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Ford Motor

The auto industry in Europe may be on the way back up, after hitting rock bottom last year, but its woes are by no means over, says Ford's head of Europe, Middle East and Africa, Stephen Odell.

Overcapacity is a persistent concern, he says.   Some European factories are still operating at about 70% of their capacity, although Ford itself has taken steps to reduce its factory and labor costs - having closed one Ford plant in the U.K. and soon to close another in Belgium.

Odell says the biggest factor depressing car sales is the 20 to 25% unemployment rates in southern European countries like Spain and Greece.

"I think the biggest inhibiters is probably employment levels," Odell told a roundtable of journalists in Dearborn.  "Which is why, in our forecast, we have a sort of modest and slow recovery for the next four to five years."

Odell says Ford does expect to regain profitability in Europe next year.

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The app-based, taxi-like services UberX  and Lyft are in talks with the city of Ann Arbor - after the city sent the companies a "cease and desist" letter. 

This is just the latest of many legal tangles across the country for the companies, which are operating in a new grey area of transportation-for-hire. 

The companies say they are "rideshare services."  State and local transportation officials call them "transportation network companies," but insist that many of the regulations applying to traditional taxis also apply to these new services.

Wikimedia Commons

There are many different auto museums – some dedicated to displaying cars with unique engineering and designs, and others dedicated to displaying the automobile’s impact on society.

Michigan's auto museums have had little success. Flint’s "Autoworld" theme park closed two years after opening, and the Walter P. Chrysler Museum closed its doors recently.

Europe has had a different experience.

Autostadt, which means “auto city” in German, is in Wolfsburg, Germany. It averages about two million visitors per year. BMW and Porsche also have notable museums in Germany.

Why do auto museums in Europe succeed, while those in the auto capital of the world have not?

“Europeans seem to have such a deep bond with their vehicles,” says Paul Eisenstein, publisher of  The Detroit Bureau. “They are seemingly more interested in the mechanicals and what have you. They have a tendency to be drawn to automotive exhibits, museums, parks, and everything at a much greater rate than Americans are.”

*Listen to our interview with Eisenstein at 3 p.m. today. We'll post the audio for that interview here around 4:30 p.m. 

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30 years ago, "Autoworld" opened its doors on July 4, 1984 in Flint, Michigan.

It was an indoor theme park and museum dedicated to preserving and spreading automotive achievements.  

Bill Shea, editor and reporter for Crain’s Detroit Business, said that the attraction wasn’t that popular and visitors were confused about what Autoworld was.

Was it supposed to be a museum or a theme park?

This led people to ask why a group of people invested $80 million into the endeavor.

Organizers hoped Autoworld would revitalize the inner city of Flint, develop Michigan’s tourism industry, and preserve the automotive history in the city.

But, in 1987, the attraction closed its doors permanently. Here's a video of them imploding the building from ABC News:

*You can hear our interview with Bill Shea today at 3 p.m. We'll add the interview to this post at 4:30 p.m.

Atlanta Jeep Ram Dodge

Fiat Chrysler continued its climb back to health in June.  It was the 51st month in a row the automaker increased its U.S. year-over-year sales.

The long streak of sales gains is being led by the Jeep and RAM brands. 

Jeep sales rose 28% compared to last June, and RAM sales were up 14%.

"In spite of two fewer selling days in June versus a year ago, we were able to increase our sales 9% and post our strongest June sales in seven years," said Reid Bigland, head of U.S. sales for Chrysler.

The automaker remains weak in terms of small and midsize car sales.  The Dodge Dart has performed well under expectations, selling only 7,225 in June. 

But the company has higher hopes for the new Chrysler 200, which began shipping to dealers in late spring.

General Motors

General Motors' sales rose 1% in June - despite two fewer sales days in the month, despite a delayed recall scandal, and despite the company issuing a record number of recalls.

The Detroit automaker's sales were the best for June since 2007.

Karl Brauer is an analyst with Kelly Blue Book. 

He says the media and Congress have displayed an intense interest in GM's admission that it delayed an ignition switch recall for eleven years. 

Customers aren't paying as much attention.   

"Most people look at this recall as old GM and old models that has nothing to do with what's in the showroom right now," says Brauer.

GM recalled an additional 7.36 million cars  for what it calls "unintended ignition switch rotation."

That's the same problem at the root of an earlier recall of cars with a defective ignition switch. In February, GM recalled 2.6 million Cobalts, HHRs, Saturn Ions and other small cars with a defective ignition switch.

In both recalls, the car's ignition switch can suddenly turn off, which disables the power steering, power brakes, and air bags.

The new recall is for:

An image from the consumer alert issued for the GM ignition switch recall.
NHTSA

GM will pay a minimum of $1 million to victims of serious or fatal crashes involving cars with a faulty ignition switch. 

GM admits it delayed a recall of small cars with a defective switch for 11 years. 

GM says 13 people died and 54 were injured when the ignition switch turned off, disabling the power steering, power brakes, seat belt pretensioners and air bags. 

But attorneys for victims' families say there are many more such cases. 

The program is run by Kenneth Feinberg, who oversaw similar programs for victims of the BP oil spill and 9/11.  He says it won't be easy to determine who's eligible.

"So many of these accidents occurred long ago," Feinberg says. "The car is gone, and we've gotta come up with circumstantial evidence."

But Feinberg says he will work with families who wish to file claims, or their attorneys, to guide them through what kinds of evidence would substantiate a claim – such as police reports, medical reports, black box data, and witness statements.

The program will also pay for victims' lost earnings and long-term care.

Ford Motor Company

Alan Mulally will hand over his Ford CEO job to Mark Fields next Tuesday. 

Fields has been with Ford since 1989 and the chief operating officer since 2012.

Mulally came to Ford as an auto outsider and many questioned his ability to turn the struggling company around.

Detroit News business columnist Daniel Howes was one of the doubters. Howes is now happy to say he was wrong. And Mulally has created big shoes for Fields to fill

General Motors

General Motors CEO Mary Barra appeared this week before a House subcommittee that is investigating the automaker's ignition-switch debacle.

Barra didn't sugarcoat the fact that GM bungled this terribly. She freely admitted their engineers knew about the switch problems 12 years ago, but didn't connect that to the airbag malfunction linked to at least 13 deaths.

And Barra had a litany of changes she's instituted in response, including firing 15 high-level employees.

Detroit News business columnist Daniel Howes says this has to go deeper.

“Members of Congress, to put it gently, (are) skeptical that a company like this with the track record that it’s had, particularly in the last five years, would be able to do that,” Howes said.

Howes says with exception of the president of GM, those at the top of the company are longtime General Motors people.

Hyundai

The increased complexity of cars is causing an uptick in problems reported in the first 90 days of ownership, according to an annual survey by J.D. Power.

Problems reported by owners in the first 90 days rose 3% for 2014 model year cars over last year. 

The group says that's because of the increased complexity and features in new cars, especially when it comes to voice recognition and Bluetooth syncing. 

The harsh winter also caused some extra problems with paint, engine performance, and heating systems. 

user: harry_nl / flickr

The word from Europe is new car sales were up in May.

It's the ninth straight monthly increase, which is good news for the U.S. carmakers who've been watching their bottom lines suffer through the European sales slump.

There were 1.1 million new cars registered in the European Union, an increase of 4.3%.

Increased auto sales include:

·         7.7% in the United Kingdom

·         5.2% in Germany

·         17 % in Spain

Stateside’s partner, BBC Business reporter Russell Padmore, says the big reason for the uptick in sales is an "aging car fleet.” During the debt crisis, Europeans held off from buying new cars to save money. Now they can’t hold off any longer. 

*Listen to full interview above. 

General Motors CEO Mary Barra.
Dave Pinter / flickr

General Motors CEO Mary Barra was back on Capitol Hill today.

She was there to offer more testimony on the growing ignition switch recall problem which has been linked to 13 deaths and the recall of some six million GM vehicles.

Mary Barra was not alone. She came with independent investigator Anton Valukas and his 300-page report.

Detroit News Washington Bureau Chief David Shepardson says Valukas was able to answer questions about the report while Barra could focus on what GM was going to do in the future.

“Overall, the questioning was a lot gentler than last time, because the committees didn’t express frustration with Mary that she was not able to answer so many different questions,” Shepardson said.

“There are really no questions they could answer with the exception of the why.”

*Listen to full interview above.

user paul (dex) / Flickr

The recall notices just keep coming.

The ignition-switch crisis took a big new turn Monday as General Motors recalled 3.4 million cars.
That's on top of the 2.6 million small cars already called back for ignition switches that can slip out of the "run" position if the key is carrying extra weight and is somehow jarred. That could cause the engine to stall and kill power steering, power brakes, and air bags.

The problem has been linked to at least 13 deaths and over 40 crashes. However, GM sales have not been greatly affected.

This latest recall comes as CEO Mary Barra prepares for what will undoubtedly be a rough session tomorrow on Capitol Hill before the House Energy and Commerce's Oversight and Investigations Subcommittee.

*Listen to full interview above.

General Motors has found another problem with ignition switches in vehicles.

In what's sure to become extra ammunition in Wednesday's Senate committee interrogation of GM Chief Executive Officer Mary Barra, the automaker this week is recalling 3.16 million mostly older model vehicles to replace slotted keys with keys with a hole.

The company says the fix will prevent the cars from inadvertently turning off if there is extra weight on the key ring and the car goes over a bump.

The cars involved in the recall:

The Lincoln MKZ was advertised as "the most fuel-efficient luxury hybrid in America." Not any more.
Michael Gil / Wikimedia Commons

You think Ford was a little embarrassed last year after having to reduce its mileage claims for the Ford C-Max? Now they have to reduce those claims for six 2013 and 2014 models (claims on the C-Max have to be reduced again).

All of Ford's 2013 hybrid and plug-in hybrid vehicles are affected, as well as most 2014 Fiesta models.

Here's a little damage control from Ford's Raj Nair:

36th Constitutional Convention

Dennis Williams is the new president of the United Auto Workers Union, and members appear to be very optimistic about the leadership.

Detroit News business columnist Daniel Howes told Stateside that the union views Williams as somebody who can be an innovative bargainer and bring a new perspective.

Howes in his column today said that Dennis Williams has his work cut out for him to correct the mistakes of his predecessor, Bob King. 

Williams is the first UAW president who never headed one of union’s main three departments: Ford, General Motors, and Chrysler. He is also the first who has never worked in an auto plant.

*Listen to full interview above. 

Sarah Cwiek / Michigan Radio

GM shareholders meet today at the automaker’s Detroit headquarters—with protesters circling outside the Renaissance Center.

The protesters include family members of people who died in GM cars that have since been recalled.

GM has acknowledged 13 deaths as a result of faulty ignition switches. But victim’s advocates say that number is much higher, possibly more than 100.

Laura Christian’s daughter, Amber Marie Rose, died when the airbag in her 2005 Chevy Cobalt failed to deploy.

Wikipedia

"We failed."

That was the painful self-assessment from General Motors today, as CEO Mary Barra unveiled the findings of an internal investigation into the automaker's ignition switch crisis.

The defective switches are linked to at least 13 deaths and 47 crashes over more than a decade.

Today Barra spoke to GM employees at a town hall meeting broadcast around the world.

Michigan Radio's auto reporter Tracy Samilton was at the town hall, and she joined us on today’s Stateside.

*Listen to our conversation with Tracy Samilton above. 

GM executives answer questions during this morning's press conference.
GM / YouTube

Update 3:30 p.m.

Texas attorney Bob Hilliard represents about 70 families suing GM in a variety of state and federal courts.  

He says his clients were “stunned” to hear GM CEO Mary Barra admit the problem was a result of "incompetence and neglect."

“I don’t think that GM can come into a court of law anymore and argue it wasn’t their fault,” says Hilliard. He says the only thing GM can argue now is “what is the value of the loss.”

But Hilliard says he does worry GM will claim it's not liable for problems predating its bankruptcy. He cites a case involving a Pennsylvania man who was paralyzed from the chest down in an accident.   

“In court they say GM did not design this vehicle. GM did not manufacture this vehicle. GM did not sell this vehicle. Even though this vehicle was a 2006 GM Cobalt,” says Hilliard.

Hilliard says he's "skeptical" about the victims’ compensation fund GM is offering to establish.

Update 10:34 a.m.

The much-anticipated report that looked into what went wrong at General Motors was given to federal regulators and Congress this morning.

GM executives held a press conference this morning about what the report found and how GM plans to respond.

This is a turning point in the ignition switch recall saga for GM.

CEO Mary Barra refused to answer detailed questions from the press and from Congress until Anton Valukis released the findings of his investigation.

The New York Times' Bill Vlasic writes that GM execs hope this report will relieve some pressure on the company:

Legal experts say that G.M. has taken a calculated risk that Mr. Valukas’s findings and recommendations will sufficiently answer the myriad questions hanging over the company.

“The downside is that members of Congress, the press and the public may think that the report lacks credibility if it is in an in-house investigation,” said Carl W. Tobias, a law professor at the University of Richmond.

But Professor Tobias said that Mr. Valukas, a former United States attorney, was a good choice for the delicate task of investigating G.M. “His reputation is on the line with this report, so he is not likely to sacrifice that for G.M.,” he said.

But this is just another step in the grand mea culpa for GM.

Vlasic reports the company faces more Congressional hearings, more investigations from the U.S. Justice Department and the Securities and Exchange Commission, and it will need to compensate the families of the victims of the ignition switch problems:

... the company is awaiting recommendations from the lawyer Kenneth R. Feinberg on how it will compensate victims of switch-related crashes and family members of people who died as a result of the defect. G.M. faces hundreds of private claims and lawsuits.

Mr. Feinberg, who oversaw compensation claims for victims of the 9/11 terrorist attacks and the Boston Marathon bombing, has said he would make his recommendations to G.M. later this month.

To see how this crisis unfolded for GM, check out this timeline from NPR's Tanya Basu.

9:48 a.m.

General Motors CEO Mary Barra says 15 employees have been fired over the company's recent ignition switch recalls.

Barra made the announcement this morning as she released an internal investigation by attorney Anton Valukis into the recall of 2.6 million older small cars for defective ignition switches.

Barra says the internal investigation into its recent ignition switch recall is "brutally tough and deeply troubling."

“What Valukis found in this situation was a pattern of incompetence and neglect,” Barra said. “Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by the faulty ignition switch.”

It took GM more than a decade to report the switch failures, which it blames for 13 deaths.

In a town hall meeting at GM's suburban Detroit technical center, Barra says attorney Anton Valukas interviewed 230 employees and reviewed 41 million documents to produce the report, which makes recommendations to avoid future safety problems.

automotiveauto.info

A new study by Business Forward says electric costs will go up only slightly for auto manufacturers as a result of proposed EPA regulations on utilities.

And those costs pale in comparison to the financial impact from climate change.

Jim Doyle is president of the trade group.   He says storms are a huge expense for auto plants, which have to shut down if a supplier can't ship parts due to weather. 

And climate scientists say global warming is increasing the frequency and severity of major storms.

Wikipedia

Hyundai and Kia made the greenest cars last year, according to an annual ranking by the Union of Concerned Scientists.

The sister Korean companies stole the crown from Honda, which had been No. 1 since 1998.

Car dealership.
GM

WASHINGTON – A price-fixing investigation into the auto parts industry has mushroomed into the Justice Department's largest criminal antitrust probe ever, and it's not over.

The investigation was made public four years ago with FBI raids in the Detroit area.

It's led to criminal charges against dozens of people and companies, stretched across continents and reverberated through an industry responsible for supplying critical car components.

Thirty-four individuals have been charged and 27 companies have pleaded guilty or agreed to do so. Collectively, they've agreed to pay about $2.3 billion in fines.

A Justice Department official says it's safe to say that U.S. car buyers paid more as a result of the conspiracy.

Officials say the investigation stands out for its scope and for the cooperation received from Japan, Australia and other countries.

Steve Carmody / Michigan Radio

WASHINGTON (AP) - A price-fixing investigation into the auto parts industry has mushroomed into the Justice Department's largest criminal antitrust probe ever, and it's not over.

The investigation was made public four years ago with FBI raids in the Detroit area.

It's led to criminal charges against dozens of people and companies, stretched across continents and reverberated through an industry responsible for supplying critical car components.

DETROIT – General Motors is recalling 2.4 million vehicles in the U.S. as part of a broader effort to resolve outstanding safety issues more quickly.

The latest action brings to 13.6 million the number of vehicles GM has recalled this year, a new record for the automaker.  

The recalls announced Tuesday include 1.3 million older-model crossovers with defective front seat belts and 1 million sedans with a shift cable that can wear out. 

GM is also recalling 1,400 new Cadillac Escalade SUVs with faulty air bags. No fatalities related to the defects have been reported, GM says. It expects to take a $400 million charge in the second quarter to repair the vehicles. 

GM agreed to a $35 million federal fine last week for delays in reporting a deadly ignition switch defect.

A few years ago, most of us would not know what the phrase "connected vehicles" meant. Today, the technology is being used in more vehicles, in hopes of cutting down on accidents and traffic jams. 

A new study from the University of Michigan Transportation Research Institute finds that even as the public welcomes the prospect of safer driving, they are still worried about being hacked and preserving their privacy. 

We were joined by the researchers who conducted this study. 

*Listen to the full interview above. 

The National Highway Traffic Safety Administration has posted online the results of additional tests performed by GM engineers on recalled Cobalts, HHRs, Ions, and Solstices.

The cars have defective ignition switches that can turn into the "accessory" or off position if a) there is extra weight on the key ring, and b) the switch is jarred, by the car going over rough terrain, for example.

Chrysler posted a loss of $690 million in the first quarter of 2014, largely due to one-time costs associated with a stock buyout.

Chrysler and its Italian partner Fiat purchased the 41.5% of the shares of Chrysler held by a union retiree health care trust.

The deal set the stage for the two to merge, forming a new company – Fiat Chrysler Automobiles.

From a purely sales perspective, Chrysler did well in the first quarter. Sales rose 10% from the same period last year, and the automaker's market share rose a full percent.

An Indian manufacturing company is expanding into Michigan.

Mahindra Group will locate  its technical research facility in Troy – and a manufacturing facility in Ann Arbor.

Mahindra's first product in the U.S. will be an electric scooter called the "GenZe."

The scooter is designed for modern urban and campus commuting.  It will get up to 30 miles on a charge, and the battery can be removed and plugged into a regular 110-volt outlet.

Two more big recalls today, this time by Ford Motor Company and Chrysler.

Both companies say they are unaware of any injuries or accidents related to the issues.

Chrysler is recalling about 780-thousand newer model minivans for window switches that can overheat and catch fire.

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