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Auto/Economy
3:20 pm
Thu July 21, 2011

U.S. government ends Chrysler investment; Fiat takes over

The U.S. government is no longer invested in Chrysler.
Ricardo Giaviti Flickr

WASHINGTON (AP) - The Treasury Department says it has ended its investment in Chrysler LLC after Italian automaker Fiat SpA purchased the U.S. government's remaining holdings in the auto company.

Fiat paid $560 million to the Treasury Department for the government's 98,000 shares. Fiat has run the company since it emerged from bankruptcy protection in June 2009.

Treasury provided a total of $12.5 billion to Chrysler and its financing arm after the recession hampered auto sales and sent Chrysler and General Motors to the brink of collapse. The funds came from the government's $700 billion bank bailout fund.

Since then, $11.2 billion of the assistance has been repaid, Treasury says. Chrysler repaid $5.1 billion in loans from the government in May. Treasury said it likely won't recover the remaining $1.3 billion.

Economy
12:41 pm
Thu July 21, 2011

Magic Johnson joins Detroit venture capital firm

From left, Brian Hermelin, Earvin "Magic" Johnson, Detroit Mayor Dave Bing, and Josh Linker. All but Bing are partners in Detroit Venture Partners.
Sarah Hulett Michigan Radio

NBA Hall of Famer and Michigan native Earvin “Magic” Johnson is joining a venture capital firm committed to helping early stage tech firms.

Detroit Venture Partners was founded in part by Quicken Loans founder Dan Gilbert. It plans to invest in 12 to 15 companies a year, at up to $3 million per company.

Johnson says right now, talented young people are leaving Michigan and Detroit because they don’t see a future for themselves.

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Economy
11:02 am
Thu July 21, 2011

Whirlpool reports second quarter loss

thewildinvestor.com

Whirlpool is reporting a loss in its second quarter. The company says the loss is the result of a legal settlement. The company announced in June that it would pay $603 million to Brazilian bank Banco Safra S.A. to settle the 20 year old dispute.

From the Associated Press:

Whirlpool Corp. is reporting a second-quarter loss largely due to the settlement of Brazilian collection dispute, but its adjusted results topped Wall Street's expectations.

But the world's biggest appliance company said Thursday that it now expects full-year earnings at the low end of its previously reported range and shares dipped 3 percent in premarket trading.

Whirlpool lost $161 million, or $2.10 per share in the past quarter. That compares with a profit of $205 million, or $2.64 per share, a year ago. Excluding the settlement and other items, adjusted earnings were $2.76 per share. Revenue climbed 4 percent to $4.73 billion from $4.53 billion. Analysts expected earnings of $2.73 per share on revenue of $4.74 billion.

Whirlpool, whose other brands include Maytag and Kitchenaid, is based in Benton Harbor. Mich.

Changing Gears
9:28 am
Thu July 21, 2011

Growing the region's clean economy

Algal Scientific's demo project at an Ohio landfill.
Photo courtesy of Geoff Horst

The clean economy is touted as a future economic driver of the region. But a new report shows that while Ohio and Illinois have added jobs to the clean economy, Michigan is the only state to have lost them. Changing Gears visited one scientist in Plymouth, Mich., who’s trying to nudge that number back up.

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Economy
6:42 am
Thu July 21, 2011

Job growth stalls, state unemployment rises in June

Ep_jhu Flickr

Job creation has been dragging for most of this year in the state and across the country. That helped push Michigan’s unemployment rate slightly higher to 10.5 percent in June.

There were 8,000 more unemployed people in Michigan last month – a total of 496,000 thousand people looking for work. The unemployment rate was inching downward as people found jobs in high-tech business services, health care, and manufacturing.

Bruce Weaver of the state Bureau of Labor Market Information says all that stalled in February.

“It appears that job levels have flattened out in the state and that’s across the board.”

The number of hours worked and payroll earnings also fell. The rate of unemployment and under-employment is 19.6 percent. That number counts part-timers who would like to work full-time, and former job seekers who got discouraged and quit looking.

Economy
5:00 pm
Wed July 20, 2011

Oakland County: Fannie, Freddie dodging taxes

Oakland County Treasurer Andrew Meisner says homes like this one, sold in foreclosure by Fannie Mae and Freddie Mac, are costing the state millions in lost tax revenues.
Sarah Hulett Michigan Radio

There’s a David-and-Goliath story about to play out in federal court in Detroit.

Oakland County Treasurer Andrew Meisner says Fannie Mae and Freddie Mac are illegally dodging millions of dollars in taxes. The government-backed mortgage giants were created by the federal government, but they were spun off decades ago as hybrid enterprises with a policy mission and a profit motive. 

Just where Fannie and Freddie sit on the public-private spectrum is the central issue of the court case. And the court fight could be a bellwether for similar battles in other states. 

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Auto/Economy
12:40 pm
Wed July 20, 2011

UAW chief to push for bigger profit-sharing checks

In a 2007 photo from left, Bob King (current UAW President) is with Ron Gettelfinger, (former UAW President), Bill Ford, Executive Chairman, Ford Motor Company, and Alan Mulally, President and CEO, Ford Motor Company.
Ford Motor Company

DETROIT (AP) - The head of the United Auto Workers union says if his members agree to profit-sharing instead of pay raises from Detroit's automakers, the companies will have to write bigger checks than they do now.

UAW workers at General Motors got $4,300 profit-sharing checks this year, while Ford paid out $5,000 and Chrysler paid $750.

President Bob King has told The Associated Press that profit-sharing or other flexible methods of compensation will be discussed when the union formally begins contract talks with the Big Three next week.

Yet King, who has preached cooperation with the companies over confrontation, said that while he wants workers to be fairly compensated, he also wants deals that keep down the companies' fixed costs so they are competitive with foreign-based automakers.

Auto/Economy
4:40 pm
Tue July 19, 2011

Median household incomes in Michigan are shrinking

Michigan's median household income dropped over the past decade.
Photo by penywise morgueFile

The median income for Michigan households has dropped by more than $9,000 over the past decade. Only one other state, Hawaii, has seen a bigger loss in income.

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Economy
1:28 pm
Tue July 19, 2011

Unemployment rate makes Michigan retailers nervous

User: Justin.Beck Flickr

The continued high unemployment rate is making Michigan retailers nervous about sales this summer. Rising commodity prices for things like cotton and petroleum products are costing retailers more. Tom Scott is with the Michigan Retailers Association. He says some retailers are slashing prices for their shoppers, but generally retailers are optimistic despite the uncertainties.

Our unemployment rate seems to be stuck. We’re not seeing much improvement there, so that’s certainly a big concern. One thing that is helping is the recent drop in gas prices.

Scott recognizes gas prices could spike at any time.  He says if shopping continues to move in a positive momentum, retailers should be fine.

-Traci Currie - Michigan Radio Newsroom

Economy
12:47 pm
Tue July 19, 2011

AP analysis: Economic stress rises in Midwest

WASHINGTON (AP) - Counties in the Midwest and South that have a high number of autoworkers have seen a jump in economic stress levels, according to an Associated Press monthly analysis.

But Midwestern states also have seen the largest decreases in economic stress since the recession ended. That's primarily because of growth in manufacturing. Ohio has added 7,600 factory jobs in the past year.

The AP's Stress index calculates a score from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score signifies more economic stress.

Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. By that standard, about a quarter of the nation's 3,141 counties were stressed in May, roughly the same as in April.

Economy
10:53 am
Tue July 19, 2011

Borders closes: 10,700 workers to lose jobs

Borders will begin to close some of its stores as early as this week.
Steve Carmody Michigan Radio

After 40 years in the business, the national bookstore chain Borders has officially called it quits.

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Economy
7:03 am
Tue July 19, 2011

News roundup: Borders to go out of business

The closure of Borders is making headlines across the country this morning
Lornais Flickr

Borders Group Inc., the Ann Arbor-based bookstore chain, announced yesterday that it is closing after failing to find a buyer. Some stores will close as early as Friday. The liquidation of Borders is making headlines across the state and around the country:

Meanwhile, Michigan Governor Rick Snyder's office says the closing of Borders is more a reflection of publishing industry problems than a statement about Michigan's business climate, the Associated Press reports. From the AP:

His office says the fall of Borders marks the end of an important piece of Michigan history. Snyder is a former Ann Arbor businessman who was elected as a Republican in November.

Spokeswoman Geralyn Lasher says the Snyder administration will "want to look closely from the jobs perspective of people in the state."

Economy
4:35 pm
Mon July 18, 2011

Borders Books is going out of business

The liquidation process for Borders stores could start as early as Friday, July 22.
Jennifer Guerra Michigan Radio

Borders Books is officially going out of business.

The Ann Arbor bookstore chain issued a statement this afternoon saying the company Hilco and Gordon Brothers will "purchase the store assets and start the liquidation process." 

Borders Group President Mike Edwards:

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Auto/Economy
2:47 pm
Mon July 18, 2011

GM to invest $328 Million in Flint Assembly Plant

media.gm.com staff

General Motors will invest $328 million in its Flint Assembly Plant, to prepare the facility to build the next generation of Chevy and GMC full-size pickup trucks.

The plant just added a third shift earlier this year.

Joe Ashton is the UAW's GM Vice President.

He says the profitable trucks made at the Flint Assembly Plant are an important source of revenue for GM.

The UAW heads into contract negotiations next week with Ford, Chrysler and GM. 

Ashton says workers want a lot of different things from their new contract. 

Economy
12:16 pm
Mon July 18, 2011

Michigan's Best campaign expands

Scott Schopieray Flickr

Some grocery store shelves are being filled with more Michigan-made products. Grand Rapids based Spartan Stores recently expanded its Michigan’s Best program by stocking more Michigan products in more stores. Spartan Stores started the Michigan’s Best campaign in 2009 to stimulate local businesses and farms. Alan Hartline is an executive at Spartan Stores. He says the campaign is great for Michigan.

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Auto/Economy
1:00 am
Sun July 17, 2011

Can immigrants save Michigan's economy?

DonkeyHotey flickr

How immigrants can improve Michigan’s economy will be the topic of a conference in Detroit on Monday. And some heavy hitters – including New York City Mayor Michael Bloomberg and Michigan Governor Rick Snyder – will be among the speakers.

Steve Tobocman is director of Global Detroit – which advocates for “pro-growth” immigration reform. He says critics’ view that encouraging immigration would increase the already-fierce competition for jobs is off base:

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Auto/Economy
3:00 pm
Fri July 15, 2011

Delta discontinues service to five Michigan cities

J. Miguel Rodriguez Flickr

Delta Airlines is discontinuing service to five airports in Michigan, including Alpena, Iron Mountain, Escanaba, Pellston and Sault Ste. Marie, according to the Detroit News:

"Delta Air Lines said today it plans to discontinue flight service in 24 underperforming markets around the country, including at five airports in Michigan."

"'While Delta would prefer to continue serving these communities, the new reality of mounting cost pressures faced by our industry means we can no longer afford to provide this service,' Delta said in a statement."

"Delta, which said it also plans to retire its Saab fleet of aircraft and halt $14 million in annual losses, said it would notify the Department of Transportation of its plans, which would affect Essential Air Service markets."

"The EAS program ensures small communities have access to passenger air service and includes subsidies by the government to airlines."

-Brian Short, Michigan Radio Newsroom

People buy more fuel-efficient cars
10:11 am
Fri July 15, 2011

Emissions from new cars drop since 2007

user: ifmuth flickr.com

Emissions from new vehicles dropped 12% between 2007 and this year, according to a new index by the University of Michigan Transportation Research Institute. 

But it’s unclear if that trend will continue in the future.

For decades, there was little increase in the fuel efficiency of the new cars people bought. 

That changed starting in 2007.  Consumers turned to more fuel-efficient cars and they drove fewer miles, lowering overall emissions. 

But it probably wasn’t environmental concerns that caused the shift. 

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Economy
4:46 pm
Thu July 14, 2011

Metro Detroit ranks No. 9 in millionaires

jdurham MorgueFile

 Never mind the recession or the near collapse of the auto industry just a couple of years ago.

A report in the Wall Street Journal finds that Detroit and its suburbs have plenty of people whose bank accounts are very healthy.

Michigan Economic Development Corporation spokesman Joe Serwach says Michigan is holding its own.

“Detroit came in at No. 9, ahead of San Jose, which surprised me," Serwach says. "I would have thought Silicon Valley would have had more. But we had 92,100 millionaires.”

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Auto/Economy
4:39 pm
Thu July 14, 2011

Borders faces liquidation after lead bid falls through

Borders bankruptcy auction set for July 19
Jennifer Guerra Michigan Radio

It’s been a busy 24 hours for Ann Arbor-based Borders: The bankrupt bookstore chain has gone from having a potential buyer to talk of liquidation.

The auction to sell Borders is still scheduled for Tuesday, July 19th.  But the lead bidder, known as a "stalking horse," has pulled out. That bidder was Najafi, a private equity from Arizona a firm.

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