auto industry

GM share price up on better-than-expected earnings report

Oct 31, 2012
Andrea_44 / Flickr

GM shares were up Wednesday on the back of a stronger-than-expected third-quarter earnings report.

The automaker reported a net income of $1.48 billion, down just 14.5 percent from last year despite major losses in Europe.

As a result, GM stock had increased by 9.66 percent to $25.53 a share by 2:20 p.m.

Melissa Burden with the Detroit News has more:

Ford restructures in Europe, cuts 5,700 jobs

Oct 25, 2012

Ford is cutting 5,700 jobs in the U.K. and Belgium as it tries to return to profitability in Europe.

The company is expecting annual losses of over $1.5 billion in Europe.

Alisa Priddle of the Detroit Free Press has more:

The actions will cut capacity by 18% or 355,000 vehicles a year which should result in annual savings of $450 million to $500 million, the company said today.

The recent bankruptcy of battery company A123 has some questioning the profitability of electric cars like the Nissan Leaf.
user cliff1066 / flickr

Tuesday’s bankruptcy announcement by A123 Systems Inc. has many taking another look at the prospects of the electric car.

Conservative commentators have taken the opportunity to bash the Obama administration for its green energy investments.

In 2009, A123 received a $249 million grant from the Department of Energy.

Ken Lewenza, president of the Canadian Auto Workers.
Canadian Auto Workers union

The Canadian Auto Workers and GM announced a tentative contract Thursday night reports The Globe and Mail:

The deal extends by one year the life of a car-assembly plant in Oshawa, Ont., that was scheduled to close next year and adds a new shift of workers at a neighbouring plant. That means GM’s employment level in Canada should be roughly the same as it is today – or about 7,000 people – in 2016.

After reaching a tentative four-year deal with Ford on Monday, CAW officials have agreed on an indefinite extension of negotiations with Chrysler and GM.

Kate Wells

Vice President Joe Biden took the spotlight at Detroit’s Labor Day parade. It's one more sign that the auto bailout is shaping up as a central theme of the Obama-Biden campaign.

Last week Republican nominee Mitt Romney asked Americans if they were better off today than four years ago. Now comes part of the Democrats’ response: you sure are if you’re an auto worker.

User IFCAR / Wikimedia Commons

In mid-September, General Motors will temporarily close the Detroit-Hamtramck plant that makes the Chevrolet Volt for about a month.

user hotblack /

A credit reporting agency says the rate of overdue auto loans is at the lowest rate in more than ten years.

TransUnion says the rate of U.S. auto loan payments at least 60 days overdue fell in the second quarter to 0.33 percent. That's down about 25 percent from the same period last year and 8 percent from the first three months of this year.

Michigan is well below the national average, with 0.21 percent of borrowers delinquent on their car loans.

Brian Charles Watson / Wikimedia Commons

In this Saturday's Week in Review, Michigan Radio's Rina Miller speaks with Political Analyst Jack Lessenberry about auto earnings, the new state model for measuring K-12 academic achievement, and the primary election coming up on Tuesday.

RM: U.S. car companies announce their profit statements this week. How are things looking, Jack?

Steve Carmody/Michigan Radio

DEARBORN, Mich. (AP) - Ford Motor Co. says its net income fell by 57 percent to $1 billion in the second quarter as losses in Europe and Asia mounted.

The company lowered its full-year profit forecast. Ford still expects a strong operating profit, but it will be lower than 2011. Previously the company had expected to make about the same amount.

The four most famous words that Mitt Romney never wrote are, “Let Detroit Go Bankrupt.”

You read that right.  Mitt Romney never wrote those words.  They were the headline of a New York Times op-ed column that was authored by Romney and published in the newspaper on November 18, 2008.

I doubt that most people could accurately recite so much as a sentence of the op-ed that Governor Romney actually wrote in that column.  All that anybody remembers is the headline, which I have discovered was written by a New York Times editor, not Governor Romney.

There's a lot of excitement around electric vehicles. But so far sales have not been great.

Michigan Radio’s auto beat reporter Tracy Samilton decided to get some firsthand experience driving two electric vehicles - the Nissan Leaf and the Chevy Volt.

JW: So while we are calling them electric cars there are some fundamental differences in how they work.

TS: The Leaf is a pure electric vehicle it only runs on the battery and when it runs dry you have to recharge the battery to get more out of the car. And the Volt has a battery, and you run on that as an electric car for about 35 miles, and then after that it has a generator that runs on gasoline that provides more electricity so the car can keep running. So Chevy calls it an electric car with extended range.

JW: And after spending that week with the Leaf and the Volt, what did you think?

TS: Well, they’re two totally different cars and I had two totally different experiences as you can imagine. When I got the Volt, that week that they gave it to me I actually have a vacation arranged in Pennsylvania. Well because it has the extended range I could actually take the volt to the camp sight, some 400 and some miles away. And I plugged it into my cabin, which had electricity. You know most of this was done on the gasoline but I was able to get it recharged in my cabin.

When it comes to the Leaf, it’s a different kind of vehicle, I could not have done that.

The Beijing auto show runs this week in what is now the world's largest car market, and a crucial one for Detroit companies.

General Motors just announced it will open 600 more dealerships in China, where it sells more cars than it does in the U.S. Last week, Ford announced construction of its fourth Chinese assembly plant.

For longtime American auto executives in China, witnessing the shift in the global auto industry is dramatic.

(photo by Steve Carmody/Michigan Radio)

DETROIT (AP) — Ford Motor Co. says its credit rating has been restored to investment grade by the Fitch Ratings agency.

The automaker's debt has been at junk status since 2005. The company had to mortgage its factories and other assets to borrow billions in order to stay out of bankruptcy.

Ford issued this statement:   

“We are very pleased with today’s decision by Fitch. It is an important proof point of the continued progress the Ford team is making with our One Ford plan. Moving forward, we will continue to focus on driving profitable growth for all of our stakeholders. In fact, our One Ford plan includes achieving strong investment grade ratings and maintaining investment grade throughout an economic cycle."

Company spokesman Jay Cooney says Ford's assets will be released as collateral once a second ratings agency boosts the company's credit rating.

(photo by Steve Carmody/Michigan Radio)

 Lansing area business and civic leaders say they are going to work together to market hundreds of acres of vacant industrial land.

The capital city region has more than 400 acres of land left vacant by cuts in the auto industry.

Bob Trezise is the president of the Lansing Area Economic Partnership.  He says in the past the different local governments tried to develop the old industrial land separately..

Michigan’s republican  primary was last week, but that doesn’t mean presidential candidates are done courting voters.

A U.S. Green Party presidential hopeful, Jill Stein met with supporters in Michigan to tout her party’s platform.

Stein talked with a small group yesterday at a Amer's deli in Ann Arbor about what she calls her “Green New Deal.”

She says the Deal focuses on living wages and green technology.

Usually, journalists are sent press releases before political events, because the organizers want reporters to cover them. Monday, I got one about an event that was already over.

That would normally strike me as a trifle unusual, until I saw that it was from the Green Party of Michigan. They had a meeting last weekend in Bay City which they said was “charged with enthusiasm.“

What did they talk about? Well, among other things, quote “the unrest palpable among the lower echelons of society.” and the “once-dismissed voters who opted to eschew either,” major party nominee.

Richardo Giaviti / Flickr

President Barack Obama is expected to visit the Washington Auto Show on Tuesday.

Obama sometimes calls his decision to rescue General Motors and Chrysler a tough choice that saved jobs in an important industry.

The auto show will give him another forum to talk about GM and Chrysler, along with the administration's attention to manufacturers and efforts to boost fuel efficiency standards.

The president's advisers view the auto bailout as a potential point of contrast with Republican Mitt Romney, who opposed Obama's decision to pour billions of dollars into the companies.

During his State of the Union address last week, Obama said the auto industry has hired tens of thousands of workers, and he predicted the Detroit turnaround could take root elsewhere.

(photo by Steve Carmody/Michigan Radio)

 Environmentalists say significantly raising federal fuel economy standards will benefit Michigan’s auto industry.   

The Obama administration is considering more than doubling the current average fuel economy standard by 2025 to more than 50 miles per gallon. 

Three big, new investments by automakers in one Ohio city are raising hopes for a revived economy. Chrysler and General Motors have promised to spend more than $800 million on retooling and expanding their factories in Toledo.

These moves announced in recent months will create at least 1,400 jobs and keep thousands more. Parts suppliers also are expected to add more jobs in and around Toledo.

Chrysler announced plans on Wednesday to build a new Jeep SUV at its Toledo assembly plant while adding 1,100 jobs. It also hinted that more work could be coming.

That's why Toledo Mayor Mike Bell calls the news "the equivalent of a blood transfusion for our city."

(photo by Steve Carmody/Michigan Radio)

 In southeast Michigan today, President Obama said free trade agreements passed this week by Congress will lead to more jobs and more economic opportunities.   

Obama and South Korean president Lee Myung-bak toured GM’s Orion assembly plant.   Obama says the new South Korea trade agreement should boost U.S. auto sales in Asia. 

(photo by Steve Carmody/Michigan Radio)

 Congress is expected to vote on free trade agreements with South Korea, Columbia and Panama today.  The South Korean agreement is potentially one of the largest free trade deals in years.  

 Michigan Senator Debbie Stabenow says she opposed the agreement initially reached by the Bush Administration, but she says the trade pact now has special protections for the U.S. auto industry.  

Chrysler Group and the United Auto Workers have reached a deal on a new four-year contract that creates 2,100 new jobs.

The union says in a statement Wednesday that Chrysler will invest $4.5 billion in its plants under terms of the deal.

The union gave few other details.

But the agreement is expected to be similar to deals reached earlier with General Motors Co. and Ford Motor Co.

Workers at those companies gave up pay raises for most union members in exchange for profit-sharing payments.

The Chrysler deal covers 26,000 workers.

Most of us understand that the auto industry isn’t what it used to be. Especially, what we think of as the domestic auto industry. For one thing, it is much smaller, both in terms of market share and in number of people employed. Some time ago, the national media stopped using the term “the big three.“

Now, they mostly call them the “Detroit Three.” Technically, it would be more accurate to say, “the Detroit Two, and the Detroit-based subsidiary of an Italian firm.”  And one of the two, aka General Motors, sells more Buicks in China nowadays than in America.

Photo courtesy of Mosaic Youth Theatre

When the auto industry nearly collapsed a couple years ago, it had major ripple effect on the state’s arts and culture institutions. General Motors and Chrysler stopped contributing money to non-profit arts groups almost immediately. But now at least one of those auto companies is back in the giving game.

A look at how the ups and downs of the auto industry have affected Michigan's arts organizations.

The Detroit Three, aka the "Rocks of Gibraltar"

Up until a few years ago, it was hard to find an arts organization in southeast Michigan that didn’t rely on and receive generous amounts of money from the auto industry. We’re talking five or six-figure contributions.

Anne Parsons, president of the Detroit Symphony Orchestra, says for decades GM, Ford and Chrysler were the corporate giants of philanthropy:

ANNE PARSONS: "They had been the “Rocks of Gibraltar” if you will, certainly our corporate giving."

JENNIFER GUERRA: "...and now?"

ANNE PARSONS: "Well I think it’s very different. They’re absolutely engaged corporate leaders, but I certainly think the impulse to knock on the door of one of the auto giants to have your problems solved or challenges met, I think those days are over."

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.

User: Wigwam Jones / Flickr

Now that Chrysler paid off its debt six years ahead of schedule, Michigan congressman Gary Peters is inviting Senator John McCain to see the automotive industry recovery for himself. In 2009 McCain said he’d like to meet anyone who believed Chrysler would survive.

Peters says he wants McCain to see the progress Chrysler has made in two years.

Debbie Stabenow maintains a lead over Pete Hoekstra in a new Michigan poll.
Office of Senator Stabenow

Michigan U.S. Senator Debbie Stabenow says the future of the Michigan economy depends on a strong auto and manufacturing base, as well as agriculture:

“You can’t have an economy in this country unless you make things and grow things. And the fundamental part in making things really is the auto industry and manufacturing. ”

(photo by Steve Carmody/Michigan Radio)

Fiat CEO Sergio Marchionne says the Italian auto maker will increase its stake in Chrysler in the coming days.  Fiat currently controls about 25% of the Detroit auto company.  The Wall Street Journal reports Marchionne plans to add another 5%. 

(photo by Steve Carmody/Michigan Radio)

Fiat/Chrysler CEO Sergio Marchionne talked about an improving revenue picture ahead of a Fiat stockholders meeting today in Turin, Italy. He also says Fiat may soon increase its stake in Chrysler from 25% to 35% this year.   Fiat took over management of Chrysler 21 months ago, as the Detroit automaker emerged from bankruptcy protection.

Agenzia Giornalistica Italia reports that Marchionne told investors  that he is confident Fiat's 2011 goals will be met:

He explained, moreover, that in 2011, profits will amount to 37 billion(with the possibility of reaching more than 100 billion after 2014, due to the Chrysler integration effect), whereas the management outcome will range from 0.9 and 1.2 billion. Dividends policy will be confirmed (25% of net profits will go into dividends).

The Wall Street Journal quotes Marchionne as saying Fiat will increase this year its share of the European auto marker, where it saw a decline in 2010. 

"We expect a general improvement in trading conditions, with the exception of the passenger-car market in Europe, which will be negatively influenced by declines forecast for Italy and France...Nevertheless, we project that our market share will increase as a result of new model releases programmed for the second half".