auto industry

(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..

JillStein.org

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".

Pity the poor minivan. 

It hauls the family on vacations, never complaining.  

Carries the kids to school and soccer practice.  

Ever ready for a spontaneous trip to the hardware store, but does it get any respect? Nope. 

It gets called names. 

"Loser cruiser."

"Road slug."   

Well, if you make minivans, you can get mad.  Or like Toyota, you can embrace the situation with a tongue-in-cheek rap -- “The Swagger Wagon”  sung by an unhip, white, yuppie, suburban couple, with their two kids jammin' to the beat, next to a Sienna minivan.

"We rock the SE not the SUV, and it's true if I were you I'd be jealous of me, in the swagger wagon, yeah, the swagger wagon, I got the pride in my ride in the swagger wagon...."

Chrysler invented the minivan 27 years ago.  But after being wildly popular for years, the segment has lost customers, first to SUVS, then to crossovers. 

The people who design minivans are the first to admit they’re fighting an image problem.  And they’re doing something about it.  Chrysler has an optional all-black leather interior it nicknamed the “Man Van. “  All four of the biggest players – Honda, Chrysler, Toyota and Nissan – got minivan makeovers this year.  There’s more sculpting, more chrome, more creased sheet metal.  Even jaunty little fins.  Sage Marie is with Honda.    

"If you think of what makes a sports car compelling, it’s that its low and wide, that's what makes it emotionally exciting.  So from a styling standpoint we tried to do that with the Odyssey."

In your FACE, sports car owners.  And cue another tongue-in-cheek song about minivans, this time a Beach Boys-style parody by the Austin Lounge Lizards.

"Hey, little minivan, we're going to the grocery store!/She's got an automatic tranny with overdrive and the radio's tuned to Magic 95/ She gets 30 miles on a gallon of gas and  I can schlep all the girls to gymnastics class/Hey little minivan, we're goin' to the children's museum!"

Well, upping the cool factor may help.  But people really buy minivans for comfort,  convenience, and practicality.  The sliding doors, all that space.  And the seats. 

Minivan designers take fierce pride in their seating configurations.   Honda’s Odyssey has a second row middle seat you can slide really close to the front seat.  That puts the baby within arm’s reach of a parent.  For Chrysler, the bragging point is “Stow and Go seats,”  which, in a matter of a few seconds, can be neatly folded and pushed into a compartment in the floor.

Fold all the seats down and there’s enough room for a refrigerator or two.   But one company thinks some customers could be willing to downsize a little, especially as gas hovers around $4.00 a gallon.  Ford Motor Company’s new small people-mover, the C-Max, will seat seven.  It will have sliding doors.  But Ford’s Paul Anderson says it will get car-like fuel economy.  Just don’t call it a minivan.

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General Motors says it earned $510 million in the fourth quarter and $4.7 billion last year as it continued an impressive comeback from bankruptcy.

It was the company's first profitable year since 2004 and GM's best performance since making $6 billion in 1999 during the pickup truck and SUV boom.

GM says fourth-quarter net income was fueled by strong sales in China and the U.S. as the global auto market began to recover. GM says net income per share was 31 cents, including $400 million in charges mainly for preferred stock dividends and for buying preferred stock from the U.S. government.

The quarterly profit was less than the two previous quarters. GM says expenses were higher because it launched two new vehicles. Revenue for the quarter was $36.9 billion.

user santoshkrishnan / creative commons

General Motors is expected to formally announce its first ‘full-year profit’ since 2004 on Thursday. It was just two years ago General Motors had to seek bankruptcy protection.    Now, the automaker is expected to announce a 5 billion dollar profit for 2010.

Aaron Bragman is an automotive analyst with IHS Global Insight.  He gives a big part of the credit to the federal government for helping GM through bankruptcy. 

“I don’t think we’d be in the place where we’re at right now if the government had not intervened and actually funded their bankruptcy.  We’d be in a very different place.”

 Bragman says 2011 might be another good year for GM, because of rising gasoline prices. 

 “Chevy is bringing several small vehicles to market.  The new Spark is on the horizon.  The new (Sonic) is coming this year.   So we’re actually seeing a lot of these small cars coming…and now we’re seeing a market force that may actually drive people to go an buy them.”

Bragman says high gasoline prices may hurt Chrysler, because it doesn’t have as many high- mileage vehicles to offer car buyers.

December auto sales numbers are due tomorrow. It’s expected to be another good month for Detroit’s automakers. 

After watching auto sales dwindle in the depths of the recession, auto companies have seen a surge in buying demand in recent months.  December is expected to be the third straight month of strong domestic auto sales.

GM's Renaissance Center
Santosh Krishnan

GM is offering some of its employees a buyout this Christmas. The buyout offer will target at 8 assembly plants in Michigan. 

The Associated Press reports:

General Motors is offering buyouts to several thousand skilled trades workers at 14 plants around the U.S. 

The automaker will pay eligible workers $60,000 to retire with full benefits. Younger workers will have the option to take the $60,000 in exchange for giving up retiree health care and other benefits.   GM spokesman Chris Lee didn't know how many workers will get the offers.

Sarah Hulett / Michigan Radio

Dan Akerson, General Motors' CEO, told the Economic Club of Washington D.C. this morning that his company was humbled by its "near-death experience" during its 2009 bankruptcy.

GM to hire 1,000 in MI

Nov 30, 2010

General Motors has just announced that it will hire 1,000 engineers to work on battery technology in Michigan. The jobs include helping to develop batteries for hybrid, electric and hydrogen fuel cell vehicles. Most of the jobs will be at a technical center in Warren.

The Detroit Free Press reports the jobs come as GM:

…prepares to deliver the first Chevrolet Volt extended-range electric cars next month… GM plans to build 10,000 Volts by the end of 2011 and at least 45,000 in 2012. Initially, the Volt will sell in California, New York City, Washington, D.C., and Austin, Texas. Next spring, those markets will expand to include Michigan, New Jersey, Connecticut and the rest of New York and Texas. Within a year and a half, GM plans to sell the Volt nationwide.

GM Renaissance Center in Detroit.
John F. Martin / Creative Commons

 Next month’s General Motors’ big stock offering is expected to be much less than at one time predicted.

The GM Initial Public Offering is expected to hit the market around November 18th.

 When GM initially started talking about selling stock, the speculation was that November’s sale could be easily one of the largest initial public offerings in history.   Perhaps generating more than $16 billion.

Now some analysts are predicting the GM IPO will collect only about $6 billion. 

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