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10:47 pm
Tue May 22, 2012

Chrysler boosts sales with subprime borrowers

Chrysler-Group flickr

Chrysler's new car sales have been improving faster than almost any other car company in the U.S. in recent months.

But the company has also been relying on subprime borrowers more than almost any other car company.

That's according to Edmunds.com.

People with good credit can usually find a car loan with a four percent interest rate.

But a growing number of Chrysler's customers have poor credit - and their loans have 10 percent interest rates.

Edmunds analyst Jessica Caldwell says it's definitely boosting Chrysler's sales, but there are risks.

"I think subprime can tarnish your image in a way," she says.  "If you have a high percentage of subprime borrowers, people start to catch on or think that perhaps your brand isn't as prestigious as you would want to think it is."

Even though subprime car loans are riskier, there is still a relatively low rate of default.

People are much more likely to default on a subprime house loan than a subprime car loan. 

Auto
8:37 pm
Tue May 22, 2012

Ford gets investment-grade credit rating, blue oval back

To mark the return of the Ford Blue Oval and investment grade status, Bill Ford, Jr. joined over 1000 employees outside of Ford World Headquarters in Dearborn to form a human Blue Oval.
Ford Motor Company

Ford Motor Company has its "Blue Oval" back, after a second ratings firm upgraded Ford to "investment grade."

The trademark and other assets were put up as collateral for loans in 2006. Those loans got the company through the recession and a restructuring without a bankruptcy.

Bill Ford, Junior is the Board's Executive Chairman, and the great-grandson of Henry Ford. He says it's a "once in a lifetime" event.

"When we pledged the Blue oval it was enormously emotional for me and my family," Ford said. "Because we weren't just pledging an asset, we were pledging our heritage."

The ratings upgrade means Ford will likely have a larger pool of bond investors. The company will also have lower borrowing costs.

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Auto
5:11 pm
Wed May 16, 2012

Electronic stability control proposed for big rigs

The National Highway Traffic Safety Administration may soon require big rigs and other large trucks to have electronic stability control systems.

The technology could prevent a lot of accidents and rollovers. 

NHTSA already requires electronic stability control systems on passenger cars. The systems are able to automatically apply the brake on individual wheels. 

It's estimated electronic stability control reduces accidents where the driver loses control of the car by at least 40%.  There could be a similar benefit for big rigs, busses and other large trucks.

Russ Rader is with the Insurance Institute for Highway Safety.

"The technology is available, it's not expensive, and we should get it on large trucks."

NHTSA says a rule could become final within two to four years. 

The University of Michigan Transportation Research Institute estimates at least 4,600 truck accidents could be prevented if electronic stability control were required, and at least 126 lives saved per year.

Auto
7:30 am
Wed May 16, 2012

Retirees await details of Ford’s offer to pay pensions in lump sum

From left to right Ford retirees Larry Mcknee, Robert Matsui, Allan Yee, and Bill Reckinger meet up Friday afternoons for golf.
Alex Schulte Michigan Radio

90,000 white collar Ford retirees will soon have a big decision to make. Should they stay in the auto company’s pension plan? Or take their chances with a lump sum payout instead?

The offer Ford Motor Company announced in late April is believed to be the first of its kind for such a large ongoing pension fund.

Lump sum the buzz at Ford retirement clubs

In Michigan there are more than 30 clubs for Ford retirees. The lump sum option is the conversation at retiree club meetings right now.

“Retirees are going to have to make a decision about mortality, about death; their own. That’s not something we do every day,” Ford retiree Charles White said. White worked at the Dearborn campus for 29 years in engineering management. He retired in 1996.

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Auto
2:45 pm
Tue May 15, 2012

Former Ford Chairman and CEO Harold "Red" Poling dies at 86

Harold "Red" Poling, former Ford Motor Company Chairman and CEO.
Ford

Harold A. Poling, a former Ford Motor Company chairman and CEO who was credited for reviving the company in the 1980s, died at age 86. The Detroit Free Press reports Poling passed away on May 12 in Pacific Grove, Calif.

Ford Motor Company released this statement after the news of Poling's death.

“Red Poling was an extraordinary leader who had a profound impact on Ford Motor Company and everyone who worked with him.  With a list of accomplishments that span 43 years, including leading the company through a remarkable turnaround during the 1980s and 1990s, Red was respected by all for his leadership, his passion for being the low-cost producer and  his genuine affinity for people.  Our thoughts and prayers go out to his family.”

The Detroit News reports Poling made difficult decisions in the 1980s, including decisions that led to plant closures and layoffs, that returned the company to profitability.

But earlier than most American car executives, he studied Japanese practices such as just-in-time parts delivery.

"I took some very harsh actions back then," he told The Detroit News in 1993. "Ford was losing large sums of money, and there were no road maps for turning a company around. So it was all up to me."

Poling focused on quality. During the 1980s, Ford was counting on the new Escort to shore up sagging sales. But Poling delayed the introduction of an automatic transmission for the car until quality problems had been solved.

He also delayed the introduction of the Taurus by nine months until quality issues had been resolved.

The Detroit Free Press reports when Poling retired in 1994 "the company was preparing to launch a new Mustang, introduce its first minivan with the Windstar and sell the tiny Aspire subcompact car," and that he was part of a management team that "approved $3 billion to develop the Ford Taurus and Mercury Sable." 

As a child, Poling said he spent a lot of time with his father who was a mechanic. “We’d grind valves, change piston rings and clutches and do lots of other jobs. It was serious work but to me it was interesting.”

One of four children, he enlisted in the Navy and then went to graduate from Monmouth College before receiving his MBA from Indiana University.

The Freep reports Poling's "all-time favorite car was the 1932 Ford Model A, the first car he bought, used, but in good shape."

Auto
5:38 pm
Mon May 14, 2012

German auto parts company to expand in Michigan

A German auto parts company says it will open a third plant in Michigan.

Brose North America -- Brose is pronounced "Brose-uh" -- says Governor Rick Snyder's recent trade mission to Germany is part of the reason. 

Snyder visited Italy and Germany during a trade mission in March. 

Brose officials say talks about a Michigan expansion began "in earnest" during the Governor's visit to the company's facilities in Wurzburg, Germany.

Brose says it plans to buy a former Chrysler Mopar plant in New Boston near Detroit, to meet new demand in North America for seating and doors, after winning new contracts with Chrysler and Ford. 

The company expects to hire an additional 450 people in the next five years to work at the new plant and Brose's two other factories in Auburn Hills and Warren.  

Auto
6:12 pm
Wed May 9, 2012

Chevy Volt vs. Nissan Leaf

The Nissan Leaf plug (left) and the Chevy Volt plug (right).

There's a lot of excitement around electric vehicles. But so far sales have not been great.

Michigan Radio’s auto beat reporter Tracy Samilton decided to get some firsthand experience driving two electric vehicles - the Nissan Leaf and the Chevy Volt.

JW: So while we are calling them electric cars there are some fundamental differences in how they work.

TS: The Leaf is a pure electric vehicle it only runs on the battery and when it runs dry you have to recharge the battery to get more out of the car. And the Volt has a battery, and you run on that as an electric car for about 35 miles, and then after that it has a generator that runs on gasoline that provides more electricity so the car can keep running. So Chevy calls it an electric car with extended range.

JW: And after spending that week with the Leaf and the Volt, what did you think?

TS: Well, they’re two totally different cars and I had two totally different experiences as you can imagine. When I got the Volt, that week that they gave it to me I actually have a vacation arranged in Pennsylvania. Well because it has the extended range I could actually take the volt to the camp sight, some 400 and some miles away. And I plugged it into my cabin, which had electricity. You know most of this was done on the gasoline but I was able to get it recharged in my cabin.

When it comes to the Leaf, it’s a different kind of vehicle, I could not have done that.

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Auto/Economy
10:15 pm
Thu May 3, 2012

Fast-charging charging system could reduce "range anxiety" for electric cars

Ford Motor Company has teamed up with seven other car companies to develop a faster method of recharging electric cars.

Fast-charging could help reduce the problem of what some call "range anxiety." 

One drawback of an electric car is how long it takes to recharge the battery - up to 7 hours for some electric cars. And if you push the car to its range limit you risk being stranded; that causes range anxiety. 

Mike Tinskey is associate director of vehicle electrification at Ford. He says it's hoped that eventually, "We can get to a point when we can charge just as quick as you can fuel up a conventional car with gasoline."

The new system isn't that fast, but it's a lot faster than charging on a 120 or 240 volt outlet. 

It will take about 20 minutes to get an 80% charge on a depleted electric car battery .

Other companies involved in developing the new system are Audi, BMW N.A., Chrysler, Daimler, General Motors, Porsche, and Volkswagen ...

Auto/Economy
1:59 pm
Thu May 3, 2012

Ford opens new $450 million plant in Thailand

Ford's new plant in Rayong, Thailand.
Ford

Ford Motor Company celebrated the official opening of its Ford Thailand Manufacturing (FTM) plant in Rayong, Thailand. It's the company's second plant in Thailand.

The $450 million passenger vehicle manufacturing plant "will serve as the foundation for Ford’s plan to introduce eight new vehicles to the ASEAN region by mid-decade," according to a company press release.

The ASEAN region includes the countries of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and VietNam.

Ford officials said no other auto company has invested more in Thailand over the last five years:

“The opening of this new, world-class facility is the latest example in our aggressive growth plan for this region, which represents Ford’s largest industrial expansion in half-a-century,” said Joe Hinrichs, president of Ford Asia Pacific and Africa. “The world-class One Ford vehicles produced here will be part of our plan to launch 50 new vehicles and powertrains in Asia Pacific and Africa by mid-decade.”

Ford officials said the new facility in Thailand includes "one of the world's fastest stamping presses, and the latest in automotive manufacturing robot technologies. The plant is capable of producing 6 different vehicles simultaneously.

This allows the company to bring new vehicles to market faster, and test new vehicles while maintaining full production speed.

 

The company released this video of the plant:

Auto/Economy
11:26 am
Thu May 3, 2012

Auto parts maker to buy plant in Saline, Michigan, employ 500 people

The Saline, Michigan parts plant acquired by Faurecia.

A French auto parts maker says it plans to buy a parts plant in Saline, Michigan. Faurecia SA says the interior components plant will be part of a joint venture.

From the Associated Press:

Faurecia and Rush Group announced Thursday that they're creating Detroit Manufacturing Systems, a joint venture to build and automotive interior components in Detroit.

The companies say the venture expects to employ about 500 people in Detroit within the next three years and will make parts at first for Ford Motor Co.

Here's more from a Faurencia SA press release:

Faurecia will acquire the Saline business, which generates $1.1 billion annual sales supplying cockpit modules, instrument panels, door panels and center consoles for 12 vehicle programs assembled at eight Ford plants throughout North America. With this acquisition, Faurecia’s objective is to create a new operation that is optimized for efficient production, in line with the Faurecia Excellence System.

In conjunction with the Saline acquisition, Faurecia will enter into a new joint venture with Rush Group Ltd., one of the Rush Group of companies that together comprise one of the largest Native American and woman-owned businesses in North America. The joint venture, called Detroit Manufacturing Systems (DMS), will do injection molding, assembly and sequencing of interior trim components from a new facility in Detroit. Rush Group will hold the majority of the capital and the management of DMS, while Faurecia – with 45% of the capital – will bring its technology and manufacturing expertise to the joint-venture. As a result, the Saline plant will focus in the future on core technologies such as injection molding, skin manufacturing and foaming operations with annual revenues of nearly $400 million.

Transportation
10:46 am
Thu May 3, 2012

Detroit Metro Airport lands good ranking in "Best and Worst" list

Travel and Leisure magazine

You gotta give them a lot of clicks to find the ranking on their page (can someone say pageviews!), but once you finally get there, you'll see that readers of Travel and Leisure ranked Detroit Metro Airport (DTW) as the 3rd best airport in the country.

Detroit’s airport is at the top of its game, ranked No. 1 in terminal cleanliness, design, location, lounges, and business centers. It came in third for service and staff communication and fourth in baggage handling. As Delta’s second largest hub and the carrier’s primary gateway for Asia, that’s no mean feat. The airport fell short only when it came to public transportation options—not surprising considering you’ve landed in the Motor City.

Viable public transport to Detroit Metro has always been a problem. Some are making attempts to improve the situation.

Just recently, the public transportation system in Ann Arbor, the Ann Arbor Transportation Authority, announced a partnership with a private company, Michigan Flyer, to provide cheaper transit to the airport.

Twelve bucks will get you from A2 to DTW. That's better than a typical $40 to $50 cab ride.

The best airport named by readers was Minneapolis (MSP)... the worst was New York's LaGuardia (LGA) - JFK and Newark airports also ranked poorly.

Sound about right to you?

Auto/Economy
5:51 pm
Tue May 1, 2012

April car sales up, but not for all

U-S car sales rose about two percent in April from the same month last year.

That's better news than it sounds, according to Michelle Krebs of Edmunds dot com. She says there were three fewer selling days this April than there were last year.

Krebs says small car sales remained brisk in April, because of high gas prices. But she says sales of midsize cars like the Honda Accord and Chevy Malibu are also increasing.

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Auto/Economy
3:51 pm
Tue May 1, 2012

Michigan is home to the Motor City, but what if young people stop driving?

user (Buchanan-Hermit) wikimedia commons

In a state like Michigan, with a history that's virtually inseparable from that of the automobile, it might be hard to imagine a life without cars. But according to  a recent report, an increasing number of the nation's young people are choosing to drive less or not to drive at all.

The report found that:

Read more
Commentary
11:51 am
Tue May 1, 2012

Commentary: More companies betting on Detroit

There’s an old Russian saying that, even, if you covered the world with asphalt, eventually a crack would form.

And in that crack, grass would grow. I was reminded of that yesterday by an Italian businessman my age, a man who is betting on green shoots coming through a town caked with many layers of asphalt. His name is Sergio Marchionne, and he is the CEO of a company called Fiat. Three years ago, he did something many at the time thought stupid. He took over a dying bankrupt company.

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Auto/Economy
6:07 pm
Mon April 30, 2012

Chrysler factory to stay open this summer to make more Jeep Grand Cherokees

Chrysler says its Jefferson North Assembly Plant in Detroit will forgo the traditional two-week shutdown this summer.

The unusual move will help the company keep up with strong demand for the Jeep Grand Cherokee and Dodge Durango. 

Sales of the new Durango are up 33% from last year, and sales of the new Grand Cherokee are up 44%.  

The factory's employees are already working nine hour shifts plus two Saturdays a month, but Chrysler spokeswoman Jodi Tinson thinks they don't mind.

"Considering where we have been over the last couple of years, I think there is a very positive feeling that these vehicles are being so well received," says Tinson.   "And they (workers) are reaping the benefits by being able to work some overtime."

Chrysler had been planning to hire 1,100 new workers at the plant next January but will move that ahead to this November.

Auto/Economy
11:23 am
Mon April 30, 2012

Chrysler begins producing the Dodge Dart this week

Chrysler unveiled the Dodge Dart at the North American International Auto Show earlier this year.
Mark Brush Michigan Radio

The Dart will help make Chrysler a full-line auto company once again. It's a compact car, or so-called "C-segment," car.

It's the first vehicle to combine a U.S. design with a Fiat chassis or platform.  The last small car Chrysler made was the Dodge Caliber and that was not very successful.

Chrysler and Fiat CEO Sergio Marchionne thinks the Dart will do much better.

"We are looking forward to a successful launch of a C-segment sedan, which is a piece of the market that we've been absent from for a long period of time, so we're expecting great volumes in terms of the Dart for the remainder of the year," said Marchionne.

A version of the Dart that gets 41 miles per gallon is expected later this year.

Economy
1:26 pm
Fri April 27, 2012

Michigan tells 13,000 low-income families they still could qualify for benefits

LANSING, Mich. (AP) - Michigan officials are sending letters to 13,000 low-income families who have lost cash assistance because they hit a five-year federal limit telling them they may still qualify for benefits under state law.

The notices will explain how families can reapply for monthly checks.

Genesee County Circuit Court Judge Geoffrey Neithercut ruled last month that recipients can't be cut off once they reach the five-year federal limit if they haven't also reached the state limit.

Michigan's four-year limit doesn't include months where a parent is needed at home to care for a disabled child or other family member. Those months count under the federal limit.

The Michigan Supreme Court declined to immediately hear an appeal. The state Department of Human Services has asked the Michigan Court of Appeals to reverse Neithercut's decision.

Auto/Economy
9:29 am
Fri April 27, 2012

3 bits of news from Ford Motor Company today

Ford

The first bit... Profits.

Ford reported  first quarter income this morning. The automaker says net income fell by 45 percent compared to a year earlier. Overall, net income totaled $1.4 billion, compared with $2.5 billion last year.

Ford says European sales plummeted and the company paid higher taxes.

The second bit... Pensions.

The company is planning to offer up lump-sum pension payments to 90,000 U.S. salaried retirees and U.S. salaried former employees.

In a statement, the company said this was part of their long term strategy to "de-risk its global funded pension plans."

If an individual elects to receive the lump-sum payment, the company’s pension obligation to the individual will be settled. This is the first time a program of this type and magnitude has been offered by a U.S. company for ongoing pension plans. Payouts will start later this year and will be funded from existing pension plan assets. This is in addition to the lump-sum pension payout option available to U.S. salaried future retirees as of July 1, 2012.

The New York Times reports the plan is to reduce liabilities to its underfunded pension plans:

Ford’s global pension plans had $74 billion in liabilities at the end of 2011 but were underfunded by $15.4 billion.

And the third bit... Consumer Demand.

Ford acknowledged they likely would not be able to keep up with pent-up consumer demand because of production constraints. Again, from the New York Times:

Ford this month increased its industry light-vehicle sales forecast for the United States in 2012 to a range of about 14.3 million to 14.8 million. But it said it expects its market share to decline because it will not be able to raise plant output quickly enough to match the market’s growth.

“We just simply can’t keep up with what we think will be the level of consumer demand,” Mr. Shanks said. “It’s not going to affect profitability because we’ll still build what we thought we would or a little bit more.”

Auto/Economy
1:01 am
Fri April 27, 2012

Job prospects improving in most of Michigan

Job applicant Daniel Zanetti talks with a recruiter at the Michigan Works job fair at the Lansing Center
(photo by Steve Carmody/Michigan Radio)

Unemployment rates declined in most of Michigan during the past month.

State officials reported Thursday the Detroit Metro region saw the sharpest decline, down about six tenths of a percent from February to March.   Unemployment ticked up slightly in Ann Arbor.

In Lansing, unemployment held steady at 7.2%.

Daniel Zanetti was at a job fair in Lansing Thursday.    The recent college graduate is hopefully he can soon find a job in his field.

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Economy
2:40 pm
Thu April 26, 2012

Report: Oakland Co. experienced "torrid" growth in 2011

Oakland County’s economy had a “red hot” year in 2011. That’s according to a report by economists at the University of Michigan.

The county added more than 23,426 jobs last year. The economists who prepared the report say they expect the recovery to continue in the next three years – although at a more modest clip.

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