Detroit automakers

The Detroit Institute of Arts
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This Week in Review, Jack Lessenberry and Rina Miller discuss big name politicians stopping in Michigan to campaign for local candidates, the latest development in Detroit’s bankruptcy trial, and GM’s record global sales despite a dismal week on Wall Street.


Steve Carmody / Michigan Radio

ISIS, Ebola, tensions between Russia and the Ukraine, economic slowdowns in China, Europe, Latin America, and elsewhere – the profusion of gloomy headlines added up to a grim day on Wall Street yesterday, as the Dow plunged more than 450 points. 

It was the heaviest day of trading in more than three years. 

The stomach-churning day on Wall Street came exactly as General Motors announced some shiny, happy news: GM sold more cars and trucks worldwide in the third quarter than anytime since 1980.

Daniel Howes says the GM's record sales are largely powered by the relatively positive markets in North America and China. But in a lot of other parts of the world, the sales stink for GM as well as its competitors. 

User: Robert Heese / Flickr

Global automakers look to China to rev up their global sales, but growth in China's car sales slowed again in September. 

According to The Detroit Free Press, sales in passenger vehicles in China rose 6.4% in September from a year earlier, slowing from 8% in August and 13.9% in May. 

John McElroy is an auto analyst and host of the Autoline Daily webcast. He says the numbers are direct indicators of the economic health of the Chinese economy, which seems to be cooling down.

DETROIT – General Motors is recalling 2.4 million vehicles in the U.S. as part of a broader effort to resolve outstanding safety issues more quickly.

The latest action brings to 13.6 million the number of vehicles GM has recalled this year, a new record for the automaker.  

The recalls announced Tuesday include 1.3 million older-model crossovers with defective front seat belts and 1 million sedans with a shift cable that can wear out. 

GM is also recalling 1,400 new Cadillac Escalade SUVs with faulty air bags. No fatalities related to the defects have been reported, GM says. It expects to take a $400 million charge in the second quarter to repair the vehicles. 

GM agreed to a $35 million federal fine last week for delays in reporting a deadly ignition switch defect.

Lester Graham / Michigan Radio

Detroit's unemployment is high, really high. It's nearly 18%. That’s almost double the Michigan rate of unemployment and Michigan is among the worst in the nation.

So, when a manufacturer hires hundreds of Detroit residents, it gets attention.

Sonari Glinton / NPR

Vice President Joe Biden says the US government bet on American automakers—and won.

Biden touted the auto industry’s comeback during a stop at Detroit’s North American International Auto Show Thursday.

Biden said Detroit’s automakers have come a long way since GM and Chrysler went bankrupt in 2009.

And he said that resurgence proves the government-backed restructuring worked—and saved the country from a much deeper recession.

Chrysler introduced the car it’s promising will “redefine the brand” at Detroit’s auto show Monday.

The “flagship” 2015 Chrysler 200 is the Auburn Hills-based automaker’s first venture into the highly competitive mid-size sedan market in more than a decade.

Chrysler officials say the model will go “head-to-head” with its competitors in terms of quality, design and – at just under $22,000 – price.

Chrysler-Group / flickr

It's Thursday, time for our weekly check-in with Detroit News Business Columnist Daniel Howes.

He's up at the Mackinac Policy Conference today and it seems he got some interesting insights into how the financial and investing world views the Detroit auto companies.

He joined us to tell us all about it.

Listen to the full interview above.

If you live in Michigan there’s a good chance you’ll head up north this summer, or maybe west to bask in the sun on Lake Michigan, but if you’re still not sure where to escape this summer, we have some fun tips on hidden vacation gems you are sure to enjoy.

And, Rick Pluta gave us an update on the Mackinac Policy Conference.

And, Daniel Howes shared his insights on how the financial and investing world views the Detroit auto companies.

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Policymakers debate how to spend surplus

The debate continues in Lansing over how the state should spend almost half a billion dollars in unexpected revenue this year. The Michigan League for Public Policy believes that because the state’s Earned Income Tax Credit is less than a third of what it was a couple years ago, legislators should restore the credit for the working poor.

"A spokesperson for state House Democrats says they support the idea of using some of the money to restore the Earned Income Tax Credit. However, Governor Rick Snyder says a similar tax credit from the federal government does enough to help working poor families in Michigan. He wants to use the extra cash to fix roads," Michigan Radio's Jake Neher reports.

Merger between Beaumont and Henry Ford sacked

The planned merger between Beaumont and Henry Ford health systems, two of southeast Michigan’s largest health care providers, has been scrapped. The leaders of each hospital signed a letter of intent to merge last fall, but negotiations didn’t work out so well. On Tuesday, Henry Ford CEO Nancy Schlichting sent a letter to employees, indicating they’ll end talks and let the agreement expire.

“It became apparent that two very different perspectives have emerged for the new organization between Henry Ford and Beaumont,” Schlichting wrote. Michigan Radio's Sarah Cwiek has more.

Rising car sales cut plant shutdowns

Summer vacation will be cut short for auto factory workers in Michigan this year, as carmakers try to keep up with heightened demand. Detroit automakers plan to reduce their annual shutdowns at dozens of North American plants that produce popular Ford and Chrysler models.

“This sends a strong signal that the industry is in a healthy place,” Jeff Schuster, senior vice president of forecasting at market researcher LMC Automotive, told The Detroit News.

automotiveauto.info

This morning, the New York Times reported on the slow and steady increase of Chinese companies setting up in metro-Detroit.

The NYT's Bill Vlasic reports it has been a largely unannounced trend – and given the public opposition experienced by Japanese automakers – it is most likely an intentionally quiet entrance.

Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers.

Overall, most Chinese suppliers are interested in expanding their direct business with Detroit car companies. Many Detroit car companies rely on low-wage countries like Mexico to get common car parts. Chinese companies are trying to change that.

Stateside: A big event for the Big Three

Nov 14, 2012
www.hbs.edu

Being presented this week at the Henry Ford Museum is a case study called “The Big Three Roar Back." The aim of the event, organized by Harvard's Business School, is to examine the comeback of the American auto industry.

One of event's organizers is Harvard Business School professor, William George.

George spoke with Cyndy about the Big Three's revival and other industries of concern.

Listen to the segment in our podcast above.

Pobrecito33 / Flickr

United Auto Workers President Bob King says the relationship between the union and Detroit car companies has dramatically improved.  That could help the two sides reach an agreement more quickly in ongoing contract talks.  And King hopes it will help him sell the value of his union to foreign auto companies in the U.S.

The UAW is a third the size if was in 1979 mostly due to the downsizing of the Detroit Three.  Future hiring by Detroit car companies will likely be modest.  So the UAW wants to unionize foreign auto companies in the U.S. 

Union President Bob King says most of the companies have agreed to meet with his group.  He says the union needs to overcome strong anti-union sentiment, and convince the companies that the new UAW wants to help them be profitable.

“Probably the biggest question in their mind is, is this for real, is this a passing fancy with the UAW or is this for real?”

Prolonged and contentious contract talks could throw a monkey wrench in the unions’ plans to try to unionize a foreign automaker.  But King and Detroit automakers say they’re negotiating in a spirit of cooperation.