Ford Motor Company

Analysts expect the auto industry to post very good sales numbers on Monday.  

IHS Global Insight automotive analyst Rebecca Lindland says September was a very good month at car dealerships.   She says the number of car buyers increased last month.  At the same time, Honda and Toyota were finally able to get more vehicles to showrooms, as the disruptive effects of last March’s earthquake and tsunami began to fade.

user brother o'mara / Flickr

UAW talks with Ford heat up

Officials from the United Auto Workers are pushing for more from Ford Motor Company. Michigan Radio's Sarah Cwiek reports the union leaders "expect to get better terms" from Ford, since the company is in a better position compared to GM and Chrysler. From Cwiek's report:

If the two sides can’t come to an agreement, there is the possibility of a strike. Since Ford didn’t go through bankruptcy, it doesn’t have the no-strike clause in its current contract that the other companies enjoy.

Like its fellow U.S. automakers, Ford is reluctant to increase its fixed costs by raising wages. But the union is expected to make a major push for bonuses, more generous profit-sharing formulas and retaining jobs in the U.S.

Costs of Enbridge oil spill going up

Officials from Enbridge Energy have revised their estimates for cleaning up the oil spilled into Talmadge Creek and the Kalamazoo River. It's original cost was $585 million. Now, they say it will cost $700 million. Michigan Radio's Steve Carmody reports the new estimate was part of paperwork Enbridge Energy filed with the U.S. Securities and Exchange Commission. An Enbridge spokesman says the increase is due to "additional work around submerged oil and just some more active remediation of the impacted environment."

New state policy: ties for guys

In contrast to their chief executive's style, officials from the Department of Licensing and Regulatory Affairs have issued a dress code for men that calls for ties. Governor Rick Snyder prefers a sport coat and dress shirt with no tie. The Lansing State Journal reports the new policy is aimed at thousands of state employees:

The new policy went into effect Sept. 12 for about 3,700 employees at the state Department of Licensing and Regulatory Affairs. It's part of a move to implement a consistent dress code among the several state bureaus and offices that merged this year to create the agency.

"Some of the old bureaus had dress codes, others didn't," said Mike Zimmer, the agency's chief deputy director. "We thought it should be consistent throughout the department."

UAW, Ford talks heat up

Sep 26, 2011
UAW
UAW

Ongoing contract talks between the UAW and Ford are heating up.

The union has indicated it expects more for workers from the only Detroit automaker to avoid bankruptcy.

Since Ford is the best-positioned of the three US carmakers, union leaders expect to get better terms from that company than from GM and Chrysler.

There’s a great deal of celebration going on over the fact that General Motors and the United Auto Workers union have reached tentative agreement on a new, four-year contract.

In the old days, what this would have meant was speedy ratification, followed by a similar settlement with Chrysler within perhaps two weeks, and then Ford maybe a month later.

That was the era of pretty much one-size-fits all pattern bargaining agreements. But that was before the near-death and the resurrection of Chrysler and GM, and it’s now a different world.

I spent some time yesterday with one of the best industry analysts around -- Kristin Dziczek, who heads the labor and industry group at CAR, the non-profit Center for Automotive Research based in Ann Arbor. Dziczek knows the management spokesmen and the economists, and has friends and relatives who are in the UAW. She eats, breathes, and sleeps this stuff.

Ford Motor Company

"You couldn't kill it no matter what you did to it."

So said Ford spokesman Octavio Navarro of the Crown Victoria in CNN Money:

The last Ford Crown Victoria rolled off a Canadian assembly line Thursday, marking the end of the big, heavy Ford cars that have been popular with taxi fleets and police departments for decades.

Since 1979, almost 10 million Crown Victoria, Mercury Grand Marquis and Lincoln Town Cars -- so-called Panther Platform vehicles -- have been sold.

The last "Crown Vic" rolled off the assembly line at 12:30 p.m. yesterday, according to the NY Times City Room blog. They write that the car will likely be exported to Mexico or Saudi Arabia.

The Canadian auto plant where the Crown Victoria was made, the St. Thomas Assembly Plant in Ontario, is closing.

CNN Money reports that Ford "is offering $100,000 cash payments or relocation offers, among other programs, for the workers at the plant."

So with the Crown Victoria out, what will future cop cars look like? CNN put together this gallery.

The deadline for Detroit automakers and the United Auto Workers’ union is fast approaching. 

But contract talks could be extended past the deadline of this Wednesday – especially at Ford. 

Ford is the only company that faces the possibility of a strike this time, because of agreements made during GM and Chrysler’s bankruptcies.

UAW President Bob King says a strike is not the goal.

But some union dissidents think a strike could happen.

Gary Walkowicz  is a bargaining committeeman at UAW Local 600 in Dearborn.

U.S. auto sales were a bright spot in a sea of bad economic news in August.  Most companies reported increases from the same month a year ago. 

Consumer sentiment in August fell to its lowest level since November 2007, stock markets dove, and fears of a double-dip recession increased. 

Those conditions usually flatten U.S. vehicle sales.

Yet car sales rode the storm, with sales at Chrysler  up 30%, GM,  up 18% and Ford,  up 11%. 

Ford Motor Company sprang a surprise on the media world on Monday by announcing it had signed a memorandum of understanding with Toyota to jointly develop a rear-wheel drive hybrid system for SUVs and trucks.

Ford is the undisputed king of the pickup in the U.S.  Its F-series pickup has been the best-selling vehicle in the U.S. for 25 years.

Toyota is the undisputed king of the hybrid - the Prius is the best-selling hybrid in the U.S.

Pobrecito33 / Flickr

The United Auto Workers' lead negotiator with Ford Motor Co. says talks with the Dearborn-based automaker are ahead of schedule and says the union is asking its locals to hold routine strike authorization votes by Sept. 2.

Jimmy Settles tells the Detroit Free Press the votes are "nothing unusual" and are a normal part of every contract cycle with Ford.

Settles and UAW President Bob King announced the decision to hold a strike authorization vote Tuesday at a UAW meeting in Chicago. The union started negotiations with Ford late last month to replace a four-year contract that expires Sept. 14.

Contracts also are up at General Motors Co. and Chrysler, of which Fiat is the majority owner.

Library of Congress

The U.S. government has agreed to pay $10.8 million for part of a cleanup at the River Rouge complex in Dearborn.

From the Detroit News:

The Dearborn automaker filed suit in May 2004 against the federal government in U.S. District Court in Detroit, arguing the government should pay a share of the costs of cleaning up the automaker's Rouge manufacturing complex that opened in 1917 stemming from military production from World War I.

Workers at Ford's Michigan Assembly Plant will soon be working on larger vehicles.
Sam VarnHagen / Ford Motor Co.

DETROIT (AP) - Two people familiar with the matter say Ford Motor Co. can't build as many hot-selling Focus cars as it wants because of equipment problems at a parts factory.

The people say machinery that makes a key dashboard part doesn't work all the time and has slowed production at the Focus factory near Detroit. The company has taken the unusual step of flying in
parts from Europe. But the people say Ford is still running short on dashboards.

The problem has forced dealers to put customers on waiting lists. The redesigned Focus was Ford's top-selling U.S. passenger car last month.

The people didn't want to be identified because they aren't authorized to speak about the matter. A Ford spokesman would not comment.

Toolshed4 / Flickr

Ford Motor Company announced its second-quarter earnings this morning. And, although profits dropped slightly, the automaker did beat analysts' expectations. The Associated Press reports:

The company earned $2.4 billion, or 59 cents per share, down 8 percent from $2.6 billion, or 61 cents per share, in the second quarter of 2010. It was Ford's ninth straight quarterly profit. Worldwide sales rose, but the company spent more on materials and product development.

Revenue rose 13 percent to $35.5 billion. Analysts polled by FactSet had forecast revenue of $32.15 billion. Without one-time items, including $110 million for employee reductions, Ford would have earned $2.9 billion, or 65 cents per share. That beat analysts' forecast of 60 cents per share. Ford paid off $2.6 billion in debt during the quarter.

UAW

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.

A technology company has sued Ford Motor Company over patent infringements related to some of Ford’s hottest new products, including Sync.

The lawsuit says Eagle Harbor Holdings met with Ford starting in 2000 to discuss using Eagle Harbor’s voice command software and other patented technology. 

Eagle Harbor's General Counsel, Jeff Harmes, says Ford’s hands-free phone system, Sync, uses some of that technology.   But he says Ford broke off talks with Eagle Harbor in 2008.    

user brother o'mara / Flickr

Michigan House to release its redistricting plan

The political boundaries in Michigan are being redrawn by the party in power, and Republicans in the State House plan to release their proposed redistricting maps this Friday.

Redrawing political boundaries is required every ten years after the U.S. Census numbers are released.

It's the first time the public will see how some Republicans plan to redraw Michigan's political maps.

Republicans in the State Senate will release their plans later.

Michigan is the only state in the nation to have lost population, so the state will lose one seat in the U.S. House of Representatives. From the Detroit News:

Congressional districts represented by Democratic U.S. Reps. Gary Peters of Bloomfield Township and Sander Levin of Royal Oak would be merged under a plan Republicans reviewed in late May that was obtained by The Detroit News.

If both wanted to keep their seat, they'd have to run against each other in a Democratic primary. The draft plan would boost GOP majorities in a number of districts, making it easier for Republicans to hold on to their seats.

After the maps are released, the House Redistricting Committee will have hearings, according to a press release by Lund.

The latest U.S. Census numbers show that populations declined in southeast Michigan and grew in the west and other parts of the state.

State Representative Pete Lund (R - Shelby Township) chairman of the House Redistricting Committee was quoted in the News article, "the maps are going to reflect where people have moved. Whatever areas lost population will lose representation, and whatever areas gained population will gain representation."

Ford shares fall after $2 billion judgment in dealer suit An Ohio judge ruled that Ford Motor Company had to pay more than $2 billion in damages to thousands of dealerships. In the class action suit, the dealers contend they were overcharged for trucks they paid for over an 11 year period. From the Associated Press

Ford Motor Co. shares sank early Monday after an Ohio judge said the automaker had to pay nearly $2 billion in damages to thousands of dealerships who participated in a 2002 class-action lawsuit. But the shares pared their losses as several analysts downplayed the news and said Ford can absorb the damages even if loses a planned appeal.

ACLU goes after Livonia's medical marijuana ban

The ACLU will challenge Livonia's medical marijuana ban in court today.

From the Detroit Free Press:

The American Civil Liberties Union will try to convince a Wayne County judge today to strike down a Livonia ordinance that bans medical marijuana in any way, shape or form.

The ACLU of Michigan, arguing on behalf of a medical marijuana patient with multiple sclerosis, claims that the Livonia measure violates the 2008 Michigan Medical Marihuana Act, which legalized medical marijuana. ACLU Attorney Andy Nickelhoff will present oral arguments at 11 a.m. before Wayne County Circuit Court Judge Wendy M. Baxter.

The ACLU is representing Linda and Robert Lott of Birmingham.

Both Ford and General Motors today predicted they will expand their global presence, despite rising energy and commodity prices. 

GM held its first public stockholders meeting in Detroit – and Ford held its annual Investors Meeting in New York. 

GM CEO Dan Akerson told stockholders to consider the company a long-term investment, not short-term.  GM stock has lost a fair bit of value since the IPO in November.    

 The CEO of General Motors, Dan Akerson, told reporters today that he's concerned about the "jobless economic recovery" and high federal deficits.

From the Associated Press:

The CEO told reporters before the company's stockholders meeting Tuesday that the government should have a 10-year plan to cut its roughly $14 trillion deficit. He says that would bring much needed stability to markets.

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.

Ford, GM and Chrysler are getting along with their suppliers better than they used to.  

But an annual study says the companies have a ways to go to catch up with their Japanese counterparts. 

John Henke is President of Planning Perspectives, which studies the working relationship between parts suppliers and their customers, the car companies. 

He says that relationship has long been adversarial for the Detroit Three, which means suppliers often don’t give them the best prices for parts, or the first crack at new technologies.

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.

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.

Earlier this week, I was talking with a battle-hardened senior TV producer in her fifties who I don‘t think of as a romantic.

“I have to cancel a meeting Thursday night,” she told me. “I have to be up by 4:30 on Friday.”

“Are you catching an early flight?” I asked. “No.” she said. “I have to watch the royal wedding.”

Thanks to the time difference, monarchical devotees who want to watch Prince William and Kate Middleton exchange vows live will have to rise before dawn.

I was impressed by that, and remember thirty years ago, when a similar wave of pan-royal excitement swept our nation when Charles and Diana were married. And then suddenly I realized that we’ve been sitting on a solution to a lot of our problems, both in this state and the nation. We need a royal family, and we’ve got the perfect candidate right here in Michigan.

I’m being perfectly serious.

Ford announced its biggest first quarter profit since 1998.  The company made 2.6 billion dollars, and predicts it will remain profitable for the rest of the year despite some economic headwinds. 

But Ford also faces some unique challenges if it wants to keep growing.

Company CEO Alan Mulally likes to joke about the “small home improvement loan” of $23-billion the company took out in 2006.   That money paid for the company to improve its products and avoid bankruptcy. 

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.

user brother o'mara / Flickr

State seeks concessions from unionized corrections workers

In these austere times, governments large and small are seeking to save money by getting union workers to reduce the benefits and/or wages.

The State of Michigan is seeking $95 million in concessions from those unionized employees who work in state prisons.

From the Associated Press:

The amount requested from the Michigan Corrections Organization represents more than half of the $180 million in concessions Gov. Rick Snyder wants from state employees in the budget year that starts Oct. 1, The Lansing State Journal reported Monday.

The union's members make up about 16 percent of the state's work force, but are being asked to make 53 percent of concessions. Michigan Corrections Organization executive director Mel Grieshaber criticized the state's actions.

"We are in sticker shock right now," he told the newspaper. "It's not fair. Our membership is angry about it. . . . It's very offensive. You won't find a more dangerous job in state government."

Kurt Weiss, A spokesman for the Office of the State Employer, the agency that oversees all collective bargaining negotiations for the state, said the Department of Corrections is the "only major state department in which employees are solely funded by the general fund," and Governor Snyder is trying to close a $1.4 billion dollar budget gap in the general fund.

Ford Motor Company has a solid first quarter

Ford announced is best first quarter earnings since 1998. According to the Detroit News, the first quarter earnings were...

$2.6 billion, or 61 cents per share.

The results, an increase of $466 million over the first quarter of 2010, far exceeded analysts' expectations of about 50 cents per share.

Operating profit of $2.8 billion was the strongest for a first-quarter since 2004 and $2.1 billion of that was from automotive operations as consumers continue to embrace the automaker's vehicles, which include new and fuel efficient models. Total revenue was $33.1 billion, up $5 billion from the same period in 2010.

"Our team delivered a great quarter, with solid growth and improvements in all regions," Chief Executive Alan Mulally said.

And unlike the gas price spike in 2008, Ford Motor Company and the other domestic automakers are much more prepared for the current price spike with more choices for smaller, fuel efficient cars... 

Michigan's average gas price above $4 per gallon

It hasn't happened since 2008. That was the year gas prices shot up and consumers started looking for smaller cars. AAA Michigan says the statewide average for gasoline is $4.04.

From the Associated Press:

The auto club says Tuesday that prices for self-serve unleaded fuel rose 6 cents per gallon since Monday to a statewide average of $4.04. That's $1.20 per gallon higher than last year at this time. AAA Michigan says the last time the average hit $4 was Sept. 19, 2008, when it was $4.03 per gallon.

Dearborn-based AAA Michigan surveys 2,800 Michigan gas stations daily. It typically releases its gas prices report each Monday. But the auto club says it decided to put out a special edition of its gas prices report Tuesday because the average topped $4 a gallon.

Sarah Hulett / Michigan Radio

Governor Rick Snyder was greeted with boos at an event to celebrate the launch of the new Ford Focus today.

Workers at Ford’s Michigan Assembly Plant wore red T-shirts to show their solidarity with union workers whose collective bargaining rights are threatened.

Snyder says he wasn’t rattled by the reception.

"I respect people for having differing opinions, particularly when you’re talking about fundamental change."

(Ford Motor Company)

Rising gasoline prices are apparently spurring interest among car buyers in smaller, more fuel efficient vehicles. Gas prices in Michigan are hovering around $3.50 a gallon. In California, the average price for a gallon of gas is nearly $4. 

George Peterson is the president of Auto-Pacific, an automotive marketing research firm. He says gas prices are helping boost interest in small cars. 

“There’s a tremendous amount of interest, especially with the new small cars on the road that are very, very good.  The Hyundai Elantra, the Ford Focus, the Chevrolet Volt, the Chevrolet Cruze, the upcoming Honda Civic.  All of those are very fuel efficient.  Very good small cars.”  

Still, Peterson says  SUVs remain the leading segment in the auto sales market.

“The largest segment of vehicles still selling is Sport Utility Vehicle.  Now most of those are cross-over SUVs.  So they’re much more fuel efficient than the old gas hog SUVs that we had before.   If you think about sales, SUVs are king, followed by small cars, followed by mid-sized cars.”   

Peterson says the last time gas prices spiked over $4 a gallon, many drivers traded in gas guzzling SUV’s for smaller, more fuel efficient cars. But, he says many of those drivers expressed buyers’ remorse, after missing their larger, more powerful rides.

Ford's global small car, the Ford Fiesta, has received the equivalent of a five-star safety rating in virtually all the regions of the world in which it is sold - China, New Zealand, Australia, Europe, and the United States.   The subcompact car also received a "Top Safety Pick" award from the Insurance Institute for Highway Safety, which nonetheless warns drivers that in general, larger vehicles are safer vehicles.   

General Motors factory workers will get a record amount in profit-sharing checks this year.  The automaker's 48,000 UAW hourly workers will get at least $4,000.  That's more than twice the company's previous record for hourly worker profit-sharing  - $1,775 in 1999.

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