economy

Historical
4:51 pm
Thu June 16, 2011

The Ambassador Bridge: Looking back, looking forward

Patricia Drury / Flickr

In his state of the state address, Governor Rick Snyder urged the legislature to approve the construction of a new bridge span between Detroit and Windsor, Ontario.

Michigan Radio’s Political analyst Jack Lessenberry sat down with Michigan Radio’s Jennifer White to talk about the role the Ambassador Bridge has played in its 82 year history, and the reasons why a new bridge may be necessary. 

Billions of dollars a week move across the Ambassador Bridge. “It’s the most important trade crossing between the United States and Canada, and perhaps in the world,” says Jack.

The Ambassador Bridge was built largely as a beacon of prestige for Detroit in the roaring twenties, and would eventual grow to be a massive economic asset.

Jack would remind us though that “nothing lasts forever.” While the Ambassador Bridge was state of the art in 1929, it’s no longer adequate for the amount of traffic or the size of today’s tractor trailers.

--Cade Sperlich, Michigan Radio Newsroom

Auto/Economy
1:00 pm
Thu June 16, 2011

Chrysler to reopen part of plant in Trenton, Michigan

Increased demand for Chrysler's Pentastar V6 engine helped to reopen part of the Trenton North engine plant.
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.

Auto/Economy
10:28 am
Tue June 14, 2011

Honda profits plunge as it seeks to recover from earthquake

The remodeled Honda Civic was supposed to be a big sales driver, but Honda has had to scale back its release. Reuters says the company won't go back to "full production of the best-selling model until after summer."
Honda

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."

Auto/Economy
2:36 pm
Fri June 10, 2011

Toyota expects fiscal year profit to fall 31 percent

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.

Politics
4:49 pm
Wed June 8, 2011

Governor Snyder announces free legal help for start-up businesses

User Sabine01 Flickr

Governor Rick Snyder has unveiled a new program with a law firm that will offer free legal services for about 60 start-up companies a year.

The MiSpringboard program with Varnum law firm will last five years.

Snyder says he would be open to creating similar programs with other law firms that are willing to offer free services for start-ups. 

Read more
Auto/Economy
2:33 pm
Thu June 2, 2011

Ford announces its smallest engine ever

A Ford Focus being built in Germany. Ford's not saying yet which cars will get their new 1.0-liter, three-cylinder engine.
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.

Read more
Economy
4:38 pm
Tue May 31, 2011

Study: Michigan families need 3 times minimum wage to thrive

user j wynia Flickr

LANSING, Mich. (AP) - A new study says a single parent in Michigan with a preschooler and a school-age child needs to earn more than three times the state's minimum wage to be economically
secure.

Wider Opportunities for Women and the Michigan League for Human Services released the report Tuesday.

The study says the wage-earner in that family of three needs to earn about $52,000 a year with benefits to cover child care, housing, health care, transportation, savings and retirement.

A state report says nearly six out of 10 jobs expected to be created in Michigan through 2018 won't enable a worker to earn that much.

The league says reducing tax credits for low-income workers and cutting spending on children's clothing allowances also are making it harder for hard-pressed families to reach economic security.

Auto/Economy
3:12 pm
Tue May 24, 2011

Chrysler celebrates after paying back government loans

Chrysler CEO Marchionne said "we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker."
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."

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Auto/Economy
11:33 am
Tue May 17, 2011

Ford to expand engine plant in India

The Ford Figo is sold in India. The company plans to expand an engine plant in Chennai, India.
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.

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Economy
11:50 am
Mon May 16, 2011

Economist: Michigan will keep adding 60K jobs a year

An economist says the resurging domestic auto industry is helping the state get back on its feet (assembly of the Chevy Volt).
Argonne National Laboratory

 LANSING, Mich. (AP) - A University of Michigan economist says the state's rebounding economy will add about 60,000 jobs annually for the next three years.

George Fulton says the state unemployment rate will hover between 9 percent and 10 percent through 2013 as job growth stays steady but not spectacular.

Fulton gave his economic forecast to state economists Monday at the Capitol. He says the resurging domestic auto industry is helping the state get back on its feet as the Detroit Three see their first increase in market share since 1995. All sectors except government are expected to add jobs.

Fulton says Michigan is in the early stages of a sustained recovery and that 2011-13 will be the best three years for the state economy since 2000, although some residents will continue to suffer.

Arts/Culture
12:06 pm
Fri May 13, 2011

Artpod: Small art raises big bucks

Folks in Saline have sold art to raise $100,000 over seven years, and all the money goes to an area nonprofit.
Dani Davis

On today's installment of Artpod, we hear how artists use their talents to raise money for a local nonprofit.

People don’t often think of “art” as a money-making endeavor, but a group in Saline, Michigan is proving otherwise. Their story is about taking little pieces of art and turning them into big money makers. And all that money is being used to help feed hungry people in Washtenaw County.

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Auto/Economy
11:33 am
Fri May 13, 2011

Chrysler moves up summer plant shutdowns to June

Chrysler headquarters in Auburn Hills, Michigan.
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.

Changing Gears
12:52 pm
Wed May 11, 2011

Across the region, shutting the local library

Zachariah, left, and Craig Boyd, Saturday morning regulars at Gary Public Libary's main branch.
Niala Boodhoo Changing Gears

What happens when your local library shuts its doors? That’s a question Midwestern towns from Evanston, Ill., to Troy, Mich., are asking as local libraries are targeted in budget cuts.

I went to Northwest Indiana, where the Gary Library Board has just decided to close its main branch, to find out the impact on a local community.

Gary has five library branches. The other four have names, like Kennedy, or Du Bois. This one is simply called the "main library."

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Auto/Economy
12:14 pm
Tue May 10, 2011

Car production in Japan could return to normal earlier than expected

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.

Economy
12:33 pm
Thu April 28, 2011

Business is solid for three Michigan companies

Roger Penske says the first quarter results for the Penske Automotive Group "exceeded my expectations."
Ted Van Pelt Flickr

Three big corporations in Michigan released their first quarter results today and according to the numbers, business is booming.

Dow Chemical exceeds expectations (Midland, Michigan)

The company says "sales rose 20% to $14.7 billion versus the year-ago period, with double-digit increases in all operating segments and all geographic areas."

As Andrew Dodson of Booth-Mid Michigan pointed out, analysts had expected Dow to achieve $13.8 billion in sales.

Dow's earnings before interest, taxes, depreciation and amortization (a measure of a company's operating cash flow) went up more than $600 million to $2.4 billion, "the second highest quarter in the Company's history," according to Dow.

CMS Energy reports net income of $135 million (Jackson, Michigan)

CMS Energy's principal business is Consumers Energy. The Jackson-based company's reported income of $135 million translates into $0.52 per share, for the first quarter of 2011. That's compared to a net income of $85 million, or $0.34 per share, for the same quarter last year.

From the company's press release:

The first quarter results reflect colder than normal winter temperatures that boosted natural gas and electric sales at the company’s Michigan utility, Consumers Energy. Those sales increases partially were offset by costs the utility incurred in restoring service to electric customers after a series of unusually severe winter storms.

Penske Automotive has strong quarter (Bloomfield Hills, Michigan)

Penske Automotive Group Chairman, Roger Penske, said, "our first quarter results exceeded my expectations. I am particularly pleased with the same-store retail revenue growth generated in all lines of our business.

From Businesswire:

[Penske] reported a 51.7% increase in first quarter income from continuing operations attributable to common shareholders to $36.4 million, which compares to income from continuing operations attributable to common shareholders of $24.0 million in the first quarter last year. Earnings per share from continuing operations attributable to common shareholders increased 50.0% to $0.39 per share from $0.26 per share in the first quarter last year. Total revenue in the first quarter increased 15.3% to $2.9 billion, including an 11.6% increase in same-store retail revenues, due in large part to increases in new and used retail vehicle unit sales.

Auto/Economy
9:23 am
Thu April 28, 2011

Chrysler intends to repay government loans by end of June

Chrysler's headquarters in Aurburn Hill, Michigan. The company says it plans to pay back government loans by the end of June.
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.

Read more
Economy
6:53 am
Thu April 28, 2011

U.S. Treasury Secretary to visit Southeast Michigan

U.S. Treasury Secretary Timothy Geithner will visit the Detroit Economic Club today.
Center for American Progress Flickr

U.S. Treasury Secretary Timothy Geithner will visit Michigan today. He'll make an appearance at the Detroit Economic Club. Geithner will speak with Detroit's political, business and community leaders about the economy, the Associated Press reports. From the AP:

Geithner's appearance Thursday afternoon is part of the Detroit Economic Club's 2010-11 meeting season.

President Barack Obama swore Geithner in as the 75th treasury secretary in January 2009. He was deeply involved in the negotiations that led to billions of dollars in government loans being given to General Motors and Chrysler.

Detroit and Michigan have suffered as much as any city or state economically over the past few years. Thousands of workers have been laid off as businesses have been forced to close or downsize.

Economy
8:39 am
Wed April 27, 2011

Whirlpool reports higher net income in the 1st quarter

2011 is off to a good start for Whirlpool.  The Benton Harbor appliance maker reported its net earnings rose in the first quarter.   Whirlpool reports its net earnings for the first three months of 2011 clocked in at $169 million, up from $164 million in the first quarter of 2010.  Total sales increased 3% to $4.4 billion.  

First-quarter operating profit totaled $228 million compared with $241 million in the prior year.  On an adjusted basis, first quarter 2011 operating profit(2) totaled $221 million compared to $287 million in 2010.  Results were favorably impacted by cost reduction and productivity initiatives, increased monetization of certain tax credits, and higher unit volume.  These favorable factors were offset by lower product price/mix and higher material and oil-related costs. 

Jeff Fettig is Whirlpool's CEO.  

"Our first quarter results reflect our ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation....We recently announced a 16% dividend increase, reflective of the success of our brand value creation strategy and our strong financial position.  We remain committed to attracting and retaining consumers to our brands, providing excellent service and value to our trade customers and consumers while driving lower costs and higher quality across our global operations."  

Auto/Economy
11:34 am
Tue April 26, 2011

Ford makes out big in the first quarter

In the first three months of the year, Ford made $2.5 billion.
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.

Auto/Economy
3:30 pm
Fri April 22, 2011

Report: Japanese automakers check exports for radiation

The aftermath of the earthquake and tsunami in Japan. Crippled nuclear power plants have fueled worries of radiation exposure.
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.

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