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Changing Gears
8:40 am
Tue July 26, 2011

Road Trip: Decatur, The Heart of Illinois Agribusiness (Part 2)

Corn being grown across the street from Archer Daniels Midland Co. headquarters in Decatur.
Niala Boodhoo Changing Gears

Our Changing Gears road trip continues. Yesterday, I was in Kohler, Wisconsin. Today, I went down state in Illinois to Decatur.

Driving south from Chicago, it only takes about 25 miles to hit the corn fields. For the next 150 miles to Decatur, it’s a sea of yellow corn tassels, a head tall.

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Auto
7:44 am
Tue July 26, 2011

Profits at Ford drop but beat Wall Street expectations

Toolshed4 Flickr

Ford Motor Company announced its second-quarter earnings this morning. And, although profits dropped slightly, the automaker did beat analysts' expectations. The Associated Press reports:

The company earned $2.4 billion, or 59 cents per share, down 8 percent from $2.6 billion, or 61 cents per share, in the second quarter of 2010. It was Ford's ninth straight quarterly profit. Worldwide sales rose, but the company spent more on materials and product development.

Revenue rose 13 percent to $35.5 billion. Analysts polled by FactSet had forecast revenue of $32.15 billion. Without one-time items, including $110 million for employee reductions, Ford would have earned $2.9 billion, or 65 cents per share. That beat analysts' forecast of 60 cents per share. Ford paid off $2.6 billion in debt during the quarter.

Economy
6:24 am
Tue July 26, 2011

State to receive small business funds

State and federal officials are expected to announce that Michigan will be the first place eligible for loans to small businesses investing in clean energy or located in economically distressed areas.

U.S. Small Business Administration head Karen Mills, Michigan Gov. Rick Snyder, Dow Chemical Co. chief Andrew Liveris and others are scheduled to announce the impact investment program in a Tuesday afternoon conference call.

The initiative will work with private institutional investors to help identify and provide money to private equity fund managers who invest in targeted companies. Federal funds also will be offered to small businesses that get a share of the private investments.

The program is part of President Barack Obama's Start-Up American initiative aimed at spurring high-growth entrepreneurship and the creation of more jobs.

Auto/Economy
5:06 pm
Mon July 25, 2011

16,000 employees offered cash incentives to move to Detroit

Five Detroit businesses hope to entice their employees to move downtown by offering them cash incentives.
user Bernt Rostad flickr

Several Detroit businesses are paying their employees to move to the city as part of a new incentive program called "Live Downtown."

Employees can get $20,000 dollars toward the purchase of a new home. Those who rent will get up to $3,500 for two years. Even employees who already live in the city can get money to make home improvements.

Here's a list of the 5 companies behind the new "Live Downtown" program:

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Auto/Economy
3:11 pm
Mon July 25, 2011

UAW begins new contract negotiations with automakers

From left - UAW President Bob King, UAW Vice President Chrysler Department General Holiefield, Chrysler Senior Vice President of Manufacturing Scott Garberding and Chrysler Vice President of Employee Relations Al Iacobelli.
UAW

The United Auto Workers formally kicked off negotiations today with Detroit automakers.

Current UAW contracts with Chrysler, GM, and Ford expire in mid-September.

Michigan Radio's Sarah Cwiek reports that Chrysler Group LLC management and the UAW emphasized unity at the press event today:

Scott Garberding is a Senior Vice President for Chrysler. He says the company and the UAW worked together to get Chrysler through bankruptcy. Garberding says it’s important for the new contract to recognize the sacrifices Chrysler workers have made.

"And at the same time, establishing a legacy for our organization to ensure that we remain competitive long-term. And I can’t think of a better team that could collectively come together and craft that type of arrangement. "

Last week, UAW President Bob King said he wanted workers to see the benefits of increased profit sharing. The UAW is also expected to seek wage increases for entry-level workers, and job guarantees. After huge layoffs, King said remaining workers want to count on their jobs:

“They want stability,” he said. “They want to know they’ll be working next week and next year, and that they will be able to send their kids to college.”

Talks are expected to take at least a month, and if things don't go well in negotiations with Chrysler and GM, the UAW is compelled to enter into binding arbitration. The UAW cannot strike under the terms of the government bailouts:

This year, for the first time, the UAW is bound by an agreement that it reached with Chrysler and General Motors in 2009 that requires the two sides to enter into binding arbitration if they reach an impasse.

King said Chrysler and the UAW have formed a committee to set up the ground rules for arbitration, even though he said that is a last resort.

“If arbitration happens … then I would say we haven’t done our job,” King said.

The UAW can, however, strike against Ford Motor Company. Analysts are curious to see if UAW negotiators are able to secure better terms with Ford.

Changing Gears
10:38 am
Mon July 25, 2011

What company towns look like today: Kohler, Wisconsin (Part 1)

The name you see in many bathrooms around the country has its roots in Kohler, Wisconsin.
Niala Boodhoo Changing Gears

From Pullman in Chicago to Firestone in Akron, these employers loomed large in everyone's daily lives.

But what does a "company town" look like today?

The Changing Gears team hit the road to find out.

All this week, we’re looking at how these places are coping with economic change.

For our first story, I visited the village of Kohler, Wisconsin.

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Bright colors in small cars
2:03 pm
Sat July 23, 2011

Small cars increasingly grab attention with color

Some car companies are rolling out brighter colors on their vehicles,  especially on small cars.   

These days, you can order a lime-green Ford Fiesta, a coppery-orange Honda Fit, or a sunshiny-yellow Fiat 500.

Mazda has probably pushed the color envelope the furthest, with an attention-grabbing color for the Mazda 2 called “Spirited Green.”

It’s really green. 

Teresa Stafford is a lead designer for color and materials for Mazda.

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Economy
11:04 am
Fri July 22, 2011

Borders says goodbye after 40 years

A going out of business sale at a Borders bookstore in Washington D.C.
Martin Kalfatovic Flickr

CEO Mike Edwards sent a goodbye note to customers today as going out of business sales start at Borders Book stores across the country.

In his note, Edwards explained why the company couldn't keep their doors open:

We had worked very hard toward a different outcome. The fact is that Borders has been facing headwinds for quite some time, including a rapidly changing book industry, the eReader revolution, and a turbulent economy. We put up a great fight, but regrettably, in the end, we weren't able to overcome these external forces.

Over the last decade, the company made many missteps that led to its demise. One of the most notable was the company's failure to invest early in online book sales. Analysts say other problems included being overextended in real estate holdings for the bookstores, and a lack of leadership.

The shuttering of the company means 10,700 will be out of a job. 400 here in Ann Arbor will lose their jobs at Borders Headquarters (a place that once had 1,800 workers).

We asked our Facebook friends what they will miss when the Borders bookstores are gone.

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Economy
5:11 pm
Thu July 21, 2011

Lemonade economics

The recession has taken its toll on the neighborhood lemonade stand.
Amelia Carpenter Michigan Radio

(Here's a version of the story that aired on Michigan Radio.)

Turns out even lemonade stands aren’t immune to Michigan’s economic recession.

Molly and Lucy Prochaska have been in the lemonade business for the past five years. They sell lemonade, iced tea, and Arnold Palmers (50 cents for a small cup, $1.00 for a large.)  They also sell popsicles at fifty cents a piece, which is a new addition this year.

They’ve got a cash register, lots of signage. They're also located close to downtown, so there's a good amount of foot traffic from the Ann Arbor Art Fairs.

But 12-year old Molly says business just isn’t what it used to be:

MOLLY PROCHASKA: The first year was really nice, we got lots of money. But after that, when the economy started to go down we didn’t get as much money.

JENNIFER GUERRA: You think it had to do with the economy?

MOLLY PROCHASKA: Probably. People didn’t want to spend as much. They wanted to save their money.

The girls made around $200 their first year. Molly is saving up her lemonade money to buy a camera; Lucy wants to buy an iPad.

But it's not all doom and gloom at the lemonade stand. Molly says business this year is picking up a bit. She says that could mean one of two things: the economy's picking up, or more people are coming because it's "super hot out."

Also, side note, it looks like Molly and Lucy might have to step up their game now that a new lemonade stand popped up a block away. Not only is the new stand charging less for a cup, but they also use fresh lemons.

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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