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PCOLA
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July 1, 2018 to December 31, 2018
Investing lessons for 2019 Rob Carrick The people managing the country’s largest pension fund oversee a portfolio far different than yours. But they’re guided by a few core principles that are relevant to everyday investors who value a simple, low-drama approach to long-term wealth-building. To start with, the Canada Pension Plan Investment Board doesn’t sweat a single bad year like 2018. The board reports investing results quarterly and thus is accountable for short-term gains and losses. But the view at the CCPIB is short-term results tell you mainly about what the stock and bond markets did in a particular year. You can’t properly assess your investment holdings and the strategy that binds them together until a block of years pass. “We look very closely at five- and 10-year returns,” said Geoffrey Rubin, senior managing director and chief investment strategist at the CPPIB. “That’s that we put particular prominence on when we think about our performance.” The CPPIB has yet to report results for the final three months of 2018, when stocks were at their wildest. But the five- and 10-year returns to Sept. 30 were 12.1 per cent and 9.1 per cent, respectively. For context, the FTSE TMX Canada Universe Bond Index averaged 4.4 per cent over the 10 years to Sept. 30, the S&P/TSX index averaged 6.3 per cent, the S&P 500 averaged close to 12 per cent in U.S. dollars and the MSCI Europe Australasia and Far East (EAFE) Index averaged almost 8 per cent (total returns are used here – they include dividends). A big difference between your portfolio and the CPPIB’s $368-billion investment fund is that the latter had 48.4 per cent of its assets in publicly traded securities as of Sept. 30 and 51.6 per cent in private investments that include actual holdings in real estate and infrastructure. For the most part, it’s simply not practical for retail investors to invest in privately held assets. But the CPPIB still assesses itself in ways that are relevant to individuals holding their stocks, exchange-traded funds and mutual funds. Mr. Rubin said the board believes returns must exceed what a very simple, plain vanilla portfolio would have actually returned. An easy way to do similar in your portfolio is to measure your returns against various stock and bond indexes, or against balanced funds with a comparable asset mix to yours. For example, you could use the new “portfolio in a box" ETFs from Vanguard – the ticker symbols are VCNS, VBAL and VGRO. Make sure you compare your own portfolio against a similar mix of assets. Mr. Rubin said the CPPIB portfolio is considered to have a risk profile equivalent to a conventional portfolio of 85-per-cent stocks and 15-per-cent bonds. This mix has been calibrated to sustain the CPP over the long term when combined with future contributions from workers and employers. Aging populations and weak increases in economic productivity have led to a growing sense that investment returns from both stocks and bonds will be modest in the years ahead. The CPPIB is among those who see an answer to this in developing markets, where growth levels are higher. “We’re actually not as pessimistic about developed market growth as some others might be,” Mr. Rubin said. “But it’s clear that emerging markets are in a different state of development than more mature markets.” He said emerging markets are now about 17 per cent of the fund, but could go as high as one-third over the next decade. Take a lesson from the CPPIB on fees by comparing what you paid and what you got in returns. Fees for the CPP’s investment portfolio come to 0.91 per cent with all costs considered, while a much simpler portfolio of globally diversified ETFs can be had for as little as 0.11 per cent (brokerage commissions extra). “We clearly appreciate and acknowledge that every dollar of expense is a dollar that does not otherwise go into the Canada Pension Plan itself,” Mr. Rubin said. “But we very carefully trace the net investment returns of our investment portfolio, inclusive of all fees that we pay externally and internally.” The year ahead marks the beginning of a long process of improving CPP retirement benefits for future retirees. Increased contributions will be drawn from workers and employers and some of the money invested in a portfolio that is partitioned off from the main CPP investment fund. This new portfolio will have a risk level equivalent to a portfolio split evenly between bonds and stocks, which is to say it will be more conservative than the main fund. With its private equity and real assets, the CPP is light years more complicated than the typical individual’s portfolio. Yet in curbing risk in the new portfolio to fund CPP enhancements, the board has opted for a basic strategy of blending Government of Canada bonds in to the existing investment approach. “It’s a very effective, simple, low-cost way for us to benefit from the demonstrated diversification that government bonds bring to a riskier portfolio,” Mr. Rubin said. An enormous pension fund loading up on federal government bonds has the potential to distort the bond market. With a ready buyer, there would be less pressure on the feds to increase yields on new bonds being sold to finance government operations. Mr. Rubin said the CPPIB doesn’t see a material effect on Canada’s bond market for at least 10 years; longer term, the board will likely branch out to bonds from other governments. For everyday investors, the least risky bonds are those maturing in five years or less. But with its long-term investing horizon, the CPPIB can afford to liberally mix in bonds maturing 10 to 30 years as well. At the opposite end of the risk spectrum from government bonds are investments in the cannabis sector and cryptocurrencies such as bitcoin. The CCPIB has exposure to cannabis stocks through investments that track the broad stock market and has researched cryptocurrencies, Mr. Rubin said. “At this point, we don’t view cryptocurrency as an investable asset class for this organisation.” |
The station wagon is dead, Phil Berg, For several decades I've asked auto execs the same question: “What's the difference between a car and a truck?” My favorite answer was from a top Toyota sales chief: “If you can sell fruit out of the back, it's a truck.” The debate has never ended, especially now that the terms “crossover” and “SUV” are used to categorize the top-selling “sit-high” cars. Michigan drivers will note their Jeeps and Subarus sold with these descriptors are currently listed as station wagons on the vehicles' registrations. I find the industry and government terms for these vehicles lacking, and the marketers' terms more useful. A Mercedes executive once told me their station wagons are so named because they are designed for the homemaker to drive the office worker to the train station. Popularity of the wagon's body style almost disappeared when the minivan was introduced in the 1980s. And then almost as quickly, the SUV replaced the minivan in the 1990s once automakers figured out how to domesticate the truck hardware on early SUV platforms, and please customers tired of the minivan's utilitarian image of suburban sprawl dwellers. The newest SUV boom these days is in a crossover category called the “three-rower," a type of wagon marketed as an SUV and able to carry seven or eight passengers like a minivan. For 2019 there are at least 23 nameplates that cover this description. Three notable new entries are the Subaru Ascent, Volkswagen Atlas and a significantly refreshed Honda Pilot. These step into the duties that the station wagon used to perform. The fill a lifestyle need that Honda is calling the “family adventure” car. Sales of midsize SUVs rose in 2018, while passenger cars — you know, sedans and hatchbacks — dropped. In addition to the increased sales, adventurous families seem to have more money than typical car buyers. Prices of SUVs in similar size classes to passenger cars range from several thousand dollars for compact five-seaters to more than $12,000 for seven-seaters. I like the new family adventure cars, er, light trucks. The Lincoln, Alabama, factory where the Pilot is built claims it to be a truck, as it does for the Ridgeline pickup and Odyssey minivan also built there. These two non-adventure family vehicles share much of the driveline and platform with the Pilot. What makes these three-row crossover SUV machines different? For one, unlike minivans and station wagons, they have available four-wheel drive systems and higher ground clearance. According to Honda Pilot chief engineer Lara Harrington, who also headed the resurrected compact Passport SUV for 2019, “Some people will never drive off-road. But they prefer the ride height to see farther in traffic.” Still, the off-road ability of the Pilot, which is to me essentially a minivan underneath, is near-Jeep in hardware and capability, uncompromised even if it's rarely used. In addition, Honda refreshed the Pilot for 2019 in directions it thinks the three-rowers are headed: “Up front is a more masculine appearance,” adds Harrington, which the company added to the third-generation Pilot, which was introduced in 2016. Seems that its minivan-looking former styling was a turn-off to buyers — the Pilot ranks significantly behind the Jeep Grand Cherokee, Toyota Highlander and Ford Explorer in popularity. The looks are also intended to point buyers at the Pilot's off-road ability Honda's Pilot is unique in the SUV segment in that it uses driveline hardware from its pickup, which includes a four-wheel drive system that doesn't rely on individual wheel braking to control the apportionment of torque to each wheel. Instead of aiding directional control of the vehicle on slick surfaces by braking a spinning wheel, it sends torque to the wheel with the most traction. That's typically better than most crossovers. Yet the Pilot also shares the smooth-riding, independent suspension of its Odyssey minivan. The Pilot, similar to Ford's Explorer and Jeep's Grand Cherokee, offers three additional driving modes that are impressive compared to simpler all-wheel drive systems. The modes allow reduced chances of spinning a wheel in “snow” mode, and in two off-road modes, “rocks” and “sand," allow the driver the ability to spin wheels, which is normally an advanced driving technique for keeping momentum on deep sand. So with the new aim toward family adventure, the capability of these three-rowers points toward the trend of adventure-seeking as part of the new American Dream, which means keeping the ability to carry a large family as did the tame suburban minivan, and without the rough edges and ride of a truck. This year, 2018, is the first in the U.S. to see vehicles labeled as trucks outselling cars, which may be significant, I think, in the future of the debate around “What is the difference between a car and a truck?”
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Compact Ford Ranger
I get the big truck thing. Big Ford F-series trucks that drive small business to construction sites every day. Big Ram trucks that haul race cars to the track. Big Chevy Silverado profits that fuel GM’s big autonomous dreams. Big, big, big. “Ungh, ungh, ungh,” as Tim Allen might grunt. But I’m a compact vehicle guy. I like spicy Ford Fiesta ST meatballs with nimble handling and hatchbacks you can stuff IKEA stuff into. Mazda CX-5 crossovers that will carry the kids to school, then dance through the twisties on the way home. Buick Encores that have single-handedly put POP POP into a FIZZLE FIZZLE brand. So I’ve been watching this compact truck thing. Once a sleepy segment monopolized by the Baja-shredding Toyota Tacoma, it has come back to life as the Detroit Three have invaded with their unique truck features: Handsome GMC Canyons, Chevy Colorados with corner-step beds, Rubicon-forged Jeep Gladiators. Now comes the Ford Ranger pickup, and I like it a lot. It’s a truck with all that compact stuff I crave: utility, interior room and fun, fun, fun. If I were a construction boss like my neighbor, Pickup Bob, I’d have an F-series with acres of interior room for long days on the job. But we can barely fit the things in our garages. It needs a tugboat to get down my driveway. The Ranger is for the weekend warriors who want a truck to drive to work on Monday. The adventure seeker who wants to load up dirt bikes for a Saturday trip to the country. Or go-karts for day at the track in East Lansing. Or, if more space is needed, it’ll pull a rented U-Haul trailer with its best-in-class 7,500-pound towing. As that towing number would indicate, the Ranger is a chip off the old F-150 block. Like big brother, it wears that best-in-class muscle with pride (best payload, too). But I have to admit, I was underwhelmed at first sight. The Ranger has been a long time coming since Ford left the segment in 2011, but the midi-pickup didn’t spend a lot of time at the plastic surgeon. Whereas big brother wears a chiseled bod and Olympian’s face, Ranger wears rounded, plain lines. There are no signature F-150 touches like the scalloped A-pillar window – though the higher bed sills look cool. Add three things and my pulse quickens: FX4 off-road package, Sport package... and getting behind the wheel. Compact sedans like the Volkswagen Jetta are value leaders with standard safety features like adaptive cruise-control, blind-spot assist, etc. Compact trucks, not so much. The Ranger doesn’t get interesting until you opt up to the $35,210 XLT SuperCrew with standard Co-Pilot360 safety package (adaptive cruise-control, Blind Spot Information System, etc.) plus FX4 off-road goodies like a bash plate. It makes the Ford a better deal than a comparable Toyota TRD Off-Road. Add the Sport package’s blacked-out grille and 17-inch wheels, and now you got attitude. Attitude to match the Ford’s handling. I’m a big Tacoma fan, but its talents lie off-road, not on. The Ranger is a mid-sized truck that truly feels compact on the road with tight handling and minimal bed flutter. Where I had to saw at the Tacoma’s wheel through fast corners, the Ranger is steady. It’s got the feel of the pricier, Multimatic-shocked Chevy Colorado ZR2. Under the skin is one of Ford’s finest mills – the versatile 2.3-liter turbo-four found in the riveting Focus RS and base Mustang. But while the four-banger seems inadequate in the pony car, Chief Engineer Rick Bolt and his merry band of elves have blessed Ranger with a gravelly voice. Ungh, ungh, ungh. Married to Ford’s 10-speed tranny, the engine's 310 pound-feet of torque does everything well from cruising to hauling motorbikes. Excellence extends off-road. While Ranger left the U.S. market, it never ceased international production. But to meet U.S. customer standards — and the expectations that come with being Son of F-series — engineers went through the Ranger head to tow (pun intended). The head gets a class-exclusive steel bumper for when, well, you hit things off-road. Towing gets the aforementioned muscle thanks to liberal use of high-strength steel in the frame. On a challenging California off-road course, the Ranger rollicked like a Raptor, eagerly attacking moguls with its steel chin and underbelly skid plates (get the FX4 off-road package), then sprinting across open spaces under full throttle. Ford trucks are expected to have brains to go with their brawn. The Ranger brings to the game Trail Control, the clever low-speed adaptive-cruise option I also tested on the F-150 Raptor in Utah last month. The feature takes care of low-speed crawling over rocky terrain so you can enjoy the scenery while steering. This Jeep-like feature is a reminder that the Ranger’s size is more suited to the craggy Outback than big brother Raptor. (Ahem, when is that Ranger Raptor coming to the U.S., Ford?) Thus equipped, my lightning-blue, tech-tastic, 4WD, SXT (middle trim) Ranger with Sport package comes in at a very class-competitive $40,000. The bad news for the Ranger is that, at $40,000, pickup lovers might just trade up for a bigger F-150 XLT. The good news is that a well-equipped Ranger SuperCrew can be had for about the price of a Ford Escape Titanium for the family that needs access to a bed for weekend adventures, but without sacrificing good road manners and most interior amenities. The Escape customer might frown on the Ranger’s hard plastic surfaces like door sills and lower dash. Ford counters they’re necessary for the truck customer who expects a truck to be rough, muddy — and even washed down internally. Fair enough. But a truck for this price should also come with the same standard amenities as a compact car. Pay the premium, however, and Ranger’s tech offerings are plentiful: Apple CarPlay and Android Auto, two USB ports in the rear seat, digital instrument display. It’s a thoroughly modern truck that's light years from the ol’ 2009 nail. “In some ways it’s a good thing it took us a decade to get back to market,” says engineer Keith Erickson, “because the truck has changed so much.” Welcome back, Ranger. Because big matters — but so does compact. 2019 Ford Ranger Vehicle type: Front-engine, rear or four-wheel drive, five-passenger pickup Price: $25,395 base including $1,095 destination fee ($42,085 SuperCrew 4x4 as configured) Powerplant: 2.3-liter, turbocharged inline-4 cylinder Power: 270 horsepower, 310 pound-feet torque Transmission: 10-speed automatic Performance: 0-60 mph, 6.3-6.7 seconds (Car and Driver est.); 1,860-pound payload (SuperCab 4x2); 7,500-pound towing Weight: 4,145 pounds base (4,441 pounds SuperCrew 4x4 as tested) Fuel economy: EPA fuel economy: 20 city/24 highway/22 combined (4x4) Report card Highs: Capable on and off-road; tech-tastic Lows: Vanilla looks in base truck; tech will cost ya. Overall: 3 stars
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Can any of GM's plants slated
Michael Wayland DETROIT — Business vs. politics. It’s a choice General Motors will likely have to make following a significant backlash to the company’s plans to idle and potentially close five plants in North America. The plans, announced last month, were initially praised on Wall Street. But in the political arena, they’ve kicked up a storm of protest that the highly profitable automaker is being greedy, sacrificing American and Canadian jobs to find cheaper labour in Mexico and betraying the taxpayers who bailed it out a decade ago. GM hasn’t wavered from the plans. But outside pressure is mounting, and the groups applying it sound convinced that they can force the company to re-examine its decision and save at least one of the plants during the 2019 contract negotiations with the UAW. On paper, the Detroit-Hamtramck plant in Michigan appears to have the best survival chances. It’s newer, has received substantial investments in recent years and is closer to other facilities — including GM’s battery plant and r&d operations — that are key to the automaker’s next generation of vehicles. And it would represent a smaller commitment. Detroit-Hamtramck, according to LMC Automotive, has a total capacity of 160,000 units, compared with 410,000 at the Lordstown, Ohio, plant also slated for shutdown. Cutting Lordstown would make a much bigger dent against GM’s nearly 1 million units of underutilized capacity. But Lordstown and its allies, including President Donald Trump himself, have mobilized quickly to cast the plant as the sympathetic symbol of GM’s restructuring and job cuts. UAW Local 1112 President Dave Green partnered with the Youngstown-Warren Regional Chamber of Commerce for a campaign called “Drive it Home, Ohio” to persuade GM to increase its investment in the plant, rather than shut it down. The group’s efforts include having more than 5,000 schoolchildren write letters to GM CEO Mary Barra urging her to keep production in Ohio, distributing signs to residents and businesses to hang in windows, and raising funds to escalate its campaign. “We plan on traveling around the state as early as January and doing events every week to keep us in the news,” said Green, a 29-year UAW member. “We don’t want this to die. We’re going to continue to let GM know we are part of the family and want to continue to be part of the family.” Trump, who campaigned as a champion of Midwest auto workers, has lavished far more attention on Lordstown than on Hamtramck since Barra announced the restructuring moves on Nov. 26. “You know, the United States saved General Motors,” Trump said, referring to the 2009 government-led bankruptcy, “and for her to take that company out of Ohio is not good. I think she’s going to put something back in soon.” For that to happen, state and local officials and the union would have to step up with enticements of their own, said Kristin Dziczek, vice president of industry, labour and economics at the Center for Automotive Research. Meanwhile, in Canada, Unifor National President Jerry Dias said he and Unifor officials spent two hours on Dec. 20 outlining for some of GM’s top executives in Detroit a series of options and solutions to keep the Oshawa plant operating beyond 2019. Dias said GM executives did not “unilaterally close the door on keeping the plant open.” However, the meeting didn’t include GM CEO Mary Barra, Dias said. Key players at the meeting for GM were Alicia Boler-Davis, head of global manufacturing; Gerald Johnson, head of North American manufacturing, and new GM Canada president Travis Hester. “They said they had listened to our proposals and would get back to us one way or the other by Jan. 7,” added Dias during a press briefing at Unifor Local 444/200 offices across the Detroit River in Windsor. “I am optimistic that they understand the importance of the Canadian market to their global operations.” The lobbying effort for the Detroit-Hamtramck plant has been more subdued, but it’s revving up as Lordstown’s profile rises and union leaders in Canada make their own push to save the Oshawa, Ontario, plant from a planned shutdown. In Detroit, UAW Local 22 on Thursday, Dec. 20, hosted a small demonstration at the plant to show “unified support with UAW leadership as well as state and local representatives,” and planned to deliver letters to GM headquarters the next day. Frank Stuglin, UAW Region 1 director who oversees the plant, said the union expects to ramp up its efforts on behalf of all the U.S. plants next year, as the UAW enters into formal contract negotiations with GM. As things stand now, Stuglin said, neither Lordstown nor Detroit-Hamtramck has the edge in being able to secure a lifeline from GM. “This is the start of it,” he said. “A lot of things are going to come next. We’re going to figure that out as it goes.”
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GM transformation imperils Daniel Howes, Detroit’s decade of labor peace is coming to an end. With the exception of United Auto Workers members in 2015 rejecting Fiat Chrysler Automobiles NV's first contract offer, this town’s automakers have reaped the benefits of steadily rising sales and record profits — the proverbial rising tide of good times rewarding both labor and management. Hourly workers have profited, too. They've pocketed record profit-sharing payouts even as demand for traditional sedans wanes and company planners increasingly move to pare shifts and up production elsewhere to more profit-rich pickups and SUVs. General Motors Co. is changing all that. Its plan to idle four U.S. plants, kill production at a fifth in Canada and imperil the jobs of nearly 6,000 North American union members is rocking auto unions on both sides of the border. It's roused members amid multi-front trade battles ensnaring the auto industry and shining new light on old beefs about GM's federally backed bankruptcy and the practice of building products where you sell them. Politicians, led by President Donald Trump, are enraged at GM's perceived betrayal, delivered the Monday after the Thanksgiving holiday. Communities from Detroit to Lordstown, Ohio, and Oshawa, Ont., are reeling. And the unions are using holiday sentiment to make a point they’re likely to repeat in the run-up to national contract talks with the Detroit automaker over the next two years: “U.S. and Canadian workers made GM.” This is just the beginning of a year-long drama that is equal parts theater, politics and economics. The first act opened Thursday on Canadian networks scheduled to carry an ad dubbed "Betrayal" and on both sides of the Detroit River — at Unifor Local 444 in Windsor and at a UAW vigil at GM's Detroit-Hamtramck Assembly Plant. The messages outline the contours of a looming rhetorical battle that easily could morph into confrontation because the stakes are so high. They pit the unions, their strike funds and part of their institutional foundation against an automaker desperate to prove its mettle to investors during a transformative time for the auto industry. "Why should our jobs and products go to Mexico?" asks a four-page ad Unifor placed in the Thursday editions of The Detroit News and Detroit Free Press. "GM has made excuses for closing five plants in Canada and the U.S. But really, it's about moving our jobs and our products to Mexico." It's actually about much more than that. GM management and its key North American unions are navigating a future none can clearly discern — not GM CEO Mary Barra and her management team, not UAW President Gary Jones and his vice presidents, not Unifor President Jerry Dias and his deputies, and not investors. Even the Silicon Valley tech heavyweights greedily eyeing the revenue possibilities conjured from marrying self-driving technology to automotive platforms are learning how difficult it can be to meld their knack for technological innovation (and its implicit risk of failure) with tightly regulated automotive engineering. The result is an auto industry being forced to think and act differently, to hire differently, to field product portfolios that look different from the traditional balance of cars, trucks and SUVs. Over time, those changes should balance the workforce and production needs, but not without some painful disruption culminating in fewer employees and more productivity. This is not business as usual. With the thinnest of public explanations, GM is pushing its unions to help shape a new business model from the pieces of the existing one. The transition is likely to defy some of the industry's most enduring, if unofficial, rules: First, management doesn't move to close plants and eliminate employees in good times, but it is. Second, labor doesn't decide what products to develop and build, management does. Third, automakers should build where they sell, but the post-bankruptcy GM is increasingly straying from that mantra. It sells vehicles in the United States and Canada that are produced in Mexico, Germany, China and South Korea. That's far more than its crosstown rivals, which means it's likely to be a frequent flashpoint — and metaphorical cudgel — in next year's talks. Get used to it.
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Ford to recall 410K F-Series
Associated Press Detroit – Ford is recalling more than 874,000 F-Series pickups with engine block heaters in the U.S. and Canada because they can catch fire. The recall covers certain F-150s from the 2015 through 2019 model years, as well as the 2017 through 2019 F-250, 350, 450 and 550. The company says in documents posted Friday on the U.S. National Highway Traffic Safety Administration website that water and contaminants can get into the heater cable and cause corrosion. That can cause electrical shorts and possible fires. Engine block heaters warm the engines so they can start and warm up faster in extreme cold temperatures. The company says the risk of fire happens only when the block heater cable is plugged into an electrical outlet. Ford has received three reports of fires in Canada, but none in the U.S. Minor property damage was reported in one incident, but there haven’t been any reports of injuries, Ford said in a statement. Dealers will inspect and seal the cable or replace the heaters if needed. The recall is expected to start in the U.S. on Jan. 7. F-Series pickups are the top-selling vehicle in the United States. |
Unifor says GM to  Click to Enlarge Dave Hall WINDSOR, Ont. — Unifor President Jerry Dias said Thursday he remains “optimistic” that General Motors will cancel recently-announced plans to close its Oshawa assembly plant at the end of 2019. Dias said he and Unifor officials spent two hours outlining for some of GM’s top executives in Detroit a series of options and solutions to keep the Oshawa plant operating beyond 2019. Dias said GM executives did not “unilaterally close the door on keeping the plant open.” The meeting didn’t include GM CEO Mary Barra, Dias said. Key players at the meeting for GM were Alicia Boler-Davis, head of global manufacturing; Gerald Johnson, head of North American manufacturing, and new GM Canada president Travis Hester. “They said they had listened to our proposals and would get back to us one way or the other by Jan. 7,” added Dias during a press briefing at Unifor Local 444/200 offices across the Detroit River in Windsor. “I am optimistic that they understand the importance of the Canadian market to their global operations.” Dias said those proposals include launching GM’s new Blazer in Oshawa rather than Mexico, extending truck production in Oshawa, extending two existing passenger vehicle programs and bringing product back to Canada from Mexico. “If those products can go from Canada to Mexico, they can certainly come back,” said Dias. “The ball is now clearly in GM’s court.” GM said in November it would stop the truck shuttle program that sees the automaker ship unfinished outgoing models of the GMC Sierra and Chevrolet Silverado to Oshawa from a plant in Indiana. The automaker also said it will stop building the Chevy Impala and Cadillac XTS. Dias pointed out that Canadians produce more than 300,000 GM vehicles every year and that Canadians consumers buy just as many. By contrast, he said, Mexico produces more than one million GM vehicles but Mexican consumers buy less than one-quarter of that amount. Blaming declining sales of passenger vehicles across the automotive industry and a switch in focus to autonomous and electric vehicles, GM announced Nov. 26 that it would no longer allot product to its Oshawa assembly plant after December 2019, throwing 2,500 Unifor members out of work. The plant, which once employed 23,000 workers at the height of its production in the 1980s, has been a major part of the Oshawa economy for 100 years. The scheduled closure will also affect thousands of spinoff jobs in the nearby parts supply industry which rely upon producing parts for the massive plant which dominates the city’s landscape, Unifor said. GM’s Oshawa announcement came 10 years after the Canadian, Ontario and U.S. governments delivered US$62 billion in bailouts to the company after the automaker filed for bankruptcy protection in 2008. Unifor calls GM’s decision to stop production at Oshawa a betrayal. In its Thursday news release, GM Canada appeared to hit back at the union, saying it had “repaid all of its loans and has fulfilled or surpassed all the terms” of the federal and provincial bailouts. “The government support enabled GM to continue its Canadian operations after 2009 and helped manage the Canadian economy through the 2009 financial crisis,” the news release reads. GM Canada also said it was “committed to Canada and we are not going anywhere,” pointing to continued operations at CAMI Assembly in Ingersoll, Ont., and at its engine and transmission plant in St. Catharines, Ontario. “There are no plans for operating changes at those operations at this time,” the release reads. Unifor officials also said that during collective bargaining negotiations in 2016, GM committed to keeping Oshawa open for the duration of the four-year agreement which expires Sept. 21, 2020. GM, which is implementing a massive company-wide restructuring plan designed to save $6 billion by the end of 2020, also announced it is closing assembly plants in Lordstown, Ohio and Hamtramck, Mich. Another undisclosed assembly plant outside North America and a U.S. propulsion plant will also close. As a result of the closures and a downturn in passenger car sales, GM said it would stop making vehicles such as the Chevrolet Volt, Impala, Cruze and Buick Lacrosse as well as the Cadillac CT6 and XTS models
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Unifor plans international ad
John Irwin TORONTO -- Canada's Unifor union plans to spend millions of dollars on a cross-border advertising campaign in Canada and the United States as part of its effort to save General Motors' assembly plant in Oshawa, Ont., union President Jerry Dias said. Dias, in an interview with Automotive News Canada, said Unifor is already airing radio ads about Oshawa in the Toronto market, with commercials lined up in other Canadian markets throughout the week. He said the advertising effort before a Thursday meeting between the union and General Motors in Detroit is designed to get the automaker's attention "in a minor way" and promised a "no-holds-barred" media campaign on both sides of the border if GM does not signal that it could back away from its plans for Oshawa. "After the meeting on the 20th, if we don't get any sort of positive messaging, then there will be a media blitz that GM has never seen. We're not Australia," he said, referring to the nation's final auto assembly plant closing in 2017. "We're not going to take it sitting down." Dias declined to say specifically where the company has bought advertising, only saying that the union has lined up "high-profile" time slots on TV, as well as ad buys in newspapers and radio. The union has already started a social media campaign called #SaveOshawaGM. GM in November said it would stop allocating production to Oshawa Assembly and two other assembly plants in the U.S. in 2019 as part of a larger corporate restructuring plan. The plant builds the Chevrolet Impala and Cadillac XTS sedans, both of which GM plans to cut from its North American lineup. It also does final assembly on previous-generation Chevrolet Silverado and GMC Sierra pickup bodies shipped from Indiana. GM plans to stop building those pickups in Oshawa by the end of 2019. In addition to the ad campaign, Dias said the union would take "major action" in the new year in response to GM's plans. He declined to reveal Unifor's plans when asked if they would involve strikes or other actions. "We are going to get GM's attention in a very aggressive, meaningful way," he said. "There is nothing that we won't do." Tensions between GM and Unifor have been high in recent years. In 2017, GM threatened to close its Ingersoll, Ont., assembly plant in response to a monthlong strike there. The two sides reached a deal to keep the plant open, though Unifor did not receive the lead producer designation for the Chevrolet Equinox crossover that the strike was largely about. The 2017 strike followed tense labor negotiations in 2016 that revolved around the future of the Oshawa plant, which was seen as being in imminent danger of closing. GM would invest $500 million in the plant so it could do pickup final assembly there -- a move GM said was always meant to be temporary. Unifor leadership has blasted GM's plans to shutter the plant, with Dias calling it the "ultimate betrayal" and rejecting GM Canada's plans to find 2,400 jobs for its Oshawa workers at its dealerships and in other industries. David Paterson, GM Canada's vice president of corporate and environmental affairs, acknowledged last week that the union has voiced "some strong opinions" on Oshawa. "We have an obligation and duty to work with our union to determine -- in addition to our pensions and the income supplements our employees will get -- what things we can provide," Paterson told the Canadian Press. Barring a breakthrough at Thursday's meeting between GM and Unifor leadership, tensions appear likely to rise in 2019 as the union calls for a boycott of GM vehicles. "Canadians have had enough of General Motors. It's clear that this is the straw that broke the camel's back," Dias said. "The focus of the next year is going to be to educate General Motors on what is going to happen to them in Canada."
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2019 Ford Ranger Test Drive:
By Gary Gastelu The Ford Ranger is back. That is to say, it’s back in the USA. Ford introduced a new one to the rest of the world in 2012, but decided not to sell it here as it focused on full-size trucks instead. Considering how well the F-Series has been doing in recent years, it probably wasn’t a bad call. That’s especially true when you look at Chevy Silverado sales, which have been flat since the Colorado returned after a short break in 2015 and started cannibalizing some customers. But Colorado buyers get to drive home in the truck that they want, rather than a monstrosity they don’t really need. Meanwhile, demand for the Tacoma has been so strong since Ford got out of the small truck game that Toyota had to spend $150 million to increase production at one of the two factories that makes it. So, with a fear of missing out finally getting the best of it, Ford has re-engineered the Ranger for U.S. consumption and retooled a former compact car plant in Michigan to build it in. Unlike the F-150, which you can order in roughly six or seven gazillion configurations, when the Ranger hits showrooms in January it will initially be offered in just two cab sizes and three trim levels that are all equipped with a powerful 2.3-liter turbocharged four-cylinder engine and 10-speed automatic transmission. That means there’s no bargain-basement Ranger, and prices start at $25,375, which compares favorably to the competition's V6 trucks. The Ranger team says it aimed the single powertrain at providing efficiency and capability in one package so shoppers wouldn’t have to choose between the two, and it was right on target. The engine provides 270 hp and 310 lb-ft of torque, the latter tops among gasoline-powered small pickups. It also delivers 23 mpg in 2wd trucks and 22 mpg powering 4x4s, both figures best in class. So is the 1,860 payload rating on two-wheel-drive SuperCab models, while all Rangers are rated to tow up to 7,500 pounds, which is more than some F-150s can handle. Those are strong numbers, but since the Ranger is being marketed mostly to “lifestyle” buyers who are hooked on a feeling, rather than cold and calculating fleet managers, Ford ladled on plenty of refinement and features, too. The Ranger has a softer, sportier look than the F-150 that shouldn’t scare off anyone cross-shopping it with a crossover. The cabin is roomier than the Tacoma’s and about the same as the Colorado’s, which means compact car-size accommodations. SuperCabs and four-door SuperCrews are the exact same length overall, but have six- and five-foot-long beds, respectively. There are only 44.8 inches of space between the wheelhouses, so you’ll have to perch that plywood for the home projects on top of them, but an ATV or two dirt bikes fit fine. The interior design doesn’t break any new ground, but is perfectly functional. Entry-level XTs come with an old-school radio, so there are plenty of knobs and buttons to augment the touchscreen infotainment system that makes an appearance on higher trims. Aside from the armrests, all of the surfaces that you don’t sit on are hard plastic, unless you go for a top-of-the-line Lariat that gets a soft-touch toupee on the dashboard to complement its heated and leather-upholstered seats. The Ranger is exceptionally quiet, and its ride comfortable and controlled. It has a limber, yet well-damped suspension that’s adept at handling both rough streets and winding mountain roads, and is a step or two above the Colorado and Tacoma in this regard. The engine feels as strong as its specifications suggest and the transmission never gets too busy, despite the multitude of gears it has to choose from. Over the course of a 150-mile route filled with fast California highways and two-lanes rising 4,000 feet into the sky I averaged a spot-on 23 mpg without trying to. I also took a Ranger with a 30-foot-long, 6700-pound boat attached to it for a spin and hardly knew it was there, but the blind-spot warning system did. It can be programmed to account for trailers of varying lengths. Automatic emergency brakes are standard across the lineup, and lane-keeping assist and adaptive cruise control are available. If it sounds like Ford put too much effort into pleasing the country club crowd, don’t worry. All of the 4x4s can be ordered with an FX4 package that comes with tougher shocks, extra underbody protection, tow hooks, an electronic locking rear differential and a bevy other off-road-focused features. These include Ford’s Trail Control, which is a low-speed cruise control that can operate as slowly as 1 mph and allows you to focus on steering as you navigate tough trails. But not too tough. Even with the FX4 gear, the Ranger only has 8.9 inches of ground clearance and isn’t a hardcore off-roader in the vein of a Tacoma TRD Pro or Colorado ZR2, but it can scramble up hills like a Tough Mudder and take pretty big bumps at speed without bottoming out. Ranger prices top out above $45,000, but you get what you pay for. Ford knew that if it was going to return to this segment it would have to make a splash, and it did. Apples to apples and overall, the Ranger is the most impressive truck on sale today. Unfortunately for Ford, there is another one on the way soon. It’s the Jeep Gladiator, a hotly-anticipated Wrangler-based, open-top truck that appears to be more than ready for battle. But Ford already has a counterattack planned for 2020 when it goes after the Wrangler with a yet to be revealed Ranger-based Bronco SUV. |
Lincoln Continental
Ford Motor Co. will offer a car that's more exclusive than the Ford GT supercar. Sort of. It's a Lincoln Continental with suicide doors. Ford's luxury arm will sell only 80 Lincoln Continental 80th Anniversary Coach Door Edition vehicles for the 2019 model year. The suicide doors on the cars are so-named because the passenger doors are hinged at the rear rather than the front. They've been largely abandoned because of safety concerns: If the doors are opened at speed, the wind can violently swing the doors open and bring the backseat passenger with them. However, the new Continental's electronically controlled doors cannot be opened if the car is moving more than 2 miles per hour, Lincoln officials said. The doors, originally used on horse-drawn carriages, were offered at various times in the Continental's history. Lincoln marketing manager Trevor Scott said, "It shows a combination of our commitment to the vehicle and the rich history of the brand," There won't be a formal application process, but anyone who wants the vehicles will have to work with a Lincoln dealer to get their hands on one. Lincoln will vet each order to ensure the person buying the car intends to keep it — not just resell it for a profit.
Similar restrictions were placed on the Ford GT. Celebrities and car enthusiasts had to prove their bona fides in order to be consider for one of the supercars. Scott said the vehicles will retail for slightly more than $100,000 when they go on sale next summer. A top-of-the-line Black Label Lincoln Continental retails for $70,000. The suicide-door Continentals will roll off Ford's assembly line in Flat Rock as Black Label Continentals. Ford will then ship the cars to Massachusetts-based Cabot Coach Builders, an aftermarket modification company. Cabot will cut the vehicles in half, stretch them 6 inches, fit the suicide doors, and build out a custom second row with extra leg room, larger seats and a center console with controls, tray tables, wireless charging and other perks. The automaker plans to sell the cars exclusively in the U.S. for the first run in 2019. Lincoln will showcase the vehicle at one of the 2019 auto shows in China, Scott said, and could sell the vehicles there in 2020. The spacious backseat is primed for the Chinese market, where many luxury buyers purchase cars with a longer wheelbase and spacious backseats, because they have chauffeurs. The specialty vehicle has popped up on the drawing board of Lincoln design director David Woodhouse multiple times since he's been with the company. "We've always idealized the Continental to have center-opening doors," Woodhouse said.
The automaker has a penchant for rolling out concept vehicles with eye-catching doors. Before the Lincoln Navigator launched last year, the automaker in 2016 had debuted a concept at the New York auto show that had massive gull-wing doors. The special-edition Continental is a tribute to the history of the nameplate. The 1961 Continental had center-opening doors, too. And it's one of the vehicles Lincoln holds up as one of its best, historically. The 2019 model will have a few other perks. Officials said the heads-up display that projects on the windshield for the driver will be the first that people can see while wearing polarized sunglasses. |
New GM faces old
Washington — The furious backlash against General Motors Co.’s restructuring, delivered by official Washington, may be a harbinger of things to come. Even as the Detroit automaker executes a plan to cut 8,000 salaried employees, idle four U.S. plants and imperil 3,300 hourly workers, its crosstown rivals are quietly reshaping their footprints to account for dramatically shifting demand and to bolster their cash hoards to fund next-generation technology. The result is likely to be frustration, confusion and yet more pushback from constituencies outside the executive suites: Why are automakers booking billions in North American profits on fatter profit margins acting like companies desperately managing an imminent recession? And how can they justify the actions when two of Detroit’s three automakers owe their survival to U.S. taxpayers amid the global financial meltdown? GM and Fiat Chrysler Automobiles NV, recipients of $51 billion and $12.5 billion respectively in federal largesse a decade ago, have used their second chances to streamline their businesses and to move on. Congress — and by extension, chunks of the American people — have not. And that’s likely to prove a challenge next year as GM seeks federal extensions of tax credits for electric cars, as the automakers push deeper into the Auto 2.0 spaces of mobility, autonomy and electrification, and as all three companies bargain new national contracts with the United Auto Workers. The negotiations could prove complex. As GM moves to wind down production at four U.S. plants, Ford Motor Co. and Fiat Chrysler are rebalancing their U.S. production, affecting union members and signaling a slowdown in vehicle sales. Ford said Thursday it will cut 230 jobs at its Van Dyke Transmission Plant in Sterling Heights, and offer those employees positions at other Ford plants, in the first quarter of 2019. Last month, Ford said it would move 500 hourly employees from its Flat Rock Assembly Plant where it builds cars to its Livonia plant to build transmissions for in-demand trucks and SUVs. The Flat Rock plant, home to the iconic Mustang and Lincoln Continental sedan, will go down to a one-shift schedule in the spring, displacing 650 full-time hourly employees. The automaker also will shift 500 people to its Kentucky Truck Plant to build full-size SUVs and trucks. Fiat Chrysler is preparing to convert its idled Mack II engine plant in Detroit into a second assembly plant to build a three-row version of the next-generation Jeep Grand Cherokee, The Detroit News reported. The move, which could be announced as early as next week, likely would cushion the blow of the potential closing of GM’s Detroit-Hamtramck assembly plant. But not quite yet, leaving GM a lightning rod for criticism. CEO Mary Barra attempted to thaw the relationship between her company and Congress with face-to-face meetings in Washington with lawmakers from Michigan and Ohio, where three of the four targeted U.S. plants are located. But reversing a decade of being deemed beholden to taxpayers is likely to take more than a week-long tour of Washington. Barra's appearances did little to appease members of Congress. They complained of being blindsided by the news of potential plant closures. And the CEO's explanation decidedly did not satisfy President Donald Trump, who was delivered to the Oval Office in part by campaign promises to workers in the industrial Midwest. "I don’t like what she did," Trump fumed in a Fox News interview Thursday. "I think it was nasty." “To tell me a couple of weeks before Christmas that's she's going to close in Ohio and Michigan — not acceptable to me," Trump continued. "And she's either going to open fast or somebody else is going to go in. But General Motors is not going to be treated well." The automaker in 2019 will pull vehicles from five plants in the United States and Canada. Four of the facilities — including Detroit-Hamtramck Assembly and Warren Transmission — are in the U.S. and employ about more than 3,000 hourly workers. On Friday, nearly three weeks after the Nov. 26 announcement of the austerity measures, GM attempted to give clarity about what the plant idlings might mean: It expects be able to offer new positions to about 2,700 of those workers through transfers. But some of those workers would have to commute long distances, or even move to other parts of the country. Notably, the announcement was communicated to lawmakers before it was released to the news media. In her meetings with lawmakers from Michigan and Ohio two weeks ago, Barra sought to reassure them that GM is sensitive to the impact of displaced workers. But she made clear the automaker views itself as the "new GM," a leaner and more agile company than the one taxpayers bailed out a decade ago. The company notes it repaid most of the money it received in the initial bailout, although the federal government lost $11.2 billion on the transactions that resulted in the U.S. divesting of GM's stock. 'Helicopter' relationships Congress vividly remembers the political pain it endured during the period when GM was derided as "Government Motors." And that colors Washington's view of everything the company has done in the last 10 years. "GM needs to pay more attention to relationships on the Hill," said U.S. Rep. Debbie Dingell, D-Dearborn, who described GM recently as the “most disliked company in Washington." "They focused on Treasury relationships until they paid it back," Dingell continued. "They feel beat-up upon. But if they invested in making sure people knew what was going on, what we're doing to support them, they wouldn't have been met with the intensity they were met with last week." GM will have to do much more than a Barra fly-in to improve its standing on Capitol Hill, Dingell said: "It's kind of like being a helicopter parent. You can't helicopter in and think everything is going to be OK." The company declined to comment on its broader relationship with key constituencies in Washington. During her whirlwind tour of Washington, Barra bristled at suggestions that GM still owes a debt to taxpayers, obligations it should have considered before drafting its austerity plans. She noted that GM has invested $22 billion in the U.S. since 2009. "We will be forever grateful for the assistance that the U.S. government provided General Motors, and we're trying to make sure we're good corporate citizens and continue to provide jobs and provide vehicles and transportation that consumers want in this country," Barra said. "That's what I think is the most responsible thing that we can do to thank the American taxpayers for what they did for us." The explanation did little to mollify angry lawmakers who represent districts that include the soon-to-be idled plants, or to quiet critics who insist the Detroit automaker's obligations to taxpayers should continue until it completely reimburses the U.S. Treasury. "We note with concern that GM has increased its Mexican-based production in recent years, including of the Blazer, and we ask you to consider Lordstown as an alternative assembly facility for vehicles intended for U.S. consumers," Ohio U.S. Sens. Sherrod Brown and Rob Portman wrote in a letter to Barra after their face-to-face meeting over the possible closing of the Lordstown Complex in northeast Ohio. GM says the decision to build the upcoming Blazer in Mexico was made at least two years ago, although it was not announced until June. Barra told lawmakers that Lordstown "was running full out of three shifts" at the time the Blazer decision was made. Trump warnings The blowback from Congress and the president is potentially ominous for GM. The company is lobbying for an extension of electric vehicle tax credits, and it's seeking relief from tariffs on foreign steel and aluminum that have been instituted by Trump. Trump has threatened to yank electric-car subsidies that are used by GM to make plug-in vehicles more attractive to auto buyers, although he does not have the power to target GM individually. Trump has also again threatened a 25-percent tariff on cars imported to the United States in retaliation for GM's decision, a move that would hit its Buick brand particularly hard because its lineup includes vehicles built in Germany, China and South Korea. GM, which is betting on an electric-car future, is teaming with Nissan Motor Co.,Tesla Inc. and environmental groups in a push to remove a cap on a federal tax credit that provides up to $7,500 to buyers of electric cars. Trump already has cast doubt on GM's bet on electric cars. "I don't run a car company, but all-electric is not going to work," the president said in Thursday's Fox News interview. "It's wonderful to have it as a percentage of your cars, but going into this model that she's doing I think is a mistake." UAW talks looming GM's austerity plans will have major ramifications in its negotiations with the UAW as all three Detroit automakers bargain new labor contracts next year. The UAW has filed a complaint alleging that GM's "unilateral" decision to idle the plants in Michigan, Ohio and Maryland is a violation of the 2015 labor contract. They say the contract requires the company to notify the union before making decisions that will result in job losses. “We have been clear that the UAW will leave no stone unturned and use any and all resources available to us regarding the future of these plants," UAW President Gary Jones said. Kristin Dziczek, vice president of the Center for Automotive Research, said: "After years of very strong profits ... it's going to be difficult to go to the UAW with an austerity contract. For business reasons they had to address this under-utilized capacity now, but doing so kind of sets the stage for how the conversations with the UAW will go." Jonathan Bernstein, president of California-based Bernstein Crisis Management Inc., which specializes in handling public relations crises, said GM is in a tough spot. "The goal in crisis communications is to communicate with compassion, confidence and competence," he said. "In crisis, stakeholders feel anger, fear and other negative emotions. Those all filter their reactions to the facts. Corporate comments must be sensitive to that, and so must the timing of a bad-news announcement. "Blindsiding stakeholders with bad news only makes them feel worse, the exact opposite of what GM should want to achieve," Bernstein continued. "It’s difficult to piss off pretty much all your stakeholders at once, but GM appears to have done it."
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Unifor to discuss Oshawa fate
John Irwin TORONTO — Unifor leadership will meet with General Motors executives on Dec. 20 in Detroit to discuss the automaker’s plans to shutter its Oshawa, Ont., assembly plant, union boss Jerry Dias told Automotive News Canada. It was not immediately clear which GM executives would meet with Unifor. A GM spokeswoman wrote in an email that the company meets with Unifor “regularly to discuss our business, but we don’t discuss those meetings externally.” The meeting would come almost one month after GM said it would stop allocating product to the Oshawa plant at the end of 2019. The automaker will do the same at an assembly plant in Ohio and one in Michigan. It all part of a broader restructuring. Dias has promised a major fight with the automaker in the coming months to try to keep the plant open. “GM is leaving Canada, and we’re not going to let them,” Dias told The Canadian Press. “We are going to waste General Motors over the next year. Waste them.” Oshawa Assembly builds the Chevrolet Impala and Cadillac XTS sedans, both of which GM plans to cut from its North American lineup, and does final assembly on previous-generation Chevrolet Silverado and GMC Sierra pickup bodies shipped from Indiana, a program the automaker said will end by December 2019. Unifor has launched a nationwide “Save Oshawa GM” campaign, which includes a social media blitz and email writing, as part of its effort to keep the plant operating beyond 2019. GM on Friday said it would help displaced Oshawa workers find a job, saying it would provide retraining tools and identifying 300 jobs at GM dealerships in Ontario, 100 jobs at other GM facilities and about 2,000 jobs in other industries that could be filled. “My priority is to have a transition plan for every Oshawa Assembly employee,” GM Canada President Travis Hester said in a statement.
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Mightier Ford Raptor
Where do you exercise your pet Orca whale? Big, ravenous, and capable of speeds in excess of 30 mph, it needs an ocean to play. A similar riddle plagues the Ford F-150 Raptor pickup. Though the name suggests a bird of prey or velociraptor of "Jurassic Park" fame (Ford intentionally won't signal either), the 5,500-pound pickup is more of a land shark — an animal of outsized capabilities that needs a sea of sand to really show its stuff. Based on the formidable best-selling Ford F-150, the Raptor is America’s only supertruck. No one else makes a pickup capable of Baja-like, 100-plus mph off-road speeds. Its fortified steel skeleton, sinewy 450-horsepower twin-turbo V-6 and robust Fox-shocks cartilage enable terrain-shredding capabilities that are awesome to experience. When I first experienced them in southern California’s Borrego Springs desert in 2016, I was in awe — and sorrow. The vast Borrego desert is a Raptor playground. Miles of high-speed dirt flats where the big truck hit 100 mph. Sandy expanses where its Fox shocks leaped from mogul to mogul. And dry-wash beds where its 35-inch tires dance in dust. Trouble is, it’s rare earth — far from where the Kraken lives in suburban garages. Mere off-road parks like Michigan’s Mounds or Silver Lake can’t contain it. Buy a Corvette ZR1 supercar and you can track it at M1 Concourse at speeds approaching 130 mph. Its full limits can be explored at track days at myriad facilities like Mid-Ohio or Road America or Autobahn Auto Club. Happily, Ford is trying to solve that. Buy a Raptor — about 15,000 are sold a year — and Ford gives you a free day at Utah Motorsports Park to explore its considerable capabilities. For 2019 those capabilities have, incredibly, expanded. Add to its holster electronically controlled Fox Live Valve shocks which adapt to the terrain so the beast conforms to the changing landscape. They reduce roll, pitch and skittishness to make the Raptor even faster off-road. Think of the shocks as the off-road equivalent to magnetic shocks that allow track-focused cyborgs to turn faster laps. Of course, faster speeds demand better seats. Ford has invited the legendary Recaro into its cabin to design bolstered seats so you can better ride Orca without falling off. And since long trails ultimately lead into the mountains, Raptor has gained Trail Assist, a sort of low-speed cruise control — pioneered by Land Rover — that automatically pilots the truck at speeds from 0-20 mph up/down steep grades so you can concentrate on steering and navigating. Ford packs these goodies into a $54,000-$74,000 truck that is cheaper than a supercar, but affords unique off-road thrills. I experienced the new Raptor at the Ford Performance Racing School outside Salt Lake City like a customer would. With over 100 sold-out dates a year hosting 20 owners each, the Raptor experience won’t disappoint. Compared to my 2016 Raptor outing, the shocks felt immediately better on-road as we turned out of Utah Motorsports Park for the Wasatch Mountains. Where the previous-generation Raptor felt stiff with a constant empty-bed flutter in the background, the 2019 model was smoother, to the point that I forgot it was a pickup. Not that anyone else would. Though its innards have been upgraded, the Raptor’s ferocious visage remains unchanged for the new model year. Its ribbed hood looks like a prehistoric predator’s back; its fearsome, black maw looms in the mirrors of cars half its size. Turning off the asphalt onto twisted trails through Jacob’s City and Sunshine Canyon, the Raptor was in its element. Toggling the steering-wheel mounted mode selector to Baja, I bounded across the landscape inhaling gravel, rock and moguls like they weren’t there. With 510 pound-feet of torque, the beast cries for more. More throttle. More landscape. And more noise. I understand the complaints of pals who have held onto their first-generation V-8 Raptors. Though the twin-turbo V-6 offers more power, the exhaust note needs more bass. Tip into the throttle and hear the V-6’s (muffled) roar. I wish I had a V-8. Back at the school, Ford Performance set up a dirt jump. I floor the beast to 60 mph over the jump and Orca went airborne like it breached the ocean’s surface — WHUMP! It landed down the slope like an Olympic skier nailing a long jump. More! “With the new shocks, everything performs at new levels of performance,” says John Williams, a school instructor. “It has more ability to handle the terrain and take performance to new limits.” But even Williams acknowledges he doesn’t know its limits. He hasn’t found sustained trails here where he can hit the Raptor’s 100 mph potential. Even the Utah desert, it seems, is too small for Orca. So Ford has made sure that the beast can excel at more mundane duties, like crawling up the face of the Wasatch. This is Jeep Wrangler Rubicon territory with craggy slopes, narrow ravines and rocky steps. But the Raptor now comes equipped with something even the Rubicon doesn’t have: Crawl control. I engaged 4-Low to lock the rear differential and then pushed the Crawl-control button. The darn thing drove itself up the hill at 2.5 miles per hour (yes, digital speedos now do fractional speeds). No fighting the throttle, no lurches, no limits. All this happens in a leather-stitched cabin as comfortable as your corner office. Playing passenger in the huge backseat of the Supercrew cab, I folded my legs and took in the scenery. The 7,000-foot Wasatch mountains offer breathtaking views of the surrounding valley. With more space than the average New York apartment, the Raptor’s bed will easily hold a family picnic. Walking around the pickup is like walking around a supercar. Admire the wide track, the power-dome hood, the angry grille. But there are aesthetic touches, too. The tailgate graphic now subtly offsets the dark gray “Ford” from its black frame. The Recaro seat inserts are the same blue as Ford’s GT supercar. I rowed the GT around Utah Motorsports Park's demanding race track last year, sliding its carbon-fiber chassis to the limits of adhesion, then letting loose 647 ponies down the front straight. The off-road limits of the Raptor are still out of reach here. That’s not to say the Performance School isn’t worthwhile. It’s a must for any Raptor owner. Because after you have conquered the Wasatch, you’ll be hungry for more. Hey, Ford, how about a performance racing school in Baja? Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne. Catch “Car Radio with Henry Payne” from noon-2 p.m. Saturdays on 910 AM Superstation. 2019 Ford F-150 Raptor Vehicle type: Front-engine, four-wheel drive, five-passenger pickup Price: $54,350 base including $1,495 destination fee ($68,845 as tested) Powerplant: 3.5-liter, twin-turbocharged V-6 Power: 450 horsepower, 510 pound-feet torque Transmission: 10-speed automatic with paddle shifters Performance: 0-60 mph, 5.1 seconds (Car and Driver); 1,200-pound payload; 8,000-pound towing Weight: 5,518 pounds Fuel economy: EPA fuel economy: 15 city/18 highway/16 combined Report card Highs: Upgraded Fox shocks improve on- and off-road performance; new Crawl control Lows: Need a big playground to realize its outsized capabilities; wish it had a V-8 Overall: 4 stars |
Ford releases 2019
The 2019 Ford Ranger will be the most fuel-efficient midsize pickup on the market when it hits showrooms earlier next year. Ford Motor Co. announced Tuesday the truck's standard 2.3-liter EcoBoost engine and 10-speed transmission will get an EPA-estimated 23-miles-per-gallon of combined fuel economy, beating any competitor currently in the space. "Midsize truck customers have been asking for a pickup that’s Built Ford Tough," said Todd Eckert, Ford truck group marketing manager, in a statement. "And Ranger will deliver with durability, capability and fuel efficiency, while also providing in-city maneuverability and the freedom desired by many midsize pickup truck buyers to go off the grid." The revived Ranger enters an increasingly competitive market in which automakers are clawing for proof points to differentiate their products. General Motors Co. has two vehicles in the space. Toyota Motor North American, Nissan Motor Co., and Honda North America all have one vehicle each competing in the midsize truck space. The Ranger gets a combined EPA-estimated fuel economy better than all the competition for the 4x2 trucks. The 4x4 Ranger gets 22-miles-per-gallon combined, the same as the Chevrolet Colorado and GMC Canyon. The 2011 4x2 Ranger with a 4-cylinder, 2.3-liter engine mated to a five-speed transmission got an EPA-estimated combined gas mileage of 20-miles-per-gallon. Ford will also have to contend with the Jeep Gladiator midsize truck expected to launch in the first half of 2019. Pricing and fuel economy for that vehicle have yet to be released. The 2019 Ranger will start at $25,395, including delivery charges. The Blue Oval's midsize pickup will top out close to $40,000 on the 4X4 SuperCrew Lariat with a 5-foot box. That's more expensive than the trucks currently in the market. Ford officials have said the 2019 Ranger will be packed with technology. It's the first time Ford will sell the truck since 2011 — and a lot has changed. For one, combustion engines have gotten more fuel-efficient. The Range will launch with one engine option: the 270-horsepower 2.3-liter EcoBoost that can produce 310-lb.-feet of torque. The truck will come with standard automatic emergency-braking on all trim levels — the XL, XLT and top-level Lariat. Blind-spot monitoring, automatic high-beams, lane-departure warning, lane-keep assist and parking aids are standard starting with the mid-level XLT. Customers can get systems to help handling in snow, rain, uneven terrain or sand on all three trim levels for added cost. Ford began building the trucks at Michigan Assembly Plant in Wayne in October. The trucks will arrive at dealers in January |
Ford-VW could
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CANADA: Detroit 3 drag Global Automakers of Canada predicts first Automotive News Canadian new-vehicle sales fell for the eighth consecutive month in November, down 8.2 percent when compared with the same month last year, according to the Automotive News Data Center in Detroit. Vehicle sales in November totaled 145,984 units while year-to-date sales stood at 1,886,901, down 1.7 percent from last year. The Global Automakers of Canada, which represents 15 automakers based outside Canada and the United States, called the trend “worrisome” and predicted 2018 would mark the first annual sales decline in a decade. “Despite an increase in consumer confidence of over two points in November – according to TradingEconomics.com – that has not translated into higher vehicle sales,” David Adams, president of the Global Automakers of Canada, said. Each of the Detroit-based companies took double-digit sales losses – with FCA was down 35.2 percent. GM was down 18.3 percent while Ford fell 10.7 percent. “Anytime all three companies are down significantly the whole market will be down as well,” Adams said. “Notably, however Toyota had a new November sales record and was third in sales for the month, and only about 500 units behind General Motors for second spot.” Ford sold the most vehicles in November taking the sales crown from GM and with one month to go, Ford retains the overall sales lead on a year-to-date basis. The Ford F-Series pick-up truck also remains Canada’s best-selling vehicle through November, while the Honda Civic retains that distinction for passenger cars. Trucks comprised 73 percent of the market in November compared to 72 percent in 2017. Here’s a look at how some of the automakers fared in November: FCA DOWN 35% FCA Canada saw it’s sales plummet 35.2 percent to 12,406 vehicles in November as every brand took a double-digit hit. Dodge sales were down 58.2 percent, Chrysler down 44.3 percent, Jeep 31.5 percent, Ram 20.2 percent, Fiat down 44.6 percent and Alfa Romeo down 14.3 percent. Flagship vehicles for every brand took a beating. Jeep Wrangler sales were down 62 percent to 679 units. Ram pickup sales dropped 20 percent to 5,387 units. Dodge Caravan sales fell 64 percent to 1,343 units. And Pacifica sales were off 43 percent to 251 units. Part of the reason for the slide was FCA’s slow exit from fleet sales, which were down 49 percent year over year. FCA Canada said in a statement it “continues its strategy of reducing its sales to the daily rental segment.” FORD SLIPS 10% Ford Canada sales fell 10.7 percent in last month, even though the popular Edge had its best November on record with 2,034, a 32-percent increase over the same month last year. Lincoln MKX/Nautilius sales were up 19 percent to 369 units. The Nautilus name replaced MKX this year after the vehicle was redesigned. “We’re pleased by the consumer response to the new Ford Edge and Lincoln Nautilus, which are proudly built in Canada,” said Mark Buzzell, CEO, Ford of Canada. “Canadians are also excited about the all-new Ford Edge ST, with customer response towards Ford’s first performance utility being very positive.” Ford’s car sales were down 41.8 percent, while truck sales fell 7.7 percent. NISSAN'S BEST NOVEMBER Nissan Canada had its best November on record even as sales of its luxury Infiniti brand fell 7.4 percent. The automaker sold 11,446 vehicles last month, up 0.5 percent compared with November 2017. The Nissan division, alone, saw record monthly sales for November with 10,444 units sold, up 1.3 percent year-over-year. The Nissan Qashqai compact crossover, full-size Titan truck, mid-size Frontier truck and all-electric Leaf all had record months. TOYOTA SURGES 10% Toyota Canada reported another record sales month, with 18,731 units sold in November, up 10.4 percent compared with 2017. The Toyota division saw sales of 16,787 vehicles, up 11.5 percent compared with last year for the division’s best November yet. The luxury Lexus brand posted sales of 1,944 vehicles, up 1.7 percent compared to last year for its best November yet. “We’re seeing record numbers of Canadians buying our cars, trucks and electrified vehicles,” said Larry Hutchinson, president and CEO, Toyota Canada Inc. As Canadians turn to electrified vehicles, Toyota Canada also saw record hybrid-vehicle sales last month. The automaker reported record sales of 2,039 units sold, up 21.2 percent compared with 2018. Hybrid sales represented 10.9 percent of Toyota Canada’s total sales for the month. HYUNDAI, KIA HEAD IN OPPOSITE DIRECTIONS Hyundai and Kia brand sales headed in the opposite direction in November. Hyundai sales were up 10 percent while Kia sales sank 17.3 percent. The Elantra was Hyundai’s top-selling car with 2,872 units sold, while the Tuscon was the brand’s best-selling light truck with 2,350 sold. Kia sales were led by the Sorento (1,062 sold) and Sportage (1,018 sold) on the truck side, while the Forte (1,138 sold) led the brand’s car segment. |
Unifor calls for boycott of Union has launched a social
media Greg Layson Canadians are being asked to boycott General Motors if the automaker follows through on a plan to shutter its assembly plant in Oshawa, Ont., at the end of 2019. Unifor Local 222, which represents about 2,500 workers at the factory, is asking owners of GM vehicles to display lawn signs that read: "If GM pulls out of Oshawa, this is the last GM vehicle I buy." The union wants people to snap a photo of themselves, their vehicle and the sign and tweet it to the automaker. “Show the decision-makers in Detroit what you think of their plans for Oshawa,” the union said in a statement. “Public pressure does get results.” The plant currently builds the Cadillac XTS and Chevrolet Impala and finishes assembly of outgoing models of the light- and heavy-duty GMC Sierra and Chevy Silverado. The automaker plans to axe all four vehicles from its lineup after 2019. It means about 3,000 employees — roughly 2,500 of them hourly and represented by Unifor — will be out of work. Immediately after GM announced on Nov. 26 that it would not allocate product to the Oshawa plant beyond 2019, Unifor President Jerry Dias promised one “hell of a fight” to keep the plant open. Local 222 is also selling black t-shirts emblazoned with the words “Save Oshawa GM” for $10 each. The union is asking its members to wear the shirts on Fridays. The money “goes directly to the Save Oshawa GM campaign. The union has also launched the website SaveOsahwaGM.ca and Twitter account @SaveOshawaGM. GM Canada didn’t immediately respond to a request for comment. General Motors has sold 283,025 vehicles in Canada through November, down three per cent over the same time last year. Only Ford has sold more vehicles (290,948) in Canada this year. |
Volkswagen may build cars
The Associated Press Have you driven a Volkswagen lately? The German automaker is talking to Ford about using some of its excess U.S. manufacturing capacity to build future VW models, VW CEO Herbert Diess told reporters Tuesday after meeting with White House officials on trade. Ford and VW have been in preliminary discussions about creating an alliance focused on commercial vehicles built on shared platforms, but specifics on where they would be made have not been pinned down. Volkswagen currently runs its own manufacturing facility in Chattanooga, Tenn., where it produces the Passat sedan and Atlas SUV, and VW North America CEO Scott Keogh revealed at the Los Angeles Auto Show last week that the company is scouting locations for a potential second factory that would build electric cars. Diess did not say if the use of Ford facilities would take the place of the second plant or be aimed at additional production. At a separate event in Detroit on Tuesday, Ford chairman Bill Ford Jr. told reporters that the talks with VW were “going well,” but said it was too early to discuss any manufacturing plans that may result from them, Reuters reported. With Ford’s recent elimination of several car lines and a continuing shift toward less conventional mobility segments, a Morgan Stanley analyst this week projected that Ford could make as many as 25,000 job cuts in the near future. General Motors last week announced manufacturing cuts that could affect 18,000 employees worldwide.
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Ford cuts could eclipse
In the first half of next year, Ford Motor Co. will detail plans to lay off part of its global salaried workforce — and Morgan Stanley analyst Adam Jonas said in a note Monday that the Blue Oval's cuts could exceed the 8,000 salaried employees targeted by rival General Motors Co. Ford's response: "pure speculation." "As we have said, we are undertaking restructuring activities that could result in potential EBIT charges of $11 billion, with cash-related effects of $7 billion, over the next five years," Ford spokeswoman Karen Hampton said in a statement. "These actions will come largely outside of North America. This includes the targeted and thoughtful approach we are taking to the redesign of our global salaried workforce. "All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation." Both GM and Ford are in the midst of restructuring their respective business models to prepare for an uncertain future. U.S. sales are plateauing, U.S. consumers aren't buying the sedans that saved the U.S. automakers during the fuel crisis last decade. And both companies, as well as their foreign-owned competitors, are spending billions to develop electric and autonomous vehicles expected to be dominant forces in the next generation auto industry. "This is not just a GM or a Ford thing," Jonas wrote. "There are bigger forces at work driving global OEMs to rethink the fundamental idea of supporting increasingly obsolete segments, propulsion systems, and geographic regions." GM announced a week ago the company in 2019 would idle five plants in North America and lay off 6,000 salaried employees in addition to the 2,250 white-collar workers who took buyout offers. The idled plants, which mostly build cars, would affect more than 14,000 employees — though it's unclear whether those plants would be permanently closed, or if GM will assign new products to the plants in Michigan, Ohio and Ontario. The Detroit automaker plans to close two plants overseas next year as well. GM will spend as much as $2 billion on employee-related cuts as part of the nearly $4 billion the Detroit automaker says it could spend on its restructuring efforts. Ford, meantime, announced earlier this year it would spend $11 billion to restructure its global business. Ford officials in October said they would cut an undetermined number of salaried employees globally, some of which would come out of its North American operations. Ford officials have also said repeatedly that the automaker did not have a glut of line workers. Six of Ford's nine U.S. assembly plants this year operated at above 80 percent capacity utilization, according to data from LMC Automotive. By comparison, half of GM's 12 U.S. assembly plants were operating below 50 percent. But Jonas wrote in his note that Ford's $11 billion implies 20 plants and 50,000 employees would be cut. Ford, however, has given no indication of any planned closures or layoff numbers. "We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion," Jonas wrote. "But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers." Ford CEO Jim Hackett has said the company plans to trim operating expenses by $25.5 billion over the next several years. It will spend the $11 billion to restructure. Ford executives haven't offered details on the layoffs because they don't have them yet, several Ford officials have told The Detroit News. The automaker is aiming to flatten management globally based on feedback from individual department leaders. The company expects to have specifics on a headcount reduction by the second quarter of 2019. The Dearborn automaker is currently on the brink of a new product rollout that would bring new nameplates into the lineup for several years while it phases out sedans from the lineup. Ford leadership has also promised details — possibly by the end of the year — on partnerships with Mahindra Group in India, and Volkswagen in Europe and South America, as well as restructuring in Europe, South America and China. Meantime, GM has said its layoffs, sedan cuts and plant idling will save the company $6 billion by 2020. The moves announced last week drew the ire of President Donald Trump and several other local and national politicians. Some have called GM's manufacturing announcements a strategic move ahead of 2019 negotiations with the United Auto Workers. |
UAW challenges GM plan
Nora Naughton, The United Auto Workers is formally challenging General Motors Co.'s plans to idle four U.S. plants next year. A week ago, GM said it would stagger production-stops at Detroit-Hamtramck, Lordstown, Ohio, Warren Transmission and Baltimore Operations — leaving the facilities "unallocated" at the height of the latest renegotiation of the national GM-UAW contract. In its restructuring announcement last week, GM was careful to address the affected plants, using the term "unallocated" to indicate that the products currently built at these plants would stop production without anything to immediately replace them. The use of the word "unallocated" deliberately avoids the words "idle or "close," which are explicitly addressed in the 2015 agreement between GM and the UAW. "Characterizing these plants as 'unallocated' — rather than closed or idled — does nothing to relieve the company of its obligation to comply with the Plant Closing Moratorium," the head of the UAW's GM department, Terry Dittes, wrote in a letter sent to GM's vice president of labor relations, Scott Sandefur, that was obtained by The Detroit News. "We expect the company to honor its commitments and we will use all of our resources to enforce our agreements." The UAW has said since last week it would challenge GM's plans for the union-represented plants. On Monday the union filed its formal objections to the automaker's proposed actions, even though they would be subject to negotiations in next year's contract talks. “We have been clear that the UAW will leave no stone unturned and use any and all resources available to us regarding the future of these plants," UAW President Gary Jones said in a statement. "There are issues related to this and to collective bargaining that we cannot discuss in detail at this point. But UAW members across this country are committed to using every means available to us on behalf of our brothers and sisters at Lordstown, Hamtramck, Baltimore and Warren, MI." Ohio's two U.S. senators — Republican Rob Portman and Democrat Sherrod Brown — are expected to meet Wednesday in Washington with GM CEO Mary Barra to discuss the future of the automaker's plant in Lordstown, Ohio. Barra also is expected to meet with some of the Michigan delegation noon Thursday to discuss the two Michigan plants that are scheduled to lose product next year. Incoming freshman House members from Michigan are in Boston this week for training and can't attend the Barra meeting in person. Staffers may sit in on their behalf, aides said. "We are working on a potential time to hear from Ms. Barra. We are still working out the logistics," said Rep.-elect Elissa Slotkin, D-Holly. "It's been really important for us new members to try and understand what is happening with GM, what the plan is, what their strategic vision is going forward, and how federal policy plays into that." GM was widely criticized in Washington last week following its restructuring announcement, including a vow from Rep. Debbie Dingell, D-Dearborn, a former GM executive, to rescind her support for the automaker if they continue to import from Mexico. The union had already accused GM of a longer-term plan to move more production to Mexico, where labor costs are lower. The UAW says GM was hiding behind slowing sedan sales in its restructuring announcement Monday. "This issue impacting our members, their families, the communities and all of America is much more complicated due to the known fact that GM is a major importer of their brands from China, Canada and Mexico that are sold in the United States," Dittes said in the joint statement with Jones. GM imports only one vehicle from China, the Buick Envision, and has asked the Trump administration to exempt the lower-volume vehicle from Chinese import tariffs. The automaker imports the Chevrolet Equinox, Trax, and Cruze hatchback and GMC Terrain from Mexico. GM also plans to build the new Chevrolet Blazer at its plant in Ramos, Mexico, a decision that was met with fury by the union. The Detroit automaker has said it needs to strengthen its core business and improve its free cash flow to position for an emission-free and driverless future. And that will include painful moves like shrinking the salaried workforce and addressing excess plant capacity. |
GM's plans for plants sets Nora Naughton, General Motors Co.'s staggered idling of four U.S. plants will come at the height of next year's bargaining with the United Auto Workers, setting the stage for a battle to keep the plants open and save union jobs. The Detroit automaker says it needs to strengthen its core business now while the company and the industry are in a good position, and that includes painful moves that could affect some 14,300 jobs across the company. GM's actions with its plants are also the first public move in the latest renegotiation of the national GM-UAW contract, a complex agreement developed over 81 years. The contract bars GM from closing or idling union-represented plants except in dire circumstances, and the union is expected to argue that the slowing sales of sedan built at Detroit-Hamtramck and Lordstown, Ohio, is not dire enough. That means, experts say, talks between the automaker and the union this summer — as the plants wind down production — are likely to be dominated by efforts to ensure new products are allocated to some, or all, of the affected plants. "If anyone was thinking next year’s contract talks were going to be easy, they were fooling themselves," said Kristin Dziczek, vice president of the Ann Arbor-based Center for Automotive Research. "These are still very profitable companies, and workers want to be rewarded. But now there is this existential dread that this is the first shot across the bow. And the conversation shifts to what can be maintained versus what can be gained." When GM idles five plants in North America next year — a move that could imperil 3,300 union jobs in the U.S. and 2,600 in Canada — it would mark the end of the line for six money-losing sedans. But GM was careful last week in its restructuring announcement when it addressed the affected plants, coining a new term: "unallocated." The reason: to avoid the words "idle" or "close," which are explicitly addressed in the 2015 agreement between GM and the UAW. The "Plant Closing and Sale Moratorium," outlined on page 356 of the agreement, states that GM will not will not close or idle "in any form, any plant, asset, or business unit of any type" outside of collective bargaining, with a caveat for extreme market conditions or an "act of God." "GM and the UAW will talk about numerous topics that affect our employees and our business during 2019 negotiations," GM said in a statement emailed to The Detroit News. "As always, our intent is to work with the UAW constructively to address our business challenges in a way that keeps the company competitive in these changing market conditions." The UAW is challenging GM's decision to leave the four plants "unallocated." The union is accusing the automaker of a long-term plan to move more production to Mexico where labor costs are lower, adding that it's only now using slowing sedan sales as an excuse for their actions. "This was long planned through intentional strategic investment decisions and product movement over our objections," the UAW said in a statement to The News. "They may have kept the news about it quiet, but this was planned and had to be gradually executed long before sales numbers were known.” Through a spokesman, the UAW's vice president and director of the GM department, Terry Dittes, said he could not talk publicly about bargaining strategy. Federal lawmakers — and President Donald Trump — appear to back the union. U.S. Rep. Debbie Dingell, D-Dearborn, a former GM executive, took to CNN earlier this week to call GM "the most thoroughly disliked company in Washington, D.C." Generally a stalwart supporter of Detroit's automakers on Capitol Hill, Dingell has repeatedly pointed to GM's decision to build the new Chevrolet Blazer in Mexico as a slight against American workers, labeling it a plan to "ship jobs" out of the country. That move was also met with fury from the UAW when it was announced earlier this year. "I'm aware of the fact that we're dealing with a cyclical industry, and these companies have to prepare for a downturn," Dingell said in an interview. "But I'm not giving my support to a company that keeps sending jobs to Mexico and not here. We have had enough of that." In an effort to ease tensions with lawmakers, GM CEO Mary Barra is expected to meet with the Michigan delegation in Washington on Thursday, according to two sources familiar with the planning. It would be Barra's second trip to Washington in as many weeks, following a meeting last Monday with Larry Kudlow, the president's assistant for economic policy and director of the National Economic Council. In addition to cutting 8,000 salaried jobs — including roughly 6,000 layoffs — GM is addressing its under-used capacity among its 12 U.S. assembly plants. The Detroit automaker has more plants than any of its domestic competitors, with six of its 12 plants running under 80-percent capacity, generally considered the measure of profitability. The widespread excess capacity is a sign that GM simply has too many plants, says Ron Harbour, a vice president for the Oliver Wyman management consulting firm: "The problem that GM has had is an uneven distribution. GM has a bunch of plants running at (capacity) and others running on one or two shifts." GM's actions with Lordstown, Detroit-Hamtramck and its Canadian plant in Oshawa, Ontario, may only be the beginning. Plants in Lansing, Orion, Bowling Green and Fairfax are also at risk, judging by capacity utilization rates tracked by LMC Automotive, an industry consultancy. "While these changes will help GM’s overall capacity utilization, risks still remain for further capacity actions," LMC said in a study released Friday. "Certain plants like Lansing Grand River, Orion and Fairfax are well below ideal utilization rates, and could be targets if GM seeks additional cost savings." GM's excess plant capacity adds a new sense of urgency to the usual product allocation negotiations that occur routinely during national contract talks. The company's moves next year, as announced last week, only partially resolve GM's problem, experts say. They don't fix it. GM has said publicly it needs to take "proactive steps" to improve overall business performance and strengthen free cash flow to capitalize on electrification, mobility and autonomy ventures. The automaker is planning to launch a driverless taxi service sometime next year, followed by what it says will be a profitable second-generation electric vehicle platform in 2020. "Usually, these things happen when the company is in bad financial shape, and the union recognizes something has to be done," said Art Schwartz, a former GM labor negotiator and president of Labor and Economics Associates, Ann Arbor-based consulting firm. "It's a difficult situation, and hard to explain to the union why you're closing a plant while you're making lots of money.
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How new NAFTA deal
Washington — President Donald Trump and leaders from Canada and Mexico on Friday signed a new trade deal that would replace the North American Free Trade Agreement, clearing a major hurdle in Mexican politics but setting up a likely battle for U.S. congressional ratification. The signing comes a day before the Dec. 1 inauguration of new Mexican President Andrés Manuel López Obrador, who ran a populist campaign in which he frequently used President Donald Trump as a foil. It also follows an announcement from General Motors Co. on Monday that it would idle four U.S. plants, cut 8,000 salaried employees and threaten the jobs of 3,300 hourly workers. GM's announcement, which touched off a firestorm in Washington, raised questions about how much support the Trump administration can get for the new trade agreement from newly emboldened Democrats who will control the U.S. House in January. The signing of the new trade agreement sets off a 60-day calendar for the Trump administration to submit to lawmakers a list of changes to U.S. law that will be required for the deal to take effect. The congressional review coincides with a legally-required analysis by the U.S. International Trade Commission of the impact of the new trade agreement on the U.S. economy, which has to be completed by March 2019. The new deal known as the United States-Mexico-Canada Agreement — or USMCA — calls for increasing from 62.5 percent to 75 percent the percentage of a car's parts that have to come from one of the three countries to qualify for duty-free treatment. It also requires that 40-45 percent of an auto's content be made by workers earning at least $16 per hour. Vehicles not meeting the requirements would be subject to a 2.5 percent duty. Trump has touted the agreement as a major victory for U.S. manufacturers: "Just signed one of the most important, and largest, Trade Deals in U.S. and World History," he tweeted Friday. "The United States, Mexico and Canada worked so well together in crafting this great document. The terrible NAFTA will soon be gone. The USMCA will be fantastic for all!" Automakers feared initially that Trump would follow through on campaign promises to pull out of the NAFTA agreement completely, upending a quarter century of duty-free trilateral trading. They praised the Trump administration for negotiating a new pact that still includes Canada and Mexico, but they raised questions about Trump's decision to place tariffs on foreign steel and aluminum. Matt Blunt, president of the American Automotive Policy Council, which lobbies for Ford, General Motors and Fiat Chrysler, said in a statement he commends U.S. negotiators for "crafting an agreement that keeps the United States and North American automotive manufacturing competitive, and for including important provisions that require the acceptance of vehicles built to U.S. safety standards and address currency manipulation." Blunt added: "However, we remain concerned that the continued imposition of steel and aluminum tariffs on Canada and Mexico will undermine the benefits of the USMCA. We strongly encourage the parties to come to a resolution and relieve the undue burden that has been placed on U.S. manufacturers." The USMCA contains provisions to protect up to 2.6 million cars and $32.4 billion worth of parts imported from Canada and Mexico from tariffs on imported vehicles that are being considered separately by the Trump administration. The Trump administration has faced criticism over its trade policies since GM said it will cease production next year at its Detroit-Hamtramck and Warren Transmission plants in Michigan, at Lordstown Assembly in Ohio, at Oshawa Assembly in Ontario and at Baltimore Operations in Maryland. Work will stop next year at predetermined dates, but plants will not officially close. The company is planning to lay off about 5,750 salaried workers next year after a buyout program last month had 2,250 takers, according to a memo sent to employees by CEO Mary Barra and obtained by The Detroit News. The salaried buyouts and the layoffs together will affect 8,000 North American employees and a number of global executives, none of whom are part of the senior leadership team. Some House Democrats cited GM's move as they questioned the ability of the new trade agreement to prevent automakers and other companies from moving production to Mexico in search of cheaper wages. U.S. Rep. Debbie Dingell, D-Dearborn, a member of the House Energy and Commerce Committee and former GM executive, has said she is "bound and determined" to make sure the proposed trade deal is not approved without strong protection for auto workers and other blue-collar employees. "The administration will try to sell this deal as a win for American workers," Dingell said in a Friday statement. "If President Trump is ready to bring stability to trade policy and to craft a deal that levels the playing field and brings jobs back to our country, I’ll work with him. But signing a document simply to say the president made a deal won’t help American workers and won’t keep jobs in the U.S." In a statement Friday, United Auto Workers President Gary Jones argued the new deal "is not strong enough ... to deter them from moving products and taking advantage of low cost labor. Unfortunately, as GM’s idling of plants in Ohio, Michigan and Maryland this week showed — the 'New' NAFTA, as it stands now, is not strong enough to protect American workers." Independent analysts said the new deal would continue to benefit domestic automakers but cause costs and prices to increase because of tougher content rules. "The USMCA won’t lead to major shifts in the existing production and supply chain for the industry, and that’s a good thing," Cox Automotive Chief Economist Jonathan Smoke said in a statement. "But it will prevent substantial movement away from North America and the U.S. in the future because of the added rules and the potential of a higher Section 232 penalty." Section 232 is a rarely used trade enforcement option, which Trump used earlier this year, that gives the president the power to deal with the threat of imports on national security grounds. The U.S. imported 2.4 million vehicles from Canada and 1.8 million from Mexico in 2017, according to the U.S. Department of Commerce's International Trade Administration. Canadian automotive parts imports to the United States totaled $30.1 billion in 2016, according to the ITA. Mexico exported $46 billion in auto parts to the U.S. in 2016, according to the Center for Automotive Research. John Bozzella, CEO of the Association of Global Automakers that represents foreign-based manufacturers, said in a statement that “an integrated North American automotive market has been key to the success of production in the United States," Bozzella said he hopes "the U.S.-Mexico-Canada Agreement will support a vibrant future auto market," but he also questioned the Trump administration's insistence on placing tariffs on foreign steel and aluminum. “At a time when steel and aluminum tariffs have substantially increased auto manufacturing costs in the United States, it is unfathomable that this important issue has not been resolved in the context of these negotiations," he said. |
Unifor president calls for Jerry Dias also wants Canada to hold off on signing USMCA
November 30, 2018 WASHINGTON — The head of Canada's largest autoworkers union wants Prime Minister Justin Trudeau to borrow the tactics of the U.S. president and get tough with General Motors, Donald Trump-style. Unifor president Jerry Dias is also urging both countries to hold off signing the new U.S.-Mexico-Canada Agreement on trade and to join forces on a 40-per-cent tariff on GM vehicles built in Mexico. He wants the company to reverse plans to cut more than 14,000 jobs, including 2,500 production workers in Oshawa, Ont. "I think both Canada and the United States should put the brakes on immediately," Dias said as he arrived at the Canadian Embassy in Washington for a meeting with officials to discuss next steps. "The ink isn't even dry and you have General Motors completely violating what it is we are trying to accomplish, so I think both Canada and the U.S. should be saying to General Motors, 'Listen, you are holding up the signing of this deal, this weight is on your shoulders. You're the one that's holding all this up."' In addition to mothballing the Oshawa plant, the cuts involve shutting down production at four facilities in the U.S, including in Ohio and Michigan. GM plans to end 3,300 production jobs south of the border and do away with 8,000 salaried workers, all in the name of US$6 billion in savings by 2020. It's a sign of more to come, said Dias — GM is clearly focused on moving its manufacturing work away from both countries, including moving work to Mexico and China, which means job losses will continue unless both Canada and the U.S. ramp up the pressure. A hefty tariff on Mexican-made imports would "get their attention immediately," he said, even as he acknowledged the contradiction between battling U.S. tariffs on steel and aluminum on the one hand, and joining forces in a similar tactic on the other. "It sounds bold, it sounds aggressive, it's not productive — but we're dealing with a corporation that doesn't care," Dias said. "They've watched all this unfold, they listened for 15 months and they don't care. This is all about their shareholders, it's all about the board. It has nothing to do with people." TARIFF ’IDEA IS WRONG’ Flavio Volpe, president of the Canadian Automotive Parts Manufacturers Association, said while he understands the union leader's frustrations, adopting Trump's hardline tactics would be a grievous tactical error at a time when Canada is trying to negotiate a solution to its own tariff impasse with the U.S. Canada remains subject to Trump-imposed tariffs — 25 per cent on steel exports and 10 per cent on aluminum — that the U.S. claims are justified on the grounds of national security, and that auto-industry experts acknowledge have made it more expensive to build cars in both countries. They're called "Section 232 tariffs," for the part of an American trade law that allows them. "You can't be hoping for the benefits of the USMCA, fighting Section 232 tariffs and endorsing company-specific tariffs at the same time," Volpe said in an interview. "Jerry is a very important and positive part of the Canadian automotive fight, but that tariff idea is wrong." Trump, whose 2016 election victory came in large part from blue-collar supporters in the U.S. Midwest who cheered his promise to bring jobs back to the hard-hit manufacturing sector, has threatened to withdraw support for GM if it didn't reverse course. TRUMP: TARIFFS ‘BEING STUDIED’ He doubled down on that threat Wednesday, saying the General Motors cuts have prompted fresh discussions about slapping tariffs on auto exports. "The president has great power on this issue," Trump tweeted. "Because of the GM event, it is being studied now!" The Trump-christened USMCA, increasingly known north of the border as the "new NAFTA," is due to be signed later this week when world leaders gather in Argentina for their annual G20 meetings. That signing is widely expected to go ahead despite the outstanding tariff issues. In announcing the cuts Monday, General Motors said its retooling is part of a dramatic course correction to position the company for the coming dominance of electrified, interconnected and automated automobiles. There's no reason why that work can't happen in Canada, Dias said. "They're not talking about transforming from cars to spaceships. It's still a car; it's the exact same car, it's just got different technology inside of it," he said. The company launched a high-tech research centre last year in Markham, Ont., not far from the Oshawa plant, he added. "Certainly they can develop that technology, and then implement it in a car they're assembling five miles down the road." |
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Ian Thibodeau, It took General Motors Co. CEO Mary Barra less than a month to deliver details on how she'd save billions by restructuring the automaker. And that has some investors waiting for specifics from Ford Motor Co., after company officials said in early October that job-cut announcements wouldn't come until next spring. One clue emerged Wednesday: The Blue Oval said it will redeploy hourly workers to transmission and SUV plants, but that's far from the sweeping moves GM detailed on the first work day after the Thanksgiving holiday. Barely 25 days after the General Motors Co. chief used a Halloween letter to announce plans for restructuring that likely would include involuntary layoffs, the company acted decisively: To save $6 billion, five factories will be idled in North America, including two in its backyard. Six-thousand salaried layoffs, on top of 2,200 who accepted buyouts. Another 3,300 hourly jobs imperiled. Six car models axed, including the plug-in hybrid Volt that was supposed to show the path forward. Moody's Investor Service on Wednesday praised the moves as a sign of the company's commitment to financial discipline. It called GM's moves "an undertaking to maintain its current strengths ... to remain at the forefront of the auto industry's movement toward electrification, autonomous driving, ride hailing, and connectivity." Some experts believe that makes Ford’s restructuring look sluggish at a time when investors want assurances the company is fortifying itself for the future. Others suggest Ford might just be taking a different approach in how it explains its restructuring to employees, the public and Wall Street. "You can't wait until the house is on fire to start making changes," said David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research. "Ford has been a little slower-moving. There hasn't been a lot of visible activity." The cost-cutting details GM announced Monday demonstrated Barra's plan to get out in front of imminent and vast industry changes, unstable trade conditions, plateauing vehicle sales, shifting consumer preferences and future investments in electric and autonomous vehicles that could cost billions. Ford is facing all those same headwinds, without constantly updating investors and analysts about how it will combat them. Hackett's business redesign has been underway since at least April, when the automaker announced it would cut sedans from the lineup. But only GM has said how many positions will be cut, and how much money will be saved as a result. Wall Street noticed: GM stock trading up more than 5 percent immediately following the news Monday, though those gains were mostly erased by the close of business Tuesday. "GM was kind of out front on that," said David Kudla, chief investment strategist of Grand Blanc-based Mainstay Capital Management LLC. "Ford has just been more close-to-the-vest on how they're handling the salaried-headcount reduction. It wasn't made public the way that Mary Barra did. I think it's just a difference in how they want to approach it. On the other side, GM is playing a bit of catch-up on what they want to do with sedans in the lineup." Next year, GM will idle two plants in Metro Detroit, a third in Ohio, one in Canada and another in Baltimore. All told, the idled plants, buyouts and layoffs would affect 14,300 jobs across the company, and save GM $6 billion in 2019. Meanwhile, Ford plans to cut $25.5 billion in costs over the next several years through changes to product development, purchasing and manufacturing. The automaker plans to spend a separate $11 billion to restructure its global business, part of which will come from global white-collar layoffs. Ford executives haven't offered details on the layoffs because they don't have them yet, several Ford officials have told The Detroit News. The automaker is aiming to flatten management globally based on feedback from individual department leaders.The company expects to have specifics on a headcount reduction by the second quarter of 2019. The Dearborn-automaker in 2018 did sweeten a "phased retirement plan" it has offered to salaried employees for the last several years, by offering an additional lump-sum payment equal to nine months of pay to retirement-eligible employees in North America. Retirement-eligible Ford employees include those who are at least age 55 with at least 10 years of company service; age 65 with at least five years of company service; or any age with 30 years of service. Ford did not publicly announce that plan, and it differs from the buyouts GM offered North American salaried employees and global executives with 12-years or more of seniority. "Ford is not as outspoken about it," Kudla said. "They could have gone out and made a bigger deal." Ford's relative silence could continue to hurt the automaker's stock price in the short term, analysts said, though the automaker has up to now dodged the political anger lobbed at GM since its austerity announcement Monday. On Wednesday, Ford announced it too would be further cutting car production, but any hourly workers displaced by shift changes would be relocated to other plants, and no plant would go dark. Still, Hackett was promoted because his predecessor, Mark Fields, lacked a vision for the future, and couldn't generate buzz on Wall Street. In the year and a half since Hackett was appointed CEO, Ford stock is off more than 15 percent. GM stock is up less than 1 percent since Barra took the helm in 2014 — and Monday's announcement might have been, in part, an effort to bump that stock, analysts said. Both automakers are making moves to trim excess white-collar jobs, cut money-losing vehicles and get the right kind of workforce in place for the future, said the Center for Automotive Research's Cole. But GM's recent clarity comes at Ford's expense on Wall Street. Following the GM news, Evercore ISI analysts called Ford’s approach "much more drawn out, less detailed and lethargic." according to Bloomberg. The GM news Monday prompted a "statement on business transformation" from Ford. The automaker outlined seven points it is focusing on as Hackett restructures the global business, all of which were previously announced. Ford "has the best manufacturing capacity utilization in North America based on the aggressive restructuring we completed a decade ago," the statement read. Moody's called GM's cost-cutting moves indicative of "continued commitment to financial and operating discipline," in a Wednesday note. Ford leadership has promised details — possibly by the end of the year — on partnerships with Mahindra Group in India, and Volkswagen in Europe and South America, as well as restructuring in Europe, South America and China. Ford officials in recent months have described a sense of urgency within as Hackett and his executives push the restructuring plan ahead. The Dearborn-automaker could be taking a different approach to communications than its competitor. "Ford has just chosen to approach it differently," Kudla said. "It doesn't mean they're not taking the steps." But Ford might look lost if the automaker doesn't show some specifics of its cost-cutting plan before the middle of next year. "I wouldn't be surprised if Ford moved that timeline up a little bit," Cole said. "You want to separate yourself, but you want to be in the same territory." |
Union to fight Oshawa GM
plant closure 'tooth and nail'
https://www.youtube.com/watch?v=0IbJC7C0v1s
Union chief warns Oshawa Dias voices optimism after meeting with PM, vows
John Paul Tasker The president of the country's largest private sector union said he fears General Motors could be headed for a "complete disinvestment" in Canada if it's allowed to shutter its Oshawa assembly plant. But Jerry Dias, president of Unifor — the successor to the now-defunct Canadian Auto Workers union — said he is hopeful about the prospects for a solution after an hour-long meeting with Prime Minister Justin Trudeau and his staff this afternoon. "He's certainly going to roll up his sleeves and speak to General Motors and do every thing he can to get their attention," Dias said of Trudeau. "The prime minister doesn't view it as a fait accompli — he's going to roll up his sleeves and fight with us." In a statement, a spokesperson for Trudeau said the two men had a "constructive meeting" in which they shared their "disappointment" over GM's decision to lay off more than 2,500 auto workers. "Our focus is on the families and community impacted by this global announcement, and the PM made it clear that we will fight for our workers and are looking at all options to support them," said the statement. "They also discussed their respective recent discussions with GM, as well as the PM's call with President Trump earlier today about the auto industry and how best we can stand up for people affected on both sides of the border." Unifor National President Jerry Dias holds a news conference after meeting with Prime Minister Justin Trudeau on Parliament Hill in Ottawa on Tuesday, November 27, 2018. (Fred Chartrand/Canadian Press) Dias said they spoke about Trudeau's call with Trump earlier Tuesday about GM's plans. Dias said Trudeau and Trump should pursue a coordinated, binational strategy to stop GM from closing its plants in Oshawa, Ohio, Michigan and Maryland. Dias is also calling for new tariffs on all GM-made vehicles from Mexico. While GM is making cuts in both Canada and the U.S., the company is deepening its investment in Mexico, where the company now builds nearly 1 million vehicles a year. Trump reacted angrily to GM's planned closures in the U.S., threatening to pull all federal subsidies from the automaker and end lucrative tax credits for people who buy electric vehicles. Buyers of electric vehicles made by GM and other automakers get U.S. federal tax credits of up to $7,500, helping to reduce the price as an incentive to get more of the zero-emissions vehicles on the road. 'We have a major problem' Dias said that, without similar government action here, GM eventually will end up shutting down all of its operations in Canada. He pointed out that, if Oshawa does close, it would leave only one GM assembly plant remaining in Canada — the one in Ingersoll, Ont., which assembles the Chevrolet Equinox that is also made in Mexico. There is also a GM propulsion plant in St. Catharines, Ont., which builds engines and transmissions to be sent on to assembly plants for installation. "We have a major problem. If in fact GM completes its plan of divesting in Canada, then the auto parts industry collapses," he said. Dias wants GM to shift production of another vehicle to Oshawa to stave off the closure of its plant there. If GM does not reverse its decision, Dias said, his workers are prepared to take prolonged labour action. Dias said he will meet with his American counterpart, the president of the United Automobile Workers, to discuss joint actions against the company. Dias said Canada can't afford to sit idle as the Detroit-based manufacturer shifts more vehicle production to low-wage jurisdictions like Mexico. "They aren't closing our damn plant without one hell of a fight," he said. "Our plant in Oshawa is not closing and we'll do whatever it takes. We're sick and tired our jobs going to Mexico. Period. "We will do anything to stop that. We need a very aggressive strategy." The labour leader has a friendly relationship with the federal Liberal government; he worked closely with Ottawa as it renegotiated NAFTA with the U.S. and Mexico. Trudeau and Innovation Minister Navdeep Bains have said the government is ready to support the 2,500 workers affected by the closure, but both have pointed out that GM seems unwilling to change its mind about the Oshawa closure as the company pursues a broader global restructuring. GM has said the closures announced Monday are necessary because of shifts in consumer buying patterns. The Oshawa plant makes the Chevrolet Impala, a once-popular sedan that has seen its sales plummet in recent years as North American car buyers increasingly favour pickup trucks and sport-utility vehicles. Oshawa has been home to vehicle manufacturing since 1908. |
GM to close Oshawa plant
Automotive News DETROIT -- General Motors said it plans to close its Oshawa, Ont., assembly plant and four U.S. factories while slashing salaried jobs and overhauling its global operations. The automaker on Monday said Oshawa Assembly, Lordstown Assembly in Ohio and Detroit-Hamtramck Assembly in Michigan will not be allocated any products beginning in 2019. Propulsion plants in Maryland and Michigan also will not be given any product. Not allocating product doesn’t mean the plants will close, but it puts their future and the jobs of roughly 6,300 hourly and salaried factory employees – 3,300 in the U.S. and 3,000 in Canada – at risk heading into contract negotiations with the UAW in 2019 and Unifor in 2020. Oshawa, GM said, is slated for closure. Unifor President Jerry Dias said he has been told the opposite, saying he’s heard that Lordstown will be down in March, followed by Hamtramck in May and that Oshawa only doesn’t have product slated for it beyond 2019. “But if you don’t have a product beyond 2019, you have to close it,” Dias said. GM, according to its contract with Unifor, must give official notice a year ahead of a plant closure. That has not yet happened, however is expected to occur. Dias promised “one hell of a fight here in Canada with General Motors,” and said that workers walked out of the plant this morning in advance of GM’s announcement. ‘EVERYBODY’S FURIOUS’ “I’ve been speaking with the UAW already, and everybody’s furious. If I have my way, I would shut down every GM assembly plant in Canada and the United States,” Dias said. “GM clearly doesn’t give a crap about its employees in Canada or the United States. They continue to beef up their jobs in Mexico.” All of the products currently assembled at those three plants – Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala, Chevrolet Cruze and Chevrolet Volt – are expected to stop being produced for the U.S. market by the end of 2019. GM also announced it will close two unidentified assembly plants outside of North America by the end of next year and restructure its salaried workforce. The automaker expects the announced actions to annually contribute to $6 billion (all figures USD) in cash savings by 2020 — $4.5 billion in cost reductions and $1.5 billion in lower capital expenditures. “This industry is changing very rapidly,” GM CEO Mary Barra told reporters Monday here. “We want to make sure we’re well positioned … These are things we’re doing to strengthen the core business.” Barra declined to discuss whether the plants could reopen as part of the negotiations, citing the company is “unallocating them today.” ‘COMMITTED TO WORKING WITH UNIONS’ She later told analysts that the company is “committed to working with GM’s unions.” Oshawa has two assembly lines. The flex line produces the low-volume Cadillac XTS and Chevrolet Impala while the truck line produces the light- and heavy-duty Chevrolet Silverado and GMC Sierra pickups. It employs 1,542 employees, including 1,348 hourly union workers. The Oshawa decision is the latest body-blow to a Canadian auto industry that has struggled to retain jobs and plants this century as automakers instead invest heavily in cheaper locations in Mexico and the southern United States. Should the Oshawa plant close, GM will be down to just one assembly plant in Canada, its CAMI factory in Ingersoll, Ont. GM threatened to close that plant last year during contract negotiations with Unifor before the two sides agreed to a new labour deal. Auto manufacturing in Oshawa, about 60 kilometres east of Toronto, dates back to 1907, when McLaughlin began building vehicles based off of Buicks sold in the United States. McLaughlin would be bought by GM in 1918, and a host of iconic GM vehicles have been built in the city since then. Auto manufacturing in Oshawa has been on the decline in recent decades. Ten years ago, the city was home to two GM plants, one for car assembly and the other for truck assembly. But the truck plant closed in 2009 during the depths of the Great Recession as the automaker was working its way out of bankruptcy, and the former car plant, now Oshawa Assembly, appears set to join it soon. CANADA CAUGHT OFF GUARD Many in the industry appeared to be caught off guard by the announcement. Until news of Oshawa’s demise broke on Sunday evening, union officials were largely optimistic about the plant’s future, citing the $500 million investment the company made following 2016 negotiations to allow for Silverado and Sierra final assembly. Dias told Automotive News Canada in June that the plant would be safe because “nobody walks away from a $500-million investment.” Speaking on Monday, Dias called the Oshawa decision the “ultimate betrayal.” He said he was only told of GM’s decision to not allocate product to Oshawa beyond 2019 on late Sunday afternoon, after he had already began receiving calls from reporters inquiring about the news. He said he was set to meet with GM executives, including GM Canada President Travis Hester, in the afternoon. “The Oshawa plant is the most efficient, has had one of the best vehicle launches, has set benchmarks and standards on how to do it the right way,” Don Chiodo, Unifor’s auto director, told Automotive News Canada. “It’s fully flexible, one of the few that can build both cars and trucks. It makes no sense to me that they would shut it down.” The salaried workforce restructuring includes cutting 15 per cent of its 54,000 salaried employees in North America — more than 8,000 — including slashing global executives by 25 per cent. Included in the salaried reduction is a recent buyout offering to 18,000 salaried employees that ended last week. GM declined to say how many employees accepted the voluntary offer. Barra said the actions are not a result of “anything specific on the horizon.” They are meant to be proactive steps to ensure GM is “lean and agile.” PLANTS NOT AT CAPACITY It was expected that GM needed to address underutilization of its plants. GM represents 1 million of the 3.2 million units of underutilized capacity in the U.S. through October, according to the Center for Automotive Research in Ann Arbor, Michigan. The impending round of cost cuts follows measures taken in 2015-18, when GM targeted $6.5 billion in reductions, including restructuring unprofitable markets such as Europe and South Korea. Detroit-Hamtramck currently builds the Chevrolet Volt, Chevrolet Impala, Buick LaCrosse, Cadillac CT6. U.S. sales of the Impala were down 13 per cent through September. Lordstown, which has dropped from three shifts to one in recent years, exclusively produces the Chevrolet Cruze. Sales of the compact car were down 27 per cent through September, GM said. It’s unknown at this time how many plant employees will be cut, as some could retire or be offered positions at other plants. GM expects to find the restructuring costs through a “new credit facility” that the company says will “further improve the company’s strong liquidity position and enhance its financial flexibility.” |
Oshawa GM plant to close,
Joshua Freeman, General Motors Canada is expected to announce that it is closing all operations in Oshawa, affecting approximately 2,500 jobs. Multiple sources told CTV News that the announcement about the closure is expected to happen on Monday morning. The move would affect approximately 2,500 unionized positions and 300 salaried employees. However thousands of other jobs could be affected in related industries, such as auto parts manufacturing. “I’m hoping it’s just a rumor,” outgoing Oshawa Mayor John Henry said. “Until we hear something, we don’t know.” Henry, who himself has family members who work at GM, said Oshawa has played a big part in the success of General Motors. “My entire family has worked at General Motors,” Henry said. “My dad was a foreman in the plant. I have two brothers in the plant. My sister worked there in university. I worked there as a contractor. So it’s a big part and I’m just a typical family in Oshawa.” Henry said there had been “no heads up” for the city or the region about the news. Other Oshawa representatives also weighed in, expressing concern Sunday night. “Extremely concerned about reports regarding potential closure of GM Canada Oshawa operations. @ColinCarrie & I are reaching out for information,” Durham MP Erin O’Toole wrote on Twitter. Carrie, the MP for Durham, called the news “very concerning” and said he was looking into the situation. In a statement Sunday night, Oshawa MPP Jennifer French called the news “gravely concerning.” “If GM Canada is indeed turning its back on 100 years of industry and community — abandoning workers and families in Oshawa — then this is a callous decision that must be fought,” French wrote. She called on the provincial PC government to fight to save the plant. “Words cannot fully describe the anxiety that my community is feeling at this moment,” French wrote. The indications are that the closure may be part of a global restructuring of the company and that there could be other plant closures around the world, sources said. It’s not clear whether other GM jobs in Markham, Ingersoll and St. Catharines could be affected as well. At one point GM’s Oshawa operations employed around 40,000 people. With reports by CTV News Toronto Reporter Miranda Anthistle and CP24 Reporter Leena Latafat Official: GM to close Ontario Rob Gillies, Toronto – General Motors is planning to announce the closure of its Oshawa, Ontario, plant Monday, which will eventually result in the loss of about 2,500 jobs. The plant closure announcement was confirmed late Sunday by an official familiar with the decision. The official spoke on condition of anonymity because they were not authorized to talk publicly ahead of Monday’s announcement. The official said it is part of a global restructuring of GM as they shift focus to lower emitting hybrid vehicles, which is not the focus of the Oshawa plant. GM has informed the Canadian government of the plan. GM opened its factory in Oshawa, near Toronto, in 1953. The plant is used to make the Cadillac XTS and Chevrolet Impala sedans as well as the Chevrolet Silverado and GMC Sierra trucks. A GM spokesman declined to comment. GM had been expected to close plants because of struggling sales. Unifor, Canada’s largest private sector union, said in a statement that it does not have complete details of Monday’s announcement, but it has been informed that there is no product allocated to the Oshawa plant past December 2019. “Based on commitments made during 2016 contract negotiations, Unifor does not accept this announcement and is immediately calling on GM to live up to the spirit of that agreement,” the union said in a statement on its website. “Unifor is scheduled to hold a discussion with General Motors (Monday) and will provide further comment following the meeting.” Oshawa Mayor John Henry said he had not spoken to anyone from GM. Jennifer French, who represents Oshawa in the provincial legislature, said she finds the news “gravely concerning.” “If GM Canada is indeed turning its back on 100 years of industry and community – abandoning workers and families in Oshawa – then this is a callous decision that must be fought,” she said in a statement.
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AutoCanada to buy Ont. Ford Windsor, Ont., dealer to be first Ford Canada
AutoCanada Inc. has agreed to acquire Rose City Ford in Windsor, Ont., making it the first Blue Oval store to be owned by a publicly-held dealership group in Canada. Rose City Ford, a 65,000-square-foot dealership that employs about 65 people and sells about 1,425 vehicles annually through fleet and retail, will also give AutoCanada its first Ford dealership in the country, a key for the company as it looks to expand its brand lineup and physical footprint. “We are very excited to acquire our first Ford dealership, an acquisition that will advance our strategy of diversifying the brand and geographical mix in our portfolio of dealerships,” AutoCanada Executive Chairman Paul Antony said in a statement. “We would like to thank Rose City Ford and Ford of Canada for their confidence in AutoCanada, and we look forward to building a strong partnership with Ford.” AutoCanada expects the deal to close in December. A Ford of Canada spokesman confirmed the automaker has signed a letter of intent with AutoCanada. Ford of Canada in June said it would reverse its long-standing policy against publicly-traded companies owning its stores, about six months after General Motors Canada did the same. Toyota and Honda are among the major automakers that still prohibit publicly-traded companies from owning its stores. John Chisholm, president of Rose City Ford, said it would be “business as usual” at the store as AutoCanada plans to keep the dealership’s employees on board. Chisholm said he and his wife, secretary-treasurer, Sophia Chisholm, would also remain with the dealership, though their precise roles are yet to be determined. He said he would remain the owner of the land and the building, and AutoCanada-owned Rose City will be a tenant. “We have been approached over a number of years on a number of occasions, and it was never the right deal, to be truthful. When you’re selling a family-owned business that’s been around for almost 40 years, the deal really has to be right,” Chisholm told Automotive News Canada. “AutoCanada made an offer to purchase us, and we really liked the terms of the agreement and we agreed to sell.” The acquisition is the latest in a series of deals in recent months made by AutoCanada, which has expanded its footprint in recent years to become less dependent on certain brands and markets in western Canada. The company owns 69 dealerships in eight provinces and in Illinois, selling 27 brands. AutoCanada on Nov. 8 reported a net loss of $16.5 million in the third quarter, though the company appears to show no signs of slowing down its buying spree. In an earnings release, the company said it plans on growing, in part, through “through disciplined, accretive acquisitions that offer brand and geographical diversity.” AutoCanada made waves earlier this year when it acquired nine stores in the Chicago area, including its first Toyota, Honda and Lincoln stores. Among other recent acquisitions, the company said in September that it would acquire Mercedes-Benz Heritage Valley in Edmonton, a purchase that it funded with a sale-leaseback transaction at its BMW Laval and Sherwood Park Volkswagen dealerships in Quebec and Alberta. It has been a tumultuous year for the dealership group. Under pressure from investors worried about the company’s long-term financial health and about costs related to the Illinois deal, AutoCanada made a host of leadership changes earlier this year, including the departures of the company’s CEO, COO and CFO. Paul Antony, the former CEO of CarProof, was named executive chairman, while former Birchwood Automotive Group COO Michael Rawluk was named president. It also hired two former executives at AutoNation Inc., the largest dealership group in the United States, to run its American operations. |
2019 Ford Mustang GT By Gary Gastelu The 2019 Mustang GT Bullitt is “awesome,” and that has nothing to do with its connection to the Hollywood thriller it gets its name from. I know this because a 9-year-old told me so. He had no idea who Steve McQueen was, but boy did he flip when he saw the car. So did my son, who is literally colorblind and thought it was red. This eliminated the possibility that he’d heard me talking about a dark highland green Mustang driven by a guy who dared to coordinate a navy blue turtleneck with a brown blazer and intuitively made the association. For many of those old enough to have seen the film on the silver screen, it’s an instantaneous one, and you’ll find them gathering around the Bullitt like moths to a flame. It’s good news for Ford that they’re not alone, because they aren’t getting any younger and the movie isn’t anywhere near the Netflix Top 100, even though it’s celebrating its 50th anniversary this year.
Heck, even Steve McQueen’s granddaughter Molly told me at the unveiling of the car in January that she’d only seen it “once or twice,” and I’m not so sure if she ever did because “once or twice” is the least believable answer to pretty much any question about things you’ve done. She did say that she’d watched the chase on YouTube “a bunch of times,” however, which sounds about right.
Ford got the new Bullitt very right. The visual ties to the on-screen machine go beyond the paint to the blank grille, the silver-rimmed and black-spoked wheels, and the chrome trim around the grille and side windows, none of which are available on any other Mustangs. Neither are the “Bullitt” logos. There are six scattered around the car, which is probably five too many. Frank Bullitt was a plain-clothes detective, after all. But the Bullitt is far from just a paint and stickers tribute. It’s essentially a GT Premium – complete with a digital gauge cluster and heated/ventilated seats – that’s also equipped a bunch of goodies from the Mustang’s optional Performance Pack. Among them are stronger shocks, big Brembo brake calipers, wide and sticky Michelin Pilot Sport 4S tires and a limited slip differential, which only comes connected to a six-speed manual transmission that’s topped by a white cue ball shifter. The front end is finished with a chin splitter that adds menace, while the rear spoiler is deleted to maintain some semblance of undercover style.
The Bullitt gets its own engine, too. It’s a special version of the GT’s 5.0-liter Coyote V8 that’s been fitted with the freer-breathing intake manifold and throttle body from the Mustang Shelby GT350’s motor, which gives it a 20 hp boost to 480 hp and makes the Bullitt the most powerful GT yet. It also has an exhaust system that's tuned to make it sound as much like the pipes on the 1968 390 GT from the movie as possible. It won’t trick a cinephile, but it gives the Bullitt a unique and very loud voice. That is unless you switch it into quiet mode, which is enabled by a bypass valve, but even then it’s not exactly on the hush-hush.
Prices start at $47,590, which is well in line with the sum of its parts. Ford will build as many as it can sell, but it’ll just be around for the next two years. The only options available are an adjustable MagneRide suspension that you definitely want; an electronics package with things like a blind-spot warning system, an upgraded stereo and built-in navigation that you probably want; and snug, high-back Recaro sports seats that you should probably try on first. They’re snug and a good call if you plan to take the Bullitt to the track, but it's more of a street fighter and the standard buckets are just the thing for a double surveillance shift. Either way, it's equally quick and that engine loves to growl all the way up to its 7,400 rpm redline. If the sharp handling is any different than a regular GT’s, I can’t say I noticed or cared, because it’s spot-on without being too rough for the road. You could cruise around comfortably in it all day, and you can bet that I did. This kind of balance is where Mustangs shine.
And you can get an even shinier Bullitt, because Ford also offers it in black. I don’t get why, but honestly, they should unlock the full color palette. The combination of that engine and the performance bits is beautiful. Ford did build one in Kona Blue for an auction to benefit the Juvenile Diabetes Association, but I'd love to see what it actually looks like in red.
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Celebrating the 50th anniversary of iconic movie “Bullitt” and its fan-favorite San Francisco car chase, Ford introduces the new cool and powerful 2019 Mustang Bullitt.
Celebrating the 50th anniversary of iconic movie “Bullitt” and its fan-favorite San Francisco car chase, Ford introduces the new cool and powerful 2019 Mustang Bullitt.
After buyout deadline, GM's
General Motors Co.'s years-long effort to overhaul its workforce is shifting into overdrive as the deadline for 18,000 salaried employees to accept buyouts passed on Monday. “The best time to solve a problem is the minute you know about it," CEO Mary Barra said at The New York Times DealBook conference earlier this month, where business leaders discussed their industries. "Most problems don’t get smaller with time — and so that’s kind of a fundamental learning.” Under GM's buyout offer, eligible employees could receive six months' pay and six months' health care starting in February, though on a case-by-case basis some employees could leave before the end of the year to effectively get eight months' compensation, according to two sources familiar with the matter. To meet a company-wide cost savings target, managers from each department received goals to meet by the end of the year. Those could be met by addressing discretionary spending or by leveraging the buyouts, a GM spokesman said. If these costs goals can't be reached, GM has said it would consider layoffs at the start of 2019. The company is not targeting a specific headcount for the buyouts, focusing instead on the cash savings those buyouts would deliver over time. Still, given the generally low take-rate of white-collar buyout programs, GM faces an uphill battle to avoid layoffs. "These programs don't usually fulfill the entire need of the company, but even if layoffs have to come later on it's much less than if a company had to start with layoffs," said Andy Challenger, vice president of Challenger, Gray and Christmas, a Chicago-based employment firm. "It's generally a good (tactic) if a company can afford it, because you can weed out some of the people who were ready to leave" before forcing exits. GM and its competitors have for the last half-decade aggressively recruited and hired workers in emerging auto disciplines — from software development, to battery and fuel-cell technology. And in a year when the traditional side of the business is facing more acute challenges — including rising commodity costs due to tariffs and uncertainty surrounding NAFTA and trade with China — automakers are signaling that the next step in transforming their workforces for the future will have to include cuts. And the time to do it is now, industry leaders have concluded, when consistent profits and hefty margins allow automakers to make their cuts surgically before the automotive industry contracts dramatically and they can't slash fast enough to keep up. GM's buyouts, offered to salaried workers in North America and global executives with at least 12 years of experience, are as much a cost-savings effort as they are another step in GM's transformation of its workforce, the company says. GM already boasts that some 40 percent of its 67,000 salaried workers joined the company in the last four years. Ford Motor Co. is also taking a hard look at its salaried workforce, planning to cut an undetermined number of its 70,000 salaried jobs globally by the second quarter of next year. It's all part of CEO Jim Hackett's fitness regimen for the Blue Oval, which aims to trim $25.5 billion in operating costs over the next few years at the same time the automaker spends $11 billion in part to restructure the workforce. "It's not that these companies don’t need as many people," said Mike Ramsey, an automotive analyst for research firm Gartner Inc. "It’s that they don’t need the people they have. The people they have can’t necessarily pivot to what they need." The deadline to accept the GM's buyout was this week, but the automaker says it likely won't report the result of the program — cost savings or jobs eliminated — until next month. If the automaker doesn't meet the undisclosed savings benchmark for this voluntary severance program, GM has said it would have to consider layoffs. The results could show that there are some previously protected salaried jobs that might go extinct as the automotive industry barrels toward the mobility, electrification and automation of Auto 2.0. Said Ramsey: "Software development is beginning to automate what used to be done by (mechanical and technical) engineers." That phenomenon shows in an upcoming study of automation's effect on industries by the Brookings Institution in Washington, which found that six engineering and engineering technician occupations in the auto industry have automation potential of more than 20 percent in the next 20 years, meaning more than 20 percent of the tasks associated with those jobs could be automated. The same study found that chief executive tasks have an automation potential of 25 percent. "Knowing that we almost lost the domestic auto industry a decade ago, these companies have to be cognizant of staying on the right side of technology," said Mark Muro, a senior fellow at the Brookings Institution's Metropolitan Policy Program who helped compile the study. GM's Barra insists the need to remain competitive on new technologies and cut costs are intertwined. In a memo sent to employees on Halloween, she said the leadership team is focused on improving the company's free cash-flow — essentially the money GM is able to keep after all expenditures, like in a savings account. "Free cash-flow is an important measure of how much we can invest in new products and technologies, and provide returns to our investors in the form of dividends," Barra wrote. "Without a strong cash position, we cannot be the agile, innovative industry leader we need to be as we realize our longer-term vision." Providing returns to investors while still pouring money into what GM has said will prop up its vision for the future — driverless and emission-free vehicles — will be important to maintain for the Detroit automaker, a company that has lauded itself as shareholder-friendly after emerging from federally induced bankruptcy in 2009. "Companies are in the business, in the long run, of creating value for shareholders," said Mark Wakefield, a consultant for Alix Partners. "Driving cash and cash flow means you give me a dollar and I give you two dollars back." GM is aiming to end the year with $4 billion in free cash flow. It had negative $300 million at the end of the third quarter, though seasonally most of GM's cash flow comes in the last three months of the year when new products hit dealer lots. The Detroit automaker is also planning to spend $1 billion this year on its GM Cruise LLC operation, the company's self-driving vehicle development arm. And $500 million of that will be spent largely on hiring in the fourth quarter, Barra told investors after GM released its third-quarter earnings. "This isn't really about cutting overall staff, it's about realigning," said Ramsey. "Look at what GM and Ford have committed to, with bit bets on electrification and autonomy. To make people believe what they're saying, they need to re-balance the workforce."
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Patent reveals new idea for By Gary Gastelu
Ford has designed a side mirror that offers a view of what’s in front of a car. Well, not the mirror itself, but the LIDAR that’s hidden inside its housing. A patent application first reported on by CNET reveals the concept that could find its way onto the autonomous vehicles Ford is planning to introduce as early as 2021. Until now, Ford’s self-driving test cars, like those of many automakers, have been equipped with unsightly and un-aerodynamic sensor arrays that include LIDAR pucks, which emit invisible laser beams to create 3D images of their surroundings.
The patent depicts the range of vision of the pair of LIDARs to cover the sides and front of the car, but doesn’t indicate where any rear-facing equipment would be installed. The housing has also been constructed of materials that reduce electromagnetic interference.
And while it may seem redundant to have mirrors on an autonomous car that doesn’t actually need them, they are required by current regulations and would allow for a driver to take manual control. |
Ford: We're doing more Ian Thibodeau, Miami — Ford Motor Co. delivered a message to skeptical investors wanting answers about its Auto 2.0 strategy: We're doing more than you think. They outlined how Ford thinks it can make money on those cars once they launch, how the research they've done in Miami has changed how the vehicles operate, and how that research will be applied come 2021 when Ford plans to launch self-driving service in multiple cities. “The world doesn't understand how much progress we've made," Ford CEO Jim Hackett said in an interview Wednesday in Miami. "The world doesn't see smart. I've got to kind of get you to live in it. It's come a long way." Ford plans to spend $4 billion over the next few years building those vehicles and the business model it will run them through to make money. Ford has been secretive about its self-driving vehicles and future plans, much to the displeasure of the investment and analyst community. The day-long event for journalists and analysts in Miami (investors get a look Thursday) came as Ford and Argo continue to negotiate potential self-driving partnerships — and a potential investment of more than $1 billion in Argo from Volkswagen AG. Hackett wanted to show everyone what Ford accomplished in roughly a year in Miami, even if the product is still more than two years away from launching. When Ford and Argo launched in the city, the autonomous test mules didn't know what to do when they encountered bicyclists. Wednesday, the cars safely maneuvered around bikes and much more. The cars can now predict where pedestrians, bicyclists and people in wheelchairs might be headed, and how cautious the vehicle needs to be during random situations. Safety drivers only once took over the self-driving hybrid Ford Fusion that The Detroit News rode in Wednesday during a 5-mile trip along a predetermined route through the busy Overtown, Edgewater and Wynwood neighborhoods of downtown Miami. Throughout the drive, the vehicle got around double-parked cars, parallel parkers, bicyclists and pedestrians like a human driver should: cautiously, but with ease. “We didn’t stage anything on these streets,” Sherif Marakby, CEO of Ford Autonomous Vehicles LLC, said in an interview. “That is so much more difficult than having an easy, controlled experiment. This is not an experiment. This is scale.” Learning to drive For Brian Salesky, Argo AI CEO, Wednesday's event was a long-awaited chance to pull back the curtain. Argo, barely two years old, has been under the Ford umbrella since 2017, when Ford announced a $1 billion investment in the Pittsburgh-based technology company. He and his business partner, Argo President Peter Rander, haven't had many chances to show people what they've been building. "This is a pretty thrilling process to see this is really working," Rander said. Sam Abuelsamid, analyst with Navigant Research, and Jeremy Acevedo, analyst with Edmunds said separately that Wednesday's event gave them a much-needed look at Ford and Argo's progress. As competitor Waymo readies its vehicles for commercial use in Arizona by the end of this year, Ford needed to signal where it's at. "There's a lot of things that they're really doing well," said Abuelsamid. Argo seems to have simultaneously developed a safe and comfortable vehicle, he added: It accelerates smoothly, but confidently. It trails vehicles at a distance which many human drivers would trail. It brakes smoothly at intersections, and creeps up slowly to peer around obstructions and see oncoming traffic. It navigated complex situations like double-parked vehicles, unprotected left turns and human drivers failing to give the autonomous vehicle the right-of-way. Argo and Ford are still learning, Salesky and Marakby said in interviews. Wednesday's event was by no means meant to show a finished product. Both companies still have two years of work to do before launching — and then years of updates after that. The Argo team found quickly that Miami drivers only loosely obey the rules of the road. Right-of-ways are based solely on a driver’s willingness to assert themselves. Salesky's team over the last year tweaked the system so that it won't get taken advantage of when it yields to one car. Engineers found at one intersection that if the vehicle stopped too far ahead to allow someone to make a left-hand turn into its lane, a steady stream of drivers would spill ceaselessly into the lane. They adjusted the system so the car pulls farther forward and only allows one vehicle to proceed. Tweaks like that will need to be done in every city in which Ford and Argo launch. The companies plan to test in several more cities over the next two years ahead of launching the autonomous vehicle business. Business model Ford officials stressed Wednesday that less than a year of work in Miami brought changes to both how the autonomous vehicle operates, and how Ford is building its business model. Marakby and Marcy Klevorn, Ford president of mobility, have found here that people living in high-rise buildings don't want to leave their residence to retrieve packages. That changes how Ford works with partners on delivery services. The company also learned that the businesses using Ford's system for delivery might be based downtown, but Ford and Argo need to map outlying neighborhoods if they want to reach a large number of customers. The automaker knows that all of its competitors will have some sort of autonomous driving business. But Klevorn said in an interview that Ford can distinguish itself through ease-of-use. The company is building out an app that will allow a certain vehicle to be deployed, based on need. Officials said the in-depth testing in Miami — and soon Washington, D.C. — means Ford's product will be ready for mass-use on the first day it launches. If Ford has simply launched its vehicles in Miami in 2021 without this immersive testing, they’d have spent a year changing things and losing money, Marakby said. Ford has ongoing partnerships with Postmates delivery service and Domino's Pizza. It announced Wednesday it would partner with Walmart on grocery delivery. Those partnerships depend on cities and people adopting the technology, the ability to safely introduce the vehicles. Ford and Argo said Wednesday a safety engineer will be riding in the driver's seat — even when the automaker begins giving rides to the public in the test vehicles in 2019 and 2020. By then, most everything Ford showed on Wednesday will be changed, including the vehicle the automaker uses as its autonomous platform. Ford's still hasn't said what that all-new hybrid nameplate will look like. Acevedo, an industry analyst with Edmunds, said that lead time is still hurting Ford. "Sometimes first matters," he said. "That's just not the case here. We have some clarity that they have those initial first steps to get the ball rolling." Ford and Argo officials said Wednesday they are moving at the proper pace to launch at the scale they're anticipating in 2021. "If we wanted to call a launch 100 vehicles next year, we could do that," Marakby said. "I don't think we want to do that. This is real, and what we're doing is building to set up this business to be profitable." |
Ford recalls nearly
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Ford, Walmart partner on
Ford Motor Co. is partnering with Walmart to figure out how self-driving vehicles might be used for delivering groceries. Walmart has more than 5,000 Sam's Club and Walmart locations in the U.S. The retail giant expects to expand delivery options to 800 stores in 100 U.S. metropolitan areas by the end of the year. The heart of Ford's research will start in Miami-Dade County, where the automaker has spent nearly a year testing and building out a business model for the autonomous vehicle fleets it plans to launch in 2021. "Like us, Walmart believes that self-driving vehicles have an important role to play in the future of delivery, and that true success comes from first learning how individuals want to use them in their daily lives," Brian Wolf, Ford's autonomous vehicle business lead, said in a statement. "Together, we’ll be gathering crucial data about consumer preferences and learning the best way we can conveniently connect people with the goods they need." The announcement comes ahead of a Wednesday event in Miami in which Ford executives — including CEO Jim Hackett, and officials from Argo AI, the Pittsburgh-based technology company currently building the software for Ford's autonomous vehicles — will give details on the development of the autonomous cars and how the companies plan to use them come 2021. Walmart isn't Ford's first commercial partner on autonomous vehicle research. The automaker last year ran tests with Domino's Pizza in Ann Arbor using a vehicle outfitted with a suite of autonomous vehicle sensors. The companies wanted to see how customers reacted to getting their pizzas delivered by a car that looked like it wasn't being driven by a human. The news with Walmart comes after Hackett in recent months has promised more details, clarity and updates on Ford's ongoing restructuring, cost-saving efforts and pending partnerships. Most recently, news has been circulating around partnership talks with Volkswagen AG. The German automaker is considering investing more than $1 billion in Argo AI, in which Ford has a majority stake. Volkswagen and Ford are negotiating other pieces of an autonomous vehicle partnership in addition to partnering globally on light commercial vehicles, trucks and other pieces of the companies' global business. The automaker in Miami this week is expected to give media, analysts and investors rides in its autonomous test vehicles, and demonstrate pieces of the developing business model. The Walmart partnership will be focused on research. Ford won't be running vehicles without a human driver through Walmart parking lots. The automaker is interested in figuring out what modifications would need to be made to a delivery vehicle to effectively transport perishable goods, or how an autonomous vehicle would make multiple deliveries in one trip. |
Ford's China partner planning  Zotye E200 EV at Beijing Auto Show in April Nora Naughton, Ford Motor Co.'s newest Chinese partner, Zotye Automobile, is preparing to launch at least two SUVs in the Blue Oval's backyard. The relatively small Chinese automaker Zotye Automobile International Co. is partnering with California-based HAAH Automotive Holdings to look beyond its home market and form a new sales distribution company in the United States known as Zotye USA (pronounced ZOH-tay) — a tie-up that would sell direct competitors to some of Ford's most lucrative SUVs. "We're facing a new reality where the Chinese domestic market is slowing for the first time in recent memory," said Michael Dunne, CEO of Hong Kong-based ZoZo Go, a firm that advises automakers on the Chinese market. "Now that things have gone soft, automakers are finding themselves in a situation where they have to export and find new markets. Zotye is possibly the first, but they won’t be the last." Chinese automakers have long been eyeing the rich U.S. market, following years of accusations that state-required joint ventures with foreign automakers are being used to more quickly gather global industry technical intelligence and manufacturing know-how. But there's a new sense of urgency as a nearly three-decade period of growth has been followed by months of contraction, added Dunne. Ford Motor Co.'s newest Chinese partner, Zotye Automobile, is preparing to launch at least two SUVs in the Blue Oval's backyard. The relatively small Chinese automaker Zotye Automobile International Co. is partnering with California-based HAAH Automotive Holdings to look beyond its home market and form a new sales distribution company in the United States known as Zotye USA (pronounced ZOH-tay) — a tie-up that would sell direct competitors to some of Ford's most lucrative SUVs. "We're facing a new reality where the Chinese domestic market is slowing for the first time in recent memory," said Michael Dunne, CEO of Hong Kong-based ZoZo Go, a firm that advises automakers on the Chinese market. "Now that things have gone soft, automakers are finding themselves in a situation where they have to export and find new markets. Zotye is possibly the first, but they won’t be the last." Chinese automakers have long been eyeing the rich U.S. market, following years of accusations that state-required joint ventures with foreign automakers are being used to more quickly gather global industry technical intelligence and manufacturing know-how. But there's a new sense of urgency as a nearly three-decade period of growth has been followed by months of contraction, added Dunne. A Ford spokesman said Zotye's plans to enter the U.S. market are unrelated to its joint venture with the automaker on electric vehicles in China for that market, and declined to comment further. Dealer recruitment efforts by Zotye and Guangzhou Automobile Group Motor Co. Ltd. (GAC) herald the prospective arrival of long-anticipated Chinese players in the competitive U.S. market, even as trade tensions escalate between China and the United States. Zotye USA says it is prepared to meet the challenge, though it's optimistic the frayed trade relationship between the two countries will improve by the end of 2020. Ford recently scrapped a plan to import a Focus crossover from China, citing the potential impact of tariffs imposed on Chinese imports by President Donald Trump as too large a threat to profits on what Ford said would have already been a low-margin vehicle. "It won't stop our deal," HAAH CEO Duke Hale said of trade uncertainty. "Both Zotye and HAAH are in a position to be able to give up a little margin and still be more than competitive." Hale said Zotye is developing two yet-to-be-named compact and midsize SUVs specifically for the U.S. market — two of the most competitive segments — though it's not clear yet which vehicle would arrive first. The vehicles would be built in China and imported to the U.S. Among the target competitors would be the Toyota RAV4, Honda CR-V and Nissan Rogue — all of which compete with the Ford Escape. The new company, wholly owned by HAAH, will be based in Lake Forest, Calif. Plans for the dealer network include up to 325 stores nationwide, targeting the top 80 markets in the U.S. — including Metro Detroit. Others Chinese players have tried and failed to enter the U.S. in the last 15 years, including Chery Automobile Co. and industry giant Geely Automobile Holdings Ltd., which also owns Sweden's Volvo Cars Ltd. and holds a nearly 10 percent stake in Germany's Daimler AG. Hale said his holding company has been in talks with Zotye for "a couple of years," evaluating the Chinese automaker's product for the U.S. market as the small company grows in its home market. "This company is in growth mode," he said, "and it's possible they could get a first-mover advantage." Zotye could see some competition from GAC Motor, which came to the Detroit auto show at the beginning of this year with plans to enter the U.S. market by the end of 2019. A spokeswoman for GAC Motor said the automaker is on track to begin selling its GS8 SUV in the U.S. by the beginning of 2020, and is actively recruiting dealers. The tie-up with HAAH is separate from Zotye's joint venture with Ford on electric vehicles for the Chinese market, as Zotye is not currently planning to bring EVs to the U.S. Ford's China unit continues to struggle, with sales in the Asian market falling by 45 percent in October as an industry-wide sales slowdown sets in. Analysts say that signals the Blue Oval might have missed the wave in the fastest-growing global market. And as the Dearborn-based automaker looks to stop the bleeding in China, a global tie-up with one of its Chinese joint ventures likely isn't the focus, Dunne said. "Inside China, Ford, like many other automakers, was looking for a solution to meeting China's EV requirements," he said. "I don't think they were ever looking for a joint venture for the purpose of being global partners." Meantime, privately owned Zotye is coming to the U.S. with one of the market's hottest products and Ford's livelihood: SUVs. Within less than two years, the Blue Oval says SUVs, pickups and commercial vehicles will account for nearly 90 percent of its sales volume in the SUV-crazy U.S. market. The move from Zotye, which sells some 300,000 units in China annually, is likely to get the attention of giants like Geely, which sold 1.2 million vehicles last year. "There is a certain pride in who will be the first Chinese brand to land cars in the American market," Dunne said. "If little Zotye is prepared to enter the market, why not the big guys? There probably won't be a knee-jerk reaction, but others will certainly be watching." |
Big investments on table
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Fate of Trump trade agenda
Washington — The fate of President Donald Trump’s proposed replacement for the North American Free Trade Agreement may rest in the hands of Democrats who won control of the U.S. House of Representatives on Tuesday. U.S. Rep. Debbie Dingell, D-Dearborn, said the proposed replacement for NAFTA, known as the United States-Mexico-Canada Agreement, is likely to be front and center for the new Democratic majority in the U.S. House after they take office in January. "I don't think anybody is going to bring it up in the lame duck," she said, referring to the period between an election and when lawmakers return home for the holidays ahead of the new Congress being sworn in. "They'll bring it up next year." Dingell, who is a member of the House Energy and Commerce Committee, said Democrats themselves are still sorting through Trump's proposal to replace NAFTA. She did not offer an opinion on which way the party might go after it takes power in January. "People are starting to look at the details," she said. "This is not front-and-center for anybody right now." U.S. automakers have expressed relief that the Trump administration was able to strike a deal to maintain a trilateral trading relationship. But they have expressed concern the agreement does not do enough to shield Canada and Mexico from steel and aluminum tariffs that have been imposed by Trump. Nicholas Coutsos, chief of staff for American Automotive Policy Council, which lobbies for General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles, said in comments submitted to the U.S. International Trade Commission ahead of a Nov. 15 public hearing that U.S. automakers still are reviewing the proposal, but they "believe the new agreement will help the U.S. auto industry remain competitive in the global marketplace and continue growing jobs here at home." Coutsos added that the group remains concerned that an agreement has yet to be reached to resolve the issues surrounding the steel and aluminum tariffs recently imposed by the Trump administration on Mexico and Canada. Trump has said he intends to sign the new agreement by November and submit it to Congress for approval. By law, the administration must publish the text of a new trade agreement 60 days — which it did in August — before the president signs it. Following the signature, the U.S. International Trade Commission will have up to 105 days to analyze the impact of new trade agreement on the U.S. economy, which would likely push Congressional approval into March 2019. The proposed agreement calls for increasing from 62.5 percent to 75 percent the percentage of a car's parts that have to come from the U.S., Canada or Mexico to qualify for duty-free treatment. Additionally, the USMCA requires that 40-45 percent of an auto's content be made by workers earning at least $16 per hour. It contains provisions to protect up to 2.6 million cars and $32.4 billion worth of parts imported from Canada and Mexico from tariffs on imported vehicles that are being considered separately by the Trump administration. Vehicles not meeting the requirements would be subject to a 2.5 percent duty. Absent a push by the Trump administration to speed up the clock for the trade commission review, the agreement the president has touted as a fulfillment of a major 2016 campaign pledge would fall to the Democratic-led House that will be sworn in the first week of January. Democrats might also choose to weigh in on Trump's decision to impose tariffs on foreign steel and aluminum. The White House is also considering new levies on imported cars, although Democrats' close ties with unions may make them reticent to pick a fight. U.S. manufacturers have railed against the metals tariffs because of the added cost for making products. Detroit automakers have even argued against additional tariffs on imports, because they fear retaliation for their vehicles exported to other countries. Asked if Democrats are going to look at passing legislation to undo the tariffs that have been implemented by Trump, U.S. Rep. Dingell said "we're going to look at everything." In his first public remarks after Tuesday's votes were tallied, the president expressed hope that trade can be an area where he can reach bipartisan agreement with newly empowered Democrats. "Hopefully, we can all work together next year to continue delivering for the American people, including on economic growth, infrastructure, trade, lowering the cost of prescription drugs," he said during a press conference at the White House on Wednesday. U.S. Rep. Nancy Pelosi, D-Calif., likely to once again become Speaker of the House, identified infrastructure and lowering the cost of prescription drugs as areas the new Democratic majority could work on with the Trump administration in her first remarks since the election. But trade pointedly was not mentioned. Charlie Chesbrough, senior economist and senior director of industry insights for Cox Automotive, said Democrats' close relationship with unions will likely complicate the politics on the USMCA and other trade agreements that are renegotiated by Trump. "Democrats in general are on the side of labor, and the higher content requirements (for domestic parts for autos) and higher wages are welcomed by unions and workers in the U.S.," he said. "In general, the treaty is popular. I don't see a reason they would want to open that can of worms." Unions have cast a wary eye toward the USMCA, arguing the Trump administration's proposal does little to ensure the Mexican government will enact wage increases that are prescribed in the new deal. In comments submitted to the ITC, the AFL-CIO said the renegotiated trade agreement "begins to take a new direction in some key areas," but it also locks in provisions that it took issue with in the previous iteration of NAFTA. "Given the government of Mexico’s history of policies that purposely undermine wages and obstruct the rights of workers to organize and bargain collectively, the USITC should not assume that the mere presence of such obligations will effectively promote changes to law and practice," the AFL-CIO said. Automakers have urged the ITC to consider the potential impact of the proposed changes to rules for percentage of a car's parts that have to come from the U.S., Canada or Mexico to qualify for duty-free treatment. "U.S. automakers will need to establish new and elaborate processes to ensure compliance with these rules," John Bozzella, CEO of the Association of Global Automakers that represents foreign-based manufacturers, said in comments of his own submitted to the ITC. He said the commission should consider the consequences if automakers find themselves unable to comply with rules of origin because of cost or other reasons. If the USMCA is approved, it will be subject to review in six years and will end in 16 years unless all three countries agree to another 16-year renewal. Buoyed by the negotiations that led to the potential NAFTA replacement, the Trump administration is also moving to re-open trade agreements with Japan, the United Kingdom and the European Union. Democrats likely will have a bigger say in the fate of those deals. |
For Ford, echos of 2005 as Molly Smith Ford Motor Co. could be close to getting junked again. That's what the bond market is saying. The company's debt is trading like it's speculative grade, as investors worry about how higher steel tariffs and slowing sales will weigh on its profits. Ford is rated one step above junk by Moody's Investors Service and two steps by S&P Global Ratings. Any downgrade could be painful for bond investors, and for the company. The automaker has more than $150 billion of short- and long-term debt globally, and is one of the 15 biggest corporate bond issuers in the U.S. outside of the financial sector. In 2005, Ford was cut to junk along with General Motors Co. Bob Shanks, Ford's CFO, said on an earnings call last month that the company is committed to maintaining its investment-grade ratings, and doesn't intend to lose that status again. The company is "moving with a sense of urgency and taking proactive steps to redesign and restructure the business," and over time 'the market will recognize our progress," Ford spokesman Brad Carroll said. But debt investors are skeptical. The extra yield that money managers get for holding Ford's 4.346 percent bonds due 2026 rather than similar Treasuries jumped to levels typical of high-yield companies. The cost of protecting Ford's debt against default using credit derivatives rose in October to the highest levels since 2012 before settling down again. Moody's downgraded the company in August to one level above junk, and said further cuts are possible in the medium term. "There's a better chance than not it ends up in high yield," said Henry Peabody, a portfolio manager at Eaton Vance Corp. in Boston. "It's a combination of a fairly weak strategic position, less than ideal strategic decisions over last handful of years, a smattering of overconfidence and where we're at in the credit cycle." Ford is fighting a "multiple-front war," Peabody said, citing the company's slowing sales growth in China and higher costs in the U.S. from global trade disputes. Ford fared better during the financial crisis than GM and the Chrysler Group, now part of Fiat Chrysler Automobiles NV, by avoiding bankruptcy and the government-backed bailouts that its competitors received. But losing its investment-grade status forced Ford to finance itself on a secured basis, essentially putting everything from its inventory to the rights to its oval blue logo in hock. When Ford reclaimed its investment-grade ratings in 2012, after it cut debt and profits jumped, Chairman Bill Ford announced the upgrade to employees on the public-address system normally used for fire drills at Ford's Dearborn, Mich., headquarters. "When we pledged the blue oval it was enormously emotional for me personally and for my family, because we weren't just pledging an asset, we were pledging our heritage," Ford said in May 2012. "To get that back feels wonderful and this is one of the best days I can remember." New trouble Now the company is facing difficulty again. Ford told investors in July it is launching an up to five year overhaul that could cost it $11 billion, as it focuses on higher margin products such as trucks, crossovers and SUVs and exits segments that include sedans. However, it has provided scant details on the restructuring plan, and has yet to reschedule an investor meeting that was originally set for September. Struggling operations in Asia and Europe prompted Ford to cut its 2018 profit forecast. The company posted about a 50 percent decline in earnings for the second quarter, followed by a nearly 40 percent decline in the third quarter. Its shares last month fell to their lowest level since 2009. Ford's bonds trade at risk premiums similar to those of junk-rated companies in the auto industry, such as Allison Transmission Holdings Inc. and Dana Inc., and have since Moody's cut the company to a step above junk in late August, according to Bloomberg Intelligence research. The bonds have rallied recently, but still trade at risk premiums higher than Fiat Chrysler, which is rated junk, and GM, signaling investors believe Ford is a bigger credit risk. One source of support as the company tries to fix itself is its cash position: Ford had around $35 billion of liquidity as of Sept. 30. That's given comfort to credit raters, who have noted it as a positive. Earnings margins and operational challenges outside the U.S. are top concerns to Moody's, which rates Ford Baa3. S&P and Fitch Ratings both rate the company one step higher at BBB. More cuts? Ford would need to be cut to high yield by two ratings firms before it fell out of the investment-grade index. Many money managers don't see that as likely, even if Moody's decides to cut the company to speculative-grade, said Joel Levington, a former S&P director and now head of credit research for Bloomberg Intelligence. Ford has options for avoiding downgrades, Levington said, including cutting its dividend -- a step the company has insisted it won't take -- or selling less profitable units. "To get to the place where you're talking about two rating agencies going to high-yield, you're saying not only is the company a basket case, but that it isn't doing anything to stave off either of those actions," Levington said. "I wouldn't assign a high probability around that." To some money managers, current trading levels represent an attractive buying opportunity. The company's bonds pay high yields and the credit quality is relatively high, said Matt Brill, senior portfolio manager at Invesco. "Ford generates a lot of cash flow and they have so much more flexibility than they did a decade ago," with regard to costs, he said. But bond analysts caution that the debt is by no means a slam-dunk investment. Carmakers are cyclical businesses, and as the Federal Reserve raises rates, increasing financing costs for consumers, vehicle sales aren't likely to improve much, if at all, from here. "Autos were always the light that everyone's looked to in this post-recession era," said Jody Lurie, a corporate credit analyst at Janney Montgomery Scott. "I don't think investors are looking at them on that momentum story that they once had, or looking at them as the beacon of hope that they once were." |
Ford acquires scooter
Ford Motor Co. is adding two-wheeled scooters to its transportation lineup. The Dearborn-based automaker announced Thursday it acquired San Francisco-based dockless electric scooter company Spin, and would launch those scooters in Detroit immediately. Sundeep Madra, vice president of Ford X, a new division within Ford Smart Mobility that acts like a startup business incubator focused on mobility ideas, said the scooters help Ford round out its end-to-end mobility offerings. Ford can now reach any kind of customer, he said, from car buyers to urban e-scooter riders. It's clear to Ford that the scooters have quickly evolved into a viable urban transportation option, and not just a quirky toy. The generation of kids that remember the years that Razor scooters were on everyone's wish list are now working in major downtown offices, Madra said. Those people are comfortable on a scooter, they're comfortable using an app to call up transportation, and the e-scooters can whisk someone from place to place without them breaking a sweat in their work attire. They're also fun, he said. "This is more than a craze," Madra said. Bird Rides Inc. and Lime, two companies currently operating in Detroit and around the country, have tallied 10 million rides in less than a year. "This is really addressing a real need. It's one of the spaces where we're convinced there is starting to be a serious product market." The scooters have caused a fuss in multiple U.S. cities. Ann Arbor officials confiscated scooters left on sidewalks, and threatened to ticket users driving the machines on sidewalks, according to MLive. In San Francisco, there were reports of people throwing Bird scooters into the ocean. In Detroit, there were complaints that the scooters weren't accessible to those in the neighborhoods who needed alternative transportation most. And nearly every city fielded complaints that the parked scooters were cluttering the sidewalks. Madra said Ford aims to abate those rubs. Spin doesn't launch in cities without permission, and the two companies plan to leverage Ford's existing relationships with city governments and universities to launch the scooters. The Detroit launch could hit at the right time. It's the first official launch since Ford acquired the company, and Detroit just updated its rules so that each scooter-sharing company will be able to deploy 400 of the devices — up from the previous cap of 300. The companies are also required to deploy 100 scooters in neighborhoods outside of Grand Boulevard. Officials said the city will work with the companies to ensure scooters are accessible throughout the city. Spin currently operates in 13 U.S. cities. Over the next 18 months, Ford and Spin plan to launch reach 100 markets. The scooters won't have Ford's logo on them, but Madra said the automaker is working on a way to get its brand involved. The scooter company joins a list of companies Ford has founded, acquired or invested in over the last several years geared toward alternate modes of transportation, or transportation services. The automaker now has its hands in a bike-share program, a shuttle service, a non-emergency medical transport service, a vehicle subscription service, and traditional leases and sales. Ford plans to launch its autonomous vehicle business by 2021. The scooters, Madra said, help Ford reach one of its goals related to mobility. "We're trying to solve congestion problems," Madra said. "The solution to that isn't to put more cars on the road. |
Detroit Symphony chimes in with
Lincoln Motor Co. will debut the all-new Aviator at the Los Angeles Auto Show this month ahead of its 2019 launch, and the SUV comes with its own Detroit soundtrack. Lincoln partnered with the Detroit Symphony Orchestra to develop and record chimes to replace the beeps or dings that would typically notify a driver of an open fuel cap, unlatched seat belt or open door. All told, the orchestra developed "non-critical, soft-warning chimes and hard-warning chimes" for 25 features on the Aviator. The DSO worked through multiple sessions to develop the alerts. Lincoln narrowed the chime sounds down from 125 recorded options. It's a first-ever feature for Lincoln. "Aviator represents the true vision of the Lincoln brand," Lincoln design director David Woodhouse said in a statement. "With a look this striking, we needed to have sounds that matched the beauty of this vehicle." The Aviator continues a string of launches or redesigns for Ford Motor Co.'s luxury brand during an ongoing rebranding effort. Its return brings a much-needed three-row SUV to Lincoln's small lineup, and that meant designers paid special attention to detail with the vehicle Lincoln hopes will compete with Acura, Cadillac and other premium brands. The Aviator takes styling cues from the Lincoln Navigator, which launched in its current iteration last year to praise for its design. If the Aviator sees even part of the success that the Navigator and Ford’s new Expedition have had since their introduction, it will boost Lincoln’s bottom line, officials have said. The automaker is currently in a sales slump — along with much of the rest of the industry — as it moves to start selling a new MKC and the Nautilus crossover SUV. Lincoln has said it will debut five other new SUVs over the next few years in addition to the Aviator. The Aviator will have a plug-in hybrid option when it goes on sale in 2019, a first for the company. Lincoln is also debuting new technology on the vehicle, namely a keyless entry system that allows users to unlock and start the SUV with smartphones and leave the key fobs in the house. |
Ford, Volkswagen mulling
Ford Motor Co. and Volkswagen AG are discussing a global partnership on self-driving vehicles that would align two of the world's largest automakers behind one of the biggest bets on the future of the auto industry. The companies have been exploring a partnership on autonomous vehicles as part of talks that began earlier this year, two ranking sources close to the situation told The Detroit News on Friday. Any alliance would not include cross-shareholding, or a merger, of the parent companies, the automakers have stressed. The discussions intensified after the companies in June signed a memorandum of understanding to explore how and whether Ford and VW could co-develop commercial vehicles, which could play a role in a self-driving vehicle partnership. A pending deal on autonomous vehicles is progressing, one of the sources told The News. The partnership likely would be a critical piece of Ford and CEO Jim Hackett's ongoing $11 billion global restructuring aimed at stemming losses in Europe and South America, growing market share in China, boosting profit margins in North America and cutting costs globally to free capital for investments in next-generation technology. Volkswagen is currently the best-selling automaker in China, where Ford has struggled to enlarge its foothold. The German automaker, based in Wolfsburg west of Berlin, also has strong presences in South America and Europe, two markets where Ford has struggled in recent years. Last year, Ford lost $479 million in South America, $199 million in Europe and $721 million in its Asia Pacific market. Volkswagen, meantime, would piggyback on Dearborn-based Ford's market penetration in North America. It also would gain access to the Pittsburgh-based Argo AI, the company in which Ford invested $1 billion to develop software for its autonomous vehicle system. A tie-up would enable the companies to offer a wider portfolio of vehicles for self-driving technology, to spread costs and to build the economies of scale thought necessary to profitably build battery-electric autonomous vehicles. Ford has spent $479 million on mobility so far this year. "These companies can form some partnerships on this stuff and spread out the costs of some of this development," said Sam Abuelsamid, analyst with Navigant Research, a company that tracks autonomous vehicle development. "The costs of this technology are enormous. If they can develop one system that they both utilize, they can spread that cost over more vehicles." Partnership is proving to be an increasingly popular route to the mobility, autonomy and electrification of Auto 2.0. Google parent Alphabet Inc.'s Waymo self-driving unit is partnering with Fiat Chrysler Automobiles NV to provide minivans to its Waymo self-driving unit. Toyota Motor Corp. is partnering with Uber Technologies Inc. on self-driving cars. And General Motors Co. and its self-driving arm, GM Cruise LLC, last month inked a deal with Honda Motor Co. to develop and build a “purpose built” autonomous vehicle, with Honda investing $2.75 billion in Cruise over 12 years. The partnership creates a formidable trans-Pacific player in the race to deploy autonomous vehicles, in part because the two automakers have complementary global footprints. For GM, the partnership provides access to the Japanese market and Honda's expertise in small car development. A tie-up of Ford and Volkswagen's autonomous businesses would also reunite two robotics and autonomous vehicle pioneers. Volkswagen currently partners with Silicon Valley startup Aurora on its own autonomous vehicle development. Chris Urmson, CEO of Aurora, worked with Bryan Salesky, CEO of Argo, when the two worked at Google. The VW-Ford discussions regarding autonomous vehicles were first reported by Bloomberg. The companies announced in June they had signed a memorandum of understanding to explore partnering on commercial vehicle development. One source said Ford and Volkswagen had been discussing an autonomous vehicle partnership since the beginning of this year. The talks are ongoing. “Collaboration isn’t being limited in any way whatsoever, whether it’s different types of technology, product segments or geography,” Ford CFO Bob Shanks told Bloomberg. “We’re having a very broad set of discussions about how we can help each other around the world." Details of any proposed VW-Ford tie-up could come as early as Nov. 16, Reuters reported. That's when the German automaker's CEO, Herbert Diess, could present his plan on advanced technology investment — including a potential self-driving partnership with Ford that could reduce steep development costs. A partnership on commercial vehicles could be another cost-saving boon for the companies if they partner on autonomous vehicles. The companies have made clear that any partnerships would not result in or be considered a merger. Ford in July announced plans to separate its autonomous vehicle business into a separate business unit to attract outside investment. Volkswagen and Ford could partner on autonomous vehicles through Ford Autonomous Vehicles LLC. A source told The News that leadership from both Ford and Volkswagen are treating discussions around autonomous vehicle tie-ups as separate from the commercial vehicle partnership. Volkswagen did not respond to requests for comments. Ford spokeswoman Jennifer Flake said in a statement that, "Our (Memorandum of Understanding) with VW covers conversations about potential collaborations across a number of areas. It is premature to share additional details at this time." |
North American auto U.S. metal tariffs also weighing down continent's competitiveness November 5, 2018 The North American auto industry will likely lose global market share under the new trilateral trade agreement reached by Canada, Mexico and the United States, warns Scotiabank Economics. While the financial institution says the United States-Mexico-Canada Agreement (USMCA) gives Canada short-term relief by way of eliminating uncertainty, paving the way for new investment, it erodes the competitiveness of the auto industry across the entire continent. Under the new pact, the trio of countries agreed to increase the regional content share requirement in light vehicles to 75 per cent from 62.5 per cent —under a four-year phase-in period beginning in 2020. They also incorporated a clause in the new deal that mandates that 40 per cent of the value of a vehicle traded within the region must originate from factories where the average wage is US$16 per hour. Since employees in the Mexican auto manufacturing sector earn, on average, around USD $3 an hour, certain auto producers in Mexico will require a greater share of U.S. or Canadian auto parts. “Tighter rules of origin requirements will likely result in higher auto prices due to increased input costs, which could ultimately dent North American competitiveness and see some production moved overseas,” Scotiabank warns in its fourth-quarter global outlook, released late Thursday. “The auto provisions of the deal will reduce the competitiveness of the North American auto industry over time, leading to higher prices and a possible loss of global market share.” The report went so far as to call the USMCA “a move away from free trade.” Along with the high-wage rule, automakers must prove that the steel and aluminum in their vehicles are manufactured in the region to qualify for duty-free status. Automakers also must show that core components such as the engine, transmission, suspension, axles, chassis, steering system and batteries meet the 75-per-cent regional requirement. The impact "will be different for each automaker, and even for each model," said Manuel Padrón, an auto sector specialist at the law firm Baker & McKenzie. Scotiabank also says metal tariffs — 10 per cent on aluminum and 25 per cent on steel — are hurting the auto industry and will continue to do so if they aren’t lifted by U.S. President Donald Trump. Some U.S. automakers have already noted an erosion in profits stemming from the so-called “national security” metals tariffs. Ford, the second largest automaker in the U.S., has claimed the tariffs have cost the company around US$1 billion in profits. Scotiabank notes an increase in the cost of metal in the automotive supply chain this year. While prices for electronic equipment in autos have climbed by 0.6 per cent since December, those of motor vehicle bodies and trailers, made mainly of steel and aluminum, have increased by 3.4 per cent during the same period, the report said. The metal tariffs have also led some Canadian auto dealers to put multimillion-dollar construction projects on hold because the cost of steel is on the rise. If the USMCA is ratified, the new rules will take effect Jan. 1, 2020, and be phased in. Automakers will have three years to adjust their supply chains to meet the new targets, with a possible two-year extension. NAFTA will remain in effect until the new agreement is ratified and phased in.
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FCA sales up, Fords down
Judging by last month's sales, the Great American Car is slowly disappearing — for Detroit, anyway. Fiat Chrysler Automobiles NV's new trucks and SUVs pushed sales 16 percent higher in October — and Ford's aging lineup held the automaker back last month as its crosstown rival spent thousands on incentives to grab pickup market share. Ford Motor Co. leadership is looking ahead to 2019, when the automaker is scheduled to launch a new Ranger midsize pickup, a new Explorer, new Escape and new Super Duty. By then, the automaker's new Edge and Edge ST will have made it to more dealer lots, too. "We believe we're gonna do really well," Mark LaNeve, Ford sales chief, said Thursday. Ford reported its October sales dropped 3.9 percent to 192,616 units. FCA said strong sales from all of its brands powered the 16-percent improvement compared to the same month a year ago. FCA sold 177,391 vehicles last month, including 141,200 retail units. It's a big leap considering October 2017's sales were inflated by U.S. consumers buying replacement vehicles after hurricanes in the southern U.S. totaled thousands of vehicles. Automakers did have one more selling day this October than they did in 2017. Ford's truck sales fell 4.9 percent to 88,725 units. Car sales were off 17.1 percent. SUV sales rose 6.7 percent, the automaker reported. Ford's average transaction price hit $36,800, up $1,400 more than last year. LaNeve said Ford has seen its market share grow in full-size pickups despite new entries from FCA and General Motors Co., which no longer reports monthly sales figures. "Our strategy to prioritize our trucks, SUVs and vans is paying off with October running at record-level transaction pricing," said LaNeve in a statement. "Our sales mix continues to heavily favor these products, which last month represented 81 percent of sales. F-Series turned in its eighth straight month of sales above 70,000 trucks, while Ford SUVs are operating above the record pace they set last year and van sales continue to post strong gains." Meantime, FCA sold a historic high number of Ram trucks in October. Sales of the trucks were up 14 percent compared to a year ago. October was the eighth month straight that the automaker has seen truck sales increase. Jeep brand sales were up 9 percent, too. FCA sales are up 7 percent through 10 months of 2018, a year when most automakers and the industry as a whole expected a sales plateau after record years. Ford sales are down 2.5 percent through 10 months. Toyota Motor North America reported its sales were up 1.4 percent in October compared to a year ago. The automaker sold 191,102 vehicles last month, and is nearly even through the 10 months of 2018. Sales of the Camry, Corolla sedan and Prius were all down through 10 months of 2018. None of those vehicles saw sales rise in October, either. Toyota's pickup sales are up 16.6 percent year-to-date; SUV sales are up 9.6 percent in that same time frame. Subaru of America Inc. reported its monthly sales were up 2.5 percent in October. That marks the 83rd consecutive month of sales increases for the brand flush with the rugged crossovers and SUVs U.S. buyers want. Analysts had forecast that comparing this year's October sales to last year's sales would be difficult due to the boost automakers saw from people replacing vehicles after the hurricanes. Still, automakers were expected to report higher transaction prices in October compared to a year ago as Ford and FCA specifically rein in sedan sales and push SUVs and trucks. But while rising transaction prices are good for the automaker, they're generally bad for consumers — it means it costs more for the average U.S. buyer to get a vehicle. While sales are still strong in 2018, rising prices could hurt automakers next year. "Affordability may be the canary in the coal mine for the level of auto sales as we close out 2018 and begin to look at 2019," said Jeff Schuster, president of Americas Operations and Global Vehicle Forecasts at LMC Automotive. "Transaction prices are still edging higher." Interest rates are climbing, too. The annual percentage rate on new financed vehicles averaged 6.2 percent in October, the highest in nearly 10 years, according to Edmunds analysis. That's leading some automakers, like FCA, to increase incentive spending to move new vehicles off dealer lots. Ford has reined in its incentive spending in recent months. Said Jeremy Acevedo, Edmunds’ manager of industry analysis: "It’s getting harder and harder for shoppers to afford a new car, and if the economy starts to slip, we’re at a point now where we really could start to see some significant impacts in the auto market," |
Ford partners to develop
Ford Motor Co. has partnered with a Chinese company to test self-driving vehicles in the world's largest auto market. The Dearborn-based automaker announced Wednesday it would team up with Baidu Inc., China's equivalent of Google, on a two-year autonomous-vehicle testing project aimed at developing the self-driving vehicles and testing them on roads in China. Ford's latest move in China comes a week after the automaker decided it would break its Chinese business unit away from what was previously called its Asia Pacific region. Ford appointed Anning Chen to CEO of Ford China. Chen aims to get Ford caught up in that market, where an aging lineup has hindered Ford this year. Ford CEO Jim Hackett has pushed his executive team to grow Ford's footprint in China, the company's No. 2 market behind the United States. After larger-than-expected losses in China this year, Ford is launching several new vehicles there, is intensifying localization of some 90,000 Ford- and Lincoln-brand vehicles imported from the United States, and is pushing to localize Ford’s leadership in China. That included the hiring of the new CEO and reorganization of the businesses in Asia. The autonomous vehicle partnership could potentially help Ford ready its robotic vehicles for a global launch. The automaker has said it will have the first-generation fleet of autonomous ready to go in 2021, but offered few specifics on the launch sites. Officials at Ford and Argo AI, the company Ford partnered with to develop the vehicles, have said the autonomous vehicles will launch "at scale," which means the vehicles will be deployed in multiple areas, not one geo-fenced area in a downtown. "Working with a leading tech partner like Baidu allows us to leverage new opportunities in China to offer innovative solutions that improve safety, convenience and the overall mobility experience,” Sherif Marakby, president and CEO of Ford Autonomous Vehicles LLC, said in a statement. "This project marks a new milestone in the partnership between Ford and Baidu, and supports Ford’s vision to design smart vehicles that transform how we get around." Ford and Baidu plan to begin on-road testing in Beijing at the end of 2018. When the tests wrap in two years, the carmaker said the vehicles "will be capable of operating autonomously within a specific geographic area and under certain weather conditions" in China. Baidu has had a hand in autonomous driving development in China. The Beijing-headquartered company founded the Apollo Project, which provides software such as mapping technology for automakers and suppliers to use with their own hardware. Essentially, the Apollo Project provides an operating system for the hardware auto companies are building, much like the Android or iOS operating system on a cellphone. Ford is one of the partners in that project. Ford is also developing something similar in the U.S. dubbed the "Transportation Mobility Cloud," which aims to develop a network of services in something like an app store for mobility. Ford and Baidu agreed to to explore other possible partnerships in connectivity, artificial intelligence and digital marketing. |
Ford wows Vegas with Carbon
Take the week off, Celine Dion. Las Vegas is home to the dazzling Specialty Equipment Market Association show through Friday, and Ford opens the extravaganza Tuesday with the latest version of its Ford GT supercar. The show-stopping, 2019 Ford GT Carbon Series is the lightest version of Ford’s performance halo car – and punctuates the point with acres of exposed carbon fiber including dual exposed stripes, A-pillars and lower body panels. Ford will also show its range with truck acts including eight custom F-150 and seven modified Ranger pickups. The GT Carbon Series hits the market at the same time that Ford is re-opening the application process for its 647-horse, twin-turbo V6-powered, Le Mans-winning legend on Nov. 8. Ford had previously capped GT production at 1,000 but has added 350 units to be produced through 2022. “The Ford GT Carbon Series stands out on the road with its striking carbon fiber-rich design and on the track with its athleticism,” said Hermann Salenbauch, chief of Ford's Performance Division, which oversees the GT and other earth-pawing models.
Where the Ford GT’s previous lightweight track star, the Competition series, stripped the GT of daily amenities like radio and air conditioning, the Carbon Series maintains both (while still dropping 39 pounds) so that owners can run hot laps on track – then cool off with AC on the ride home. “While the Ford GT Competition model appeals to hardcore racing enthusiasts, we found more customers asking for more exposed carbon fiber with the air conditioning and radio still intact," said Lance Mosley, marketing ringmaster for Ford Performance. "So we developed the Carbon Series to satisfy that need, while providing a distinct look.” It’s not the first time that Ford has used SEMA — a sprawling trade show featuring aftermarket, performance-enhancing steroids like supercharged engines and off-road truck lift kits — to showcase its state-of-the-art muscle. At the 2008 show, Ford debuted the F-150 Raptor, the fastest off-road pickup on the planet. The $500,000-base Ford GT, the production version of the IMSA race car that took home the IMSA Weathertech GTLM manufacturer's trophy this year, headlines the Performance division. Featuring state-of-the-art aerodynamics technology like a Formula One-style keel-nose and retractile rear wing, the GT is motivated by twin-turbos spinning a 3.5-liter V-6 to 647 horsepower and a top speed of 216 mph. To hit its dietary goal, the Carbon Series boasts light-weighting innovations like carbon fiber wheels, titanium exhaust and lug nuts, and a polycarbonate rear hatch. That, and Ford tossed the cupholders. If all that carbon fiber isn't enough to stand out from the exclusive GT crowd, the new edition can be accented with mirror caps, center stripes, and calipers in four colors: silver, orange, red, or blue.
For all the GT's drama, however, the Performance division's sales have been turbocharged by Mustangs and trucks. Sales were up a whopping 70 percent in 2017 to over 205,000 units globally. And that's before Ford invaded two new segments this year with its Edge ST SUV and Ranger Raptor small truck — the latter available only in overseas markets. An upgraded F-150 Raptor will also bow later this year. The model flood continues in 2019 with the expected debut of a 700-horsepower-plus Mustang GT500, the most powerful 'Stang ever, and an Explorer ST ute. To keep buyers salivating, Ford is bringing eight customer F-150 builds to Vegas as well as seven modified Rangers. As for GT buyers, your application can be found at www.FordGT.com beginning Nov. 8. |
Conratulations
France Ahern |
Goldman Sachs upgrades Ian Thibodeau, Goldman Sachs analysts upgraded Ford Motor Co. stock ahead of a stream of new product launches planned for 2019 and 2020. The investment firm revised its 12-month price target from $9 per share to $12 per share, analyst David Tamberrino wrote in a note to investors Monday. It upgraded the stock from a "neutral" grade to a "buy". The upgrade comes just more than a week after Morgan Stanley downgraded its rating for Ford stock, and less than a week after Ford beat analyst expectations with its third-quarter earnings. "The combination of refreshed product cadence globally as well as cost improvements from strategic initiatives will begin to take hold," Tamberrino wrote. "And with investor Ford stock had a tumultuous month. Shares dipped below $9 for the first time in six years in early October. On news of the upgrade Monday, Ford shares closed the day up 3.3 percent $9.28 per share. The stock is down more than 26 percent this year, and is off about 20 percent since CEO Jim Hackett ascended to the top job in May 2017. Company spokespeople have said repeatedly that "the entire company is moving with a sense of urgency and taking proactive steps to redesign and restructure the business," and Ford is "confident that over time, the market will recognize our progress." Tamberrino wrote Ford could battle plateauing U.S. sales and declining sales in China with its new products coming to market in early 2019. CEO Jim Hackett's $25.5 billion cost-cutting push will help the bottom line as well. The $11 billion global restructuring will "deliver long-term benefits," he wrote. The automaker saw a response on the stock market when it announced its third quarter earnings that were better than anticipated, and performance in North America that, according to Ford officials, was already showing fruits of Hackett's cost cutting initiatives. Ford is currently preparing for a string of new or refreshed products planned for 2019, including the Ranger midsize truck. "One of the larger reasons that we believe Ford has underperformed its peers is |
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Sept. 20, 1940 - Oct. 26, 2018 Retired Oct 1, 1998 It is with great sadness that we inform you Stu passed away on Friday October 26, 2018. Our sincerest condolences go out to his wife Mei-Lin Online Tribute Page for condolences
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China troubles dampen Michael Martinez DETROIT — The world's largest vehicle market is causing some of Ford Motor Co.'s biggest headaches. The automaker lost $378 million in China during the third quarter, down from a $102 million profit there a year earlier. That nearly half-billion-dollar swing dragged Ford's otherwise-profitable Asia Pacific region into the red and was a big reason executives said they no longer expect to meet a companywide target of 8 percent global margins by 2020. In light of the dismal performance, Ford last week hired a new CEO for its China operation, Anning Chen, and separated the country into a standalone unit directly accountable to company headquarters. Chen, 57, a former Ford executive with 25 years of industry experience, was most recently CEO of China's state-owned Chery Automobile and chairman of Chery's joint venture with Jaguar Land Rover. Ford is facing slower sales in China due to an aging product lineup, as well as increased competition and trade barriers created by the Trump administration's tariffs and retaliation by Beijing. It's a stark turnaround for a country that just a few years ago represented a big growth opportunity for Ford, which began selling vehicles there later than many of its rivals. Ford's new-vehicle sales in China plunged 43 percent in September from a year earlier and were down 30 percent in the first nine months of 2018. "China has really changed," Jim Farley, Ford's president of global markets, told Automotive News this month. Farley said Ford's profits in China are driven by three key vehicles: the Ford Edge, Kuga and Transit. All are at the end of their life cycles. The company is attempting to fix that problem with a product blitz that includes 50 new models by 2023, including a China-only crossover called the Territory and a redesigned Ford Focus sedan that won't be coming to North America. "These launches and the growth opportunity of improving profit really come down to those products and how they land in the market," Farley said. Chen, who starts as CEO of Ford China on Thursday, Nov. 1, previously spent 17 years at Ford in executive management roles focused on product and technology platform development and JV expansion. He joined Chery in 2010, when it was the seventh-largest vehicle manufacturer in China. He earned an MBA from the University of Michigan and a Ph.D. in engineering from the University of Cincinnati. "Success in China is critical as we reposition our global business for long-term success," CEO Jim Hackett said in a statement. Despite a 37 percent decline in third-quarter net income, Ford's stock jumped 9.9 percent the day after last week's earnings report. That was its largest one-day gain since April 2009, though the shares still ended the week below $9. Ford's earnings beat analyst expectations by a penny per share, and revenue rose 3 percent to $37.6 billion, driven by higher sales of big-ticket vehicles in North America, including the redesigned Ford Expedition and Lincoln Navigator SUVs. In North America, earnings rose 7.5 percent to $1.96 billion. Profit margin for the region was unchanged from the same period a year ago, at 8.8 percent, despite fewer sales and a drop in market share. That's because Ford is selling fewer low-margin sedans as it phases them out and more high-profit SUVs and pickups. Hackett said those results "demonstrate early evidence" that his restructuring plan is improving the business. ‘Building blocks' "We've had an extremely productive quarter in terms of putting building blocks in place," Hackett said on a conference call. "We're addressing real issues, and we're moving quickly to redesign the business in support of our stated strategy." Ford's global profit margin was 4.4 percent, down from 6.3 percent a year earlier. The company lost $558 million outside North America. Ford said its mobility unit lost $196 million in the quarter, vs. a $72 million loss during the same period a year ago. The unit is in a heavy investment phase that has little offsetting revenue. Meanwhile, Ford Motor Credit made $678 million, marking its best quarter since 2011. Ford said higher costs and uncertainty across the industry, as well as the international challenges it's working to overcome, likely will prevent it from hitting its goal of an 8 percent global profit margin by 2020. CFO Bob Shanks declined to offer an alternate time frame for reaching that threshold. "We don't see, at the moment, a way to get there," Shanks told analysts. "Certainly, we're trying to get there as fast as we can. I'm not going to put a time frame on it because I don't want to go back and have to change it." |
Ford talks with VW to
Ford Motor Co. is in serious negotiations with Volkswagen AG to broaden their alliance beyond commercial vehicles in ways that would help the American automaker reverse losses in Europe and South America and share costs of pricey technology and small cars. “We’re having a very broad set of discussions about how we can help each other around the world,” Bob Shanks, Ford’s chief financial officer, said in an interview Thursday. “Collaboration isn’t being limited in any way whatsoever, whether it’s different types of technology, product segments or geography.” The talks with VW are taking place at a pivotal time for Ford. While the stock soared almost 10 percent after the company beat earnings estimates, the automaker is restructuring globally and walked away from margin targets that it had set for 2020. Partnering with rivals is one way to lower costs and get new cars and technology to market faster. Ford is in similar talks with Mahindra & Mahindra Ltd. to broaden an alliance that began to develop models for India and other emerging markets, including sport utility vehicles and electric cars. “With VW and Mahindra, we haven’t put boundary conditions in terms of where we could collaborate,” Shanks said. “We’re looking at the strengths and the gaps of each company on both sides of the table and trying to understand how we can help each other.” Hackett’s hint Ford Chief Executive Officer Jim Hackett hinted that the partnerships were progressing when he spoke to analysts on the company’s earnings call. “We look forward to sharing more about this global redesign of the company,” said Hackett, who is leading an $11 billion restructuring of the company. “We are going to be coming to you more frequently, including we’re going to talk about these strategic partnerships in the near future.” Ford shares rose the most in more than nine years Thursday after the company surprised investors with a $2 billion pretax profit in North America, on the strength of sales of high-profit pickups and SUVs. The result is early validation for the automaker’s controversial decision to abandon sedans in America. While there’s still much to be done to update Ford’s aging lineup and prepare for the self-driving future, the shares rallied after having plunged to an almost nine-year low earlier in the week. “There was fear that we might disappoint,” Shanks said Thursday during a break from meetings with investors and analysts in New York. “There was relief that the business not only met expectations, but showed the strength of North America, the strength of Ford Credit and the fact that the overseas operations actually got slightly better.” VW history Striking deals with VW and Mahindra could further improve Ford’s outlook. Morgan Stanley analyst Adam Jonas predicts Ford will lose $3.6 billion in Europe from 2019 to 2021, making it the least-profitable automaker in that market. In South America, where VW also operates, Ford has lost more than $4 billion since 2012. Sharing costs to develop cars and new technology with another automaker could help reverse those losses. “In the world we’re in, where the future is so ill-defined because it’s yet to be created, companies are going to have to collaborate more together,” Shanks said. “We have a history with VW. We get along with them. And if you look at the strengths and weaknesses of each of us, we match up really, really well.” The same is true with Ford’s relationship with Mahindra, Shanks said. “That’s very important in these types of collaborations because getting along well is a good part of the formula for success,” Shanks said. “There’s lots of examples where that hasn’t been the case and, ultimately, they haven’t succeeded.” Hurried discussions Shanks wouldn’t say if there is a deadline for reaching deals with the automakers, but he said talks are proceeding with urgency. “We’re trying to get things done as quickly as we can because we’re all trying to improve the fortunes of each of our companies,” Shanks said. “So we’re moving to get clarity and get moving on to the actual collaboration as quickly as possible.” The partnerships and a parade of new products coming next year, including the mid-size Ranger pickup and redesigned versions of the Explorer and Escape SUVs, will begin to show the shape of Ford’s turnaround plan, Shanks said. “Starting next year, the picture will start to come more and more into focus,” Shanks said. “It’s something that won’t be a big bang. It will be done as fast as we possibly can, but it will be done in chunks and pieces.”
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1.3M Ford Focuses recalled By Staff Ford is recalling nearly 1.3 million Focus compact cars in the U.S. because a fuel system problem can cause the engines to stall without warning. The recall covers cars from the 2012 through 2018 model years with two-litre four-cylinder engines. Ford says a valve in the fuel system can stick in the open position, causing too much vacuum, and an engine control computer may not detect the problem. Excessive vacuum can cause the gas tank to deform, as well as other problems. The recall came after the government’s National Highway Traffic Safety Administration presented owner complaints to Ford. Dealers will reprogram the computer and replace the fuel system valve if needed. They’ll also inspect a carbon canister and the gas tank and replace them if needed. Ford says owners should keep the gas tank at least half full until repairs are made. The company says it’s not aware of any crashes or injuries caused by the problem. The recall is expected to begin on Dec. 10. |
China, tariffs ding Ford Q3 profits
Dearborn — Ford Motor Co. profits slid 37 percent in the third quarter due mainly to continuing losses in China and costly steel tariffs, the company said Wednesday, and it will not reach its pre-tax margin targets for 2020. Net income is down 27 percent for the year. Ford booked net income of $991 million in the third-quarter on $37.6 billion in revenue, up 3 percent for the quarter. But the Dearborn automaker lost $378 million in China alone, Chief Financial Officer Bob Shanks said Wednesday. That's 20 percent less than the company lost there in the second quarter, but enough to ding the increased revenue and profits generated by its North American business. Shanks added that tariffs on steel are increasing prices and creating a bubble currently costing Ford millions despite all the benefits the company has received from policy decisions under the Trump Administration. "What we still are waiting for…is that steel and aluminum be included in (the United States-Mexico-Canada Agreement) so that the increase that we’ve seen from the 232 tariffs that have created effectively a bubble on those commodities will be eliminated," Shanks said Wednesday. He added that President Donald Trump's ongoing trade war will probably cost Ford $1 billion this year. Of that, $600 million can be attributed to rising commodities costs; $200 million is related on tariffs between the United States and China; and the remaining $200 million is related to Ford's decision a few months ago to cancel plans for the Focus Active crossover it planned to import from China. In a punishing day on Wall Street, shares in Ford closed down 4.71 percent at $8.19. The broader Dow Jones Industrial Average dropped more than 600 points, officially giving up all of its gains for the year. The S&P 500 lost more than 3 percent, and the Nasdaq slumped more than 4.4 percent, officially entering a correction. One net effect of higher interest rates, fatter commodity prices and plateauing demand: Ford will not hit its target of an adjusted earnings margin of 8 percent by 2020, Shanks said. The automaker reported a 4.4-percent margin company-wide Wednesday, off 1.9 percentage points compared to a year ago. The third-quarter slip comes as headwinds increase for U.S. automakers and other manufacturers due to President Donald Trump's ongoing trade war, rising U.S. steel and aluminum prices and rising interest rates. Investors are also looking for details from Ford, specifically, regarding CEO Jim Hackett's ongoing $25.5 billion cost cutting push and the $11 billion he plans to spent restructuring the global business. Joe Hinrichs, Ford president of global operations, said Monday that U.S. steel is now the most expensive in the world. Ford has said previously that it sources most of its steel and aluminum from U.S. companies. A representative from the American Iron and Steel Institute declined to share information on pricing, citing anti-trust laws. The $1 billion costs due to trade, coupled with an industry-wide U.S. vehicles sales plateau, are slamming the company's bottom line. Ford's U.S. sales are down 2.4 percent so far this year. "Ford, like many other automakers, is facing the backside of 'peak auto' in the U.S.," David Kudla, CEO of Grand Blanc-based Mainstay Capital Management LLC, wrote in a note prior to Ford's earnings release. "As long as investors feel in the dark on the future of Ford, the stock will suffer." Ford’s stock price has hovered around $8.50 per share for two weeks. Off about 20 percent since Hackett ascended to the top job, the price is at a six-year low. Wednesday, the stock was off more than 3 percent, trading below $8.30 per share The company is planning global layoffs to its white-collar workforce, leaving non-union rank-and-file Ford employees uncertain about their future. Senior leadership is pushing to get its North American profit margin back to 10 percent — the automaker posted an 8.8 percent North American margin in the third quarter. Ford reported $2 billion in earnings before interest and taxes in North America, up roughly $100 million from a year ago. The automaker lost $245 million in Europe, $152 million in South American and $208 million in the Asia Pacific region. The Middle East and Africa segment reported a $47 million profit. Ford also spent $196 million in its mobility segment, 172 percent more than a year ago. Earlier this month, Ford used an "Inside the Oval" event in Las Vegas to woo its national dealer body with plans and products for the future. Dealers expressed confidence in Ford's product plans for the next few years after a week of meetings there, but that did little to spur investors. Morgan Stanley analyst Adam Jonas on Oct. 19 cut Ford's $14 overweight price target (a "buy" rating) to $10 equal-weight (essentially, a "hold" rating). He said in a note that investors are cautious of the No. 2 U.S. automaker, saying it lacks transparency and action on its $11-billion global restructuring plan, and has fallen behind competitors in its electric and self-driving vehicles ventures. A Ford spokesman said then the company was confident investors would recognize Ford's value over time. Ford then on Tuesday announced plans to split its business in China from what was formerly Ford Asia Pacific, and appoint a new CEO atop a leadership team made up of mostly Chinese nationals to boost performance in the world's largest auto market. The company after the second quarter adjusted its full-year outlook because of worse-than-expected performance in Asia and Europe. It affirmed that guidance Wednesday. "This quarter shows that our business remains strong in key areas," Hackett said in a statement. "We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations and nimble enough to win in a fast changing world." |
Ford government freezing $14
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Local 584 Attends Queens
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Ford's product onslaught
Wayne — Line workers like Mirek Standowicz here at Ford Motor Co.'s Michigan Assembly Plant know this week marks the start of two of the Blue Oval's biggest product launches in several years. But the official beginning of production on Oct. 29 for the 2019 Ford Ranger also signals a return to form for the factory that built trucks and SUVs here for 64 years before the Great Recession and the plant's detour into assembling compact cars fewer buyers want. "Everybody wants to build a truck," said Standowicz, a 57-year-old line worker at the assembly plant, told The Detroit News. "We built this compact car, and this car is a car and no one would be very excited about it. Everybody is waiting for the Ranger. Everybody is waiting for the Bronco. We will actually contribute to our profit sharing. It makes you feel good about it." Cars like the Focus and its gas-electric hybrid cousins fell out of favor with U.S. consumers in recent years — just as they did at Ford, hungry to reap higher profit margins from its U.S. lineup. The automaker announced in April it would ax all its sedan models — save the iconic Mustang — over the next few years in favor of higher-margin trucks, SUVs and commercial vehicles. Standowicz returns to work this week to help give Ford a shot in the arm. After several years of record U.S. sales and the profits to match, automakers are managing a U.S. sales plateau that analysts don't expect will turn around soon as interest rates and vehicle prices continue to rise. CEO Jim Hackett attended Monday when the automaker held a celebratory event outside the Michigan Avenue plant a week ahead of the official launch. Line workers took rides in hand-built models even as they checked out the new features and after-market add-ons Ford is planning to offer on the midsize pickup. The Ranger debut kicks off a product offensive for the Dearborn automaker, as the company moves to replace 75 percent of its U.S. portfolio with new vehicles or redesigns of existing nameplates by 2020. By 2023, Ford will have three more nameplates in its lineup than it does now, despite plans to drop the Fusion, Focus and Fiesta sedans and hatchbacks. It could be a lucrative new addition for Ford. The midsize truck segment is growing as U.S. buyers look for utility vehicles that are smaller than F-150s, Rams and Silverados. Ford is trailing General Motors Co. into the market — the Detroit's automaker's Chevrolet Colorado and GMC Canyon pickups are currently the only midsize trucks from Detroit's Big Three battling pickups from Toyota, Nissan and other automakers. "It's going to be a half-million unit segment," said Joe Hinrichs, Ford president of global markets. "(That) is plenty big enough to compete in. And we think the built Ford tough Ranger will do really well. This Ranger has been launched around the world and it's doing really well. We know there's a lot of interest." Hinrichs said the Ranger can play well with the F-150, Ford's best-selling vehicle, and the best-selling truck nameplate in the country. The F-Series have gotten larger since Ford pulled the Ranger from the U.S. in 2001, Hinrichs said. The new midsize truck can fit nicely in a size gap behind the F-150. Workers at Michigan Assembly spent the last eight years building the Ford Focus and C-Max. Both vehicles have seen steady declines in sales in the last two years — the company negotiated with the UAW three years ago to ax the models, The Detroit News reported in 2015. The new trucks will hit dealer lots in January. They'll be the first Rangers sold in the U.S. since 2011, when the automaker axed the vehicle. "Rangers were a very strong truck for us," Hinrichs said. "We're feeling really good about the truck, and I know our dealers are as well." Ranger production here precedes the launch of the 2020 Bronco SUV, which will be added to the assembly line at a later date. Michigan Assembly Plant — which roughly a decade ago had to cut shifts when consumers stopped buying its full-size Expedition and Navigator SUVs — will be responsible for the new iterations of two of Ford's most iconic nameplates. To hear Ford employees tell it, the Bronco and Ranger are two of Ford's most-anticipated launches in the company's history. "People here are incredibly excited," said Chadd Howard, final launch manager at the plant. "It's not just about making trucks, but bringing back an iconic brand from Ford. It feels like a new building inside here. It's just nice to get back to being relevant."
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Morgan Stanley downgrades
Ford Motor Co. shares shrugged off a downgrade by Morgan Stanley on Friday, after the investment bank said the carmaker's earnings and cash flow are under pressure and its dividend is at risk. Morgan Stanley analyst Adam Jonas decreased Ford's $14 overweight price target (a "buy" rating) to $10 equal-weight (essentially, a "hold" rating). He said in a note that investors are cautious of the No. 2 U.S. automaker, saying it lacks transparency and action on its $11-billion global restructuring plan, and has fallen behind competitors in its electric and self-driving vehicles ventures. "While we do believe investors will eventually pay for details and execution," he wrote, "we think the market needs more evidence of success before embracing the Ford restructuring story." Ford spokesman Bradley Carroll said the company is moving with a sense of urgency to restructure its business. "We will capitalize on our strengths, bolster underperforming products and regions, and selectively and smartly disposition where we cannot make an appropriate return," he said in an email. "We’re confident that over time, the market will recognize our progress." The Dearborn-based automaker's stock closed at $8.50 in trading Friday, down a penny from the day's open. The market was mixed Friday, with the Dow Jones Industrial Average slightly up and the S&P 500 slightly down. General Motors Co. was up 12 cents to $31.20, while Fiat Chrysler Automobiles N.V. rose 2 cents to $15.51. The downgrade comes after the Blue Oval's stock closed below $9 per share for the first time in six years earlier this month. Moody's Investor Services in August downgraded Ford to one step above junk bond status. Ford shares are off about 20 percent since CEO Jim Hackett took over in May 2017. Company officials have said that a planned $25.5 billion in operational cost cuts, including global layoffs to its white-collar workforce, and its restructuring don’t amount to a crisis. Senior leadership is pushing to get North American profit-margin back to 10 percent — it was at 7.4 percent in the second quarter of 2018. Hackett and his team say they are getting Ford ready to brave the next downturn, whenever it comes, and a future with more electric cars and self-driving vehicles. To that end, Jonas recognized Hackett as a "visionary leader" whose long-term approach may not bring about the turnaround timeline investors expect. "[W]e have a reasonable level of confidence in Ford management," Jonas wrote, "but are concerned that the movement in fundamental market factors may dominate the investor debate for the next 12 months, and could create a better opportunity to revisit the stock at an improved valuation risk-adjusted return." |
Ford seeks to allay dealers’
Las Vegas – The expectations hadn’t been this high in a decade. Nor had the questions facing Ford Motor Co. been so numerous. Some 4,000 dealers from around the country gathered here this week looking for answers inside the same ballroom at the Bellagio Hotel and Casino where, in 2008, former CEO Alan Mulally showed the new Taurus that would help Ford brave the recession under his "One Ford" rallying cry. This time, dealers wanted to know what new products they’d be selling to fund Ford's investment in autonomous vehicles. Some were still angry at not having been warned before Ford announced it would stop selling sedans within the next few years. “There’s a guy in my showroom who wants an Escape — he’s not worried about where the future is going,” dealer Tim Hovik said before the meeting started this week. Hovik, owner and general manager of San Tan Ford outside of Phoenix, is one of the top Ford dealers in the U.S. But while several U.S. dealers told The Detroit News they came to the "Inside the Oval" event skeptical and unsure whether CEO Jim Hackett had a vision, the dealers The News spoke to said by the time they left, they had more confidence in Ford's position. The company is going after Jeep with off-road and rugged utility vehicles. It's diving into a strong 2019 U.S. economy with new Ranger and Super Duty pickups. An all-new rear-wheel drive Explorer and all-new Escape will hit showrooms next year. The Bronco is coming in 2020. So is a smaller, unnamed off-road SUV and an unnamed 2020 battery electric vehicle, which dealers saw this week. And Ford plans to fill the spaces left by the discontinued Fiesta, Focus and Fusion sedans with similar-priced crossovers. The average age of Ford's lineup will be the youngest in the game come 2023, executives told dealers. It’s currently one of the oldest. High-volume nameplates like Mustang, F-150 and Bronco will get electrified powertrain options, which Kumar Galhotra, Ford president of North America, said will help Ford grow the number of electric vehicles it sells to 600,000 units in the next five years. Hackett made clear that for all the talk of autonomous vehicles, he and his team are not ignoring the SUVs and trucks that pay the bills now, several dealers told The News. Officials plan to cut average delivery time to dealer lots to 38 days within a few years; it's at 82 now, the same it's been for years. And Ford plans to work with dealers to start a new loyalty program that rewards returning customers, something dealers and company officials said could generate some extra cash and keep people buying Fords for longer. All the new product gives Hackett and company some breathing room while they try to figure out how to make safe, profitable autonomous vehicles. "They didn't just say what the dealer body needed to hear," said Rob Sneed, general manager of Power Ford in Albuquerque, New Mexico. "He filled in most of the gaps." Replacing small cars Hackett and his team came to Las Vegas to put everything they could on the table for the people selling the vehicles. They didn't give dealers specific answers on what would replace the small, affordable cars that bring first-time buyers in the door and get them into the system. But they spoke generally about how they'll build the lineup and bring in smaller, rugged vehicles to fill those spaces at the same price point as a Fiesta, Focus or Fusion. Ford dealers also got an apology for the way the leadership announced in April the decision to cut cars, according to Greg Balasco, owner of Lakeland Ford in Tampa, Florida. Dealers drove the 2019 Ranger in Las Vegas. They saw the new rear-wheel drive Explorer, redesigned Escape, as-yet-unnamed 2020 battery electric vehicle, an unnamed small "rugged" SUV some call the baby Bronco, and the Mustang GT 500. And then, according to several dealers who spoke to The News, they listened to company leaders explain, piece by piece, what they had been working on, and how that would affect dealers. The leadership felt they had to give the people selling the vehicles some peace of mind. The company isn't in crisis, but it is going to change under Hackett, according to Jim Farley, president of global markets. "It's kind of a personal meeting for me," Farley said on the second night of the week-long dealer event. His first dealer event was that 2008 meeting in the midst of rising gas prices. The company rolled out the new Taurus then, and it was up to Farley to get the dealers on-board. "We all knew what was at stake (then)," he said. "We've been busy for a year now. Most of it in private. We all wanted (this week) to be just as special, because it's such a different time for us. It's a comeback story, but it's a different comeback story. We want it just as bad." He added: "Instead of a Taurus, it's now an electric car." 'Rowing ... in same direction' Judging by the usual metrics, it's been harder to believe in Ford lately. Ford’s stock price hovers below $9 per share. Off about 20 percent since Hackett ascended to the top job, the price is at a six-year low. The company is planning global layoffs to its white-collar workforce, leaving rank-and-file Ford employees uncertain about their future. Senior leadership is pushing to get North American profit margin back to 10 percent — it was at 7.4 percent in the second quarter of 2018. Company officials, Executive Chairman Bill Ford Jr. included, say that a planned $25.5 billion in operational cost cuts and $11 billion global restructuring don’t amount to a crisis. The company is profitable, they say. Hackett and his team are getting Ford ready to brave the next downturn, whenever it comes, and a future with more electric vehicles and self-driving vehicles. Some dealers who spoke to The News said they believe product plan is strong, and they better understand how the trucks and SUVs fit into the model for Ford's future, which incorporates more than the gas and diesel vehicles they currently sell. “There’s a cohesiveness at Ford right now,” Hovik said after he attended a town hall-style meeting this week. “It feels like everyone’s rowing the boat in the same direction for the first time in a while.”
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US probes Ford pickup tailgates
Detroit – U.S. safety regulators are trying to figure out why the power tailgates on some Ford F-Series pickups can open unexpectedly while the trucks are moving. The National Highway Traffic Safety Administration opened an investigation into thousands of F-250 and F-350 Super Duty trucks from the 2017 model year. The agency says in documents posted Wednesday that it has five complaints from owners about the problem. It says unsecured loads could spill onto the road. The documents show Ford sent a service bulletin to dealers in October of 2017 saying the problem is caused by water getting into electrical wiring. Investigators will determine how widespread the trouble is and whether a recall is needed. Ford says it’s cooperating with NHTSA and will move quickly to recall vehicles if data indicates a safety issue. In a rare move, the agency listed the number of vehicles involved in the investigation as “confidential.” Ford spokeswoman Elizabeth Weigandt said the company did not request it. A NHTSA spokesman said he would look into the matter. Ford sold nearly 897,000 F-Series trucks during calendar year 2017, making it the most popular vehicle in America. About one-third, or roughly 299,000, were Super Duty models. Sales figures from last year include some 2018 models, and some 2017s were sold in calendar year 2016. It was unclear how many of Super Duty trucks have power tailgates. NHTSA has two investigations underway of Ford’s F-150 pickup trucks, one from August on complaints of seat belt fires and another from 2016 dealing with the scope of a recall for brake failures.
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New Ford Territory SUV
Ford Motor Co.'s all-new SUV exclusive to the Chinese market will feature technology developed for customers there, the automaker said Monday. The Ford Territory debuted Tuesday morning in China ahead of its early 2019 launch. Peter Fleet, president of Ford's Asia Pacific operations, said the Territory is the first of 50 new vehicles the company plans to launch there by 2025. "It's a great proof-point for our in-China, for-China strategy," Fleet said. The midsize SUV targets buyers outside of China's biggest cities by offering a lower price than most Ford or Lincoln vehicles currently sold there. It will come to market in early 2019, within 18 months of when they decided to make it a short lead-time for the automaker. It's the product of Ford's partnership with Jiangling Motors Corp. (JMC), with heavy influence from the Chinese company. Ford officials said JMC's market expertise and insights on Chinese customers propelled the vehicle to launch. It's the first Ford SUV made exclusively for the Chinese market. The automaker said the vehicle will offer the backseat legroom sought by Chinese consumers. The vehicle will have a 10.25-inch LCD touchscreen, WiFi connectivity and cloud-based voice-recognition that can be used to open the sunroof or windows, control the climate controls or operate the infotainment system. It has Ford's suite of standard driver-assist features the automaker is also rolling out in the U.S. Fleet said the Territory signals where Ford hopes to go with its Chinese products. "(The Territory) is very oriented toward the needs of our Chinese customers," he said. "It nicely signposts how the new portfolio of vehicles are highly optimized to the needs of our Chinese customers." The SUV comes at a pivotal time for Ford. The automaker lags hometown competitor General Motors Co., as well as some other international companies, in terms of sales growth and market penetration in China. Ford's sales there slid 25 percent through the first six months of the year; the company blamed an aging vehicle lineup at the time. The Chinese market has most recently come under scrutiny as CEO Jim Hackett pushes forward with an $11-billion restructuring of the company's global operations. Ford is expected to grow its footprint in China, its No. 2 market. After larger-than-expected losses in China this year, Ford is launching several new vehicles there. It is intensifying localization of some 90,000 Ford- and Lincoln-brand vehicles imported there from the United States, and is pushing to localize Ford’s leadership in China — including likely naming a Chinese national its next CEO in the region.
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Ontario to auto industry: Prove October 16, 2018 TORONTO — Ontario Premier Doug Ford will keep his pledge to end a $3.2-billion fund that automakers and suppliers used to help finance manufacturing projects. Jim Wilson, minister of economic development, job creation and trade, said other funds, including regional ones sometimes used by smaller companies, will remain in place even as the Jobs and Prosperity Fund shuts down. But companies can expect higher job-creation expectations and more auditing to secure funding. “The onus is on me and my team and this department to raise the bar in terms of how that money is spent,” Wilson told Automotive News Canada. “If Premier Ford is going to have his name on anything, he’s going to make sure that it’s absolutely necessary.” Ford, whose Progressive Conservatives swept into power in a June election, campaigned on promises to cut what he called “corporate welfare.” He singled out the Jobs and Prosperity Fund, created in 2014 under former Liberal Premier Kathleen Wynne. CAUSE FOR CONCERN It was one of several issues on which Ford and the PCs diverged from the platform of the New Democratic Party, now the Official Opposition. The NDP pledged in its 2018 platform to “create a stream within the Jobs and Prosperity Fund to promote manufacturing research and development,” while working to create a “single window” for automotive investments. The fund has doled out hundreds of millions of dollars to automotive companies, including Honda Motor Co., Toyota Motor Corp., Fiat Chrysler Automobiles, Ford Motor Co. and supplier Linamar Corp., to help fund various manufacturing projects. The Ford government’s stance on the incentives was cause for concern for some industry executives. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said that while, “in a perfect world,” Ontario and other jurisdictions would not have to compete with each other on incentives, the province risks becoming less competitive if it takes too many incentives off the table. PRODUCTION FALLS Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, which represents the Detroit Three in Canada, said the group plans to meet with the provincial government to discuss incentives and other ways to make Ontario less cost-prohibitive for companies. He said incentives are important to attract automaker investments necessary to keep manufacturing in Canada. “If there’s no assembly in Ontario, we don’t have a supply chain, and the ripple effects start from there,” Nantais said. “And if you delay new investments in your plants and so forth, you tend to lose efficiency over time.” Wilson said other incenives and funds will remain in place and that the government will honour all contracts under the Jobs and Prosperity Fund. “There are other ad hoc programs where you go directly to Cabinet to give $80 million to Honda for their paint shop, for instance,” Wilson said. “We’ll still be there, as a government.” When asked if the provincial government prefers incentives in the form of grants or loans, a spokeswoman for Wilson said it “depends on the circumstances.”
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Material prices October 15, 2018 Raw material prices are hovering near a six-year high as automakers wrestle with volatile costs of steel, aluminum, copper and plastics. In August, raw material costs for North American-built vehicles averaged $2,000 (all figures USD) a unit — about $221 more than a year earlier — according to the New York consulting firm AlixPartners. Four commodities account for the bulk of a vehicle's raw material cost: steel, aluminum, plastic resin and copper. The price of copper and some other materials "have started to come down from their peak in May and June," said Dan Hearsch, a managing director of AlixPartners. But there's a catch. U.S. manufacturers must pay a 10 per cent tariff on imported aluminum, so the price of that metal could prove volatile. And the AlixPartners index — which derives aluminum prices from the London Metal Exchange — does not yet reflect the tariff. In June, the White House subjected Canada and Mexico to U.S. aluminum and steel tariffs. Automakers are starting to feel the impact. In September, Ford CEO Jim Hackett acknowledged that the tariffs cost his company $1 billion in profits. And in July, General Motors said second-quarter commodity costs were $300 million higher than a year earlier. Hot-rolled steel prices have jumped 28 per cent to 40 cents per pound over the past year, according to AlixPartners. Automakers buy most of their steel in North America, but certain types — such as stainless and electrical steel — are imports subject to the 25 per cent U.S. tariff. Meanwhile, plastic resin prices rose 31 per cent as feedstock costs jumped over the past year. To control commodity prices, automakers typically buy in bulk for resale to suppliers. Toyota Motor Corp. does so for steel, aluminum and plastic resin, says Bob Young, the automaker's North American purchasing chief. Toyota also allows suppliers' component prices to float up or down as raw material costs fluctuate. "We believe our suppliers can't control commodity prices," Young said. "We don't want our suppliers expending resources trying to manage that. We want them to focus on costs they can control." Suppliers are expected to minimize scrappage and cut weight. "If the supplier has 50 per cent scrappage, that's not a cost that we will absorb," Young said. "If they are not efficient, they will absorb the cost." The big-ticket commodity is steel, Young says. In North America, Toyota's steel purchases total $1.8 billion a year. Toyota negotiates one-year steel contracts that are renewable in April, so the company has been somewhat insulated from recent price increases. But only somewhat. Young says steel prices in North America are significantly higher than in other regions. "If you look at different types of steel — hot-rolled, cold-rolled, coated — it's roughly a 40 per cent gap," Young said. "That's hard to justify from a cost standpoint. If we want to remain globally competitive, we need to see an improvement in pricing." So what does the future hold for raw materials? Hearsch is reluctant to make predictions. In the first eight months of 2018, North American light-vehicle production totaled 11.4 million units, down from 11.8 million a year earlier. Theoretically, raw material prices should ease as demand slumps. But it's unclear whether vehicle production accurately forecasts a wider economic downturn, Hearsch said. "The auto industry is just one of the big users of these raw materials," he said. "Production is slowing, but we're not predicting whether this is a big downturn."
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Ford's workout is not like the
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Ford Edge ST, the family hot-hatch
Performance SUVs aren’t as crazy as I thought. I caught up with some of my pocket-rocket brethren at the Ford Edge ST’s media debut in Utah last week. Like me, they love Ford’s compact ST (short for Sport Technologies) hatchbacks. Like me, they think hot hatches are the best combo of fun and utility. And like me, they are stoked about the Ford Edge ST sport utility vehicle. Think of it as a giant hot-hatch for motorheads with kids. “The cornering on the autocross course was phenomenal. I would never have expected a big vehicle to handle so well,” said Karl Weber, 30, father of two and owner of a Ford Focus SVT (ST’s predecessor badge). He wants an Edge ST. Now. “I’ve got two boys and I’ve got an Escape, and this would make a good jump for more space,” said Ben Richter, 32, father of two boys from Nebraska who owns a Ford Focus ST and recognizes its DNA in the Edge ST. Every ST generation has to grow up. Young leadfoots whose first hot hatch was a VW Golf GTI (me) or Honda Civic Si (my sons) or Hyundai Veloster R-Spec or Nissan Juke NISMO. With kids and disposable income, they have graduated to the diaper-changing, soccer-game-shuttling, upstate-vacation phase of life. But they haven’t been neutered of their auto enthusiasm: The growl of dual pipes. The Woodward stoplight drag. The call of a country road. Ford has found the right horse for the job. While the Ford Escape compact ute would seem the logical SUV for the job — starting at $25,000, it is the next hatch in the lineup after the Focus – but the upright ute is more Barbie than Ken. And hot-hatch demographics are decidedly male. The mid-size Edge is, well, edgier. Its sculpted looks are more butch than the Escape. Edge sales skew male. And then there’s the chassis: Where the Escape is an SUV platform, the Edge shares its toned bod with Fusion and Taurus cars. The Edge is a big athlete, an advantage Ford has previously recognized with a Sport version. The last-gen Sport got a substantial engine-upgrade from the base Edge, putting out a healthy 315 horsepower and 350 foot-pounds of torque. The Edge ST takes the Sport and pumps it with steroids. At speed over the undulations of Utah country roads outside Salt Lake City, my ST gulped the landscape, setting fire to the fall leaves. WAAAAUGHHH! wailed the V-6, while the two-ton chassis stayed remarkably true to my direction. Make no mistake, this is a rhino compared to the Focus/Fiesta pitbulls. But it’s a rhino in tennis shoes. Ford achieves this feat the old-fashioned ST way: more power from the twin-turbo V-6 (335 horses and a whopping 380 pound-feet of torque), bigger sway bars, and stiffer shocks and springs. The Frankenstein surgery of ST and ute (Ford performance engineer: “Let my creation live!”) is aided by some fundamental changes to the base Edge for the 2019 model year. Credit upgrades like a smooth, eight-speed automatic transmission that delivers silkier shifts and 2 mpg better fuel economy on the highway. Also an all-wheel drive system with better traction that can throw torque front-to-rear as well as side-to-side in order to avoid getting stuck in snow ruts. I drove an Edge Titanium back-to-back with the ST (like other ST models, the Edge ST pricing starts close to where the upper-trim Edge Titanium tops out — $45,000 vs. $42,000 for the ST). I appreciated the hatch utility that makes ST such a versatile vehicle. Signature Ford tech is everywhere. The brand that first brought you the kick-open trunk, panoramic sunroof and self-park assist offers all those features here and more. Standard on the $29,999 base Edge are camera and connected systems that offer essentials like blind-spot assist, collision-mitigation braking and remote start (“Alexa, start my car”). There’s more on offer from adaptive cruise-control to smartphone apps to a nifty rotary dial. “With the technology and space and everything you’re getting, it’s a good bargain,” hot-hatch brother and Fiesta ST owner Lou Rivera, 29, raved. And once you go ST, you’ll never want to go back. It’s not just the power and rock-solid handling, the ST brings presence to an SUV segment that sorely needs it. Handsome as the Edge is, it has melted into the SUV field. Hyundai’s utes have copied its pentagon grill and LED rear-lighting. If an Edge ST looms in your mirrors, you’ll know it. Like Patriot tight end Rob Gronkowski smeared with black face-paint, the Edge comes ready for battle. The front clip has been swapped for a new, blacked-out grille and lower intakes. Wheel wells are engorged with black 20-inch wheels (21-inch optional). And all the trimmings – from window sills to rear diffuser have been wrapped black. Paint it in ST-exclusive Metallic Blue and the big ute reminds of my other favorite blue-devil performance car, the BMW M2. Living with the Edge ST, like its brother Focus, will require putting up with flaws (but not the Fiesta ST, which is a consistent member of my Top 10 cars list). Despite the added torque and twin turbos, the Edge ST exhibits noticeable turbo lag under the cane. That sluggishness isn’t helped by the eight-speed tranny’s odd lack of urgency when called upon to shift. At full flog, I was constantly tempted to use the shift paddles. These negatives would be more annoying if they were in track-day cars like the Focus or Fiesta. But a track-focused vehicle this is not, which Ford telegraphs by not offering heavily bolstered Recaro seats or a manual shifter. Still got the need for track days? Keep your old Fiesta ST around. Especially since the Fiesta and Focus are exiting the U.S. market after 2019 – along with other Ford cars. Which begs the question, is the Edge ST about to lose its buyer base? We’ll see. For now, hot-hatch graybeards rejoice – the Ford Edge ST means you don’t have to leave ST performance behind when you graduate to a family ute. Performance SUVs are no longer just for the $100,000 Jeep Trackhawk or BMW X5 M jet set. A new segment is born. What are you waiting for, VW and Nissan? Will we see a Tiguan GTI or Murano NISMO soon? Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne. Catch “Car Radio with Henry Payne” from noon-2 p.m. Saturdays on 910 AM Superstation.
Vehicle type: Front-engine, front- and all-wheel drive, five-passenger SUV Price: $30,990 base Edge, $43,330 base ST include $995 destination fee ($44,890 FWD turbo-4 Edge Titanium and $46,540 AWD Edge ST as tested) Powerplant: 2.0-liter turbo inline 4-cylinder, 2.7-liter twin-turbo V-6 Power: 250 horsepower, 275 pound-feet torque (turbo-4); 335 horsepower, 380 pound-feet torque (V-6) Transmission: 8-speed automatic Performance: 0-60 mph, 5.5 seconds (Car and Driver est.); top speed: 130 mph; tow capacity: 3,500 pounds (V-6 ST) Weight: 3,959 pounds base FWD (4,477 AWD ST as tested) EPA fuel economy: 22 city/29 highway/25 combined (FWD turbo-4); 19 city/26 highway/21 combined (Edge ST) Report card Highs: Aggressive look; sure-footed power Lows: Turbo lag; upshifts too casual Overall: 4 stars
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Video Review Of 2019 Ford Edge
Ford stock hits 6-year low as
Ford Motor Co. shares traded below $9 on Tuesday for the first time in more than six years, a low point that experts blame in part on the Dearborn automaker's reluctance to share a detailed map of its future. The stock price slumped 3.4 percent Tuesday to close at $8.95 per share. Blue Oval stock hadn't closed below $9 per share since August 2012, when it hit $8.92. The stock is down roughly 28 percent this year, and is off about 20 percent since CEO Jim Hackett ascended to the top job in May 2017. Wall Street might be punishing Ford, experts and company officials say, but that doesn't amount to a crisis. Automakers in general are falling out of favor with investors as U.S. sales figures continue to flatten, vehicle prices increase and ongoing trade wars add uncertainty to the mix. U.S. auto stocks were down across the board Tuesday, on a day the Dow Jones Industrial Average declined only two-tenths of a percent: Crosstown rival General Motors Co. closed down 4.64 percent per share, and is off more than 20 percent this year. Fiat Chrysler Automobiles NV was down 0.9 percent, off 7.86 percent for the year. "Everyone's sensing some level of contraction," said Karl Brauer, an auto analyst with Kelley Blue Book. "It's ironic because the economy seems to be as good as it could be. "What’s unique to Ford is I think they’ve been more challenged in long-term assessment planning. The average investor hasn’t got the same level of confidence (in Ford) as other manufacturers." Perhaps adding to Tuesday's selling pressure: Jim Cramer, a prominent investor and financial-TV personality, on Monday told CNBC that Ford has "to close everything that they're not profitable in. Ford has to become a small company. In the New Economy, Ford's not working. So I say, 'Don't buy Ford.'" In a statement Tuesday, the automaker defended the actions it is taking to redesign the business — and how long it's taking to execute them during an extended period of profitability. "As we have said before, the entire company is moving with a sense of urgency and taking proactive steps to redesign and restructure the business," spokesman Brad Carroll said. "We will capitalize on our strengths, bolster underperforming products and regions, and selectively and smartly disposition where we cannot make an appropriate return. We’re confident that over time, the market will recognize our progress." Ford is profitable, thanks chiefly to a North American business undergirded by its best-selling F-Series pickups and an expanding portfolio of SUVs. It's also sitting on a pile of cash, totaling $16.8 billion at the end of the second quarter, and another $19.6 billion in marketable securities. Ford's real problem right now is the stock price, said David Kudla, CEO of Grand Blanc-based Mainstay Capital Management LLC, and convincing investors it has a future in Auto 2.0. Ford's shares are floundering because company officials have yet to telegraph clearly the company's plan for autonomous vehicles and its restructuring. "This is not 2008," Kudla said, referring to the troubled macro-economic environment Ford and its rivals faced a decade ago amid the global financial meltdown. "This is not 1992. There's no crisis at hand here. This isn't a financial crisis for Ford. They have time to do this methodically and do it optimally. What we still want to see is more of that articulation. More of that messaging of their strategic plan." Executive Chairman Bill Ford Jr. conceded as much in late September. He said the company was "not even close to a crisis," but said there is work to do. Tuesday's blow to the stock price comes after consecutive announcements Friday and Monday partially detailing ongoing plans to restructure. On Friday, Ford officials said they expect cut an undetermined number of salaried employees around the globe as part of an effort to flatten management. Ford then announced Monday it would shave $150 million per year by way of a new marketing deal with New York-based BBDO. Read more: Ford's workout is not like the others and that's the point Coupled with previously announced streamlined product development and partnership talks with Volkswagen AG and Mahindra of India, the moves are part of company-wide cost-cutting efforts. The automaker is undergoing an $11 billion global restructuring and a $25.5 billion operational cost-cutting push. Aside from assurances that Hackett and his officials are making changes, Ford hasn't been nearly as as specific as Wall Street historically expects from traditional automakers. And the company has yet to give details about its autonomous vehicle platform and the business model for those vehicles. The lack of detail is exacting a price, said Kudla: "Where is the company going and what people can invest on? You see a lot of that at GM. Investors are looking for more of that detail from Hackett and from Ford." Most auto stocks started the fourth quarter of the year on a weak note due to flat sales and growing trade tensions between the United States, China and the European Union. Late last month, Hackett said he expected President Donald Trump's tariffs to cost Ford $1 billion in profits over the next year. Ford's stock dip comes just more than a month after Moody's Investors Service downgraded Ford to its lowest investment-grade rating, calling the company's outlook "negative." The ratings agency said the downgrade came amid "the erosion in the company's global business position and the challenges it will face implementing its Fitness Redesign program." The new Baa3 rating, considered a risky investment, is one grade above Moody's rating for junk bonds. Moody's said then that Ford should take aggressive actions — like the company's decision to ax all its sedan models — while it posts strong North American profits and has strong liquidity. But it will take several years for benefits of a restructuring to materialize, Moody's said. Ford said Friday that any plans to cut salaried workers wouldn't materialize before the second quarter of 2019. The automaker is just a few months away from a new-product rollout that should add a cache of high-profit vehicles to its lineup. By 2020, Ford wants nearly nine of every 10 vehicles sold in the U.S. to be a truck, van or SUV. The automaker has also pledged to launch its first fully autonomous vehicle without a steering wheel, brake pedal or accelerator by 2021. But if Ford officials want to improve the stock price — Bill Ford and the Ford family have huge portions of their personal wealth tied to the stock — the company needs to give investors and other constituencies a clearer picture of its future, Kudla said. "This stock price discounts the future," he said. "That's what people are looking for: What's the future at Ford?"
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Ford picks BBDO
Ford Motor Co. announced Monday the latest step in the automaker's cost-cutting gambit: New York City-based advertising agency BBDO is now the company's global creative advertising agency. The decision comes roughly five months after The Wall Street Journal first reported the Blue Oval had started to review part of its advertising spending with London-based WPP PLC. Ford had been a top client for WPP since around 2000, according to Ford spokesman Said Deep. The automaker had said in January that it planned to cut annual spending on marketing as part of billions of costs cuts planned elsewhere within the company. The automaker is currently mulling an $11 billion restructuring expected to bring cuts to salaried positions globally in addition to a $25.5 billion operational cost-cutting push. The automaker expects to save $150 million a year from the marketing switch. The changes will also create 100 new in-house marketing positions focused on brand design and customer experience, among other things. WPP, which has an in-house team called GTB dedicated to the Ford portfolio, will remain part of a multi-agency team at handling media planning, media buying, shopper and performance marketing, website development and customer relationship marketing for Ford. "Ford already is one of the most recognized and respected brands in the world," Joy Falotico, Ford group vice president and chief marketing officer, said in a statement. "In this pivotal moment of reinvention and transformation, we’re excited to partner with world-class creative agencies to unlock the full potential of the iconic Blue Oval." The marketing switch comes ahead of a flood of new products expected to start in 2019 for the automaker. Ford will launch the 2019 Ranger, 2019 Lincoln Aviator and a redesigned Explorer and Escape, as CEO Jim Hackett and his team of executives work to right-side the company's global product lineup. Ford will cut all of its car models except for its Mustang in the next few years. Officials plan to launch more off-road and performance SUV variants over the next five years. By 2023, the automaker will have 23 nameplates in its lineup. The automaker said in March that nearly nine out of every 10 vehicles sold in 2020 will be a truck, SUV or commercial vehicle. BBDO will assume its new role Nov. 1. Ford will also introduce a new brand campaign later this month for various vehicles. |
FCA outsells Ford for
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Ford expects to cut Ian Thibodeau, Ford Motor Co. has begun what company officials expect to be a months-long process to form a plan focused on trimming its global salaried workforce. Officials expect to cut the number of salaried employees globally, which could include some in its profitable North American segment, according to Kiersten Robinson, Ford chief human resources officer, and Mark Truby, Ford vice president of communications. Thursday, officials began examining where the company has too many "layers" of salaried workers. The company expects to know what, where and whom to cut by the second quarter of 2019. Some information on preliminary plans might become available before then. Robinson and Truby told The Detroit News there were no details yet as to which regions will see the largest cuts. The automaker said the workforce reduction is not expected to affect hourly employees. The reductions are expected to fall under the $11 billion restructuring the company announced last quarter. Ford announced the start of the reorganization internally Thursday. "The net result will be a flatter organization," Robinson said. "The more layers we have, it really impedes our ability to move fast." Details are thin, but the internal announcement made public Friday illustrates the game the 115-year-old automaker is playing with Wall Street analysts and investors. They want answers Ford isn't ready to give, according to Kristin Dziczek, vice president of Industry, labor and economics at the Center for Automotive Research in Ann Arbor. "This is just getting their ship in order," she said. "Wall Street has no patience for waiting for anything. Any delay in getting more details is probably too much in their eyes. (Ford) doesn't want to say exactly what they're doing, but they also don't want to make it look like they're sitting doing nothing." The plan will emulate processes the automaker used earlier this year to reorganize its highest-level management under CEO Jim Hackett, Truby said. Those decisions brought about the creation of Ford Autonomous Vehicles LLC, which broke out the company's autonomous vehicle business and shifted officials to cover more specific segments of the company. "There is going to be over the course of this some reduction of workforce, but we don't have any numbers there," Truby said. "It'll be based on the work that we need to do. It could be more in some places and less in others." The Ford officials said some of the work will be based on internal surveys and focus groups. Ford employees have complained that there is too much bureaucracy and too many layers within salaried ranks. The decision-making process is expected to finish by the second quarter of 2019. The restructuring is expected to take three to five years, the automaker has said. Industry experts have speculated for weeks since the automaker announced plans to spend $11 billion to restructure its global business in addition to more than $25 billion in operational cost cuts. Sources in September told The Detroit News that most of that restructuring money would be spent outside of the U.S. on the automaker's European and South American businesses. But the expectation that Ford could execute a global restructuring over the next three to five years without significantly impacting its 86,000-person workforce in the United States was then met with skepticism outside the company. The company employs 202,000 people globally. The global restructuring is happening at the same time as a separate $25.5 billion workout aimed at cutting operational costs. The $11 billion restructuring of money-losing operations is separate. The latter is likely to be a more traditional workout, reducing excess plant capacity and cutting jobs in a bid to turn chronic money losers into contributors to Ford’s bottom line. As early as the fourth quarter, the automaker could detail the future of its partnerships with Mahindra Group in India and Volkswagen in Europe and South America, though actions contemplated for those regions are expected to run into next year. North America is the only region in the company delivering solid, if slightly subpar, margins this year. And belt-tightening has been a part of the plan Hackett inherited when he arrived in the c-suite in May 2017. The automaker cut 1,400 salaried workers in the U.S. last year through early retirement and buyout options. Ford is cutting sedans completely out of its U.S. lineup to make room for larger, more profitable and theoretically more desirable crossovers. Over the next five years, the automaker plans to trim $12 billion from what it expected to spend on materials for products; $7 billion from its product development and engineering processes; $5 billion from marketing and incentive spending; and $1.3 billion on manufacturing costs. All of that serves to give the automaker more for its money as it launches a slew of new products through 2023. Through the first half of this year, Ford lost nearly $800 million total in South America, the Middle East, Europe and Asia Pacific. Only North America, home to the franchise F-Series line of pickups and a full stable of SUVs, delivered enviable profits to Ford's bottom line. In 2017, Ford lost $784 million in South America; lost $263 million in the Middle East and Africa; and made $234 million in Europe, a trend there that appears to be reversing this year. North American profits helped the automaker post a $7.6 billion profit for the year, underscoring the need for global restructuring. The automaker reports its third-quarter earnings Oct. 24. For now, the automaker is cautiously rolling out information on how it will reorganize its global footprint to brave an uncertain future. Even if that means causing some uncertainty among its workforce. "It’s incredibly painful for the people affected," Dziczek said. "But the livelihood of everyone else that remains at Ford is at stake.They’re kind of damned if they share information, damned if they don’t. It is a tough needle to thread." |
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On behalf of Knights Table, we are indebted to Unifor Local 584 annual Food Drive to assist those impacted by hunger, poverty & homelessness in the community. Please note the totals for Unifor Local 584 Thanksgiving Food Drive:
Thank you for caring for those individuals and families who continue to rely on Knights Table for their daily food support. Regards,
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Auto industry relieved by NAFTA Regional content rules make supply chains less Janyce McGregor Sighs of relief rippled across the North American car industry on Monday. There would be no 'Carmageddon' caused by auto tariffs torpedoing cross-border trade, now that NAFTA 2.0 had found a safe landing zone. U.S. President Donald Trump had threatened to apply tariffs of up to 25 per cent on any vehicle or automotive part entering America. With the successful conclusion of the United States–Mexico–Canada Agreement (USMCA), the Canadian and Mexican automotive industries are no longer facing the threat of such crippling disruptions. But make no mistake: the continental auto trade will be less free than ever. To continue to avoid tariffs in North America, 75 per cent of a vehicle's parts have to originate in North America — up from 62.5 per cent under the old NAFTA rules. New labour rules mean that 40 per cent of its content must come from plants paying workers at least $16 per hour. And at least 70 per cent of the steel and aluminum must originate on the continent. "Higher content is more protection. Protection ultimately leads to less efficiency," said Canadian automotive consultant Dennis DesRosiers. "The paperwork is going to be onerous. "The price of vehicles ultimately will have to reflect that. And when you increase prices a little bit, the market shrinks. You might have a million fewer vehicles being bought." As that reality sets in, it's possible the car business may end up gaining less than it's giving up. "There's benefit to a higher content, but the inefficiencies related to it probably offset any benefit," DesRosiers said. "In many respects, it's a wash." Economics vs. reality Union leaders cheered when Mexico agreed to requirements for higher wages and stronger labour standards, weakening its competitive advantage. The USMCA may shrink its wage gap with Canadian or American plants. But workers are only secure when their industry prospers — and this deal doesn't necessarily help with that. Labour accounts for between five and eight per cent of a vehicle's cost, DesRosiers said. Because assembly plant jobs are the most visible and politically-sensitive cost, the need for efficiency in component costs can be overlooked. "Some of the industry types are over-the-top happy," but it's only because they've avoided their "nightmare scenario," DesRosiers said. "Nobody's really worked through yet all the potential implications." Carmaking is a global business. "From a pure economics point of view, the lower the content rules, the better," DesRosiers said. At the moment, some German, Japanese and Korean brands import key parts and still meet the existing NAFTA content requirements for their assembled vehicles. As regional content rules escalate under USMCA, it will be difficult for manufacturers to meet the higher thresholds without assembling more core components — powertrains, engines and transmissions — in North America. "That will likely result in some new investment [in North America]," DesRosiers said. "But will these investments be efficient?" Prices influence consumer demand Brett House, the deputy chief economist for Scotiabank, agrees that more foreign investment could be coming as a result of the new regional value content rules. Canadian vehicles assembled by the big three automakers — General Motors, Ford and Fiat Chrysler — already have over 80 per cent regional content on average, he said. Factoring in Canada's Toyota and Honda plants, however, the overall figure for all cars made in Canada is around 71 per cent regional content. With new wage requirements making Mexico less attractive, southwestern Ontario might be in luck. However, "this is overall cost-increasing for the North American supply chain ... over the longer term, competitiveness-reducing," said House. Some production could exit North America — particularly smaller cars with tighter margins. Then there's how consumers may react if car prices rise to cover these higher costs. "People respond to price incentives," House said. Consumers may buy cheaper models, or drive cars they already own longer, shrinking market demand. New reason for tariff threats Trump's threat of car tariffs served as negotiating leverage. But now this deal's in hand, it's also an enforcement tool. Any automaker considering moving production to a lower-cost jurisdiction to dodge the new rules now worries about getting hit with a 25 per cent tariff on every vehicle or part it wants to ship back into the massive American market. As a result, changes driven by the USMCA in North America could be limited to the margins. "There's not a lot that tips the apple cart over. We don't have to restructure everything," said Kristin Dziczek of the Michigan-based Center for Automotive Research. Still, some parts of the regional supply chain aren't quite ready to meet the needs of the future. North America's higher-cost jurisdictions might need to start manufacturing batteries for electric cars or components for self-driving vehicles, for example. "I don't see anything in the agreement that lowers the cost of making vehicles in North America," Dziczek said. "There are provisions in this that say it has to be real production, not just, 'Take two parts and screw them together.'" For the remaining 25 per cent of content that doesn't have to come from North America, there's now an even stronger incentive to move production of those parts to lower-cost countries to try to counterbalance the higher cost of producing the rest of the vehicle, she said. But thanks to the ongoing threat of Trump's car tariffs, that might be risky, Dziczek points out. Chinese components that used to be competitive have been slapped with steep American tariffs in Trump's ongoing trade war. Protectionism that works "There is a very good strategic benefit negotiated by being inside the walls while the guns are firing outside," said Flavio Volpe, the president of Canada's Automotive Parts Manufacturers Association. "You don't have to agree with the illegal use of punitive tariffs, but you can agree that it's better not to be the ones who bear the costs while you fight that." Trump's next big trade negotiation, with the Japanese, might be key to lifting the steel and aluminum tariffs burdening Canada's industry at the moment, Volpe said. Both Japan and the U.S. desperately want to contain the Chinese, and the Trump administration may feel the steel tariffs are valuable leverage for pushing the Japanese to accept the new North American rules of origin. This new age of reactionary protectionism may turn out well for Canada's industry, he said. The USMCA "drives purchases all the way down the supply chain," including materials, Volpe said. "Anybody who wants to make a car tariff-free for a North American consumer must buy 20 to 30 per cent more from the North American supply chain than it did yesterday. "You're going to get more orders, and you've got the potential for more customers, because your customers now must meet a higher threshold, that only you can help them meet. It's a great deal for parts suppliers."
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Premier Ford vows to scrap Canadian Press TORONTO - Ontario Premier Doug Ford vowed Tuesday to scrap labour reform legislation from the previous Liberal regime that raised the province's minimum wage and introduced a range of other worker protections, a declaration that came days after his government said the law was under review. Ford's comments caught the opposition off guard and upset those in the labour community who have been supporters of the law known as Bill 148. "We're getting rid of Bill 148," the premier said in the legislature. "We're going to make sure we're competitive around the world." The Progressive Conservatives said last week that they would halt a planned increase to minimum wage set to kick in next year as a result of the Liberal law, and the labour minister said the rest of the legislation was being reviewed. The bill mandates equal pay for part-time and temporary workers doing the same job as full-time employees and increases vacation entitlements to three weeks after a worker has been with their company for five years. It also requires employees to be paid for three hours if their shift is cancelled within 48 hours of its start, and expands personal emergency leave to 10 days per year, two of them paid. When brought in, the law was applauded by labour activists who had been calling on the government to increase the minimum wage for years. Some businesses, however, complained about the hike in minimum wage — from $11.60 to $14 an hour on Jan. 1 — and raised prices, cut staff hours and reduced employee benefits in response. When asked to clarify his comments about the bill, Ford doubled down on his remarks Tuesday afternoon. "I don't think this is any surprise," he said. "I talked about this all throughout the campaign. I went from town to town talking about Bill 148." Ford said the bill has hurt Ontario businesses and meant workers lost their jobs. He wouldn't say if the government planned a full repeal of the bill or changes to part of it, adding that more information would be available in the coming weeks. "Bottom line, it's an absolute job-killer," he said of the bill. "We want to create more jobs for everyone right across the sector." NDP Leader Andrea Horwath said it's not clear, despite Ford's latest comments, just what the government plans to do with the labour reform law. Repealing the legislation will only make life more unstable for workers across the province, she said. "At the end of the day, dragging us backwards to the days where people couldn't get three weeks vacation or they couldn't get sick time off when they were sick at work, these are things that we worry about," she said. Interim Liberal leader John Fraser said the premier's declaration hurts workers across the province. "It does a disservice to the office to not fully consider the direction you're going in," he said. "The premier's not doing that." Pam Frache, the Ontario co-ordinator of the Fight for $15 and Fairness, a group that supports the law, noted that the government has not yet introduced legislation to replace or repeal Bill 148, despite Ford's comments. "We still think there's time for the premier to change his mind, to do the right thing and to stand with the people, not with the corporate elites," she said. Meanwhile, the Ontario Chamber of Commerce, which represents the province's business community, said it would like the government to repeal Bill 148. "The very real unintended consequences (of Bill 148) have forced our members to decrease product offerings and increase the price of products being sold, hire fewer employees, reduce services and hours of operation, cut back on employee benefits, and halt capital investment — all in an effort to stay afloat," president Rocco Rossi said in a statement. Last year the province's economic watchdog, the Financial Accountability Office, estimated more than 50,000 people could lose their jobs due to the minimum wage increase brought in by the Liberal bill.
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How NAFTA 2.0 will
Washington – American dairy farmers get more access to the Canadian market. U.S. drug companies can fend off generic competition for a few more years. Automakers are under pressure to build more cars where workers earn decent wages. The North American trade agreement hammered out late Sunday between the United States and Canada, following an earlier U.S.-Mexico deal, shakes up – but likely won’t revolutionize – the way businesses operate within the three-country trade bloc. The new United States-Mexico-Canada Agreement replaces the 24-year-old North American Free Trade Agreement, which tore down trade barriers between the three countries. But NAFTA encouraged factories to move to Mexico to take advantage of low-wage labor in what President Donald Trump called a job-killing “disaster” for the United States. Sunday’s agreement is meant to bring manufacturing back to the United States. The president, never known for understatement, said the new deal would “transform North America back into a manufacturing powerhouse.” But America had to make some concessions, too. For example, it agreed to retain a NAFTA dispute-resolution process that it wanted to jettison but Canada insisted on keeping. Overall, financial markets were relieved the countries reached a deal. For a time, it had looked like Trump might pull out of a regional free trade pact altogether – or strike one without Canada, America’s No. 2 trading partner. At noon Monday, the Dow Jones industrial average was up more than 240 points. Economists, trade attorneys and businesses are still parsing the agreement. But here’s an early look at what it means for different players. Farmers Trump has raged about Canada’s tariffs on dairy imports, which can approach 300 percent. American dairy farmers have also complained about Canadian policies that priced the U.S. out of the market for some dairy powders and allowed Canada to flood world markets with its own versions. The new agreement ends the discriminatory pricing and restricts Canadian exports of dairy powders. It also expands U.S. access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office). Above that level, U.S. dairy farmers will still face Canada’s punishing tariffs. And the “supply management” system Canada uses to protect its farmers is still largely in place. Still,trade attorney Daniel Ujczo of the Dickinson Wright law firm said that “the U.S. dairy industry seems happy … for now.” Automakers NAFTA remade the North American auto market. Automakers built complicated supply chains that straddled NAFTA borders. In doing so, they took advantage of each country’s strengths – cheap labor in Mexico, and skilled workers and proximity to customers in the United States and Canada. The new agreement changes things up. For one thing, the percentage of a car’s content that must be built within the trade bloc to qualify for duty-free status rises to 75 percent from 62.5 percent. A bolder provision requires that 40 percent to 45 percent of a car’s content be built where workers earn $16 an hour. That is meant to bring production back to the United States or Canada and away from Mexico (and perhaps to put some upward pressure on Mexican wages). The provisions could drive up car prices for consumers. The new deal also provides some protection to Canada and Mexico if Trump goes ahead with his threat to slap 20 percent to 25 percent taxes on imported cars, trucks and auto parts. It would exclude from the proposed tariffs 2.6 million passenger vehicles from both Canada and Mexico. Multinational Companies Like other U.S. trade agreements, NAFTA allowed multinational companies to go to private tribunals to challenge national laws they said discriminated against them and violated the terms of the trade agreement. Critics charged the process gave companies a way to get around environmental and labor laws and regulations they didn’t like, overruling democratically elected governments in the process. U.S. Trade Rep. Robert Lighthizer, who negotiated the new deal, had another complaint: The tribunals took some of the risk out of investing in unstable or corrupt countries such as Mexico. Why, Lighthizer argued, should the United States negotiate deals that encourage investment in other countries? The new pact scales back provisions protecting foreign investment. Lori Wallach, director of Public Citizen’s Global Trade Watch and a sharp critic of NAFTA, praised the new agreement for reining in what she called NAFTA’s “outrageous” tribunal system that had allowed big companies to launch “attacks on environmental and health policies.” Drug Companies The new trade pact delivers a windfall to pharmaceutical companies that make biologics –ultra-expensive drugs produced in living cells. It gives them 10 years of protection from generic competition, up from eight the Obama administration had negotiated in the TPP. But good news for the pharmaceutical industry could be bad news for users of the drugs and for government policymakers trying to hold down health-care costs. “New monopoly privileges for pharmaceutical firms … could undermine reforms needed to make medicine more affordable here and increase prices in Mexico and Canada, limiting access to lifesaving medicines,” Wallach said. Retailers The United States pressured Canada and Mexico to raise the dollar amount that shipments must reach before they become subject to import duties. Canada, for instance, will allow tax- and duty-free shipments worth up to 40 Canadian dollars (about $31), up from 20 Canadian dollars ($16) under NAFTA. The change makes U.S. products more competitive in Canada because they will be subject to less tax at the border – and delivers savings to Canadians who shop online. However, trade attorney Ujczo notes, the higher threshold poses a threat to Canadian retailers. Here’s a look at what some major Canadian players had to say: FLAVIO VOLPE, PRESIDENT OF APMA Flavio Volpe, head of the Canadian Automotive Parts Manufacturers Association took to Twitter and praised the deal and its brokers. “Negotiating with an unorthodox, unconventional, sometimes belligerent, more powerful trading partner over the past 13 months was a historical challenge,” he said. “Ending that process with a deal that increases investment and more competitive market access for Canada is extraordinary. “I want to give full credit for our success on NAFTA/USMCA to [Foreign Affairs Minister] Chrystia Freeland and Team Canada. The non-partisan, public/private effort was amazing and I’m proud to be a footnote in this history’s chapter.” JERRY DIAS, PRESIDENT OF UNIFOR The United States “finally came to their senses” and created an environment conducive to reaching an agreement with Canada, said Jerry Dias, head of the major Canadian union Unifor, a key player in the negotiation drama. “Things started to change when the United States understood that we weren't moving on the dispute mechanism, Canada's cultural exemption needed to be in place, we weren't going to bend on the auto industry,'' he said Monday on Parliament Hill. “The auto industry should be absolutely thrilled,” Dias said in an interview on BNN Bloomberg TV. “Today people can rest and take a big deep breath. We really are in a situation where we can attract investment.” ROB WILDEBOER, CHAIRMAN OF MARTINREA “I think Canadian stocks in general have had this NAFTA cloud over them, that’s certainly true for the auto parts sector. I expect valuations are going to increase,” Rob Wildeboer, chairman of Martinrea, said in an interview with Bloomberg while discussing stock prices. ROB BURTON, OAKVILLE MAYOR “We understand this new trade agreement will provide a solid foundation for our auto industry to continue to build and expand,” said Oakville Mayor Rob Burton, Chair of Auto Mayors. “The deal supports open new markets and encourages increased investment in, and exports of, Canadian produced vehicles and parts.” JEAN SIMARD, CEO OF ALUMINIUM ASSOCIATION OF CANADA “Certainly disappointed because they didn't agree on a solution on the 232 sanctions regarding aluminum and steel,” said Jean Simard, CEO of the Aluminium Association of Canada. “We find it very unfortunate, and to us it's certainly very important in the coming days and weeks leading to the final signing of the agreement that they are able to resolve the situation.” KEN NEUMANN UNITED STEELWORKERS United Steelworkers Canadian director Ken Neumann said Canada “sold out” steel and aluminum workers by not getting rid of the 25 per cent steel tariffs and 10 per cent aluminum tariffs. “It appears Canadian steel and aluminum workers are among those being sacrificed in the concessions made by the Liberal government in this deal,” he said in a statement. |
City of Brampton
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Canada, U.S. reach new James McCarten, A new era in North American free trade dawned in the dead of night Sunday as a 14-month NAFTA modernization effort between Canada, the U.S. and Mexico finally came to fruition with just hours to spare before an end-of-weekend deadline. What began as a marathon in the summer of 2017 ended in a flat-out sprint as negotiators in Ottawa and Washington worked around the clock to put the finishing touches on language adding Canada to the deal reached over the summer between the U.S. and Mexico. “It’s a good day for Canada,” was all Prime Minister Justin Trudeau would say as he left a late-night cabinet meeting in Ottawa that capped several days of frenetic long-distance talks that included Foreign Affairs Minister Chrystia Freeland and U.S. Ambassador David MacNaughton. Details remained sparse, but U.S. administration officials say the deal — newly christened the U.S.-Mexico-Canada Trade Agreement, or USMCA — provides increased access to Canada’s dairy market for U.S. producers and limits the American impact of Canada’s controversial supply management system for dairy and poultry products, long a thorn in the side of President Donald Trump. It also appears to preserve the key dispute-resolution provisions — Chapter 19 — which allow for independent panels to resolve disputes involving companies and governments, as well as Chapter 20, the government-to-government dispute settlement mechanism. Canada fought hard to retain Chapter 19, a holdover from NAFTA that U.S. trade ambassador Robert Lighthizer worked tooth and nail to eliminate. “USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region,” Freeland and Lighthizer said in a joint statement. “It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” On the matter of Section 232 tariffs, Trump’s trade weapon of choice, U.S. officials told a late-night conference call with reporters that the two sides had “reached an accommodation”‘ on the issue. A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs. A similar agreement between Mexico and the U.S. preserves duty-free access to the U.S. market for vehicles that comply with the agreement’s rules of origin. Those rules require that a certain percentage of an imported vehicle’s components be manufactured in the United States. Some have characterized the side letter as effectively establishing a quota on the number of autos that can be exported to the U.S. — anathema to the very principles of free trade. But Dan Ujczo, an international trade lawyer with the U.S. firm Dickinson Wright, said it would only apply to a very small percentage of vehicles that don’t comply with the origin rules. “When people are saying there’s a cap on auto exports, it’s only in the limited situation where the goods are non-conforming with the rules of origin. So if you comply with the rules of origin, there’s no way you are subject to 232 tariffs,” Ujczo said. “This objection is largely more philosophical than practical — the idea of having quotas as a side letter to a free trade agreement. The practical consequences are limited, if any.” Despite the fact that Ottawa had long pushed back hard against allowing the deal to be periodically revisited, officials in the U.S. briefing said the new language includes a provision that will indeed see the deal reviewed every six years. “This is going to be one of the most enforceable trade agreements we’ve ever had,” one official said. “This gives us a significant new form of leverage in terms of encouraging people to come up to the mark and really fully comply with all of their obligations. “This administration is committed to strong and effective enforcement of this agreement, just like all of our other agreements. We will be watching very carefully to see and to make sure that all of the things that have been pledged and promised in the agreement do come about.” Insiders got wind of a breakthrough after 14 months of tumultuous talks and just hours before U.S. and Mexican trade authorities were set to publish their own trade agreement without Canada as a signatory. Federal cabinet ministers were summoned to a late Sunday meeting at the Prime Minister’s Office near Parliament Hill, while the White House convened its own late-night trade briefing conference call just an hour before the midnight deadline. “In short, we think this is a fantastic agreement for the U.S., but also for Canada and Mexico,” said the American officials, who cheered the fact that U.S. dairy ranchers would soon have “substantial” expanded access to lucrative markets north of the border. They described the central elements of the deal as a “template” that would become the “playbook” for all of the Trump administration’s future trade deals, including new and stronger rules of origin on autos and mechanisms to ensure agreements don’t become “stale and outdated.” “It’s a great win for the president and a validation of his strategy in the area of international trade.” In Ottawa, PMO officials said there would be another cabinet meeting Monday and a news conference likely as well. Meantime, congratulations were being offered among key stakeholders who have been on the edge of their seats waiting to see if Canada and the United States would find common ground. An agreement on how to treat the auto sector, reached this summer between the United States and Mexico, was central to a revamped NAFTA going ahead. But the U.S. and Canada had trouble dealing with other areas in the pact, including Canada’s dairy industry, its insistence on a strong dispute settlement mechanism and concerns about intellectual property and culture. The Canadian Chamber of Commerce said it was relieved that an agreement in principle had been reached. But President Perrin Beatty said the details of the text needed a closer look before a final verdict could be rendered. “Specifically, we will seek clarity on how the agreement addresses the existing tariffs on Canadian steel and aluminium, as well as how it will ensure that tariffs and quotas upon Canada’s auto sector exports will be avoided,” Beatty said in a statement. Trudeau has promised repeatedly to keep the country’s supply management system intact, despite pressure from Trump. The issue has also figured prominently in Quebec, where voters go to the polls in a provincial election on Monday.
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Ontario Government Cancels Long Standing Car Emissions Test by Alan Kan If you’re a driver in Ontario, which an overwhelming percentage of you are, then you know that your automobile has to get frequent emissions testing, whether the car is a newer or an older model. Well, the days of those mandatory tests, at least on private passenger vehicles, appear to be coming to an end, according to Doug Ford’s provincial government. The premier held a press conference on Friday, September 28, alongside Transportation Minister John Yakabuski and Environment Minister Rod Phillips to announce that, as of April 1, 2019, Ontario is cancelling the Drive Clean emissions testing for passenger vehicles. “By ending Drive Clean tests and repairs for passenger vehicles, this government is reducing the burden on residents and families who own a car, so they no longer need to take time out of their days to take their vehicles in for unnecessary tests,” Ford said. “We’re saving taxpayers over $40 million every year. And we’re better targeting the biggest polluters to protect Ontario’s air.” The Drive Clean program was introduced by the Mike Harris PC government in 1999. “It provided a way to target emissions related to smog and other environmental problems,” said Phillips, which resulted in a decrease in the number of cars that fail the emissions test. “But Drive Clean was intended to be a time-limited program, and as the years passed, so did its usefulness. It has provided less and less value for taxpayer dollars,” Phillips continued. A Global News investigation in 2014 found that almost all newer vehicles passed the Drive Clean emissions test, so the logic of testing them did not compute. In its place, the government announced a new, enhanced program will focus on heavy-duty vehicles like commercial transport trucks and will ensure that Ontario continues to lead Canada in reducing harmful smog-causing pollutants. A policy proposal has been posted on the Environment Ministry’s website for 30 days to encourage public consultation. “By enhancing our testing of heavy duty vehicles, we will ensure that Ontario continues to lead Canada in reducing harmful smog-causing pollutants,” said Yakabuski. “These changes will make a real, long-term difference for our air quality, while respecting taxpayer dollars today.”
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Ford F-150 hybrid By Gary Gastelu Ford used the 100th anniversary celebration for its Rouge complex on Thursday to reconfirm plans to introduce a hybrid F-150 in 2020. The electrified truck will be built at the Dearborn Truck Assembly plant at the historic facility, where the current F-150 is made. The light duty pickup is also manufactured at Ford’s Kansas City Assembly plant. Full details on the new powertrain have not been revealed, but executives have previously told Fox News that it will not be a plug-in hybrid. It will, however, have an outlet that will allow it to double as a portable generator for worksites and recreational activities. The automaker is also scheduled to launch a hybrid-powered Ford Mustang at the same time that will be focused on performance, providing V8 power but with more torque and greater efficiency that a conventional eight-cylinder drivetrain. Given the timeframe, the F-150 and Mustang will likely be sold as 2021 model year vehicles. |
Ford CEO says Keith Naughton, Ford Motor Co. Chief Executive Officer Jim Hackett encouraged President Donald Trump’s administration to resolve trade disputes quickly or it could do “more damage” to his company, which is already suffering losses from tariffs imposed by the White House. “The metals tariffs took about $1 billion in profit from us – and the irony is we source most of that in the U.S. today anyways,” Hackett said in an interview on Bloomberg Television. “If it goes on longer, there will be more damage.” A deal is imminent on a new North American Free Trade Agreement, Hackett said later during the Bloomberg Global Business Forum 2018. “I think there’s going to be news about NAFTA being closed soon,” Hackett said. “Europe and North America are making tremendous progress as it relates to vehicle discussions and now we have to deal with China.” Ford and other global automakers have opposed the president’s use of tariffs and the retaliation they spur. Last month, Jim Farley, Ford’s president of global markets, described Trump’s tariffs on steel and aluminum as a “significant headwind for us.” A few weeks later, the second-largest U.S. automaker canceled plans to import the Focus Active crossover from China, citing Trump’s vehicle tariffs. “What we’re urging our administration to do – where we’re in China and in Europe – we say, you need to come to agreement quickly,” said Hackett, who added that trade issues are “top of mind” for him. Hackett said the trade disputes are paralyzing American business. “Business, you hear them talk about, they count on certainty,” Hackett said. “In this case, we’re kind of frozen. A lot of businesses aren’t sure and that’s not good.” New restrictions on trade, such as Trump’s threat to impose tariffs on vehicles coming into the U.S., exacerbate the problem of global overcapacity to manufacture cars, Hackett said. “There’s too much capacity maybe in the wrong places and that’s why the trade question is so important,” he said. “The footprint for production was more malleable before these trade structures. Now we’re going to have to deal with lanes that we can only distribute in.” Ford reported net income in 2017 of $7.6 billion, the most since 2013, but with analysts estimating a 29 percent drop in profit this year, it’s embarked on an $11 billion restructuring effort to improve margins in the core automotive business while investing billions in electric and autonomous-vehicle technology. Ford stock fell 1.3 percent in trading Wednesday to $9.27. |
Ford FCA Oppose Detroit News Dearborn — Ford Motor Co. and Fiat Chrysler Automobiles NV both opposed the Trump administration’s current proposal to relax gas mileage rules, calling instead for a strategy that eases standards set during the Obama administration without freezes or rollbacks. “FCA supports the policy choice in favor of ongoing fuel economy improvements in the fleet, but that policy needs to be based on market realities as they have evolved since 2012,” FCA’s vice president of global fuel economy Steve Bartoli said in testimony Tuesday. “In business and in government, we have to make decisions based on the best information available to us at the time, but we also must be nimble enough to adjust our plans when the facts on the ground change.” Ford’s global director of sustainability and vehicle environmental matters, Bob Holycross, echoed this sentiment, saying in his testimony that the Blue Oval does not support “standing still.” “We need a consistent, stable regulatory framework in which to make these capital-intensive investments, including policies that will help drive demand for emerging technologies,” he said. The Tuesday hearing in Dearborn is the second of three to take place nationwide this week. The first was in Fresno, Calif, Monday and the last is in Pittsburgh Wednesday. General Motors Co. did not testify, opting instead to provide written comments on the agencies’ Notice of Proposed Rulemaking by the October 26 deadline. The National Highway Traffic and Safety Administration and the Environmental Protection Agency earlier this year proposed freezing the mandate after the 2020 model year, when automakers will be required to build fleets averaging about 39 miles per gallon fleet wide. The agencies have also indicated the federal government could push to revoke a longstanding waiver allowing California and roughly a dozen other coastal states to set their own stricter auto emissions standards — a move that would be met with litigation, the states have said. This federal move was touted as a helping hand to the U.S. automotive industry. But automakers and the groups that lobby for them pushed back against the proposal, instead supporting a move to a more measured path to improved fuel economy that includes reaching a single national standard. The Alliance of Automobile Manufacturers, a lobbying group that represents most automakers in the U.S., said this single standard is needed to ensure the health of the industry going forward. “One national program enables (automakers) to keep new vehicles affordable, so more Americans can replace older vehicles with models that are cleaner, safer, and more energy-efficient,” said Chris Nevers, the alliance’s vice president of energy & environment. |
Ford's Hinrichs: 'Very September 25, 2018 DETROIT — A reworked North American Free Trade Agreement wouldn't make sense if it excluded Canada, Joe Hinrichs, Ford Motor Co.'s president of global operations, said Monday. Hinrichs, who is also the former CEO of Ford Canada, was speaking at a luncheon for the Original Equipment Suppliers Association. He said he's optimistic that all three countries in NAFTA can reach an agreement, despite news late last week that talks had stalled between Canada and the United States. The United States and Mexico last month had come to a bilateral agreement, and President Donald Trump has threatened to pull the plug on talks and continue on without Canada. "It's very important that Canada be a part of it," Hinrichs said. "I can't envision a future of the North American automotive industry where Canada is separated out. We're too integrated on too many issues." The sides remain at odds on a handful of issues. Canada is seeking some kind of guarantee that, if a deal is reached, it won't be hit with the auto tariffs Trump is threatening. The latest talks also have hinged on dispute panels meant to handle anti-dumping and countervailing duty cases. The United States wants to kill the panels, enshrined in Chapter 19 of the current NAFTA, while Canada wants to keep them in some form. The countries also are discussing one of Canada's key bargaining chips, dairy concessions, which has angered farmers in the country. "It's fair to say the challenges with the [U.S. and Canada] right now aren't necessarily around the auto business," Hinrichs said. "We don't want the auto business to be the unfortunate casualty of other issues." Ford builds a number of vehicles in Canada, including the Ford Edge, Flex and GT, and the Lincoln Nautilus and MKT. Hinrichs declined to say how the company's business would be affected if there is no deal, saying he is optimistic that one will get done. "It's the rational, logical thing to do for the auto industry," he said. Talks this week could be critical. The sides want to sign an accord before Mexico's president-elect, Andres Manuel Lopez Obrador, takes office Dec. 1. To do so, they would have to publish a deal by Sept. 30 and thus would need to reach an agreement imminently to have time to put it into legal text. The countries also could extend the talks past Sept. 30. "I worry a little bit that we'll run out of time and other consequences will happen," Hinrichs said. "But we're continuing to tell everybody involved that it's certainly our expectation that there's a modernization of NAFTA with all three countries involved." |
Ford told to pay Thai
Bangkok – A Thai court has ordered Ford Motor Co. to pay 291 customers a total of about $720,000 in compensation for selling cars equipped with faulty transmissions. The Bangkok South Civil Court’s decision was welcomed Friday as a victory in a country where consumers rarely win redress. Most of the plaintiffs in the class action suit will get payments of $800 to $8,000 each depending on the number of times and length of time their cars took to be repaired. But 12 plaintiffs were denied compensation because their cars were modified before they were repaired. None of those taking part in the joint lawsuit decided Friday were reporting injuries. Ford said in a statement, that it respected the court’s verdict. “We apologize for the inconvenience caused by the Powershift transmission problems and we reiterate that we will work earnestly to take responsibility for fixing them according to our customer service procedures,” the company said in statement issued in Thai. It’s another development in a long string of problems with the Ford transmissions, which have resulted in a lawsuit settlement in the U.S. and a fine in Australia. Last year, Dearborn-based Ford settled a class-action lawsuit and agreed to pay owners of 2012 to 2016 Focus and 2011 to 2016 Fiesta cars up to $2,325. Those who paid for repairs could also be reimbursed in the complex settlement, which is being appealed. This year, Ford’s Australian subsidiary was fined 10 million Australian dollars ($7.6 million) for mishandling complaints about faulty transmissions in thousands of cars. The group in the Thai lawsuit asked Ford to buy back the cars and sought 600 million Thai baht ($18.5 million) in damages. They can appeal the ruling within 30 days. One of the plaintiffs, Varoporn Chamsanit, said the five-year warranty on her car’s transmission was about to run out and she was unhappy the court’s ruling did not mention Ford’s future responsibility for repairs. “On one hand, I feel proud that we consumers got together and made this demand by ourselves and fought a long fight for several years now,” she said. “Today the court made it clear that Ford is at fault and awarded compensation for us. I am proud of the result that we received from the court and feel we’ve gotten a certain degree of justice.” The case was viewed as a milestone for Thailand, where the civil law was amended several years ago to allow class action litigation for the first time, enabling consumers to seek damages for various complaints. “If we consider this case, beyond the amount of money awarded, this shows that when consumers work together against any big company, we can achieve a victory. When we file a class-action lawsuit, we can prove the damage is widespread and real, not just hearsay,” said lawyer Jinna Yamoaum.
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PM says James McCarten Sept 21, 2018 WASHINGTON - Thirteen months is an "absolutely normal" time frame for a task as complex as modernizing North American trade, Foreign Affairs Minister Chrystia Freeland said Wednesday as she notched another day on the road towards a new NAFTA deal with the United States and Mexico. On a day where signs of progress were in the air, Freeland shrugged off talk of congressional deadlines and growing impatience in political circles as she justified the amount of time it has taken for all three sides to get to their current positions. Rome, in other words, wasn't built in a day. "For an agreement of this scale, 13 months for a very deep modernization of the kind we're working on is absolutely normal," said Freeland, who will be back for more talks Thursday. "Trade agreements do take some time, both to negotiate and to update, because the economy is complicated and trade agreements are complicated." And when asked whether she could hear the clock ticking, she said: "Canada's sole objective — the only target that we are aiming for — is getting a good deal for Canada, so that's what we're focused on." Among the evidence that the finish line isn't far away: word from sources familiar with the negotiations that the U.S. backed off in recent weeks on its demands for lucrative procurement projects. Then there was the mood of Freeland herself, who arrived in the U.S. capital the night before wearing a T-shirt from her kids emblazoned with the slogan, "Keep Calm and Negotiate NAFTA," and thanked journalists for keeping vigil and ordinary Canadians for their expressions of support. "People come up to me on the street or in airports, which is where I am often found, just saying how strongly they support Canada in these complex negotiations," she said before a midday meeting with Ontario Premier Doug Ford, in town to wave the Team Canada flag. "I just want to say to everyone who has done that, thank you very much. It means a lot to me. I always share your messages with the negotiating team, and that gives us real strength and reminds us of how important the work we're doing is for Canadians." She credited Mexico with making significant concessions in its deal with the U.S. on automobiles and for permitting large wage increases for Mexican auto workers — something Canada and the U.S. both wanted to stop the growing flow of automobile production into Mexico because of its cheap labour. "Over the summer, Mexico made some very deep, very difficult concessions on rules of origin," she said, referring to an early U.S. demand that would have dramatically increased the amount of American content required in cars built outside the country. "The fact that Mexico made those concessions is good for higher-wage workers; good for the high-wage workers of Canada, good for the high-wage workers of the U.S., and that is what allowed the rest of the negotiations to move forward." And there was the all-nighter pulled by one of Canada's negotiating teams, which Freeland said didn't wrap up its marathon session until 7 a.m. Wednesday morning. "There is some very intensive work happening," she acknowledged as she thanked negotiators, too, for their tireless efforts. Sources say Mexico believes it has also done much of the "heavy lifting" on getting the Americans to back down on its demand to limit the ability of Canadian and Mexican firms to bid on U.S. infrastructure projects, while seeking greater access for American firms to Mexican and Canadian government projects. Mexico and Canada are both quietly taking credit for standing firm against the controversial U.S. position that would have effectively limited their respective countries' ability to bid on valuable American government infrastructure projects. Earlier in the day in Ottawa, Prime Minister Justin Trudeau said Canada isn't backing down from its own demands — a position that has some U.S. legislators bristling at what they consider a stalling tactic. "We've been very clear that we're interested in what could be a good deal for Canada, but we're going to need to see a certain amount of movement in order to get there," Trudeau said. Pressure is mounting on the federal government to get a deal done. On Wednesday, Texas Republican Kevin Brady, head of the influential House Ways and Means committee, told CNBC the two sides are "close enough" and the time has come for Canada to "step it up" and get on board. Trade observers say that while many in Congress want Canada to be part of a three-way deal, they may not be willing to sacrifice an agreement in principle between Mexico and the U.S. negotiated earlier this year. That deal is widely seen to require congressional approval before Dec. 1 in order to survive the arrival of an incoming Mexican government whose supporters have mixed feelings about the agreement. Advertisement Jerry Dias, head of Unifor, Canada's largest private-sector union, said Canadian negotiators remain unmoved by the recent rumblings on Capitol Hill and focused on getting a deal that's in the country's best economic interests. While Canada has been pushing for wording in NAFTA aimed at strengthening labour protections and gender equality, the overall negotiations are said to have stalled over Canada's insistence that an agreement contain an independent dispute-settlement mechanism. "There's not going to be an agreement where disputes are handled in the American courts. Why would we do that?" Dias said. "Having Colonel Sanders take care of the chickens — in other words, having all disputes handled in the U.S. courts — just doesn't make any sense for Canadians."
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Toronto Unifor Locals Posted Sept 20, 2018 Members, When Unifor disaffiliated from the Canadian Labour Congress in January of 2018, we immediately shared our principled stance with our locals and the broader labour movement that workers in Canada have the right to belong to a union of their choosing. The Canadian Labour Congress is failing to provide unionized workers with that choice, and now we see that the Toronto and York Region Labour Council has chosen the same path. When your union took that stance to oppose the failed enforcement of Article 4, we encouraged you to continue your relationship with your labour councils. Much of the work of our unions happens in our communities, and labour councils can be an important space for advocacy and organizing. It has become clear however, that Unifor is unable to continue that connection with President John Cartwright and the Toronto and York Region Labour Council. Since Unifor’s disaffiliation, Unifor labour council delegates have engaged in a sustained effort to participate in the Council, but lately the TYRLC executive has disparaged and insulted our union instead of fulfilling their mandate of forging solidarity across unions and communities. On Tuesday September 11, workers at the Fairmont Royal York voted on joining Unifor, the largest union representing hotel workers in Canada. Just days before this vote, Cartwright, as President of the Labour Council, wrote to these workers attempting to push them to vote against joining our union. This letter contained multiple inaccuracies and is an inexcusable overreach, a blatant attempt to interfere in the democratic process and to influence a choice between one TYRLC affiliate and another. In the immediate aftermath of Unifor’s disaffiliation, Cartwright penned his Open Letter to the Labour Movement, which again completely disregarded the importance of Unifor’s stance, and took cheap shots at our union. Unifor members are blocked from participation on committees and the executive board, and we have seen no decision made on their status at the Council. Despite these actions, we continued to collaborate and attempted to work together for a celebratory labour day in Toronto. But, in a move that can only be described as petty, the TYRLC Executive chose to repeat last year’s parade line-up to prevent our union from marching in front for our 5-year anniversary when it was our turn, and deliberately placed us last. The accumulation of these actions paints a clear picture about the position of Cartwright and the TYRLC Executive. They chose to take a side in what should be a free vote for members choosing to join Unifor, and they have outwardly disparaged our union. We cannot continue to encourage your participation in this Council. The time has come for Unifor local unions to cease participation and funding of the Toronto and York Region Labour Council. Hopefully this relationships can be repaired, but that day will not come until respect can be shown on both sides. If you have any questions about this process, or are looking for ways to continue your activism in the city, please contact Josephine Petcher, Unifor Toronto Area Director at Josephine.Petcher@unifor.org or email politicalaction@unifor.org. Our union remains focused on the challenges that lay ahead and will continue to be active in Toronto and in all Unifor communities. All members are encouraged to join in the exciting work that Local Union Task Force organizers are coordinating through ongoing campaigns and Unifor Area Councils. In solidarity, Jerry Dias |
Unifor video that names, The Canadian Press ST. JOHN'S, N.L. -- A union video that identifies replacement workers who crossed the picket line during an ongoing lockout in Gander, N.L., has prompted a debate over the ethics of naming and shaming such workers. The minute-long video titled "meet the scabs" was posted to Unifor Canada's Twitter and Facebook channels on Sept. 6, showing images and names of workers hired as replacements for the 30 D-J Composites workers who have been locked out of their jobs since December 2016. As of Monday, the Twitter video had more than 700 responses, many of them critical of Unifor's tactics shaming the workers rather than the employer, with some saying the video amounts to bullying. The comments even came from people apparently sympathetic to the locked-out workers' cause. User (at)DomatoRecord wrote, "As a member of Unifor I am disgusted by this shameful video. We should be lobbying for laws that forbid employers to hire replacement workers. Not going after the workers, who are probably desperate. How could you, Unifor?" Unifor's Atlantic regional director, Lana Payne, said the video is one of many ways the union is "stepping up our efforts on all fronts" after almost two years of social media campaigning, letters to the provincial government and negotiations with the American-based employer. Payne said the ad is a response to the employer's "escalating tactics" to block the union, including hiring enough replacement workers to match the number of those locked out. "My responsibility and our responsibility as a union is to defend our members, and that's what we're doing," Payne said. Payne also questioned why the public has not felt the same outrage for the locked out workers, noting that the provincial Labour Relations Board has found the employer twice violated the provincial Labour Relations Act for failing to bargain in good faith. "They have spent their savings in order to be able to continue to fight, this is how much they believe in this principle," said Payne. "They should be able to have a union in their workplace, a pretty basic right in Canada, and yet they have had to fight for that right now for 630 days on a picket line." Some of the online debate has focused on Newfoundland and Labrador's high unemployment rate, expressing sympathy for the replacement workers trying to make a living. But Payne said there are many jobs available in Gander, and the replacements made a choice to publicly take the locked out workers' jobs. "These are communities where everybody knows that these folks are crossing the picket line, and I would argue there are jobs in this town. They don't need to cross the picket line for employment," said Payne. Payne said the members on the picket line did not participate in making the video, and that the union has not heard from D-J Composites since the latest ads. British Columbia and Quebec are the only provinces in Canada with legislation preventing the use of replacement workers during a strike or lockout. The issue also caught the public's attention a few weeks ago when workers start striking outside the Canadian National Exhibition in Toronto. David Doorey, a labour law professor at York University, said studies are inconclusive as to how such legislation affects the duration of a lockout, but said the use of replacement workers in Gander seems to have prolonged the dispute. "It's very unlikely that this particular lockout would have lasted this long if the employer was banned from hiring replacement workers," Doorey said in an email. Unifor's video, while unsettling to many, also has legal precedent. In 2013, the Supreme Court of Canada ruled that unions have the right to photograph and publish photos of replacement workers. Tom Cooper, a professor of business ethics at Memorial University, said Unifor's ads should be considered alongside the ethical considerations of minimizing harm. Cooper said naming people involved in labour disputes is not a new tactic, but the permanent and public nature of online videos can do more harm than good in a case like Gander's for the locked out workers' cause and the replacement workers' privacy. "I don't see this online naming and shaming to be any benefit to the workers in Gander, from kind of a strategic and business ethics standpoint," Cooper said. "If your strategy is, 'How do we get this lockout resolved?', I'm not sure it actually meets that obligation." Cooper said while Unifor's actions are intended to protect their members' interests and their right to a union, in this case the union seems to be falling short of a higher standard to protect the general population's rights to privacy and a dignified life. "I'm not sure in this case they're meeting the higher standards," said Cooper. "They're about social justice, they're about human rights, they're about protecting the rights of individuals, and in this case they're not doing that. They're only protecting the rights of one group, which is their members."
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Who has the real leverage September 16, 2018 WASHINGTON -- From day one, President Donald Trump has imposed his will on talks to overhaul the North American Free Trade Agreement. But as his administration tries to seal the deal, it’s not clear he holds all the cards. Trump’s repeated threats to pull out of the pact have kept Mexico and Canada on their heels. The president may still brandish the threat of withdrawal to push a deal through Congress. Yet Canada does have some leverage as it decides whether to join a tentative U.S. deal with Mexico. Meanwhile, any deal Trump signs then requires congressional approval, and the Democrats are favored to seize control of the House in November, making approval far from a foregone conclusion. Here are three ways to think about the power dynamics in the NAFTA renegotiation: TRUMP HAS ALL THE LEVERAGE Trump is the reason the negotiations are happening in the first place. He demanded a rewrite, and he set the tone with a series of proposals designed to reduce the U.S. trade deficit, especially the large shortfall with Mexico. When talks stalled earlier this year, the Trump administration employed a classic divide-and-conquer strategy, focusing on talks with Mexico and leaving Canada on the sidelines. The result was a preliminary deal with Mexico. The U.S. is trying to convince Canada to join the party, keeping the three-way structure of NAFTA intact. But Trump has made clear he’ll sign a deal only with Mexico if necessary, and he has threatened tariffs on Canadian-made cars if it can’t strike a deal. The clock is ticking: Trump has given notice to Congress that he’ll sign a new trade deal with Mexico -- and Canada “if it’s willing” -- by the end of November, and his officials have to present text of the agreement to U.S. lawmakers by the end of this month. NO, CANADA DOES Canada may be the David to the U.S. Goliath, but it has proven to be a tenacious negotiator in the past, and it’s standing its ground on NAFTA. The U.S. said it wanted a deal by Aug. 31, so that outgoing Mexican President Enrique Pena Nieto could sign the agreement before his successor, Andres Manuel Lopez Obrador, takes office Dec. 1, thus insulating the new president from the political risks of a new trade accord. But Trudeau called Trump’s bluff, and negotiations with Canada continue. One key advantage for Trudeau: the math on new auto rules may depend on Canada’s inclusion. The U.S.-Mexico proposal requires at least 40 per cent of cars in the trade zone be made by workers making US$16 per hour. Adding Canada’s relatively well-paid autoworkers would make it much easier to meet that threshold. Trump’s plan may be to lure auto plants to the U.S. from Canada. But for now, automakers and unions are pushing for Canada to be brought into the fold. Lawmakers on Capitol Hill, including members of Trump’s own Republican Party, share that view, which puts pressure on Trump to strike a deal with Canada, said Edward Alden, a senior fellow at the Council on Foreign Relations in Washington. “The U.S. and Mexico have said they will go it alone, but Congress has made it utterly clear that a U.S.-Mexico only deal is D.O.A. on the Hill,” said Alden. CONGRESS HAS THE FINAL VOTE U.S. Trade Representative Robert Lighthizer has expressed optimism that the deal he’s negotiating could win broad support in Congress. Certainly, there are some aspects of the new accord that Democrats can hail as a victory, including the first minimum-wage provision in a U.S. trade deal. Republicans can argue they saved Nafta from the trash can of history. But because of the legal hoops the administration has to jump through, it’s unlikely NAFTA 2.0 will be put to a vote until next year, when the political climate may be very different. Polls indicate the Democrats will take the House in the midterm elections in November. They will be looking to wound, not support, a president that their base abhors. “The administration is flying a strange route, because it’s claiming to have Democrat support without doing the coalition building needed to get the votes,” said Scott Miller, a senior adviser at the Center for Strategic and International Studies. “It’s not the Democrats’ agreement. It’s not their president. They may just gleefully walk away.” WHAT ABOUT MEXICO? Even though Mexico agreed to a new deal with the U.S., it’s still only a “preliminary agreement in principle,” and Mexico could easily walk away. Lopez Obrador has signaled that his administration will govern pragmatically, but he is still a maverick who campaigned against the establishment and espoused left-leaning policies. If a new NAFTA turns into a political liability, he may be inclined to scuttle a deal.
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Ontario Superior Court that The Canadian Press Sept 13, 2018 A court-appointed monitor for the Sears Canada bankruptcy process says it opposes a proposal that would effectively allocate all the failed retailer's remaining assets to the company's underfunded pensions. FTI Consulting argues in a Sept. 7 filing to Ontario Superior Court that the pension proposal should be dismissed due to legislation and case law. A petition filed with the court in July by the pensioners claimed about 18,000 Sears retirees should have first claim on assets to reduce a roughly $260 million shortfall in their pension plans. However, Sears Canada had only about $158.3 million on hand plus a few properties that remain to be sold — meaning none of the company's other unsecured creditors would receive anything if the pensioners get first priority. If the pension motion fails, the remaining assets will be divided up proportionately among all classes of unsecured creditors. FTI says it's opposing the pension motion through its role as monitor — a sort of umpire assigned to help a judge sort out conflicting claims — in part because it doesn't appear any of the other unsecured creditors is in a position to challenge it. It says the other creditors are primarily small businesses and individuals including former employees, retirees, contractors, vendors and customers with warranty claims. The department store chain's last remaining stores closed their doors for the final time on Jan. 14 this year. |
How Ford is tackling
Dearborn — Ford Motor Co.’s $25 billion global restructuring is targeting its vast manufacturing and product development system, as well as its troubled operations in Europe and South America — the regions most likely to be hit with job cuts. The efforts, still taking shape, could shield the Blue Oval’s profitable North American operations from significant layoffs, two ranking sources familiar with the situation told The Detroit News, particularly if the national economy remains buoyant as Ford launches a new midsize Ranger pickup, new compact and midsize SUVs, and a revived Bronco. “It’s not about slashing costs and laying off people to get to prosperity,” Hau Thai-Tang, Ford's executive vice president of product development and purchasing, said in an interview this week. “It’s about becoming fitter so that we can reinvest that into delivering products that customers want and value — and doing it faster. It’s not that we have too many people or they’re not working hard or they’re not smart." But the expectation that Ford could execute a global restructuring over the next three to five years without impacting significantly its 86,000-person workforce in the United States is being greeted with skepticism outside the company. That’s because it defies the industry’s long record of restructuring, typically synonymous with voluntary buyouts, involuntary layoffs, plant closings or some combination of all three. "Ford is behind where they need to be on a number of fronts," said David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research. "What that says to me is there will be rationalization of their labor force. It's just the nature of the beast." In a note last month, Morgan Stanley wrote: "At this stage, we have assumed global headcount reduction of approximately 12 percent" — roughly 24,000 of Ford's 202,000 global workforce. "Such a magnitude of reduction is not without precedent in the auto industry.” It's not yet certain, either. Rival General Motors Co. books slightly less annual revenue and sells more vehicles worldwide than Ford with roughly 20,000 fewer employees. Last year, GM sold 52.7 vehicles worldwide per employee compared to 32.8 vehicles per employee at Ford. Two sources with knowledge of ongoing $11 billion restructuring talks focusing on Ford’s international businesses told The News the automaker expects to announce its plans for fixing Europe and South America as early as the end of this year. Ford employs 14,000 in South America and 54,000 in Europe, and its restructuring plans in those regions could include job cuts, but no final decisions have been made. “You have a morality about that," CEO Jim Hackett said in a recent interview, sidestepping a question about potential job cuts as part of a global restructuring. "You really think about them. And so if they have to go, you take care of them. "What I've said to the teams is that the mistakes we have — it's never going to come out of my mouth that factory labor is the issue. It's not. We've got to get right and fit. We've been managing the headcount. The company shrank in (the 2008-09) crisis and almost added all the cost back." Avoiding the high-profile bankruptcies that ensnared General Motors Corp. and Chrysler Group LLC nearly a decade ago allowed Ford to retain its dual-class shareholder structure enabling Ford family members to control the company. But it also ensured Detroit's No. 2 automaker would not be forced to make the kind of deep cuts now enabling GM to generate a similar amount of revenue with about 20,000 fewer employees worldwide. Cost-cutting in the global auto industry almost always includes some form of job cuts, be they consensual buyouts, involuntary layoffs or a combination of the two to reduce overall payroll. Ford is signaling that it has a better way to achieve its desired result of a “fitter” company without dreaded job cuts. Broadly speaking, Ford officials say, the automaker’s $25.5 billion workout can be separated into several buckets: first, the rationalization of product development, purchasing and manufacturing that is expected to wring an estimated $20 billion in costs from the operation. That includes transitioning from nine vehicle platforms to five global vehicle “architectures” with modular components, as practiced already by Toyota Motor Corp. and Volkswagen AG. One example: reducing the number of what Thai-Tang calls "excessive options" on vehicles. Ford uses nine different "hub bearings" on its vehicles, the part that enables a wheel to turn freely on its axle. But where's the valued added to the customer? “There’s no customer that’s coming into a dealer and saying, ‘You know, I want a different hub bearing,’” he said in an interview. “That’s not even something that’s visible to them. That’s just us not minding the shop. What is it about the business model that’s allowed that to happen?” Another example: designers and engineers working in an "energy room" — new spaces devoted to singular Ford products where designers, engineers and marketers solely meet to go over product plans — gave Thai-Tang three options mocked up with cardboard for a door hinge on the 2020 Bronco. The employees told him which of the three worked best, and the team decided to move forward with a design in minutes. That process would have taken weeks, and used more expensive materials to "design" the hinge options, in the past. The second bucket is a separate, $11 billion restructuring of money-losing operations in Europe and South America. It's likely to be a more traditional workout, reducing excess plant capacity and cutting jobs in a bid to turn chronic money losers into contributors to Ford’s bottom line. In recent weeks, the sources said, Ford officials have met with outside consulting groups recruited to help the company navigate its restructuring. As early as the fourth quarter, the automaker could detail the future of its partnerships with Mahindra Group in India and Volkswagen in Europe and South America, though actions contemplated for those regions are expected to run into next year. Ford does not expect to target its North American operations or its workforce in any meaningful way, according to a ranking source close to the situation, because its plants are running at or near capacity and because the operations generate the bulk of the automaker’s profits. Additionally, Ford is expected to grow its footprint in China, its No. 2 market. After larger-than-expected losses in China this year, Ford is launching several new vehicles there, is intensifying localization of some 90,000 Ford- and Lincoln-brand vehicles imported there from the United States, and is pushing to localize Ford’s leadership in China — including likely naming a Chinese national its next CEO in the region. Ford’s North American business is the only region in the company delivering solid, if slightly sub-par, margins this year. And belt-tightening has been a part of the plan Hackett inherited when he arrived in the c-suite in May 2017. The automaker cut 1,400 salaried workers in the U.S. last year through early retirement and buyout options. Ford is cutting sedans completely out of its U.S. lineup to make room for larger, more profitable and theoretically more desirable crossovers. Over the next five years, the automaker plans to trim $12 billion from what it expected to spend on materials for products; $7 billion from its product development and engineering processes; $5 billion from marketing and incentive spending; and $1.3 billion on manufacturing costs. All of that serves to give the automaker more for its money as it launches a slew of new products through 2023. Morgan Stanley, for its part, projects a 12 percent global workforce reduction would yield annual cost savings of $2 billion a year within 18 months. It envisions annual savings of another $1 billion from rationalizing engine architectures, as well as other asset write-downs. But exiting unprofitable global markets like South America or Europe altogether would be more difficult for Ford than rival GM, which sold its two money-losing European brands in 2017. A major reason: unlike GM,Ford has concluded it cannot sell its 115-year-old Blue Oval to a rival automaker in an under-performing region — one reason it publicly denied a Bloomberg report last month saying Ford was shopping its South American unit. The brand holds too much value, the thinking goes, to entrust it in a single region to outside management unconnected to the company or its legacy. "Like so much of the Ford investment thesis," Morgan Stanley wrote in a follow-on report about the potential benefits of a partnership with VW, this is "a show-me restructuring and capital realignment story. Investors are still wanting more action in the form of decisive restructuring, business unit transparency, capital allocation and external validation" of its Auto 2.0 mobility strategy. Through the first half of this year, Ford lost nearly $800 million total in South America, the Middle East, Europe and Asia Pacific. Only North America, home to the franchise F-Series line of pickups and a full stable of SUVs, delivered enviable profits to Ford's bottom line. In 2017, Ford lost $784 million in South America; lost $263 million in the Middle East and Africa; and made $234 million in Europe, a trend there that appears to be reversing this year. North American profits helped the automaker post a $7.6 billion profit for the year, underscoring the need for global restructuring. Britain's Sunday Times reported last weekend that Ford plans to cut thousands of jobs and ax car models in Europe as part of an effort to rejuvenate the business there, but Ford officials disputed the report. The Times said the company, the market leader in the United Kingdom, would cut the European sibling of the Fusion — which Ford plans to drop from its U.S. lineup after 2020. “Everything is on the table,” Bob Shanks, Ford's CFO, has said. “We have looked at every single part of the business. It’s a very complex endeavor. We are determined to turn this business around right throughout the whole company. There’s more work that’s underway.”
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Despite Trump tweet,
Washington – Ford won’t be moving production of a hatchback wagon to the United States from China – despite President Donald Trump’s claim Sunday that his taxes on Chinese imports mean the Focus Active can be built in America. Citing Trump’s new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America. Trump took to Twitter Sunday to declare victory and write: “This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!” But in a statement Sunday, Ford said “it would not be profitable to build the Focus Active in the U.S.” given forecast yearly sales below 50,000 For now, that means Ford simply won’t sell the vehicle in the United States. Kristin Dziczek of the Center for Automotive Research said that Ford can make Focuses “in many other plants around the world, so if they decided to continue to sell a Focus variant in the U.S. market, there are several options other than building it in the United States.” In April, Ford announced plans to stop making cars in the United States – except for the iconic Mustang – and to focus on more profitable SUVs. It stopped making Focus sedans at a Wayne, Michigan, plant in May. The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China. “Without the tariffs, the business case was pretty solid for that model in the U.S. market,” Kim said. Demand for small cars in the U.S. has been waning for years with relatively low gasoline prices and a shift from cars to SUVs and trucks. If Ford sold fewer than 50,000 Focus Active wagons per year, it would run a U.S. factory on only one shift per day, which isn’t cost-effective, Dziczek said. Automakers like to run plants on at least two shifts, and preferably three per day to cover the cost of building and equipping the factory, and to turn a profit. Ford also wouldn’t want to spend millions on equipment to build the Focus Active here because at low sales volumes it wouldn’t get a good return on its investment, Dziczek said. If sales were high enough to justify production at a U.S. plant, the price of a compact vehicle isn’t high enough to cover the difference in wages here, she said. “The margins are very slim,” Dziczek said. “Even if you had demand and volume, it’s still very difficult to build a small car in the U.S. profitably, which is why you find very few of them here.” In China, labor costs are about $8 per hour including benefits, but it’s more than $52 per hour in the U.S., according to Dziczek. Ford, BMW, Mercedes and others export about 250,000 vehicles to China from the U.S. each year, Dziczek said. Most of them are luxury cars and SUVs with higher profit margins that can cover higher U.S. wages, she said. For the Focus Active, the tariffs on Chinese vehicles changed everything. The United States on July 6 began imposing a 25 percent tax on $34 billion in Chinese imports, including motor vehicles. Last month, it added tariffs to another $16 billion in Chinese goods and is readying taxes on another $200 billion worth. China is retaliating with its own tariffs on U.S. products. The world’s two biggest economies are clashing over U.S. allegations that China deploys predatory tactics – including outright cybertheft – to acquire technology from U.S. companies and challenge American technological dominance. |
Trump warns
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Ford recalls 340K trucks By Tom Krisher DETROIT – Under pressure from U.S. safety regulators, Ford is recalling about 2 million F-150 pickup trucks in North America because the seat belts can spark and cause fires. Approximately 340,000 of the trucks are in Canada. The recall, which covers trucks from the 2015 through 2018 model years, comes about one month after the National Highway Traffic Safety Administration began investigating fires in the pickups, which are the top-selling vehicles in the United States. Ford said Thursday that it has 23 reports of smoke or fire in U.S. and Canadian trucks, but it’s not aware of any injuries. NHTSA began investigating in early August after getting five fire reports, including three reports that trucks were destroyed. According to Ford, seat belt pretensioners can generate excessive sparks when they tighten before a crash. That can ignite gases inside a support pillar between the front and rear seats, causing insulation and carpet to catch fire. The Regular Cab and SuperCrew Cab trucks were built between March 12, 2014 and Aug. 23, 2018, according to documents posted Thursday by NHTSA. The seat belt pretensioners were made by ZF-TRW and now-defunct air bag and seat belt maker Takata, which was purchased by Joyson, another auto parts supplier. Dealers will remove insulation and install heat-resistant tape to repair the trucks. They also will remove remnants of wiring tape and modify interior panels in Regular Cab trucks. Owners will be notified starting Sept. 24. In one of the complaints filed with the U.S. government, an owner in Grand Rapids, Michigan, told NHTSA that on July 7, a deer ran into the driver’s side of a pickup, causing minor damage. The side air bags inflated, and after five to 10 minutes, a passenger noticed a fire on the bottom of the post between the front and rear doors where the seat belts are located. “The truck went up in complete flames in a matter of minutes and is a complete loss,” the owner wrote. People who file complaints are not identified in the NHTSA database. Ford said in a filing Thursday with U.S. securities regulators that the recall will cost about $140 million and will be counted in third-quarter results. The company maintained its full-year adjusted earnings-per-share guidance of $1.30 to $1.50. |
New Ford watch By Gary Gastelu There's a new Ford watch that costs $461,500. But it comes with a car. Well, it’s really the other way around. It’s a special edition chronograph made by Autodromo that’s only available to owners of the $450,000 Ford GT supercar and lists at $11,500. The watch is assembled in the USA using Swiss movement, and features a knob and buttons styled after the switchgear in the mid-engine coupe. Buyers can pick the colors of the face, stripes and bezel to match those on their vehicle. It’s delivered in a carbon fiber box and comes with an aluminum case engraved with the car’s chassis number. Ford plans to make only about 1,000 GTs through 2020, and Ford Performance Marketing Manager Jim Owens doesn’t expect that every owner will buy a watch to go with it, so matching pairs may become hot tickets on the auction circuit, where GTs have already been sold for as much as $1.8 million. Too rich for your blood? There's also a fan version for $695, but anyone can buy one of those. Well, anyone with a spare $695 who thinks watches are still a thing. |
Sales of SUVs,
U.S. consumers continued to buy everything but sedans in August — and analysts said that could mean automakers get more competitive with the pricing of their SUVs and trucks. The industry saw sales rise compared to the same month a year ago driven in large part by a SUV, truck and crossover frenzy, and the fact that Hurricane Harvey took a bite out of last year's August sales figures. Subaru of America posted its best-ever sales month in company history. The automaker has posted 81 consecutive months of month-over-month sales gains. The shift away from cars also drove monthly sales increases of 4.2 percent at Ford Motor Co., 10 percent at Fiat Chrysler Automobiles and 1.3 percent at American Honda. But General Motors Co.'s total sales were down 13 percent for the month, according to sales figures obtained by The Detroit News. GM earlier this year stopped publicly reporting monthly sales figures, opting to report sales each quarter to provide what the company said was a better look at its performance. A spokesman for the automaker declined to comment Tuesday. Toyota Motor North America posted a 2 percent sales decrease when compared to August a year ago, when Hurricane Harvey took a bite out of selling days in the southern U.S. "Initial results imply a continued shift from passenger cars — mid-size sedans in particular — toward light trucks," Stephanie Brinley, analyst with IHS Markit, said in a note. "The shift in market preferences has already occurred, and declines now are often a function of inventory and slowing incentives. Automakers have and continue to adjust production of sedans to meet lower demand, and incentives on them have been slowing. Under these circumstances, the declines in passenger car sales are also less disruptive for automakers with flexible manufacturing capability and popular light-truck products." Analysts also expect incentive spending to increase as automakers try to attract consumers to SUVs as the market continues to plateau, and average transaction prices climb. As the market floods with SUV models — and the Detroit Three enter the throes of the pickup wars — analysts expect the industry will be able to discount vehicles to move more product. "Average transaction prices are up for the industry, as most manufacturers reported gains from the sales mix continuing to shift from cars to SUVs,” Tim Fleming, analyst for Kelley Blue Book, said in a statement. "Moving forward, the industry could see further discounts and incentives in these utility segments, as automakers continue to focus their attention on placing their products at the top of consumers’ consideration lists." Ford brand sales were up 4.2 percent in August due in part to strong fleet sales. Lincoln brand sales were up 2.7 percent. Total Ford sales were down 1.2 percent through the first eight months of the year. The automaker saw car sales plummet 21.3 percent in August compared to the same month a year ago. SUVs were up 20.1 percent, and trucks were up 5.7 percent. FCA sales rose 10 percent in August compared to a year ago on the backs of the Jeep and Ram brands. "Our August results highlight how the all-new Ram light-duty is coming into its own,” said Reid Bigland, head of U.S. sales, in a statement. “Ram light-duty total sales rose 55 percent to 36,798 vehicles for the month." The automaker sold 87,502 Jeep vehicles in August, with Wrangler setting a new record. Ram brand sales rose 27 percent as the automaker introduces its all-new Ram 1500 to the market. Chrysler and Dodge brands slid 3 percent and 18 percent, respectively. Toyota reported its August sales were down 2 percent compared to the same month a year ago in the U.S. Its Toyota and Lexus brands posted combined sales of 223,055 units. Toyota's Corolla sales were down 5.4 percent in August and 7.8 percent for the year. Its total car division slid 9 percent through the first eight months of the year. Toyota SUVs were up 11.7 percent through August; trucks were up 16.7 percent, with the Tacoma midsize trucks seeing 25 percent growth through August. Honda car sales slid 15.3 percent, while its truck sales grew 18.9 percent. The Accord, Honda's bread-and-butter vehicle, is down 14.1 percent through the first eight months of the year. Automakers are facing a sales plateau after consecutive years of record sales figures. The companies are also contending with dwindling U.S. interest in sedans and compact cars and a glut of used vehicles coming back to dealers, who most analysis companies say will sell the vehicles at a bargain. U.S. consumers are also becoming less keen on buying a new vehicle, according to Ford's analysis of the marketplace. Ford sales chief Mark LaNeve said Tuesday that Ford will push to launch competitive product in the new year. The Dearborn automaker is currently working with the oldest average vehicle age among the Detroit Three. "There's really good competition," he said Tuesday. "You've got to have great product...We've got to continue to run our (product) plan." Ford plans to cut sedans completely out of its product line up within the next few years and replace those models with new crossovers. The Focus Active was expected to arrive in the U.S. by late 2019, but the automaker cancelled plans to launch that vehicle in the U.S. The automaker plans to have nearly 90 percent of its sales volume in the U.S. to be trucks, SUVs or commercial vehicles by 2020. J.D. Power and LMC Automotive expected incentive spending to fall overall on top of the sales increase as automakers reduce spending on sedans and small cars. As consumers continue a transition into trucks and SUVs, average transaction prices are also expected to rise to $31,836, up nearly $600 compared to a year ago. "The auto industry still faces a prolonged and elevated level of trade risk, but overall sales are holding steady," said Jeff Schuster, Americas operations an global vehicles forecasts at LMC. "We no longer expect fleet sales to be ratcheted back in the second half, but we do see stronger competitive pressure on the volume brands fighting for share. The result is a total light-vehicle market that we expect to eek out a very slight increase — 0.1 percent — 2017." |
Labour Day Parade
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'Game-changer': Union leaders say they have had Kathleen Harris This Labour Day, union groups are marking what they see as a milestone in their movement — new clout in the NAFTA talks that have unfolded over the last year. While much has been said about the declining power of unions, labour groups say they're playing a crucial, unprecedented role in the negotiations. The Liberal government has brought in union leaders, as well as various industry sector stakeholders, to hear broad perspectives on how best to improve the 25-year-old trade pact. "I can't think of any trade agreement, ever, where labour has played any sort of an active role," said Jerry Dias, national president of Unifor, Canada's largest private sector union which represents the autoworkers. "NAFTA has been a game-changer for the labour movement and how working class people are treated as it relates to trade." After talks broke off in Washington Friday, Prime Minister Justin Trudeau worked the phones Saturday. Along with calls to former prime minister Brian Mulroney, Trudeau reached out to two of Canada's most powerful union leaders -- Dias and Hassan Yussuff, president of the Canadian Labour Congress. Trudeau thanked them for their input and offered a status report on talks. "They're not going to fold. They're not going to carve a bad deal just to appease the Trump administration," Dias said of the conversation. Dias said the key sticking points — cultural identity, a dispute mechanism and supply management — are significant and he doesn't expect a quick resolution. Political cloutAfter unions played a role in ousting the Harper government in 2015, Dias said the Liberal government appears to understand the influence of the labour movement in politics. "I think they understand that labour is not just a nuisance; that we actually have a voice, we represent millions of people and we're going to play a big role in the politics of the country," he said. "They have a choice. They can exclude us and then we will exclude them, or they can include us." Adam Austen, spokesperson for Foreign Affairs Minister Chrystia Freeland, said the government values the input of labour groups "immensely" and has consulted them throughout the negotiations. "Labour unions have played a critical role throughout this negotiation and were crucial in helping shape the Canadian negotiating position, in particular on rules of origin for the auto sector and the deal's labour provisions, both of which have been strengthened, in part due to Canadian ideas," Austen wrote in an email. Role in shaping Canada's positionsWhile not directly at the table, union leaders have routinely met with the NAFTA negotiators, have been briefed on developments, and have made trips to Washington during the sessions. Yussuff, who is on the minister's NAFTA Council, said time will tell how influential their input has been on the final NAFTA deal. But he said for the first time, unions have had a real role in shaping Canada's bargaining positions. "It's been unique in the sense that we've been able to have some access to learn what's been going on at a relatively early period and more importantly, to remind the government to take care and protect the key sectors that are all driving this economy ... that are going to protect our members' jobs in the long-term." Trade lawyer Mark Warner said, while the government kept the union leaders abreast of developments through briefings, he's not convinced they had tangible impact on the talks. "In a concrete sense, has that affected the negotiating positions of the government? I'm not that sure I've seen evidence of that to be honest," he said. 'Progressive' trade agendaTo create distance from the previous Conservatives, the Trudeau government has promised a "progressive" trade agenda to try to incorporate gender equality, environmental protection, Indigenous rights and labour standards into trade agreements. It's not known what progressive issues will be in, or out of, an updated NAFTA, but new Trade Diversification Minister Jim Carr's mandate letter does not mention advancing a progressive trade agenda. NAFTA talks will resume in Washington Wednesday, after Donald Trump again threatened over Twitter to shut Canada out of the deal and warned Congress to butt out of negotiations with Canada. Trump tweeted that "there is no political necessity to keep Canada in the new NAFTA deal." Andrew Leslie, the parliamentary secretary to the foreign affairs minister, shrugged that off as rhetoric as talks go down to the wire. "These negotiations have been taking place over the past year," he said in an interview with CBC News Network. "Literally multiple hundreds of issues have been resolved. It's the last three to four and we always expected things to have a certain amount of drama and excitement the closer we got to the finish line." |
Is there even such a The bestselling non-truck in America is made in Canada and has Mexican parts Peter Armstrong One of the most popular vehicles in the United States is a perfect example of why it would be so hard and so destructive to impose tariffs on Canadian-made cars in the name of protecting American ones. The Toyota RAV4 — the bestselling non-truck in America — is made in Woodstock, Ont. In fact, 247,633 of them were made there last year. The process to build each one is an intricate dance of manufacturers and suppliers in multiple countries, with hundreds of trucks a day crossing borders back and forth between Canada, the United States and Mexico to deliver parts.
There are more than 300 trucks a day pouring into the Woodstock plant, criss-crossing borders and making sure the operation has the parts it needs. "From Woodstock, there's a truck going to Michigan every single hour of every day to pick up parts," says Ray Tanguay, former CEO and president of Toyota Motor Manufacturing Canada. And there are other trucks going to various suppliers across the continent. The Woodstock plant operates under a "just in time" delivery process. That means there's no warehouse to store parts. All those trucks bring all those parts by the hour. They're unloaded and funnelled into the manufacturing process immediately. "Just in time means we are very dependent on suppliers' reliability and quality," says Tanguay, who most recently served as an adviser on the auto industry to the federal and Ontario governments. But it also means the entire process is dependent on trade agreements, border crossings and duty agreements. It's also dependent on the absence of paperwork. "When the auto pact was signed in 1965 they set it up as a paperless system," says Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. So all those shipments move without someone in every factory needing to fill out one more form. There's one less person at the border checking that paperwork and one less employee at each manufacturing plant making sure the papers are in order. "The typical automobile has between 5,000 and 8,000 individual components," DesRosiers says. "As we put them together these components cross the border multiple times," he says. Tariffs would add to the cost of any vehicle. But they aren't the only added cost — DesRosiers says the additional paperwork involved in any new system of tariffs or duties would add an additional $1,000 to $2,000 per vehicle. He says the automotive industry has spent years making the system ever more efficient. Just in time delivery, which began with plants like the one where RAV4s are made in Woodstock, has meant savings spread across the entire system. "It essentially took tens of billions of dollars of costs out of the system in making vehicles and almost all of that [saving] has been passed onto the consumer," DesRosiers says. The fear is now that a broader "Made in America" sentiment is trying to change that system. Some Americans (not only their president) want to see more cars made in the U.S. with more American-made parts in them. "Real globalization of the industry has created tremendous efficiency. And they're asking us to undo some of that efficiency in order to meet higher standards of content in North America," says Kristin Dziczek, vice-president at the U.S.-based Centre for Automotive Research. The problem with that, she says, is that it's become increasingly difficult to determine what Made in America even means. She points to the American Automobile Labeling Act. Even it, the only public source of content data in the U.S., counts both American and Canadian manufacturing as "domestic." "There is no way to tell what an American car is" she says. "Or how American your car is on any public data source available to consumers." So, consumers can't tell where their vehicles are really made. The auto industry has spent decades making these intricate and complex supply chains more efficient. That's saved billions of dollars — savings that have been passed onto the consumer. (DesRosiers says the average cost of a car, adjusted for inflation, is about the same as it was 15 years ago.) Undoing or even complicating that process will rattle an entire industry and add thousands of dollars to the cost of a vehicle. Which is why DesRosiers can't understand why the Trump administration would even consider going down that path. "You'd need an absolute idiot in Washington to do that," he says. "Even a Grade 12 economics student could figure out this is the absolute worst thing to do for both countries." |
Retiree Norm Colville
Visitation - Thursday August 30, 2018 - 4-8 pm Brampton Memorial Gardens
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Moody's hands Ford lowest
Moody's Investors Service downgraded Ford Motor Co. to its lowest investment grade rating Wednesday, calling the company's outlook "negative." The ratings agency said the downgrade comes amid "the erosion in the company's global business position and the challenges it will face implementing its Fitness Redesign program." The new Baa3 rating, considered a risky investment, is one grade above Moody's rating for junk bonds. Ford CEO Jim Hackett and his executive team expect to lead a $25 billion global restructuring plan over the next few years. Moody's said in a statement that the restructuring, coupled with "softening" North American margins, languishing earnings in China, and losses in South America and Europe have "contributed to the erosion in Ford's key credit metrics between 2016 and the twelve months ending June 2018." The ratings agency said the restructuring should take aggressive actions — like the company's decision to ax all its sedan models — and happen while Ford posts strong North American profits and has strong liquidity. But it will take several years for benefits of a restructuring to materialize, Moody's said. The company will also be spending money to restructure while it invests in autonomy, electrification and mobility ventures, next-generation technology that often referred to as Auto 2.0. "Ford's negative outlook recognizes the significant challenges of effectively executing the full scope of the Fitness program, and the extended time period over which material benefits might be achieved," Moody's wrote in a note. "In addition, the considerable financial and managerial resources devoted to the Fitness program will reduce Ford's ability to contend with any unexpected cyclical downturn." Ford spokesman Brad Carroll said in a statement that the company has delivered strong financial results for nearly a decade, and has a strong balance sheet that provides financial flexibility. "We know we can capitalize on our strengths, bolster under-performing products and regions and disposition where we cannot make an appropriate return," Carroll said. "We’re confident that as we do, the market will recognize our progress." Moody's said Ford's rating could be further downgraded if the company does not show progress in "pursuing the Fitness initiatives" by early to mid-2019, or if the company fails to address losses in its major regions around the world. The chances for an upgrade of Ford's ratings through 2020 are "very modest," Moody's wrote. That could be possible if the company successfully executes Hackett's vision, which would require hitting a 10 percent earnings margin in North America, and becoming competitive again in China.
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Canada, U.S. see common Tuesday, August 29, 2018 WASHINGTON — Canada and the U.S. agreed Tuesday that one of NAFTA's most significant hurdles — defining the content rules of North American autos — may have been resolved by Monday's side deal between the Trump administration and Mexico. The White House is calling on Canada to endorse what President Donald Trump has described as the North America Free Trade Agreement's replacement, by the end of the week. Trump has already rebranded it the "United States-Mexico trade agreement." Top members of Canada's negotiating team made an abrupt return Tuesday to NAFTA talks in Washington, where they face stiff pressure from Trump to join the deal his administration struck earlier in the week with Mexico. Foreign Affairs Minister Chrystia Freeland, who cut short a week-long diplomatic trip to Europe to travel to Washington, met Tuesday with U.S. Trade Representative Robert Lighthizer. It was her first in-person NAFTA meeting with Lighthizer since the spring. ‘POSITIONS HAVE MOVED’ After their one-hour meeting, Freeland told reporters that over the coming days, the negotiating teams would search for new areas of compromise — but she declined to answer direct questions on what could be on the table for Canada. "Some positions have moved since the last time we met face to face and we'll be looking closely at what those changes are and what they mean for Canada," said Freeland, who credited Mexico for making "tough decisions" to compromise on labour as part of its auto rules of origin talks with the United States. The United States and Mexico agreed workers earning at least US$16 an hour should make 40 per cent to 45 per cent of autos. They also agreed that 75 per cent of automobile content would come from within North America, an increase from the current 62.5 per cent. "The fact that that agreement, on those difficult issues for Mexico, was able to be reached definitely clears the way to have significant, substantive and, I hope, productive conversations with the U.S. this week," said Freeland, who called it the autos deal a positive for high-wage countries like Canada and the United States. All sides, she added, agreed to delve deeply into specific issues Wednesday. Earlier in the day, both Larry Kudlow, the director of Trump's National Economic Council, and U.S. Commerce Secretary Wilbur Ross turned up the heat on Canada's negotiators during televised interviews. Serious differences remain on other issues, including the dairy sector, how to settle disputes and a U.S. proposal for a sunset clause. But Ross also told the Fox Business Network program "Mornings With Maria" that the American and Mexican progress on autos would be palatable to Canada. ‘POSITIVE PROGRESS’ Prime Minister Justin Trudeau signalled agreement. "There's been some very positive progress particularly on autos and we're glad to be engaging as we have been," he told reporters Tuesday in Longueuil, Que. Trump himself has threatened automotive tariffs that would cause considerable damage to both economies if Canada declines to join the U.S.-Mexico deal. He also warned he would terminate the 24-year-old NAFTA, a treaty between Canada, the U.S. and Mexico that has been economically significant for the continent. For the last five weeks, Ottawa has watched from afar as Canada's two continental partners moved forward with one-on-one trade talks of their own. "We have been encouraged by the progress made by our NAFTA partners over the past weeks," Trudeau said. "This was an important step to moving forward on renegotiating and improving NAFTA." The United States and Mexico also agreed on issues such as intellectual property, digital trade, labour, financial services and Mexico's de minimis threshold for duty-free online sales that cross borders. In addition, the new deal would expire after 16 years with reviews every six years, a senior U.S. administration official said Monday during a briefing. Canada had rejected an earlier U.S. proposal that NAFTA 2.0 be renegotiated — or sunsetted, in trade lingo — every five years. Trudeau sidestepped a question about the new version of the sunset clause in the U.S.-Mexico deal. NAFTA A ‘RIP OFF,’ SAYS TRUMP Trump, who has called NAFTA a "rip off" for the U.S., called Monday's announcement a big win. He then delivered his ultimatum to Canada. "One way or the other, we have a deal with Canada," Trump said from the Oval Office, where he was joined on a speaker phone by Mexican President Enrique Pena Nieto. "It will either be a tariff on cars, or it will be a negotiated deal; and frankly a tariff on cars is a much easier way to go, but perhaps the other would be much better for Canada." For Trump, striking a new trade deal with Mexico — and possibly Canada — would be welcomed as a political win for Republicans ahead of the crucial U.S. midterm elections this fall. Mexico would like to seal a new trade agreement before the incoming government of president-elect Andres Manuel Lopez Obrador takes office Dec. 1. |
New Ford management teams
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What may be the world's
By Gary Gastelu An immaculate 1978 Ford Pinto Squire Wagon was auctioned Thursday night for an eye-popping $33,000. The green, wood-sided wagon was sent across the block at the Mecum Monterey auction by collector Peter Escovedo, who has a penchant for unusual mundane American cars and purchased it himself about eight years ago. The three-speed automatic model is an unrestored survivor with just over 15,000 miles on its odometer and its original plaid interior. Even among the multimillion dollar cars it was rubbing shoulders with at the auction, it was a standout.
“I had a lot of car friends who knew the car well making wagers on what it would go for,” Escovedo told Fox News after the sale. “I knew it was a fantastic car and that someone would appreciate it enough to pay some coin for it," he said. Escovedo said he was a little worried, because he was offering it with no reserve, but then it got a ton of attention at the event. The book value for a typical Pinto like it is just around $2,500, but there aren’t many, if any, left that can compare.
“It was exciting to pass on what is probably the world’s most expensive Pinto,” Escovedo said. “No matter the price, I think the new owner got a great car and that’s probably what he thought too.” |
The benefits to raising Ontario’s
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Ford recalls electric car August 25, 2018 Ford is recalling the charging cords for more than 50,000 plug-in hybrid and electric cars in North America — 1,327 of them in Canada — because they could cause fires in electrical outlets. The company says the 120-volt cords came with certain 2012 through 2015 Focus electrics and some 2013 through 2015 Fusion Energi and C-Max Energi plug-in hybrids. Ford says plugging the cords into outlets that aren't on a dedicated circuit or are on damaged, worn or corroded circuits could cause wall outlets to overheat. The company says it has reports of four fires involving C-Max cords, but no injuries. In three of the fires, owners used extension cords, which Ford says it tells owners not to do. In the fourth fire, Ford says the cause was inconclusive but it does not believe the blaze was related to the cord. Dealers will replace the cords with ones that can sense high temperatures and shut off charging if necessary. Owners will be notified by letters starting next week. Ford says owners can keep using the original cords but should follow owners-manual instructions that spell out requirements for wall outlets. |
Ford unbridles 50th-anniversary
Royal Oak – Woodward Dream Cruisers like to flex American muscle, and Ford on Thursday showed off its latest hard-body — the $130,000 limited-production Cobra Jet, the most powerful NHRA Mustang drag racer ever. Celebrating the 50th anniversary of the first Cobra Jet at the 1968 National Hot Rod Association Winternationals, Ford says its latest earth-pawing steed will break the tape in the quarter-mile in the mid-eight-second range at about 150 mph. While the 565-horsepower Cobra Jet shares a chassis with the current sixth-generation Mustang, it comes equipped with significant modifications including a solid rear axle, three-speed racing transmission, huge hood bulge housing a supercharged V-8, skinny front tires and 9-inch rear slicks to put down the power.
A stripped-down interior helps shed pounds. Out back, a wheelie bar and drag chute immediately identify the Mustang as a dragster. Missing are the Mustang's signature quad-tailpipes. The Jet's exhaust simply stops at the headers underneath the cockpit, creating a deafening roar. The Cobra Jet will do battle against the similarly equipped Chevy Camaro COPO and Dodge Challenger Drag Pack at quarter-mile Midwest drag strips like Norwalk in Ohio as well as the legendary Pomona, California strip. The Detroit Three brands dominate NHRA drag racing.
Unlike the street-legal dragsters that burned up Woodward Avenue in Pontiac last Saturday to open Cruise week, Stock class dragsters like the Cobra Jet do not come with VIN numbers and are not street legal. Like the Camaro COPO, which limits production to 69 dragsters every year in honor of its 1969 debut, Ford will only build 68 Cobra Jets. With the resurgence of Detroit muscle cars in the early 21st century, the Detroit Three have resuscitated dragster variants that were staples of the late '60s and early '70s. "This is the fastest Cobra Jet ever. There's a lot that's new on this car," said Cobra Jet engineering manager Dave Born at Ford's Royal Oak Dream Cruise stand on Woodward next to the Oxford White beast with a Cobra graphic snaking up around the rear wheels. Rules require that NHRA dragsters use a production-based motor. So Ford stuffs a 5.2-liter variation of its Coyote V-8 that is significantly downsized from the original, 1968 car’s 7-liter ground-pounder. A 3.0-liter Whipple Supercharger helps the new car pump out 565 ponies compared to the '68’s 335. Buyers will take Ford's turn-key dragster and race it in NHRA's Stock class. Pro teams like Watson Racing will heavily modify the Jet for NHRA's wild Factory Stock Showdown class and generate upwards of 1,000 horsepower. This May, Chuck Watson, Sr. crossed the tape in just 8.07 seconds at over 174 mph. Mustang Cobra Jets and Camaro COPOs have dominated NHRA racing, but Dodge have come on strong recently with Illinois racer Geoff Turk becoming the first Factory Stocker to break the mythical 8-second barrier this spring with a 7.99-second shot in his Drag Pak.
While no Stock dragsters ran down the Woodward Avenue drag strip last weekend, one of the sport’s biggest names — Leah Pritchett, who races a Drag Pak in Factory Stock — was there driving her other NHRA dragster, a 11,000-horse Top Fuel slingshot. The new Mustang Cobra Jet can be ordered from Ford dealerships in either Race Red or Oxford White. Teams can outfit the new car with exclusive 50th-anniversary graphics and badging. Customers can order now at an MSRP of $130,000. “From the very first Mustang Cobra Jets dominating the 1968 NHRA Winternationals to our modern-day racers, the Ford Performance Parts team continues to build on Cobra Jet’s success at the track over five decades,” said Ford Performance Parts chief Eric Cin. “This has inspired generations of Mustang fans to create their own performance machines for the street.”
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Canadian travellers should
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Toolmakers caught Automotive News A profit pinch point is developing for automakers and suppliers working on new vehicle platforms: the cost of the tools to build them. Toolmakers are adding tariff costs to their prices, says Laurie Harbour, a consultant who works closely with the North American supplier and tool-and-die industries. Harbour warns that a wave of higher-than-expected bills from tool shops will soon hit the auto industry. Toolmakers are dealing with higher prices for steel as a result of a new 25 per cent U.S. import tariff on the metal, as well as tariffs on specific Chinese-made automotive tooling. Imported automotive injection molds have been hit with a tariff, and that is spinning uncertainty through the tooling industry, said Harbour, CEO of Harbour Results Inc. in suburban Detroit. A major shift in automotive tool manufacturing has occurred over the past two decades with China emerging as a key source for North American manufacturers. Further complicating the outlook is how the United States and Canada will resolve the North American Free Trade Agreement. Some 80 per cent of the auto industry's injection molds are traditionally produced in Canada — largely in Windsor. In some cases, Canadian tooling companies also now rely on Tier 2 content from China. "Every tool out of Windsor will face an added tax," Harbour said. "It will change the equation on every part and every vehicle that relies on that tool. "Adding 25 per cent to the price of an item can have a huge impact on its profit margin," Harbour said. "It's not clear who's going to absorb the added cost. If I'm a toolmaker, it might be all of the margin I had on the job." Vehicle projects require large numbers of new tools. A single front fascia package might require the creation of 50 tools. A vehicle redesign could involve $200 million worth of tool orders. Harbour said tool shops and suppliers are scrambling to understand how they will be affected by tariffs on molds, steel and aluminum. She said some of her clients have been asked by customers not to source the tools they now need for future vehicle programs from China. Some suppliers have even been asked to claw back tool orders they made with Chinese vendors, she said. The new border scrutiny is requiring Canadian tool suppliers to provide certificates of origin to account for the content of their products. Harbour is advising clients to assign dedicated managers to track trade issues. "On the positive side, this could be great news for U.S. tool producers," Harbour said. "We're already seeing some tool work leave China and come back to North America. I think you could see many customers deciding that it's just too risky to rely on imported tools, and just opt to make what they need here. "But the trouble right now is the uncertainty," she said. "These programs move on a tight schedule. There's not much time for unknown factors."
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Despite car cuts, Ford brand's Automotive News DETROIT — The Ford brand's U.S. lineup will grow to 23 nameplates — three more than today — in the next five years, despite plans to stop selling sedans in the region, a top company executive said Thursday. The automaker's Canadian lineup mirrors that of the one in the United States, with slight differences among Transit wagons. Ford Motor Co. product chief Hau Thai Tang said the brand would add nine nameplates — seven of which will be pickups and utilities — through 2023. They will fill holes left by eliminating the Fiesta, Taurus, Fusion, C-Max, Flex and all but a wagon version of the Focus, and expand the brand into several new segments, resulting in a net gain of three nameplates for the brand. The product overhaul comes as Ford works to decrease its average showroom age from 5.7 years today to 3.3 by 2020. It hopes to have the freshest showroom in the industry by that time. "It's like selling fish and vegetables," Thai-Tang said at a media event tied to this weekend's 2018 Woodward Dream Cruise in suburban Detroit. "The fresher it is, the better they do." Ford executives have vowed to replace the sedans they're phasing out of North America with vehicles employing different body styles. The brand also is adding two off-road utilities in the coming years: the Bronco and a smaller off-road crossover that has yet to be named. Other new nameplates include the Ranger midsize pickup, a long-range battery-electric crossover inspired by the Mustang, and a commercial autonomous vehicle. Ford also is reportedly considering bringing a compact pickup to market by 2022. As it redesigns many of its vehicles, Ford will place them on one of five modular platforms: rear-wheel-drive/all-wheel-drive body-on-frame; front-wheel-drive/awd unibody; commercial van unibody; rwd/awd unibody; and a unibody platform for battery-electric vehicles. All five will be able to accommodate hybrid vehicles. "This is a profound shift in terms of how Ford is thinking about the business, and how we're working," Thai-Tang said Thursday. Reiterating a presentation to the 2018 J.P. Morgan Auto Conference in New York last week, Thai-Tang said the flexible architectures will help Ford cut costs and boost the efficiency of its supply base. He said Ford can unlock 70 percent of the value content of a vehicle by moving to the modular approach. Thai-Tang and other Ford executives are attempting to offer more clarity on the company's plans amid increasing pressure from Wall Street to better detail CEO Jim Hackett's turnaround efforts, which will include an US$11 billion restructuring. "We believe," Thai-Tang said. "I think we have to do a good job telling the story and the rationale, and giving [analysts and investors] tangible proof points. That's the challenge for all of us."
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Ottawa preparing response in August 17, 2018 OTTAWA — With threats of devastating U.S. tariffs hanging over the auto sector, Canada's economic development minister says Ottawa is considering every possible way it could respond if the Trump administration follows through on its warning. Navdeep Bains said Plan A is to continue encouraging the U.S. to back away from the tariff threat, which industry has warned would inflict significant damage on both countries' economies. But just in case they are applied, Bains said Ottawa is considering "every conceivable option." "We're taking nothing off the table at this stage," Bains said in an interview. "We're looking at every tool in our toolbox." Bains declined to share specifics when asked about potential industry support in Canada or retaliatory actions against the U.S., however, he noted how Ottawa took several steps to respond to American steel and aluminum duties. Earlier this summer, Ottawa applied retaliatory tariffs on $16.6-billion worth of U.S. imports of steel, aluminum and other products. It also announced a financial aid package for industries caught in the crossfire, including up to $2 billion in new funding and support for workers in steel, aluminum and manufacturing sectors. Levies, however, on the critical auto industry would have far bigger impacts on Canada's economy — and would likely call for a far greater response. "I don't want to get into the speculation game, all I can assure you is that we will continue to support the workers and we will continue to support the industry as we've done so in the past," said Bains, who added that the government first needs to genuinely understand what the tariffs would look like and how they're applied. "We take nothing for granted, we're doing our due diligence, we're doing our homework." ‘WILL TAX CARS’ U.S. President Donald Trump has made repeated threats — including one late last week — that he would slap Canada with auto tariffs. In a tweet that appeared to reference NAFTA's ongoing renegotiation, Trump wrote that the "deal with Mexico is coming along nicely" and that "Canada must wait." Trump then sent a warning to Ottawa: "Their Tariffs and Trade Barriers are far too high. Will tax cars if we can't make a deal!" Ottawa has been on the NAFTA sidelines for a fourth straight week while it awaits the completion of one-on-one talks on the deal between the U.S. and Mexico. Bains said Canada has been presenting its case to the U.S. administration, state governors and other American lawmakers about the negative consequences of the tariffs on the highly integrated auto industry for both countries. Last month, Canada's deputy ambassador to Washington, Kirsten Hillman, delivered a message during testimony at U.S. Commerce Department hearings that Ottawa would retaliate with auto tariffs of its own. The Commerce Department is investigating whether the duties should be applied based on the premise that auto imports from Canada pose a national security risk to the U.S., an idea Ottawa has rejected. To help figure out Canada's potential responses, Bains said he's spent much of his summer listening to the auto industry. The process included a conference call Wednesday with the Canadian Automotive Partnership Council, which has a membership that includes CEOs of the country's five auto assemblers and of its leading parts suppliers as well as representatives from labour unions, academia, dealer associations and industry ministers from Ontario and Quebec. ‘PEOPLE ARE NERVOUS’ Council member Jerry Dias, president the country's largest private-sector union, said the federal government has been signalling it would do something "meaningful immediately to shore up the companies" in response to U.S. auto tariffs. Dias expects a federal package to include many parts, such as incentives, work-sharing programs and guaranteed loans. "People are nervous," he said, adding it would be "incredibly problematic" if Trump moved ahead with the tariffs. Dias, however, isn't convinced Trump will follow through because of how much damage the levies would cause to the powerful U.S. auto sector. Political opponents say Ottawa needs to do a better job of helping people and businesses affected by U.S. tariffs already in place. Tracey Ramsey, an NDP MP from Windsor, Ont., says she's heard from many people who have had a tough time navigating government agencies as they search for key information, such as applying for tariff exemptions and for assistance under the $2 billion worth of support promised by Ottawa. Earlier this week, the opposition New Democrats called on the Liberals to create a national task force on tariffs that would streamline the process by creating a single government portal. |
Marchionne exposed in FBI
Detroit — Fiat Chrysler's longtime CEO Sergio Marchionne gave an expensive Italian watch to United Auto Workers Vice President General Holiefield and failed to disclose the gift while being questioned by federal investigators, two sources told The Detroit News. The sources describe a dramatic "gotcha" moment during a secretive July 2016 meeting between Marchionne, head of Fiat Chrysler Automobiles NV, and investigators. It ended with the auto executive exposed to the possibility of federal charges. Marchionne, 66, was never charged before he died July 25 in a Zurich hospital. The auto executive's gift of a watch to a ranking union leader could bolster any criminal case against FCA, which has been named co-conspirator in the case along with the UAW. Both organizations could face criminal charges, fines and governmental oversight. Flanked by his white-collar criminal defense lawyer, William Jeffress, at the U.S. Attorney's Office in Detroit, Marchionne was asked by investigators whether he had given UAW leaders valuable items. Marchionne said no, according to the two sources, who spoke under the condition of anonymity because they were not authorized to discuss the case. Investigators then confronted Marchionne with evidence he had given Holiefield a custom-made Terra Cielo Mare watch in February 2010. The Italian watchmaker has produced custom-made, limited-edition timepieces with the Fiat logo emblazoned on the dial since at least 2006.
A 2014 model featuring the Fiat logo and a mustard-yellow dial retailed for $2,245. The watch given to Holiefield came with a hand-written note from what documents identify only as an unnamed FCA executive: “Dear General, I declared the goods at less than fifty bucks. That should remove any potential conflict. Best regards, and see you soon,” according to federal court records obtained by The News. It is unclear whether investigators showed Marchionne the watch and note or just photographs of them, and it is unknown whether federal agents have the watch. "There is a lot of intrigue here," said Peter Henning, a Wayne State University law professor and former federal prosecutor. "Prosecutors had him and had leverage over him. This was an arrow in the government's quiver." Holiefield died in March 2015. The next year, Holiefield's home in Harrison Township was raided by federal agents investigating his widow, Monica Morgan-Holiefield, who was convicted and sentenced to 18 months in federal prison last month for her role in the scandal. The raid was one stop in a broader series of searches that included the homes of Alphons Iacobelli, the automaker's top labor negotiator, and former UAW Vice President Norwood Jewell. An inventory of items seized during the raid at Morgan-Holiefield's home is sealed in federal court. Also unclear is how Marchionne explained the watch after being confronted by investigators. It is unknown whether Marchionne reached an agreement before talking to the government that would have granted him limited immunity as long as the auto executive told the truth. "If you don't tell the truth, all bets are off," Henning said. "If you lie, the government can use what was said against you. The FBI doesn't give you a free pass on lying." It is unclear why Marchionne was never charged. The potential charges include making a false statement and violating a federal labor law barring employers from giving union officials money and valuable items. "Prosecutors are playing the long game," Henning said. "We don't know what would have happened in six months if his health had been all right." It is possible FBI agents and prosecutors continued to build a criminal case against Marchionne, Henning said. "He could have said he forgot about the watch, so the government has got to be a little careful," he said. "When he said 'no,' it looks like they've got him, but the government has to ask if maybe it's not worth charging him but get his cooperation." The custom-made timepiece by Terra Cielo Mare is described in court records as an example of a stream of illegal benefits flowing from Fiat Chrysler to labor leaders during a years-long conspiracy designed to wring concessions from the UAW. Federal prosecutors have left clues to Marchionne's involvement in hundreds of pages of federal court filings that referenced, but never publicly identified, the auto executive. Instead, the government identified Marchionne only as "FCA-1" as the investigation continued and prosecutors secured convictions against three Fiat Chrysler officials. Fiat Chrysler released a statement to The News on Wednesday: “FCA US continues to cooperate fully with this investigation. The company also confirms that Sergio Marchionne met with the government in July 2016, in the spirit of full cooperation, where he answered questions to the best of his recollection. As the U.S. attorney’s investigation is ongoing, the company cannot comment further.” The U.S. Attorney's Office would not discuss the meeting with Marchionne or say whether he was a target of an investigation that has led to seven convictions. Those include Iacobelli, who is scheduled to be sentenced Aug. 27. Iacobelli was accused of using more than $1 million in Fiat Chrysler funds on a Ferrari 458 Spider convertible, which he outfitted with an “IACOBLI” vanity plate, a pool at his Rochester Hills mansion and two solid-gold, bejeweled Montblanc fountain pens that cost $35,700 each. The first reference to Marchionne in federal court records is on page 19 of a 42-page indictment last year charging Iacobelli and Holiefield's widow with conspiring to violate federal labor laws. The indictment outlines a scheme by Fiat Chrysler executives to keep UAW officials "fat, dumb and happy." Executives funneled money and gifts to labor leaders through the jointly operated UAW-Chrysler National Training Center, according to the indictment. UAW leaders who served on the training center's board were given credit cards paid for by the automaker. UAW officials were given free rein to buy personal items, including $1,000 pairs of Christian Louboutin shoes, jewelry, purses, and a $2,180 shotgun for Jewell, according to court records and interviews. Jewell has not been charged with a crime. UAW President Bob King was investigating how Holiefield and other union officials were using training center credit cards, according to the indictment. That month, King’s senior assistant asked an unnamed Fiat Chrysler official for the credit card records, according to the Iacobelli indictment. The unnamed Fiat Chrysler official emailed Iacobelli. “We can’t provide the requested type of information to such people,” the email read. “If we tell (King and his assistant) that we aren’t giving them (expletive), what are they going to do, tell (FCA-1) we are being uncooperative? If so, so what?” “We are providing nothing,” Iacobelli responded, according to the indictment. “We’re gonna have fun with these evil people.” The conspiracy is damaging and sows distrust among UAW members, Henning said. "More than anything, it shows union leadership appears to have been bought with trinkets," he said. "The mistrust this fosters among union members is incredible." |
Flying cars could be on the horizon
Keith Laing, Washington — With the push of a button and wings that fold down, cars capable of driving at highway speeds might one day be able to turn into flying machines and leave all that ground-traffic behind. In fact, one Massachusetts-based company says as soon as next year it will offer a hybrid vehicle that does just that. It says the vehicle — known as the Transition — will be capable of converting "from drive mode to flight mode in under a minute." The company behind it, Terrafugia Inc., was purchased last year by Volvo parent Zhejiang Geely Holding Group. Other big-name companies also are getting in on the act. Uber has selected Dallas and Los Angeles to test a vertical-takeoff and landing service known as uberAIR. It plans to run demonstrator flights in 2020 and begin commercial operations in 2023. Additionally, aerospace company Airbus teamed with Italdesign to premiere a concept vehicle called the Pop.Up at the 2017 Geneva International Motor Show. A passenger capsule can disconnect from the four-wheel road unit and be lifted into the sky like a helicopter with eight counter-rotating rotors. Audi signed on to the project this year. Anna Mracek Dietrich, co-founder and regulatory affairs representative of Terrafugia, said her company was founded in 2006 by five pilots "who all wanted to something in general aviation that's innovative that would make it easier to fly." After testifying at a recent congressional hearing on "urban air mobility," Dietrich told The Detroit News she was pleasantly surprised by the reception she received from lawmakers. "It speaks to a lot of excitement and latent demand for vehicles that make aviation for personal mobility more attainable," she said. Her testimony was delivered to the U.S. House Science, Space and Technology Committee, which met last month to examine the regulation — and possibilities — of flying cars. “For decades, flying cars have been the object of our imagination," said committee chairman U.S. Rep. Lamar Smith, R-Texas. "They represent aspiration, innovation and the freedom of exploration." He said advances in batteries and computers are providing companies "with the tools they need to turn science-fiction into science-fact.” Auto industry observers are more skeptical. "We have flying cars already. They're called helicopters," said Rebecca Lindland, senior analyst at Kelley Blue Book. "The problem is that they're way too expensive and the infrastructure isn't there for widespread use. But I can tell you that wealthy people in the New York area use helicopters for commuting." Lindland acknowledged that major companies are exploring development of flying cars, but she said it will take a lot of work to make them affordable for mass-production. "I'm not saying it's not going to come," she said. "We have the technology. We can build these things. The question is, can anybody afford it?" Another complicating factor is air-traffic control. Access to airspace over the United States is strictly regulated by the Federal Aviation Administration, which is still wrestling with the process of developing rules for unmanned drones. Terrafugia's Dietrich said the company is working with FAA to determine what regulations would be needed. The rules would have to be "flexible enough, but focused on the safety intent," she said. Eric Allison, head of aviation programs for Uber, said his company's plans call for multi-modal transportation in which passengers are transported on the ground to sky ports, where they can be pooled into vehicles capable of flying them to their destinations. "We think it's an opportunity to improve the way people move around cities even more than we've already done where you can push a button to get where you want to go through the air," he said. "Just like we pool right now with Uber Express, we'll pool people into these vehicles," Allison continued. Allison said Uber's aerial vehicles will be operated by licensed pilots, at least initially. But he said "in the future, many people think autonomy can play a role." He believes advancement in electric propulsion will make it possible to build aerial vehicles that are much cheaper than helicopters. And catching a ride on one wouldn't be much different than hailing an Uber with a cellphone app. "You'll see an option pop up just like Uber X or Uber Black in certain markets," Allison said. "You'll have UberAir." |
FCA-UAW conspiracy ran
Detroit — A vast conspiracy designed to corrupt contract negotiations between Fiat Chrysler Automobiles NV and the United Auto Workers started long before the automaker's former labor negotiator, Alphons Iacobelli, got involved, his lawyer said Monday. A sentencing memo filed in federal court Monday indicates more Fiat Chrysler executives were involved in the $4.5 million conspiracy but does not publicly identify who, if anyone, orchestrated the conspiracy or ordered illegal payments. The filing suggests Iacobelli is fulfilling his obligation to cooperate with an ongoing FBI investigation. Iacobelli, 59, of Rochester Hills faces up to eight years in federal prison when sentenced Aug. 27 for his role in the scandal. Iacobelli pleaded guilty in January to one count of conspiracy to violate the Labor Management Relations Act and one count of subscribing a false tax return. An eight-year prison sentence would be unwarranted and unjust because Iacobelli is not responsible for all of the misconduct involving Fiat Chrysler executives and UAW officials, defense lawyer David DuMouchel wrote Monday. "The corruption that is the focus of this case did not begin with Al Iacobelli. The practices that form the backbone of this case did not begin with Al Iacobelli. The system of corruption that has been exposed here did not begin with Al Iacobelli," DuMouchel wrote. "Mr. Iacobelli’s hope is that such practices — which did not originate with him — nor for that matter the others who have been convicted here — will end with him." The investigation, which has expanded to include General Motors Co. and Ford Motor Co., is focused on whether automakers funneled illegal payments and benefits to UAW leaders through jointly operated training centers. Fiat Chrysler released a statement late Monday in response to an inquiry from The Detroit News. "The company has investigated the allegations and has found no evidence that any FCA US employees senior to Alphons Iacobelli were aware of or participated in any illegal activities related to the (National Training Center),” the FCA statement said. DuMouchel urged U.S. District Judge Paul Borman to sentence Iacobelli to less than four years in prison. Iacobelli also has agreed to pay $835,523 in restitution to the Internal Revenue Service. "But, it is punishment — and severe punishment, not only for what he did, but for what others did, who apparently believe it is a good idea to lay the blame for all this misconduct at the feet of Al Iacobelli," the lawyer wrote. "Much of it belongs there; much of it does not." The sentencing memo reiterated that payments and valuable items given to UAW officials were designed to corrupt the collective bargaining process between the automaker and the UAW. "Both FCA and UAW officials contend that 'it had no effect.' Mr. Iacobelli, however, has stated that the payments were made in an effort to obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration of the collective bargaining agreements between FCA and the UAW," the lawyer wrote. "That is exactly why they were made." Iacobelli is the highest-ranking Fiat Chrysler official indicted in a scandal that has led to criminal charges against seven people and reshaped the top ranks of the auto industry as FBI agents investigate all three Detroit automakers. Prosecutors say Iacobelli used training funds to buy a $365,000 Ferrari, a pool and bejeweled fountain pens worth $71,000. In Fiat Chrysler's case, prosecutors say the automaker's executives created a policy to keep UAW leaders “fat, dumb and happy” and wring concessions favoring the automaker. Iacobelli will be the second person sentenced in the scandal. Last month, Monica Morgan-Holiefield, the widow of UAW Vice President General Holiefield, was sentenced to 18 months in federal prison for a tax crime. Iacobelli worked as Fiat Chrysler's vice president of employee relations from 2007 to 2015 and was the lead negotiator in the 2009 Chrysler/UAW labor agreement. The conspiracy started in approximately January 2009, according to the government. "However the reality is that the conspiracy at issue here had started long before that," DuMouchel wrote. "Mr. Iacobelli joined an already ongoing conspiracy. The practices and corruption that are the focus of this case started long before Mr. Iacobelli." There are at least three co-conspirators who have not been charged, according to the government and court records. The three are: Fiat Chrysler, the UAW and, as revealed in the filing Monday, the jointly operated UAW-Chrysler National Training Center. The filing by Iacobelli's lawyer Monday does not identify other new potential targets or Fiat Chrysler executives involved in the conspiracy. Several passages are redacted in the 25-page document. The only other Fiat Chrysler officials charged so far: • Former Fiat Chrysler analyst Jerome Durden, who struck a plea deal last year and is awaiting a possible 37-month prison sentence. He was accused of helping transfer millions of dollars in training center funds to Holiefield, Morgan-Holiefield and Iacobelli, who used the funds on personal luxuries. • Former Fiat Chrysler executive Michael Brown, who helped run the UAW-Chrysler National Training Center, also pleaded guilty and could be sentenced to 18 months in prison. He admitted providing misleading and incomplete information to a federal grand jury. Iacobelli outranked the men during a career spanning multiple owners of Detroit's smallest automaker. In March 2007, Iacobelli became Chrysler’s vice president of employee relations. Two months later, DaimlerChrysler AG dissolved when Daimler sold its controlling interest in Chrysler to Cerberus Capital Management LP for $7.4 billion. Daimler briefly retained a 19.9 percent stake. About two years later in April 2009, Chrysler filed for Chapter 11 bankruptcy during the financial crisis, and Cerberus exited the company a month later. In June 2009, Chrysler reorganized as Chrysler Group LLC, which Fiat SpA subsequently acquired. Iacobelli ascended to the lead negotiating position with Chrysler in 2008 amid a realignment of the human resources staff, essentially replacing retired senior vice president of employee relations John Franciosi. After Franciosi's retirement, Iacobelli was realigned to report to the executive vice president for human resources and communications, Nancy Rae. Iacobelli abruptly retired in June 2015, a month before negotiations with the UAW were to begin and amid an FBI investigation. Fiat Chrysler, though, said it fired Iacobelli after officials learned of the federal investigation and launched an inquiry. Iacobelli’s supervisor was Michael Keegan. He headed human resources for FCA North America until being named head of the automaker’s global communications in August 2017. Fiat Chrysler has provided lawyers for Keegan and other executives questioned during the investigation. A Fiat Chrysler spokeswoman said the practice is customary. Fiat Chrysler CEO Sergio Marchionne was questioned by investigators and was being represented by a criminal defense lawyer amid the ongoing investigation. Marchionne died last month. Federal prosecutors have secured convictions of three former UAW officials so far. One former official, Nancy Adams Johnson, told federal prosecutors UAW President Dennis Williams directed subordinates to use funds from Detroit’s automakers, funneled through training centers, to pay for union travel, meals and entertainment. Williams has not been charged with a crime. The scandal, meanwhile, has left Iacobelli with a ruined reputation and shattered life, his lawyer argued Monday. "Admittedly, he was part of the problem," DuMouchel wrote. "He was not the problem."
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US probes F-150 fires possibly Associated Press Detroit – U.S. safety investigators are looking into complaints of fires that may have been caused by the seat belts in Ford F-150 pickup trucks. The investigation covers trucks from the 2015 through 2018. Ford sold about 2 million F-150s during those years. The National Highway Traffic Safety Administration is investigating five complaints that fires began in the trucks after seat belt pretensioners made by ZF-TRW or Takata were activated. Pretensioners prepare seat belts to gradually restrain passengers. Three fires destroyed the trucks, while two went out by themselves. The agency says the fires began in a support pillar that houses the belts. Investigators will figure out the exact cause and whether a recall is necessary. None of those who complained reported any injuries. Ford says it’s cooperating with the probe. In one of the complaints, an owner in Grand Rapids, Michigan, told NHTSA that on July 7, a deer ran into the driver’s side of a pickup, causing minor damage. The side air bags inflated, and after five to 10 minutes, a passenger noticed a fire on the bottom of the post between the front and rear doors where the seat belts are located. “The truck went up in complete flames in a matter of minutes and is a complete loss,” the owner wrote. People who file complaints are not identified in the NHTSA database. Messages were left Tuesday seeking comment from ZF-TRW and Takata. |
Rejuvenated Lincoln
Dealers in major markets urged to build stand-alone showrooms Automotive News DETROIT — Lincoln is asking its dealers in the 30 top U.S. luxury markets to build stand-alone stores, reversing an effort to consolidate with the Ford brand, after a product revival has given Lincoln confidence that it can challenge top-tier makes. Lincoln executives say stand-alone stores regularly outsell dualed dealerships and are responsible for most of Lincoln's sales gains in recent years. They cite internal and external surveys concluding that luxury customers prefer buying in a dedicated space. Lincoln has roughly 150 dealers in the 30 markets that it says account for 70 percent of the industry's luxury sales. Nearly half of those dealers have built or started construction on exclusive stores independently. That, executives say, is evidence of the strength of Lincoln's revival. The company wants its 78 remaining dualed dealerships in those markets to commit by next July to building stand-alone stores that will be completed by July 2021. Service departments and parts of the business that don't interact with customers can continue to share buildings with the Ford brand. "Customers expect the environment to be equal to the product," Robert Parker, Lincoln's director of marketing, sales and service, told Automotive News. "They want to buy a luxury product in a luxury environment." Lincoln will help dealers find land and will give them more money for each vehicle they sell after their new stores open. In addition, starting in the second quarter next year, Lincoln will allow only stand-alone dealerships to sell its more profitable, high-end Black Label vehicles if they don't stock them already. Executives revealed the plan to dealers last week via webcast and intend to discuss it with them next month at Lincoln's annual fall dealer meeting. Dealers can forgo the investment and larger bonuses, but brand officials said they expect most will make the switch. They declined to give details on the expected cost or amount of incentives to be offered, saying each case will be different. The move comes as Lincoln tries to build on the sales momentum that started in 2012 with several upcoming products. It's launching a freshened version of the MKX crossover that will be renamed the Nautilus this fall and plans to introduce a three-row crossover called the Aviator next year. "The next phase of the transformation is critical," Parker said. "This is probably the biggest two years in Lincoln's history." Lincoln is asking its dealers to invest in brick and mortar about a decade after a push by management to combine Lincoln-Mercury dealerships with Ford stores. Going back to more stand-alone outlets underscores how far the brand has come, said Greg Wood, Lincoln's sales and service manager. "That was a critical time; it was about survival," Wood said. "Now, we're in this next chapter. This is the time for us to leverage this opportunity with the world-class products and continue to evolve and step up our client experience." 'Not hiding anything' Lincoln refers to its new showroom design as Vitrine, a French word for a glass display case. The exterior of each store is defined by floor-to-ceiling glass windows that illuminate the vehicles inside at night. "It just lights up like a jewel box," Wood said. "We want an open environment; we're not hiding anything." The modern design borrows heavily from the showrooms Lincoln has opened in China since entering that market in 2014, as well as its boutiquelike Lincoln Experience Centers in California and Texas. The footprint is between 6,000 and 8,000 square feet, smaller than most dealerships. Dealers have the option for a one- or two-story building with space in the showroom for two, four or six vehicles. The vehicles sit on what's known as a runway, a design borrowed from the China stores, with lights on the ground to better highlight the product. Customers can speak to sales representatives in "pavilions," intimate rooms with couches and TVs that replace desks and chairs. "We're not looking to build grandiose 40,000-square-foot facilities," Wood said. "It's about being small and nimble. It's more about the experience than the transaction." Higher sales Lincoln says the sales at its 72 stand-alone large-market stores speak for themselves. Retail sales at those dealerships rose 48 percent from 2014 through 2017, compared with 18 percent for the brand overall. Three stores already have adopted the new design. West End Lincoln near Minneapolis transitioned to an exclusive store from a dualed outlet in January, and its retail sales jumped 60 percent this year through July. Retail sales doubled in July at Lincoln South Coast in California, which opened a new store in June. "Transaction prices are going up. Their margins are going up," Parker said. "They're not being forced to discount like maybe they have been. They're getting their money back." While some of Lincoln's 845 stores may elect to drop the brand, Wood said he doesn't expect the size of the network to drastically change, as more dealers potentially come aboard. "This is not about reducing our network," he said. "It's all about listening to luxury clients. It's an opportunity to raise the water level for everyone." Building the brand In Alpharetta, Ga., a wealthy suburb north of Atlanta, Angela Krause Lincoln opened a stand-alone store and has had a noticeable sales boost. The 8,000-square-foot store was built on land next to the formerly dualed operation. The dealership is working to completely separate its Lincoln business from the Ford brand, even ordering new business cards, nametags and signage. Dealer principal Vernon Krause said the switch was necessary to compete with rivals. The store sits on a luxury row of sorts, across the street from a Volvo showroom and a short distance from Porsche, Lexus and Jaguar-Land Rover dealerships. "When you're Ford-Lincoln, it's sort of like you're an afterthought," he said of Lincoln, which in the U.S. sells about one vehicle for every 24 sold by the Ford brand. "When you have your own facility, it shows everybody's committed to building the brand." Zack Krause, the sales manager, said the dualed store was selling about 12 Lincolns a month. Since the Lincoln-only operation opened, sales have more than doubled. "Customers have pulled up and said, 'This is how it should be,' " he said. "I think people like to be here, which is saying a lot for a dealership."
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Mustang swagger pushes
Flat Rock — Ford Motor Co. on rolled its 10-millionth Mustang off the line Wednesday at Flat Rock Assembly Plant. The landmark achievement was driven by consumers' passion for the muscle car, officials said. Jim Farley, Ford's president of global markets, called it the Mustang swagger. "Our most successful products are the ones that go just beyond a functional requirement," Jim Farley, president of global markets, said in an interview. "The Mustang swagger is something we're going to bring to all our crossovers and utilities." That attitude was present at an event Wednesday that brought out line workers and dozens of Mustangs to celebrate that 10-millionth vehicle. Mustangs from 1964 onward were arranged in the parking lot to spell out number "10,000,000." The very first Mustang and the most recent Mustang were the commas. The crowd ogled the pony cars as the owners revved their engines. Farley told the crowd about his own black 1966 Mustang that he bought for $500 and drove — at 14 years old — across the country. But it was Darryl Goodwin, assistant to United Auto Workers Vice President Rory Gamble, who got the line workers to puff out their chests a bit. "Those other guys talk about their sports cars," he said. "But we love our Mustangs."
Farley and other leaders at the Blue Oval are trying to garner similar enthusiasm for other Ford products as the automaker readies several new vehicles to bring to market in 2019 "Mustang represents Ford at its best," Farley said in an interview. "Mustang has given me and everyone at Ford the confidence to emotionalize our products (and) lean into the space away from cars as commodities, to drive pride and connection to a vehicle." But it takes time to build brand equity like the Mustang's. Ford's been cranking out GTs, fastbacks, convertibles, special editions and other versions of the pony car for more than 50 years. What came off the line Wednesday was a 460-horsepower V-8 GT convertible in Wimbledon White with a six-speed manual. That's a big difference from the 164-horsepower three-speed that was the first Mustang built in 1964. Ford has that brand recognition in pieces, Farley said. F-Series is the country's best-selling pickup. Ranger is gaining recognition around the world, and has a highly anticipated return to the U.S. slated for early in 2019. Ford's Focus RS has a cult following in Europe. But other nameplates have struggled to elicit an emotional response like Mustang, according to Farley. Farley, CEO Jim Hackett and President of Global Operations Joe Hinrichs have said at multiple events this year that Ford is going to continue its push into performance-oriented models by beefing up the number of nameplates carrying the ST badge, and also offering more off-road models. Those models would serve to boost the cachet of the new and refreshed Ford nameplates. Redesigned Lincolns and a refreshed Edge will hit showrooms through the second half of the year. Said Farley: We need to "execute products in an emotional way." |
Canada to review auto emissions Automakers don't want Ottawa to make any final The Canadian Press Canada will review the joint vehicle emissions standards it has with the United States before it decides what to do about the U.S.'s plan to weaken those standards in the coming years. Environment Minister Catherine McKenna will unveil a discussion paper as early as Tuesday to kickstart that review, just days after the White House announced it is going to cancel the required annual increases in emissions standards after 2021. Canada and the U.S. have been aligned on vehicle emissions for more than two decades. Unless Canada scraps the existing regulations and writes its own, which could take at least two years, this country will automatically follow the American plan. That plan, agreed to in 2012 by then-prime minister Stephen Harper and then-president Barack Obama, was to compel automakers to make vehicles more fuel efficient each model year between 2017 and 2025. U.S. President Donald Trump, however, is now going to freeze the standards as of 2021. A spokesperson for McKenna said the review was planned when the regulations were adopted, not as a result of the Trump move last week. Caroline Theriault said Canada will look at both environmental and economic impacts in that review and complete it before any decisions are made on how to proceed. "We are paying close attention to the U.S. midterm review of vehicle fuel efficiency standards and to the actions of California and other like-minded U.S. states," she said. A 'dramatically different' market Canadian automakers don't want Ottawa to make any final decisions on regulations here until it's clear what will happen in the United States. At least 19 state attorneys plan to sue the U.S. government over the rollbacks, including the White House's goal to eliminate a federal legal waiver that allows states to set standards stricter than the national ones. "The reality is because we have always followed what the U.S. has done it makes sense to see what comes out of the other end of the U.S. regulatory review process," said David Adams, president of Global Automakers of Canada. His group represents 15 automakers which sell cars in Canada and will be part of the review process. Among the variables the government needs to explore, Adams said, are whether consumers have behaved the way government and industry expected when the regulations were set, and whether fuel-efficiency technology has been adopted as expected. "Right now, we're finding the market is dramatically different than we maybe anticipated when the standards were first set," said Adams. The biggest change has been the uptick in demand for pickup trucks and SUVs compared to cars. Trucks and SUVs now account for more than two-thirds of auto sales in Canada. Light-duty gasoline vehicles accounted for about 11 per cent of Canada's entire greenhouse gas footprint in 2016, the most recent year for which emissions data is available, an increase of about four per cent over the previous decade. Canada's aim to cut emissions to be at least 30 per cent less than they were in 2005 by 2030 requires road transportation to play its part. A lengthy legal battle If Canada remains aligned with the U.S. on vehicle emissions and the U.S. does halt further improvements after 2021, the International Council on Clean Transportation last week projected it will add 10 million tonnes to the annual emissions of cars and trucks by 2030, compared to where they would be with the existing standards. Dan Woynillowicz, policy director at Clean Energy Canada, said the U.S. move has introduced a lot of uncertainty for automakers and for Canada, with a multi-year legal battle over the Trump plan expected. "The odds of it being overturned in the courts are pretty high but we're not going to have those decisions for years," he said. Woynillowicz said automakers plan six or seven years ahead and are already preparing for the existing standards so it may be the best business policy for them to proceed as planned no matter what the U.S. does. Electric vehicles also add a variable to the mix, with consumer demand for hybrid and zero-emission vehicles increasing each year. Canada plans to unveil a zero-emission vehicles strategy sometime this year and Woynillowicz said the American emissions standards situation may end up affecting that plan. Adams said the industry is committed to making cleaner cars and knows electric zero-emission vehicles will eventually be the whole picture. "It's reasonably clear now the future of the industry is decarbonization," said Adams. "It's just a question of how quickly we go down that path."
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Blame FCA's 33% Excluding FCA, Canadian new-vehicle purchases rose by 0.8% in July
If you’re looking for someone or something to blame for falling new-vehicle sales in July, look no further than one of the world’s biggest automakers. Fiat Chrysler Automobiles is the reason sales dropped 3.2 per cent last month. “The July drop is nearly all attributable to a 33-per-cent year-over-year plunge in Fiat-Chrysler (FCA) sales which, at 15,715 units sold, recorded their worst month since early 2014,” Juan Manuel Herrera of Scotiabank Economics wrote in the financial institution’s auto newsflash. Excluding FCA, Canadian new-vehicle purchases rose by 0.8 per cent in July. Nearly every FCA brand, including the venerable Jeep and Ram nameplates, suffered declines of more than 22 per cent. Only the small-volume Alfa Romeo, with 92 vehicles sold in July, and Chrysler, with 492 sold last month, increased sales. Sales numbers for the remaining brands were as follows:
FCA has posted 14 consecutive months of year-over-year sales declines for both cars and trucks, Herrera said. The drop in car sales is parallel to that experienced across most automakers and is in line with shifting consumer preferences, he said. Trucks comprised 69.8 per cent of the market in July compared with 68 per cent last year, according to the Global Automakers of Canada. “The fall in FCA truck sales, however, is seemingly endemic,” Herrera said. Light truck volumes for FCA have fallen by 12 per cent through July when compared with the first seven months of last year. Meanwhile the remaining automakers have managed a 6.9 per cent increase in light truck sales during the same time period. Ram was the second highest-selling vehicle in Canada in 2017, but so far in 2018, FCA has sold 17 per cent fewer Ram trucks relative to the same period last year, according to Scotiabank data. FCA has also been hit by fading demand for the aging Dodge Caravan minivan. Scotiabank now forecasts automakers to sell two million vehicles in 2018, down about two per cent from the record 2.04 million sold in 2017.
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Ford loads midsize Ranger
Ford Motor Co.'s 2019 Ranger will be technologically far superior to the bare-bones pickups that bore the name for nearly three decades. The automaker hopes that sets the new midsize truck apart from the competition. Expectations are high for the reintroduction of the Ranger, which debuted in January at the Detroit auto show and will hit the road early next year — the first new Ranger sold in North America since 2011. Ford officials and analysts say those expectations are fueled in part by buyers' desired for driver-assist and other advanced safety features that aren't offered on many midsize trucks. That could give the Ranger an edge over the five existing midsize trucks: the Chevrolet Colorado, GMC Canyon, Toyota Tacoma, Honda Ridgeline and Nissan Frontier. An unnamed midsize Ram pickup will be introduced within a few years. "Customers have a wide range of needs, and they're really looking for a truck that can deliver all of it," Ranger marketing manager Chad Callander said in an interview. "People want a daily-use vehicle that gives them everything to make it easier to drive. Midsize buyers are saying they want all that, too." At least 20 new features will come standard or as optional upgrades for an added cost. The Ranger will be one of the first new vehicles Ford will sell with standard automatic emergency-braking on all trim levels — the XL, XLT and top-level Lariat. Blind-spot monitoring, automatic high-beams, lane-departure warning, lane-keep assist and parking aids are standard starting with the mid-level XLT. Customers can get systems to help handling in snow, rain, uneven terrain or sand on all three trim levels for added cost. Callander told the Detroit News the Ranger's class-exclusive blind-spot monitoring can extend to cover whatever a driver might be towing. It will be standard on XLT and Lariat trims. Midsize trucks haven't exactly been known for their advanced features.
"The segment is almost prehistoric," said Dave Sullivan, manager of product analysis with AutoPacific Inc. "There's a lot of opportunity within the segment to be able to stand out, whether we're talking safety or infotainment. There's definitely some unexpected white-space." To get driver-assist features on nearly any vehicle, consumers have to put extra money on the hood. Despite that, automakers and analysts have said that consumers want the potentially life-saving technology. Among the mid-size trucks currently on the market, only the Tacoma or Ridgeline offer automatic emergency-braking, blind-spot monitoring, automatic high-beams, adaptive cruise-control or other safety features. The Tacoma is the only model to have autonomous braking, adaptive cruise-control, lane-departure warning and automatic high-beams standard across all trim levels — which beats what Ford will offer standard across its Ranger lineup. But the Ranger is expected to have blind-spot monitoring with trailer coverage, hill-descent control and power outlets in the truck bed either standard or optional for a charge across the Ranger trims, which the Tacoma doesn't currently offer. Offering advanced technology features can signal to customers that a vehicle had more time and research invested in it, said Stephanie Brinley, analyst with IHS Markit. Sullivan and Brinley said the Ranger could raise the bar for mid-size trucks. "This mid-size truck is different," said Brinley. The old Ranger "was inexpensive, and it was incredibly efficient. It played a different role than the pickup trucks today. I don't know how much success they'd have if they went that way again. The expectation for feature availability is completely different." Ranger customers, according to Ford and analysts, are looking for something less expensive than the $27,000 at which most full-size F-150s start, but without sacrificing capability. Midsize-truck buyers also want maximum utility and maneuverability out of their pint-sized hauler. But they also want a deal, the analysts said. Callander says Ford knows there's a pricing sweet-spot for the Ranger. "There's price sensitivities all over," he said. "We know that for this vehicle there is a desire for it to be a more affordable proposition than some other trucks. We’re implementing some really capable technologies, and we’ll be competitively priced with the rest of the market." Pricing for the Ranger has not yet been announced. The Colorado, starts at $20,000. The Tacoma starts at $25,000. Ford will also have to deliver a good-looking truck. Midsize-pickup buyers aren't going for brutish trucks they plan to beat up, according to Brinley and Sullivan. "It's your interior and exterior designs and how well they connect," Brinley said. "Particularly in the interior. And it matters |
'It's going to be hard': Retirees head to court in the fall to fight for more money Sophia Harris Many Sears Canada retirees found it hard to take this week when they got their first reduced pension payment — chopped by 30 per cent. They had been bracing for a 20 per cent cut, but only learned in June it would shrink by a further 10 per cent. "It's terrible," said Ron Husk of Mount Pearl, N.L., who worked for Sears for 35 years. On Wednesday, his monthly pension payout dropped by almost $450. "I stayed awake at night thinking about it and I don't know what to do," said the 72-year-old former appliance salesman. When Sears shut its doors in January, it left behind an underfunded pension plan that serves about 18,000 retirees. They will be going to court to fight for more money, but for now they must contend with a significant decrease in their monthly cheque. The pension fund is actually short about $260 million, which works out to a 20 per cent deficit. But due to a delay in reducing pensioners' payments by 20 per cent, they now face a 30 per cent cut for the next 20 months. "People had their minds wrapped around the 20 per cent, now it's more than that," said Ken Eady, vice-president of the Sears Canada Retiree Group (SCRG), a volunteer organization representing retirees. "It's another loss for Sears pensioners." Retiree Attilio Malatesta spent the majority of his 44-year career with Sears working in sales in Kelowna, B.C. (Attilio Malatesta) Attilio Malatesta of Calgary worked for Sears for 44 years. He says his pension was cut by $800 a month starting this week. "It's going to be hard," he said. Malatesta is even considering returning to work in sales to make up for the lost income — something he's not looking forward to. "Who the hell's going to hire a 73-year-old guy?" he said. "I can only stay on my feet for so many hours. I have arthritis." Husk is already working, as a greeter at Home Depot. He took the job last year in anticipation of a reduced pension. "I'd rather stay home," he said. "Anybody at 72 prefers not to work." 'You do what you can' Their prospects could change somewhat, depending on what happens in court. In the fall, lawyers for the retirees will argue in Ontario Superior Court that they should move to the front of the line, ahead of other creditors still waiting to be paid the debt Sears owes them. "This is not the same type of debt as merchandise or landlords," SCRG's Ken Eady said of Sears's underfunded pension plan. "The company's obligation was to have it fully funded, and they failed." According to court documents, retirees are asking for nearly $730 million. Most of the money would go to top up the pension fund ($260 million) and provide health benefits ($421 million). Retirees lost their benefits three months after Sears filed for bankruptcy protection in June 2017. But even if they were to move to the front of the line, the pensioners would likely only see a small portion of their claim. According to the court-appointed monitor for Sears's insolvency proceedings, the defunct retailer has about $126 million left in its coffers and faces more than 2,000 claims for its cash, totalling at least $36 billion. Eady hopes retirees can lay claim to that $126 million, which he says would still be a drop in the bucket compared to what they're actually owed. "You do what you can," he said. "It certainly doesn't rectify the injustice of us being shorted on our pension and benefits." What about the government? Some retirees believe the federal government should step in to help. "I don't know what you have to do to get the government to listen," said Gail McClelland of Calgary, who worked for Sears for 33 years. "There has to be something done to protect pensioners." Advocates have called for federal legislation that would provide safeguards for workers when corporations collapse and can't pay out pensions. Sears retirees in Ontario are already faring better because of a provincial law that guarantees the first $1,500 of monthly pensions for retirees in defined benefit plans. "Why should they be covered and we're not?" Malatesta said. "We're in Canada. We work for the same company." In November, NDP MP Scott Duvall introduced a private member's bill that would give pensioners top priority when companies go under and the leftover money is doled out to creditors. However, private member's bills rarely become law. Meanwhile, the federal government plans to hold consultations on the matter. Its goal is "to find a balanced approach to the important issue of Canadians' retirement security," Derek Mellon, spokesperson for Innovation, Science and Economic Development Canada, said in an email. But that's little comfort for pensioners like Malatesta, who are waiting to hear what more — if anything — they'll get back from Sears, while grappling with a different kind of retirement than they had planned. "You give your life to a company and then in the end you get shafted." |
Lincoln Navigator tops J.D.
New-car owners found Lincoln Motor Co.'s Navigator to be the most gratifying model on the market, J.D. Power said Wednesday. The Navigator had the highest overall score in the J.D. Power 2018 U.S. Automotive Performance, Execution and Layout Study, which measures the satisfaction of new car owners. Its APEAL score was 915 out of 1,000, the highest level recorded since 2013. "To be top of the industry, you have to do everything well," said Dave Sargent, J.D. Power's vice president, global automotive. "They hit it out of the park." Specifically, owners liked the exterior look of the Navigator, especially its front, Sargent said. They also liked its entertainment system and the power. J.D. Power surveyed nearly 68,000 people who bought or leased 2018 model-year vehicles after their first 90 days of ownership. Respondents evaluated their vehicles across 77 attributes, from acceleration to comfort. The industry average increased 10 points to 820 in overall satisfaction from 2017. Mass-market brands saw a 10 point increase from the 2017 survey, while luxury brands improved by six points. The gap between the luxury and mass-market segments have shrunk to an all-time low of 37 points. Sargent said technology, especially driver-assistance features such as blind-spot detection, have helped close that gap. "A few years ago, you had to buy a premium vehicle to have that," Sargent said. "Now it’s more common placed on mass-market vehicles." Increases by more than 15 points for Dodge, Jeep, GMC and Chevrolet also helped to shrink the spread. Sargent said launches of Chevrolet's Equinox and Traverse, which led their model-type segments, and GMC's Terrain boosted their APEAL scores. GMC and Chevrolet also topped the list of mass-market brands with a score of 826. Genesis, with 884 points, was the top brand. The Ford brand received 824 points, tying fourth overall with Dodge and placing just behind Ram. Ford Motor Co. took home four model-level awards, the most of any other parent company. One such vehicle was the Ford F-150, the top large light-duty pickup truck for two years in a row. The Audi A3, BMW X1, Chrysler Pacifica, Lincoln Continental, Honda Ridgeline and Porsche Cayenne also held top positions for a second year. "It's always useful to know how other consumers feel," Sargent said. "If other people like it, chances are you may like it, too." APEAL winners Highest overall brand: Genesis (884) |
Ex-UAW boss Dennis Robert Snell, Detroit — A former labor official told federal prosecutors that United Auto Workers President Dennis Williams directed subordinates to use funds from Detroit’s automakers, funneled through training centers, to pay for union travel, meals and entertainment. As part of a plea agreement filed Monday, Nancy Adams Johnson told investigators Williams made the directive to relieve pressure on the union’s budget. Williams, the union's president from 2014 until mid-June, and the UAW had no comment on the allegations made by Adams Johnson, the second-highest ranking official in the union’s Fiat Chrysler department. Money filtered through the training centers for the benefit of UAW officials is at the center of a widening scandal that has led to seven convictions, a shakeup at the highest levels of the auto industry and raised questions about the sanctity of labor negotiations between the union and Detroit's automakers. "Maybe this is what the senior levels of the UAW were used to, but at its core, this is a significant betrayal of trust," said Peter Henning, a Wayne State University law professor and former federal prosecutor. "This is how a small fraud becomes a much bigger one." Adams Johnson's plea agreement does not identify the "high-level UAW official" who made the directive. Sources familiar with the investigation told The Detroit News that she identified that official as Williams. They spoke on the condition of anonymity because they were not authorized to speak about the investigation. Williams has not been charged with any wrongdoing. He is the highest-ranking labor official linked to an investigation that has implicated union leaders and auto executives. The federal court filing indicates a new path for FBI investigators in a criminal investigation that has spread beyond Fiat Chrysler to General Motors Co. and Ford Motor Co. It suggests company officials gave, and union officials received, gifts in violation of federal laws designed to protect the purity of labor negotiations. Adams Johnson's guilty plea could have implications for her one-time boss, former UAW Vice President Norwood Jewell. Jewell has previously been linked to a conspiracy involving Fiat Chrysler executives funneling illegal payments and benefits to UAW officials to wring concessions favoring the automaker. The plea agreement was dated July 18 and signed by Adams Johnson, her lawyer Harold Gurewitz, and two federal prosecutors, including Assistant U.S. Attorney David Gardey, chief of the public corruption unit. Adams Johnson's lawyer declined comment. Last month, in his last formal address to members at the UAW's Constitutional Convention in Detroit, Williams tried to distance the union from the scandal. "To be clear: those who misallocated or misused training center funds betrayed our trust," Williams told thousands of union members gathered in Cobo Center. "The UAW has zero tolerance for corruption, wrongdoing, at any level of this organization." Williams, who retired last month after a single term as president, could not be reached for comment. He did not respond to messages left with his wife, the UAW, the union's general counsel, Williams' lawyers in Chicago and at the UAW Black Lake Conference Center, a wooded retreat where he has use of a cabin. UAW spokesman Brian Rothenberg did not directly address the allegation involving Williams, saying: “I cannot comment on speculation from unsubstantiated allegations.” The conspiracy to use training center funds for improper purposes began by at least January 2009, five years before Williams was elected UAW president, according to federal court records. The directive described by Adams Johnson stands in contrast to the reported actions of Williams' predecessor as UAW president, Bob King, years earlier. In 2011, King confronted UAW Vice President General Holiefield and Fiat Chrysler Automobiles NV executive Alphons Iacobelli about the selection of Holiefield’s wife, Monica Morgan-Holiefield, as a vendor for the UAW-Chrysler National Training Center and a nonprofit controlled by Holiefield, according to court records. “During a face-to-face meeting in Auburn Hills, Michigan, the UAW president warned Holiefield and Iacobelli that paying Monica Morgan was a bad idea and that they could ‘go to jail’ and instructed them not to direct any additional business to Monica Morgan,” according to the indictment charging Iacobelli and Morgan with violating federal labor laws. Both Iacobelli and Morgan-Holiefield have pleaded guilty for crimes related to the scandal. She was sentenced to 18 months in federal prison on July 13; Iacobelli is awaiting a possible eight-year prison sentence. In order to circumvent conflict-of-interest rules, Holiefield and his wife asked a friend to create a new company in early 2012 to supply shirts, cups and other trinkets to the training center, the indictment alleges. Holiefield died in March 2015. Federal prosecutors earlier this year labeled the UAW and Fiat Chrysler as co-conspirators in the scandal, an allegation at odds with claims the labor union and automaker were victimized by rogue employees. The conspiracy coincided with challenging times for the UAW, according to the government. The UAW was facing significant financial pressure in 2014 when members approved the first hike in membership dues since 1967, and in 2015, according to Adams Johnson's plea deal. UAW Secretary-Treasurer Gary Casteel reported to members that the union's income for the year ending Dec. 31, 2015, was $207 million, or $42 million less than expenses. "Sometime in 2014 or 2015, a high-level UAW official directed senior UAW officials to use money supplied by automobile manufacturing companies through joint UAW training centers to pay for travel, including travel solely for purported union business, as well as lavish meal and other entertainment costs of senior UAW officials and their friends, family and allies," according to Adams Johnson's plea agreement. "This directive was issued in order to reduce costs to the UAW budget from such expenditures because the UAW's budget was under pressure." If senior UAW officials agreed to accept illegal benefits, that amounts to a conspiracy, Henning said: "It's the starting point for fairly serious criminal conduct," he added. "This is how the U.S. Attorney's Office sends a message and says who they're looking at. If you're going to cooperate, it's better to come in now rather than later." The ongoing investigation has centered on whether automakers sent illegal payments and things of value to UAW officials through joint-operated training centers that are supposed to benefit blue-collar workers, potentially influencing collective bargaining. The centers are funded by Detroit's automakers. From 2014 to 2016, the UAW-Chrysler National Training Center's credit cards bankrolled expensive meals, golfing, hotel suites, limousines and condominium expenses for high-level UAW officials in Palm Springs, California, according to the government. Simultaneously, Fiat Chrysler officials filtered money through the training center to pay the salaries of "a large number of" UAW officials and employees who supposedly were assigned to work at the training center, the government alleges. "(Fiat Chrysler) paid these salaries for the UAW even though senior UAW officials and (Fiat Chrysler) executives both knew that these UAW officials and employees 'assigned' to the (training center) spent most of their work time performing tasks for the UAW . . ." the government alleged. Jewell, the former head of the union’s Fiat Chrysler department, is one UAW vice president who benefited from a cozy relationship between the automaker and the union, according to the government. Iacobelli, Fiat Chrysler's top labor negotiator, approved spending more than $30,000 in worker training funds on a party for Jewell in August 2014, a bash that included “ultra-premium” liquor and strolling models who lit labor leaders’ cigars, according to court records. The training funds covered the $7,000 cigar purchase and a $3,000 tab for wine in bottles with custom labels that featured Jewell’s name, sources told The News. Prosecutors raided his home in November during the investigation, which has previously revealed that Jewell received a $2,180 shotgun purchased with training center funds. The UAW said that Jewell didn’t know the shotgun was purchased with training center money and later reimbursed the money spent on the firearm. Jewell has not been charged with a crime. Prosecutors applied new pressure Monday when Adams Johnson, Jewell's top administrative assistant, agreed to cooperate with the ongoing investigation. Late last year, The News revealed federal agents were interested in Joe Ashton, a retired UAW vice president appointed to GM’s board in 2014, and Cindy Estrada, his successor in charge of the union’s GM department, according to sources familiar with the investigation. Since that disclosure, Ashton resigned from GM's board and Estrada last month was transferred to replace Jewell as head of the UAW's Fiat Chrysler department. Neither Ashton nor Estrada have been charged with a crime.
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Slumping sedan sales
Passenger car sales took a nosedive in July, driving down overall results for several automakers last month. Ford Motor Co. passenger car sales plummeted nearly 28 percent, and even stalwarts of the segment like the Toyota Camry and Honda Accord posted double-digit declines. "The massive drops in July car sales demonstrates we haven’t hit rock-bottom yet," Cox Automotive analyst Michelle Krebs said in a statement. "One driver of the continued decline is likely the plethora of used cars and, more importantly, nearly new utility vehicles coming off lease and back into the market. As affordability becomes more of an issue, used vehicles provide a value alternative to new sedans." New-vehicle prices increased by nearly $1,000 last month, compared to July 2017, averaging $35,359, according to Kelley Blue Book data. Much of that gain is in the luxury SUV and full-size pickup markets. "The primary forces at work in the current new-car market, including supply, demand and pricing, are pushing transaction costs to a level some buyers aren’t willing to pay," Cox Automotive analyst Karl Brauer said in a statement. "We saw high fleet sales from a number of automakers in July, but even that wasn’t enough to hit positive overall numbers in July." |
3,000 WestJet cabin 'Now we begin the work of building our local and
David Bell · About 3,000 of WestJet's cabin crew members are now officially unionized after the Canada Industrial Relations Board issued an interim order naming the Canadian Union of Public Employees (CUPE) as the certified bargaining unit for employees. According to a statement from WestJet, the order came in mid-afternoon Tuesday. A mass email sent by CUPE to flight attendants read: 'Congratulations, we did it!!!' The message went on to say, "This is an amazing step forward for WestJetters. "We knew that we could do it together. Now we begin the work of building our local and preparing to bargain our first collective agreement." A statement provided to CBC News by WestJet said that the interim order will let the company make submissions by Aug. 10 about what positions they want excluded from the scope of the newly formed bargaining unit. "We are disappointed by this outcome but respect the rights of our employees to choose their representation," Ed Sims, WestJet president and CEO, said in a prepared statement Tuesday. "We now shift our focus to working effectively with CUPE in the interest of success for WestJet as a whole." CUPE says the interim order is based on forthcoming negotiations needed with the company to determine who is included and excluded as union members. The interim order is specific to WestJet employees only and does not include cabin crew working for Encore or Swoop. "We know that Swoop flight attendants want and deserve a union and we will work with them to bring them into the family, along with Encore, in the near future," CUPE said. Earlier on Tuesday, WestJet posted rare losses of $20.8 million in the second quarter, attributed to a labour dispute with pilots, higher fuel prices and increased competition. |
Tariffs already being
Tariffs implemented by President Donald Trump — and in some cases, falling sales in China as a result — are hitting Detroit automakers in the wallet. General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV each adjusted full-year outlooks for 2018 on Wednesday as they revealed lower-than-expected second-quarter earnings — all of which were impacted by rising costs of steel and aluminum. The automakers all expect to incur higher commodities costs through the end of the year following a tariff tit-for-tat set off when the Trump administration placed duties on foreign steel and aluminum. Ford reported tariffs cost the company roughly $145 million in the second quarter, and estimated it would incur about $500 million to $600 million in costs in 2018 due to the ongoing trade war. GM's second-quarter profits dropped 2.8 percent compared to the same period a year ago due primarily to rising domestic steel and aluminum prices as a result of tariffs, the automaker reported Wednesday. While GM buys more than 90 percent of its steel and aluminum from the U.S., domestic producers have seized the opportunity to raise their prices as foreign metals grow more expensive. The rising cost of materials was more than GM had anticipated. The Detroit automaker posted a $2.4-billion second-quarter profit, but lowered its full-year earnings outlook on expectations that costs of commodities like steel and aluminum will continue to rise. It said its full-year diluted adjusted earnings per share would come in at around $6, with an adjusted free cash flow of roughly $4 billion. GM had previously forecast diluted adjusted earnings per share would be in the $6.30-$6.60 range. “The new issue is the commodity escalation,” said Chuck Stevens, GM chief financial officer. “The unexpected or accelerating pressure is really on the steel side of the business.” CEO Mary Barra said repeatedly that GM was in position to brave challenges presented — even indirectly — by the ongoing trade war: “Even with the recent macro-economic challenges, I continue to be confident." GM made $592 million in China in the second quarter. But earnings in China were offset by unfavorable currency devaluations in South America which cut GM's international profit to $143 million. On the day Fiat Chrysler CEO Sergio Marchionne died, the transatlantic automaker reported that second-quarter earnings climbed 39 percent and achieved net industrial cash — a longtime Marchionne goal — for the first time. The company said Wednesday its net profit grew to $882 million (754 million euros). It posted an 8-percent adjusted pre-tax margin in North America, a 0.4 percent decrease compared to a year ago. North America continues to deliver the bulk of the automaker's rising profits. But even Fiat Chrysler adjusted its full-year outlook for 2018, lowering its projected revenue for the year from $146 billion (125 billion euros) to a range between $134 billion (115 billion euros) to $137 billion (118 billion euros). China proved to be a trouble spot for Fiat Chrysler, with a $114 million (98 million euros) loss in the Asia-Pacific region that includes China. Fiat Chrysler's new CEO, Mike Manley, told investors in his first public remarks on Wednesday that China is an ongoing challenge the company is facing as he transitions to the top leadership position. "Clearly when you step back and look at our results for the quarter, the biggest challenges we face, and frankly we're going to face to some extent for the balance of the year, are all focused in China," he said. "With duty changes that were announced, these particularly impacted Maserati, which resulted in a slowdown of sales and shipments to dealers." Ford blamed a May supplier fire that disrupted F-150 production for days, as well as poor performance in China, for second-quarter for profits that were down nearly $1 billion compared to a year ago. The Dearborn automaker made $1.1 billion in the second quarter of 2018, a nearly 50 percent decrease compared to last year. The Dearborn automaker also lowered its full-year earnings guidance, blaming a "challenging quarter" in its Asia-Pacific and European markets. Ford now forecasts an adjusted earnings per share of $1.30 to $1.50. That's down from the $1.45 to $1.70 per share forecast at the start of the year, according to CFO Bob Shanks, a roughly 11-percent decline. The results come during a tough transitional period for Ford. Not only is the company undergoing internal shifts to the organizational structure, but its sales are slipping compared to a year ago due to an aging product lineup. The automaker is not performing in China compared to a year ago, and Ford is still nearly a year away from a product launch gambit expected in 2019. The automaker said it was taking "urgent action to address underperformance" in China, including resetting its product lineup in the country and adding more localized products like the Explorer that will be built in China. “Candidly, we’re extremely dissatisfied with our performance in Europe and China and we did not plan for these results,” Jim Hackett, Ford president and chief executive officer, said during a call with investors. Ford’s disappointing performance in China reflects “a policy environment that is uncertain” due to tariffs, Shanks said. “We had a very difficult quarter with year over year decline in almost every metric all driven by China. We are very disappointed in our performance in China. We lost $483 million in the quarter." Shanks said Ford’s poor performance in China was driven by “unfavorable market factors for Ford and Lincoln." The Dearborn automaker also blamed “tariffs and industry-related net-pricing impacts.” At a press conference in the White House Rose Garden on Wednesday with European Commission President Jean-Claude Juncker, Trump talked about an agreement to “work towards” zero tariffs on non-auto related industrial goods. He made no mention of relief for automakers or a tariff standoff with China. “We’re starting the negotiation right now, but we know where it’s going,” Trump said of his talks. Michelle Krebs, senior analyst for Autotrader, said the numbers from Detroit's automakers show they are healthy despite the uncertainty they face domestically and internationally. "The next couple of years will be challenging because the U.S. market, from which the Detroit Three derive most of their sales and profits, are in a post-peak era," she said. "We expect sales to remain strong, but off record levels due to rising interest rates. Added costs from tariffs that are passed along to consumers will also cause sales to fall." Krebs said Detroit's automakers learned lessons from the last recession that led to two of the city's three manufacturers accepting bailouts from the federal government. "I would expect continued discipline," she said, "not only in terms of inventories, but in terms of keeping costs in check." |
Ford, VW issue separate recalls July 31, 2018 Ford and Volkswagen have each issued recalls because a number of vehicles are at risk of rolling away, but for different reasons. The recalls affect a total of 61,010 vehicles. Ford is recalling 36,887 vehicles because the bushing that attaches the shift cable to the transmission may degrade over time and could detach, according to a recall notice on Transport Canada’s website. If that happens, it could allow the transmission to be in a different gear than the one selected by the driver. The problem could also allow the driver to move the shifter to park and remove the ignition key while the transmission gear may not be in park. If the parking brake is not applied, it could result in unintended vehicle movement. The problem affects Ford Escape and Fusion vehicles from the model years 2013-2016. Meanwhile, Volkswagen is recalling 24,123 vehicles because the park position switch might malfunction due to a problem with the electrical contacts, Transport Canada says. That could allow drivers to remove the ignition key without the shift lever being in the park position. If the parking brake is not applied, the result could be unintended vehicle movement. The defect affects Golf and Golf Wagon vehicles from the model years 2015-2018. |
Ford profits down nearly half
Ford Motor Co. blamed a May supplier fire that disrupted F-150 production for days, as well as poor performance in China for second-quarter profits that were down nearly $1 billion compared to a year ago. The company said it could spend $11 billion over the next three to five years to spur profits around the globe. The Blue Oval on Wednesday teased plans that hinted at the big moves analysts and Wall Street had been begging for. Ford plans to at least significantly shrink spending in unprofitable markets like South America or the Middle East and Africa in favor of markets where the automaker sees returns. Chief Financial Officer Bob Shanks and CEO Jim Hackett offered no specifics on which markets would account for the $11 billion in anticipated charges. "I’d like nothing better than to give you visibility," Hackett said. "We only can share information publicly once decisions are made... It’s not as simple as just pulling the plug and exiting markets." Ford made $1.1 billion in the second quarter of 2018, a nearly 50 percent decrease compared to last year. The Dearborn automaker also lowered its full-year earnings guidance, blaming a "challenging quarter" in its Asia Pacific and European markets. The automaker now forecasts an adjusted earnings per share of $1.30 to $1.50. That's down from the $1.45 to $1.70 per share forecast at the start of the year, a roughly 11 percent decline. Shanks said the company has a road map of "where to play" in the future, which will require restructuring that could potentially cost the company $11 billion on its earnings before interest in taxes over the next three to five years. He said for the company to have identified a dollar amount and a time frame, it has a view on where it will need to invest and where it will not invest in the future. "For us to have identified a specific number and a specific time frame, we have a point of view about where we’re going to make investments and where we’re going to allocate our capital in the future, we have a point of view where we’re not," Shanks said. "And the consequence of not making those investments would be a business that needs to be dispositioned. And in part, that would be done through a restructuring." The automaker reported the fire at the Meridian Magnesium Products plant in Eaton Rapids cost the company $591 million. Shanks also said rising steel and aluminum costs due to tariffs cost the company roughly $145 million, and estimated it would incur about $500 million to $600 million in costs in 2018 due to the ongoing trade war. But the bigger issue was the $483 million it lost in China during the second quarter. The automaker reported earnings before interest and taxes of $1.8 billion in North America and $49 million in the Middle East and Africa. The automaker lost $178 million in South America, $73 million in Europe and $394 million in its Asia Pacific market. There is "a lot of work ahead of us in China," Ford Chief Financial Officer Bob Shanks said. "We're very disappointed in that result." President of Global Markets Jim Farley said second-quarter results in both Europe and the Asia Pacific markets — responsible for driving down full-year projections — were unacceptable, and the company was in the middle of a multi-faceted plan to drive profits in those markets. Both markets are suffering from product lineups in those regions ill-suited for the respective customers, Farley said. Ford desperately needs new SUVs in China, for example. "We have to redesign Europe," Farley said. "We understand the importance of getting our China business back on track." Ford's second-quarter revenue totaled $38.9 billion, and 27 cents adjusted earnings per share. The results come during a tough transitional period for Ford, according to industry analysts. Not only is the company undergoing internal shifts to the organizational structure, but its sales are slipping compared to a year ago due to an aging product lineup, the brand is not performing in China compared to a year ago, and the company is still nearly a year away from a product-launch gambit expected in 2019. And the entire industry is facing headwinds as sales plateau. The second-quarter results were announced a day after Ford detailed plans to create a separate unit within the company for its autonomous vehicle business. Ford Autonomous Vehicles will house all parts of Ford's self-driving vehicle business. It's a signal from the Dearborn-based automaker that its autonomous vehicle research is gaining traction, and the various facets of the company's autonomous vehicle business is reaching a point where it needs to break out from under the Ford Smart Mobility umbrella. The second quarter results come roughly 14 months into Hackett's tenure as CEO, and amid continued cost-cutting and evaluations within the Dearborn-based automaker. The company plans to trim $25.5 billion in operating costs by 2022 and cut its North American passenger car lineup by more than 80 percent, eliminating the Taurus, Fiesta, Fusion, C-Max and Focus sedans within a few years, and replacing at least the Focus and Fusion sedans with crossover wagons. Ford plans to add five all-new SUVs over the next two years, along with the 2019 Ranger midsize pickup that debuted at the Detroit auto show in January. The company plans for nearly 90 percent of its vehicles sold in 2020 to be a truck, SUV or commercial vehicle.
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Sergio Marchionne, who saved The Canadian Press MILAN — Sergio Marchionne, a charismatic and demanding leader who engineered two long-shot corporate turnarounds to save both Fiat and Chrysler from near-certain failure, died Wednesday. He was 66. The Exor holding company of the Fiat founding family Agnelli announced Marchionne's death in Zurich in a statement. "Unfortunately what we feared has come to pass," Fiat heir John Elkann said. "Sergio Marchionne, man and friend, is gone." Marchionne built the dysfunctional companies into the world's seventh-largest automaker almost by personal force of will, living on a corporate jet crossing the Atlantic to push employees to accomplish what most people thought was impossible amid a devastating global recession. Marchionne, who was Italian and Canadian, had revived Fiat by 2009 when he was picked by the U.S. government to save U.S.-based Chrysler from its trip through bankruptcy protection after being owned by a private equity company. "It's highly unlikely that Chrysler would exist today had he not taken that gamble," said Autotrader.com analyst Michelle Krebs. "The company was in such bad shape, being stripped of any kind of resources by the previous owners." Marchionne met most of his goals, even though at times he was doubted by nearly everyone in the automobile business. But he didn't live long enough to complete his last two: personally hand over the reins of Fiat Chrysler Automobiles to a hand-picked protege and lay out plans for transforming supercar maker Ferrari. Marchionne had shoulder surgery in summer 2018, and the company said last weekend that complications meant he would not be able to return. The manager, known for his folksy, colorful turns of phrase and for his dark cashmere sweaters no matter the occasion, was the darling of the automotive analyst community. Even when expressing doubts at his audacious targets, they expressed admiration for his adept deal-making. That included getting GM to pay $2 billion to sever ties with Fiat, key to relaunching the long-struggling Italian carmaker, and the deal with the U.S. government to take Chrysler without a penny down in exchange for Fiat's small-car technology. Marchionne joined Fiat after being tapped by the Agnelli family to save the company. Fiat had for generations been a family-run enterprise, and having someone at the helm from outside Italy's clubby management circles — even a dynamo like Marchionne — was an enormous change. Other key corporate moves included the spinoff of the heavy industrial vehicle and truck maker CNH and of the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs led by John Elkann. Elkann came into his own under Marchionne's stewardship, taking over as chairman in 2010 having been tapped more than a decade earlier by his grandfather, the late Gianni Agnelli, to run the family business. As Marchionne's health failed following surgery, a clearly emotional Elkann delivered what amounted to an impromptu eulogy and message of gratitude to a man he called his mentor. "He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people," Elkann said over the weekend. "He taught us that the only question that's worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference." It was Marchionne's success in turning around a pair of Swiss businesses that drew the attention of the Agnelli family. He joined Fiat's board in May 2003, four months after the death of Gianni Agnelli. He became CEO in June 2004, following the death of Gianni Agnelli's brother, Umberto, Fiat's chairman, leaving a family void in the company. As an outsider, Marchionne was unfettered by local loyalties and he set about cutting jobs and expenses, slimming management ranks and increasing shareholder value along the way. He brought in other outsiders to key positions and relaunched the iconic 500, which became one of the new Fiat's calling cards as it expanded abroad. While he started small with limited industrial alliances, his ambitions soon grew. The bankruptcy of Chrysler gave him the opportunity to create a global car company with brands including Jeep, Ram, Alfa Romeo, Ferrari and Maserati that he envisioned would grow to 6 million cars a year. A global economic crisis that bottomed out car sales in key U.S. and European markets prevented him from reaching that goal, but his industrial vision never faltered as he spun off CNH and Ferrari into stand-alone entities. His most quoted presentation to analysts, titled "Confessions of a Capital Junkie," argued that consolidation was inevitable in the investment-heavy car industry. But though he tried for another merger with General Motors, talks never led to a deal. Still, newspaper photographs of a chain-smoking Marchionne awaiting talks with German Chancellor Angela Merkel outside the Chancellery in Berlin on the role of GM's then-subsidiary, Opel, made clear just how personally he took the negotiations. Marchionne had planned to step down as CEO of FCA after the close of 2018, with the presentation of the year-end results in April. He always insisted that his successor would come from inside — so it was no surprise when British manager Mike Manley, who helped boost Jeep to global success and get Fiat a foothold in Asia, was named as his successor as Marchionne's health failed. He had never indicated plans for Ferrari or CNH, leaving many to speculate that the tireless manager known for his short sleep cycles and globe-trotting style would use those positions to keep a foothold in the automotive world. In June, he laid out FCA's five-year plan — raising the eyebrows of analysts who pointed out he would not be the one to execute the plans. He responded by expressing confidence in his hand-picked teamwhich helped draft the targets. The plans included launching electrified powertrains across Fiat brands — a tacit acknowledgement that the company had lagged in introducing hybrid, hybrid-electric and full-electric engines. They also were to put Ferrari engines in Maserati cars as Marchionne sought to take on electric-car pioneer Tesla — but unlike at Tesla, which has so far failed to turn a profit, earnings were a fundamental at FCA. Marchionne's penchant for numbers was always clear in his attentive quarterly presentations. He let his real satisfaction show during the June 2018 presentation when he announced the company had reached zero debt, by donning a necktie for the first time in a decade — albeit briefly. His next major move was to be the presentation of a new business plan in September for Ferrari, which he aimed to turn into a luxury company beyond just cars to further boost earnings at the company that he was determined would remain an exclusive player with a limited annual production. At his last public appearance in his role as FCA CEO, Marchionne in late June attended a ceremony in Rome where a Jeep was presented to Carabinieri police. Marchionne began his brief remarks noting that he grew up in a household where his father was a Carabinieri officer. Speaking of the paramilitary police corps, he said he recognized in the Carabinieri "the same values at the basis of my own education: seriousness, honesty, sense of duty, discipline and spirit of service." Marchionne was divorced. He is survived by his companion, Manuela Battezzato, and two adult sons.
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Inflation rate rises to highest Annie Rueter The cost of living in Canada is going up at its fastest pace since 2012, new numbers from Statistics Canada show, as gas prices have risen by almost 25 per cent since last summer. The consumer price index rose to 2.5 per cent in June, from 2.2 per cent in May. It's the highest inflation rate on record since February 2012, the data agency said. Higher gas prices were one of the major factors in the increase, as pump prices have risen by 24.6 per cent from last summer's level. But it wasn't just gasoline — overall energy costs were a significant driver, up 12.4 per cent from last year. Prince Edward Island has the highest inflation rate in the country, with prices rising by 2.9 per cent over the past year. The lowest is in Quebec, where the rate of increase has been two per cent. In a separate release, Statistics Canada reported retail sales increased two per cent in May to $50.8 billion, following a 0.9 per cent decline in April.
Douglas Porter, chief economist at BMO, said poor weather in April — especially in Ontario and Quebec — hurt retailers. Auto sales jumped up 3.7 per cent during the month, but even if stripped out, retail sales were up a "strong" 1.4 per cent. General merchandise stores, building materials and clothing accessories stores contributed to the gain, while food and beverage stores saw a decline in sales for the fourth time in five months. Taken together, both reports point toward higher interest rates at the Bank of Canada, said James Marple, senior economist at TD. "Downside risks to trade remain ... but the economic data are increasingly making the case for further Bank of Canada rate hikes," said Marple. The strong showings in retail sales and the inflation figure suggest "the odds of one more hike this year have risen." The Bank of Canada will release its next interest rate decision on Sept. 5. |
Canada warns of retaliatory Hearing probes whether duties should be applied Andy Blatchford The federal government has sent a blunt warning to the Trump administration — if it slaps Canada with auto tariffs, Canada will hit back. Canada's deputy ambassador to the U.S. delivered the message Thursday in Washington during testimony at U.S. Commerce Department hearings. The department is investigating whether duties should be applied based on the premise auto imports pose a national security risk to the U.S. Putting levies on the highly integrated, economically critical North American auto industry and its supply chains would lead to large-scale layoffs on both sides of the border, numerous experts have warned. The talk of auto tariffs comes at a time when the next-door neighbours are already engaged in an unprecedented trade dispute. In June, the Trump administration imposed tariffs on steel and aluminum imports. The move prompted Canada to retaliate with reciprocal duties of its own on imports of the metals from the U.S., as well as dozens of other consumer products. Kirsten Hillman, Ottawa's envoy to Washington, insisted Canada will strike back again, if necessary. "Should this investigation ultimately result in the application of tariffs on autos, Canada will once again be forced to respond in a proportional manner," Hillman testified. Where Americans get their cars from
Americans bought 17.2 million cars last year. Less than 1/3 of them were made in America by the Big 3
"Maintaining open trade in autos and auto parts between our countries is crucial to the economic well-being of our companies, our communities and our workers, which, in turn, supports our collective security. We urge you to reflect on these matters as you prepare your recommendations." Canada's warning came the same day the European Union announced it was prepared to launch retaliatory measures against the U.S. if President Donald Trump introduced auto tariffs. Trump has proposed tariffs of 25 per cent in a decision he insists would help American workers. His administration has expressed concerns that, for decades, foreign imports have eaten away at the U.S. auto industry. Hillman rejected the idea that Canada could represent a risk for U.S. national security. She argued that American contingency planners have long considered Canadian industrial centres as key sources of reserve capacity in the event of an attack on the U.S. "In this investigation, you are being asked to examine a specific industrial sector: automobiles and auto parts. Not tanks. Not battleships. Civilian passenger vehicles and parts," she said. "So where's the nexus between civilian vehicles and national security? There is none and there's no basis for finding one." Jim Wilson, Ontario's minister for economic development and trade, also voiced concerns at Thursday's hearings. The province, which relies heavily on the auto sector, would suffer a big blow from U.S. levies. "If auto tariffs are imposed, everybody loses," Wilson said. At the start of the hearings, U.S. Commerce Secretary Wilbur Ross said, "It's clearly too early to say" if the investigation will ultimately result in a recommendation that tariffs be introduced based on national security grounds. "But President Trump does understand how indispensable the U.S. automobile industry is," Ross said. For several hours, U.S. industry leaders — one after another — testified that auto tariffs would inflict significant economic damage. They pleaded with the administration to back away from its threats. Ann Wilson of the Motor & Equipment Manufacturers Association said the tariffs would lead to significant job cuts within six months of their application and delay or eliminate research and development. Wilson warned that if tariffs were to make auto components too costly, then suppliers and vehicle manufacturers would be forced to move production outside the U.S. Out of all the witnesses Thursday morning, only one voiced support for an auto tariff investigation. Jennifer Kelly, director of research for the United Automobile Workers, said decades of weaker investment as well as the movement of auto jobs to low-wage places like China and Mexico by U.S. corporations has sapped the country's security. "We believe a comprehensive investigation into the impact of the loss of auto manufacturing and its consequences for our national security and economic well-being is long overdue," said Thomas, who also called for a careful study before the administration takes any steps that will affect the complex global industry. "We caution that any rash actions could have unforeseen consequences, including mass layoffs of American workers. But that doesn't mean we should do nothing." The debate over auto tariffs is in the spotlight at a deeply uncertain time in the Canada-U.S. business relationship. Trump's steel and aluminum tariffs are based on the premise that they represent a national security threat — the same assertion under investigation for the proposed auto duties. This week, the U.S. announced another national security probe into possible duties on U.S. uranium imports. The stalled renegotiation of the North American Free Trade Agreement, which also includes Mexico, has created additional unknowns for Canadian businesses. They warned the duties would hurt competitiveness, drive up prices on cars and trucks and trigger major job losses. "We appreciate the desire to strengthen our trade agreements to better achieve a level playing field, but tariffs are the wrong approach," said Jennifer Thomas, vice-president of federal government affairs for the Alliance of Automobile Manufacturers. "The opposition is widespread and deep because the consequences are alarming. Higher tariffs will harm American workers, families and the economy. Simply put, tariffs are a massive tax on consumers." |
US probes complaints that
Detroit – Federal safety investigators are looking into complaints that engines on some Ford Escape vehicles can overheat and suddenly stall while being driven. The U.S. National Highway Traffic Safety Administration says in documents posted on its website Friday that it has 40 complaints from consumers about stalling, including two alleging that the engines caught fire. The investigation covers about 127,000 Escape small SUVs in the U.S. from the 2013 model year that have 1.6-liter turbocharged four-cylinder engines. Investigators will determine the cause of the engine stalling, how often the problem happens, which vehicles are affected and whether a recall is warranted. Ford said in a statement Friday that it is cooperating with the investigation as it always does. In one of the complaints involving a fire, an Escape owner in Dozier, Alabama, reported that on June 6, the engine stalled while being driven, and the SUV coasted to a gas station, where it caught fire. There were no injuries. Last year, Ford recalled more than 200,000 vehicles with the same-size engines because they can overheat and catch fire. But the 2013 Escape was not included. Covered by the recall in North America are Escapes from the 2014 model year, plus the 2014 and 2015 compact Fiesta ST, the 2013 and 2014 Fusion midsize car and the 2013 through 2015 Transit Connect small van. Ford also conducted similar recalls in Europe and China. Late last year, Ford said in documents that it will repair any coolant leaks that might be found in the 200,000 recalled vehicles. The repairs were detailed in company documents posted by NHTSA in December and came 10 months after the company said it would only install a coolant level sensor “with supporting hardware and software.” In March of 2017, the automaker announced that it would recall the cars, SUVs and vans because their 1.6-liter turbocharged engines can overheat if coolant gets low, causing the cylinder head to crack and spew oil. At the time, Ford had reports of 29 engine fires with no injuries. Ford Motor Co.’s March press release and initial recall documents filed with NHTSA did not mention fixing any leaks but the company later said that was its plan all along. Experts say a healthy engine should not leak or consume coolant, which is often called anti-freeze and is circulated through the engine to regulate the temperature. The NHTSA investigation comes two days after an audit by the Transportation Department’s Inspector General found that the agency failed to act quickly on a consumer complaint, and that could have delayed recalls of dangerous Takata air bag inflators in various models. The Inspector General also found that the agency’s process for monitoring car and truck recalls isn’t adequate. And the report released Wednesday said NHTSA isn’t verifying recall completion rates reported by automakers or making sure manufacturers file proper documents. “Overall, inadequate controls and processes for verifying and collecting manufacturer-reported information have hindered NHTSA’s ability to oversee safety recall implementation,” the inspector general wrote.
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Ford recalls 550K vehicles
Detroit – Ford is recalling about 550,000 cars and SUVs in North America to fix a gearshift problem that could cause the vehicles to roll away unexpectedly. The recall covers certain 2013 through 2016 Fusion sedans and some 2013 and 2014 Escape small SUVs. Ford says a bushing that attaches the shifter cable to the transmission can fall off. If this happens, the driver could shift into park but the vehicle could be in another gear. That could let the vehicle roll, increasing the risk of injury or crash. The company says it doesn’t know of any crashes or injuries. Ford is advising owners to use the parking brake. Dealers will replace the shifter bushing at no cost. Owners will be notified by July 30. Parts should be available late this quarter. |
Carmakers to Trump:
Washington — The auto industry is unified in its opposition to the Trump administration's proposal to impose tariffs as high as 25 percent on imported cars, but leaders fear the message is likely not to be heeded. Groups that lobby for both Detroit manufacturers and their foreign counterparts will testify at a public comment hearing organized by the U.S. Commerce Department on Thursday, which is considering the duties under the guise of national security. The agency received 2,356 written comments — mostly negative — that included submissions from General Motors Co. and Toyota Motor Co. On Tuesday, a group of seven lobbying groups representing various segments of the auto industry released a letter to President Donald Trump that urged him to reverse course. The letter is a rare show of industry-wide unity. "We have come together as a united U.S. auto industry — domestic and international automobile manufacturers, suppliers, dealers and auto care businesses — to urge your Administration to achieve fair trade through policies that won't jeopardize American jobs, our economy or U.S. technological leadership," the letter said. "Raising tariffs on autos and auto parts would be a massive tax on consumers who buy or service their vehicles — whether imported or domestically produced," the groups continued. "These higher costs will inevitably lead to declining sales and the loss of American jobs, as well as increasing vehicle service and repair costs that may result in consumers delaying critical vehicle maintenance." The letter was signed by the Alliance of Automotive Manufacturers, which represents foreign and domestic car manufacturers; American Automotive Policy Council, which lobbies for Detroit manufacturers; the Auto Care Association, which represents independent manufacturers, distributors, repair shops, marketers and retailers; American International Automobile Dealers Association, which represents dealerships for foreign cars; the Association of Global Automakers, which represents international manufacturers; the Motor and Equipment Manufacturers Association, which represents part manufacturers; and the National Automobile Dealers Association. The groups are scheduled to testify Thursday. They will be joined by representatives from Volkswagen, Hyundai, the United Auto Workers union and ambassadors from the European Union, Mexico, Canada, Turkey, Japan, South Korea, Malaysia and South Africa. In the hopes of spurring Congress to take action to block the implementation of import tariffs, the Association of Global Automakers is planning a "drive-in" Thursday in which domestic workers at foreign-owned plants will drive cars they build to Capitol Hill to draw attention to the potential negative impact of tariffs. The auto workers will be joined by U.S. Sen. Doug Jones, D-Ala., and U.S. Reps. Drew Ferguson, R-Ga., and Jackie Walorski, R-Ind. Brian Krinock, senior vice president of vehicle plants for Toyota Motor North America, said Tuesday that a 25 percent tariff on finished vehicles or components would add as much as $3,000 to the price of some its best-selling U.S. models. "If we were to look at the Camry, about 30 percent of the parts inside the Camry are from somewhere else other than the U.S.," he said. "The cost would be $1,800 that would be impacted. If we look at Toyota Sienna, America's family van, about $3,000. That's made in Princeton, Indiana. If we also look our Tundra pickup truck, made in San Antonio, Texas, the cost would be $2,800." Krinock said the impact of tariffs would not be limited to Toyota, or even foreign-owned manufacturers. "I can say this that there's no automaker that has 100 percent exclusive in the U.S. source parts," he said. "It is a global business and global operations." Detroit manufacturers have warned the Trump administration that tariffs could expose them to retaliation from the home countries of foreign-owned competitors and put jobs of U.S. autoworkers at risk. In comments submitted to the Commerce Department in late June, GM warned: “If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs.” Most foreign-owned automakers have been reticent to release information about the potential impact of tariffs on their price of cars in the U.S. showrooms, but have argued that domestic jobs in plants typically located in states that carried Trump to the presidency could be put in risk. Hyundai, which builds the Elantra, Sonata and Santa Fe in Alabama, noted in a statement provided to The Detroit News on Tuesday that it "has a significant manufacturing presence in Alabama, and its U.S. operations and associated suppliers have created more than 25,000 American jobs and invested more than $8.3 billion in the United States." The South Korean company noted its domestic dealerships have also created 47,000 U.S. jobs. "Free and fair trade makes the United States a competitive market place," Hyundai said. "Broad restrictions, such as tariffs, on auto and auto part imports will raise costs for American consumers and families." Mazda, which has announced plans to build a $1.6 billion joint assembly manufacturing plant with Toyota in the U.S. that could open in 2021, said in comments submitted to the Commerce Department that tariffs would force it to reassess U.S. manufacturing plans and its ability to maintain a robust domestic dealer network. Volkswagen said in a Tuesday statement it "has made significant long-term investments in the United States that would be impaired by restrictive changes to trade including the proposed tariff on automotive imports from the European Union. "We believe that tariffs of this kind are a tax on the U.S. consumer and will result in higher prices and also threaten job growth," the German automaker said. "In addition, the potential for escalating trade retaliation presents a serious risk to economic growth in all countries." John Bozzella, the global automaker group's president, said Tuesday he has never seen the auto industry this united. "You cannot find a company that has asked for this protection," he said. "You cannot find a group of employees that has been loud and strident and forceful in a request for protection. I don’t see it anywhere." Chad P. Bown, senior fellow at the Peterson Institute for International Economics, a nonpartisan think tank, said the industry's united front may fall on deaf ears. He cited the the Trump administration's decision to impose tariffs on foreign steel and aluminum. "This may make no impact on the administration whatsoever," Bown said. "As we saw in the aluminum case, the aluminum industry came out against it."
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Ontario trade minister heads to July 18, 2018
Washington this week to defend the province's auto industry at a U.S. Department of Commerce hearing. Jim Wilson said he will be speaking Thursday at the public hearing to investigate national security issues around imports of automobiles and automotive parts. Wilson said he planned to stress the economic benefits of working with Ontario's auto sector. "It is clear that Ontario is not a national security risk to the United States," he said. "The U.S. and Ontario share many of the same goals — together, we can advance our shared priorities of creating jobs on both sides of the border by developing strong, competitive business environments that spur innovation and growth." U.S. President Donald Trump has slapped duties on U.S. steel and aluminum imports from Canada and other allies and threatened similar duties on Canadian-made cars and parts. Wilson called for balanced and fair trade between the two countries, adding that Canada and the U.S. have an integrated supply chain that benefits both. "One in five jobs in Ontario, or 1.3 million jobs in Ontario, depend on good relations with the United States and our trade relations," Wilson said. "In the United States, we want to go down there this week and make it clear that nine million jobs (in the U.S.) depend on good NAFTA negotiations with the United States, and that's what I'll be doing at the end of the week." Wilson's trip to the U.S. comes as Ontario Premier Doug Ford has pledged to work closely with the federal government on trade. Ford has said he and his ministers would discuss the importance of reaching a new NAFTA deal and added that Ontario will not sit on the sidelines. Shortly after winning the spring election Ford met with Foreign Affairs Minister Chrystia Freeland and Canada's ambassador to the United States, pledging his help in trade matters. "It's going to be a full court press," Ford said after the meeting in June. "I'm going to be travelling to every single state because nothing is better than meeting someone eye-to-eye." |
Ford to pay $299M to Keith Laing, Washington — Ford Motor Co. has agreed to pay $299 million to drivers of cars with faulty Takata air bags, according to court documents. The payouts, included in a settlement filed in federal court in Miami on Monday, intendes to reimburse drivers for expenses incurred while they are waiting for theirs cars to be repaired and provide loaners for drivers whose cars are inoperable until the fix is completed. Takata air bag inflators under recall are prone to explode with sometimes deadly force, especially in humid climates. Ford joins other automakers including Toyota Motor Corp., Subaru Corp., Mazda Motor Corp. and Nissan Motor Co. in reaching settlements with owners of its vehicles that have been impacted by the Takata recall. Toyota agreed in 2017 to pay $278.5 million; while BMW agreed to pay $131 million. Mazda Motor paid $76 million and Subaru paid $68 million. Nissan Motor Co. agreed to pay $98 million in a separate agreement that was also reached in 2017. Peter Prieto, a court-appointed attorney for plaintiffs in a class-action lawsuit filed over the air bags, said the agreement with Ford will help compensate drivers who were exposed to the possibility of exploding air bags. Ford has 3.8 million recalled air bags, of which it has fixed 938,000, according to the National Highway Traffic Safety Administration. The company urged customers to contact their dealers immediately for free repairs. "Safety is our priority," Ford said in a statement. "We remain focused on working with our customers to get their vehicles repaired." Recalls of Takata air bags have spread to nearly 13 percent of vehicles in the United States. The devices have been linked to at least 13 deaths and more than 180 injuries in the United States. Worldwide, 22 have died. |
Ford Fusion to be name
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Ontario's been fighting to get July 15, 2018 Long viewed as a close partner of the U.S. auto industry, delivering tooling services, components and finished vehicles in step with factories in the United States, Ontario has struggled over the past decade. Now it is battling back - determined to rekindle local manufacturing. Canadian economic leaders viewed the situation as dire, since Ontario is the center of the country's automotive sector. Since 2006, 16 new vehicle assembly plants have opened in North America - not one of them in Canada. Officials now believe they can regain Canada's competitive edge and win new auto investment by partnering with companies on their investments. "During the global recession, our government made the investments necessary to keep our auto sector strong during that turbulent time," Steven Del Duca, former Minister of Economic Development and Growth, said in an interview prior to a June 7 election, during which he lost his seat. "Ten years later, thanks to these actions, Ontario has a thriving auto sector - but there remain important opportunities that call for continued government support and investment." The focus now shifts to the Progressive Conservative's majority government led by Doug Ford, who doesn't always believe in using tax money to help spur investment by big corporations. In May, the Canadian and Ontario governments said they will invest a combined $220 million to support Toyota Motor Corp., which has announced projects there valued at $1.4 billion. Toyota said it will upgrade its two Ontario assembly plants to build the next-generation RAV4, as well as incorporate R&D operations. Last year, Ford Motor Co. said it will invest $1.2 billion to establish a connected vehicle engineering research centre in Ottawa and upgrade factories across the province. The Canadian and Ontario governments committed a combined $204 million to the projects. At the beginning of this year, Linamar Corp. also said it will invest $500 million in Ontario. The Canadian government committed $49 million to the project and Ontario said it will provide a conditional grant of up to $50 million. Linamar will use the money to advance next-generation technology for electric and connected vehicles, creating an innovation center dedicated to machine learning and robotics with 1,500 jobs. While the U.S. auto industry made a furious comeback in the years following the industry crisis of 2008-2009, some remnants of it lingered on in Canada. Canada, and Ontario in particular, lost out on critical automotive investment in 2010 as North American vehicle sales and production began to rebound, industry veteran Ray Tanguay, now an automotive advisor to the government of Canada and Ontario, reported in his 2018 "Drive to Win" report about the outlook for Canada's auto industry. "In order for Canada to win investments we cannot just be competitive," Tanguay wrote in his report. "We need to be better than other jurisdictions south of the border." The Linamar investment is a significant one because it represents a solution for an emerging opportunity- the industry's need for more engineering firepower. Linamar operates 20 plants around Guelph, Ontario. Del Duca said the supplier is considered a "true, homegrown success story and a vital pillar of the local economy in the Guelph region." Linamar CEO Linda Hasenfratz said the decision to make a major investment in Ontario was an important move for the supplier. "We have very deep capabilities and deep bench strength here in terms of manufacturing and technology," Hasenfratz said. "We absolutely want to take advantage of the fantastic workforce and people we have here to launch business. We're dedicated, and always have been, to manufacturing in Ontario."
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Goodbye Fusion sedan,
Ford Motor Co. is killing its slow-selling Fusion sedan while keeping the name to affix to a sport wagon it is developing to take on Subaru’s popular Outback, according to people familiar with the automaker’s plans. The Fusion name probably will live on when the sedan exits early next decade, according to a spokesman. It will be replaced in the showroom by a high-roofed hatchback built on the same mechanical underpinnings, said two people who asked not to be identified revealing future product plans. Ford shocked the auto industry – and many of its dealers – when it announced plans in April to abandon the shrinking sedan market and go all in on higher-profit sport utility vehicles and pickups. By early next decade, only the Mustang pony car will remain in Ford’s U.S. lineup. Worried that customers will defect to rivals, dealers have pushed to retain the Fusion name, which just four years ago was such a strong seller that Ford had to add a second factory of production. “They spent hundreds of millions of dollars for brand equity in that Fusion name – not $10 million or $20 million – but hundreds of millions,” said Rhett Ricart, one of Ford’s top dealers, whose showroom is near Columbus, Ohio. “The smart thing is to play on that brand equity.” Ford spokesman Mike Levine declined to speculate on the new Fusion’s design while confirming “we’ll likely continue to use the name because of its awareness, positive imagery and value with consumers.” The planned reinvention for the made-in-Mexico Fusion is akin to how Ford is transforming the Focus compact car into a crossover utility vehicle that the automaker will begin making next year in China. Ford needs to find a way to keep its sedan buyers returning to its showrooms. A trade-in analysis by researcher Kelley Blue Book found that less than half of Ford Fusion owners are loyal to the brand. The most popular SUV models that Fusion owners consider are the Honda CR-V and Toyota RAV4, KBB found. “Ford has a hard time moving people from their cars to SUVs,” said Michelle Krebs, a senior analyst with KBB affiliate Autotrader. The automaker has been vague on the Fusion’s future, even as it revealed it was ending production of the Taurus sedan in March 2019 and the subcompact Fiesta in May 2019. The Fusion sedan seems to be retiring some time in 2021, but the automaker appears to have reversed course on whether to keep the name in the lineup. “They were canceling it originally, but then they were like, No, we’re not canceling it,’” said John Murphy, an analyst for Bank of America Merrill Lynch, who publishes the closely watched “Car Wars” report that predicts future product plans for all major automakers. A sport wagon similar to the Subaru Outback will thrust Ford into a fast-growing and competitive segment of the market. With sales up 5.5 percent this year, the Outback is Subaru’s top-selling model and wins kudos for its practicality, dependability and fuel economy. Jim Farley, Ford’s president of global markets, hinted that such a vehicle was coming in April when he explained that the company was exiting sedans to offer a “growing variety” of “utility body styles.” He said those new models would “give customers the utility benefits without the penalty of fuel economy.” Ford dealers are just happy they won’t suffer the penalty of losing the Fusion name. “There’s no doubt that we’ve built up equity in that name,” said Jack Kain, a Ford dealer near Lexington, Kentucky. “We can’t let that go.”
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Appeals court approves $10B The Associated Press San Francisco –A U.S. appeals court on Monday approved a $10 billion settlement between Volkswagen and car owners caught up in the company’s emissions cheating scandal. The deal delivered “tangible, substantial benefits” and the federal judge who approved it did more than enough to ensure it was fair, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled unanimously. The German automaker agreed to spend up to $10 billion compensating owners of roughly 475,000 Volkswagens and Audi vehicles with 2-liter diesel engines – the bulk of the vehicles caught up in the scandal. Volkswagen acknowledged that the cars were programmed to cheat on emissions tests. Under the terms of the deal, the automaker agreed to either buy back the cars or fix them and to pay each owner thousands of dollars in additional compensation. U.S. District Judge Charles Breyer in San Francisco approved that deal in 2016 as part of a $15 billion settlement that also included $2.7 billion for unspecified environmental mitigation and an additional $2 billion to promote zero-emissions vehicles. Volkswagen has acknowledged that more than 550,000 vehicles in the U.S. were programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators found that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems. |
Transit van a quiet
Ian Thibodeau, It's not sleek, it's not fast and it's not flashy, but Ford's full-size Transit van has been a quiet sales giant, dominating the commercial van market across the world. And it's that very workhorse character that could make it and the smaller Transit Connect the potential platforms for the automaker's business plan to move people and things with fully self-driving vehicles, experts say. Ford has declined to comment on what model might carry the brand's autonomous business come 2021, when it says it will bring a robotic vehicle to market. But experts point to the vans' affordable and adaptable nature as logical bases to enter the market. For now, the Transit and passenger-oriented Transit Connect are generating sales during an off-year when the automaker has few new offerings to compete with flashy new SUVs and crossovers offered by competitors. The full-size van is popular among commercial buyers for its versatility and easily customized cargo space. Ford hopes the low price point and interior space can help its popularity among other buyers outside the commercial realm — though owning the commercial market has proven lucrative. "The Transit is really getting the lion's share of that commercial market," said Karl Brauer, executive publisher of Autotrader.com, a marketplace for car shoppers. The Transit commercial vehicle generates most of the sales for the segment. Ford says sales were up 7.5 percent through the first six months of the year, driven largely by fleet sales. Sales of the smaller Transit Connect were down 3.8 percent. "It's similar to how the F-150 is the best-selling vehicle in the full-size truck market," said Brauer. "You've got Ford owning these two highly profitable segments." Brauer, who in 2016 used a full-size commercial Transit to haul car parts from California to Michigan, said Ford has a unique vehicle in that model. It looks and drives like a modern vehicle, he said, not a clunky full-size van. Daimler AG, Fiat Chrysler Automobiles NV and General Motors Co. all produce full-size commercial vans. But Ford's global Transit platform dominates when it comes to global volume. The nameplate recognition and market penetration gives Ford an undercurrent of profit that helps carry the automaker as it prepares refreshed Transit and Transit Connect models this year during a slow time for new products. "It's basically the F-Series, part two," Brauer said. "If you're able to provide for commercial and fleet use when the economy is generally booming, that's a whole new level of profit." Mark LaNeve, Ford sales chief, said he expects retail sales for both vehicles to grow through the end of the year as the automaker gears up to launch a refreshed van and eliminate sedans from its lineup. "It's a hell of a great value in the marketplace," LaNeve said. "We're going to do a surprising amount of retail business." The success Ford has seen with the Transit in the commercial vehicle market is having a trickle-down effect, according to Stephanie Brinley, analyst with IHS Markit, a London-based analysis company. The success of the commercial vehicle is helping turn consumers' eyes to the Transit Connect, which would in turn build brand recognition and trust as Ford gears up to launch its autonomous vehicles in 2021. "The Transit Connect is finding a niche home," she said. "Others which have offered similar products have not seen the same success (and) part of Ford’s success with Transit Connect is related to its strong commercial business. "They have even more potential to support Ford's future autonomous vehicle plans, as the vehicles can be customized for multi-purpose use." Although Ford officials have declined to comment on what its first-generation autonomous vehicle will look like, or what platform it will use, the company has said it will be able to transition between moving people and moving goods. They have said it will be a hybrid and will be a new nameplate. That might not mean it's a new architecture, though. GM removed the steering wheel, brake pedal and accelerator from its Bolt electric vehicle, stuffed it with autonomous hardware and software, and renamed it the Cruise AV. Ford currently tests its autonomous software on hybrid Fusion sedans, though it uses Transit vehicles for the Chariot shuttle service it's invested in. For now, Ford hopes the Transit Connect will be piloted increasingly by human drivers. The company is marketing the van toward people like Chris and Tiffany Best. The owners of the Rust Belt Market in Ferndale said their Transit Connect has become a surprising asset as they balance work and family life. "It's a better value than some of the SUV models for our lifestyle," Tiffany Best said. She and Chris use the vehicle to haul anything from plywood to planters to the market. They also use it as a family-hauler. It's easier to get in and out of than an SUV, they said, and the high ceiling allows for more cargo space than most mid-size or small SUVs. Another perk: It doesn't look like a soccer-mom van. "It looks cool," Chris Best said of their gun-metal gray Transit Connect. "It's not like a typical van." That's something Ford hopes to build on as it eliminates sedans from its lineup, though analysts don't think the Transit Connect will be able to fill in the gap sedans will leave. With the Fusion, Fiesta Taurus and Focus sedans to be axed — along with the C-Max compact — the Connect would become Ford's second-cheapest vehicle, currently retailing at $23,215. Ford has said the Focus will be redesigned into a crossover dubbed the Focus Active. Other crossovers are expected to enter Ford's lineup in the next few years. Brinley expects the Transit and Transit Connect to remain silent profit pillars for the Dearborn automaker moving forward. "I don’t think it’s going to come close to filling a sedan gap," Brinley said. "It’s not sexy, it’s practical. There are more utilities coming from Ford which will do better. |
Auto tariffs would be If Canadian government responds in kind, it could CBC News July 9, 2018 The U.S. government threat to put a tariff on all Canadian-made vehicles would be "catastrophic" to Canada's economy, costing 100,000 jobs and adding as much as $9,000 to the sticker price of a new car if Canada responds in kind, dealers say. Following recently announced levies on steel and aluminum, U.S. President Donald Trump has repeatedly threatened in recent months to impose a similar tariff on Canadian-made vehicles, something the Canadian Automotive Dealers Association warned Friday may be enough to tip the entire economy into recession. The metal tariffs saw steel face a surcharge of 25 per cent, while aluminum was hit with a 10 per cent hike. The president has suggested a similar plan for cars, one that would see 25 per cent on cars themselves, and 10 per cent on parts. "This — or anything close to it — would be catastrophic for not only the Canadian automotive industry but for the economy as a whole," CADA's chief economist Michael Hatch said at a news conference Friday in Ottawa. The group, which represents 3,200 Canadian car and truck dealers, says that more than 100,000 manufacturing jobs would be at immediate risk if tariffs are imposed. "Longer term, indirect job losses at dealerships and elsewhere would drive this number much higher," CADA said. Other recent reports from banks have had similar conclusions, with Toronto-Dominion Bank recently calculating that the job toll from auto tariffs could be in excess of 160,000. Hatch's analysis suggests that Ontario would feel the impact more than anyone, as the province is home to the lion's share of all auto and parts manufacturing in Canada. On the consumer side, CADA estimates that if Canada responds with similar tariffs of their own on U.S. cars — just as they did in retaliation to the metals tariffs — he expects the average price of a car to increase by between $5,000 and $9,000, depending on the make and model. The average new car in Canada currently costs about $40,000, CADA says. "Impacts on industry on both sides of the border will be significant but in the end it is the American consumer that will pay by far the biggest price if tariffs are imposed," Hatch said. "These figures aren't alarmist, they are the reality that we face." Car dealerships employ 156,000 Canadians, CADA says, and as many as 30,000 of those jobs could immediately be at risk if any car tariffs come to pass. "In a trade war, we point the guns at ourselves," Hatch said. The group urges lawmakers to do anything they can to avoid that scenario, by working to secure a new NAFTA deal. But if the worst should happen, CADA is recommending three steps it wants the federal government to take in order to minimize the damage:
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Aging lineup ails Ford in China Ian Thibodeau, Ford Motor Co. sales in China slid by 25 percent in the first six months of the year, just as a trade war breaks out between the U.S. and that country. China said Friday it would retaliate against U.S. tariffs with 25 percent duties of its own on certain products — including automobiles from the United States. In response to that declaration, Ford said Friday it will not raise the prices of its vehicles exported to China for now, according to a Bloomberg report. The Dearborn automaker said exports to China totaled 7,848 for the first half of the year. An aging vehicle lineup was the primary culprit that hurt Ford's China sales for the first half of 2018, even as some of its competition flourished. While Lincoln brand sales have increased 4 percent for Ford in China this year, the automaker has struggled to sell aging the products that it imports there, as well as those it sells with its joint ventures. Peter Fleet, president of Ford's Asia Pacific wing and CEO of Ford China, said the company knew 2018 would be a tough sales year due to its product cycle. "China is a new product-driven sales market," spokeswoman Lori Arpin said in an email. "As part of our In China, For China strategy, Ford will introduce a wave of exciting new products later this year including the all-new Focus and new Escort. As our volume vehicles, the all-new Focus and new Escort will hit the showroom in a few months." Arpin said Ford is focused on a long-term strategy, and plans to expand its product portfolio there as part of plan that takes the company through 2025. She said Ford is focused on its plan as the trade war between the U.S. and China erupts. Ford reported it sold 62,057 vehicles in China in June, a 38 percent decline compared to the same month a year ago. It's sold 400,443 vehicles there this year. Meantime, Ford's crosstown rival General Motors Co. reported China sales grew 4.4 percent in the first half of the year, having sold 1.8 million vehicles. The Detroit automaker plans to add 10 new models there in the second half of the year. GM sold nearly double the number of vehicles in the second quarter in China than Ford has sold there all year. Buick moved 230,454 units in China in the second quarter; Lincoln has sold 24,314 vehicles there in the first half of the year. Ford plans to launch four redesigned vehicles in China later this year. "Looking forward to the second half of the year, we will continue to bring our strategy to life by further strengthening our relationships with our partners and dealers, providing our customers with more choices and nurturing our local team for a bigger, better and brighter future for Ford in China," said Fleet in a statement. |
U.S. auto tariffs could cut Canada produces just over 2 million new Rajeshni Naidu-Ghelani The number of cars made in Canada could fall by almost 900,000 units a year if the U.S. hits this country with a 25 per cent auto tariff, according to a recent report by CIBC. Royce Mendes, senior economist at CIBC Capital Markets, is the latest analyst to sound the alarm over the impact that Canada's economy could see from the recent tariff threat from U.S. President Donald Trump. "It wasn't that long ago when it was commonplace to question whether President Trump could make good on his promises. But, so far, he's generally found ways to stay true to his word, and that's exactly what's so concerning about auto tariffs," Mendes said in a note on Wednesday. Trump and his administration have repeatedly threatened Canada with the possibility of imposing a 25 per cent tariff on cars imported from Canada, along with 10 per cent tariff on auto parts after deciding against exempting Canada from hefty tariffs on steel and aluminum since June. The Canadian government has responded with tit-for-tat tariffs on those metals from the U.S., along with tariffs on a long list of other goods starting this month, which has intensified the trade war between the two neighbours. Mendes estimates that if the U.S. imposed a 25 per cent tariff on cars imported from Canada, then that would result in the country's auto production falling by 900,000 units a year. But, if a U.S. auto tariff was imposed on all imported cars, and not just those from Canada, then production in the country could fall by more than 400,000 cars a year. Canada produces more than two million new vehicles a year, according to Statistics Canada. That suggests that car production in the country would fall by roughly half if only Canada was targeted with a U.S. auto tariff, according to CIBC. "After also accounting for a 10 per cent U.S. tariff on [auto] parts, and the fact that reduced Canadian production would require fewer foreign inputs, we estimate the direct drag on GDP [gross domestic product] to be one per cent and 0.5 per cent respectively for each scenario," Mendes said. "That doesn't take into account a resultant weaker Canadian dollar, which would work to soften the blow, but a hit to confidence could potentially seriously worsen the situation." Job losses north of border In terms of how many jobs would be affected by the fall in Canadian auto production, Mendes didn't specify the resulting number of job losses. He did, however, add that there could be a ripple effect over time as people who lost jobs spend less and cause employment to decline in other industries. Just last month, however, TD Bank warned that Trump's auto tariffs could cost Canada 160,000 jobs, especially if Canada retaliates. Mendes said that while it's tempting to suggest that Canada could raise its own tariffs and force Canadians to buy cars made in the country, that is not a "feasible solution." "Canada only produces a handful of models relative to the hundreds of choices to which consumers have become accustomed to," he said. "Unless you believe someone looking to buy a flashy drop-top convertible sports car would be satisfied leaving their local car dealership with the keys to a minivan, it isn't a feasible solution to the potential problem at hand." He added that U.S. consumers were somewhat better prepared to deal with an import tariffs on cars, because U.S.-made cars accounted for almost 80 per cent of total cars sold in the country last year. In comparison, only about 10 per cent of cars made in Canada last year were bought by Canadians. Meanwhile, Douglas Porter, chief economist at BMO Financial Group, said that there's no way one can put that fine a point on what will happen to auto production in Canada on the back of U.S. auto tariffs. "Companies will ultimately decide whether to keep plants open or not, so production is going to move in big discrete chunks," he said. Porter did, however, agree with Mendes that the tariffs could send Ontario, the heart of Canada's auto production, into or near a recession. "Given the range of U.S. import volume changes resulting from the tariff, Canadian auto production could be cut by somewhere in the 600,000 to [the] one million unit range," Porter said. "Assuming a similar impact through the parts supply chain, this would directly carve roughly 0.3 to 0.6 percentage points from Canadian GDP, and could put at least 40,000 factory jobs at risk."
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Advocacy group seeks Ford
Detroit – A nonprofit auto safety advocacy group is asking Ford to recall 1.35 million Explorer SUVs due to continued complaints of exhaust fumes in the passenger compartments. The Center for Auto Safety says it found 44 complaints in a government database about fumes and potential carbon monoxide after owners had taken Explorers in for free repairs in a Ford customer service campaign that started last October. The center made its request in a letter to Ford CEO Jim Hackett this week. The National Highway Traffic Safety Administration has been investigating the problem for two years in police and civilian Explorers from the 2011 through 2017 model years, but it has not reached a conclusion. Ford says Explorers are safe, owner complaints have decreased and the free service has addressed the exhaust odors. The company says anyone who isn’t satisfied with the repairs should contact their dealership “for further inspection.” In the service, Ford said mechanics would check for leaks in the rear lift gate gaskets and drain valves. If any leaks are found, they’ll be sealed or gaskets will be replaced to prevent fumes from entering. They’ll also reprogram the air conditioning to let in more fresh air. “The continued complaints and corresponding reports of incidents and injuries demonstrate the problem of carbon monoxide exposure inside Ford Explorers has not been resolved,” Jason Levine, the center’s executive director, said in a statement. Based on complaints, Levine said the problem seems to have continued into model year 2018 Explorers “suggesting that the issue apparently has not been designed out of the vehicle.” Levine said he thinks NHTSA would look into the effectiveness of a recall if 44 owners complained that the remedy did not work. The center also said Ford and NHTSA should do a recall “before tragedy strikes” from a driver or passenger being overcome by fumes. Prior to October of last year, Ford had focused on fixing only law enforcement versions of the Explorer. But while maintaining the civilian versions were safe, the company said it decided to do a service campaign for them in response to customer concerns about odors and carbon monoxide. NHTSA began its investigation of Explorers in July of 2016. The agency said previously that tiny cracks in the exhaust manifold – a cast iron or stainless steel tube that carries combustion gasses to the exhaust – could explain why fumes are entering the cabin. But Ford has said there is no pathway for exhaust to escape from the manifold into the car. NHTSA said in a statement Tuesday that it is testing multiple civilian and law enforcement vehicles and doing field inspections of vehicles involved in complaints. The agency also says it’s testing and monitoring the effectiveness of Ford’s customer service repair campaigns.
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FCA's Canadian plants safe if John Irwin Unifor President Jerry Dias says he is confident Fiat Chrysler’s Canadian assembly plants will survive even though the Chrysler and Dodge brands were left out of the company’s five-year business plan, which spans from 2018 through 2022. FCA unveiled its five-year plan in Italy in June. The automaker focused most of its attention on Jeep, Ram, Alfa Romeo and Maserati. The absence of Chrysler, Dodge and Fiat led to speculation that those brands could be on the chopping block, though the company maintains that the brands will not be eliminated. Their omission raised questions about the future of FCA’s Ontario operations. FCA’s Brampton plant builds the Dodge Charger, Dodge Challenger and Chrysler 300, while the Windsor plant assembles the Chrysler Pacifica and Dodge Grand Caravan minivans. The company employs about 9,600 hourly workers at the two facilities, combined. Dias said FCA has assured him the plants will survive into the future with product commitments, though he did not say whether the company has pledged new products such as a Jeep vehicle to either factory. He said he has confidence in FCA CEO Sergio Marchionne, a Canadian citizen, wanting to keep those plants open. “I take him at his word,” Dias said. “I doubt very much that he would want to see the fall of those plants on his watch.” Both plants have received investments from FCA in recent years. As part of 2016 labour negotiations, the Brampton plant was slated for a $325 million retooling of its paint shop, while the company spent more than $1 billion to retool the Windsor plant for assembly of the next-gener- ation minivan. Of course, there is still NAFTA renegotiations and U.S. President Donald Trump’s threat of tariffs on vehicles imported from Canada. FCA is developing contingency plans to adjust its manufacturing footprint should Trump’s hardball trade tactics result in higher auto tariffs or the collapse of existing trade agreements. However, it’s not clear how Canada fits into those plans. FCA’s five-year plan includes a new three-row Jeep Grand Cherokee, a midsize Ram pickup, several new or updated Alfa Romeos, a battery-electric Maserati sport coupe and other new products. Marchionne said FCA would spend US$9 billion (C$13.7 billion) on a plan to electrify its lineup.
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Trump tariffs could add July 3, 2018 TORONTO — The Trump administration's tariff threats have the potential to drive companies currently operating in Canada out of the country, the president of a Canadian automotive association said Tuesday. The United States has already imposed tariffs on the steel and aluminum industries and has threatened to impose a 25 per cent levy on Canadian-made autos. The tariffs could make Canadian-made products uncompetitive and add $6,000, $10,000 or more to the cost of a vehicle, said David Adams, president of Global Automakers of Canada, at an event sponsored by the Economics Club of Canada. He said a non-automotive company he knows has decided it can't expand in the United States from Ottawa, because of the uncertainty, so it's opening a U.S. office and the same could happen to automotive companies. "The uncertainty effectively does the job of…driving more investment into the United States as the safe harbour," Adams said. The Trump administration hasn't necessarily realized that the its tariffs will also hurt the United States, said MaryScott (Scotty) Greenwood, chief executive of the Canadian American Business Council — pointing to a recent announcement by Harley-Davidson. A tariff war between the U.S. and many of its trade partners has already prompted the iconic American motorcycle company to move production of motorcycles bound for Europe overseas, blaming European Union tariffs it said would add an estimated $2,200 cost to the average bike. That prompted President Donald Trump — whose own tariffs prompted the EU moves — to accuse Harley of using tariffs as an excuse for moves already planned. "It's a very dangerous game we're playing here, economically," Greenwood said. Prime Minister Justin Trudeau has announced Canada will impose $16.6 billion in retaliatory tariffs on U.S. products coming into Canada, which went into effect on Sunday. But CIBC chief economist Avery Shenfeld said Tuesday the United States is far better equipped than Canada to withstand the use of tariffs as a "sledge hammer" in trade negotiations. Some Americans will face higher costs on imported goods from Canada but U.S. producers will be at a smaller risk because their home market is so much bigger than ours, Shenfeld said during a panel discussion about NAFTA in Toronto. "If you are doubting whether or not you can produce that widget for (a car) in Canada and avoid a 25 per cent tariff when you sell that part to the American plant, you're . . . going to want and see what happens," he said. "Canada and Mexico can't afford to have this cloud of uncertainty, to a much greater extent than the U.S. can."
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Province Announces Changes Kelly Roche Prescription drug coverage is changing -under the new OHIP+ program- less than 24 hours after Ontario Premier Doug Ford unveiled his “all-star” cabinet at Queen’s Park. Minister of Health and Long-Term Care Christine Elliott says it’s “more efficient, saving the taxpayers money and dedicating resources to the people who need it most.” The OHIP+ program -which provided free meds for Ontario residents 24 and under- is now covering only those who don’t have existing prescription drug benefits. Kathleen Wynne’s Liberal government rolled out pharmacare on Jan. 1, 2018 — with a $465 million price tag. But now it’s being revised and “children and youth who are not covered by private benefits would continue to receive their eligible prescriptions for free,” said Elliott. This means those who are covered by private plans would bill those plans first, with the government covering all remaining eligible costs of prescriptions. “Since insurance plans can cover thousands more drugs than the 4,400 currently available through OHIP+, children and youth would have access to more medications than under the current program,” said Elliott. Private insurers have previously given the government a grace period for some medications, which is set to expire on July 1. “We are asking those insurance groups to extend this grace period as we make these changes,” Elliott said. “We look forward to working with insurance groups to ensure a smooth transition to this updated system.” The Liberals also extended pharmacare coverage to seniors, making prescription drugs free for Ontario residents ages 65 and over starting August 1, 2019. Commonly prescribed drugs for cholesterol, hypertension, thyroid conditions, diabetes, and asthma were to be covered. It’s unclear where it stands. Ontario is the first province to provide prescription medication coverage at no cost for children and youth age 24 and under. |
Automakers push back against Half of imported vehicles come Automotive News WASHINGTON -- The trade association representing international automakers operating in the United States said Wednesday that imposing tariffs on imports of vehicles and parts for national security reasons would harm the auto industry by raising prices, lowering demand and inviting retaliation from trading partners. The group predicted significant job losses in the United States. President Donald Trump has long complained about the U.S. trade deficit in automobiles, especially criticizing Germany and the European Union, and instructed his administration to investigate whether any action is needed to correct the imbalance. He has floated the possibility of a 25 per cent import tax. “America does not go to war in a Ford Fiesta,” Association of Global Automakers President John Bozzella said in a conference call with reporters. “There is no national security justification for taxing imports of vehicles and parts or discriminating between global companies headquartered here or in allied countries. Every U.S. production facility in the industry could be made available in a national emergency, and the 130,000 Americans who work directly for international automakers are no less patriotic or willing to serve their country in a time of crisis than any other American.” “If this investigation leads to tariffs, retaliation against U.S. exports is inevitable,” Bozzella added. Substantial tariffs against major US auto exports have in fact already been announced, placing American auto workers on the front lines of this trade conflict.” The Trump administration is investigating whether auto imports are a national security threat under authority in the Trade Expansion Act of 1962 that has only been invoked on two occasions -- only one of which resulted in any trade action before the Trump administration. Most trade experts and economists say using national security as a pretext for protectionism opens the door for other countries to circumvent World Trade Organization rules and claim sovereign rights to impose tariffs based on defence needs. Bozzella noted that the U.S. auto industry is thriving, with near record levels of production, sales and exports, and isn’t seeking government help against imports. The Association of Global Automakers noted in the filing that all 14 automakers producing vehicles in America -- including homegrown Ford Motor Co., General Motors and Fiat Chrysler Automobiles -- import vehicles, accounting for 44 per cent of U.S. sales. Of these, half are imported from free-trade partners Canada and Mexico, and those vehicles incorporate significant U.S. content. The Alliance of Automobile Manufacturers, whose members include many that belong to the Association of Global Automakers as well as the Detroit Three, also filed comments warning that 25 per cent tariffs would add about US$5,800 to the price of a vehicle and collectively cost consumers US$45 billion per year. The alliance usually focuses on safety and environmental issues related to autos, leaving trade issues to the Automotive Policy Council, representing companies with domestic headquarters, or the Association of Global Automakers. Its involvement suggests that the domestic and international automakers are on the same page, given that the tariffs would also apply to equally to Buick's imports from China and BMW's from Germany, and because all manufacturers import parts for vehicles assembled in the United States.
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Congratulations to
Sherry Genova
Ian Kinnear
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