Chrysler Group / Flickr

The head of Chrysler and Fiat says the U.S. auto industry can meet tough new fuel efficiency requirements.  The tentative proposal will more than double the miles per gallon average for cars by the year 2025.

Federal officials, automakers, and the UAW agreed to raise the average miles per gallon to 54-and-a-half within the next 14 years. Right now, the average is 25 miles per gallon.  Critics say the new goal may not be technically feasible.  But Chrysler and Fiat CEO Sergio Marchionne thinks it is:

"The powertrain guys...  are an incredible resource, an incredible talent.  Let them do their job."

But Marchionne is a skeptic when it comes to the role electric cars will play in meeting the new requirement.  He thinks it will be easier and cheaper to dramatically improve gasoline engines and transmissions.


The United Auto Workers formally kicked off negotiations today with Detroit automakers.

Current UAW contracts with Chrysler, GM, and Ford expire in mid-September.

Michigan Radio's Sarah Cwiek reports that Chrysler Group LLC management and the UAW emphasized unity at the press event today:

Scott Garberding is a Senior Vice President for Chrysler. He says the company and the UAW worked together to get Chrysler through bankruptcy. Garberding says it’s important for the new contract to recognize the sacrifices Chrysler workers have made.

"And at the same time, establishing a legacy for our organization to ensure that we remain competitive long-term. And I can’t think of a better team that could collectively come together and craft that type of arrangement. "

Last week, UAW President Bob King said he wanted workers to see the benefits of increased profit sharing. The UAW is also expected to seek wage increases for entry-level workers, and job guarantees. After huge layoffs, King said remaining workers want to count on their jobs:

“They want stability,” he said. “They want to know they’ll be working next week and next year, and that they will be able to send their kids to college.”

Talks are expected to take at least a month, and if things don't go well in negotiations with Chrysler and GM, the UAW is compelled to enter into binding arbitration. The UAW cannot strike under the terms of the government bailouts:

This year, for the first time, the UAW is bound by an agreement that it reached with Chrysler and General Motors in 2009 that requires the two sides to enter into binding arbitration if they reach an impasse.

King said Chrysler and the UAW have formed a committee to set up the ground rules for arbitration, even though he said that is a last resort.

“If arbitration happens … then I would say we haven’t done our job,” King said.

The UAW can, however, strike against Ford Motor Company. Analysts are curious to see if UAW negotiators are able to secure better terms with Ford.

Ricardo Giaviti / Flickr

WASHINGTON (AP) - The Treasury Department says it has ended its investment in Chrysler LLC after Italian automaker Fiat SpA purchased the U.S. government's remaining holdings in the auto company.

Fiat paid $560 million to the Treasury Department for the government's 98,000 shares. Fiat has run the company since it emerged from bankruptcy protection in June 2009.

Treasury provided a total of $12.5 billion to Chrysler and its financing arm after the recession hampered auto sales and sent Chrysler and General Motors to the brink of collapse. The funds came from the government's $700 billion bank bailout fund.

Since then, $11.2 billion of the assistance has been repaid, Treasury says. Chrysler repaid $5.1 billion in loans from the government in May. Treasury said it likely won't recover the remaining $1.3 billion.

Ford Motor Company

DETROIT (AP) - The head of the United Auto Workers union says if his members agree to profit-sharing instead of pay raises from Detroit's automakers, the companies will have to write bigger checks than they do now.

UAW workers at General Motors got $4,300 profit-sharing checks this year, while Ford paid out $5,000 and Chrysler paid $750.

President Bob King has told The Associated Press that profit-sharing or other flexible methods of compensation will be discussed when the union formally begins contract talks with the Big Three next week.

Yet King, who has preached cooperation with the companies over confrontation, said that while he wants workers to be fairly compensated, he also wants deals that keep down the companies' fixed costs so they are competitive with foreign-based automakers.

WASHINGTON (AP) - Counties in the Midwest and South that have a high number of autoworkers have seen a jump in economic stress levels, according to an Associated Press monthly analysis.

But Midwestern states also have seen the largest decreases in economic stress since the recession ended. That's primarily because of growth in manufacturing. Ohio has added 7,600 factory jobs in the past year.

The AP's Stress index calculates a score from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score signifies more economic stress.

Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. By that standard, about a quarter of the nation's 3,141 counties were stressed in May, roughly the same as in April.

Severstal North America

DETROIT (AP) - The U.S. Energy Department says it has loaned $730 million to the North American arm of one of Russia's largest steel companies to modernize its Detroit-area plant.

The government and Severstal North America on Wednesday officially announced plans to upgrade and expand facilities in Dearborn that make steel for the auto industry. They say the project will employ around 2,500 construction workers and create 260 factory jobs.

The money comes from a $25 billion low-interest loan program created in 2007 to help car companies retool older factories to build green cars.

Severstal bought the Dearborn factory in 2004.

Google Maps and the U.S. Department of Energy

One group in west Michigan wants to encourage more people to buy electric cars by building more charging stations.

From the Grand Rapids Press:

The West Michigan Strategic Alliance is proposing the development of at least 4,000 charging stations across eight counties. Alliance President Greg Northrup is seeking approval from county boards in Kent, Ottawa and Muskegon for the project, which would be financed through the sale of bonds and be repaid over a 10-year period.

“We’ve got $3 billion invested in battery projects in West Michigan,” Northrup said. “Why shouldn’t we have the infrastructure to go with it?”

So those are 4,000 proposed electric charging stations.

How can you find charging stations that are online now?

Google and the U.S. Department of Energy to the rescue. You can enter your address on the DOE's website to find alternative fueling stations near you.

Fast Company says "eventually, this Google/DOE partnership will serve as the primary EV charging station data source for GPS and mapping systems (like the one that may be in your car already)."

Midland, Mich. (AP) - Dow Chemical Co. and Japanese chemical company Ube Industries Ltd. said Wednesday they've agreed to form a joint venture to manufacture electrolytes for lithium-ion batteries
which are increasingly being used in cars among other things.

The 50-50 joint venture, named Advanced Electrolyte Technologies LLC, is expected to be finalized later this year pending regulatory approval.

Dow said the joint venture will allow it to expand its alternative energy offerings.

"The growing demand for alternative energy production and energy storage systems places technologies such as advanced batteries for electric/hybrid vehicles and power generation at the very center of the global mega-trends," said Heinz Haller, Dow executive vice president and chief commercial officer.

The joint venture's first manufacturing facility is expected to be built at Dow's home base in Midland, Mich. for startup next year.

user anthonares / Flickr

TOKYO (AP) - Toyota Motor Corp. says it will recall 82,200 hybrid vehicles in the U.S. due to computer boards with possibly faulty wiring.

The company's U.S. subsidiary said Wednesday it will conduct a safety recall that involves some Highlander and Lexus brand hybrid SUVs from its 2006 and 2007 lines.

Toyota said the recall covers just the vehicles sold in the U.S., and other models are not affected.

The car giant said in a press release that soldering in a control board in the vehicles' hybrid system is inadequate and could be damaged during high-load driving.

Toyota was recovering from recalls that eventually reached 14 million vehicles worldwide, when it was hit by production disruptions from parts shortages due to the massive earthquake that struck Japan in March.

According to the Detroit Free Press, a spokesperson for an auto group is pushing back on a 56 miles-per-gallon efficiency requirement that the White House said may go into effect for 2025.

From the Detroit Free Press:

While Detroit’s automakers themselves are staying publicly mum so far on what they think of a 56-miles-per-gallon fuel economy target by 2025 floated by the White House last week, other interest groups are already weighing in.

Bailey Wood, a spokesman for the National Association of Auto Dealers, said that requiring an average of 56 m.p.g. for cars and light trucks would “mean a tremendous shift in the types of vehicles consumers would be able to buy,” and could price some consumers out of the market for smaller cars.

“To meet that goal, 55% of market share would be hybrid and plug-in electric vehicles, according to the Center for Automotive Research,” Wood said in a statement, noting that such vehicles made up less than 3% of what U.S. consumers bought last year.

-Brian Short, Michigan Radio Newsroom

Greg Mason / Flickr

Chrysler says it will invest $114 million in the Trenton North engine plant and save about 268 jobs.

From Reuters:

Chrysler will repurpose about one-fifth, or 400,000-square feet, of the Trenton North engine plant to make parts for the Pentastar engine made at the Trenton South plant.

The plant was closed last month, but the need for these parts has increased as Chrysler replaces seven V-6 engines with the new Pentastar V-6 engine, Brian Harlow, head of powertrain manufacturing said in a statement.

"This investment has also given Trenton North, which has been building engines for nearly 60 years, a new lease on life," Harlow said.

The city of Trenton gave Chrysler some tax breaks in exchange for investing in and reopening part of the Trenton North engine plant.

Crain's Detroit Business reports the tax break as a "50 percent tax abatement for Chrysler for 12 years."

Trenton Mayor, Gerald Brown, said he's happy Chrysler has given the plant a new lease on life. From the Detroit News:

Trenton Mayor Gerald Brown said the city is thrilled Chrysler is reopening the plant...

On Monday, the Trenton City Council approved a tax break for the $114 million project.

"My administration worked very hard to come to an agreement that will provide the city with long-term stability at the site, additional jobs and tax base improvements while further enhancing the relationship that Trenton and Chrysler have enjoyed since the 1950s. Trenton truly is Chrysler Town and we are proud of it," Brown said.


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

From the Associated Press:

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

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

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

Reuters reports that Honda released the numbers later than usual:

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

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

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

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

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

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


When it comes to fuel economy, Roger Clark says, "how you drive matters."

Roger is a fuel economy expert with Chevrolet. He has a few tips for getting more miles per gallon without buying a new car. We tested his driving style against Monte Doran’s, also with Chevy. Roger and Monte drove matching Chevy Cruzes and took identical routes. Both did a little highway and a little city driving on a weekday around 5pm. Roger followed his own fuel saving tips and Monte did exactly the opposite.

Ford Motor Company

In the car world, engine size matters. It used to be the bigger the engine the more appeal it had (more power, and more vrooom!).

But now Ford is going small by announcing the "the smallest engine Ford has ever built."

Ford says the fuel-efficient 1.0-liter engine is a "three cylinder engine that delivers the same performance as a four-cylinder."

Ford says the engine is still being tweaked and is not in cars yet.

Emilio Labrador / Flickr

Late payments on auto loans hit their lowest level since 1999 in the first quarter, providing more data that shows consumers have gotten a handle on their debt.

TransUnion said the rate of payments that are 60 days or more past due reached its lowest point since the credit reporting agency began tracking the figure, dropping to 0.49 percent.

The improvement from 0.66 percent a year ago reflects the stronger auto sales market, which is being fed by higher consumer confidence and low interest rates, says Peter Turek of TransUnion. The number of auto loans started during the quarter rose 22 percent from the prior year.

TransUnion expects late payments to continue to drop this year.

Steve Carmody

It's your turn to chime in on the auto bailouts - online or on-air.

Today, in the second hour of the public radio call-in program Talk of the Nation, host Neal Conan will ask the question "was the auto industry bail out worth it?"

It will air on Michigan Radio today at 3 p.m.

Here's how the show's producers phrase the question:

When taxpayers bailed out GM and Chrysler, many complained it was waste of money, and not the right role of government. Now, Chrysler pays off the last of its $10 billion loan with interest. After GM paid down billions that it borrowed from the US treasury. The auto industry bail out-- was it worth it? Next Talk of the Nation from NPR News.

You can call the program at (800) 989-8255 - and here's the inside scoop on how best to get on the air. You can also send the show's producers comments or questions online.

Michigan Radio's Sarah Hulett reported that U.S. Treasury Secretary Timothy Geithner recently said the the government will most likely lose money on its investment in the domestic auto industry, but making money on the investments was never the main goal - Geithner said they had two objectives:

"One is to get these companies back in private hands as quickly as we can, it makes no sense for the government to be in there a day longer than is necessary, but we also want to recover as much of the taxpayers’ money as possible."

So what do you think? Were the bailouts worth it?

It's probably the second sticker you look at (the first being the price sticker).

The new fuel economy and environment labels will take effect with model year 2013 cars and trucks. The EPA is calling the new labels "the most dramatic overhaul to fuel economy labels since the program began more than 30 years ago."

The new labels show more information about fuel economy, such as predicted annual fuel costs (based on $3.70 per gallon), and how much in fuel you would save compared to an average car (an "average" car's mpg is set at 22 mpg). The labels also give a greenhouse gas rating, and a smog rating.

And it wouldn't be an updated label without a way to load it into your smarty-pants phone. Here's a video from the EPA on how that works:

user paul (dex) / Flickr

LANSING, Mich. (AP) - General Motors Co. will add 2,500 jobs at a Detroit-area factory that now makes electric cars, investing $69 million so the plant can make two new Chevrolet sedans.

The factory, which straddles the border between Detroit and the small enclave of Hamtramck, now makes the Chevrolet Volt and its European counterpart, the Opel Ampera.

But GM announced on Wednesday that it will upgrade the factory so that it can run around the clock making the new Malibu midsize car and a revamped version of the aging Impala large sedan.

About 1,200 of the jobs will be new hires, since GM still has to recall about 1,300 laid-off workers in the U.S.

But in Michigan, which has among the highest unemployment rates in the nation, 1,200 new jobs is big news.

GM announced on May 10 that it would create or keep about 4,000 jobs by investing $2 billion in 17 factories in eight states.

The Detroit-Hamtramck announcement adds to previous expansion announcements in Bowling Green, Ky.; Toledo, Ohio; and Flint and Bay City, Mich.

"Filling this plant with new work is very satisfying because GM is dedicated to helping rebuild this city," Mark Reuss, the company's North American president, said in a statement.

GM said last week it would shut the plant down for four weeks starting in June, reconfiguring it to increase Volt and Ampera production from 16,000 cars per year to 60,000 next year in order to meet strong demand.

The shutdown also will let GM add equipment to build the 2013 Malibu midsize sedan at the plant starting next year. The car also will be built in Kansas City, Kansas.

In addition, GM said it will build a long-overdue new version of the Impala at the Detroit-Hamtramck plant.

GM will stop producing two other big cars at the factory, the Cadillac DTS and Buick Lucerne, later this year.

user socialisbetter / Flickr

Chrysler got itself out from under the higher interest loans from the U.S. and Canadian governments today - sooner than it had planned to.

Company officials are celebrating today at Chrysler's Sterling Heights assembly plant.

From the Detroit News:

The automaker has repaid $5.1 billion in loans, as well as $1.8 billion in interest and other fees, releasing Chrysler from all monetary commitments to the governments less than two years after the bailouts kept them in business. Chrysler went to the capital market for lower-interest financing to get out from under the government loans that carried interest rates as high as 20 percent. The refinancing — which is much like refinancing a home mortgage — will save more than $300 million annually.

In a statement, Treasury Secretary Timothy Geithner said: 

Chrysler’s early repayment of its outstanding TARP loans is an important step in the turnaround of this company and the resurgence of the auto industry. Because President Obama made the tough decision to stand behind and restructure the auto industry, America’s automakers are growing stronger, making new investments, and creating new jobs today throughout our nation’s industrial heartland."

The U.S. Treasury gave a total of $12.5 billion to Chrysler under TARP’s Automotive Industry Financing Program. After today's payment, Treasury officials say "Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interest, and canceled commitments." The U.S. Treasury continues to hold a 6.6 percent stake in Chrysler. Those shares could be sold when Chrysler's stock goes public or if the Treasury decides to sell its shares to another investor. In their statement today, Treasury officials said the government is "unlikely to fully recover its remaining outstanding investment of $1.9 billion in Chrysler."

user Ford APA / Flickr

Ford Motor Company plans to expand one of its engine plants in India.

From the Associated Press:

Ford Motor Co. says it will spend $72 million to expand an engine plant in India to support sales and export growth.

The company said today the investment in its Chennai engine plant will create more than 300 jobs. Ford plans to run the factory on three shifts per day.

CHESTERFIELD TOWNSHIP, Mich. (AP) - Two brothers whose Michigan company supplies parts to the auto industry have been charged with fraud in an investigation of the quality of plastic.

Orman and David Bernhardt of Davalor Mold are accused of using less expensive materials than required in seat belt assemblies and then covering it up through false reports.

The fraud charge was filed Monday. Their lawyer is Bob Sheehan, and he says a guilty plea is planned.

He says there's "absolutely no safety issue." Sheehan says the parts were tested by federal regulators.

Davalor Mold is in Macomb County's Chesterfield Township, about 30 miles northeast of Detroit. The company works for Tier I auto suppliers, which supply parts for automakers. The alleged scheme lasted for two years until spring 2010.

user fiatontheweb / creative commons

DETROIT (AP) - Chrysler is moving its normal summer shutdowns at three factories into June from the usual July closings because of parts shortages from the earthquake in Japan.

The company says its pickup truck plant in Warren, Mich., and its Toledo, Ohio, North assembly plant will be idled the weeks of June 20 and 27. Both plants had been scheduled to close the weeks
of July 11 and 18.

In addition, a Toledo parts operation will close the week of June 20 instead of July 11.

The company says its other plants will have their normal summer shutdowns in July and August.

Nearly all automakers have lost production due to parts shortages from the March 11 earthquake and tsunami that hit northern Japan. The quake damaged parts supply plants or knocked out electricity.

Car production in Japan could return to normal earlier than expected.

From the Associated Press:

A report says Toyota's global car production, disrupted by parts shortages after Japan's March 11 earthquake and tsunami, will likely return to normal two to three months earlier
than expected.

Japan's top business daily Nikkei said Tuesday that Toyota's output will normalize earlier than the end of this year as parts shortages are easing. It didn't cite any sources.Toyota said last month its worldwide production will likely return to normal levels by November or December.

Toyota Motor Corp. spokeswoman Shiori Hashimoto could not confirm the report.

The disasters destroyed many factories in northeastern Japan, causing severe parts shortages for Toyota and other automakers. The supply crisis has cost the company production of 400,000 vehicles in Japan, and 100,000 overseas.

Michigan Senator Debbie Stabenow and Congressman Gary Peters say the government should do more to help the auto industry mass-produce fuel-efficient technologies.

The two Democrats were at Bosch auto supplier headquarters in suburban Detroit today to urge Congressional support for the Advanced Vehicle Technology Act.

The bill would authorize $300 million a year for private sector fuel-efficiency research.

Peters says "this is just the right thing to do" with Michigan gas prices at record highs:

 "You’re going to hear a lot of ideas about drilling and other types of ideas, but really the best idea is to push the technology," said Peters. "Push innovation. And that’s what we do here in the Detroit area better than anybody else in the world, and that’s innovate with vehicles and automobiles."

Peters says the legislation has support from both environmental and business groups.

The bill passed the U.S. House with bipartisan support last year, but it couldn’t get through the Senate.

user cogdogblog / Flickr

The government is investigating the safety of some Ford F-150 trucks.

From the Associated Press:

U.S. safety regulators are investigating a fuel tank problem that could affect more than 2.7 million Ford F-150 pickup trucks.

The National Highway Traffic Safety Administration says on its website that the steel straps holding up the gas tank can rust and break, possibly causing a fuel spill and fire.

The agency says it is looking into trucks from the 1997 through 2001 model years. The F-150 is the top-selling vehicle in the U.S.

NHTSA says there are 243 reports of the tanks falling and causing two fires. No injuries have been reported.

The agency began looking at the problem last year when it had received 32 complaints.

Ford says it's cooperating with the investigation. Anyone with concerns should contact their dealer.

IFCAR / wikimedia commons

Sales numbers for April are coming in today, and there are more signs that the American public has pent up energy to buy new cars. As they did in 2008, higher gas prices are driving demand for smaller, fuel efficient cars. U.S. Automakers are more prepared for that demand this time around.

Update 3:50 p.m.

Chrysler announced the "best April sales since 2008" - a 22% increase compared with sales in April 2010. The company sold 95,703 cars in April.

user fiatontheweb / Flickr

Just ahead of a visit from U.S. Treasury Secretary Timothy Geithner, Chrysler says it intends to pay back the government loans it received by the end of June. Geithner was one of the main architects of the government bailouts for Chrysler and GM.

From the Detroit News:

Chrysler Group LLC today confirmed its intention to repay its $7.4 billion in loans to the U.S. and Canadian governments by the end of June, as long as market and other conditions remain conducive.

In a statement prior to CEO Sergio Marchionne hosting a visit from U.S. Treasury Secretary Timothy Geithner later today, Chrysler said it plans to repay its government loans with a new term loan facility and newly issued debt securities that will be sold to institutional investors in a private offering.

The Detroit Free Press reports Chrysler wants to pay back the debts because the interest rates on the government loans are high:

Marchionne has said he wants to refinance Chrysler’s debt because the interest rate is higher than commercial market rates. The effective interest on the borrowings from the U.S. is as high as 14% and as much as 20% on the Canadian debt.

In order to find investors, the Detroit News reports that senior executives will head out on a "road show" to court financial institutions. They report the automaker is currently working with Morgan Stanley, Goldman Sachs, Citigroup Inc. and Bank of America Corp.

Marcus Wong / Flickr

Ford Motor Company announced a profit of more than $2.5 billion in the first three months of the year.

That's the company's best quarterly performance since 1998.

Ford CEO Alan Mulally expects the rest of 2011 to be profitable as well - despite some headwinds like low U.S. consumer confidence and rising commodity and gas prices:

"Even though it's a slower recovery and the fuel prices are moving up, the demand is there and we are really pleased to have the product line that the consumers really do want and value."

Mulally says he's  optimistic that car sales will continue improving:

"In the automobile industry, the pentup demand is tremendous, you know the average age of car ownership is over ten years now."

Mulally says Ford also improved its balance sheet by reducing its debt by another $2.5 billion in the first quarter.

Ford took out a huge loan in 2006 before the recession.  That loan enabled the company to improve its cars during the economic downturn and avoid bankruptcy.

Since last year, the company has paid off $17 billion of debt.

Douglas Sprott / Flickr

From the Associated Press:

An auto industry group says Japanese automakers have begun checking the level of radiation on cars to be exported from Japan amid a nuclear leak crisis.

Hirokazu Furukawa, a spokesman for the Japan Automobile Manufacturers Association, said Friday the move was to ease worries among foreign consumers about radiation leaking from a tsunami-crippled nuclear power plant in northern Japan.

The automakers will inspect radiation inside a car and on its tires before shipment.

No radiation has been detected on cars to be exported from Japan, Furukawa said. Automakers are currently checking the level of radiation on cars to be shipped from eight ports.

Furukawa said around 10 cars out every 5,000 are being checked for radiation.