deficit of more than $17-million. Representative Woodrow Stanley says there aren’t many other options.  Flint can’t turn to a cash-strapped state for help.

"As a matter of fact, about 8.1 million dollars is being proposed to be cut from Flint’s revenue sharing," says Stanley.

But Stanley says getting such a bill passed will be an uphill battle, because of  strong anti-tax sentiment among Republicans in the state House.

A new study says overuse of antibiotics is still a big problem, fifteen years after the Centers for Disease Control began a campaign to stop the practice.  

Marianne Udow-Phillips is head of the University of Michigan’s Center for Healthcare Research and Transformation.  She says antibiotics do not work for viral infections.  And the more physicians over-prescribe antibiotics, the more pathogens will develop resistance to the drugs.  But she says patients and doctors alike haven’t gotten the message. Udow-Phillips says:

"We’re just sick for a long time and we just want that magic pill to fix us... But if we have a virus, an antibiotic is not gonna help.  And sometimes physicians cave in to the pressure from families who say, 'just do something'."

Udow-Phillips says drug-resistant staph has become a huge problem.  In fact, more Americans die every year from antibiotic-resistant staph infections than AIDS. 

The practice of overprescribing the drugs is a bigger problem in some parts of Michigan than others, the study found.  In Holland, only about 10% of children who saw a doctor for an upper respiratory viral infection were given a prescription for antibiotics.

But in West Branch, nearly 68% of children with upper respiratory infections were given a prescription for an antibiotic.

Udow-Phillips thinks the differences in prescription rates is most likely because the CDC campaign focused on pediatricians rather than family physicians or internal medicine specialists.  She says more children may be seeing family physicians in areas like West Branch.

Udow-Phillips says the worst part of it is, physicians are often over-prescribing so-called "broad spectrum" antibiotics, when "narrow spectrum" antibiotics would, at least, do less harm.

It's not unusual for a big snowstorm to hurt business at new car dealerships.

But it appears that February car sales in the U.S. improved over the same month a year ago, even though much of the country experienced more than one big snowstorm.                           

Car sales could be up 19% as a fair number of people trudged through snow-covered lots to buy a car.  That could be a sign that the pent-up demand that built up over the recession is now being released at a steady pace. 

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