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Auto/Economy
4:00 pm
Tue June 14, 2011

GM, other companies get Michigan state tax credits

The GM Headquarters at the Renaissance Center in Detroit
Brandon C Flickr

A state board has approved tax incentives for projects connected to General Motors and other companies in Michigan.

The Michigan Economic Growth Authority on Tuesday approved an amended brownfield tax credit valued at $10 million for GM's Van Slyke complex in Flint. The new project is expected to retain up to 185 jobs.

HP Enterprise Services is a subsidiary of Hewlett-Packard and was awarded a tax credit valued at $3.5 million over the next seven years. The credit will support a project in Pontiac expected to create up to 250 jobs.

Magna Exteriors and Interiors USA will receive a $1.5 million tax credit over the next three years connected to facilities in Howell, Benzonia and St. Clair County's China Township. More than 300 new jobs are connected to the projects.

GM War Room
1:30 pm
Tue June 14, 2011

Saving GM - inside the company's "War Room."

When a massive quake struck Japan on Friday, March 11th, Bill Hurles was up north with his sons on a snowmobiling trip.  Hurles is head of supply chain for General Motors. 

After he saw the first footage of the tsunami slamming into the northern coast, Hurles cut his trip short and returned to Warren.   By early Sunday morning, he and his team were in the War Room, desperately trying to get information.

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Economy
1:29 pm
Tue June 14, 2011

Michigan ranks thirteenth in the nation for teen unemployment

The Employment Policies Institute issued a report that shows Michigan’s teen unemployment rate is around 28 percent, compared to around 24 percent nationally.

Michael Saltsman is with the Employment Policies Institute. He says the rise in teen unemployment over the past two years is a result of employers moving toward automation and self service.

I think you see other businesses sort of moving in that direction where maybe they have waiters and waitresses bus their own tables instead of having a bus boy do it.

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Auto/Economy
10:28 am
Tue June 14, 2011

Honda profits plunge as it seeks to recover from earthquake

The remodeled Honda Civic was supposed to be a big sales driver, but Honda has had to scale back its release. Reuters says the company won't go back to "full production of the best-selling model until after summer."
Honda

The Japanese automaker saw profits fall sharply as it struggled to reorganize in the wake of the earthquake and tsunamis that struck the island nation last March.

From the Associated Press:

TOKYO (AP) - Honda says profit for the fiscal year through March 2012 is expected to plunge 63.5 percent as vehicles sales slipped amid a parts shortage caused by the quake and tsunami in northeastern Japan.

Honda Motor Co. gave the forecast Tuesday, more than a month later than usual. Like other Japanese automakers, the maker of the Odyssey minivan and the Fit compact needed more time to assess the
aftermath of the March 11 disaster.

Honda is projecting a profit of $2.4 billion for the fiscal year ending March 2012, down sharply from the previous fiscal year.

Reuters reports that Honda released the numbers later than usual:

Honda, like other Japanese automakers, had delayed providing financial forecasts because of uncertainty over when parts supplies would recover after the magnitude 9.0 quake in Japan's northeast. In late April, it announced a 52 percent drop in January-March operating profit after production came to a virtual halt in the second half of March.

"These figures are pretty bad," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, adding they could temporarily push Honda's stock lower.

Fumihiko Ike, Honda's chief financial officer, said the company plans to ramp up production in the second half of the year to make up for losses - that includes boosting production at its U.S. facilities in Indiana and Alabama "to achieve a more than 20 percent output rise beyond autumn."

Transportation
9:57 am
Tue June 14, 2011

A slow train to Chicago, Amtrak ordered to cut speeds

Amtrak traveling between Chicago and Detroit.
user amtrak_russ Flickr

On the heels of the federal government's announcement that it plans to increase the speed of Amtrak trains traveling between Detroit and Chicago, comes a slow-down order from the freight company that owns much of the track.

Norfolk Southern railroad says Amtrak trains will have to travel at speeds of 25 m.p.h. on some parts of the line between Dearborn and Kalamazoo.

More from Annarbor.com's Nathan Bomey:

The decision means that travelers on Amtrak's Wolverine line may experience 90-minute delays on the trip from Kalamazoo to Dearborn, Amtrak said. Passengers need to check with Amtrak before heading to the station for their trips.

A 90-minute delay is a big deal for trains working to improve their on-time performance, which has been notoriously bad in Michigan.

Amtrak Train number 351, for instance, travels between Chicago and Grand Rapids/Port Huron/Detroit - Pontiac. In the last twelve months, it's been on-time only 17.1% of the time.

Last month, officials from the federal government announced plans to invest $196.5 million to improve the 135 miles of rail line between Dearborn and Kalamazoo. The improvement, officials from the government say, will allow trains to reach speeds of 110 m.p.h., cutting 30 minutes off the time it will take to travel between Detroit and Chicago.

The freight company who owns the line, says they won't be responsible for maintenance on the improved track. Rudy Husband, a Norfolk Southern spokesman, was quoted in Annarbor.com:

"If they want to make the Michigan line a passenger route with higher speeds than what freight trains run, then someone other than Norfolk Southern is going to have to pay for the increased maintenance costs," Husband said. "We have been trying to work out a solution to this for a very long time now. But in the meantime we're doing what needs to be done to be responsible to our customers and our shareholders."

So before the trains speed up, they'll have to slow down.

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Economy
5:28 pm
Mon June 13, 2011

Snyder meets with Wall Street to reduce cost of borrowing

Governor Rick Snyder and members of his budget team visited New York to meet with the agencies that set the state’s credit rating.

The state’s rating suffered due to the effects of the decade-long recession.

It's bond ratings are not that bad, but they could be better.

Governor Snyder traveled to Wall Street with state Treasurer Andy Dillon and Budget Director John Nixon. They made the case that Michigan deserves an upgrade because it’s overhauled its business tax and wrapped up its budget months ahead of schedule without resorting to accounting gimmicks and one-time fixes.

Sara Wurfel, the governor’s press secretary, said “one change in a state’s bond rating can actually mean millions of dollars in lower payments.”

The governor’s itinerary included meetings with Moody's, Fitch Ratings and Standard & Poor's. The meetings only opened the discussions with Wall Street, and Wurfel says there will be further negotiations as the governor tries to reduce the cost to taxpayers when Michigan borrows money.

Economy
3:14 pm
Mon June 13, 2011

Snyder trying to improve Michigan's bond rating

LANSING, Mich. (AP) - Gov. Rick Snyder is meeting with bond rating companies in an attempt to improve Michigan's rating.

A higher or improved rating would save Michigan money because it would be cheaper for the state to borrow for new construction projects.

Snyder is expected to promote the state's improved economic outlook and fiscal restraints imposed in the recently approved state budget during Monday's meetings in New York City.

The state lost its top AAA bond rating from Standard and Poor's in 2003. Years of bad economic news  as limited Michigan's ability to improve its ranking with any of the three major agencies that rate state debt.

Michigan still has investment-grade bond ratings from the three agencies.

Economy
12:51 pm
Mon June 13, 2011

Grand Rapids LipDub creators launching PR firm

A screen shot of the Grand Rapids LipDub.
youtube.com

The creators of the Grand Rapids LipDub video are using the buzz they've created to launch what they call an "international brand awareness firm."

Rob Bliss, Jeffrey Barrett, and Scott Erickson say their new firm, Status Creative, will build upon the success they had with the Grand Rapids LipDub video (which has had more than 3 million views since its release on YouTube).

From their press release:

“We’re not going to shy away from the spotlight that the Grand Rapids LipDub is shining on us,” said Erickson, referring to the worldwide media coverage and over 3 million YouTube views the video has generated in just two weeks. “But we want people to know that our experience and capabilities go far beyond that single project.  We envision taking the same creative energy and applying it to everything from political campaigns to consumer product launches.”

They say they'll limit their work to 10 campaigns in 2011.

Economy
10:03 am
Mon June 13, 2011

Private-sector partners give $3 million for Michigan tourism ads

A screen capture of a Pure Michigan commercial.
michigan.org

 LANSING, Mich. (AP) - The state's popular Pure Michigan tourism campaign has gotten a $3 million boost from private-sector partners to support advertising this year.

The Travel Michigan Ad Partnership Program announced Monday that the contributions from 28 communities and destinations in Michigan are double those from 2010. The Michigan Economic Development Corp. is matching those contributions.

Mackinac Island, The Henry Ford in Dearborn and Traverse City are national sponsors, each contributing $500,000 toward the Pure Michigan national campaign. Travel Michigan says the money means ads will be able to run longer on cable television networks nationwide.

Pure Michigan campaigns promote the state's beaches, golf courses and other destinations to potential tourists.

Auto/Economy
2:36 pm
Fri June 10, 2011

Toyota expects fiscal year profit to fall 31 percent

TOKYO (AP) - Toyota says its profit for the fiscal year through March 2012 will fall 31 percent to 280 billion yen ($3.5 billion) in an outlook that underlines a robust recovery in the latter half of the fiscal year from the damage of an earthquake and tsunami.

Toyota Motor Corp. made the announcement Friday. It had not given an earnings forecast earlier because of uncertainties in its production outlook after the disasters on March 11 wiped out key parts suppliers in northeastern Japan.

Last month, it said January-March quarterly profit crumpled more than 75 percent because of the parts shortage that is hurting production.

Economy
2:15 pm
Fri June 10, 2011

It takes a village... and $226,920 to raise a child

Every year, the U.S. Department of Agriculture releases its estimate of how much it costs to raise a child from birth to seventeen years of age.

Here's what they found for their latest Expenditures on Children by Families report:

A middle-income family with a child born in 2010 can expect to spend about $226,920 ($286,860 if projected inflation costs are factored in) for food, shelter, and other necessities to raise that child over the next 17 years.

It represents a 2% increase from 2009, and the report also notes that, naturally, the more money you make, the more you spend on your child:

  • A family earning less than $57,600 per year can expect to spend a total of $163,440 (in 2010 dollars) on a child from birth through high school.
  • Similarly, parents with an income between $57,600 and $99,730 can expect to spend $226,920;
  • and a family earning more than $99,730 can expect to spend $377,040.

Housing accounts for 31% of the cost for raising a child for a family with a middle income.

The USDA first released this report in 1960 when a middle-income family could have expected to spend $25,230 to raise a child (or $185,856 in 2010 dollars).

Auto/Economy
6:25 pm
Thu June 9, 2011

Ford to boost production capacity for hybrids and plug-ins

Another American car company is betting that its U.S. customers want more hybrid cars. 

Ford Motor Company says it will hire more than 200 people to meet the increased demand for electrified cars.   

Earlier this year, General Motors  boosted production plans for the Volt by 30% for next year. 

Now, Ford plans a similar increase in its capacity to build hybrid and plug-in hybrid cars, including a new car called the C-Max. 

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Auto/Economy
3:57 pm
Thu June 9, 2011

Political Roundup: Auto industry bailout & Mitt Romney (audio)

Chrysler repaid $7.6 billion to the U. S. and Canadian governments back in May.

Recently, General Motors announced the addition of 2,500 jobs to its Hamtramck plant and plans to invest $130 million in a new data center in Warren, Michigan.

Michigan Radio's Jenn White helps us get a look at the political implications of the automotive industry’s progress.  She spoke with Susan Demas, political analyst for Michigan Information and Research Service and Ken Sikkema, former Republican state Senate Majority Leader and senior policy fellow at Public Sector Consultants.

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Changing Gears
3:17 pm
Thu June 9, 2011

Midwest manufacturing bouncing back

Midwest manufacturers heard good news about U.S. trade at a conference in Chicago.

A record number of exports are helping to shrink the trade deficit, and conference organizers are optimistic about the future of Midwest manufacturing.

Economist Bill Strauss, with the Federal Reserve Bank of Chicago, likes to use a tennis ball as an analogy to explain what’s going on in manufacturing.

"The sectors that fall the hardest tend to bounce back the strongest," said Strauss. "And we are definitely seeing that with regard to manufacturing where it was automotive and it was primary metals that fell the most during the downturn and they are coming back the strongest at this point."

This morning, Strauss and others told the  Chicago Council on Global Affairs they’re optimistic. They point to data like a 7 percent increase in manufacturing over the past 22 months.

Now for the bad news.

That doesn’t translate into more jobs, because manufacturers have gotten better at producing more with less people.

Economy
3:14 pm
Thu June 9, 2011

Gasoline stations accused of price fixing

Pain in the gas tank
(photo by Steve Carmody/Michigan Radio)

Five Detroit area gasoline station owners have been charged with price fixing.   The five gas stations are located in Madison Heights and are within 2 miles of each other. 

Michigan Attorney General Bill Schuette says an inside source claims the gas station operators agreed to keep their prices within a penny of one another on at least five days in February and early March of this year. 

Schuette says there is a difference between watching your competitors’ prices and colluding to keep everyone’s prices high. 

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Auto/Economy
2:24 pm
Thu June 9, 2011

It's small biz versus gardeners in Detroit's Cass Corridor

Canine to Five wants to expand into the lots adjacent to its current building, a site community gardeners have long beautified.
Sarah Hulett Michigan Radio

Liz Blondy opened Canine to Five – a dog daycare – on Cass Avenue six years ago. It’s a location few entrepreneurs have dared stake a claim, but Blondy has been successful. So successful, she wants to buy the two city-owned lots adjacent to her business, and expand. Trouble is, that’s the site of a beloved community garden that’s been there longer than her business.

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Auto/Economy
2:06 pm
Thu June 9, 2011

Was Mitt Romney wrong about the auto industry?

Republican presidential hopeful Mitt Romney has been criticized for his views on the auto bailouts.
Matthew Reichibach Flickr

Mitt Romney's visit to Michigan has sparked a debate over his views on the federal bailouts of the auto industry.

Democrats have been working to make political hay out of statements Romney made prior to, and after the restructuring of GM and Chrysler under Chapter 11 bankruptcy - restructuring that was made possible with loans from the U.S. and Canadian governments.

On his Facebook page, Congressman John Dingell said he "hopes Governor Romney has answers for Michigan's working families he abandoned two years ago when the American auto industry was in its worst crisis ever."

In 2008, Romney wrote an opinion piece in the New York Times titled "Let Detroit Go Bankrupt."

Two and half years later, with Chrysler and GM rising from the ashes, the title of his opinion piece makes it look as though he was wrong.

The Democratic Party put out this video attacking Republicans, including Romney, for their stance on the auto industry bailouts. The title of Romney's opinion piece is heavily featured in the video - (the video includes a soundtrack with dark, foreboding music for the Republicans, and happy music for the Democrats).

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Economy
1:01 am
Thu June 9, 2011

Home sale prices may be stabilizing (but not in Detroit)

But at what price?
(photo by Steve Carmody/Michigan Radio)

There's positive news about the nation's home prices, but that's not  the case in Detroit.  Data released by Clear Capital today suggests home sale prices nationally may be stabilizing.  Home prices lost ground through the winter months, and the latest data shows prices dropped by 2.3% in May.  

But the good news is prices being paid for repossessed homes nationally actually increased last month.   Foreclosed homes have been dragging down home sale prices, but that might be changing. 

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Ford, GM future bright
5:19 pm
Tue June 7, 2011

GM, Ford tell stakeholders that future is bright

Both Ford and General Motors today predicted they will expand their global presence, despite rising energy and commodity prices. 

GM held its first public stockholders meeting in Detroit – and Ford held its annual Investors Meeting in New York. 

GM CEO Dan Akerson told stockholders to consider the company a long-term investment, not short-term.  GM stock has lost a fair bit of value since the IPO in November.    

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Auto/Economy
1:01 pm
Tue June 7, 2011

Raising Gas Taxes

Yesterday, as the congressman from New York was going through his excruciating televised confession, someone called to ask me, “why don’t we have any good sex scandals in Michigan?”

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