economy

Auto/Economy
11:17 am
Tue April 12, 2011

Fiat meets another benchmark - increases stake in Chrysler to 30%

You can buy the Fiat 500 in the U.S. More access to the U.S. market was one reason Fiat took over Chrysler.
Fiat USA

During the U.S. government led bailout in 2009, Fiat took over management control of Chrysler and was given a 20% stake in the company.

The government said Fiat's stake in Chrysler could increase to as much as 35% so long as they met three milestones.

Now, the Italian company now controls 30% of Chrysler after meeting the second milestone set forth by the U.S. government.

From the Detroit News:

Fiat SpA announced today it has increased its share in partner Chrysler Group LLC to 30 percent effective immediately.

The additional 5 percent stake is triggered automatically with Fiat's completion of the second of three performance-related conditions.

The first, achieved in January, was awarded for Chrysler's assembly in Dundee of a fuel-efficient Fiat engine.

The second condition was that the Italian automaker help Chrysler generate cumulative revenue of $1.5 billion outside North America and use Fiat's dealer network in Latin America to distribute Chrysler vehicles.

The third milestone, according to the Globe and Mail, is the development of a 40 mpg Dodge car built on a Fiat platform.

Once that milestone is reached, Fiat could solidify its ownership of Chrysler. From the Globe and Mail:

Dodge is developing a compact car on a Fiat platform that will reach 40 miles per gallon, which would satisfy the third test set by Treasury in 2009.

Mr. Marchionne told analysts on a conference call in October that he expected Fiat would meet all of the Treasury’s hurdles by the end of 2011.

The indications of progress are significant because the sooner Fiat can raise its Chrysler stake to 35 per cent, the quicker it could exercise an option to take majority ownership of the U.S. automaker.

The Detroit News reports that the current ownership of Chrysler breaks down this way:

  1. 59.2% - United Auto Workers retiree health care trust
  2. 30% - Fiat
  3. 8.6% - U.S. government
  4. 2.2% - Canada and Ontario governments combined
Auto/Economy
12:10 pm
Mon April 11, 2011

Automakers face engineer shortage

The auto industry is looking for more engineers.
Michael Gil wikimedia commons

Last year, many automakers brought in profits and announced that they would open up new factories and add new jobs.

But the industry is adding new jobs at a time when qualified candidates are hard to come by.

David Shepardson wrote about the shortage in the Detroit News today:

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Culture
1:13 pm
Fri April 8, 2011

Bringing Grand Rapids and Detroit together (video)

On the bus. Community leaders from Grand Rapids take a trip to Detroit.
From the Rapid Growth Media video

Michigan Radio's Lindsey Smith hopped on a bus with community leaders from the Grand Rapids area this past Wednesday.

Their destination was Detroit. And their goal for the trip was "to build stronger bonds between Michigan’s two major population centers."

They left in the wee hours of the morning and arrived back in Grand Rapids around 2:30 a.m.

The trip organizers put this video together:

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Economy
12:11 pm
Fri April 8, 2011

The return of luxury retail

Originally published on Fri April 8, 2011 1:10 pm

Consumers spent more on retail goods in the first quarter than they did during the same time last year. That's despite higher gas prices, bad weather and a late Easter holiday.

Luxury retailers were the winners.

Retail analyst Marshal Cohen says the recession has left the consumer with "frugal fatigue."

"We're tired of being so frugal with what we're spending and at the least expensive place," he says.

A bunch retailers released their first quarter numbers this week.

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Changing Gears
12:26 pm
Fri March 25, 2011

Local governments face more losses as cases pile up in tax courts

Donald Betlem bought this home for $5,000 in 2008. He had to convince Detroit it wasn't worth ten times as much.
Kate Davidson Changing Gears

Property values have plummeted across the region.

That means cities and towns have watched their tax revenue plunge as well. But many homeowners and businesses think their property taxes are still too high.

The result is a double hit.

Local governments are in fiscal crisis, and the tax courts of Michigan, Ohio and Illinois are clogged with people who want refunds.

People like Donald Betlem.

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Environment
12:00 pm
Thu March 24, 2011

Rebranding the Great Lakes Seaway

The Dutch-flagged, Dane-piloted Avonborg was carrying 75 wind turbine blades to Burns Harbor, Indiana, on Lake Michigan, on the opening day of the St. Lawrence Seaway.
Photo by David Sommerstein

Another sure sign of spring: the Great Lakes shipping season kicked off this week.

Millions of tons of cargo travel by boat on the Great Lakes every year– freighters from the Atlantic Ocean that enter the Lakes by way of the St. Lawrence Seaway. The first freighter of the 53rd Seaway season eased through the locks in Montreal on Tuesday. David Sommerstein visited Montreal for the opening ceremonies.  He found out that Seaway officials are trying to rebrand the Seaway:

The first freighter rumbling into the St. Lambert Lock was the Dutch-flagged "Avonborg."  It was loaded up with wind turbine parts.

David spoke with Terry Johnson, the U.S. chief of the St. Lawrence Seaway:

"Wind turbines have been increasingly coming in and it’s nice to be able to see something that is visual. This is good."

The windmill parts bound for Indiana aren’t just a good photo opp. They’re the perfect image the Seaway wants to project these days – that it’s the greenest, cheapest way to transport goods. Shipping is far more fuel efficient than trucking.

Ross Fletcher of BBC Chartering contracted this ship.

"Those 75 blades represent 75 truckloads that aren’t going to travel between Montreal and the U.S. Midwest, so we’re taking 75 truckloads off the highways."

The Seaway’s been trying to reinvent itself since it was built in the 1950s.

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Economy
3:36 pm
Wed March 23, 2011

Michigan's unemployment rate declined in February

(Flickr ziggy fresh)

Michigan’s unemployment rate dropped slightly in February. Michigan’s seasonally adjusted unemployment rate declined by 3 tenths of one percent last month to 10.4%.

The state’s jobless number was still one and a half percentage points above the national unemployment rate of 8.9%.  

Michigan’s unemployment rate has been falling since September 2009. And last month, the number of jobless Michiganders fell below a half million for the first time since November 2008.

Politics
8:16 am
Tue March 22, 2011

Bing to discuss progress on Detroit's downtown

Detroit Mayor Dave Bing.
Kate Davidson Changing Gears

The Downtown Detroit Partnership is holding its annual meeting and luncheon today from noon to 1:30 p.m..

Mayor Dave Bing and others are expected to highlight progress made in developing Detroit's downtown.

From the Associated Press:

Mayor Dave Bing and Wayne County Executive Robert Ficano are scheduled to discuss the progress made over the past year in improving Detroit's downtown.

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Auto/Economy
7:59 am
Tue March 22, 2011

Michigan auto insurance rates among the nation's highest

Opps. A fender bender in Ann Arbor. Michiganders spend a lot for auto insurance.
Steve Carmody Michigan Radio

In one study, Michigan had the highest auto insurance rates in the nation. In another, Michigan ranked 11th in the nation.

That's according to a piece from Dawson Bell at the Detroit Free Press. Bell writes both studies cited "the state's unique mandate for unlimited coverage for personal injuries as a primary cause for high rates."

From the article:

Michigan auto insurance rates led the country -- $2,541 a year for a hypothetical 40-year-old man with a clean driving record -- in an annual survey released last week by the consumer insurance information site insure.com.

The Michigan rate jumped more than 21% from the same survey a year earlier, overtaking Louisiana, which topped the list last year.

Vermont, at $995 a year, was the cheapest place to buy auto insurance, the survey found.

Politics
9:17 am
Fri March 18, 2011

Report: How Snyder's tax plan would affect you

Your state taxes are likely to change.
Allan Cleaver Flickr

Ever since Governor Rick Snyder released his budget plan last month, people have been looking at the details and wondering how they might be affected by the plans.

For people with pensions and the working poor, it's been clear, you would pay more if Snyder's plan is approved. But how much more?

The Detroit Free Press, in a series of reports, is seeking to break down the numbers. In their first report What Snyder's income tax plan means for you they summarize their findings this way:

Parents with low-paying jobs would stop getting state income supplements worth as much as $1,000.

High-income retirees with generous pensions would pay thousands of dollars more.

But taxpayers in brackets that cover most Michiganders would see little change in their state income tax bill under Gov. Rick Snyder's sweeping proposals.

The Freep provides some detailed examples of how the tax proposals might affect certain people.

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Auto/Economy
9:29 am
Wed March 16, 2011

Howell manufacturing plant to stop production

Marelco Power Systems, Inc. told the Livingston County Daily Press & Argus that is will stop production at its plant in Howell.

The company makes transformers, inductors, and control systems, among other things, for the auto companies and other manufacturers.

From the Associated Press:

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Economy
3:23 pm
Mon March 14, 2011

Study: Grand Rapids, Detroit among Top 20 hardest hit by recession

The Grand Rapids metro region, like many places in the U.S., was hit hard by the recession.
Steven Depolo Flickr

A new study by the Brookings Institution shows the Grand Rapids and Detroit metro regions are in the top 20 hardest hit by the recession.

The study measures how deep the recession hit the top 100 metro regions in the United States.

It also looks at how strong the recovery is for those cities.

Jennifer Bradley co-directed the study in the Great Lakes region:

"It's not just about a particular city or a particular suburb. These places are economic units. They're rising and falling together and they will come out of the recession, or not, together."

Bradley says Grand Rapids and Detroit lead the nation in keeping their unemployment rates from spiking even higher, but it's unclear why:

"It could be more people are getting jobs. It could be more people are leaving the workforce altogether. It could be more people are leaving the region all together."

There is a lot in the study that’s not surprising.

It shows most metro regions near the Great Lakes had a weak economy before the recession, mainly because of job losses as the auto industry declined.

Bradley says business and government leaders in metro regions need to work together to strengthen their chances of recovery.

Economy
4:45 pm
Fri March 11, 2011

Snyder says agriculture key to small business growth

Governor Snyder says it's important to process the commodities made in Michigan.
Helen Hanley creative commons

Governor Rick Snyder says agriculture is a key part of his strategy to focus economic development efforts on small businesses.

The governor spoke today to the Future Farmers of America state convention. He says there’s lots of room to grow small businesses processing farm products in rural areas of the state.

"There’s an opportunity there to do more economic development in our smaller towns and our villages, and one of those connections is if you look at it, we’re producing all these great commodity products, and if we can do more and more to say let’s continue the processing of these products right where they are being produced, that’s an opportunity to create jobs in these smaller communities. "

At the same time, Snyder says he wants to rely less on tax breaks and other industry-specific incentives to create jobs.

Politics
1:44 pm
Fri March 11, 2011

Report: Psychotropic drugs "dominating" cost of prescriptions in prisons

Prison fence. State auditors say Michigan prisons could have saved millions in prescription costs.
Simon Brass Flickr

The state's prison system is in line for some budget cuts like a lot of other parts of the state government.

Now, a recent audit says the prison system could save more in prescription costs.

From the Associated Press:

DETROIT (AP) - State auditors say Michigan could have saved millions of dollars by choosing lower-cost alternatives to a mental-health drug that is widely prescribed in prisons.

The audit released Friday says psychotropic drugs are dominating the cost of prescriptions in the prison system. They added up to more than $8 million from January through July last year - 41 percent of all pharmaceuticals.

Seroquel is the most prescribed antipsychotic drug. Auditors say the Corrections Department could have saved $350,000 a month by switching just half of those prescriptions to a drug called Risperdal.

The Corrections Department says it's taking steps to control costs. The audit also found that prisoners are not being charged for over-the-counter medicine even if they can afford it.

Politics
5:45 pm
Thu March 10, 2011

Pure Michigan campaign gets funding

The Pure Michigan campaign is a good investment in Governor Snyder's eyes.
www.michigan.org

Governor Rick Snyder signed full funding into law for the Pure Michigan ad campaign.

He signed the funding plan at the Henry Ford Museum in Dearborn today, saying his plan to pay for the Pure Michigan ad campaign through a venture capital fund will work this year and next year.

He says he will continue to evaluate the effectiveness of the ad campaign over the next two years:

“I’m the metrics and dashboard person, so we’re going to focus on metrics and dashboards on everything we do,” said Snyder.

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Economy
4:10 pm
Thu March 10, 2011

Nevada joins Michigan, axes State Fair

Boy roping a plastic calf at the 2008 Michigan State Fair
Bob Vigiletti Michigan Radio Picture Project

Michigan and Nevada seem to be linked in some not-so-good ways.

High unemployment rates, high home foreclosure rates, and declining housing prices.

And now... add the lack of a State Fair to that list.

In this age of austerity, Nevada has decided to cut its State Fair. Michigan cut its Fair back in 2009.

The Associated Press reports Nevada and Michigan are the only two states without a State Fair.

From the AP:

The board of directors for the Nevada State Fair says there won't be one this summer.

Board members say budget shortfalls leave them no choice but to bring an end to the fair for the first time in 136 years.

Executive director Rich Crombie said in a statement Wednesday that a last-ditch fundraising effort had produced only a fraction of the estimated $250,000 needed to keep the fair from folding up
its tent.

It means Nevada will join Michigan as the only states in the nation without state fairs.

Crombie says they are debt but don't intend to file bankruptcy. He says the hope is to continue to raise money for another state fair in the years ahead. The first Nevada fair was held in 1874.

The Michigan State Fair, said to be the country's oldest, was closed in 2009 because of declining attendance and budget shortfalls.

Michigan Radio's "Picture Project" has some fantastic images of Michigan's now defunct State Fair.

Economy
9:00 am
Thu March 10, 2011

Detroit's slumping home prices leading nation

Detroit posted the biggest percentage drop in home prices in the nation, according to a new report. Clear Capitol says home prices in Michigan’s largest home market slide 13% in February, more than any other major city.

Alex Villacorta  is Clear Capitol’s director of research.   He says home prices in Detroit are being dragged down by banks trying to sell foreclosed homes.    Bank owned homes usually sell at well below market prices.

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Economy
8:56 am
Thu March 10, 2011

Foreclosure filings down in MI

Foreclosure filings in Michigan have fallen to levels not seen since 2008.   Realty Trac reports foreclosure filings dropped by 30 percent in February compared to a year ago. 

Daren Bloomquist is with Realty Trac.  He says mortgage lenders are finding it difficult to get home foreclosures started, since last fall’s scandal involving incorrect paperwork forcing people out of their homes.  New rules require more safeguards in preparing a foreclosure filing.  But Bloomquist says this is only delaying the inevitable for many delinquent home owners.

  “What hasn’t gone away is there are still a lot of properties that eventually we people will be foreclosed on.  That’s really the only solution for some of these situations.”  

Bloomquist says the slowed foreclosure process might help reduce the number of bank owned homes on the real estate market.   The high number of foreclosed homes on the market is blamed for causing depressed home sale prices.

Economy
2:25 pm
Mon March 7, 2011

Gas prices going up as world oil prices rise

Gas prices continue to go up in Michigan.
Andrew Taylor Flickr

Gas prices continue to go up in that wake of tensions in the Middle East.

The price of a barrel of crude oil has gone over $100 - that number was a record breaker back in early 2008 - the start of the Great Recession.

From the Associated Press:

Gas prices AAA Michigan says gasoline prices are up 8.4 cents per gallon over the past week to a statewide average of $3.53. The auto club said Monday the statewide average is 80.5 cents per gallon higher than last year at this time. Of the cities it surveys, AAA Michigan says the cheapest price for self-serve regular fuel is in the Saginaw/Bay City area, where it's $3.48 a gallon. The highest average can be found in the Marquette area at $3.59. Dearborn-based AAA Michigan surveys 2,800 Michigan gas stations daily.

The White House chief of staff Bill Daley said on NBC's Meet the Press that opening up the country's strategic oil reserves is an option the Obama Administration is considering:

"It is something that only is done--has been done in very rare occasions.  There's a bunch of factors that have to be looked at, and it is just not the price. Again, the uncertainty--I think there's no one who doubts that the uncertainty in the Middle East right now has caused this tremendous increase in the last number of weeks."

Many people wonder why we're seeing an increase in gas prices when the U.S. imports most of it's oil from Canada and Mexico.

Libya doesn't even make the the U.S. Department of Energy's Top 15 list of countries we import oil from.

The answer, simply, is that oil is a global commodity, so when the global price of crude goes up, we all pay more. Crude oil prices influence the price of gas more than other factors like refining, distribution, and taxes.

How Stuff Works has a write up of how the complex system of gas prices are factored here in the U.S.

They break the cost of a dollar of gas down this way:

  • Taxes: 15 cents
  • Distribution and Marketing: 11 cents
  • Refining: 7 cents
  • Crude oil: 67 cents

You can check gas prices near you on michigangasprices.com.

ArtPrize
2:58 pm
Wed March 2, 2011

Study: ArtPrize 2010 adds more than $7 million to Grand Rapids economy

Sicilian says most ArtPrize visitoes spent thier money on food and beverages.
Paul Sicilian Grand Valley State University

Economists at Grand Valley State University estimate last year’s ArtPrize added up to $7.5 million dollars; that’s just a little more than the first ArtPrize in 2009. But the study’s authors say they kept their estimates conservative.

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