Auto

Auto Recall
5:49 pm
Thu February 3, 2011

Ford recalls 365,000 F-150 pickup trucks

Ford Motor Company is recalling more than 350,000 pickup trucks
Toolshed4 Flickr

Ford Motor Company is recalling nearly 365,000 F-150 pickup trucks in Canada, the U.S. and Mexico. The problem is faulty door handles that could lead to the doors flying open in a crash.

The F-150 is the best-selling vehicle in the U.S. Most of the recalled trucks were made in the 2009 and 2010 model years.

The National Highway Traffic Safety Administration says a spring in the interior door handle can break, which means the door may not latch properly. So the door could potentially fling open if the truck is hit on the side.

Ford says there have been no crashes or injuries tied to the problem. Ford is also dealing with a large and expensive recall of nearly 600-000 older model Windstar minivans. That one is for corrosion in the axles that could cause the axles to break.

Economy
3:34 pm
Thu February 3, 2011

Report: How land speculators in Detroit make a buck

An old deli in Detroit. Buy cheap, sell high is the land speculator's motto.
Bob Jagendorf Flickr

"If you walked up to him on the street, you wouldn't know that he was a land baron. He's a guy in blue jeans walking around looking like he's working on somebody's building."

- Detroit city attorney Avery Williams talking about Detroit land speculator Michael Kelly.

Christine MacDonald of the Detroit News has a story on how land speculators make money in the city of Detroit.

MacDonald profiles one of the more prolific speculators, Michael Kelly.

The business model for a successful land speculator in Detroit is simple - buy a lot of land for a little money, then sit on the property until it sells for more than you paid for it.

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Auto/Economy
2:24 pm
Thu February 3, 2011

Auto workers get bonus checks

Ford's Rouge River truck plant
Jeff Wilcox Flickr

Detroit automakers are preparing to send bonuses to workers around the region. Even some temporary workers will get a share of growing profits.
Terri Houldieson is technically a temp worker, or a "long-term supplemental employee." But she’ll still get a piece of Ford’s $6.6 billion profit from last year.

Workers like Houldieson should receive, on average, about $2,000 each compared to the $5,000 for regular employees.

"We’ve all put work in and it just shows that they respect us too. Kind of like a pat on the back," says Houldieson.

Ford employs a couple thousand long term temps and most work at assembly plants in Chicago and the Twin Cities.

Houldieson said she’ll buy some new clothes for her two boys, and maybe some expensive shoes to protect her feet during those long hours at the plant.

Business
10:34 am
Thu February 3, 2011

Strong 4th quarter for Dow Chemical

Dow Chemical released its fourth quarter earnings report today and it was a good fourth quarter for the chemical giant. Its earnings nearly tripled. From the company's website:

  • The Company reported earnings of $0.37 per share, or $0.47 per share excluding certain items. This compares with earnings of $0.08 per share in the year-ago period, or $0.18 per share excluding certain items.
  • Sales of $13.8 billion rose 22 percent versus the same quarter last year.

The Wall Street Journal reports:

[Dow Chemical] has seen sales rebound in recent quarters on volume growth in basic chemicals, agriculture products and other units. Dow, whose chemicals are used in a wide range of products including diapers and products in the auto industry, has been restructuring to focus on higher-margin specialty products from commodities chemicals, which are more vulnerable to energy-price fluctuations.

Bloomberg News says the earnings are more than some analysts anticipated and come "amid increasing profit from caustic soda and plastics."

Auto/Economy
5:12 pm
Tue February 1, 2011

January car sales strong...but storm threatens February sales.

David Erickson Flickr

Most car companies had a better January than the same month last year, led by Chrysler and GM, which improved their sales 23%.

Ford sales improved 13%.  The company had a stronger January a year ago than Chrysler and GM, which were both struggling to rebuild inventories, so Ford's percentage improvement is not as great.

Ford also terminated its Mercury brand in December, and officials say the company is deliberately reducing sales to fleets like rental car companies.  A high volume of fleet sales can lower the residual value of a company's vehicles.

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Auto/Economy
2:31 pm
Tue February 1, 2011

Congressman Upton: power grid not ready for electric vehicles

Is the grid ready for electirc vehicles?
user citizenofthedeep Flickr

Michigan Congressman Fred Upton met with the Kalamazoo Regional Chamber of Commerce this morning during its "Legislative Connection Series" (tickets for the event went for $25 to $50).

The Kalamazoo Gazette reported that Upton talked about the future of energy in the country.

According to the report, Upton said gas prices might hit $4 a gallon by Memorial Day because of political instability and a moratorium on new off-shore drilling.

Higher gas prices, said Upton, will lead to more people buying up plug-in hybrid electric and fully electric cars. Something Upton feels the power grid is not ready for. From the article:

"We're going to need 30 to 40 percent more electricity by the end of the next decade, and we're not prepared," said Upton, Republican of St. Joseph.

Upton said he favors the development of more nuclear power plants and is going to look into why it takes so long to build a nuclear power plant in this country.

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Auto/Economy
6:14 pm
Mon January 31, 2011

General Motors gets back into Superbowl advertising

General Motors is jumping back into advertising during the Superbowl.  GM will likely spend $15,000,000  on ads focusing on its Chevrolet brand.

Many car companies like Ford Motor Company are using social media and Internet-based advertising more and more.  But analyst Ed Kim of AutoPacific says Superbowl ads still generate a lot more buzz.

"Any automaker advertising during the Superbowl is certainly going to have a whole lot of exposure to a whole lot of people all across America," says Kim.

Kim says GM's current marketing czar, Joel Ewanick, used to work for Hyundai, so he has experience using the Superbowl to improve a car company's image and sales.   At the peak of the recession, Hyundai began a highly successful campaign which allowed people to return Hyundai cars if they lost their jobs.  Kim says Hyundai used the campaign to good effect in its Superbowl ads.

GM did not advertise during the Superbowl last year and the year before.  The automaker does plan a social media campaign in conjunction with the Superbowl.  GM will release its Superbowl ads early to its Facebook fans.

Kim says that will generate some extra buzz for GM.

The ads will focus on the Chevrolet brand.   Chevy generates about 70% of GM's sales in the U.S.

Auto/Economy
6:04 pm
Mon January 31, 2011

Chrysler loses money in 2010 but gives performance bonuses anyway

Chrysler lost $650 million in 2010, primarily as a result of high interest payments on its government loans.

It's a far different result from the other automaker that received federal bailout loans, General Motors, which posted a healthy profit in 2010.  And GM paid back a significant portion of its loans from cash reserves and proceeds from its Initial Public Stock Offering.

But Chrysler is a much smaller company than GM, and its sales were still weak last year.  That means less revenue to lower the debt burden.   

Chrysler's CEO Sergio Marchionne says, "We’ve got more than a billion in interest costs a year, which are effectively chewing up the operating profits that we’ve got."

Marchionne  says he hopes to secure private loans to pay off the federal loans by the end of this year.

On the plus side, Chrysler has entered the new year with 16 new or significantly remodeled vehicles, just as U.S. auto sales are improving.

Despite not being able to turn a profit, Marchionne says the company met or exceeded all of its targets last year.  He says everyone pitched in to help Chrysler refresh its vehicle lineup in record time, and implement a new cost-saving manufacturing system. 

"I think it would been absolutely inexcusable on our part not to recognize what our people have done," he said during an earnings conference call with analysts and media.

The publication Automotive News reports Chrysler UAW workers will get payments of $750 each.

GM workers are expected to get actual profit-sharing checks.  GM releases its fourth quarter and full 2010 year results later in February.

Ford workers will get an average $5,000 each after the company posted its best profit in 11 years.

Read more
Economy
3:32 pm
Mon January 31, 2011

4 Michigan cities get some marketing help

Clare, Michigan is one of four communities chosen to receive downtown rebranding
Michigan Main Street Center

Four Michigan communities are changing their downtown identity with help from the Michigan Main Street Center.

The Center hopes to help each city market their unique characteristics to residents and future visitors.

Laura Krizov manages the program for the Michigan Main Street Center. She says the four cities to receive rebranding services - Boyne City, Clare, Grand Haven, and Niles -  have a downtown presence, but wanted to cultivate one that was more readily identifiable with their community.

Six communities applied for the program, but Krizov said the four were chosen because they demonstrated the need and the ability to benefit from the program:

"We feel that they will be able to pull this off and in the end, we’ll be able to give them a great brand, telling the community who they are and what they want to do."

Each community will get a logo and website that is meant to help them build a cohesive brand.

-Bridget Bodnar, Michigan Radio Newsroom

Auto/Economy
10:36 pm
Sun January 30, 2011

Deals help auto sales in January

Analysts say U.S. car sales were at least 15% better in January than the same month last year.  Part of the reason is the deals.

Credit is more available than it was last year, and many car makers are offering low to 0% financing on last year’s models, as they try to clear room for the new models on the way. 

George Augustaitis is an analyst with IHS Automotive.  He says those new cars could keep the momentum going as the year progresses.

Ford is introducing the new Focus, Hyundai will launch the new Elantra , and Honda has a new Civic on the way.

"This is really going to drive buyers back," says Augustaitis.  "And a lot of these vehicles already have a large following."

Read more
Economy
10:31 pm
Sun January 30, 2011

More problems at Borders Books

Ann Arbor-based Borders Books announced Sunday that it would be delaying January payments to its landlords, vendors and others. Borders also delayed payments in December.  

Borders says the move is intended to ‘protect liquidity’. Borders has been losing money for years, as book buyers have increasingly turned to the internet.

Michael Norris is the senior trade book analyst with Simba Information. He says there is one problem Borders executives must find a solution for. 

They need to answer the question 'Why should I shop at Borders? They should tattoo that question backward on their forehead so they can see every time they look into the mirror every morning.

Borders lined up a half billion dollars in financing last week to help the book seller stay afloat. But the company may still be headed toward bankruptcy protection

Entrepreneurship
11:39 am
Sun January 30, 2011

New event offering $5,000 a month to put good ideas to work

5x5night.com

Entrepreneurs will get a unique opportunity to get their business idea off the ground in Grand Rapids. During “5x5” 5 people will have 5 minutes to present their ideas on anything from art to education to business. 5 judges will decide which of the ideas should be awarded up to $5,000.

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Economy
12:42 pm
Fri January 28, 2011

Books without Borders? Authors ponder future of bookselling

Ann Arbor-based Borders Books may be able to stave off bankruptcy, thanks to a new financing deal announced this week .     Professional writers are waiting to see what the company’s next chapter will bring. 

Read more
Economy
9:00 am
Fri January 28, 2011

Borders Books gets lifeline (but will it be enough?)

Courtesy Creative Commons

Borders Books has been struggling to survive. 

Yesterday, the Ann Arbor bookseller announced it had lined up $550 million dollars in financing to stay afloat.

The deal is contingent on Borders reaching a deal with book publishers. It's been reported that the company set a February 1st deadline for the publishers to agree to take up to a third of the booksellers debt. A Borders spokeswoman would only say the company has not stated a specific date. 

The deal with GE Capital announced Thursday could help. Or it may not. The Wall Street Journal is reporting that Borders is still looking for money to finance the company through a possible bankruptcy filing.

Auto Earnings
7:23 am
Fri January 28, 2011

Ford announces highest profit in more than a decade

Ford announced this morning that it had made its highest profit in more than a decade
Tooshed4 Flickr

Ford Motor Company announced this morning that it had its best annual performance in more than a decade. Ford earned $6.6 billion last year as sales jumped by 20 percent. Revenues rose 3 percent to almost $121 billion.


UPDATED:  11:40 a.m.  Ford CEO Alan Mulally says salaried and hourly workers will share in the good news in the form of profit-sharing checks.  Hourly workers will get average payments of $5,000.



"To be able to share the wonderful work, the wonderful success of this, with everybody's that's worked on quality, on fuel efficiency, on safety -- it's a tremendous day for all of us," says Mulally.


Ford made $7.2 billion dollars in 1999, but it sold nearly twice the number of vehicles to get that result compared to 2010.  Mulally says the company is benefiting from what he calls a "home improvement loan" of $23-billion, taken out in 2006, that financed the company's effort to slash operating costs and improve quality.



"You think about back then (1999) and now, this is a complete transformation of Ford," he says.


Mulally says the biggest challenge this year is not specifically a Ford problem.  He says the U.S. needs to exercise sound fiscal policy so the economy continues to recover.


Ford Motor Company is forecasting higher profits in 2011 than 2010. 


The company's stock dropped Friday morning, however, as investors reacted to Ford's fourth quarter results.  The company's profits were lower than expected because of costs associated with restructuring some debt.


Mulally says the company has made swift progress in paying off that "home improvement loan."  Debt was reduced 43% in 2010.


May 3rd Election
7:28 pm
Thu January 27, 2011

Grand Rapids area to vote on increasing public transportation funding

Students board The Rapid's DASH to the Hill bus.
Lindsey Smith Michigan Radio

Public transportation around Grand Rapids could get a huge boost if voters in the city and 5 suburbs approve a mileage increase set to appear on the ballot in May. If the levy passes, The Rapid CEO Peter Varga says it would cost the owner of a $100,000 home $76 a year.

Read more
Auto/Economy
4:28 pm
Thu January 27, 2011

Levin calls for more hybrid car tax credits

Congressman Sander Levin
http://www.house.gov/levin/

A Michigan Congressman says U.S. automakers need more help to sell large numbers of electric and hybrid vehicles.

The Obama administration has set a goal of one million plug-in hybrid vehicles on the road by 2015.

There’s already a federal tax credit of $7,500 to help defray the cost of buying a hybrid or electric car.   But there’s a cap on how many of the credits are available to each automaker. 

Read more
Auto/Economy
2:24 pm
Thu January 27, 2011

General Motors' financial health improves

General Motors is saying thanks but no thanks to more federal loans.  The Detroit automaker is withdrawing its application for more than 14-billion dollars in low-cost loans from the Department of Energy.   

Many car companies including Ford have received DOE loans, which are intended to help auto companies revamp factories to build more fuel-efficient cars and trucks.  GM applied for loans through the program shortly after emerging from bankruptcy.  But the automaker says its financial situation has improved since then. 

Gerry Meyers is a professor at the University of Michigan Ross School of Business. He's also a former Chairman of American Motors Corporation.  He says taking the loans would have given GM more debt.   And the automaker told prospective IPO investors late last year that it would avoid going deeply into debt.

It’s quite clear that they’re trying to clean up that balance sheet and also get the government out of the business, so it’s just another step in that direction and I think it’s wise.

Meyers says the next step to GM’s recovery is to stop the revolving door at the top executive level.  The company has had four CEOs in two years.   

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Auto/Economy
1:07 pm
Thu January 27, 2011

GM plans to "go green" without government help

GM says it won't apply for low-interest government loans.
user santoshkrishnan wikimedia commons

The new GM has been turning a corner of late. It posted three profitable quarters last year:

  • $865 million in the first quarter
  • $1.6 billion in the second quarter
  • $2.1 billion in the third quarter

(still waiting on fourth quarter numbers)

Now, in another sign of financial health, the auto company says it will no longer seek government loans to help it modernize factories:

From the Associated Press:

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Economy
12:48 pm
Thu January 27, 2011

Michigan cities rank low on list of home foreclosure hot spots

No Michigan housing markets rank among the 25 worst for home foreclosures in a new national survey.    But, that may change by the end of this year.  

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