economy

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.

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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.

Auto/Economy
12:37 pm
Fri April 22, 2011

Warren Mayor says GM likely to add more jobs in city

Warren Mayor Jim Fouts says GM will invest in its Powertrain facility and Tech Center in Warren, Michigan
Manoli Katakis creative commons

A final decision has not been made, but Warren Mayor Jim Fouts released a statement saying GM is considering two investments in its Technical Center and Powertrain Facility in Warren.

Fouts says the investments add up to $450 million and would create 426 new jobs.

From Fouts' statement:

"These possible projects are the result of several meetings between city representatives, including me, and GM officials. I cannot stress too much how important these new investments would be to our city. They mean more jobs and ultimately more tax revenues for Warren. I am confident GM will choose these locations for new investments because the corporation realizes Warren is a business-friendly community that will go the extra mile to encourage businesses to expand or relocate here."

The mayor said Warren became a city in 1957 because of the construction of GM's Tech Center in the city. And he encouraged other business to move there.

Economy
11:14 am
Fri April 22, 2011

Two Michigan retirees flip the script on ATM fees

The law says banks have to post how much they plan to charge you on their ATM machines.
user eflon Flickr

Two retirees from Fowlerville, Michigan, Nancy Kinder and Ray Harrison, have filed several lawsuits challenging banks on ATM fee notifications.

The Electronic Fund Transfer Act says the amount the bank will charge for use of the ATM machine "shall be posted in a prominent and conspicuous location on or at the automated teller machine at which the electronic fund transfer is initiated by the consumer."

Tresa Baldas reports in the Detroit Free Press that the retirees have been taking advantage of this part of the law:

Kinder and Harrison have been "combing the state by car, looking for ATMs that don't have the notification sign, records show. When they spot one, they make a withdrawal, take a picture of the ATM, and then it's off to court."

They've sued 36 banks in two years and they recently filed five lawsuits in one day.

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Auto/Economy
9:33 am
Thu April 21, 2011

Fiat moving closer to a majority stake in Chrysler

Chrysler Headquarters in Auburn Hills, Michigan.
user fiatontheweb creative commons

Updated: 

News that Fiat will soon acquire a bigger stake in Chrysler is another sign the merger is working.

Jim Hall is president of  the auto consulting firm 2953 Analytics.  He says the merger benefits both companies.  Fiat gets access to the U.S. market and to Chrysler’s more profitable vehicles, and Chrysler gets access to Fiat's global markets and its fuel-saving technology. 

And the merger could save the companies money on parts.

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Auto/Economy
2:20 pm
Wed April 20, 2011

Another gas price hike coming?

Another increase in store at Michigan pumps?
user Orin Zebest Flickr

Gas prices in Michigan are expected to go higher, according to an online service that shares information on fuel prices. GasBuddy.com collects data on gasoline prices all across Michigan and the rest of the country.  The company says average gas prices in Michigan are about to jump up  to between $4.05 and $4.15 a gallon.

This from an e-mail sent out by Gasbuddy.com:

We're at increasing odds for a price hike. Oil prices have continued to rally this week, meaning it may be price hike time. With the rise in wholesale costs already being passed on to stations, odds are this hike will occur any time in the next 48 hours.

Patrick DeHaan, the senior petroleum analyst with Gas Buddy, says several factors, including refineries switching to summer blends of gasoline,  are behind rising gas prices. 

“Unfortunately, until these refineries get going and finish their maintenance and boost production…we will continue to see supply dwindle and that will continue to impact prices.”  

DeHaan predicts Michigan gasoline prices will continue to edge higher between now and Memorial Day.

The White House says speculators on Wall Street are driving oil prices up. President Obama made some remarks on speculation in Virginia accoring to UPI:

U.S. President Barack Obama, in a speech in Virginia, said it's not a lack of supply that is driving oil prices up on the commodity markets.

"The problem is, is that oil is sold on these world markets, and speculators and people make various bets, and they say, you know what, we think that maybe there's a 20 percent chance that something might happen in the Middle East that might disrupt oil supply, so we're going to bet that oil is going to go up real high," he said. "And that spikes up prices significantly."

In the article, Bart Chilton, a member of the U.S. Commodity Futures Trading Commission, says speculation makes up part of the price at the pump, "there is a Wall Street premium on gas prices today. Every time folks fill up their tanks, they can expect that several dollars are due to speculation."

Speculation was a big driver of the skyrocketing oil prices back in 2009.

Auto/Economy
3:25 pm
Tue April 19, 2011

Toyota announces more production cuts at North American plants

Miyagi Prefecture, Japan, after the earthquake. Toyota announced more production cuts today.
Takashi Nakano vis user tex texin Flickr

Parts shortages from Japan continue as Toyota announces more production cuts - from the Associated Press:

Toyota is extending production cuts at its North American factories through May because of parts shortages from the March 11 earthquake and tsunami in Japan.

The company says production will be suspended in North America on Mondays and Fridays from April 26 through June 3. During the same period, plants will run at half capacity on Tuesdays, Wednesdays and Thursdays.

Toyota also said Tuesday that U.S. production will be suspended the week of May 30 after the Memorial Day holiday. Canadian production will be suspended the week of May 23 in conjunction with Victoria Day.

Plans after June 3 will be announced later. Toyota says no workers will be laid off.

The company last week announced Monday and Friday suspensions from April 15 to 25.

Detroit has the "Big Three," but Japan has the "Big Five" (Toyota, Nissan, Honda, Suzuki, and Mazda).

This info-graphic from the Globe and Mail captures how interconnected the Japanese auto economy is to the rest of the world.

Jobs
12:44 pm
Mon April 18, 2011

McDonald's "National Hiring Day" is tomorrow

McDonald's hopes to hire thousands of new workers.
Miguel Vaca Flickr

"Would you like some fries with that?"

That’s the phrase many are perfecting for McDonald's National Hiring Day tomorrow. Many of the McDonald’s  jobs will be in the Midwest.

McDonald's got its start here in the Midwest, and it has a substantial presence throughout the Great Lakes states.

That’s why 10,000 of the 50,000 new workers, the company wants will be based across the region.

The McDonald's in downtown Chicago (on Chicago and State) is one location that is hiring. Nick Karavites and his family own that restaurants and 18 others across the city.

"Not only are we looking to hire cashiers but also hospitality staff and kitchen staff," says Karavites.

As the employment market improves, job seekers can get more selective about where they work.

Karavites said pay at their restaurants averages $9 an hour, and that all workers can participate in a McDonald’s Insurance program.

McDonald’s says the company needs more workers because last year’s sales were up five percent and continues to grow.

Flint
12:02 pm
Mon April 18, 2011

Reporter rides along with cops in Michigan's "Murdertown"

Closed on the weekends. Doors "locked at dusk" on weekdays.
Steve Carmody Michigan Radio

"We ain't cops anymore. We're librarians. We take reports. We don't fight crime."

That's what officer Steve Howe told New York Times reporter Charlie LeDuff.

LeDuff rode along with Howe and wrote about the experience in his Sunday Magazine article "Riding Along With the Cops in Murdertown, U.S.A."

The desperation in Flint is well known. After several years of cuts to vital city services, the city is still looking at a projected budget deficit of $17 million.

LeDuff writes that the sign on the door of Flint's Police Headquarters says it all "Closed weekends and holidays."

LeDuff writes that another sign in town is a lie. He's talking about the sign on an archway that names Flint "Vehicle City."

But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.

What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.

The murders in Flint continue to pile up. More than 20 so far this year.

Mayor Dayne Walling held a press conference recently saying "the killings and criminals must be stopped."

But who's going to stop them? LeDuff reports there are only six patrolmen working on a Saturday night in Flint and the city has laid off two-thirds of its police force in the last three years.

Michigan Radio's Steve Carmody reported that Flint's Public Safety Director Alvern Lock denied "that cuts to Flint’s police department have played a role in the increase in the city’s increase homicide rate."

But when reading LeDuff's piece, you have to wonder.

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Economy
6:42 am
Mon April 18, 2011

Personal finance: What it takes to become 'mortgage-free'

The Murphy family says "living below their means" helped them pay off their mortgage early.
Photo courtesy of the Murphys

In 1950, more than half of Americans owned their homes free and clear. No surprise that number has shrunk over the years.  But those who count themselves mortgage-free are still out there. The 2010 U.S. Census shows 1 out of every 3 homeowners owns their home free and clear. In a story produced for Marketplace Money, we look at what it takes to become mortgage-free.

Meet the Murphys

Mike and Kate Murphy live in a working-class neighborhood of Chicago, with two of their kids, Becky and Tommy, and their pet fish. They bought their charming, 3-bedroom brick house in 1996 for $156,000.

They originally started with a $110,000 mortgage. Mike Murphy says it was " obviously the largest mortgage we had ever taken out."

At the time, Kate brought in $30,000 a year, designing theater costumes part time. Mike was making $50,000 as a public school teacher:

At first they paid $1,100 a month on the mortgage. Refinancing dropped the payment to just under a $1,000. But they decided to pay a little more each month -- first $100, then $150 more.

Fast forward 13 years and they owned their house free and clear.

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