WUOMFM

auto

Brian Teutsch / Flickr

O.k. - just because it's old doesn't mean it's a clunker.

There still could be plenty of good miles left on that engine.

A Southfield-based auto research firm says Americans are holding onto their cars and trucks for a longer period of time.

The average age has reached a record 10.8 years, according to Polk.

From the Associated Press:

The Polk research firm said Tuesday that the average age of a car last July was 11.1 years, while the truck average was 10.4.

Unemployment and the sour economy have caused people to put off buying cars and trucks.

Polk says the average vehicle age has been rising since 2008. But the firm says a sales rebound last year is likely to slow the aging rate.

Car companies sold 12.8 million vehicles in the U.S. last year, up from 11.6 million in 2010.

In 2010 the average vehicle on U.S. roads was 10.6 years old, up from 10 years in 2008.

The numbers for the Polk analysis come from national auto registration data.

The group estimates that as of July 2011, there were 240,504,646 cars and trucks on the road - down from a record of 242,081,704 cars and trucks on the road in July 2008.

The average age of vehicles on the road has climbed steadily in just about every year since 1995, when the average age was 8.4 years.

In its press release, Polk said the vehicle market is changing:

Polk expects this trend may change in the coming years as CUV and small SUV populations in the U.S. market have risen in 2010 and 2011 due to their continued success in the market. Additionally, the rebound in new vehicle sales in 2011 and for the next couple of years will most likely slow down the aging rate seen in the market over the past three years, according to Polk.

user fiatontheweb / creative commons

Chrysler has announced that it will add 1,250 more jobs in the city of Detroit. The company says it is "embracing its Detroit heritage and weaving it into the fiber of its future plans."

More from a company press release:

Chrysler Group LLC is strengthening its ties with the City of Detroit by adding a third crew and 1,100 new jobs at its Jefferson North Assembly Plant in Detroit (JNAP), expanding the Jeep Grand Cherokee lineup to include a diesel version for North America in the city and reaffirming plans to add 150 jobs by reopening its Conner Avenue Assembly Plant, also located in the Motor City for production of the ultimate American sports car – the SRT Viper.

“Our future, like the history of our brands, is interwoven with the City of Detroit,” said Chrysler Group Chairman and CEO Sergio Marchionne. “Detroit long has been home to renowned innovators and craftsmen. So it is in the Motor City, home of our industrial heritage and a resilient people, that we are entrusting the manufacture not only of the ultimate American sports car, the SRT Viper, and the Jeep Grand Cherokee – the most awarded SUV ever – but also a diesel version of the Jeep Grand Cherokee for North American markets.

user citizenofthedeep / creative commons

In her post on Forbes, auto writer Joann Muller says the idea that Chevy Volt batteries are unsafe is pure poppycock... balderdash... hooey... or as she puts it:

Hogwash. GM and its battery partner, LG Chem, have tortured that battery to death. They’ve abused it, mutilated it, jarred it, twisted it, and even punctured it with nails. There’s nothing wrong with the Volt or its battery that can’t be fixed with a couple of minor tweaks.

The minor tweaks are coming after a government safety test found that the batteries can catch fire seven days to several weeks after a crash. No fires were reported in real-world circumstances.

The company announced today that it will add parts to ensure the batteries will not catch fire.

Muller reports that the government has crashed a Volt with the new parts - no fire yet - but they'll give it another week to see if one starts up:

In a statement, NHTSA said  it crashed a Volt retrofitted with GM’s newly designed steel reinforcement device in a side-pole impact test on December 22. The results of that crash test showed no intrusion into the vehicle’s battery compartment, and no coolant leakage was apparent. As a precaution, NHTSA has monitored the crashed vehicle since the test and will continue to do so for one more week. But the agency said the preliminary results of the crash test indicate that GM’s fix should solve the problem.

rap-up.com

The front man for the pop music group the Black Eyed Peas, William James Adams, Jr., more commonly known as Will.I.Am, announced that he will start a car company in East Los Angeles, the neighborhood he grew up in.

"I invested my money in building my own vehicle, because I want to bring jobs to the ghetto that I come from, so why not invest like I invested in making a demo to start the Black Eyed Peas," said Adams.

He's not building a car from the ground up - more like modifying a car with existing Chrysler parts.

Here he is announcing the new venture, IAMAUTO, on the Tonight Show (apologies if you have to suffer through a commercial):

Jalopnik, the Gawker website of the automotive world, didn't take the announcement too well.

Here's what Matt Hardigree wrote in his post "Will.I.Am Launches Crappy Car Company":

I didn't watch Leno last night, so all of this is coming via one online report attached to this picture. I'd like to think it's a hoax but it's so bad it seems like it could credibly be a BEP byproduct.

The vehicle will be built using "OEM parts from Chrysler" with a Beats by Dr. Dre audio system. Given he drives a Chrysler 300 in his new video it's likely this is the basis for the car. Lord help us if it's a Chrysler 200.

Will.I.Am wants Leno to test drive the car when it comes out.

U.S. vehicle sales continue to rise

Jan 4, 2012

Consumers appear to be more confident in the economy, and it showed in the salesrooms of American car companies last year.  

Chrysler saw the biggest improvement, with sales up 26 percent over 2010.

The company says its Jeep Wrangler and Chrysler 200 sedan were the most popular of the 16 new or revamped models it rolled out.

Ford sales rose 11 percent, driven by demand for its trucks and SUVs.

General Motors reports a 14 percent increase for 2010 bolstered by its passenger car sales, including the new Cruze and Sonic.

Don Johnson is GM’s vice president for U.S. Sales Operations. He says the company predicts more growth next year, but is keeping an eye out for bumps in the road:

"Clearly we have to, as always, keep our eye on oil and gas prices, and on the political environment as we prepare for an election in November.”

Altogether, U.S. automakers sold nearly 6 million vehicles in 2011.

user danielctw / Flickr

TOKYO (AP) - Toyota says it aims to sell 8.48 million vehicles next year as it attempts a comeback from a year battered by the March disaster in Japan and the flooding in Thailand.

Toyota said in a release Thursday that its target for calendar 2012, which does not include group companies, would represent 20 percent growth from its global sales this year.

The manufacturer behind the Prius hybrid and Lexus luxury models said it plans to sell 8.95 million vehicles around the world in 2013.

IFCAR / wikimedia commons

Car companies revamp their models just about every year now. Honda recently announced that they'll revamp their Civic model mid-year. From the Associated Press:

Honda is revamping its Civic ahead of schedule because of intense competition for small-car buyers in the U.S.

The company is telling dealers it will have a revamped model by the end of next year, even though the 2012 Civic just hit showrooms over the summer.

The move is unprecedented for any carmaker because new models aren't usually revamped for at least three years.

Honda executives confirmed the Civic is being redone early. They say they're trying to stay ahead of the competition. There are more compact models available to consumers now.

But Honda might also be reacting to poor reviews of their latest Civic model.

The Detroit News reports that criticism new Civic "has shown a chink in the automaker's product line...":

A new Civic was introduced this summer and has been criticized for conservative styling, cheap materials in the interior and unimpressive driving characteristics. The car scored too low in Consumer Reports testing to be recommended.

user brother o'mara

Saab files for bankruptcy

Saab Automobile filed for bankruptcy in Sweden this morning. The announcement came after officials from General Motors rejected support for a proposal designed to save the company.

From a Saab press release:

After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded. The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.

Benton Harbor schools working to avoid an emergency manager

The Benton Harbor Area Schools are one of several entities in line for a possible state takeover by an emergency manager. State officials are expected to release findings of a preliminary review of the school system's finances this week.

Michigan Radio's Lindsey Smith reported on the cuts Benton Harbor Area Schools Superintendent Leonard Seawood, and members of the school board are proposing in hopes of avoiding a state-takeover:

He and the school board have agreed to close 2 schools and lay off 20 employees. Teachers have agreed to work for less money as the district and the union renegotiates a contract with concessions. Seawood is looking to get a 10-percent pay cut for teachers and increase their health care contributions to 20-percent.

The board agreed to demolish some old buildings and list others for sale. BHAS had already privatized bus drivers, custodians, grounds and maintenance and food service.

Protests at Lowe's in wake of "All-American Muslim" controversy

After Lowe's pulled its ad from TLC's reality show "All-American Muslim," protesters picketed outside a Lowe's store near Detroit this past Saturday.

From the Associated Press:

About 100 people gathered outside the store in Allen Park, a Detroit suburb adjacent to the city where "All-American Muslim" is filmed. Lowe's said this week that the TLC show had become a "lightning rod" for complaints, following an email campaign by a conservative Christian group.

Protesters including Christian clergy and lawmakers called for unity and held signs that read "Boycott Bigotry" and chanted "God Bless America, shame on Lowe's" during the rally, which was organized by a coalition of Christian, Muslim and civil rights groups.

Lowe's pulled the ads after it received pressure from the Florida Family Association. In a letter to advertisers, the group said the show was "attempting to manipulate Americans into ignoring the threat of jihad."

American politicians are vowing to fight new Chinese tariffs on large U.S. made cars and SUVs.    

In 2010, the U.S. won a Chinese tire-dumping complaint before the World Trade Organization. 

China has complained about U.S. poultry dumping.  The U.S. is investigating whether China subsidizes solar panels. 

Now the fight is over cars.  Republican Congressman Kevin Brady of Texas heads a trade subcommittee. 

Lindsey Smith / Michigan Radio

Of the 263 automotive plants closed across the country over the past three decades, nearly 49 percent have been repurposed, according to a Labor Department study released Thursday.

And the pace of redeveloping them has accelerated.

The New York Times reported today that, despite the fragile economy, developers have bought as many closed plants in the past three years – 32– as they did in the previous 26 years. Lower property values and a glut of plants on the market have contributed to the trend.

The repurposed plants have welcomed traditional manufacturers, and some of have been turned into housing developments, offices and research centers which has helped affected communities rediscover needed tax revenues, according to the study, which was authored by Ann Arbor, Mich.-based Center for Automotive Research.

Regional differences influenced the fate of plants following their closures. Sites in the South and along the East and West coasts fared the best in finding new users, according to The Times, which said all 14 former plants closed in California and Texas were reused. In Michigan, the state hardest hit by closures, 43 of 105 have been revitalized.

Overall, 135 of the 263 remain vacant, including 24 that have been closed for at least two decades.

“They’re not all going to repurposed,” Jay Williams, executive director of the Office of Recovery for Auto Communities and Workers, told the newspaper. “Not every community is going to find a pot of gold at the end of this pathway.”

user danielctw / Flickr

Toyota has sharply downgraded its expectations for what it will earn in the fiscal year that ends in March. Toyota expects a net profit of $2.3 billion for the fiscal year. That’s less than half the profit it predicted in August. The automaker is blaming a strong yen, which makes its vehicles less competitive on prices, outside of Japan. It’s also blaming recent heavy flooding in Thailand, which disrupted the distribution of auto parts. Toyota is on track to lose its title as the world's largest automaker this calendar year. It sank to No.

Lester Graham / Michigan Radio

It could be time to crack open a modestly-priced bottle of champagne.

Analysts say, like the recent good news about retail purchases, November auto sales "may have run at the fastest pace in more than two years."

From Bloomberg News:

Light-vehicle deliveries in November, to be released Thursday, may have run at a 13.4 million seasonally adjusted annual rate, the average of 14 analysts surveyed by Bloomberg. That would top the 12.3 million pace of a year earlier and October's 13.3 million rate, which was the best month since sales were helped by "cash for clunkers" in August 2009...

"November was a good retail environment for consumers overall," Erich Merkle, Ford's sales analyst, said . Consumers have been "sitting on the sidelines for quite some time. Black Friday provided that reason to get out there."

The head of Toyota's U.S. sales unit said there's a lot of pent up demand among consumers, "it's starting to push industry sales regardless of whether the economy is flat or going up."

Courtesy of Walter P. Reuther Library / Wayne State University

There may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1 in Flint, Michigan. It’s one of the factories sit-down strikers occupied in the 1930s. The plant made tanks during World War II. It was later closed, gutted and reborn as a GM design center. But GM abandoned the site after bankruptcy and the new occupants don’t make cars. They sell very expensive prescription drugs.

There’s one group of experts who can always tell you the history and significance of an old factory. They’re the guys at the bar across the street.

Cars, agriculture, tourism, it’s all fair game for people who want Michigan to tap into the Chinese market.

But what does that really mean and who really stands to benefit?

Governor Rick Snyder recently led a Michigan delegation to China.

He says strong economic ties between Michigan and what is now the world’s fastest growing economy are essential to Michigan’s economic growth.

Part 1

The Associated Press reports that an industrial contractor has bought a former General Motors facility in Pontiac with plans to use the 6-acre property for an expansion.

More from a Revitalizing Auto Communities Environmental Response (RACER) Trust press release:

An industrial contracting company has purchased the former GM ACG Penske facility on Oakland Avenue, with plans to expand its business at the six-acre property.

The RACER Trust sold the property, which includes a 32,000-square-foot building with multiple truck bays, to Lee Contracting, headquartered across the street from the ACG Penske facility, at 675 Oakland Ave.

Lee Contracting Founder and President Ed Lee said he plans to expand his more than 200-employee company, and the former ACG Penske property provides a perfect fit. “This was a great opportunity to build upon our business right here in Michigan,” he said. “Having this great site right across from our current facility provides us with a base to continue expanding the business.”

Lee Contracting is a single-source contractor specializing in complete turnkey solutions for industrial and manufacturing clients.

Terms of the sale were not disclosed.

screen grab from YouTube video

Officials from Toyota Motor Corporation say the company will start selling robots that help elderly and sick people. The Associated Press reports the company is "aiming for commercial products sometime after 2013."

From the Associated Press:

Toyota unveiled its ambitions for high-tech health care Tuesday, displaying experimental robots that the auto giant says can lift disabled patients from their hospital beds or help them walk.

The company aims to commercialize products such as its "independent walk assist" device sometime after 2013 – seeking to position itself in an industry with great potential in Japan, one of the world's most rapidly aging nations.

Prices and overseas sales plans are still undecided.

Several years ago, the company demonstrated a violin playing robot:

The 1.5-metre tall Violin-playing Robot, equipped with a total of 17 joints in each of its hands and arms, uses precise control and coordination to achieve human-like agility. It could also be used to assist with domestic duties or nursing and medical care.

Here's a video of Toyota's robot playing Pomp and Circumstance:

user socialisbetter / Flickr

Chrysler CEO Sergio Marchionne said the two-class pay system currently in place will have to be replaced with a single wage system in the next round of contract talks with the United Auto Workers.

The UAW and Chrysler just approved a 4-year contract with the two-class pay system in place, so the next opportunity to revise the system won't come until the next round of contract negotiations.

More from the Associated Press:

Negotiations for that contract start in 2015.

He says the current system creates two classes of workers. New workers in the bottom tier make about half as much money as longtime UAW members.

Marchionne didn't say how he would come up with one wage. But it's likely he'll try to reduce the pay of top-tier workers. General Motors and Ford could follow and pay could be cut for most of the UAW's 112,000 members.

UAW workers approved a four-year contract with Chrysler on Wednesday. It includes raises for bottom-tier workers.

More on what Marchionne said comes from Changing Gears reporter, Pete Bigelow:

The structure is, “not something that can go on for a long period of time,” he said on a conference call to discuss the company’s second-quarter earnings. Marchionne continued, saying, two-tiers is “not a viable structure on which to build our industrial footprint.”

Changing Gears reporter Kate Davidson provided some insights into the two-class pay system in a piece she produced last year for Changing Gears.

At the time, the starting rate for a "two-tier" worker was $14 an hour. The new contracts have pushed the starting rate for "two-tier" workers above $19 an hour.

Ricardo Giaviti / Flickr

On the heels of the approval of a four-year contract with the United Auto Workers comes news of a 3rd quarter profit from Chrysler.

The company reported a profit of $212 million for the 3rd quarter (July, August, and September). The company had reported a second quarter profit earlier this year ($181 million for the months of April, May, June).

From Chrysler's press release:

Chrysler Group LLC today reported preliminary net income of $212 million for the third quarter, compared with a net loss of $84 million a year ago, as the Company continues to increase sales and benefit from its alliance with Fiat S.p.A.

In the third quarter of 2011, net revenue was $13.1 billion, a 19 percent increase from the third quarter of 2010, driven by increased demand for Chrysler Group’s 16 all-new or significantly refreshed cars and trucks.

Chrysler CEO Sergio Marchionne said these profits show the company is back on track:

"In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009. And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler," said Marchionne.

The Detroit Free Press reports the company "predicted it would make between $200 million and $500 million this year."

Update, 6:30 pm:

Speaking with reporters on a late afternoon conference call, UAW President Bob King says its International Executive Board followed the union’s constitution, which gives skilled trades workers a separate right of ratification on skilled trades issues.

But King says the board investigated the reasons skilled trades workers voted the contract down. He says according to Facebook posts and leaflets, the main reasons were general economic ones affecting all workers, such as bonuses - and not issues specific to skilled trades workers.

"You want to protect the rights of the minority, but you can’t let the minority overrule the rights of the majority," King said.

King says with all three contracts with the Detroit automakers now finalized, the union will turn its attention to organizing efforts, and the 2012 elections.

Here's the breakout of the vote, according to the UAW:

General Motors officials said they will "create or retain" 418 jobs with a $325 million investment at a suburban Detroit transmission plant. The company says it will invest "in tools and equipment to support production of future electric vehicle components."

So which is it? Are they creating or retaining the jobs?

According this report in Crain's Detroit Business, 360 jobs will be created at the plant in Warren, Michigan as a result of the new UAW contract:

The company would not say how many of the 418 jobs will be new positions. But a summary of GM’s new four-year contract with the UAW said 360 jobs will be added at the plant for a new transmission that originally was to have been built in Mexico. The union said that the jobs were brought to the U.S. as part of the new contract.

At this point, GM is not revealing the timing for the project.

According to GM, 679 current employees at  the plant in Warren make transmissions for the Chevrolet Traverse, Buick Enclave, GMC Acadia, and the Chevrolet Malibu sedan.

From a GM press release:

“This investment in the future recognizes the excellent work force and operation of this plant,” said GM Manufacturing Manager Gerald Johnson. “While we aren’t sharing many details about this product, I can tell you that this investment demonstrates how GM, working with our UAW partners, continues to innovate and bring new electrification solutions to our customers.”

The 2.1 million square-foot plant, equivalent to the area of 15 city blocks, produced more than 338,000 transmissions in 2010.

“We are very proud of the membership of UAW Local 909 whose hard work and dedication to building quality products is why this new electric drive unit module is being built in the United States,” said Joe Ashton, UAW vice president representing the GM Department.  “These good paying, middle class jobs are very important for the State of Michigan and the Metro Detroit area.  It is the UAW’s goal to increase employment at GM and show the world that we can compete with anyone.”

 NEW YORK (AP) - Standard & Poor's is raising Ford Motor Co.'s credit rating two notches, saying a new contract with auto workers will allow for continued profits at the car maker's North American operations.

S&P said Friday it was upgrading Ford to "BB+" - one level below investment-grade - from "BB-."

Ford shares are up 45 cents, or 3.9 percent, to $12.15 in late-morning trading.

screen grab / fordahead.com

Update 1:03 p.m.

More details of the UAW-Ford agreement emerged after the UAW's press conference. UAW vice president Jimmy Settles reports winning a "a $6,000 settlement bonus for workers and $7,000 in inflation protection and competitive lump-sum payments over the term of the agreement."

Settles said workers will receive a payment averaging $3,700 this year.

Entry-level wages for new Ford workers are similar to the GM agreement. Their hourly pay was raised to $19.28 over the term of the agreement.

The union details where the investments in jobs and upgraded auto plants will occur in the U.S. saying that "jobs, investment and product guarantees in the tentative agreement include":

  • Flat Rock, Mich., second source for the next generation Fusion and next-generation Mustang.
  • Kansas City, Mo., in-source Transit Commercial Van from Europe.
  • Louisville, Ky., new unnamed vehicle in addition to 2012 Escape.
  • Wayne, Mich., in-source C-Max from Europe in both hybrid and plug-in hybrid models.
  • Avon Lake, Ohio, in-source medium truck and frame assembly from Mexico, along with in-source Motorhome Chassis.

The agreement with Ford was recommenced to the union's larger membership. Now all UAW members will vote for or against ratification this week.

10:27 a.m.

The agreement reached between Ford Motor Company and United Auto Worker representatives will lead to more jobs and investment in the U.S., according to the Detroit News.

Alisa Priddle of the Detroit News reports that many of those jobs will be in Michigan:

The figure includes 7,000 jobs previously announced as well as 5,000 additional jobs - the majority of them new and paying the lower, entry-level wage. Ford officials declined to break down the exact split between new and saved jobs. Some the jobs are from in-sourcing of work that has been previously done in other countries, including Mexico, Japan and China.

The UAW says that "proposed agreement also includes $16 billion of investment to produce new models and upgraded vehicles and components by 2015, of which, $6.3 billion will be invested directly into retooling and upgrading plants."

Ford's union workers are demanding more from Ford compared to the workers at GM and Chrysler.

Part of it has to do with bargaining from a position of power. Ford's union workers could strike should an agreement not be reached. Chrysler and GM workers do not have that option. Both Chrysler and GM took loans from the federal government's Troubled Asset Relief Program (TARP). A condition of those loans stipulated that its workers could not strike.

Brent Snavely reports in USA Today on the other reasons workers at Ford hope to achieve more in their negotiations with the company.

Entering contract talks, the UAW and Ford had an unresolved grievance, signed by 35,000 of the automaker's 40,600 workers, alleging that Ford had violated equity of sacrifice promise by restoring merit pay to white-collar workers but not to hourly workers.

But Ford workers say they have more reasons to expect more than UAW members at GM. Ford has made $14.2 billion in profits since the end of 2008. Ford CEO Alan Mulally and Executive Chairman Bill Ford each made $26.5 million in 2010, an amount that many workers find excessive since production workers have gone eight years without a base wage increase. That high executive pay has become a rallying point for discontents in Ford's factories.

Comparing previous contracts, Snavely reports that "Ford pays $58 an hour for wages and benefits, which is about $2 more per hour than GM and $9 an hour more than Chrysler were paying..."

More details of the tentative 4-year agreement between Ford and the UAW will be revealed at an 11:30 press conference. The contract will not be ratified until the UAW membership votes on it.

user brother o'mara / Flickr

Snyder wrapping up in Asia, highlights mining in the U.P. as one business opportunity

Governor Rick Snyder is wrapping up his trip in Asia with a visit to Seoul, South Korea. Michigan Radio's Tracy Samilton reports the governor is expected to sign an agreement with the Governor of  Gyeonggi Province. The agreement states that Michigan and the province will work together to establish trade.

Of his visit to China, Snyder said he was surprised by the positive response he received from businesses. "Many of them are seriously looking at Michigan already as a good place to do business," Snyder said. He pointed to mining copper or other deposits in the U.P. as one business opportunity for Chinese companies.

Welfare recipients file class action lawsuit against state

Governor Rick Snyder signed legislation that places tighter limits on cash assistance benefits to the poor. It puts a four-year lifetime cap on cash assistance payments from the state.

For some, that cap starts tomorrow (October 1).

Some recipients facing the cap have filed a class action lawsuit. From the Detroit News:

The lawsuit, filed against Human Services Director Maura Corrigan, said immediate intervention is needed to prevent more than 25,000 parents and children from losing benefits. The welfare recipients from Saginaw, Genesee and Macomb counties asked a federal judge to issue a temporary restraining order and preliminary injunction, according to the complaint filed in U.S. District Court in Detroit.

Gov. Rick Snyder signed the legislation Sept. 6 and said the state would offer exemptions to those with disabilities that prevent them from working.

Cost of new cars higher as a result of price fixing? The U.S. Department of Justice's Antitrust Division announced that several Japanese executives have plead guilty in a price-fixing scheme: 

Furukawa Electric Co. Ltd., a supplier of automotive wire harnesses and related products, headquartered in Tokyo, has agreed to plead guilty and to pay a $200 million fine for its role in a criminal price-fixing and bid-rigging conspiracy involving the sale of parts to automobile manufacturers...  Three executives, who are Japanese nationals, have also agreed to plead guilty and to serve prison time in the United States ranging from a year and a day to 18 months. 

DOJ officials say these are the first charges "as a result of its ongoing international cartel investigation of price fixing and bid rigging in the auto parts industry."

user alins / Flickr

DETROIT (AP) - General Motors Co. said Thursday it will install a center air bag on three of its models next year to better protect drivers and front-seat passengers.

The new bag inflates from the right side of the driver's seat and is designed to protect people when their vehicles are hit on the opposite side of where they are sitting. They serve as a cushion between a driver and front-seat passenger in a collision, GM said in a statement.

The bags will come standard on all Buick Enclave crossover vehicles starting in the 2013 model year, and they'll be on the Chevrolet Traverse and GMC Acadia crossovers that are equipped with
power seats. The 2013 models will come out in the fall of 2012. Crossovers are like SUVs but are more efficient because they're built on car underpinnings rather than trucks.

GM said in the statement that the center air bags, developed with parts supplier Takata Corp., are the first in the industry. It has plans to put them in more of its models, but the company would
not say which ones.

GM said it analyzed the National Highway Traffic Safety Administration's database of fatal auto accidents and found that crashes on the opposite side of where people sit accounted for 11 percent of deaths in non-rollover crashes from 2004 through 2009. The company said it checked crashes involving passengers wearing seat belts in vehicles from the 1999 model year or newer models.

The center air bag also is expected to help protect passengers in rollover crashes, the company said.

Shares of GM rose 11 cents to $20.52 in morning trading. They are down 38 percent from the November initial public offering price of $33 per share.

user santoshkrishnan / Flickr

Update - 3:07 p.m.

More thoughts on the newly ratified UAW-GM contract from Micky Maynard with Changing Gears:

General Motors gave some new details today on its just-ratified agreement with the United Auto Workers union. Among them: up to 25 percent of its workforce could be “two-tiers” — new hires at lower rates than veteran workers.

Changing Gears reporter Kate Davidson profiled two-tier workers last year. Right now, they’re only 4 percent of GM’s workforce, but the auto company clearly has plans for more of them.

There’s a caveat, though. In order for GM to hire more workers, auto sales have to pick up, company executives said during a conference call with Wall Street analysts. And it isn’t promising to hire the same number of workers as it sees sales go up: it will study its staffing needs and hire accordingly. 

The new contract runs through 2015 and caps the number of “two-tiers” at 25 percent at the end of the contract. It calls for the new hires to get a raise to nearly $20 an hour by 2015 (veteran workers are paid about $28 an hour now).

Other GM highlights:

  • The number of people working in its U.S. factories has dropped sharply. GM had 110,000 hourly production workers in 2005, according to its presentation. In 2008, the year before it filed for bankruptcy production, GM had 78,000 U.S. workers. Now, GM has just 49,000 hourly workers, or less than half what it had six years ago.
  • For the first time in 58 years, GM does not expect its pension expense to rise under the new contract. One reason is that newly hired workers will not be covered by GM’s traditional pension plan; they will receive a 401(k) retirement program instead.
  • GM says it still has 700 workers laid off from their jobs. They have first dibs on jobs at GM plants, including the workers it plans to hire when it reopens its factory in Spring Hill, Tenn. Once those workers have been offered the chance to come back, then GM will hire new workers, including temporaries.

Read more about the GM contract in The New York Times.

1:05 p.m.

More from Pete Bigelow of Changing Gears:

General Motors became the first domestic automaker to reach an official agreement on a new contract with members of the United Auto Workers union Wednesday afternoon.

The UAW said in a written release that 65 percent of production workers and 63 percent of skilled trade workers voted in favor of the agreement, which had been tentatively agreed upon Sept 16. A four-year contract provides a wage increase for entry-level workers, and goes into effect immediately.

The agreement would create 6,400 jobs in the United States, the release said.

“When it seems like everyone in America is getting cuts in benefits and paying higher co-pays and deductibles, we were able to maintain and improve on our current benefits,” said UAW vice president Joe Ashton.

GM CEO Dan Akerson is expected to hold a conference call with Wall Street analysts at 2 p.m.

12:37 p.m.

The deal is complete. UAW members officially ratified their contract with General Motors.

From the Detroit Free Press:

The UAW said today that its members have ratified a new four-year labor agreement with GM that gives workers a $5,000 signing bonus and is expected to preserve or add 6,400 U.S. jobs.

It is the first contract for 48,500 GM hourly workers since the automaker’s 2009 bankruptcy and restructuring.

The union said the vote was 65% in favor of the agreement among production workers, and 63% in favor among skilled-trades workers.

IFCAR / wikimedia commons

WASHINGTON (AP) - Federal regulators are investigating reports that the air bags on some Jeep Liberty sport utility vehicles are suddenly going off without a crash happening.

The National Highway Traffic Safety Administration says on its website that in four of seven confirmed cases, the front driver-side air bag went off, while in three, both the driver- and passenger-side air bags deployed.

The investigation involves an estimated 387,356 vehicles made during the 2002 and 2003 model years. Five of the seven reports involved injuries.

Some owners said they saw the air bag light come on, or intermittently come on, before the air bags went off.

Former Governor Jennifer Granholm’s book, “A Governor’s Story: The Fight for Jobs and America’s Economic Future,” is on bookstore shelves. It offers her perspective on eight years in the job she described as the toughest facing any governor in the U.S.

She battled budget shortfalls, Republicans in the Legislature, and skeptics of federal efforts to bail out the Detroit auto industry.

Granholm and her co-author, former First Gentleman Dan Mulhern, spoke with me about the book and her legacy.

Jennifer Granholm says she wrote “A Governor’s Story” to offer her  prescription for the nation’s economy to lower taxes and smaller government. She says it’s based on her experience, and an often trial-and-error road to an economic strategy that can work for the entire nation.

“We’ve got a story to tell. So for everybody who cares about how to crack the code to create advanced manufacturing jobs in the American economy, we’ve got the story to tell.”

user paul (dex) / Flickr

DETROIT (AP) - Moody's Investors Service is considering upgrading General Motors Co.'s credit ratings based on improvements in its finances and the expected ratification of a new contract
with the United Auto Workers union.

GM currently has a Ba2 corporate family rating and a Baa3 secured credit rating from Moody's. Both are several notches below investment grade. GM lost its investment-grade ratings in 2005,
when it was losing billions of dollars.

GM and the UAW reached a tentative agreement on a new contract last week. Workers are expected to finish voting on it by next Thursday.

Moody's said that after an initial review, it expects the contract would let GM remain competitive in North America. The deal would pay workers a $5,000 ratification bonus and profit-sharing
checks, but it helps GM lower costs by not giving annual raises to most workers and offering buyouts to clear out older, more expensive workers.

"A critical issue in our review is whether the new contract will preserve's GM's new-found  competitiveness and support its ability to contend with increasing volatility in the global economy," said Bruce Clark, a senior vice president at Moody's.

Moody's review also will consider GM's long-term commitment to the discipline it has adopted since its 2009 government bailout and bankruptcy. Moody's said it will look at whether GM will continue
to limit production and incentives, improve quality and limit acquisitions and shareholder returns in order to strengthen liquidity.

GM's stock fell 72 cents, or 3.4 percent, to $20.56 during a broader-market selloff. The Standard & Poor's 500 was down 3 percent in late morning trading.

Fiat USA

MILAN (AP) - The ratings agency Moody's has downgraded the credit rating Fiat SpA citing financial risks tied to the integration with Chrysler Group LLC.

Moody's on Wednesday downgraded the Italian automaker to Ba2 from Ba1.

The ratings agency said it expects integration of the two automakers will mean they will have "to support each other in the event of financial difficulty."

Fiat took an initial 20 percent stake in Chrysler in exchange for engine technology and management prowess. It currently holds a 53.5 percent share.

Moody's said it made the downgrade even though Fiat does not guarantee Chrysler's debt, and that the two companies' finances remain separate.

gmmedia.com

Update 2:31 pm:

This story was clarified at 2:00 pm to say that the $5,000 bonus was for ratification of the contract.

Pay raises for entry-level workers, five-thousand dollar bonuses for ratification, and better profit sharing. Those are among the highlights of the four-year contract local UAW leaders will recommend to General Motors’ 48,500 hourly workers.

UAW President Bob King says the union bargained a “great framework” for all three Detroit automakers.

    "They’re in different states of financial health, different states of debt. We’re hoping that this country bounces back and the European situation gets resolved – they all could be impacted by that. And we think we’ve got an agreement that helps us get through those periods of time, because we didn’t add many fixed costs to this agreement."    

The tentative contract promises to add or save 6,400 workers. Nine hundred of those are at Michigan plants.

It also provides for a $5,000 dollar ratification bonus, and raises for entry-level workers. UAW President Bob King says those workers will also see generous health care provisions – including free emergency room and urgent care visits.

"What worker being hired at any employer today starts out with the kind of health care plan that workers hiring into General Motors will have? What workers have unlimited doctor visits, $25 co-pay? Nobody."

The contract also calls for $10,000 dollar bonuses for eligible employees who retire in the next two years. Skilled tradesmen who retire between November First and the end of March would qualify for additional $65,000 bonuses.

Ratification is expected at the end of next week.

Michigan Radio's Sarah Hulett is at the United Auto Worker's press conference in Detroit today.

She's reporting on some details of the UAW's new contract with General Motors:

  • Entry level wages will be bumped up to $19.28/hr over the life of the contract plus a $5,000 ratification bonus.
  • Unlimited doctor appointments with $25 co-pay.
  • $10,000 bonus for eligible employees who retire within the next two years.
  • Additional $65,000 bonus for skilled trades who retire between November 1, 2011 and March 31, 2012.
  • Jobs will be added in Michigan at facilities in Warren, Saginaw and Romulus.

UAW President Bob King says the next target for negotiations has not yet been determined.

From the Associated Press:

Union leaders from General Motors factories around the country have endorsed a new four-year contract with the company.

They are recommending that GM's 48,500 factory workers approve the deal in votes during the next week.

The agreement reached Friday includes a $5,000 signing bonus and improved profit-sharing instead of hourly pay raises for most of the workers. About 2,400 entry-level workers will get raises. They now make $14 to $16 per hour, about half the pay of a longtime UAW worker.

Profit-sharing will be a minimum of $3,500 next year.

The union now will focus on negotiations with Chrysler, and Ford will be next.

Since Chrysler isn't making as much money as GM, workers there probably won't see as good of a deal.

 

Pages