2011 Mustang may
get up to 30 mpg

Scott Burgess / The Detroit News -Nov 30, 2009

The base model of the 2011 Ford Mustang will come with nearly GT power and could get up to 30 miles per gallon in highway driving, Ford Motor Co. announced today.

Ford will debut a new V-6 engine for the sports car this week at the Los Angeles Auto Show and says it will give the basic Mustang power to rival the performance-oriented Mustang GT, which has a V-8 under its hood.

The 3.7-liter powerplant, which replaces the 4-liter V-6 now in Mustangs, will produce 305 horsepower and 280 pound-feet of torque while also offering better gas mileage.

Ford projects the engine will get 19 mpg in the city and 30 mpg on the highway. The 2010 Mustang's 4-liter engine creates 210 horsepower and 240 pound-feet of torque, while achieving 18 mpg in the city and 26 mpg on the highway.

The new Mustangs will be available at dealerships in the spring.

Stephanie Brinley, an automotive analyst at Southfield-based consulting firm AutoPacific Inc., said the additional power catches the Mustang up to the V-6 Chevrolet Camaro and should help it stay at the top in pony car sales next year.

"The V-6 Mustang is Ford's best-selling Mustang and this is a lighter car, so it should feel faster," she said. "For people looking for these kinds of cars, Mustang is still the place to go."

According to Autodata Corp., which compiles car sales statistics, Ford sold 56,469 Mustangs through October, down 32.4 percent from the same period last year.

The Mustang remains about 8,000 units ahead of the Camaro, which was reintroduced this year by General Motors Co.

The new powertrain suggests that the GT will have to show some big improvements soon, Brinley added.

The 2010 GT with a 4.6-liter V-8 produces 315 horsepower and 325 pound-feet of torque. It gets 16 mpg in the city and 24 mpg on the highway.

By raising the base model's vitals and performance level, Ford likely will have to do the same to the 2011 GT, though the carmaker has not announced a new powertrain for that car.

The V-6 Mustang will come with a six-speed automatic or manual transmission, dropping its well-used five-speed.

Ford has promised to include six-speed transmissions on 90 percent of its vehicles by 2013 in another effort to make its vehicles more fuel efficient.

The new Mustang V-6 engine, built in Cleveland, boasts a number of high-tech features such as variable camshaft timing and variable valve overlap to improve the car's emissions, fuel economy and power. Ford has dubbed the system Ti-VCT.

"Drivers are going to notice improved low-speed torque and increased fuel economy and peak horsepower," Jim Mazuchowski, Ford's manager of V-6 powertrain operations, said in a news release. "Plus, there are benefits they won't notice, too, such as reduced emissions overall, especially at part-throttle."

Ti-VCT can lower the engine's emissions by controlling the NOx -- nitrogen oxide -- and hydrocarbons.

Ford will also announce at the Los Angeles show that it will introduce a performance package for the V-6 Mustang.

It will include a different rear axle for faster off-the-line acceleration, struts, stabilizer bars and brakes from the GT, unique badges and other features.

The performance V-6 Mustang will be available at dealers in the summer.

2010 Ford Fusion: A stride
ahead of its predecessor

Ford's 2010 four-cylinder Fusion is fast enough and frugal enough, good-looking enough outside and tastefully revised enough inside that its overall flavour - despite an element of "leftovers" in this mid-sized dish -is much enhanced, better balanced and far more appealing.

The mid-size Fusion first appeared for 2006, a sort of "fusion cuisine" mix of some much-revised Mazda6 technology wrapped in styling and equipped in a fashion it was felt would suit a North American palate content with blander fare.

Now, with even mainstream fast-food brands offering bolder-flavoured versions of their traditional offerings for the more daring burger buyers, Ford has given its latest Fusion a zippier taste too. Albeit one that one that won't put the family value "burghers" who buy one - the four-cylinder version anyway - off at first bite.

The Sport that tops the range offers real motoring zest with its 3.5-litre, 263-hp V-6, all-wheel-drive, sport-tuned suspension and 18-inch wheels and tires. Think of the four-pot-powered Fusion SEL we're taking a look at as the white-bread model, but made with enriched ingredients.

Four-cylinder Fusions come in a quite well-equipped S form at $21,499, a better-equipped SE grade at $22,799 and in feature-enhanced SEL versions for $25,799. The test SEL was also equipped with a Moon & Tune option package: moon roof and Sony Audiophile 12-speaker audio, plus a rear spoiler and block heater. With destination charges, the final tally, less taxes, was $28,879.

While the basic structure may still be based on the original architecture, it has been so extensively revised it just about qualifies as "new." And while the suspension design and braking system remain essentially the same too, they have also been updated.

It's hard to describe, but the structure of the Fusion feels not solid so much as taut. And the spring and damper rates chosen, combined with the new electric power steering's positive feel and the linear response you get, make it much more enjoyable in pure driving terms than Ford's first Fusion. Ride comfort is fine, too.

There's also more power, with the previous 2.3-litre unit increased to 2.5 litres, horsepower increased by 15 to 175 hp at 6,000 rpm and torque increased by 16 lb-ft to a peak of 172 lb-ft at 4,500 rpm. This is vectored to the front wheels by a choice of six-speed manual or automatic transmissions.

The SEL comes with the latter and it helps generate solid off-the-line surge and plenty of acceleration through the gears. And it kicks down to an appropriate gear to tap into optimum engine output to provide strong acceleration for passing or merging.

Its tall top gear helps put up a highway fuel economy number of 6.4 L/100 km and a city rating of 9.4. After about 500 km, much of it Highway 401 driving, the onboard readout on the test Fusion was showing an average of 8.0 L/100 km. At a highway cruise, it was showing an average of just 6.0 L/100 km.

Ford claims the base S with automatic is the most fuel-efficient mid-sizer in Canada with ratings of 8.9 city/5.8 highway (there's also a Hybrid that does even better).

Mechanically, this latest four-cylinder Fusion is a stride ahead of its predecessor, with more than enough performance to make it easy to opt for rather than the pricier and less fuel-efficient V-6.

These updated bits and pieces are wrapped in bodywork that from the windshield back has a familiar look, a revised rear deck and taillights aside, but is fronted by arched fenders, a high-rise power dome hood and a massive three-barred grille. The latter wouldn't look out of place on Ford's F-150 pickup in terms of size and sheer chrome splendour. It all seems to work though, giving the Fusion a distinctive and decidedly less frumpy look.

This is also true on the inside, where there's plenty of head/shoulder/knee room front and rear, an all-new instrument panel with an electro-luminescent green-tinted gauge display and a leather-wrapped wheel with audio and cruise controls. Door caps are in a semi-soft material and silver trims the panels for the window controls, the centre stack (flanked by even nicer metal mesh trim) and the console - with some chrome touches here and there to add a little sparkle.

Seats aren't anything special, but have long enough cushions and between them are chrome-trimmed and blue-lit cup holders. In fact, there are a lot of nice detail touches, including lighted vanity mirrors and grab handles. Headlights are average and noise levels at speed low.

The trunk holds a useful 467 litres, made even more so by the 60/40-split rear seat and fold-flat passenger seat.

Minor quibbles are the high angle of the signal/wiper stalk, the headlight switch and info display button being located a long reach away down by your left knee and the presence of a high hump behind the rear seat that's more noticeable than a real nuisance.

The SE comes with power windows and driver's seat, air conditioning and audio, and the SEL adds alloy wheels, eight-way power driver's seat, auto-dimming mirror with microphone and compass, dual-zone automatic climate control, Ford Sync voice-activated entertainment and communications, automatic headlamps, keyless entry and bright trim outside. A pretty rich mixture for the asking price.

With this latest Fusion, Ford has boosted its passenger car game, as it has with its new entry-level Fiesta, the compact Focus and the now-full size Taurus. All are worth a look.

And hey, if you buy a Fusion right now they'll throw in a set of winter tires and rims, a nice (and novel) little added inducement with winter in the offing.

2010 FORD FUSION SEL

Type: Mid-size FWD sedan

Base Price: $25,799; as tested, $28,879

Engine: 2.5-litre, DOHC, inline-four

Horsepower/torque: 175 hp/ 172 lb-ft

Transmission: Six-speed automatic

Drive: Front-wheel-drive

Fuel economy (litres/100 km): 9.4 city/6.4 highway; regular gas

Nortel approves more exec raises

CBC NEWS - Nov 27, 2009

Management at Nortel Networks Corp., already under fire for handing out executive bonuses, approved a plan this fall to give another round of raises to its top managers, according to an internal corporate document obtained by CBC News.

The raises, in the form of increases in salary, investments or bonuses, are part of the company's plan to retain employees as it restructures after filing for bankruptcy protection in January.

But they come at a time when many laid-off and retired Nortel employees are having to fight the company in court for their severance packages, pensions and disability payments.

The former employees contacted by CBC were outraged at what they say is another example of corporate greed.

"I am shocked," said Melanie Johannink, who worked for Nortel for 18 years before being laid off in the spring. "It kind of makes you wonder where the money is going."

Former Nortel president Bob Ferchat told the CBC he was also surprised at the extent to which executives at a company in bankruptcy protection were rewarding themselves.

"My reaction, frankly, to the document is 'Here we go again'," said Ferchat. "It's another round of people dividing the proceeds, eating the carcass of the company before it's even dead."

14 executives to earn over $500K

The internal document obtained by CBC outlines a new compensation scheme for 72 Nortel executives that will see them get a total of $7.5 million US on top of their current salaries in 2009.

Of those 72 executives, 14 will be getting compensation of $500,000 or more.

The biggest earner under the new compensation plan is former treasurer John Doolittle, who took over as head of the company's corporate group in August after the departure of chief executive Mike Zafirovski. Doolittle's total compensation has been bumped to $1.68 million this year, an increase of 1.12 million over 2008, when he earned $390,000 US in salary and an estimated $170,000 US in investment and bonus money.

Nortel confirmed a new compensation scheme had been approved but would not confirm the specific information in the document CBC obtained.

Former CEO defended bonuses

Before departing in August, Zafirovski had already riled up retired and laid-off employees when he proposed $45 million in bonuses to key executives. The bonuses were approved by a U.S. bankruptcy court in March, a month after the company announced 3,000 job cuts.

Zafirovski defended the payments, saying they were necessary to retain vital executives who might otherwise flee the flagging company as it tried to maximize the sale of its assets and pay off creditors.

However, he told a House of Commons finance committee looking into Nortel's situation that the company's constrained cash resources and competing creditor claims meant it wasn't possible to pay severance to laid-off employees. He also said the company decided to trim the value paid out for pension benefits to reflect the pension plan's current funding levels.

He said the refusal to pay severance was an "agonizing" decision.

"It has weighed on me greatly," he told the committee.

"The decision not to pay severance was not taken lightly."

Zafirovski further enraged retired Nortel employees when he made a filing in October with a U.S. bankruptcy court naming himself as a creditor and claiming more than $12 million US from the company, about half of which was for pension benefits. That claim is still under review.

Workers seek pension reform

Nortel's pension deficit was estimated to be between $2.5 billion and $2.8 billion when it filed for bankruptcy protection in January.

Don Sproule, chairman of the national committee for members of Nortel's pension plan, has said about 17,500 retired Nortel employees have been affected by the bankruptcy.

Sproule said the issue for retirees is that Nortel's pension plan is about 69 per cent funded, leaving 31 per cent up in the air and in the hands of bankruptcy courts, which consider retirees and workers seeking severance or disability payments a lower priority than other creditors.

The pension deficit was discussed on Parliament Hill, and in October, federal Finance Minister Jim Flaherty introduced new rules for public pensions to ensure companies do a better job funding their plans. But the reforms would do nothing to address shortfalls in private pension plans at companies like Nortel. Ottawa has been reluctant to use taxpayer funds to guarantee private pensions.

Earlier in October, the Quebec government vowed to safeguard the pensions of 3,750 Nortel employees in the province for a maximum of five years. National assembly member François Ouimet called the measure a "special situation."

The NDP has proposed changes to the Bankruptcy and Insolvency Act that would designate workers seeking to claim the unfunded portion of their pensions preferred creditors in bankruptcy proceedings. NDP Leader Jack Layton has said the party is working on similar legislation for disability payments.

Disability payments on hold

For 62-year-old Alice Campbell, the loss of funds from her disability pension would be devastating. Campbell says she has been on disability for 15 years since a series of unsuccessful surgeries and pays more than $1,000 a month for medications.

"To lose their support on my pension... the cost of my drugs is unreal," she said. "I don't know what I would do, I really hate thinking about it."

Like Johannink and Ferchat, Campbell was dismayed that executives are being rewarded while rank-and-file workers go without the money they are owed.

Superlux Ford Taurus coming

Larry Edsall / Special to The Detroit News
November 26, 2009

You can't buy the Superlux version of the Ford Taurus at your local Ford dealership, at least not yet.

But Tommy Zondervan of Hudsonville hopes lightning strikes again after his Superlux Taurus made its debut at the recent Specialty Equipment Market Association (SEMA) automotive aftermarket trade show at Las Vegas.

When he was in his early 20s, Zondervan started creating exterior paint designs and personalized interiors for friends who were building hot rods and custom cars and trucks. His automotive artistry blossomed into Tommy Z Design, which until recently had shops in Troy and Western Michigan (now consolidated into a 4,000-square-foot facility in Hudsonville).

Though he has no formal automotive design education, Zondervan got his big break in 2004 when Chrysler launched its 300C sedan. Zondervan did sketches of how he'd tweak the styling and showed them to several Chrysler dealers.

A dealer in Chicago liked his ideas so much that he offered up a car, which Zondervan used as a full-scale canvas for a customized 300C he displayed at the 2004 SEMA Show. That car received such positive response that Zondervan soon found himself not only designing grille and body kits for vehicles such as the Chrysler 300 and Dodge Charger, but also in the aftermarket manufacturing business.

Earlier this year, he was approached by Ford to apply his style to a Taurus for display on its corporate stand at the 2009 SEMA Show. Ford already had its sporty, aggressive, twin-turbocharged Taurus SHO. The Tommy Z Design vehicle was to show how the Taurus might look as a luxury car.

Zondervan started with the mid-grade Taurus SEL. He created an attractively tasteful, rather than overly aggressively aerodynamic body kit and handsome mesh grilles. He added light-emitting diode (LED) headlamps, some chrome trim and Vibrance by PPG aspen white custom paint. To enhance the stance, he installed Pedders Suspensions XA springs and bolted on 22-inch OZ Racing wheels.

Inside the passenger compartment, he designed special perforated leather and suede seating and trim -- black with white double-stitching -- and created an enhanced audio/video system using Audiovox and Jensen components.

To make sure the car was ready for show as well as go, he freed up the engine's breathing -- air filter and exhaust hardware -- and supercharged the car's 3.5-liter V-6 engine, which now pumps out 430 horsepower.

Now that he's home from SEMA, he's working with his manufacturing partner, Jaycor Inc. of Belding, on tooling to produce similar components that he hopes will allow Taurus owners and Ford dealers to create similar vehicles. He anticipates that the body kit will cost around $1,200; the leather package around $1,000; and the supercharger $2,500-$3,000. Customers will be able to select items a la carte or simply drive away with a dealer-modified turn-key vehicle.

Ford fixes its own problems

For Ford Motor Co., the past year really has
been the best of times and the worst of times

Bryce G. Hoffman / The Detroit News
November 25, 2009

Like the rest of the auto industry, Ford sales plummeted worldwide. But the Dearborn automaker also scored major points with American consumers by foregoing a federal bailout and avoiding bankruptcy.

That good will, together with a strong lineup of new cars and trucks, meant Ford fell neither as far nor as fast as the rest of the industry. The company was finally able to pull out of a market share nosedive that began in the mid-1990s. In fact, it gained market share here and abroad while raising the average transaction price of its vehicles.

Influential surveyors including Consumer Reports and J.D. Power and Associates have lauded Ford's quality gains, delivering important endorsements to products such as the Ford Fusion and Fusion Hybrid.

Wall Street has taken notice, too, pushing the price of Ford shares north of $8.50 a year after they bottomed out at just over a buck.

"It's really gratifying to see that everybody is appreciating the Ford plan, plus the progress we are making on the plan," CEO Alan Mulally told The Detroit News.

The question now is can Ford's gains be sustained?

"Absolutely," Mulally said. He recently boosted the company's financial forecast and now expects to be "solidly profitable" by 2011. But Mulally also warned that 2010 will be a challenging year for Ford and the rest of the auto industry.

Sales remain depressed around the world. For Ford and its competitors, that means less revenue at a time when they need to spend more money to meet new fuel economy and emissions regulations.

Ford also faces some unique challenges.

General Motors Co. and Chrysler Group LLC may have damaged their credibility with consumers by filing for Chapter 11, but they also were able to eliminate billions of dollars in debt in bankruptcy court. Moreover, Ford will be more vulnerable in 2011 during the next round of national contract talks with the United Auto Workers after failing to secure the strike protection its crosstown rivals negotiated with the union as part of their government bailouts.

Still, there is no question that Ford has emerged from the turmoil of the past year as the strongest American automaker.

While GM and Chrysler begged for taxpayer aid, Ford, which bet everything on a massive $23 billion financing deal just before the global credit markets seized up, did what America loves best -- pulled itself up by its bootstraps.

That was enough to convince many consumers to visit a Ford showroom.

What they found was a new generation of cars and crossovers that boasted world-class quality and left the automaker's previous ho-hum designs in the dust. Not only was Ford fixing its problems without Washington's help, it was offering cars that rivaled Japan's best.

A year ago, Ford's share of the U.S. light vehicle market was 12.4 percent. Now, it stands at 14.6 percent. More importantly, Ford made those gains without resorting to big incentives. As GM and Chrysler slashed sticker prices and increased rebates, Ford cut back on incentives and raised the price of some of its most popular vehicles. As a result, the company increased its net pricing -- what consumers pay for vehicles, minus any incentives -- by $3.8 billion at the end of September.

"The momentum that we've gained is primarily around the products that we've introduced into the marketplace because, at the end of the day, customers are coming in to buy a product. They're not coming in because a company either did or did not take (taxpayer) money," said Ford Americas President Mark Fields. "At the same time, we've also gotten the benefit of customers saying, 'You know what, we feel good about Ford because you are doing this on your own.'"

Maintaining its momentum will require Ford to keep delivering new and better products, said analyst Aaron Bragman of IHS Global Insight in Troy.

"That's really going to be critical for them going forward," he said. "As we start to see the market rebound, the competition is going to be fierce. But Ford is in a good position because they do have a lot of new product. That's one of the key things that Mulally did -- accelerate the cycle plan."

Next year will see Ford introduce the first in a series of small cars from Europe that are the backbone of its future product strategy. If Ford is to meet its turnaround goals, they need to be an unqualified success.

Jim Farley, Ford's chief marketing officer, is confident they will be. He said the U.S. marketplace changed dramatically over the past year, and so did Ford's place in it. Instead of competing with GM and Chrysler, he said Ford is now competing with Toyota Motor Corp. and Honda Motor Co.

"That's a new place for us in the U.S.," he said. "The good will for the company grew when we decided that we didn't need help. There was a lot more people paying attention to Ford."

But Farley said Ford's work is far from finished -- especially when it comes to consumers' perception of the Blue Oval, which remains colored by years of disappointing products.

"It took a lot of time to get where we are," Farley said. "It's going to take a lot of time to get customers back. But we really have seen tremendous progress."

WASHINGTON -- Toyota Motor Corp. said Wednesday it will replace accelerator pedals on 3.8 million recalled vehicles in the United States to address problems with the pedals becoming jammed in the floor mat.

Ford's progress reflected
in stock's rally

FORD STOCK Nov 23, 2009

Bryce G. Hoffman / The Detroit News
Nov 24, 2009

A year ago, Ford Motor Co.'s stock was struggling to get back above $1.50 a share, a few days after slamming into the bottom at $1.01 a share.

What a difference a year makes.

On Monday, shares in the Dearborn automaker closed up 9 cents at $8.73. If you had invested $1,000 in Ford a year ago, it would be worth $5,596.15 today.

If you did not, but wish you had, imagine how billionaire investor Kirk Kerkorian must feel.

Last year, his Tracinda Corp. spent nearly $1 billion purchasing 140.8 million shares in Ford at an average price of $7.10 a share. By the end of that October, the casino mogul was cashing in his chips, dumping his Ford stake just over two bucks a share -- a move that would cost him hundreds of millions of dollars.

If he had kept them, Kerkorian's Ford shares would be worth nearly $1.23 billion today.

Those gains have not been lost on other high-rollers. Last week, billionaire investor George Soros revealed that his Soros Fund Management LLC had purchased 7.3 million shares in Ford over the past three months.

Ford Motor Co. CEO Alan Mulally would not comment specifically on Soros' investment, but he said the progress his company has made over the past year makes it an attractive investment target. Ford not only eschewed a federal bailout and avoided bankruptcy, but managed to grow its U.S. market share by nearly two points while increasing the amount of money paid for its cars and trucks by $3.8 billion.

"I can see why people are very interested in investing in Ford," Mulally said. "Our plan is to create long-term value for all the stakeholders."

Stock expert Peter Cohan of Massachusetts-based Peter S. Cohan & Associates said Soros' Ford play is a vote of confidence in the company by one of Wall Street's most savvy financiers.

"It should encourage investors," he said. "He's an extremely shrewd investor."

Unlike Kerkorian, who sought to influence Ford's management with his stock play, Soros appears interested in Ford only as an investment. His stake amounts to just two-tenths of 1 percent of the outstanding shares.

Cohan said the attraction for someone like Soros is obvious.

"Ford didn't need to take government money and it got a lot of cash when people were still giving money away," he said. "Ford is clearly the strongest player. It got ahead of its competitors and is well-positioned for when the economy recovers."

But Ford, like the rest of the automobile industry, still faces significant challenges. Though the company recently raised its financial outlook, Mulally warned that 2010 will be a tough year for his company and its competitors.

Though Ford is traded publicly, the company is controlled by the Ford family through its exclusive ownership of Ford's super-voting Class B shares.

The inside story of the
GM, Chrysler bailouts

David Shepardson / Detroit News Washington Bureau
Nov 24, 2009

Washington -- Detroit's Big Three automakers came closer than America realized to becoming the Big Two.

General Motors Corp. ended merger talks with Chrysler LLC in November 2008 to focus on getting emergency federal aid, but Chrysler continued to believe a tie-up with GM was its best chance for survival.

In April, as both automakers were surviving on government aid and fighting bankruptcy, Obama administration officials spent two weeks working on a plan for GM to acquire Chrysler's best assets and keep the doors open on a third of its factories.

Some members of President Barack Obama's auto task force saw it as a fallback position if Chrysler failed to reach a partnership deal with Italy's Fiat SpA. Other members opposed it. But top task force officials ultimately decided it was too late in the game for a merger, too complicated and would cost too many jobs compared to an alliance with Fiat.

The GM-Chrysler tale is among new details that emerged in Detroit News interviews with more than a dozen insiders -- automakers as well as government officials -- over the past two months.

They reveal the much greater government role in the historic bailout of both companies than has been disclosed previously.

Faced with the prospect of losing 1.1 million direct and indirect American jobs, as well as a major leg of the nation's economy, the government believed it could not afford to let the industry fail.

In the end, the GM and Chrysler bailout resulted from fortunate timing and the work of a group of unknown Wall Street veterans. Under the aegis of the White House, and without congressional approval, they forced a restructuring that the automakers themselves had been unwilling or unable to accomplish -- even as the saw disaster looming.

Among the other revelations from those inside the auto industry bailout:

• The White House auto team negotiated with billionaire investor Carl Icahn to buy parts supplier Delphi Corp., but the deal wasn't sweet enough for him to sign on. Delphi is now in the hands of its bankruptcy lenders.

• GM told the government it couldn't exit bankruptcy in the end of August or September, but was pressured by the task force to exit in early July.

• GM asked the United Auto Workers to freeze the hourly pension plan; the UAW refused.

2008 changed everything

In 2007, hard-won contracts with the United Auto Workers were heralded as game-changers that would reshape the U.S. auto industry, leveling the playing field with foreign rivals.

But the world changed in 2008.

Gas prices spiked and truck sales fell precipitously. GM announced in June that it would shutter four North American truck plants. And it quietly began trying to line up government help -- just in case.

On Aug. 1 of 2008, GM reported that second quarter revenues dropped 30 percent and it lost $15.5 billion. The company cut production by 300,000 vehicles, canceled its dividend and ordered the elimination of another 5,000 white collar jobs -- 15 percent of the salaried workforce. GM stock slid below $10 a share to its lowest level in 50 years.

A month later, the credit crisis hit. Lehman Brothers collapsed Sept. 15, filing the largest bankruptcy in U.S. history and sparking a worldwide panic. People couldn't get car loans.

U.S. sales fell below 1 million vehicles in September for the first time in 15 years.

By October, GM's position was dire. After losing $80 billion over the previous four years, the automaker was burning through cash at more than $2 billion a month. Privately, its board was considering bankruptcy.

On Oct. 13, GM CEO Rick Wagoner, accompanied by board members Erskine Bowles and John Bryan, asked the Treasury Department for an emergency bailout.

It would turn out to be one of the most significant days in the history of the nation's financial system.

The 8:30 a.m. meeting on Columbus Day, in Treasury Secretary Henry Paulson's office, also included Commerce Secretary Carlos Gutteriez and other key Bush administration officials, according to Paulson's calendar.

During the 40-minute session, GM used a Power Point presentation to explain why it would soon need a government loan to pay its bills.

Bryan, also a board member at Goldman Sachs, where Paulson had been chairman and CEO, was there to introduce Wagoner and help him make GM's case.

"You don't go bankrupt because you lose money; we've been doing that for years. You go bankrupt because you run out of money," Bryan recalled. "That prospect was very much on our minds before that first trip to Washington."

The day got worse for Paulson.

The CEOs of the nation's nine largest financial institutions came to the Treasury and agreed to a government capital infusion of $250 billion to try and stabilize the credit market.

Less than a month later, after meetings with influential lawmakers, GM released devastating third-quarter financial results Nov. 7 and said it might not survive into early 2009 without a government bailout.

GM also said it would drop talks to acquire Chrysler from private equity firm Cerberus Capital Management LP, to focus on winning emergency loans.

Around that time, Paulson directed aides to prepare a contract outlining government financing, in case GM was forced into bankruptcy.

On Nov. 30, a Sunday, Paulson met with Commerce Secretary Carlos Gutierrez and top Bush White House officials, as well as members of the incoming Obama administration.

"At that meeting, we -- the Bush team -- floated a proposal to establish an auto czar," said Keith Hennessey, a top economic adviser to Bush.

The administration would have created the position to advise the president on automakers' "restructuring plan for viability"

"The key to success of this plan was that the Obama team would publicly link arms with us and agree that they would continue the Paulson policy statement when they took over after Jan. 20th.Thus, the auto company's stakeholders would know that they had no wiggle room, and that they had no chance of getting additional funding from the next administration," Hennessey said.

The White House instead negotiated with Senate Democratic leaders in an effort to shift $25 billion for emergency loans for automakers.

Hearings fell apart

The nation's eyes focused on the industry's troubles Nov. 18 and 19,when GM's Wagoner, Chrysler CEO Robert Nardelli, Ford CEO Alan Mulally and UAW President Ron Gettelfinger appeared before House and Senate committees to make their case for federal help.

The session was a disaster. Hostile critics lambasted them for flying expensive corporate jets to Washington to seek taxpayer help, and for failing to clearly articulate why they needed the money, how they'd use it and when they would repay it.The executives were sent back to Detroit with orders to return in early December with detailed plans on how they would restore profits, restructure the industry and ensure their futures.

Having learned at least one lesson, the CEOs drove to Washington for the second round of hearings and presentations. But it wasn't enough. Late on Dec. 11, the Senate blocked auto bailout legislation, leaving it up to President Bush to decide whether the government would step in.

After failing to convince Congress to rechannel money from a $25 billion industry retooling program to a bailout account, Bush went it alone. He reluctantly stepped in on Dec. 19 with $13.4 billion.

But the lifeline came with strings.

The automakers were required to present viability plans to the government -- with a new president at the helm -- by Fe b. 17. They were directed to order fast, deep cost cuts, secure agreements from creditors to eliminate most of their debt, and win UAW concessions to bring labor costs into line with U.S. plants run by foreign automakers.

If they came up short, GM and Chrysler would have little choice but to file for bankruptcy, with few prospects to secure financing to pay for their restructuring.

Michele Davis, a spokeswoman for Paulson, said the administration agreed to rescue the companies in part because Congress didn't act and it "fell into our laps."

"With the economy in a clear downturn," Davis said, "we felt the best option was to provide short-term aid and force the companies to take drastic steps toward viability."

Task force gets to work

The new Obama administration quickly assembled an auto advisory team. Treasury Secretary Timothy Geithner flew to New York to ask Wall Street financier Steven Rattner to head the effort.

The task forceeventually numbered about 12 Wall Street dealmakers and lawyers, supplemented by dozens of people from three consulting firms retained by the government.

It met at 8 a.m. every day, tackling an agenda that went out at 5 a.m. It focused on June 1 as a key deadline for GM, because that was the due date for a $1 billion payment to bondholders.

In early February, GM Chief Financial Officer Ray Young called White House aide Brian Deese to say GM wouldn't submit its viability plan by the Feb. 17 deadline. Larry Summers, head of the White House National economic Council -- and co-auto task force chair -- immediately called GM lobbyist Stuart Eizenstadt, who as a White House advisor had helped craft the 1979 Chrysler bailout. Eizenstadt apologized and assured him that GM would meet the deadline. And it did.

Chrysler executives, who said a merger with GM was its best chance for survival, had lobbied the government to give money to GM to buy Chrysler. But GM rejected it.

While the two automakers met the Feb. 17 deadline -- Ford Motor Co. did not seek federal loans -- GM and Chrysler had to wait more than a month for a decision from the administration. But internally, the task force quickly discarded the plans as inefficient.

Obama rejected the Chrysler and GM viability plans. They were given one last chance to come up with an acceptable turnaround blueprint.

Chrysler had until April 30 to cut its debt, win labor concessions and secure a tie-up agreement with Fiat in preparation for a government-financed Chapter 11 bankruptcy. GM was ordered to take similar same steps by June 1, when a key $1 billion bond payment was due.

The pre-negotiated bankruptcies would allow the automakers to emerge from court protection quickly, shedding their burdensome obligations and saving the good assets.GM's final draft, accepted by the government, eliminated Saab, Saturn, Pontiac and Hummer and retained Chevrolet, Cadillac, Buick and GMC.

Panel split on Chrysler

Chrysler's road back from the brink was marked by harrowing moments.

In mid-March, the task force was split, 4-4, on whether to save it at all.

An economic analysis presented to Obama said up to300, 000 jobs would be lost immediately if Chrysler was liquidated. And the government's costs of liquidating Chrysler -- paying pension benefits, health care coverage to retirees, unemployment insurance -- would be in the billions.

"None of us were brave enough," Rattner said. "We just said to ourselves, 'That's 300,000 jobs in one day, when you have an alternative that's not stupid."

The administration ultimately endorsed the Fiat-Chrysler alliance -- in part because Fiat said it would become much more active in running Chrysler. Fiat CEO Marchionne would also be Chrysler CEO.

Around 10 p.m. April 10, two White House task force members called Nardelli, looking for the final operating plan between Chrysler and Fiat.

"We were under the impression that they were finalizing it," one former task force member said. "The point of the call was to check in and say, 'We are going to need it now.'"

In fact, Chrysler and Fiat remained far apart on some major issues. The task force needed an approved agreement between the two automakers in hand by mid-April, so it could have two weeks to finalize it before the April 30 deadline.

After Nardelli's unacceptable response, the task force's Clay Calhoon, 26,and Brian Osias, 32, were on the first flight from Washington to Michigan the next morning. The two advisors and some consultants arrived at 11 a.m. at Chrysler headquarters in Auburn Hills. They met with Chrysler and Fiat executives, around the massive, board room table.

"We're going to sit in the conference room until we're done," Calhoon told Nardelli.

Calhoon didn't leave the conference room until 2 a.m. Just one key issue was unresolved: What incentives would be needed to meet sales volume goals?

On Sunday, the Fiat and Chrysler team reconvened again to try to nail down the incentives but made little progress until Ron Bloom, the No. 2 official on the auto task force, called Fiat CEO Sergio Marchionne. They resolved it during a five-minute conversation.

Chrysler filed for bankruptcy April 30, after two, non-stop days of final negotiations with Fiat and government officials at the Treasury's New York law firm offices.

Its best assets were sold to Fiat and it emerged from bankruptcy as a new company, Chrysler Group LLC, June 1. The rest of the automaker's holdings were left behind to be sold or liquidated.

Other partners considered

But Fiat wasn't the only potential partner under consideration for Chrysler.

The Detroit News learned that administration officials, led by Calhoon, spent a week in Aprilworking with GM on a plan to acquire Chrysler's best assets and keep the doors open on roughly one-third of its factories.

Those talks reached the highest levels of GM, including Fritz Henderson, who took over when the government ousted Wagoner.

"What do we do in the event that we can't get the Chrysler-Fiat deal done or if the president says the terms are unacceptable to him?" said a person involved in the talks. "We didn't want to just let Chrysler liquidate. Could we save some of the assets? How would that look and how much value would be generated?

Henderson rebuffed overtures from Chrysler in February, but two months later he raised with the task force the possibility of acquiring parts of Chrysler, if a deal with Fiat faltered.

"If the Chrysler deal doesn't go through, we're interested in some pieces of Chrysler," Henderson said, according to a person familiar with the situation.

"We're interested in Jeep. We're interested in a couple of the powertrains."

GM was most interested in Chrysler's jewels: the Jeep brand, Dodge trucks and minivans.

"Fritz's view on the Ram was, it's a brand new Ram. You run it for five years for cash and not do a new one," said a person involved in the talks.

Also under consideration in GM's corporate mind: eliminating Chrysler's dealer network, and selling Chryslers at GM dealerships.

Some task force members believed a Chrysler-GM tie-up made more sense than a Chrysler-Fiat alliance because it could have added $20 billion to GM's market value, lowered the overall cost to rescue the two companies, and benefited the industry as a whole by reducing factory capacity.

On April 19, task force member and Wall Street vet Harry Wilson flew to Washington to make a "passionate plea" for supporting a GM-Chrysler tie-up. But others on the task force showed little interest, saying it was too late short of the Fiat-Chrysler deal falling apart.

But another government official noted that many of the jobs saved would have been in Canada -- and that potentially only one-quarter of Chrysler's U.S. jobs would have been saved. The dominant view became this was only an alternative if the Fiat talks collapsed.

Revenue biggest concern

GM faced more opponents in bankruptcy court, since many attorneys general and other investors who didn't object in the Chrysler case did so in the GM bankruptcy.

GM's biggest concern during bankruptcy was revenue: How much would it lose at a time when nearly all of its plants were shut down?

"We basically battened down the hatches because we really didn't know how long we would be out," said Joe DaMour, executive director of GM's finance staff. He helped lead a team of 40 overseeing the automaker's day-to-day restructuring efforts.

The administration "foamed the runway," to guard against a collapse of GM and Chrysler by guaranteeing vehicle warranties and providing fast, government-backed payments to suppliers.

DaMour said the GM bankruptcy succeed because it had to -- and because of a team of dedicated GM employees.

"You can have a lot of complex explanations for this but we knew we had no choice," DaMour said.

"There isn't this debate about (what) we should or shouldn't do.... We aren't discussing or debating this. This is what we have to do."

"On May 1 and May 15, the auto task force held eight-hour planning sessions on GM's planned bankruptcy filing at the automaker's New York law office. More than 100 participated by phone or in person.

GM planned to present a 300-page slide presentation at the first meeting. The Obama team wasn't interested. Instead, they went through 15 major issues and assigned deadlines to specific people.

With the efficiency of a drill sergeant, task force member and Wall Street vet Harry Wilson, went through each item and got a commitment of when it would be completed.

GM filed for bankruptcy June 1.

CFO Ray Young said that due to its complex accounting system, GM couldn't exit by Aug. 31 or even Sept. 30, the end of a quarter.

Wilson was incredulous: GM would lose at least $100 million a week during bankruptcy, and would be willing to incur as much as $1 billion in additional losses, because it couldn't resolve accounting issues.

"I can't think of a problem in the world I can't solve for a $1 billion," Wilson said, according to participants.

GM exited bankruptcy as General Motors Co. on July 10.

No other choice

Former GM board member John Bryan believes GM's collapse was inevitable -- whoever had been on the board, or in the CEO's office.

"(GM) could not have prepared themselves -- not in the recent years -- for a sales drop of that magnitude, given the cost structure," Bryan said. "That fault belongs to a generation or so." A "few little moves" in recent years, he said, "would not have mattered."

The board had no choice in filing for bankruptcy, Bryan said. "The government told us what to do," he said. "Life outside liquidation rested on choices made by the government."

Key finding #1

Interviews with key government and industry players revealed new details about the auto bailout negotiations and the bankruptcies of GM and Chrysler:

• In April, senior GM executives -- including CEO Fritz Henderson -- held meetings in Detroit with the Obama auto task force about making a new offer to acquire a sizable chunk of Chrysler's assets.

The meetings were initially prompted by a discussion between Henderson and former auto czar Steven Rattner that GM might be interested in buying Chrysler's prized possessions: the Jeep brand, Dodge trucks and minivans, and keeping about a third of Chrysler plants and employees.

But GM's interest -- on the heels of merger talks last summer -- came too late as the Obama administration backed a deal to turn control of Chrysler to Italy's Fiat SpA. Some in the Obama administration argued the deal could have added $20 billion to GM's market value and lowered the overall cost to rescue the two companies.

Key finding #2

• The Bush administration initially planned to announce a package of roughly $25 billion in aid to four companies on Dec. 19: GM, Chrysler, Chrysler Financial and GMAC.

But talks broke down with the two finance companies in the middle of the night -- hours before President George W. Bush's announcement. GMAC would finally reach a deal 10 days later for $7.5 billion in aid, while Chrysler Financial wouldn't get its loans for nearly a month.

Key finding #3

• The Obama auto task force held secret talks in April to sell Delphi Corp. to billionaire investor Carl Icahn. The talks collapsed when Icahn held out for a better deal. Ultimately, the government backed the bid of Platinum Equity, but the Troy-based firm was eventually acquired by its bankruptcy lenders.

Key finding #4

• GM told the government it couldn't exit bankruptcy in the end of August or September, but had to be prodded by the task force to exit in early July.

Key finding #5

• GM asked the United Auto Workers to agree to a freeze of the hourly pension plan; the UAW declined. GM also apologized to UAW President Ron Gettelfinger at one point during the talks over an incorrect labor cost figure submitted to Treasury. Talks between Gettelfinger and Fiat CEO Sergio Marchionne were so heated at one point that Gettelfinger stormed out of a meeting at Treasury.

Key finding #6

• The Obama administration sat in on several GMAC board meetings -- its right as owner of 35 percent stake in the company -- but has since stopped. Auto task force members also held face-to-face talks with American Axle & Manufacturing Holdings Inc. CEO Dick Dauch to finalize a financing deal between GM and the auto supplier.

Safety officials have investigated hundreds of Toyota complaints

Nov 23, 2009

U.S. safety regulators have looked into hundreds of reports of uncontrolled acceleration in Toyota and Lexus vehicles over more than five years. The complaints vary from sudden engine bursts that can be controlled by applying the brakes, to unintended acceleration that persists despite the driver's effort to slow the vehicle.

The reports are linked to 15 fatalities, including four people killed in a 2009 Lexus ES 350 that crashed on Aug. 28 after its driver was unable to slow the car, according to the National Highway Traffic and Safety Administration.

Its investigations and those conducted by Toyota have led to three recalls, the first in 2007 to replace driver-side, all-weather mats that could entrap the gas pedal.

Toyota announced in September that it would recall 3.8 million vehicles. It is now in discussions with NHTSA about new measures to address this long-standing issue.

March 3, 2004 -- NHTSA opens its first investigation into allegations of unintended acceleration in Toyota vehicles equipped with electronic throttle control, also known as drive-by-wire technology. The investigation covered 2002 and 2003 model year Lexus ES 300, Toyota Camry and Camry Solara sedans.

NHTSA's Office of Defects Investigation could not determine the cause of the trouble reported in some complaints because of insufficient information, and said other complaints described unrelated issues. It found nothing abnormal or defective in the pedal configuration, brakes or electronic throttle control. It closed the investigation on July 22, 2004.

Aug. 5, 2005 -- NHTSA investigates a complaint alleging defects in the throttle and brake systems, or a combination of the two, causing unintended acceleration. "Neither the reports, nor the interviews conducted by ODI, identified any vehicle-based cause to explain the incidents," it said. NHTSA closed the investigation on Jan. 5, 2006.

Sept. 14, 2006 -- NHTSA opens an investigation into a complaint of an engine surge in a 2006 Toyota Camry. The Office of Defects Investigation did not find a vehicle-based defect and its investigators did not observe an unintended surge in engine power when they tested the vehicle. Evaluation of a throttle actuator, an electro-mechanical device that opens and closes the throttle in response to commands from the engine control module, showed no component problems. Warranty and parts sales are unremarkable, it said. "These data do not support the existence of a widespread defect or ongoing concern." NHTSA closed the investigation on April 3, 2007.

March 29, 2007 -- NHTSA opened a formal investigation into reports of unintended acceleration, sometimes for long periods, of Lexus ES 350 sedans. While drivers said braking was effective in slowing the acceleration, they were unable to stop the vehicle. They said they weren't able to turn off the engine by pressing the control button. Later, they said they were unaware that it needed to be depressed for fully three seconds to stop a car in motion.

The Office of Defects Investigation said it had "observed that an unsecured Lexus accessory all-weather floor mat can trap the throttle pedal in an open position resulting in significant unwanted acceleration." It said two vehicles it inspected showed brake damage due to overheating. It said Toyota acknowledged that improperly installed mats may have been related to some of the incidents, and agreed to alert owners. On Aug. 8, 2007, NHTSA upgraded the investigation to an engineering analysis to study the problem further.

Aug. 8, 2007 -- The investigation identifies unsecured mats that can entrap the pedal as a cause of unintended acceleration. It said the risk posed by improperly secured mats was not made clear to owners, who sometimes received their new vehicles with loose mats. NHTSA said drivers also need to be told how the ignition button functions. Toyota issued recall notices to owners of Lexus and Toyota vehicles to replace 55,000 all-weather mats with redesigned ones. The investigation was closed Oct. 11, 2007.

Jan. 31, 2008 -- NHTSA investigates allegations of uncontrolled acceleration of a 2006 Tacoma pickup. After studying complaints from other Tacoma owners, it said the information suggesting a possible defect was "quite limited," and closed the investigation on Aug. 27, 2008.

Jan. 14, 2009 -- Toyota recalls 26,500 Sienna minivans to replace retention clips that secure the floor carpet cover, to prevent it from jamming the gas pedal.

Sept. 29, 2009 -- NHTSA issued a consumer alert telling owners of eight Toyota and Lexus models to take out removable driver-side mats and not replace them. Toyota recalled 3.8 million vehicles to address the risk of removable mats jamming the gas pedal. Nov. 4, 2009 -- NHTSA rebuked Toyota after the automaker said the agency had ruled out a vehicle-based defect. The removal of unsecured mats, NHTSA said, "is simply an interim measure. This remedy does not correct the underlying defect in the vehicles involving the potential entrapment of the accelerator by floormats, which is related to accelerator and floor pan design." NHTSA said it was waiting to hear Toyota's plan "to correct this very serious defect."

Toyota's image under scrutiny

Christine Tierney / The Detroit News

For years, Toyota Motor Corp. has investigated complaints from drivers saying their Toyota and Lexus vehicles accelerated all by themselves, and the company has identified essentially one cause. The trouble, according to Toyota, occurs when loose or ill-fitting floor mats, carpet covers or detached trim jam the gas pedal.

But after a highly publicized crash in August that killed four people when the driver lost control of a Lexus sedan, Toyota has come under intense pressure to reduce the risk of unintended acceleration.

The Japanese automaker and U.S. safety regulators are discussing changes to the gas pedal, as well as adjustments that would make it easier to stop a car that's accelerating, according to sources familiar with the negotiations. The U.S. National Highway Traffic Safety Administration says 15 fatalities, including the four in August, are linked to hundreds of reports of unintended acceleration of Toyotas it has received since 2002.

While that's a fraction of the casualties associated with some high-profile vehicle-safety cases, such as the Ford-Firestone debacle, the issue is deeply worrying to U.S. safety officials and could be very damaging to Toyota.

It has generated more bad publicity for the automaker, which has been stumbling through a series of misfortunes, including financial losses. Toyota also faces mounting skepticism about its response. Some drivers say they couldn't slow down or stop when they applied the brakes.

"Toyota has always been seen as producing very, very safe, bullet-proof cars," said George Peterson, president of AutoPacific Inc. in Tustin, Calif. "That's the image that has been cultivated for decades. This is making people think, is the Toyota of today the same as the Toyota of yesterday?"

Besides the damage to its reputation, Toyota faces a financial risk from lawsuits. The issue could be costly, Peterson said, if the company is found to be at fault -- and if juries are convinced Toyota knew about the problem.

Toyota is expected to outline ways to reduce the risk of unintended acceleration as early as next week. It is expected to redesign the pedal so that it can't be entrapped by a loose or ill-fitting mat. "We're very confident that the root cause is a pedal-trapping by an unsecured or inappropriate floor mat," said Brian Lyons, a spokesman for Toyota Motor Sales in Torrance, Calif. "We're looking at a vehicle-based remedy to help avoid that entrapment."

Toyota also is considering a system that would prevent the vehicle from accelerating if any pressure is being applied to the brake. This technology is already available on some cars, mostly German, and is recommended by independent safety experts.

A perplexing problem

U.S. safety investigators say they receive complaints of unintended acceleration involving many brands. But some safety advocates say Toyota has received more than its share -- particularly since it adopted drive-by-wire technology 10 years ago. In cars equipped with this system, a driver stepping on the gas pedal sends an electronic signal to the throttle.

Clarence Ditlow at the Center for Auto Safety in Washington, D.C., said its database shows that "since the late '90s, Toyota has generated more complaints on unintended acceleration than any other manufacturer."

But unlike certain defects, such as corrosion or faulty components that can easily be identified, unintended acceleration is a term that has been used to describe a wide range of occurrences and can be hard to diagnose.

There may be several causes, including driver error, say government and independent experts. There could be a problem with the brakes, acceleration or transmission. Or the electronics controlling the engine or transmission may be calibrated incorrectly.

A federal safety official likened the Toyota investigation to the long, frustrating inquiry in recent years into reports that cruise control deactivation switches on some Ford Motor Co. vehicles were causing fires. That led to a big recall by Ford, which has nonetheless preserved its reputation for building good cars.

Volkswagen AG's Audi brand suffered a near collapse in U.S. sales for several years from the mid-1980s to the early 1990s after a flurry of reports that Audi cars were prone to unintended acceleration. But after years of investigations in three countries, no defect was found in the vehicles.

Audi adopted a fail-safe measure preventing the transmission from shifting out of park unless the driver is applying the brake.

Since 2003, Audi cars have been programmed to automatically stop accelerating if there's pressure on the brake. Such a solution is one of the measures that NHTSA and Toyota are discussing to help prevent some of the incidents that customers described.

Toyota rebuked by NHTSA

Complaints range from sudden surges of engine power that can be controlled by applying the brakes to more frightening instances of unintended acceleration at high speeds. That was the situation that preceded the crash in Santee, Calif., near San Diego, of a Lexus ES350 driven by Mark Saylor, an off-duty California Highway Patrol officer. He and three family members were killed.

A month later, owners of eight Lexus and Toyota models were told to remove the driver-side mats, and Toyota later issued its largest-ever U.S. recall -- for 3.8 million vehicles.

Investigators looking at Toyota vehicles that crashed after alleged unintended acceleration, including the Lexus in California, found mats jammed near the gas pedal.

But this month, when Toyota cited a NHTSA document as evidence the mats were the sole cause of the problem, the agency rebuked the carmaker.

On Nov. 4, NHTSA said merely removing the mats didn't remedy the underlying defect, which it said was "related to accelerator and floor pan design."

But safety advocates say the mats and pedal configuration also don't explain all the complaints.

"The evidence continues to surface that we're dealing with more than a mechanical interface between the floor mat and the pedal," said Sean Kane, founder of Safety Research & Strategies Inc. in Rehoboth, Mass.

Kane, who has identified around 2,000 reports of unintended acceleration in Toyota vehicles since 1998, said some drivers saw dashboard lights flashing in a way that suggests an electronic glitch.

In 2002, soon after adopting drive-by-wire technology, Toyota issued a technical service bulletin to recalibrate the engine control module to prevent the vehicle from surging at certain speeds. That, Kane said, suggests that an electronic problem "is not out of the realm of possibility."

Toyota says it hasn't found such a problem. "From the reports and in our investigations, we've found no evidence of electronic glitches in the software or in the engine control system," Lyons said.

NHTSA officials also said that over more than five years of investigations, they have not found a defect in the electronic throttle.

Trebek tours Ford plant
before 'Jeopardy!' taping

Kimberly Hayes Taylor / The Detroit News
Nov 22, 2009

Dearborn -- Alex Trebek, host of "Jeopardy!," one of the nation's most popular quiz shows, made a rare visit to Metro Detroit Thursday to tape clues for the show at Ford Motor Co.

His appearance means that sometime soon, "Jeopardy!" fans will see clues about the automotive pioneer. But if you want to know exactly when the Ford trivia clues will air on the show that runs 7:30 p.m. weekdays on WDIV-Local 4, Trebek says "You'll have to watch every day to catch them."

During the day, Trebek spent time at a Ford assembly line, and says he was blown away by the modern technology that makes it easier for assembly workers to do their jobs. In fact, the surprisingly hilarious Trebek says he wants to take one of the robotic arms home to put in his garage to make his work around the house easier.

While taping some clues on the lawn at the Ford Research and Innovation Center in Dearborn, Trebek learned that Henry Ford, who introduced the Model T in 1908, selected Detroit because he was born on a farm in Dearborn. The host also wanted to know why other auto makers selected the region, and learned the Detroit River made it convenient to transport the vehicles. When he asked how many acres Ford Motor Company covered, he was surprised to find out the properties covered many miles of real estate.

Trebek says he has fond memories of Detroit because he took his first flight from Miami to the Detroit area many years ago, had two aunts who lived in Detroit in the 1950s and an uncle who worked for the J.L. Hudson Department store in downtown Detroit. The Canadian also acknowledged he grew up as a Red Wings fan, but changed his allegiance when the team's star player, Canadian Gordon "Gordie" Howe, left the Wings in 1980.

Perhaps most importantly, Trebek says he was so impressed with Ford technology that he's decided to purchase a new Raptor pickup truck next year. Trebek says he has another reason for his special allegiance to the Ford Motor Company.

"Ford is the only American automaker that didn't ask for a bailout," he says.

In addition to that, Trebek says he knows Michigan has the nation's highest unemployment rate, even higher than California's, and he wanted to show his support for the state.

"We want you folks to know we're aware of that, and anything we can do to cheer you up and brighten up your day, we're here for you."

Ford Motor to invest $2.3B in Brazil

Bryce Hoffman / The Detroit News
Nov 21, 2009

Ford Motor Co. will invest nearly $2.3 billion in Brazil over the next five years to modernize factories and expand production in South America's largest market.

Ford Americas President Mark Fields outlined the investment plan at a ceremony Friday at the company's manufacturing complex in Camaçari in the northern state of Bahia, sharing the podium with Brazilian President Luiz Inacio Lula da Silva.

More than half of the money will be spent to expand production at the factory, which is Ford's most advanced assembly plant in the world, and to modernize production at Troller Veículos Especiais S/A in Horizonte, Ceará, which Ford bought in 2007. The rest will be reserved for future product investments.

Ford spokeswoman Jennifer Flake said it represents the largest five-year investment in Ford do Brazil's 90-year history.

"It will give us greater manufacturing flexibility," she said.

Michael Robinet, vice president of global vehicle forecasting at CSM Worldwide in Northville, called the investment well-timed.

"It is an important market," he said, adding that Brazilian consumers are becoming more sophisticated and are no longer satisfied with cast-off models from Europe and the United States. "Going forward, Ford knows that it will be a critical market for global platforms."

Robinet said it is unlikely Ford will use its added capacity in Brazil to export to America because of distance and currency considerations. The Brazilian car market has been growing this year, thanks to low borrowing costs and government incentives.

Ford is the fourth-largest automaker in this key emerging market after Fiat SpA, Volkswagen AG and General Motors Co.

Flake said the investment will allow Ford to increase the output of its Camaçari plant by 50,000 annually. The factory, which produces the EcoSport compact sport utility vehicle and a series of products based on the old Fiesta, already produces about 250,000 vehicles each year. About 1,000 new jobs will be added at the factory.

Prosecutor to appeal bond of man charged in Ford theft

Doug Guthrie / The Detroit News
Nov 20, 2009

Detroit --A federal prosecutor said Thursday she will appeal a judge's decision to grant bond to a Chinese citizen accused of stealing up to $32 million worth of Ford Motor Co. engineering plans.

Xiang Dong Yu, also known as Mike Yu, 47, of Beijing was a Ford product engineer for 10 years. He left the company and moved to China in 2007, allegedly taking with him computerized copies of about 4,000 pages of confidential documents.

Yu was arrested last month at Chicago's O'Hare International Airport when he returned from China.

The government says a laptop computer Yu was carrying contained thousands of pages of proprietary Ford documents and a large number of confidential documents belonging to another company not named at Yu's arraignment on charges of theft of trade secrets, attempted theft of trade secrets and unauthorized access to a protected computer Thursday in U.S. District Court.

Although Yu has remained in federal custody since his arrest, Magistrate Judge Mark A. Randon on Thursday tentatively ordered his release on $100,000 bond to Pastor Peter Wu of the Chinese Gospel Church in Livonia. The church has rented Yu an apartment in Westland.

Randon delayed issuing his order to release Yu to give federal prosecutors time to appeal his decision.

Assistant U.S. Attorney Cathleen Corken told the judge Yu might flee.

"His whole life is in China," said Corken, who claimed that although the government has seized Yu's passport, he could walk into a Chinese consulate and get new travel documents.

"We have no extradition treaty with China," Corken said.

Government agents discovered on Yu's computer an application for Canadian citizenship and passport. Yu's lawyer, George Donnini, argued the government is unfairly assuming that any Chinese citizen is a flight risk. He said his client would accept conditions that included travel restrictions and an electronic tether.

According to a federal indictment, Yu had access to and made copies of "system design specification documents" prior to leaving his job in Dearborn in 2007.

Ford declined to comment.

If convicted, Yu could face up to 10 years in a federal penitentiary.

The Associated Press

WASHINGTON–Ford, Subaru and Volkswagen lead the insurance industry's annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms.

The Virginia-based Insurance Institute for Highway Safety awarded its "top safety pick" on Wednesday to 19 passenger cars and eight sport utility vehicles for the 2010 model year. The institute substantially reduced the number of awards compared with 2009, because of tougher requirements for roof strength.

Ford Motor Co. and its Volvo unit received the most awards with six, followed by five awards apiece for Japanese automaker Subaru and German automaker Volkswagen AG and its Audi unit.

Chrysler Group LLC received four awards followed by two each for Honda Motor Co. and General Motors Co.

Toyota Motor Corp., BMW AG, Mazda Motor Corp. and Mitsubishi Motors Corp. were shut out in the annual IIHS review.

Ford's recipients include the Ford Taurus and Lincoln MKS passenger cars and the Volvo S80 and C30 passenger cars and the XC60 and XC90 SUVs.

Ford said in a statement it is "committed to providing customers with safe vehicles for a broad range of real-world crash conditions.''

Subaru recorded winners with the Subaru Legacy, Outback and Impreza cars and Tribeca and Forester SUVs. Subaru was the only automaker with an IIHS winner in all four vehicle classes in which it competes.

The automaker, which has bucked the brutal U.S. sales market with a 13 per cent increase during the first 10 months of 2009, attributed its safety success to a unique engine design that sits low in the vehicle chassis and moves down and under occupants in a frontal collision.

Tom Doll, executive vice president and COO of Subaru of America, said the awards were a "tribute to the engineering that goes into Subaru products.''

Volkswagen scored with the 4-door versions of the Jetta, Passat and Golf, the Audi A3 and the Volkswagen Tiguan, a small SUV. Mark Barnes, Volkswagen of America's chief operating officer, said the "safety of our cars is of the utmost concern, from the initial design stages all the way through the maintenance procedures at dealerships.''

Chrysler won the award for the Chrysler Sebring and Dodge Avenger sedans equipped with optional electronic stability control, the Dodge Journey midsize SUV and the Jeep Patriot with optional side thorax air bags.

Scott Kunselman, Chrysler's senior vice president-engineering, said the awards underscore the Auburn Hills, Mich., automaker's ``engineering capability and leadership in occupant protection.''

General Motors Co. and Honda Motor Co. both received two awards. GM was recognized for the Buick LaCrosse and the Chevrolet Malibu while Honda won for 4-door versions of the Civic with optional electronic stability control and the Honda Element.

Other winners included the Nissan Cube, the Kia Soul and the Mercedes C Class.

The vehicles are selected for best protecting motorists in front, side and rear crash tests based on Institute evaluations during the year. The vehicles are required to have electronic stability control, or ESC, to qualify for the award. Earlier this year, the Institute said vehicles would need to receive its highest score in its roof strength evaluation to qualify the safety pick designation.

"With the addition of our roof strength evaluation, our crash test results now cover all four of the most common kinds of crashes," said Institute president Adrian Lund. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety.''

The Institute awarded its top prize to 94 vehicles in 2009 and attributed the decline in awards this year to the roof strength requirement. The Honda Accord and the Ford Fusion both dropped off the list because 2010 versions didn't earn high enough scores on the roof test.

The Toyota Camry would have made the list, the Institute said, if it had received the highest rating in rear crash protection. The Institute said the Camry's seats and head restraints were rated marginal for protection against whiplash injuries.

Fans mark end of the Edsel line

Bill Glauber / Milwaukee Journal Sentinel Nov 19, 2009

Racine, Wis. -- Before the Ford Pinto, AMC Pacer and Chevy Chevette, there was the Edsel.

It was a vision of Detroit at its mid-20th century worst, an overhyped, overpriced automotive monstrosity produced by the Ford Motor Co.

The oval front grill was ridiculous -- some suggested it looked like a toilet seat. The workmanship during the first model year was mediocre and the vehicle became a national joke. The car was named after Henry Ford's son, Edsel.

It was introduced in September 1957, became an almost overnight automotive bust and was quietly shelved Nov. 19, 1959. There, the story might have ended, an American dream turned to American rust.

But in this country, there are many people who love the unloved, especially when the object of their desire packs eight cylinders under the hood.

David Hooten is one of those whose heart flutters at the sight of an Edsel. He is the president of the Wisconsin Edsel Club, which has about 30 members.

This week, Hooten will join a few dozen other Edsel enthusiasts from around the country in making a pilgrimage to Louisville, Ky. At the site of an old Edsel plant, they'll celebrate the 50th anniversary of the car's demise.

"The car had such a bad rap," Hooten said. "I bought one just to be different."

Just how different can be found inside his garage.

Hooten owns a restored Edsel from the final model year, 1960, when the last of the vehicles rolled off the assembly line.

It is an Edsel Villager, a two-door station wagon with a tailgate.

For an 18-foot-long, 4,100-pound vehicle with flat bench seats and no seat belts, it doesn't handle too badly.

It goes from zero to 60 in about 15 seconds and, amazingly, gets around 15 miles per gallon in highway driving. And, given that the steering wheel is roughly the size of a tire, it's pretty easy to maneuver around town.

Hooten, who is 49 and works as an auto body mechanic, has been driving Edsels since he was in high school. He sticks to his belief that the cars got a bad rap.

OK, maybe the 1958 Edsel models, which, he said, weren't very well made and featured such things as push-button transmission in the steering wheel and a self-lubricating front suspension. The other two model years were just fine, he said.

For Edsel enthusiasts, there really is a certain beauty in the vehicle and sadness about the failure of the car to find a market.

Beyond becoming a punch line, though, the Edsel provides a reminder that Detroit has miscalculated in the past only to rebound. That's something to take comfort in during a time of auto bankruptcies and cash-for-clunkers sales.

2010 Ford Fusion named Motor Trend's 'Car of the Year'

Magazine's staff cites Ford's improvements, sedan's broad appeal

Bryce G. Hoffman / The Detroit News Nov 18, 2009

Dearborn --Motor Trend on Tuesday named the 2010 Ford Fusion its "Car of the Year."

The award marked the second consecutive year that Ford Motor Co. claimed one of the influential magazine's top honors. Last year, the 2009 F-150 pickup claimed "Truck of the Year."

Ford's midsize sedan beat out 22 other contenders, including the new Toyota Prius, Nissan 370Z and BMW 7 Series.

Members of the magazine's editorial staff told The Detroit News they were impressed by the improvements Ford has made to every aspect of the Fusion since it debuted in 2005.

"Ford has proven its resilience in these tough times by delivering to market a car with broad appeal to a broad range of consumers," said Motor Trend Editor-in-Chief Angus MacKenzie.

"The Fusion range has matured into a competitive roster of midsize sedans, able to compete with sales juggernauts such as the Toyota Camry and Honda Accord."

Despite one of the worst markets in automotive history, the Fusion has set a new full-year sales record this year, gaining market share and becoming the best-selling car from any U.S. automaker.

CEO Alan Mulally called the Motor Trend award "another proof point" that Ford's turnaround is working.

Ford's new products have been drawing accolades all year from key arbiters of public sentiment, such as Consumer Reports and J.D. Power and Associates.

But analyst Erich Merkle of Autoconomy.com in Grand Rapids said the Motor Trend award is even more influential.

"It's one of the most important honors," he said, adding that it can only strengthen "already impressive" sales.

Motor Trend made the announcement at a special ceremony at Ford world headquarters.

"Cars just don't happen," editor MacKenzie told a crowd of Ford employees. "Every one of you here in this room has a little piece of this trophy."

Motor Trend was particularly impressed with the new Fusion Hybrid.

"What it means is that you can have an economical and a fun product. You don't have to make trade-offs. It doesn't have to be odd looking," said Nancy Gioia, director of Ford's electric vehicle programs. "It shows what an American company can do."

Ford got an endorsement of a different sort this week from billionaire investor George Soros.

His Soros Fund Management LLC revealed Monday that it had purchased 7.3 million shares in Ford over the past three months. That helped push Ford's share price to $9 Tuesday for the first time in two years, before settling back to close at $8.98 -- a gain of 27 cents, or 3.1 percent.

Derrick Kuzak, Ford's global product development chief, said the Motor Trend award, other public recognition of Ford's progress and the company's financial performance have given a big boost to employee morale.

"Last year, it was the F-series," he said. "We really need to start thinking of this as an annual event at Ford."

GM on the road to paying
back bailout loans

Auto maker will start payments next month, but GM's equity value
must rise to $66-billion for Ottawa, Ontario to get their money back

Globe & Mail Greg Keenan and Shawn McCarthy
Novemebr 17, 2009

General Motors Co. has promised to begin paying back part of the bailout money provided by the federal and Ontario governments, but taxpayers are unlikely to get all their money back unless the auto maker's market capitalization hits a level it has never reached.

GM will repay $1.54-billion (U.S.) of the $9.5-billion it borrowed from the two governments by making eight quarterly payments of $192-million starting next month, company officials said Monday as they revealed the first financial results for GM since it emerged from Chapter 11 bankruptcy protection on July 10.

Repaying U.S. and Canadian taxpayers is “a personal commitment,” said GM chief executive officer Fritz Henderson. GM will first repay the $1.54-billion directly.

But the longer-term payback plan involves GM becoming a widely held public company again, allowing governments to monetize their shareholdings.

The U.S. and Canadian governments hold 72.5 per cent of the common shares: 11.7 per cent of those are owned by the federal and Ontario governments.

Ottawa and Ontario also hold about $400-million worth of preferred shares.

The governments would need to receive about $7.6-billion from the proceeds of a GM initial public offering if they are to be repaid all the $9.5-billion they provided to the company.

But the total equity value of GM must amount to more than $66-billion if all governments are to be repaid in full, according to an analysis by the U.S. government's Government Accountability Office (GAO). That value could be a tall order for GM; the GAO study showed GM's market capitalization peaked at $57-billion in 2000.

“It is my mission to disprove the GAO,” Mr. Henderson declared, “to create value in the company, generate results in the company so in fact the taxpayers can get a return on the investment.” GM is preparing for an IPO in the second half of next year, he added.

The federal government still hopes to be repaid in full, despite Prime Minister Stephen Harper's comments in June that Ottawa was not counting on getting money back from the sale of the equity stake.

It could take eight years to unwind the equity position, but Ottawa will move as quickly as possible, while still aiming to maximize its return. Other opinions suggest governments could be repaid if GM's market capitalization hits $57-billion.

“We are not in the auto business for the long term,” a senior official said Monday. “We expect to see taxpayers' dollars returned to the government.”

GM added that it contributed $4-billion to its Canadian pension plans to restore them to health, confirming filings it made with Ontario pension regulators in September.

The announcement of the loan payback came as the auto maker reported that revenue and market share rose, structural costs fell and billions of dollars of debt were wiped out.

But one thing did not change – the company lost money in the equivalent of the third quarter.

The results are “certainly better than our plan going into bankruptcy, but nevertheless it is a loss and you cannot be satisfied with it,” Mr. Henderson told reporters.

GM lost $1.2-billion in the period July 10-Sept. 30, which was better than an expected loss of $4.2-billion was forecast with its bankruptcy filing. Results were better than expected in North America, although GM is still losing money in its home market. It lost $651-million before interest and taxes. It also posted a loss in Europe, another troubled market where it is trying to restructure its key Adam Opel GmbH division.

Profits in Latin America and the Asia-Pacific region, which includes China, did not offset losses in North America and Europe. Asia-Pacific operations registered $429-million in earnings before interest and taxes.

A full comeback for GM depends, however, on vehicle markets improving around the world, particularly in North America and Europe. GM also needs to roll out more hit vehicles that replicate the success of such Canadian-made vehicles as the Chevrolet Camaro and Equinox and GMC Terrain, while executing a successful restructuring of Opel.

“We need at least another year of consistently improving results” before assessing whether GM can return to full health, said industry analyst Bill

GM's $1.2B loss signals
a turn-around

Automaker plans to start repaying U.S. government loans in December

Nov 16, 2009 - Toronto Star

DETROIT–General Motors Co. says it lost $1.2 billion (U.S.) from the time it left bankruptcy protection through Sept. 30, far better than it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.

The company also says it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It could pay off the full amount by 2011, four years ahead of schedule.

GM said its improved performance was fueled by new products including the Chevrolet Camaro muscle car, and the Chevrolet Equinox and GMC Terrain midsize crossover vehicles. The company's top sellers through October were the Chevrolet Silverado pickup truck and Impala full-size car.

Also, GM's global presence helped the company, particularly in China, where its sales of 478,000 in the third quarter increased 6 per cent over the second quarter.

The company cautioned that the earnings numbers mean little because they don't comply with U.S. accounting standards and cover only the part of the quarter after GM left Chapter 11 bankruptcy protection on July 10.

Even more unusual is the $79.4 billion profit the troubled automaker is reporting for the first nine days of the third quarter, when it remained under bankruptcy court protection but was able to scrap colossal amounts of debt and other obligations from its balance sheet.

"We have significantly more work to do, but today's results provide evidence of the solid foundation we are building for the new GM," CEO Fritz Henderson said in a statement.

Chief financial officer Ray Young said it's impossible to compare the third-quarter results to any previous quarter because GM is still reviewing the value of its assets and liabilities post-bankruptcy to comply with accounting principles.

"Direct comparisons are not necessarily applicable. You can make some judgments in terms of trends," Young said.

GM maintains the numbers show a company making progress, riding dramatically reduced structural costs to a far better performance than the $6 billion loss GM reported in the first quarter, the last full quarter for which its numbers met accounting standards.

GM took in $3.3 billion more cash than it spent for the third quarter, far better than the $10 billion the company burned through during the first quarter.

Its third-quarter revenue totaled $26.4 billion, also an improvement over the first quarter when it saw revenue drop nearly 50 per cent from the same period in 2008 to $22.4 billion. Revenue was aided by sales boosts in July and August from the U.S. government's Cash for Clunkers rebates.

GM said its global market share was 11.9 per cent in the third quarter, up three per centage points from the first half of the year. The U.S. share stayed flat for the quarter at 19.5 per cent.

Many customers stayed away from GM showrooms in the first and second quarters as it headed into bankruptcy protection, fearing the company wouldn't be around to honor warranties and service their vehicles.

Young said GM accountants are in the process of cleaning up the new company's books, revaluing assets and liabilities and changes to pension and health care costs that came from bankruptcy and a new contract with the United Auto Workers union.

GM expects to meet accounting standards when it reports full-year results for fiscal 2009, but those figures probably won't be released until March as accountants go through the complex process of figuring out just how much the company is now worth.

But Young said the third-quarter results still are useful to management in spotting trends and measuring whether the company is making progress.

GM lost $78 billion from 2006 through the first quarter of this year. The gargantuan losses and debt eventually choked the company to the point where it could no longer operate without government help.

GM entered bankruptcy protection with roughly $94.7 billion in debt. It emerged with $17 billion, including the $6.7 billion owed to the U.S. government. The government has given GM a total of $52 billion, $45.3 billion in exchange for a 61 per cent equity stake in the company.

The automaker also says it will begin repaying $1.4 billion it owes to the Canadian and Ontario governments in December. The loan repayments will come from escrow accounts set up for the company by the U.S. Treasury Department and Canadian governments. GM also has paid $700 million on a $1.3 billion loan from the German government to keep GM's Opel division in operation. The balance will be repaid this month, GM said.

Although the company reported positive cash flow for the third quarter, it does not expect that to continue into the fourth quarter because of the government loan repayments and a $2.8 billion payment to help Delphi Corp., its former parts division, out of bankruptcy protection.

GM has said it plans to sell stock to the public late next year so taxpayers can recoup at least part of their remaining investment, though GM Chairman Ed Whitacre said last week the timing of any GM IPO remains uncertain and depends on when the company returns to profitability.

Ford vehicle sales outlook:
'Worst is over'

Bryce G. Hoffman / The Detroit News
Nov 15, 2009

Ford Motor Co.'s top sales analyst said this November U.S. sales appear to be at least as strong as October, meaning the industry has once again found its footing after one of the worst declines in history.

"So far, so good. We won't fall backwards from October," said George Pipas, head of sales analysis and forecasting at Ford. "The worst is over -- both from an economic standpoint and from an automotive standpoint."

However, he warned that the recovery remains fragile, largely because too many Americans remain out of work.

"(Unemployment) is a drag on consumer psychology," Pipas said. "The recession may be over and the recovery may have begun, but for many, many consumers it may not feel like it's over even 12 months from now."

As a result, Ford is projecting only modest sales gains in 2010.

Speaking Friday at the Automotive Press Association, Pipas said the industry that emerges from this downturn will be changed dramatically, with more consumers opting for smaller cars and crossovers. He said these vehicles will represent the largest market segment in the United States by 2013.

That is partly due to concerns about fuel prices, which Pipas said will remain volatile. He predicted that gasoline will hit $4 a gallon again -- probably next summer.

Analyst Jim Hall of 2953 Analytics LLP in Birmingham said that is convenient, considering that Ford has shifted its entire product strategy in that direction. But he believes new, fuel-saving technologies will keep American motorists in larger vehicles.

"Some of the best of these (technologies) are too expensive to put into small cars," Hall said, adding that innovations like advanced six-speed transmissions and smaller turbocharged engines should allow automakers to meet tougher federal emissions requirements with larger vehicles, too.

"There's no penalty for big in this country."

But Pipas said the shift to smaller vehicles is about more than fuel prices.

He said it reflects changing demographics and a new, less-ostentatious aesthetic.

"Consumers in the future will be more careful about living within their means," he said.

Ford fast-tracks new cop car to replace Crown Vic

Bryce G. Hoffman / The Detroit News
November 14, 2009

Ford Motor Co. today confirmed that it is developing a new police interceptor to replace the Ford Crown Victoria when production of that model ends in 2011.

As The Detroit News first reported in August, the Dearborn automaker has decided to abandon the elderly Crown Vic platform in favor of an all-new police sedan, which will most likely be built off the new Ford Taurus platform.

"We have heard the repeated requests from the law enforcement community to continue uninterrupted support of the law enforcement community," said Ford Americas President Mark Fields. "Ford is answering the call with the new Police Interceptor -- engineered and built in America."

Ford said the new vehicle -- dubbed the Ford Police Interceptor -- will offer greater durability, better safety, stronger performance and greater fuel-efficiency than the venerable Crown Vic, which is the leader in the law enforcement segment, accounting for 75 percent of the police pursuit business in the United States today.

The new Police Interceptor is being developed with input from Ford's Police Advisory Board, which includes representatives from major police departments around the country.

"Ford's commitment to the law enforcement community produced the Crown Victoria, the benchmark police vehicle," said Lt. Brian Moran, fleet manager for the Los Angeles County Sheriff's Department and a member of the advisory board. "This commitment has continued, and Ford has been working closely with the Police Advisory Board on developing the new Police Interceptor. I am confident that the next-generation Ford police vehicle will meet the future needs of the law enforcement community and will set the new standard."

Ford said it will unveil the new model in the first quarter of 2010 to give law enforcement agencies time to develop transition plans and outfitters time to develop aftermarket equipment for the vehicle.

"Ford long has supported our public servants with vehicles that work as hard as they do," said Ken Czubay, head of marketing, sales and service in the United States. "We intend to build on this legacy with a new generation of municipal and police vehicles that set even higher standards."

Ford Fusion has record year

Bryce G. Hoffman / The Detroit News
Nov 13, 2009

Sales of the Ford Fusion have topped 151,000 units this year, making it the best-selling car from a domestic manufacturer.

Ford Motor Co. today said its popular midsized sedan already has set a new annual sales record -- pasting its previous high of 149,552 units set in 2007.

"It's extraordinary that a car could set a sales record in an environment where overall industry sales are down 26 percent from a year ago," said Ford sales analyst George Pipas.

In the first 10 months of this year, Fusion sales were 15 percent higher than they were during the same period in 2008, making it one of the top 10 best-selling vehicles in the country.

Fusion sales received a big boost from the new Fusion Hybrid, which now accounts for nearly 20 percent of all Fusion retail sales. And Ford said more than 60 percent of those buying the hybrid model are converts from other brands -- primarily Toyota and Honda.

It also has been helped by stellar ratings from influential publications like Consumer Reports, which says its quality is now superior to competing models from Japan's leading carmakers.

The Fusion was introduced in 2005 as a 2006 model. It is produced in Hermosillo, Mexico.

Kansas Ford plant voting
on strike over workload

Bryce G. Hoffman / The Detroit News
Nov 13, 2009

Workers at Ford Motor Co.'s Kansas City Assembly Plant in Claycomo, Mo., are holding a strike authorization vote today after a disagreement over workloads, but no work stoppage is expected.

The dispute began during the company's annual "rebalancing" talks with the union, which are aimed at increasing the plant's efficiency.

According to people familiar with the situation, the United Auto Workers feels that some of the proposed changes would give some workers too many tasks to perform. A strike vote is typically taken in such cases as a way of increasing pressure on the company, though these rarely result in actual work stoppages.

However, the situation at the Kansas City plant, which produces the Ford F-150 and Escape, the Mercury Mariner and the Mazda Tribute, remains volatile after 92 percent of UAW members there rejected a recent agreement on concessions between the union and Ford.

Ford spokeswoman Marcey Evans said senior managers are at the plant, negotiating directly with local leaders and leaders of the UAW's national Ford section.

"We are working together with the union to address their concerns," she said. "We have a contractual process that we follow to address such issues, and this is part of that process."

While several strike votes have been taken nationwide, Evans noted that none have resulted in a work stoppage at any Ford plant in the past 20 years.

Ford confirms plant
closing as GM invests

GREG KEENAN

From Tuesday's Globe and Mail Published on Tuesday, Nov. 10, 2009

Ford Motor Co. has made it official, confirming that it will shut its St. Thomas Assembly Plant in Southwestern Ontario in the third quarter of 2011.

A letter making the closing official was distributed to the 1,500 employees yesterday, the same day that General Motors of Canada Ltd. was announcing that its Cami Automotive Inc. operation in Ingersoll, Ont., about 45 minutes east of the Ford plant, is receiving a $90-million upgrade to increase production capacity.

The good news-bad news scenario for the Ontario-based auto industry and two plants contrasts sharply with the recent history of the two companies. That history includes a trip through Chapter 11 bankruptcy protection for General Motors Co. and a surprise third-quarter profit at Ford, which stayed out of bankruptcy protection and did not receive a government bailout.

Nonetheless, "unprecedented economic conditions and market forces have required the company to aggressively restructure our business and to consolidate our capacity in order to position the company for future success," Jim Tetreault, Ford's vice-president of North American manufacturing, said in a letter distributed to employees yesterday. "The vehicles manufactured at the St. Thomas Assembly Plant will no longer be required in our product portfolio and no incremental product could be identified to be manufactured at the facility," Mr. Tetreault said.

Those vehicles are the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car full-sized sedans, pushed off in recent years mainly to fleet customers such taxi companies and police forces.

But the gas guzzlers are pariahs now among governments, which are forcing the fleet owners they regulate and own to purchase more environmentally friendly vehicles.

Canadian Auto Workers president Ken Lewenza said although Ford made it clear during recent contract talks that the plant is closing, "this is very tough news."

Mr. Lewenza praised GM and the federal and provincial governments, however, for the GM investment, which will bring 150 Cami workers back from layoff and lead to increased production of Chevrolet Equinox and GMC Terrain compact crossover utility vehicles.

Retooling one of two body shops at Cami will enable the plant to increase production by about 40,000 vehicles a year.

Olive: Can Chrysler be fixed?

Fiat's Marchionne is taking a 'weird' approach to putting the brakes on automaker's demise

Toronto Star Nov 8, 2009

Sergio Marchionne and his executives set the appropriate tone this week at their marathon, six-hour-long unveiling of Chrysler's rescue strategy. The strategy is bizarre, and so was the meeting.

In his impassioned windup to the more than 300 industry analysts, dealers, government officials and auto journalists gathered at Chrysler's headquarters in suburban Detroit, Marchionne quoted Bill Clinton, Machiavelli and Bobby McFerrin.

Weird.

Marchionne, who spent most of his career in Toronto before a short stint with an Italian firm brought him to the attention of a then-crippled Fiat, had allowed earlier in the day that he bought a Fiat in 1968 in Toronto and was not impressed.

"If you had told me then I would be running Fiat, I would have laughed my head off."

Chrysler's salvation, should it come about, is entirely tied to its "Fiat-ization." To the adoption of Fiat styling, engine and drivetrain technology, and supposedly state-of-the-art manufacturing methods.

Decades after Fiat was driven out of a North American market where it had failed dismally, the stigma of "Fix it again, Tony" still falls readily from the lips of auto enthusiasts when the word Fiat is mentioned. Why remind us?

Weird.

Fiat's Canadian boss bragged that Chrysler's upscale Town and Country minivan, assembled in Windsor, is moving through Canadian showrooms like "chickenpox through a kindergarten class." Veteran auto analyst Nick Bunkley, who was live-Twittering the event, tweeted: "I can't make this crap up."

Marchionne has had precious little to say about his plan to restore Chrysler to viability since it exited bankruptcy in June. He did give one interview in which he complained that Chrysler was in much worse shape that he had imagined. A real confidence builder, that. Marchionne was at it again on Wednesday, boosting morale with his observation that Chrysler's in trouble "but it's not terminal"

This desultory tone was consistent with Marchionne's regard for Chrysler since Day One last spring. He insisted then that he would not take the reins at Chrysler, until Washington told him that was not on. He held out for a gratis 35 per cent stake in Chrysler until Barack Obama told him that was too greedy. (Marchionne had to settle for 20 per cent.)

He made war on Chrysler dealers by loading them up with inventory and then shutting them down. He fired the heads of the Dodge and Chrysler brands, posts to which he had just promoted them, when they broke Marchionne's directive not to talk to the auto press at the Frankfurt auto show. Omniscience and pettiness aren't an ideal mix in a turnaround CEO, whose troops already balk at keeping Marchionne's work hours. (The boss gets by on four hours' sleep.)

Despite four months to prepare, Wednesday's crucial tone-setting presentation fell flat. Not only from the gaffes, but the shoot-the-moon goals Marchionne proclaimed, described by one of the analysts at the Detroit event as "boldly delusional."

As one executive after another talked of doubling sales of a brand or boosting market share by unrealistic amounts, there were collective gasps in the audience. What are these guys smoking?

Still, it was a friendly audience. The auto press would love a Chrysler comeback story. There had to be a less petty way for Marchionne to deal with unstated skepticism than to say it is a "worldwide sport of beating people who are down."

The truth about Chrysler is that it's not down, but out. In a glut of global capacity, what the industry needs is for this chronically mismanaged firm to go away. Instead, Washington, Ottawa and Queen's Park have extended a total of about $14 billion in emergency loans to a company that hit the wall in the early 1970s, again a decade later, and survives now only on government life support – the latter an expression of goodwill that Marchionne might someday show some appreciation for.

Fiat has none of its own money on the line in this latest gambit to make Chrysler sustainably viable. It got its 20 per cent equity stake in the firm in exchange for taking on the task of fixing it. Marchionne has vowed not to commit a single euro of Fiat's own money to reviving Chrysler. Fair enough, since Fiat itself is bleeding cash back home in Europe.

In a nutshell, Marchionne proposes to spend $23 billion (U.S.) to develop 21 new bestselling vehicles that will roughly double Chrysler's North American market share in the short space of three or four model years. To make Chrysler profitable in just two or three years – something that earlier Chrysler owner Daimler AG could not do in nine years – and to pay off its $14 billion in government emergency loans by 2014.

Chrysler's sales volume has cratered by 50 per cent over the past two years. Its year-over-year market share has plummeted to 7.9 per cent in October from 11.3 per cent.

Where is the $23 billion (U.S.) going to come from, if not from Fiat? From a miraculous upturn in sales of Chrysler's current, unpopular product line, which will get a slapdash sprucing-up (inexpensive improvements to interiors, exterior trim and so on).

"It's cosmetics," shrugged Rebecca Lindland, of IHS Global Insight, telling the Detroit Free Press she cannot imagine that showroom dust-collectors like the Chrysler Sebring and Dodge Avenger are suddenly going to move like H1N1 through a crowded subway car.

Those 21 new Fiat-based models won't start arriving at Chrysler dealers for at least two years – the time needed to retool Chrysler plants, and for Chrysler hands to learn Fiat's manufacturing methods. That's too late. A resurgent Ford Motor Co. will have replaced its entire lineup by then. Also, its other rivals won't be watching grass grow under their feet.

The real problem is the Fiat-ization of Chrysler. Americans have never taken to Fiat styling. Fiat is the unlikeliest candidate to erase Chrysler's abysmal reputation for poor quality. Fiat itself ranks in the bottom quarter of more than 20 brands in J.D. Power's latest customer satisfaction survey in the company's core European market.

The word crapshoot comes to mind to describe what Marchionne is embarked on, that's how pie-in-the-sky it is. Except in that game, you play with your own money.

Inflatable seatbelts
coming to Ford Explorers

Bryce G. Hoffman / The Detroit News - Nov 6, 2009

Dearborn --For Srini Sundararajan, the new inflatable seat belt system that Ford Motor Co. debuted Thursday represents the culmination of a decade of work and the realization of his dream to make automobile transportation safer.

The 47-year-old biomedical engineer has spent nearly half of his 21-year career at Ford working on the first-ever system, which will debut on the new Ford Explorer next year and promises to provide unprecedented protection for back seat passengers -- particularly for children and the elderly.

"It's exciting. It's thrilling," he said Thursday. "We are finally done!"

Ford's new system incorporates small air bags inside the rear seat belts. These are deployed during a crash, spreading the force of impact over five times more area of the body than conventional seat belts, thereby greatly reducing pressure on the chest and helping to control head and neck motion.

Dr. Stewart Wang, a leading trauma surgeon at the University of Michigan and an expert on automobile crash injuries, said Ford's new seat belt air bag could be a real life saver -- especially for children and the elderly who are most vulnerable and most often sit in the rear passenger seats.

"It's hard to know for sure ahead of time, but this air bag has tremendous benefit by increasing the surface area (of the seat belt), and that allows them to restrain the torso better on a frail body," he said. "I think that the potential benefits are quite substantial."

Ford said the optional safety device, the first ever offered by an automaker, will ultimately be available on all of its cars and trucks worldwide for a "modest" additional cost.

The company unveiled its first prototype of the new safety system at the Detroit auto show in 2001. Since then, Sundararajan has led the team working to take the seat belt air bag from the show stand to the showroom. He says it has been an arduous journey.

The original plan was to put the system in the trunk of the vehicle, but Sundararajan said it rattled. He and his team then moved to other configurations before fixing on a location beneath the rear seats.

That worked, but the system was too expensive.

"We wanted to make it affordable for everybody," Sundararajan said. "That was a real challenge."

Ford wants to make this a mainstream offering.

That is why it is breaking with its recent practice of introducing new cutting-edge technologies in its Lincoln brand and only making them available on Ford products a year or two later.

"This is really about improving family safety, and we really think the Explorer fits that," said Sue Cischke, Ford group vice president in charge of sustainability, environmental and safety engineering.

Analyst Erich Merkle of Autoconomy.com said the seat belt air bag will resonate with parents, adding that it builds on other safety innovations the automaker has introduced in recent years that have helped the Dearborn automaker claim more five-star safety ratings from the federal government than any other manufacturer.

"Safety certainly gives you a competitive advantage," he said. "It's one more thing Ford is doing right."

Stay Home if You Have Swine Flu, Unless You Work at Wal-Mart

Ford Workers Should Be Applauded, Not Ridiculed

by Norm Kujawa | Mon, 11/04/2009

Editor’s note: Ford workers rejected a proposed concessions package last week that included a six-year wage freeze for new hires (who make half of current workers’ pay), combining of skilled trades, and giving up the right to strike for contract improvements. Ford had made some weak assurances of continued work and offered a $1,000 bonus.

The United Auto Workers announced the vote as 70 percent 'no' among production workers and 75 percent 'no' in skilled trades. UAW President Ron Gettelfinger’s home local in Louisville, Kentucky, voted no by 84 percent. The Dearborn Truck unit, whose president broke with International officials to urge a ‘no’ vote, rejected by 92.5 percent.

The pre-vote period was characterized by rank-and-filers producing leaflets that they distributed in the plants, and at least one raucous meeting in which UAW VP Bob King was shouted down.

UAW officials said they would not bring the concessions package back for a re-vote but would wait until the contract expires in fall 2011 to negotiate again.

To read how the Detroit newspapers tell it, you would think that union members dealt a death blow to Ford Motor Company when UAW-Ford workers voted overwhelmingly against another round of concessions to their 2007 contract. Rather than place blame for a corporate failure that may not occur, news media should applaud union members for doing something they have not done in over 30 years – vote against the wishes of their top union leaders.

While published reports have said that Ford will have a large, business-threatening debt load in 2011, workers in 2009, eight months after giving concessions at their leadership’s request, do not see the urgency to give more to Ford, especially since Ford reported financial gains in the second quarter, and—right after the vote—announced a $1 billion profit for the third quarter.

Concessions were double-edged idea

The drive to ask the membership for concessions was likely a double-edged idea from Ford management and UAW leaders, long known for their labor-management harmony. Management, seeking to reduce the predicted debt load and reach competitive equality with General Motors and Chrysler, whose workers were forced to give concessions due to the GM and Chrysler bankruptcy filings, thought workers would be understanding of their needs and voluntarily give up more from their contract, even while seeing increased sales and profits since voting to help the company with previous concessions.

The UAW sought to maintain pattern bargaining, a staple of the union since Walter Reuther’s days as president. Pattern bargaining, done by the UAW for over 60 years, was always a tool to bring the workers in the weakest bargaining position to equality with workers in the strongest bargaining position. This is the first time that pattern bargaining has been attempted to bring the strongest company down to achieve the pattern with the poorer companies.

With the GM and Chrysler concessions last May, Ford workers stood ahead of their brethren in many areas, including entry worker pay, job classifications, and work rules. Instead of waiting out the contract, the UAW chose to bring the Ford workers in line with GM and Chrysler workers now, at a time when Ford has been selling the government, the media, the public, and Wall Street on the idea that their business plan, management team, and labor relations are the best of the three U.S. auto companies.

No clear explanation

Ford workers said throughout the process that they had given back enough and did not see the necessity in giving the company more from their contract while increased sales and profits were being announced. They certainly do not feel that they have to endure the same pain that GM and Chrysler workers were forced to endure by the U.S. government. Yet the International UAW kept insisting that the concessions were necessary, without clearly explaining the financial situation that Ford may find themselves in in two years.

Attempts were made by Ford management to tell workers how bad the business situation might be in two years. Executives were sent to plants around the country to give slide show presentations and give gloom-and-doom speeches. After the tentative agreement was reached, UAW-Ford negotiators traversed the same path across the country to explain the concessionary agreement to a confused membership. The necessity to give concessions to a company announcing profits certainly confused many union members, and is something that UAW members have not seen before.

Several employees, not wanting to risk the future of their plant, voted for the concessions. Several plants were promised product if the agreement passed, while others would be considered for product. Giving up the right to strike and freezing wages for new hires for six years, not just the remainder of the current contract, was not a concern to those that voted for the agreement.

Workers change course

Unconvinced of Ford’s impending 2011 failure and tired of being asked to foot the bill for management’s business failures, UAW members at Ford chose not to stand by but to be an active participant in the labor relations process. Management, with the UAW’s buy-in, was able to present a good business case for concessions just a few months previously. They have not done so in this instance.

In the past, workers went for the money. This time, despite a $1000 bonus offered if the agreement passed, workers declined the money and instead stood up for what they believed was right. The years of being told they had to sacrifice again and again had finally taken a toll.

Some reporters and bloggers have said that UAW members cannot see the big picture, and undoubtedly Ford management and UAW leadership feel the same way, but asking for concessions while telling the world of your profitability simply isn’t smart.

Shop floor a forgotten place

While UAW members get ridiculed for making too much money, having too good a benefit package, and apparently not understanding big business, the know-it-all commentators and those negotiating concession packages have either forgotten, or know nothing about, the shop floor and working conditions auto workers perform under.

Today’s auto factories are nothing like the factories of decades ago, but the culture and environment inside the auto factories is still highly stressful. The much-talked-about relationship between Ford management and the UAW has not rolled down to the shop floor. In the real Ford plant world, employees have to deal with supervisors that care more about the numbers of product being produced than how it is being done, and management that seemingly cares more about climbing the next rung on the corporate ladder than managing effectively.

These realities, coupled with a selection process that discourages the best candidates from getting involved in union leadership, has led to a chaotic environment that places workers in a survival mode where every day brings new challenges, new drama, non-stop politics, and few escapes from the pressure that workers constantly find themselves under. Fixing the way business is conducted inside plant locations would go a long way toward fixing the mindset of the workforce where harmonious labor relations, spoken so highly of at the corporate level, are just a fantasy.

Workers have been beaten down by the media, the general public, and their own union and company leadership for so long, it should not have been a surprise to anyone that the concessions agreement was voted down. Those that were surprised simply are out of touch with the reality of worklife inside an auto plant. Perhaps this is the beginning of a new workers revolution, one that will gain the respect of those that negotiate on their behalf and redefine the direction of the UAW.

[Norm Kujawa was editor of the UAW Local 3000 Guide for 17 years. Local 3000 represents workers at AutoAlliance, the Mazda-Ford joint venture in Flat Rock, Michigan.]

St. Thomas plant closure
may doom 10,000 jobs

Nov 4, 2009 Canadian Press

The closure of Ford's assembly plant in St. Thomas, Ont., will not only affect the 1,400 workers currently employed at the facility, but also thousands more in the auto parts and transport industries.

Auto industry analyst Bill Pochiluk says approximately 2,500 jobs will be lost among auto parts suppliers in both Canada and the United States as a result of the closing.

And Canadian Auto Workers economist Jim Stanford says as many as 10,000 jobs in total could be lost due to the spinoff effects on the community of St. Thomas and surrounding areas.

The plant's closure will also cost the St. Thomas area more than $3 million in tax revenue.

The St. Thomas region of southwestern Ontario has been hit hard by the distress in the Canadian manufacturing sector and the auto industry in particular.

Stanford says it's probably the second-hardest hit community in Canada after Windsor, Ont.

FORD CANADA POSTS FIFTH CONSECUTIVE YEAR-OVER-YEAR SALES INCREASE; SALES UP 20%

Led by double-digit increases of Ford Fusion
and Taurus October Highlights:

• Overall vehicles sales were up 20% compared to last October
• Car sales increased 8% compared to same period last year
• Ford Taurus sales rose 57%
• Ford Fusion sales were up 65%
• Ford Mustang sales increased 8%
• Ford Flex sales rose 38%, best October on record
• Ford Edge sales were up 38%, best October on record
• Ford Escape sales increased 19%, best October on record
• Ford F-Series sales were up 59%
• Ford Explorer sales increased 21%
• Ford Expedition sales were up 46%
• Lincoln MKX sales rose 90%
• Overall Lincoln sales jump 22%

OAKVILLE, Ontario, November 3, 2009 – Ford Motor Company of Canada, Limited saw sales increase 20.1 per cent compared to the same period last year marking the company's fifth consecutive month of year-over-year sales gains. Strong sales were led by the award-winning Ford Taurus, which was recently named "Best New Family Car" in the over $30,000 category by the Automobile Journalists Association of Canada (AJAC).

Also, Ford Fusion and Ford Taurus delivered strong performances with sales increases of 64.5 per cent and 57.1 per cent respectively.

October also marked the twelfth consecutive month of market share growth, with cars and trucks from both Ford and Lincoln showing sales increases.

"We are making steady progress and remain fully focused on our plan to build a strong and sustainable Ford," said David Mondragon, president and CEO, Ford of Canada. "Consumers are seeing the signs of recovery and are gaining confidence in the quality, fuel efficiency, safety and smart technology incorporated in our new product lineup. In fact, 90 per cent of our sales come from our new models."

In addition to the 8.4 per cent increase in car sales, total truck sales were up 23.6 per cent compared to last October. The results were driven by products like the Ford Taurus, Fusion, Escape and F-Series along with the Canadian-built Ford Flex, Ford Edge and Lincoln MKX.

Due to its overwhelming success, Ford is extending its 'Recycle Your Ride' program through until January 4, 2010. With this program, consumers turning in 15-year-old (or older) vehicles for recycling will get up to $3,000 toward the purchase of a new vehicle. Ford's scrappage program builds on the Canadian government's 'Retire Your Ride' initiative which offers $300 and other benefits to eligible participants. So far, Ford of Canada has been able to scrap 1,419 clunkers under the program -- more than any other automaker.

"The Recycle Your Ride program is helping Canadians afford new vehicle ownership and is great for the environment because these older, high-polluting vehicles are taken off the road," said Mondragon. "The key to the success of Ford's program is reaching out to dealers and consumers directly so that getting a refund from the program is fast and easy."

Ford Motor Company of Canada, Limited
October 2009 Vehicle Sales

Gettelfinger says failed Ford pact worth modest price

DETROIT -- UAW President Ron Gettelfinger (pictured) said today that the Ford-UAW contract modifications rejected overwhelmingly by Ford's 41,000 hourly U.S. workers would have saved the automaker just $30 million.

In a phone interview today, Gettelfinger said he pushed the modest concessions to lock in future product commitments at Ford plants and to bring the Ford agreement with the UAW into pattern with union agreements with General Motors Co. and Chrysler Group.

Gettelfinger said a little-publicized provision of the modifications would have allowed the UAW to call a strike at Ford if the company failed to meet its product commitments. The UAW had no such provision to strike over product commitments in its GM and Chrysler contracts, he said.

A key reason that rank-and-file voters opposed the new concessions was wording that required binding arbitration over any bargaining impasses in the 2011 contract talks.

Gettelfinger said the UAW agreed to binding arbitration to bring the Ford contract into pattern with no-strike clauses negotiated this year with GM and Chrysler.

“In good times, you establish a pattern, and in bad times, you stay with the pattern,” Gettelfinger said.

He said he saw no long-term damage resulting from the contract rejection either to Ford or the UAW.

The UAW announced today that 70 percent of voting Ford production workers rejected the contract, while skilled trades workers turned it down by 75 percent.

Gettelfinger said that after paying each of the 41,000 hourly workers a $1,000 bonus called for in the modifications, or $41 million, the contract would have saved Ford just $30 million.

Ford spokeswoman Marcey Evans declined to comment, except to note that the rejected modifications were more about operating improvements than saving Ford money. In addition to binding arbitration, the modifications called for combining some skilled trades and a freeze on wages for entry-level workers.

Gettelfinger said the Ford product commitments, which meant job security for union workers, were airtight and approved by Ford's board of directors.

If Ford had failed to live up to those commitments, the union had an immediate right to strike over that issue, Gettelfinger said.

The contract language also had a caveat that product commitments were subject to market demands, he acknowledged.

But “market demand” is often debatable, providing the union with the ability to strike in a close call. “It had real teeth,” Gettelfinger said.

Gettelfinger credited Ford in the negotiations with sticking to a pledge not to ask for additional concessions on retiree health care.

On Jan. 1, Ford must make a $1.9 billion payment into a UAW-administered voluntary employees' beneficiary association, with at least $1.3 billion of the amount in cash and the rest in Ford stock. In contrast, GM negotiated a much bigger reduction in the amount it must pay in cash Jan. 1 -- to $585 million.

All told, Ford must pay $6.5 billion of a $13.2 billion obligation to the VEBA in cash, while GM's cash payment is just $2.5 billion for an obligation that was $20 billion before new concessions were negotiated just before the automaker's bankruptcy filing June 1.

Said Gettelfinger: “Ford kept its word.”

UAW rejects new concessions
to Ford, no new talks

* UAW membership rejects concessionary deal with Ford
* Says Ford's Q3 results reflect workers' past concessions
* Says will not return to bargaining table

DETROIT, Nov 2 (Reuters) - The United Auto Workers union overwhelmingly rejected a proposed cost-cutting deal with Ford Motor Co on Monday, delivering a setback for the automaker as it seeks to bring its labor costs in line with U.S. rivals.

The UAW said that 70 percent of production workers and 75 percent of skilled trades workers voted to reject a proposed agreement the union leadership and Ford negotiated in October to change the 2007 contract.

The deal would have brought the automaker's labor costs in line with General Motors Co [GM.UL] and Chrysler Group LLC, both of which won additional concessions as part of their government-financed bankruptcies.

UAW President Ron Gettelfinger said in a statement the union's past concessions have positioned Ford to be a strong competitor in a tough market and its surprise quarterly net profit announced early on Monday provided further evidence of the contributions the workers have made.

"While we will not be returning to the bargaining table, our ... membership will continue to work with Ford on a daily basis in an effort to keep new products coming into our plants," Gettelfinger said.

The UAW represents about 41,000 U.S. factory workers at Ford.

STATEMENT: UAW-FORD TENTATIVE AGREEMENT RATIFICATION RESULT

Note: The following statement is attributable to Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company.

Dearborn, Mich., Nov. 2 – We appreciate the UAW leadership for working with us to reach a tentative agreement on further modifications to our national labor agreement. Ford is disappointed that the additional changes were not ratified.

In March, the UAW-Ford membership ratified changes to the 2007 UAW-Ford national labor agreement and the Voluntary Employee Beneficiary Association health care trust that went most of the way in moving Ford to competitive parity with foreign-owned automakers. The additional modifications we sought recently were designed to honor pattern bargaining and provide Ford with similar additional efficiencies as those ratified this year for our domestic competitors. 

All of us at Ford are absolutely committed to continuing to make progress on our transformation plan, and we will take the necessary steps to be competitive with the best in the business. 

Moving forward, we will work with the UAW to discuss the next steps to ensure Ford remains competitive so we can continue to make product commitments and invest in our manufacturing facilities here in the United States.

CAW Members at Ford
Approve New Agreement

November 1, 2009

(Toronto) Thousands of CAW members working at Ford facilities in Oakville, Windsor, St. Thomas and Bramalea have voted in favour of a new agreement, ratifying the deal by 83 per cent during a series of meetings held over the past two days. The deal was reached on October 30 between the two sides.

“No one should mistake workers’ approval as satisfaction with the new agreement,” said CAW President Ken Lewenza. “Members had faith in the union to negotiate the best agreement possible and protect their interests over the long term, but the problems faced by industry cannot be resolved at the bargaining table.”

We need government and policy makers to wake up to the fact that the country’s industrial base is rapidly eroding and with it, the entire middle class.”

The deal is the second cost-cutting agreement reached between the CAW and Ford in 18 months and includes cuts to benefits, a reduction in vacation, break times and co-pays on health care, all of which were pattern items from the agreements with Chrysler and General Motors. 

During the negotiations Ford also announced it would be closing the St. Thomas assembly plant in 2011, eliminating 1,400 jobs in the already hard-hit community. Workers at the plant manufacture the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.

“This has been an extremely stressful and difficult year for Ford workers, just as it has been for hundreds of thousands of workers right across the country,” said Mike Vince, chairperson of the CAW-Ford Master Bargaining Committee and president of CAW Local 200.  “Our members have been dealing with terrible insecurity as a result of financial crisis and recession and this new agreement will give a greater deal of job security right until 2012.”

The new agreement expires on September 17, 2012 and covers approximately 7,000 Ford workers.

The results by location are as follows:

CAW Local 1520, St. Thomas
Production:  80% in favour
Skilled Trades: 81% in favour
Combined total: 80% in favour

CAW Local 200, Windsor
Production: 81% in favour
Skilled Trades: 75% in favour
Combined total: 80% in favour

CAW Local 707, Oakville
Production: 90% in favour
Skilled Trades: 91% in favour
Combined total: 90% in favour

CAW Local 584, Bramalea
Total: 85% in favour

CAW Local 240
Office: 100% in favour

CAW Local 1324
Office: 83% in favour

Combined Totals:
Total Production: 84% in favour
Total Skilled Trades: 81% in favour
Total Office: 94% in favour

Overall total: 83% in favour

Ford's mantra of difference was taken to heart by its UAW workers

Nov 1, 2009 BY TOM WALSH
FREE PRESS BUSINESS COLUMNIST

UAW workers to Ford Motor Co. and Chief Executive Alan Mulally: “We think we’re OK where we are.”

That’s the clear message in a decisive rejection by Ford hourly workers of the Dearborn automaker’s latest plea for concessions on pay and work rules to match what Chrysler and General Motors gained in bankruptcy.

And it’s proof that words can come back to haunt you.

Remember Mulally’s statement of Nov. 18, 2008, testifying before Congress?

When asked whether he would work for $1 a year during the auto industry crisis, Mulally replied, “I think I’m OK where I am.” (He made $4.9 million last year in salary bonus and benefits, and was awarded stock options valued at $8.7 million.)

You can bet the rank-and-file workers remember.

They also remember Ford management’s repeated use of the word “different” over the past year, intended to set Ford apart from crosstown rivals GM and Chrysler.

If Ford is so happy being different and better off than GM and Chrysler, the workers are asking, what’s wrong with us being better off, too?

Ford was different, its executives said, because it didn't run out of cash like GM and Chrysler.

Different because it didn't take taxpayer money to survive like GM and Chrysler.

Different, different, different. Pounding the drumbeat of difference clearly has helped Ford's public image, its car and truck sales and its stock price.

But when it comes to the wages, benefits and work rules of its UAW workforce, Ford doesn't want to be different. It wants the same labor cost savings that GM and Chrysler achieved in Chapter 11 bankruptcy.

It's easy to understand, in that context, the defiance so many Ford UAW workers have shown in recent days toward coughing up another round of contract givebacks.

They're OK with being different.

That doesn't mean, however, that Ford is wrong to ask for more concessions.

Indeed, Ford must keep insisting on cost parity with GM, Chrysler, Toyota, Honda and every other major competitor if the company is to survive and prosper.

Ford's management must continue to push the envelope on costs. Otherwise, by repeating the old cycle of avoiding confrontation by appeasing its labor union, Ford risks winding up again with the bloated legacy costs and debt loads that have made the Detroit automakers so uncompetitive with foreign rivals for the last 25 years.

Alan Mulally, Ford's president and chief executive officer, along with Executive Chairman Bill Ford Jr. and the rest of the Dearborn hierarchy, have stated bluntly that Ford Motor cannot allow itself to be disadvantaged by the bankruptcies of GM and Chrysler.

And, in fact, they convinced UAW President Ron Gettelfinger and UAW Ford Vice President Bob King that the history of pattern bargaining among the Detroit Three should be kept intact. Ford should get the no-strike clause, more flexible work rules and a freeze on entry-level worker pay that GM and Chrysler had been granted.

To persuade the concessions-weary UAW workers in the Ford plants to go along, a number of promises were made about where production of future models would be located. And the jobs that go along with those decisions, of course. Workers also were offered $1,000 bonuses.

But even with those sweeteners, the UAW rank and file has turned its thumbs down.

So what now?

Wall Street lifts an eyebrow of worry about Ford's future? Gettelfinger and King, the would-be successor to Gettelfinger as UAW president, have a little egg on their faces because they couldn't deliver a ratification vote?

So what?

Both sides need to regroup, jawbone some more and do whatever it takes to ensure that Ford stays competitive and keeps its momentum.

There's no need for an immediate revote.

Nor would it be wise for Ford management to take a high-profile, obviously punitive action like relocating production of some promising new model from Michigan to Mexico.

Still, it must be steadfast about cost control. This is the Detroit auto industry's last chance to get it right. No time for weak knees.

But it should remember to choose its words carefully.

*************************************

Download the flyer in favor of contract changes (PDF)

Download the flyer in opposition to contract changes (PDF)

Ford deal with UAW
goes down to defeat

Bryce G. Hoffman and Louis Aguilar / The Detroit News

In a fatal blow to an accord with Ford Motor Co., United Auto Workers members at three of the automaker's largest locals voted Friday against ratification of the proposed contract changes.

At the Dearborn Truck Plant, 93 percent of the votes were cast against the agreement; 53 percent of workers casting their ballots at the Romeo Engine Plant voted against the deal. And at UAW Local 862 in Louisville, which represents workers at both the Louisville Assembly Plant and Kentucky Truck Plant, 84 percent voted no.

Though UAW voting will not be completed nationwide until Sunday, enough plants now have rejected the deal to make it virtually impossible for the agreement to win enough votes for approval.

"I think it's over," said Gary Walkowicz, one of union dissidents who has led the opposition to ratification. "People are saying 'No more.' We've had enough concessions already. We've given up enough already."

While the UAW pact is headed for defeat, the Canadian Auto Workers announced a tentative agreement Friday with Ford that matches concessions union members already gave to General Motors Co. and Chrysler Group LLC.

UAW members at Ford have been angered by language that limits the union's right to strike over pay and benefit increases in the next round of national contract talks in 2011.

Workers at GM and Chrysler already approved a much broader "no strike" clause as part of agreements negotiated during those companies' government-mandated bankruptcy reorganizations earlier this year.

Union dissidents say Ford already is doing better than GM and Chrysler and does not warrant the same treatment.

But UAW leaders say giving Ford at least a measure of parity with its cross-town rivals is essential to ensuring the continuation of pattern bargaining.

CAW President Ken Lewenza made a similar pitch to his members Friday.

"Pattern bargaining has done wonders for our members, and it stays in place," he said of the new deal with Ford. "Without a pattern, Ford would be trying to extract more from our members."

Deal means more work

The tentative agreement between Ford and the CAW exactly matches the terms the union negotiated with GM and Chrysler as a condition of the Canadian government's bailout of those automakers earlier this year -- including a wage freeze for the life of the contract, a freeze on cost-of-living adjustments after June, the elimination of one paid week off and increased insurance co-payments.

In exchange, Ford agreed to add additional work at its Windsor engine factory and committed to bring a new global platform to its Oakville Assembly Plant sometime after 2012. About 10 percent of Ford's North American production will remain in Canada, which is equal to its sales there.

But Ford will close its assembly plant in St. Thomas, Ontario, in September 2011 when production of the Ford Crown Victoria and Lincoln Town Car ends. That means approximately 1,400 Ford CAW members there will lose their jobs, along with about 6,000 workers employed by suppliers and other companies that support Ford's operations there, according to the union.

"This is devastating for Canada," Lewenza acknowledged, though he said the CAW had negotiated "good" severance benefits for its members, along with a commitment by Ford to offer early-retirement packages at its plants in Windsor and Oakville that could create openings for workers who want to stay at Ford.

Lewenza said the only alternatives were much worse.

"They actually talked about disinvesting in Canada if we didn't extend the pattern to them," he said.

"Our costs are high, relative to U.S. plants -- particularly given the strength of the loonie."

Workers at some UAW plants that voted against the new deal with Ford also are worried that they could lose work if the agreement fails to win ratification.

UAW members at Ford's axle factory in Sterling Heights began circulating a petition Friday calling for a revote after local leaders warned that Ford could transfer new products promised to that plant to a German supplier.

However, UAW President Ron Gettelfinger told reporters later that he would not approve another vote.

More locals reject Ford pact

On Thursday, workers at three more U.S. Ford factories voted against the proposed contract changes, which also would freeze wages and benefits for new hires and give the company greater flexibility in how it deploys employees.

Workers at two Chicago-area complexes soundly rejected the modifications Thursday, as did UAW members at Ford's parts factory in Saline.

Approximately 80 percent of workers at UAW Local 588, which represents workers at Ford's Chicago Stamping Plant, voted against the deal, while 70 percent voted no at UAW Local 551, which represents the Chicago Assembly Plant. At Saline, 75 percent of workers voted against ratification.

While the UAW is not releasing official figures until voting is completed, at least 11 locals now have rejected the agreement. At least four have voted in favor of ratification. A simple majority of Ford's 41,000 UAW-represented workers must approve the deal for it to pass.

While Lewenza stressed that the UAW vote is "not relevant to our decisions here," he said CAW members are certainly aware of the surprise opposition to the U.S. agreement. But he urged them to think differently.

"Our members face a critical choice," Lewenza said.

"Ford is not in good financial shape. ... They have a lot of debt."

What Ford does have, he said, is new product that is beginning to win back consumers in both Canada and the United States, and he said workers need to do what they can to help the company's turnaround succeed.

Retirees Thanksgiving Luncheon Oct 9, 2009

Click here for more Pictures

Click on picture below to see video of their story

(Note: Short advertisement at the beginning)

John Mlacak 73
Former Nortel Manager faces a 30% pension loss

Leroy Pickett 67
39 Years at a steel factory, his pension cut by 30%

Ernie MacInnis 58
Laid off from his factory job of 40
years, he's living on a pension that's
underfunded by 10 per cent

Fielding Smith, 62
After 41 Years of work he now
collect bottles for extra cash

Avtar Loodu, 60
His company went bankrupt with a
30 per cent pension deficit

RETIREMENT LOST: PART ONE

RETIREMENT LOST: PART TWO

RETIREMENT LOST: PART THREE

RETIREMENT LOST: PART FOUR

RETIREMENT LOST: PART FIVE

RETIREMENT LOST: PART SIX

RETIREMENT LOST: PART SEVEN

More UAW locals
vote no on Ford deal

Canadian union reaches tentative
agreement with U.S. carmaker

Bryce G. Hoffman and Louis Aguilar / The Detroit News
Oct 31, 2009

In a fatal blow to an accord with Ford Motor Co., United Auto Workers members at three of the automaker's largest locals voted Friday against ratification of the proposed contract changes.

At the Dearborn Truck Plant, 93 percent of the votes were cast against the agreement; 53 percent of workers casting their ballots at the Romeo Engine Plant voted against the deal. And at UAW Local 862 in Louisville, which represents workers at both the Louisville Assembly Plant and Kentucky Truck Plant, 84 percent voted no.

Though UAW voting will not be completed nationwide until Sunday, enough plants now have rejected the deal to make it virtually impossible for the agreement to win enough votes for approval.

"I think it's over," said Gary Walkowicz, one of union dissidents who has led the opposition to ratification. "People are saying 'No more.' We've had enough concessions already. We've given up enough already."

While the UAW pact is headed for defeat, the Canadian Auto Workers announced a tentative agreement Friday with Ford that matches concessions union members already gave to General Motors Co. and Chrysler Group LLC.

UAW members at Ford have been angered by language that limits the union's right to strike over pay and benefit increases in the next round of national contract talks in 2011.

Workers at GM and Chrysler already approved a much broader "no strike" clause as part of agreements negotiated during those companies' government-mandated bankruptcy reorganizations earlier this year.

Union dissidents say Ford already is doing better than GM and Chrysler and does not warrant the same treatment.

But UAW leaders say giving Ford at least a measure of parity with its cross-town rivals is essential to ensuring the continuation of pattern bargaining.

CAW President Ken Lewenza made a similar pitch to his members Friday.

"Pattern bargaining has done wonders for our members, and it stays in place," he said of the new deal with Ford. "Without a pattern, Ford would be trying to extract more from our members."

Deal means more work

The tentative agreement between Ford and the CAW exactly matches the terms the union negotiated with GM and Chrysler as a condition of the Canadian government's bailout of those automakers earlier this year -- including a wage freeze for the life of the contract, a freeze on cost-of-living adjustments after June, the elimination of one paid week off and increased insurance co-payments.

In exchange, Ford agreed to add additional work at its Windsor engine factory and committed to bring a new global platform to its Oakville Assembly Plant sometime after 2012. About 10 percent of Ford's North American production will remain in Canada, which is equal to its sales there.

But Ford will close its assembly plant in St. Thomas, Ontario, in September 2011 when production of the Ford Crown Victoria and Lincoln Town Car ends. That means approximately 1,400 Ford CAW members there will lose their jobs, along with about 6,000 workers employed by suppliers and other companies that support Ford's operations there, according to the union.

"This is devastating for Canada," Lewenza acknowledged, though he said the CAW had negotiated "good" severance benefits for its members, along with a commitment by Ford to offer early-retirement packages at its plants in Windsor and Oakville that could create openings for workers who want to stay at Ford.

Lewenza said the only alternatives were much worse.

"They actually talked about disinvesting in Canada if we didn't extend the pattern to them," he said.

"Our costs are high, relative to U.S. plants -- particularly given the strength of the loonie."

Workers at some UAW plants that voted against the new deal with Ford also are worried that they could lose work if the agreement fails to win ratification.

UAW members at Ford's axle factory in Sterling Heights began circulating a petition Friday calling for a revote after local leaders warned that Ford could transfer new products promised to that plant to a German supplier.

However, UAW President Ron Gettelfinger told reporters later that he would not approve another vote.

More locals reject Ford pact

On Thursday, workers at three more U.S. Ford factories voted against the proposed contract changes, which also would freeze wages and benefits for new hires and give the company greater flexibility in how it deploys employees.

Workers at two Chicago-area complexes soundly rejected the modifications Thursday, as did UAW members at Ford's parts factory in Saline.

Approximately 80 percent of workers at UAW Local 588, which represents workers at Ford's Chicago Stamping Plant, voted against the deal, while 70 percent voted no at UAW Local 551, which represents the Chicago Assembly Plant. At Saline, 75 percent of workers voted against ratification.

While the UAW is not releasing official figures until voting is completed, at least 11 locals now have rejected the agreement. At least four have voted in favor of ratification. A simple majority of Ford's 41,000 UAW-represented workers must approve the deal for it to pass.

While Lewenza stressed that the UAW vote is "not relevant to our decisions here," he said CAW members are certainly aware of the surprise opposition to the U.S. agreement. But he urged them to think differently.

"Our members face a critical choice," Lewenza said.

"Ford is not in good financial shape. ... They have a lot of debt."

What Ford does have, he said, is new product that is beginning to win back consumers in both Canada and the United States, and he said workers need to do what they can to help the company's turnaround succeed.

Sam Gindin: The economy should be transformed
to meet climate change challenge

Ford to close St. Thomas
assembly plant

Workers to vote this weekend on closeout deal
after union says there's no way to avert shutdown

Sterling Heights Ford UAW local may ask for revote

Workers fear 'no' vote will lose axle work for site

Oct 30, 2009

Bryce G. Hoffman / The Detroit News

Ford Motor Co. could shift work promised to its Sterling Heights axle factory as part of a tentative agreement with the United Auto Workers to a German supplier after the local union voted overwhelmingly against the deal, according to a union source.

Now, some workers there are organizing a petition urging UAW President Ron Gettelfinger to call for a revote.

Spurred on by union dissidents who say the time for concessions is over, rank-and-file members at plants across the country have cast their ballots against the proposed contract changes, which were negotiated by Ford and UAW leaders earlier this month. While the union has not released any numbers, people familiar with the situation said about 3,000 more workers have so far voted against ratification than have voted in favor of it.

Under the terms of the agreement, Sterling Axle was supposed to get new rear-wheel drive work that would have added about 100 jobs. Now, union sources fear that work will be given to Getrag Corp., a German supplier with a nonunion factory in North Carolina. Local union leaders also were told Ford is considering outsourcing other components made at the plant, where 80 percent of workers voted against ratification.

The company says any change in its plans for Sterling will not come until after voting is completed at all locals.

"We haven't made any decision," said Ford spokesman Mark Truby. "We're not going to comment on future product sourcing during the ratification process."

With voting scheduled to continue through Sunday at the remaining UAW locals, momentum could still shift in favor of the agreement. But Ford executives have little hope of that happening.

"This may be the start of a little hard ball," said David Cole, chairman of the Center for Automotive Research. "If Ford can't be competitive on labor, I think we'll see more outsourcing."

On Thursday, results from two Ohio locals were released, providing more bad news to the company and union leaders. UAW Local 420, which represents workers at Ford's Walton Hills Stamping Plant, voted 88 percent against ratification. At UAW Local 863, which represents workers at the Sharonville Transmission Plant, 75 percent of workers voted no.

Now, attention is focused on UAW Local 862 in Louisville, where workers from Ford's Kentucky Truck Plant and Louisville Assembly Plant are casting their ballots.

That is Gettelfinger's home local, and the UAW president traveled there on Sunday to urge members to support the deal.

Opponents are critical of a clause that would limit the UAW's right to strike in the upcoming 2011 contract negotiations. But Ford says these limits are necessary to maintain a measure of parity with its domestic competitors, which negotiated even broader "no-strike" deals with the UAW during their recent bankruptcies.

The deal also offers the promise of new work to plants like Sterling Axle.

"I don't think people here really understood that the work we had been promised was contingent on ratification," said Sterling Axle UAW member Brian Pannebecker, who voted in favor of the agreement and is now helping to organize a petition in support of revote.

Ford lauded for
'world-class' reliability

Consumer Reports says carmaker has
achieved 'world-class' quality status

Alisa Priddle / The Detroit News
October 28, 2009

Detroit -- Ford Motor Co. is the most reliable domestic automaker, and continued quality improvements have brought its vehicles almost bumper to bumper with its Japanese competitors, Consumer Reports magazine said Tuesday.

"Ford has secured its position as the only Detroit automaker with world-class reliability," Consumer Reports said in releasing its 2009 Annual Car Reliability Survey to the Automotive Press Association here.

The endorsement for Ford comes as Detroit's Big Three fight to retain market share against strong foreign competitors and as General Motors Co. and Chrysler Group LLC strive to show the government and American taxpayers that a strong domestic auto industry is worth saving and can lead the field. GM and Chrysler, however, didn't fare as well as Ford and still have work to do, Consumer Reports said.

This is just one more proof point, but it's a great testament because that's not a statement (Consumer Reports) has always made about us," said Bennie Fowler, Ford's global quality chief.

And it's the result of dedicated work to get there.

When Ford first closed the quality gap with Honda and Toyota a few years ago, "we didn't know if it was a fluke or if they could maintain it," said Rik Paul, automotive editor for Consumer Reports. But Ford continued to produce well-made vehicles that testers and readers appreciate.

Ford CEO Alan Mulally spoke repeatedly about reliability when he took over the company, and he visited the magazine to better understand and address lackluster findings that the company's vehicles had previously suffered.

Efforts at Ford today include a system that sends information about a problem to team members on the assembly line within 24 hours of a vehicle being brought into a dealership so changes can be made to correct the issue and prevent a recurrence.

Toyota, which consistently does well in the survey, also takes any slips seriously -- such as the Lexus GS that was rated below average.

"Historically, when a car's quality has slipped, the problem is rectified the following year," said Toyota Motor Corp. spokesman Curt McAllister. "We're not sure what the problem was with the GS, but we will go through the data with Consumer Reports."

About 1.4 million readers submitted data on vehicles from 2000 to 2009 model years, and the reliability results augment staff road tests of current vehicles to determine whether a vehicle is recommended to buyers.

Toyota and Honda Motor Co. still dominate the industry for long-term reliability, and the Honda Insight topped the list as the single most reliable vehicle. The Volkswagen Touareg was last in the survey. Of the 48 models with top reliability scores, 36 were Asian brands. Toyota had 18; Honda had eight; Nissan Motor Co., four; and Hyundai Motor Co./Kia Motors Corp. and Subaru each had three.

GM had some "bright spots" and appears to be on the right track if new vehicles such as the Chevrolet Malibu are any indication, but Chrysler "still struggles" and has a long way to go with only a single vehicle recommended by the testers and readers of the magazine. Last year, the Auburn Hills automaker had none recommended.

Bankruptcy filings by GM and Chrysler did not affect results -- the survey was taken in the spring before the companies completed their stints under Chapter 11 protection, Paul said. And bankruptcy should not affect next year's results if readers are objectively noting things that break on their cars, Paul said.

Of 48 GM models, 20 were average. The all-wheel-drive Chevrolet Traverse/Buick Enclave crossovers did well, and the magazine now recommends the Chevrolet Silverado/GMC Sierra light-duty pickups.

"Consumer Reports is one of several third-party inputs GM takes seriously because we realize the influence it has on purchase decisions," said Jamie Hresko, GM vice president of global quality.

Chrysler faces the biggest challenge. Its three brands are among the four worst, and more than a third of Chrysler products are rated much worse than average. Only the Dodge Ram 1500 is recommended, and there are few new cars and trucks on the horizon to boost future scores, Paul said.

As bad as that sounds, it is an improvement over last year when the Chrysler Sebring was the worst single vehicle on the list and no models were recommended.

Chrysler will detail efforts to restore quality in its five-year business and product plan to be unveiled Nov. 4 and is expected to talk openly about the need to correct quality and other errors committed under previous owners. Chrysler's newest partner, Fiat SpA, has implemented its manufacturing processes and quality controls, and improvement already can be seen, Chrysler spokeswoman Jodi Tinson said.

Warranty claims have been reduced 30 percent in the last 18 months, she said, adding that "the Ram represents where we are going."

The problem, said Consumer Reports senior auto engineer Jake Fisher, is that Fiat in Europe is known for its style, not its quality.

"There could be a lot of very pretty cars broken down on the side of the road," Fisher said.

That should not be the case for Ford products, as about 90 percent had average or better reliability, according to the survey.

The Ford Fusion and Mercury Milan beat out the Honda Accord and Toyota Camry for the second year.

"It's rare for Consumer Reports to see family sedans from domestic carmakers continue to beat the reliability scores of such highly regarded Japanese models as the Camry and Accord," said David Champion, senior director of Consumer Reports' Automotive Test Center. The last domestic that had better reliability than the Camry and Accord was the Buick Regal in 2004, he said.

GM's Malibu with a V-6 also did well and "is on par with the most reliable family sedans," Champion said.

Ford's upscale Lincoln brand did not fare as well. All-wheel-drive versions of the Lincoln MKS, MKX and MKZ came in below average. But the MKZ was ranked stronger than the Lexus ES or Acura TL.

The Honda Accord dipped in overall ratings, something Honda spokesman Chuck Schifsky said is not uncommon for a new car. "Customers may have problems with new features and technology they are not used to. But I think the study showcases the hallmarks of the Honda brand: durability, quality and reliability."

The Nissan Armada/Infiniti QX56 large SUVs have brought their reliability up to average, but the magazine expressed concerns with the rear-drive Nissan Titan pickup, Quest minivan and tiny Versa sedan.

Continuing their quality climb are Hyundai and Kia. Scoring well were the Hyundai Elantra and Tucson and the Kia Sportage. Hyundai's foray into the luxury segment with the Genesis proved above average with the V-6 and average with the new V-8 engine. Not as strong are the Kia Sedona minivan and Sorento SUV.

"The results are not an anomaly," said Hyundai spokesman Dan Bedore. "They are the dividends of our huge investment to improve quality."

Small cars fared well. Of 37 in the survey, 20 scored above average, including the Honda Fit, Scion xD and VW Golf.

Half of the 42 family cars tested were above average, including five of eight hybrids in this segment (Prius, Fusion, Milan, Camry and Nissan Altima hybrids).

Among the least reliable vehicles in their class are the all-wheel-drive Lexus GS, Nissan Versa and Subaru Impreza WRX.

European automakers showed some improvement again this year. The reliability of Mercedes-Benz vehicles has improved; most are now average or better, and the new GLK proved a strong new entry in its first year.

Results are more mixed for BMW AG, as the 535i sedan and X3 SUV fell and the new 135i scored below average. The only model Consumer Reports recommends is the BMW 328i.

The VW Rabbit/Golf and new CC were above average, and the Jetta TDI is the only diesel the magazine recommended. The Passat and Audi A3 have improved to average, along with the Tiguan SUV.

Porsche saw its Boxster fall below average and the magazine no longer recommends it.

The reliability report is in the December issue of Consumer Reports, which goes on sale Nov. 3.

Bryce Hoffman and Scott Burgess contributed.

UAW opposition mounts
to Ford concessions

By David Bailey and Bernie Woodall

DETROIT, Oct 28 (Reuters) - Ford Motor Co (F.N) workers represented by the United Auto Workers had rejected concessions at six plants as of Tuesday, threatening to vote down a deal to give the automaker cost parity with U.S. rivals General Motors Co [GM.UL] and Chrysler.

Despite pressure from UAW national leaders to ratify the agreement, rank-and-file workers have objected to giving Ford the same kind of "no-strike" pledge on wages and benefits the union gave GM and Chrysler in bankruptcy.

Workers at a plant in Flat Rock, Michigan, where they build Ford's iconic Mustang sports car, rejected the tentative deal by a margin of 1,265 against and 485 in favor in a tally released on Tuesday afternoon.

The Flat Rock vote followed a landslide 92 percent rejection of the deal at Ford's Kansas City, Missouri, assembly plant that builds the F-150 pickup and the Escape SUV.

Workers represented by UAW local units in Livonia, Sterling Heights, Canton and Ypsilanti also have rejected the agreement.

Workers at five other UAW plants supported the tentative pact last week, leaving passage of the concessionary deal down to a crucial series of votes later this week.

The UAW and Ford announced the tentative agreement on Oct. 13. It includes production commitments from Ford intended to protect jobs and a one-time $1,000 bonus for workers.

The voting so far has been a setback for Ford, which posted net losses of $30 billion over the past three years and expects a return to annual profits in 2011, and the UAW's national leaders who have recommended ratification of the deal.

Ultimately, if Ford workers reject the agreement, they also would be rejecting pattern bargaining that has ruled financial negotiations with the Detroit-based automakers.

Ford has said agreements GM and Chrysler made with the UAW around their government-supported reorganizations would put the company at a disadvantage over the long term.

Ratification is by a cumulative vote of the roughly 41,000 Ford UAW-represented workers at the various locals across the United States.

WORKERS 'APPREHENSIVE AND ANGRY 

"For Ford, they view the contract as key to competing effectively," said Harley Shaiken, a labor law professor at the University of California at Berkeley. "For the UAW, they view the contract as critical to locking in future jobs.

"But you've got a lot of apprehensive and angry members out there because of a dismal economy and an industry that has been on a roller coaster. That combination is proving volatile in these votes."

Voting will not wrap up until Friday at UAW Local 600, which represents several thousand workers at multiple Ford facilities, including the Dearborn truck assembly plant where leaders have voiced opposition to the givebacks.

Kansas City workers raised concerns about the "no-strike" provision, a blurring of job classifications among skilled workers who make higher wages and a lack of limits on new entry-level hiring through 2015, local President Jeff Wright said.

UAW workers have made a series of givebacks to Ford since 2005, most recently approving changes negotiated in February that Ford said would save $500 million per year.

Several local union officials have said they expected a tougher sell this time after the string of recent concessions.

"I supported it," said UAW Local 182 President Steve Zimmerla, who represents workers at Ford's Livonia transmission plant. "I think it was the right thing to do for our future.

"But these are difficult times in the industry and the February concessions are still on everyone's mind."

Analysts see Ford as in a better competitive position than GM or Chrysler and some believe Ford could return to a full- year profit as soon as 2010.

Ford borrowed more than $23 billion in late 2006 to finance its turnaround and remains the only large U.S.-based automaker not to seek emergency U.S. government loans.

But the automaker has much more debt on its balance sheet than rivals GM and Chrysler, which shed billions of dollars of debt through the bankruptcy process.

Ford shares fell 14 cents, or 1.87 percent, to close at $7.33 on Tuesday on the New York Stock Exchange. (Reporting by David Bailey and Bernie Woodall; editing by Maureen Bavdek and Andre Grenon)

Disabled Nortel employees lose out

October 27, 2009

Robert Meynell Government Relations Associate for March of Dimes Canada

As Nortel divvies up its assets and former CEO Mike Zafirovski paws for $12.3 million (U.S.), employees on long-term disability are forgotten and abandoned, providing yet another example of how more than 40 per cent of Canadians with disabilities find themselves earning less than $10,000 per year.

Imagine that you have a good job at Canada's premiere telecommunications manufacturing company. You choose to make regular contributions to your company's long-term disability (LTD) benefit plan because, while you are unlikely to ever need it, you don't wish to risk finding yourself living in poverty or possibly institutionalized as a result of an accident or disease.

One day Fortune knocks, recruiting you into the world of the disabled. Though you've lost much, you are thankful that you're not also left penniless. Then you receive a letter from your employer informing you that, regrettably, your LTD plan was not really covered by an insurance company and when the business evaporates so will your paycheque.

This financial spiral is the reality faced today by the 409 people on LTD at Nortel, except that they have yet to receive the letter. Indeed, Nortel's lawyers are not disclosing much.

It turns out that while Sun Life administered the LTD payments, most of the money came from Nortel's operating revenue, which means that if Nortel stops operating, those on disability are on their own.

Unlike Nortel's 17,000 retirement pensioners, the law does not require Nortel – or other employers that do not insure liability benefits (the majority of them) – to keep the money in trust for those on disability. And unlike the tens of thousands of other Nortel employees who have lost their jobs, those on disability leave are unable to find new employment.

In the United States, France and Britain, there are statutes that protect LTD beneficiaries but Canada has no federal or provincial legislation that protects those who are most in need. Corporate directors get their bonuses. Lawyers and secured creditors walk away with full pockets. Pensioners are hurt (possibly losing more than 30 per cent of their pension) but still afloat. But the 409 people on disability may be left with nothing.

These are the most vulnerable. They are unable to work. Many are still trying to meet the cost of raising a family and they have not had the years in the workforce to build a substantial amount of savings. And their small number compounded with their disabilities render them ill-equipped to mobilize a strong defence of their rights in the face of what can only be called systemic discrimination.

Some may wonder why this amounts to discrimination when nearly everyone associated with Nortel is being hurt financially in one form or another. True, thousands have taken a financial hit, but only the 409 on disability are being driven into almost irreversible poverty.

The collapse of Nortel is neither the first nor the last time that corporate bankruptcy in Canada will throw the most vulnerable into poverty. We saw it with Eaton's and Massey Ferguson. In the unsteady economy we face, we are likely to see it again soon.

But we should stop it here – and we can. We owe it to ourselves as a country that cares for its most vulnerable to press Nortel to honour its promise to those on long-term disability and call upon the federal government to reform regulations governing LTD pensions.

This is not a question of charity, it is a question of rights. In the LTD pension plans, Nortel promised financial security in the event that the employee acquired a disability. As Nortel dissolves, it must do its utmost to compensate each of the 409 people now relying on that promise. It was a pension they paid into and it must be honoured as a pension.

UAW, Ford deal is in jeopardy

Bryce G. Hoffman and Louis Aguilar / The Detroit News
October 27, 2009

Sterling Heights --A tentative agreement on concessions between Ford Motor Co. and the United Auto Workers is facing unprecedented opposition, with many workers saying Ford's comparative success makes further givebacks unnecessary.

On Monday, 80 percent of workers voting at Ford's Sterling Axle Plant rejected the proposed contract changes -- a surprising upset, since the factory would gain about 100 jobs if the deal is ratified. That came a day after a stunning 92 percent of workers at Ford's Kansas City Assembly Plant rejected the agreement.

UAW President Ron Gettelfinger has said the concessions are necessary to maintain pattern bargaining, which has for decades essentially assured equality in wages and benefits for workers at Detroit's automakers. But union dissidents appear to be winning the debate on the factory floor.

As of Monday night, locals representing about 8,000 of Ford's 41,000 UAW members had voted against the contract changes.

It is the most serious challenge to Gettelfinger's leadership yet, and he and other union leaders have fanned out across the country in an eleventh-hour bid to save the agreement.

Even if they succeed, the outpouring of opposition has raised serious questions about Gettelfinger's ability to deliver on promises of parity for Ford after granting significant concessions to rivals General Motors Co. and Chrysler Group LLC during their government-mandated bankruptcies earlier this year.

"It's a vote of no confidence in Gettelfinger, and it's a vote of no confidence in Ford's ability to deal with labor issues," said Gary Chaison, professor of labor relations at Clark University in Worcester, Mass.

Gettelfinger sold previous concessions to workers by promising to fight for restoration once Ford returned to profitability, Chaison said. As the Dearborn automaker prepares to announce next week what is likely to be another quarter of better-than-expected earnings, it is struggling to convince workers to give any more.

"Ford's problem is that they have an embarrassment of riches," Chaison said. "They're not bankrupt. Ford has made the case that it's different than GM and Chrysler. That may have helped sales, but it's not helping now. There's been so much encouraging news from Ford that the workers who are still there feel they should be rewarded."

Instead, they are being asked to match at least some of the concessions the UAW granted to GM and Chrysler.

Ford spokesman Mark Truby said the automaker has "been consistent about communicating our plan and fairly presenting our progress against our plan."

Ford's tentative agreement with the UAW includes a freeze on wages and benefits for new hires and changes in work rules that would give Ford greater flexibility in how it deploys workers in factories. But the deal also include limits on the union's right to strike over wage and benefit increases -- the biggest point of contention for workers, and one that could jeopardize pattern bargaining.

"Pattern bargaining has been vital for the union for decades," said labor expert Harley Shaiken, a professor at the University of California-Berkeley. "It has ensured that the gains won by workers at one company are shared by all."

He said union leaders believe that giving Ford at least some of what the UAW gave GM and Chrysler is key to guaranteeing that tradition continues.

Pact maintains pattern

If the proposed agreement is ratified, Ford workers -- like their counterparts at GM and Chrysler -- would not be able to take to the picket lines if they are unable to reach an agreement on any increase to wages and benefits during the next round of national contract talks in 2011.

As The Detroit News first reported Saturday, this was demanded by the Obama administration as a condition of its bailout of GM and Chrysler. The White House did not want to invest billions in taxpayer dollars to make those companies competitive only to see the gains reversed in the next round of negotiations.

If Ford does not receive a similar commitment from the UAW, it will be at a clear disadvantage once bargaining begins.

Dissident leader Gary Walkowicz, a member of the bargaining committee at UAW Local 600 that represents workers at Ford's River Rouge complex, said the union's acceptance of this so-called "no strike" language is the chief reason he and others oppose the agreement. He said Gettelfinger and other UAW leaders sold workers on previous concessions on the grounds that they would fight to restore those givebacks once Detroit automakers were back in the black.

"This shows that never was their intention," Walkowicz said. "People are angry at the union leadership. They feel like they were betrayed and lied to."

Gettelfinger declined to comment for this story. But he and other UAW leaders have accused dissidents of deliberating spreading "misinformation."

At Sterling Axle on Monday, workers opposed to the deal passed out leaflets listing the salaries of top Ford executives for 2007 -- before they took substantial pay cuts.

At Kansas City and elsewhere, the dissidents have shouted down union leaders urging ratification.

Some workers support deal

Not all workers have been swayed.

Brian Pannebecker voted in favor of the agreement Monday at Sterling Axle. As painful as recent concessions have been, he said, they have made Ford competitive for the first time in years. He is worried about the automaker's long-term prospects if it loses the ground it has gained.

"We got into trouble because our labor costs were not competitive with Toyota and Honda," Pannebecker said. "It would be foolish to turn around now and put ourselves at a point where we're not competitive with GM and Chrysler."

Ford has made progress, but its success can only be viewed as such in comparison with its cross-town rivals.

The automaker lost more than $14.6 billion last year, and while Ford posted a surprise second quarter profit of more than $2.2 billion this year, it is not expected to be profitable on a full-year basis until 2011. Ford also remains saddled with tens of billions in debt, while GM and Chrysler were able to shed most of their liabilities in bankruptcy court.

This suggests that Ford and other automakers will face even more resistance from union members as the turnarounds at GM and Chrysler gain traction.

Kansas City and Sterling Axle are not the only factories that have voted against the agreement.

Though their facility received promises of additional work as part of the deal, workers at the Livonia Transmission Plant rejected the contract changes by a 52 percent to 48 percent margin on Friday, according UAW Local 182 President Steve Zimmerla.

Paul Vella, a 16-year-veteran Livonia veteran, voted no.

"We can't afford more concessions," he said.

Workers at a parts facility in Plymouth also voted against the contract modifications.

Union members at other plants -- including Wayne Assembly Plant, Michigan Assembly Plant and three engine plants in Cleveland -- voted narrowly in favor of ratification last week.

At many factories, local UAW leaders have remained neutral in the debate because they fear supporting the deal could cost them their seats in upcoming spring elections, according to sources.

In addition to Sterling Axle, workers at Ford's Auto Alliance Inc. plant in Flat Rock voted Monday, but results were not available.

All voting is expected to be done by Saturday.

Ford's stand: Accept cuts or we invest elsewhere

Ford and the Canadian Auto Workers resumed critical negotiations Monday, with the company stressing that it needed to cut labour costs here or it would have to invest elsewhere in the future.

Joe Hinrichs, Ford group vice-president of global manufacturing and labour affairs, told negotiators for the Canadian Auto Workers union that current labour costs are uncompetitive with their U.S. peers and employees at rival General Motors and Ford in Canada.

Hinrichs said a continuing disadvantage would make it difficult for Ford to invest here, according to CAW president Ken Lewenza.

"He reminded us of that again and that we have to deal with it now," Lewenza said in a brief break from talks at a downtown hotel.

Lewenza said Hinrichs underlined Ford has no plans for more production at the sputtering St. Thomas assembly plant beyond 2011. "He (Hinrichs) told us that was the reality and we have to deal with it. What we have to do now is find some balance and protect Ford investments in Canada."

Ford's current labour costs, including benefits and pension obligations in Canada, are about $16 (U.S.) an hour more than any of its plants south of the border and even higher elsewhere. Ford's labour costs in the United States are in the range of $50-$52 an hour.

Earlier this month Ford indicated its labour costs, which represent less than 10 per cent of the cost of making a car, are higher here than in any country where it operates.

The union represents more than 7,000 production and skilled trades people at operations in Oakville, St. Thomas, Windsor and Brampton. Ford wants concessions like those the union negotiated with General Motors of Canada and Chrysler Canada earlier this year. Those firms gained the concessions to qualify for billions of dollars in government aid to stay alive.

Talks between Ford, which did not seek government aid, and the union started in early September but quickly fizzled into information exchanges this month.

In exchange for concessions, the union is demanding commitments for future assembly or parts production so Ford of Canada would maintain 13 per cent of its North American production here.

Negotiations continued last night with CAW anticipating some company proposals to spur bargaining. Also Monday, Ford workers in Missouri overwhelmingly rejected a new contract – a sign the automaker and United Auto Workers union are having trouble convincing some locals to accept changes that lower Ford's U.S. labour costs to match those at GM and Chrysler.

Under the tentative deal, workers would get a $1,000 bonus but entry-level wages are frozen and trades people have more duties, in exchange for agreeing not to strike on wages or benefits. Other issues could lead to UAW walkouts.

Ford's Kansas City plant
workers vote down proposed contract changes

Bryce G. Hoffman / The Detroit News
October 26. 2009 5:57PM

Workers at Ford Motor Co.'s Kansas City Assembly Plant delivered a stunning defeat to the company and union leaders Sunday when 92 percent voted against proposed contract changes.

The vote came after a stormy meeting at nearby Winnetonka High School where UAW Vice President Bob King, head of the union's national Ford section, made an appeal to workers to support the agreement, which was negotiated by the UAW and Ford earlier this month.

"(He) spoke and was booed," said one worker, who asked not to be identified. "There were a lot of 'No's!' It was a very loud meeting."

Last week, several key plants in Michigan and Ohio approved the deal by narrow margins.

A Ford executive expressed "shock" at the magnitude of the rejection.

Ottawa to take action
on pension funds

RETIREMENT LOST:
PART SEVEN

Reforming a broken system

Canada's gathering pension storm

UAW/FORD FLYERS ON BOTH SIDES

Download the flyer in favour of contract changes (PDF)

Download the flyer in opposition to contract changes (PDF)

Five Ford UAW plants
back contract; vote continues

DETROIT, Oct 23 (Reuters) - Workers at five Ford Motor Co U.S. plants represented by the United Auto Workers have backed a contract aimed at bringing the automaker's labor costs in line with rivals General Motors Co and Chrysler.

Workers at Ford's Michigan and Wayne assembly plants near Detroit voted to ratify the contract, said a source familiar with the process who was not authorized to speak because the ratification has not been completed.

At three Cleveland-area plants, workers backed the proposed contract changes 61 percent to 39 percent, UAW Local President Mike Gammella said. The local represents about 1,300 workers at two engine plants and a stamping plant.

The UAW and Ford announced a tentative agreement Oct. 13 on changes to its 2007 contract that covers about 41,000 workers. The changes include a no-strike clause, wage freeze for entry-level workers and some production commitments.

Other UAW locals have scheduled votes this weekend and next week. Approval of the changes requires a majority of the votes cast by workers.

For The Ford/UAW Contract Agreement Brochure Click Here

Ford union workers
protest contract changes

Bryce G. Hoffman / The Detroit News

Ford Motor Co.'s River Rouge complex has become a hotly contested battlefield as the United Auto Workers and union dissidents square off over proposed contract changes.

Late Wednesday, UAW Vice President Bob King, who heads the union's national Ford section was confronted by members chanting "No! No!" as he tried to address a group of about 600 workers at the factory to clear up what union leaders characterized as "misunderstandings" about a tentative agreement reached between Ford and the UAW last week. That deal still needs to be ratified by rank-and-file members, and voting was due to begin at the factory complex Thursday.

"People are very upset, and they let King know it," said Gary Walkowicz, a member of the bargaining committee at the Dearborn Truck Plant and a leader of dissidents at the Rouge. "We are urging everyone to vote down these concessions."

King stayed to talk to members individually and is expected to return today.

Jerry Sullivan, president of UAW Local 600 that represents workers at Dearborn Truck and the other factories in the Rouge complex, acknowledged that opposition to the new agreement is stronger than anticipated.

"It's become a tougher fight because there's a lot of misinformation out there," Sullivan said. "People really don't understand the agreement."

Many workers at the Rouge and other Ford facilities are upset over what they perceive as an agreement by the union to give up its right to strike.

It is true that Ford had hoped to negotiate a broad "no strike" agreement similar to ones reached with General Motors Co. and Chrysler Group LLC earlier this year. But the Dearborn automaker fell short of that goal. The tentative agreement only limits the union's right to strike in disputes over pay and benefit increases. If Ford tried to cut workers' pay or benefits, they would still be allowed to strike.

And while the agreement matches limits on entry-level wages and benefits that GM and Chrysler won from the union, it does not allow for cuts to retiree benefits that were part of those deals.

Ford would not comment on the union dispute, nor would national union leaders.

Walkowicz vowed to keep up the fight, but Sullivan predicted the majority of his members will support the deal once they understand the details. He will hold an informational meeting for workers today, and voting at the Rouge and other facilities will continue until next Friday.

Ex-Nortel workers
sound pension alarm

Former workers at insolvent
company march on Parliament Hill

OTTAWA–Canadians are being urged to pay close attention to the plight of workers from bankrupt Nortel Networks Corp. because it could some day be their own story.

With many company pension plans across the country underfunded, workers could easily see their pensions and other benefits reduced dramatically or disappear if their employer closes the doors for good.

"Nobody is safe, unless you are working in there, I guess," Bob Dowson, 68, who retired from Nortel's Brampton office after 32 years, told the Toronto Star while pointing to the Parliament buildings behind him.

"We worked all our lives for this and it's just been pulled out from underneath us," said Dowson, whose current $32,000 annual pension could be reduced by some 30 per cent or more because the plan was underfunded.

Dowson and his wife Marilyn joined thousands of other former employees of the bankrupt telecom equipment maker and workers from other financially troubled companies on Parliament Hill Wednesday.

They demanded the federal government amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, or bankruptcy protection law, to make workers priority creditors instead of falling to the bottom of the pile as they do now.

"If they don't do it for Nortel, do it for the next poor suckers who are going to come along and have their pensions taken away," Don Sproule, president of the Nortel Retirees and Former Employees Protection Canada, told the rally, adding that employees of bankrupt companies deserve as much standing as "vulture bond funds."

Ken Georgetti, president of the Canadian Labour Congress, predicted that pension and benefit protections will be front and centre in the next federal election.

"Those pensions and retirement benefits and deferred earnings don't belong to the companies, they belong to workers, and what's happening in this country ... greed is winning over need," Georgetti told the crowd.

The CLC has organized a campaign to put in place pension protection insurance such as there is in the United Kingdom and the United States.

"Next time an election is called, let me tell you, pensions is going to be the No. 1 issue."

Liberal Leader Michael Ignatieff said a Grit government would bring in a law to protect pensions "so that you are not left at the back of the queue in insolvency and bankruptcy." NDP Leader Jack Layton said he would release the NDP's pension policies Thursday.

An estimated 83 per cent of federally regulated pension plans, such as Air Canada's, are underfunded while the Financial Services Commission of Ontario reported that, of 1,500 pensions it studied, 91 per cent were underfunded.

Protecting pension plans has turned into a political football, with the Conservative government saying it's a provincial matter while Ontario says bankruptcy laws are federal domain.

"The fact of that matter is that pension was registered at the Province of Ontario, and the Province of Ontario is the only body that has the right and responsibility to cover that pension," Industry Minister Tony Clement told Parliament.

Under terms of the CCAA, Nortel does not have to give notice of termination or severance pay and people laid off in the current restructuring climate receive only 69 per cent of their earned pension.

Leonard Sutton, 61, who worked 13 years for Nortel, said his once-rosy future has become very uncertain.

"We feel that our future is totally up in the air," Sutton said, recalling that one of Nortel's draws was its total compensation package.

"So that was a big enticement to stay with Nortel. We now realize we were mugs," he said, standing next to his wife Anna, who said, "Maybe if (Prime Minster Stephen) Harper and (Finance Minister Jim) Flaherty had their pensions on the line they would have some sympathy."

Elizabeth Osborne, 70, worked at the Nortel Belleville plant for 20 years before taking early retirement 10 years ago.

"I'm getting my pension now and health benefits and life insurance, but we don't know how much longer that is going to last. We may end up with no pension at all if the government doesn't do something about it," said Osborne, who lives alone.

If Ottawa doesn't help out "there will be a lot more people like us out here," she said

Key UAW leader opposes Ford deal

A key union leader said today he is opposed to a tentative agreement reached between UAW leaders and Ford Motor Co., providing fresh evidence that opposition to a proposal first announced last week persists.

“I decided for the first time in my 17-year career as a union official to go against the international leadership” of the UAW, said Nick Kottalis, president and chairman of the Dearborn Truck Plant unit of UAW Local 600.

The tentative agreement between Ford and the UAW would freeze entry-level wages, establish a requirement for binding arbitration for wage and benefit disagreements at the end of the current contract and a consolidation of skilled-trades classifications.

Ford, in return, is promising several new products for its U.S. plants, to create new jobs and a one-time $1,000 bonus for workers.

To become official the agreement must be ratified by the union’s membership and as reported earlier this week by the Free Press there is substantial opposition to the deal.

Some UAW members remain opposed because they agreed to an earlier round of concessions in March that saved Ford more than $500 million annually. Since then, Ford’s finances have improved.

“We believe this is a concessionary request,” Kottalis said. “We also don’t like the strike clause they put in there.”

Kottalis said about 2,300 people work at the truck plant. In the UAW’s structure, the workers at that plant are in a unit that is part of the larger UAW Local 600, whose leaders are reportedly in favor of the agreement. UAW spokesman Roger Kerson could not be reached for comment late tonight.

RETIREMENT LOST:
PART FIVE
Underfunded dreams

No pension safety net for the self-employed

“Like any small-business owner, my life is my company. Retirement really depends on my success, and on succession planning. Can I sell the business to someone else, or to my employees?” Ms. Mielke wonders. The Freedom 55 dream is not for her; she sheepishly admits she fails to take advantage of her RRSP allowances. “I can’t imagine that I’ll ever stop working,” she says.

Meet the next generation of retirees: middle-class workers without pensions who are left to their own devices and facing an uncertain financial future. Ms. Mielke has a plan, vague though it may be. But as formal pension plans become increasingly less common, many Canadians face a savings burden that many are unwilling – or unable – to shoulder.

‘Young people simply will not save for retirement on their own, due to lifestyle and attitude, so mandatory plans helped to solve that social problem,” says Idan Shlesinger, managing partner at consulting firm Morneau Sobeco.

“The move away from mandatory pension plans means young people are now far less likely to eventually enjoy well-funded retirement.”

For an enormous chunk of the population – for the self-employed, such as Ms. Mielke, for those who work at small businesses, for professionals, for many immigrants – a secure, comfortable lifestyle after their working years is now in question. The middle class faces a retirement nightmare. And no one in power wants to talk about the problem.

“The great irony is there is no sympathy for these people, this huge section of the public that won’t have adequate retirement income,” says Malcolm Hamilton, a principal in benefits consultant Mercer.

“There is no sympathy for the middle class.”

Take, for example, a small business owner who makes $200,000 a year, by any yardstick, an upper-middle-class earner one might expect to enjoy a cushy retirement. This person might own a franchise, or be a consultant, a lawyer, a dentist or a farmer.

On retirement, they have the good fortune of selling that business for $2-million. By any conventional standard, that individual struck it rich.

What happens next? To be safe, the retiree socks the windfall into bonds. The portfolio earns 4-per-cent interest, or $80,000 a year. Taxes take half that amount. Inflation eats up the other half.

A supposedly affluent individual is suddenly left scrambling – forced to spend their capital to make ends meet. It’s this kind of scenario that’s been pushing retirees into the stock market.

“The tax regime forces individuals to take risks that they simply should not take with their retirement savings,” Mr. Hamilton says.

For a sense of just what that extra risk actually means to those without a formal pension plan, look no further than retired dairy farmer Dick Steenstra in Goderich, Ont.

Going into the downturn, the 62-year-old had done everything right and accumulated a $1.2-million nest egg. That portfolio cracked when the market tanked; in the worst days in March, the farmer’s savings were down to just $160,000.

Mr. Steenstra stayed calm, stayed invested, and rode the market back up, but is still down by 50 per cent: The family farm goes up for sale next spring to help refill the coffers, and vacation and renovation plans are very much on hold.

“My folly was thinking I could run it myself, better than the experts,” says Mr. Steenstra, who is more than a little peeved with the Bank of Montreal teller who advised margin loans as a way to augment a self-directed portfolio.

The university-educated farmer says: “If you plan to invest a lot of your savings, I really think you need an education in investments. In retrospect, I wish I had thought of my portfolio as more of a pension than as stocks that I should trade.”

Funding retirement of Canada’s vast middle class can only become a larger social issue, as a pension paid by a benevolent employer is becoming increasingly rare.

At a time when the population is aging, more than six out of 10 Canadians have no formal pension plan, according to the most recent data from Statistics Canada. The federal agency found the percentage of the population with some sort of pension has been dropping steadily for three decades, to 38 per cent of Canadian workers in 2007 from 46 per cent in 1977.

That trend is expected to continue, as companies continue to steer away from plans now seen as expensive industrial anachronisms. The problem is most acute at smaller businesses, and there are 5.1 million Canadians – or 48 per cent of the private-sector work force – at small companies, with fewer than 100 employees.

“There are no good retirement options for the self-employed, or owners of small businesses,” says Mr. Shlesinger, of Morneau Sobeco.

He sees annuities, mutual funds and other mass market financial products as expensive and inefficient.

Mr. Shlesinger says with these savings schemes, workers “tend to either budget too conservatively, and save too much at the expense of their lifestyle, or roll the dice by underfunding their retirement savings, and hoping market performance skates them on side.”

And left to their devices, most Canadians can’t or won’t set aside enough to pay for their golden years: Statistics Canada shows that last year, just 31 per cent of eligible taxpayers made use of the RRSP program, the single biggest tax break available to individuals.

“The current market chaos should be a wakeup call to everyone – companies, governments and citizens – that our current pension system needs to be overhauled,” said Ontario Teachers’ Pension Plan chief executive officer Jim Leech in a recent call-to-action speech.

He added: “Average RRSP balances are woefully short of the levels they need to be in order to fund retirement.”

Yet as savings decline and pension plans are wound down, a large segment of the population is ramping up their expectations for life after work.

Credit, or blame, a baby boom generation that’s grown up wanting for nothing, while being bombarded with concepts such as Freedom 55, which promise fun-filled retirement.

“People aspire to more from retirement today than they did a generation back,” Mr. Hamilton says.

“That goal presents a real problem to those who are reasonably affluent … who aspire to a better life in retirement than what they may have enjoyed while working.”

The rule of thumb is that retirees need 50 per cent of the income they earned while working.

That figure assumes debts such as mortgages are all paid off and dependents have left the house. For upper-middle-class Canadians, RRSPs and government programs such as the Canada Pension Plan are unlikely to provide that kind of income. Yet there are few tax-effective ways to set aside additional savings.

And much of the middle class aspires to a more expensive retirement, filled with sun-drenched adventure travel and fine living.

Despite the middle-class retirement shortfalls that are obvious to pension experts, politicians and business leaders seem fixated on patching up existing systems.

Attention and resources get focused on underfunded corporate plans, and on a tired debate over the merits of defined-benefit schemes, where the employer makes good on shortfalls, versus defined-contribution plans, which shift market risk to employees.

There is very little talk about enhancing pensions for the majority of the population that lacks any retirement safety net. University of Toronto pension guru Keith Ambachtsheer says: “Rather than defending old faulty designs, why haven’t pension industry leaders been searching hard for designs better suited to delivering 21-century retirement living standards that are adequate, universal and sustainable?”

Fixing the pension problem will fall to the generation that comes of age struggling to fund retirement.

For jewellery designer Ms. Mielke, the goal is straightforward: “If I could change one thing in the tax code, I would make sure that if you do well in business, you do well after retiring.”

Ford not celebrating yet

Oct 21, 2009 G&M

Jeremy Cato

But as the Darquins’ travails show, the financial industry may not be ready to provide the kind of advice that people need as opposed to the kind that sells products.

It was in January, 2005, that Mr. Darquin left his job as an audiovisual technician at UBC. While his salary topped out around $45,000, his long years of service helped him amass a sizable pension, valued at $465,394.13.

Mr. Darquin, 62, was prompted to seek advice about his pension after being informed that he had two options upon leaving his job: One was to keep his money in the UBC plan, the other to take it out and invest it elsewhere.

The Darquins’ adviser recommended they invest the pension money as part of a complex plan that included investing borrowed money.

“I didn’t say to him, ‘The UBC pension isn’t enough, what can you do for me that’s better? “ Mr. Darquin recalls. “Probably the way it worked out was that he asked, if he could do better [than the pension], would that be good? I probably said yes.”

Today, the Darquins have total debts, including a mortgage, of about $150,000, up from about $50,000, and their retirement investments were recently valued at just over $267,000 – a dramatic difference from the value of the UBC pension. To recoup their losses, they’re pursuing legal action against their adviser.

“Part of the problem is that he got us into this complex financial arrangement which was really above and beyond,” says Ms. Darquin, 58. “We’re used to having a credit card and a mortgage.”

The Darquins’ story highlights what investor advocates believe is the central weakness of much of the investment advice offered in Canada. Most financial advisers make their living through commissions on the sale of investments, which means they face a conflict: Whether to recommend what offers the highest compensation or what’s best for the client.

“Most financial advisers have the best interests of their clients at heart,” says Steve Garmaise, associate director at the Canadian Foundation for Advancement of Investor Rights (FAIR). “But despite the best intentions of most advisers, they still face a fundamental conflict of interest in offering true, dispassionate advice to their clients.”

There other concerns about whether the financial industry has its clients’ best interests at heart. Many advisers are too busy to give all their clients proper attention. High mutual fund fees undermine the gains of investors who already face low returns because they’re investing conservatively for retirement.

But conflict of interest is the core issue. One of the few people addressing the quality of investment advice is Cary List, president of the Financial Planners Standards Council, which oversees the Certified Financial Planner (CFP) designation.

Mr. List wants his members to focus more on providing financial planning than on selling investments. Thus they’d be in a better position to deal with questions like the whether a client should stay in a company pension plan.

“That’s the biggest ethical dilemma,” Mr. List says. “It’s a huge challenge for any professional adviser when there’s a whole lot of money sitting on the table.”

What happens when an adviser not fixated on commissions looks at the pension question? Mr. Gillespie, of Rogers Financial, has done a lot of pension analysis for employees of UBC, where Mr. Darquin worked. “Probably, 99 times out of 100, it made no sense to pull the pension out,” he says.

Mr. Gillespie gets a variety of fees for his work, including some tied to the sale of products. But when he prepares a plan for a new client – say to tackle the “what should I do with my pension” question – there’s always a flat fee involved, instead of commissions.

If fee-only financial planning is the solution to conflicts of interest in the industry, there are other problems that need to be tackled too.

Ken Kivenko, an investor advocate, worries that many advisers are inadequately trained. But he also places some blame on individuals who won’t get involved in their own financial future.

“You’ve got what I call a triple storm,” Mr. Kivenko says. “You’ve got incompetent, conflicted people talking to a basically financially-illiterate population in general. This is very dangerous.”

Mr. List insists that CFPs have ample training to tackle pension issues – “Absolutely, and then some.” A bigger concern to him is that there won’t be enough advisers to meet the expected need for advice as the population ages and wrestles with the pension crisis.

Demand for investment products is expected to rise. Mutual fund companies would seem to be an obvious winner if people are investing more on their own for retirement, but those in the industry are cautious about the future.

Bill Holland, chief executive officer of mutual fund giant CI Financial Corp., says new money flowing into funds will be offset by aging baby boomers drawing out savings. Barbara Amsden, director of strategy and research at the Investment Funds Institute of Canada, predicts rising health costs will constrain aging Canadians from making new investments in mutual funds. Other factors weighing on fund sales include potentially slower economic growth and competition from products like exchange-traded funds, or ETFs.

One thing the fund industry has going for it, at least for the time being, is a lack of competition. Interest rates for the guaranteed investment certificates and bonds that appeal to conservative retirement investors don’t yield much more than a puny 3.5 per cent these days, and returns for a one-year term can be lower than 1 per cent.

“People cannot afford to just use deposit-type products – that will not get them what they need in retirement,” Ms. Amsden says.

The biggest rap on mutual funds is high fees. A study by a trio of global finance professors indicated that Canadians pay the highest fees in the world. The mutual fund industry here in Canada refutes the findings, but it has never produced its own contradictory study.

Mr. Holland says the pressure to cut fees is being felt most acutely for bond funds, which he expects to be very popular with people who are assembling retirement portfolios. He notes that a five-year Government of Canada bond has a yield of 2.5 per cent for much of the year, while the average cost of owning a Canadian bond mutual fund is 1.7 per cent.

“You’re taking 70 per cent of the returns, and that won’t work,” Mr. Holland says. “If you’re hitting a period of time where more people are investing in fixed income, then that has to change the fee structure.”

There’s wide agreement that Canadians will need help to make the right financial decisions about retirement, but no common front on how to provide that help. Investor advocates like FAIR’s Mr. Garmaise put the onus on government to protect investors. Industry people believe financial literacy is a key, and they point approvingly to the task force that Finance Minister Jim Flaherty announced in the summer to develop a national strategy for improving financial education.

Looking back on his own experience, Paul Darquin might agree. A lack of knowledge was why he and his wife sought the help of an adviser in the first place. “We were such novices,” he says. “We thought going to him was the answer.”

FORD/UAW October 2009 Agreement
(Modifications to 2007 Agreement)

Ford/UAW October 2009 Modification Letters

RETIREMENT LOST: PART THREE

Hybrid pension plans: a hard sell

When we look back at what we’ve done, it’s been very beneficial to the employers and the plan members,” Mr. Schaub says.

If the fix at the PPIP was both long and arduous, it also holds out hope that creaky pension plans can be put right. Indeed, the debate in Canada’s executive suites is now over just what sort of fix holds out the best hope of providing for adequate retirements without crippling employers.

The proposed solutions range from the simple to the radical. One school of thought is that the answer lies in Ottawa, with less onerous federal rules on funding traditional pension plans. At the other extreme is a movement to get rid of those plans entirely, end the era of defined-benefit pensions, and transfer the responsibility for funding retirement to the shoulders of employees by giving them defined-contribution plans.

In the middle are a variety of alternatives that, not surprisingly, are dubbed hybrid plans.

No matter which route is taken, hard choices lie ahead – for companies, their employees and for government policy makers.

The great debate

Many Canadian companies with pension plans have been hit by a double whammy of low interest rates over the long term and a dramatic drop in stock markets in the short term. The combination has knocked the daylights out of returns, typically leaving plans currently with assets equal to about 80 per cent of liabilities. Traditional pension funds in Canada’s private sector currently have a solvency deficit of about $50-billion, according to pension consulting firm Watson Wyatt.

As companies weigh alternatives for the future, a crucial choice comes down to a pair of innocuously simple-looking bits of shorthand: Will the future be DB or DC? Those four letters house a world of difference.

Traditional pension plans are DB, defined benefit. A retiree covered by the plan is guaranteed a given level of income. If the plan falls short, the employer is on the hook.

The new model, increasingly favoured by employers, is DC, defined contribution. In this approach, the employer’s responsibility is limited to making a certain (“defined”) contribution to the employees’ pension plan. Contributions made by both the employer and employee go into an individual account for the employee, who makes his or her own investment choices. If the plan falls short, the employee is on the hook.

The crisis notwithstanding, not every employer is ready to give up on DB.

“Maybe I’m being a bit paternalistic, but I’m not sure DC is the right solution if the end result of that is just to expose the entire population to market fluctuations for their retirement savings,” says David Bryson, chief executive officer of mining giant HudBay Minerals Inc., whose unionized work force has a traditional DB plan.

“I think that defined-benefit pension plans are a very, very good vehicle to address the need for pension security,” says Canadian National Railway Co. executive vice-president Claude Mongeau. “From the standpoint of employees, it is a great vehicle.” The CN plan, with $14-billion in assets, is one of Canada’s largest private-sector plans.

Even for employers, Mr. Mongeau says DB pension plans are beneficial, because they help them to retain workers. But he argues pension plans are being strangled by the federal government’s excessively tough funding rules, which have made their financing far too volatile.

For that reason, CN and six other major companies – Air Canada, Bell Canada, Canada Post, Canadian Pacific Railway Ltd., MTS Allstream and Nav Canada – have banded together to quietly lobby Ottawa for reforms to the rules.

In a submission to the Department of Finance, the companies warned that their ability to maintain defined-benefit plans “will be seriously challenged” without permanent changes to the rules.

The group’s biggest complaint centres on the volatility of the contributions they’re required to make to keep assets aligned with liabilities. Under current “unnecessarily onerous” funding rules, they say they collectively would have to contribute $3.5-billion annually from 2009 to 2013, a huge increase from $1-billion in 2008 and $800-million in 2007.

The seven companies want more time to make up their pension shortfalls. And they want the government to adopt a less-conservative formula when calculating how well-funded a plan is.

Mr. Mongeau says the current system already requires pension plans to be funded on the “hypothetical” assumption the companies are going to go out of business immediately and become insolvent, and the additional restrictions make funding requirements unsustainable.

“We cannot put our heads in the sand,” he says. “There is a big problem.”

Consultant Keith Ambachtsheer, one of Canada’s most prominent pension reformers, argues that funding requirements actually should be toughened.

Mr. Ambachtsheer, who consults to many pension funds and is director of the Rotman International Centre for Pension Management at the University of Toronto, says the private-sector pension system is “fundamentally unsound” because most plan sponsors do not allocate enough money to fund their promises, and instead hope for large returns from higher-risk investments like stocks.

“What we’ve been calling defined-benefit plans aren’t really defined-benefit plans,” he says. “They’re sort of ‘wing and a prayer’ plans, at least in the private sector.”

He has no time for the argument that tougher rules would be a death blow to the DB system. A system that operates on a significant probability that funding promises can’t be kept is not worth indulging, he says.

“Is it not more honest and functional to either put up enough capital to secure the promise, or tell plan participants up front that they are risk-bearers in this pension deal?”

Paul Gauthier, however, fears the debate about how to improve regulation for traditional pension plans is moot.

The recently retired CEO of one of Canada’s largest corporate pension fund managers – Bimcor Inc., which manages pension money for Bell Canada – says better rules may help a few plans for a while, but the traditional plan is probably destined to die out. In a move typical of many companies these days, Bell has been closing its DB pension plans to new hires and is transitioning employees to a DC model.

“Saving the DB plan is like wanting to save the horse and buggy,” Mr. Gauthier says. “We need a serious transformation of the system.”

A middle ground?

Experts, including Mr. Gauthier, are increasingly arguing that the way ahead is not simply tinkering with the rules of the game, but instituting new hybrid models that could provide better benefits than personal DC plans, while reducing the funding volatility and risk of DB plans.

Keith Elliott believes the Pulp and Paper Industry Pension Plan, which covers workers at companies such as Catalyst, West Fraser Timber, Canfor and Tembec, is already accomplishing both goals.

Mr. Elliott, director of human resources at West Fraser Timber Co. Ltd., says that since the PPIP plan was remodelled in the 1990s, it has taken an extremely low-risk approach to investing that is uncommon in Canada. The fund invests almost exclusively in long-term bonds.

“It was a hard sell in the early 1990s because the finance people said, ‘You’re giving up return.’ But to do otherwise, you had a big problem.”

That problem has been evident in recent years as many other pension plans have seen their equity assets decline sharply in bad markets. The PPIP posted a loss of just 1.6 per cent last year despite the devastating market crash, compared with an average 18-per-cent loss for a large pension plan in Canada.

Another key feature of the plan is that the member companies make a flat contribution on behalf of workers, set as a percentage of their wages. That is their only funding requirement: If the plan is short of money, employers don’t have to cough up more to repay shortfalls. Instead, the plan has to cut benefits for workers or retirees.

“There’s a significant contribution, but from an employer’s perspective, the amount is limited,” Mr. Elliott says. “There’s no other obligation.”

Benefits have been improved repeatedly over the past decade.

“Under the structure we have, we can’t have a shortfall,” Mr. Schaub says. “Unless we can fund plan improvements and guarantee them forever, we don’t grant them.”

The PPIP illustrates why many pension experts are keen on the type of hybrid dubbed a “target benefit” plan, which is already used in the public sector.

In this model, plans target a certain level of benefit payout that appears safely achievable. But if long-term investment performance makes that target unreachable, funding is not increased. Rather, the benefit level is lowered. Conversely, if investment returns exceed the target, the benefits can be increased.

Pension consultant Paul Forestell, leader of the retirement professional group at consulting firm Mercer (Canada) Ltd., says such plans are good for employees, despite that risk of reduced benefits.

Unlike individual DC retirement accounts, target plans allow large pools of assets to be combined and professionally managed, maintaining a strength of traditional DB plans. And for employers, the target benefit plans are more sustainable than the traditional DB plan in the long run.

“I think the change you need is something that makes DB less risky for employers,” Mr. Forestell says. “And target benefit plans do that.”

But the model is not going to be adopted overnight. Tax and pension rules in most provinces only allow a target benefit plan to be set up for plans sponsored by multiple employers, but not by a single employer. And the only plans that are allowed to unilaterally reduce benefit payments are those where workers get a say in their operations. That generally means the plan’s board of trustees must have union representatives.

Another complication is that DB pensions cannot simply be shifted into a target benefit plan, says pension consultant Ian Markham, director of pension innovation at Watson Wyatt. Instead, a company would stop contributions to one plan, but continue to administer it, and then also start a new target benefit plan. “It gets cumbersome,” he says.

Such practical complications are the main reason new models of pension plans are not evolving. Even hybrid models that are permitted under current regulations are not popular.

A hybrid may be better in theory, says pension lawyer Mitch Fraser. But once companies have opened up the highly charged issue of pensions, they figure they might as well go all the way and adopt defined-contribution plans, because they are the easiest model to administer. Companies don’t adopt hybrids, he says, because they simply don’t have to.

“I really hate to say it, but if a client called me and said, ‘What kind of plan should I do,’ I’d say, ‘Establish a DC plan, of course. There’s much more certainty.’”

Mr. Gauthier, who is now working with Montreal-based research centre CIRANO to develop reform proposals for the Quebec government, believes new pension models are most likely to be embraced by companies with no existing pension plans at all, especially if they can be crafted to allow smaller companies to band together.

“You create some big co-op type organization that can manage the pension plans of 3,500 smaller companies and their employees, and you set up a system that offers a lot more flexibility,” he says.

“At some point people will say, ‘Why don’t I put all my employees into this?’ And then everybody would have a pension plan that makes some sense.”

Ford commits to new
vehicles at U.S. plants

Frank Stronach sought CAW bailout, Hargrove says

Oct 19, 2009

Business Reporter

Auto tycoon Frank Stronach, who resisted unions for years, turned to the Canadian Auto Workers for a financial lifeline to save teetering Magna International in late 1990, retired CAW leader Buzz Hargrove reveals in a new book.

In a startling disclosure, Hargrove writes Stronach desperately sought millions of dollars in loans through the CAW's strike fund or wanted the union to buy stock in his struggling auto parts manufacturer.

"Incredibly, Frank turned to the same group of people he had scorned for years – our union, the CAW," Hargrove says.

But Hargrove, who was a top CAW official at the time, says in Laying It on the Line that the union had only about $22 million in the fund, which would not have put much of a dent in Magna's huge debt load.

"That's all?" a pale Stronach asked, according to Hargrove.

Hargrove, who served as CAW president from 1992 until his retirement in 2008, says Stronach may have confused the CAW with the much larger United Auto Workers in the United States, or thought the Canadian union could easily access the $500-million strike fund of its American cousins. The CAW broke away from the UAW in 1985.

"With no strikes looming on the horizon, (Stronach) figured he could tap the union strike fund, deliver a better return to the union than the banks could offer and climb out of his financial hole," Hargrove says in his 313-page book, which arrives in stores this week.

At that time, Aurora-based Magna faced the possibility of bankruptcy after overexpansion drove its total debt to about $1.2 billion while revenues were stalled in a recession.

In exchange for the loans or stock investment, Stronach told Hargrove and Hemi Mitic, another top union official, at a Markham restaurant that he would advise Magna workers to sign up for CAW representation.

"If you will loan me the money I need to keep Magna afloat or buy enough of my Magna shares to provide the cash I need, you'll have my assurance that we will encourage our employees to join the CAW," Hargrove quotes Stronach as saying. "It's a good deal. It'll benefit you and us."

(Union records show Hargrove was conservative in his estimates of the size of the strike funds. The UAW had actually accumulated $777.4 million and the CAW held $31.3 million. The latter amount was still far short of what Magna needed.)

Stronach, now 77 and still Magna's chairman, could not be reached in Europe for comment on Hargrove's version of events.

In hindsight, Stronach was right about the benefits to the union in organizing and financial returns.

Magna quickly restructured its debt in other ways and embarked on a long period of phenomenal growth that elevated the company into one of the world's biggest auto parts makers. Stronach even put up some of his family's own money to satisfy bankers.

If the CAW had taken its entire strike fund and bought Magna stock at $1.80 a share during the company's dark days of restructuring in 1990, and sold at the peak price of about $115 in 2004, the move would have generated an eye-popping $1.9 billion for the union. Even at today's stock price of about $45, the union's stake would be worth more than $780 million.

Furthermore, Stronach's offer to encourage unionization would have significantly boosted the CAW's bargaining power in the auto industry.

Magna was already the country's biggest independent auto parts maker and its non-union environment adversely affected the CAW's ability to make contract improvements at rival firms.

In his book, Hargrove also discloses he did not reject the unusual idea of using CAW strike funds to help a traditional non-union company because of the strategic gain in organizing and bargaining.

Hargrove, who was the top assistant to Bob White, then the CAW president, mentioned Stronach's idea to him but got a cold reception.

"He told us we were nuts," Hargrove said in an interview this week.

Although Stronach's enthusiasm for the idea disappeared after he heard how much the union could invest, it underlined the seriousness of his problems, Hargrove writes.

"His (Stronach's) quick reversal from an anti-union capitalist to the working man's friend was impressive and proved that many business principles go out the window when enough money is involved," Hargrove continues.

The union still only has small union representation at the company's operations in Canada. But that could change as a result of another Stronach initiative to boost his company in recent years.

Stronach's company and Hargrove's union reached a controversial agreement called "A Framework of Fairness" in 2007 to improve labour relations, productivity and innovation. Under the deal, Magna agreed not to oppose organizing drives at its plants and the union gave up the right to strike.

In the book, which follows a 1998 autobiography, Hargrove reflects on his experiences as a worker, union activist, negotiator and leader over more than four decades.

He grew up in poverty in New Brunswick, dropped out of high school and ended up on the assembly line at a Chrysler plant in Windsor before embarking on a career in the labour movement.

Hargrove says he was far from a "union boss" and recalls incidents when distillery workers spat on him or flicked lit cigarettes in his direction, and hostile Air Canada employees gave him a rough ride.

As in his earlier book, he offers numerous prescriptions for fixing the economy and the auto industry, including implementing tougher trade policies and ousting the federal Conservatives from power in Ottawa.

He writes warmly about the inspiration of individual workers on the shop floor and his positive dealings with some senior executives, such as Stronach and Gerry Schwartz of Onex Corp.

Hargrove adds he doesn't begrudge Stronach for his multi-million dollar annual pay packages because the Magna chairman built the company from nothing, created thousands of jobs and "didn't walk out of an MBA class into a corner office suite."

But the 65-year-old Hargrove, now a media commentator, university lecturer and ombudsman for the National Hockey League Players' Association, does not pull any punches.

He aims withering criticism at other executives such as Robert Milton of Air Canada, Darren Entwistle of Telus and Lee Iacocca of Chrysler, as well as politicians including Stephen Harper, Mike Harris, Bob Rae and Jack Layton.

***************************************

RETIREMENT LOST:
PART TWO

Bankrupt companies, pension promises destroyed

When companies are put into bankruptcy protection, pensioners go to the end of the queue behind most other creditors. Quite often that can
mean they receive only a fraction of their promised pension.

By Greg Keenan
Oct 19, 2009

Keith Carruthers never saw it coming.

More than a decade after he retired from Indalex Ltd., the aluminum processing company was granted protection from its creditors. Within weeks of the filing this past April, a substantial portion of his retirement income evaporated – along with the retirement incomes of several other senior executives.

“It was kind of like a lightning bolt,” says Mr. Carruthers, who retired at age 56 after 13 years as president of Indalex. “All of us are going to lose half to two-thirds of our pension. All of us are long-term employees who worked for the company for many, many years. That just leaves a real sour taste in your mouth.”

They are among the hidden victims of the Great Recession. In the year-long economic slump that is the most severe Canada has experienced since the early 1990s, 357,000 people have lost their jobs – in every sector of the economy, and at every level of the work force.

But the meltdown has also had a devastating impact on a group that does not show up in the monthly unemployment statistics: the retired. Already hobbled by an aging work force and companies’ gradual move away from guarantees for retired workers, Canada’s pension system has been pushed to the breaking point by the downturn. Now, millions of blue-collared workers, salaried employees and professionals – both the retired and those still working – are facing starkly scaled-down retirement dreams.

If there is a sector of the economy that shows the pension crisis at its worst, it is manufacturing. Once well over 20 per cent of Canada’s GDP, it has shrunk relentlessly – and so has its capacity to pay for the pension promises made in brighter days.

Within the factory sector, the unravelling of Canada’s pension system has become such a massive and broad-based problem that it is has reached the people at the very top of the corporate hierarchy: executives like Mr. Carruthers.

Many company pension plans have been left badly underfunded by market volatility and more pressing demands on their cash resources, leaving retirees with smaller plans. But the most dramatic impact on employees and pensioners has been at failed companies where pensions have evaporated in bankruptcy proceedings.

Bankruptcies, liquidations and filings for protection under the Companies’ Creditors Arrangement Act (CCAA) have surged, including such legendary Canadian titans as AbitibiBowater Inc. and Nortel Networks Corp., to name just two. And if manufacturing companies such as Indalex have been among the hardest-hit, they may also be the least likely to recover. “As soon as [a] company goes into CCAA, it’s basically like they just won the lottery and they can do whatever they want,” says Mr. Carruthers, who lives in London, Ont. “I lose the lottery.”

Hundreds of other former Indalex Ltd. employees and executives – many of whom left the company years ago – are now facing up to the same lottery loss as Mr. Carruthers. Their story, and the story of the company they helped to build and then watched flounder, shows how the recession reached deep inside the North American manufacturing sector to redefine retirement.

An acquisition too far

Indalex, which is based in Lincolnshire, Ill., is far from a household name. It began life in North America in 1964, when an ex-Alcan Inc. engineer and a colleague at a British-based company called Pillar Holdings Ltd., bought a small Canadian aluminum extrusion company.

In the unglamorous business of aluminum extrusion, which involves melting the metal and stretching it into strips for use in windows, doors, boats and other products, Indalex grew along with the Canadian and U.S. economies to become a North American leader. In Canada, the company expanded to Calgary, Montreal and Port Coquitlam, B.C.

Indalex saw its fortunes rise in an era when the burgeoning North American manufacturing sector held out the promise of well-paying jobs that provided a stable, middle-class living. Those jobs also carried the promise of a decent pension at retirement after a working life.

Indalex made that promise to its employees. For its growing ranks of unionized workers in Canada, the company participated in a multi-employer pension plan, which spread the pension costs and risks over a number of companies in the manufacturing sector. Mr. Carruthers and other executives were entitled to an enhanced package, with a supplemental retirement plan in addition to a regular executive pension plan.

Mr. Carruthers rose up the ladder at Indalex as the company expanded. Appointed president of the company’s Canadian operations in 1986, by the early 1990s, he was running its entire North American business out of Toronto. By then, Indalex was owned by Britain-based Caradon PLC and had moved into the U.S. market and was operating a handful of plants there.

The company took a step that would later contribute to its eventual collapse when its parent company purchased Easco Inc., an Ohio-based aluminum company, in 1999. That boosted Indalex’s U.S. presence to 15 plants and three casting facilities, and made the company much more reliant on the U.S. housing market just as it was taking off.

The deal led to almost a decade of restructuring.

By 2005, Caradon was bought by Honeywell International Inc., which flipped it a few months later to private equity firm Sun Capital Partners Inc.

That year, Indalex’s unfunded pension liability jumped to $42.5-million (U.S.). Rising pension liabilities increasingly were becoming a problem for manufacturers as work forces aged and downsizing reduced the number of employees paying into the plans.

By the end of 2007, in the final annual report the company would submit to U.S. securities regulators, Indalex had managed to shrink its pension deficits down to $10.3-million. But it was also beginning to wrestle with a bigger problem: the collapse of the U.S. housing market. Residential construction made up more than one-quarter of its $1-billion in revenue, but it was slowing.

Then, last year, the price of aluminum crashed, forcing Indalex to meet margin calls on hedging contracts for the metal. Meanwhile, interest on its debt had risen to $35-million a year by 2007, partly because of high-interest debt Sun Capital had taken on to finance the purchase of the company. The credit crisis made it difficult to refinance, court filings show.

With revenue sliding, the company struggled to make its payments. Then aluminum giant Alcoa Inc. drove in the final stake by seeking repayment of $6-million it was owed. Indalex’s U.S. operations were forced into Chapter 11 bankruptcy protection. The Canadian unit, running out of cash, soon followed.

The goalposts are moved

None of those problems should have been a worry for Mr. Carruthers and 12 former executives of the Canadian operations. Within days of the CCAA filing, however, Mr. Carruthers received a letter saying the supplemental executive retirement plan that was paying him $3,700 (Canadian) a month was being eliminated.

He is also concerned that his regular pension plan will be cut from its $4,000-a-month level. Are there going to be lifestyle changes?” he asks. “Yes, there are going to be lifestyle changes. We just have to cut back on everything we’re doing.”

Such issues are painful to discuss publicly, adds Bob Leckie, who was Indalex’s general counsel, but has left the company and is now a consultant in San Antonio, Tex.

“In our generation, we defined ourselves by our work,” Mr. Leckie says. “We’re the generation that when they first started losing their jobs, instead of telling their wives and families, they put their suit and tie on every morning and went out of the house because they were too ashamed to tell their families.”

Mr. Leckie points out that annual registered retirement savings plan contributions were strictly limited for the executives because of the size of the pensions they were supposed to receive.

That’s fair and reasonable, he acknowledges. “But it’s based on the fact that you’re going to collect the pension. The linkage broke down in the oversight of these pensions … The government had the power and the ability to ensure that it wasn’t underfunded.”

The group of retired executives has asked the Ontario Superior Court to restore the supplemental retirement plan, including arguing that the $3.2-million that represents the windup liability is a relatively small amount of money.

Mr. Justice Geoffrey Morawetz, who is overseeing the case, has dismissed that argument. “While this submission may be attractive on the surface, to give effect to this argument would violate a fundamental tenet of insolvency law, namely, that all unsecured creditors receive equal treatment,” Judge Morawetz wrote.

It’s that same legal principle that has stymied pensioners in other insolvent companies as they try to keep their retirement plans intact. Nortel retirees – who find themselves among unsecured creditors fighting over scraps from the sale of the company’s assets – are lobbying for changes to insolvency and bankruptcy laws.

They plan to take their case to Parliament Hill on Wednesday, when they will hold a rally. The approximately 17,500 pensioners should rank higher in the pecking order than other unsecured creditors and especially bondholders, who are protected by credit default swaps and claims against Nortel assets in the United States and Britain, argues Don Sproule, who heads the Nortel retirees committee.

The Canadian pension plans have assets that cover about 69 per cent of their liabilities, he says, so Nortel retirees stand to lose about one-third of their pensions if they don’t move up in the pecking order.

“We all sink to the bottom. We don’t know what we’re going to get,” adds the 59-year-old engineer, who retired from Nortel in 2003 after 27 years.

Although Mr. Sproule believes his argument is gaining some traction in Ottawa, he’s up against financial institutions and corporations that hold a lot of sway. Claude Mongeau, the incoming chief executive officer of Canadian National Railway, argues that changing legislation to give pensioners a higher claim than bondholders in a bankruptcy proceeding could make it harder for companies to raise money in the capital markets.

Typically, Mr. Mongeau argues, bondholders will recover 30 cents on the dollar in a bankruptcy. If a pension has a 10-per-cent shortfall “is it fair to give that 10 per cent priority over the guy who is going to lose 70 per cent? I think there is an issue of that nature.”

With files from reporter Janet McFarland

October 17, 2009
By Kristine Owram (CP)

TORONTO — Canadian Auto Workers president Ken Lewenza says Ford Canada shouldn't expect the same concessions that Ford Motor Co. (NYSE:F) won in recent talks with its union in the United States including a ban on strikes over wages or benefits.

"Obviously we watched the U.S. negotiations closely with the UAW because of the competitive challenges we have from one country to the other," Lewenza said in an interview Friday.

"But we're a Canadian sovereign union and we didn't do that at General Motors, we didn't do it at Chrysler in terms of no strike provisions and we're certainly not going to do it at Ford."

The agreement between Ford and the United Auto Workers runs until 2011, gives workers a US$1,000 bonus if they ratify the agreement and guarantees new vehicles for five assembly plants. It also bans strikes over wages or benefits, freezes entry-level wages and changes work rules to require some skilled-trade employees to do more than one job.

Ford and the CAW have been negotiating a new labour contract since early September, but talks have stalled on the issue of how much manufacturing capacity the company will keep in Canada.

The CAW says Ford Canada intends to slash its Canadian manufacturing presence from 13 per cent to eight per cent of total North American production. Ford currently has no plans to build vehicles at its St. Thomas, Ont., plant beyond 2011.

The union has accused Ford of asking for the same concessions the it gave General Motors and Chrysler in negotiations earlier this year, without being willing to make the same promises in return.

Chrysler committed to maintaining 20 per cent of its assembly operations in Canada, while GM promised to keep 18 per cent of its operations here.

Official talks are scheduled to re-start Oct. 26.

Lewenza also said he met recently with new Chrysler CEO Sergio Marchionne, who described the structural changes he has been undertaking with the goal of improving collaboration between all parts of the company.

Lewenza said he was "apprehensive" going into the meeting, but came out in "a great mood of optimism."

"We left there absolutely confident that if there's anybody that can turn Chrysler around it's Marchionne, because the guy's a workaholic. It's as simple as that," he said.

Copyright © 2009 The Canadian Press. All rights reserved.

2010 Ford Mustang GT:
Muscle-bound

Oct 17, 2009

Special to the Star

It seems the only car that fans of American muscle can talk about this year is Chevrolet's resurrected Camaro.

Last year, it was the reborn Dodge Challenger.

After absences of seven and 34 years each, it's understandable the subsequent returns of this pair of retro coupes – hearkening back to the "glory days" of the late-1960s and early-1970s muscle-car era – have hogged media headlines and enthusiasts' attention.

For 2010, however, Ford has quietly upgraded its 40-something Mustang coupe and convertible – a car that's been sold continuously since the Beatles crossed the Atlantic.

But are an upgraded interior, tweaked sheet metal, revised suspension and a bump in horsepower enough to make you choose a 2010 Mustang over its born-again rivals?

If you want the "show," but don't need the "go," you can get into a '10 Mustang coupe for $24,499. A convertible is $5,700 more. But both come with a wheezy V6 and not-very-sporting suspension.

Thankfully our tester was the more appropriately kitted-out '10 Mustang GT coupe. With a V8 engine and five-speed transmission, its $36,999 base price was in line with V8 models of the new Camaro and Challenger.

Where the new Mustang GT does stray from its American muscle competition is on its inside.

The new 'Stang's cockpit finally looks and feels like what a $40,000-plus car should compared to the economy-car plastics and design in the Camaro and Challenger.

The tan "saddle" leather in our GT model certainly upped the car's image. And instead of brittle plastics and gaping fit lines that made the last Mustang rattle when cold, interior pieces feel soft, look rich and fit tight.

If not as roomy in the back seat as the full-size, five-seat Dodge, those in the 2+2 Ford's front seats have plenty of room. And we were able to wear a toque in the Mustang without rubbing its headliner – unlike the Chevy with its chopped roof.

Yadda, yadda. Interior, shminterior. How does the new Mustang GT stack up at the stoplight grand prix? Considering the Ford's V8 is down 111 and 57 hp to the Chevy and Dodge respectively, actually, not that bad at all.

For 2010, Ford took all the good bits from perhaps the best iteration of the last model – the special edition Bullitt Mustang – and then shaved a couple of grand off the price.

That means the Mustang GT's venerable 4.6-litre power is up from 300 to 315 horsepower, and torque grows a modest five lb.-ft. to 325.

Combined with the fact that the Ford weighs (208 and 290 kg) less than the Chevy and Dodge, it scoots from zero to 100 km/h in just 5.1 seconds; a couple of 10ths faster than the Challenger R/T and only 0.1 of a second slower than the Camaro SS.

Drivers will appreciate the Mustang GT's overall tidier dimensions away from the drag strip. It feels much more nimble and easier to toss around compared to the full-size Camaro and Challenger.

The GT comes standard with 18-inch wheels (up from last year's 17s), with Mustang-specific 235/50ZR Pirelli P Zero Nero all-season rubber. Our tester had a $500 package that upgrades to 245/45ZR-19s (that improve road grip) bundled with (of all things) heated seats.

And for the first time (hallelujah!) the rear-drive Mustang offers stability control. Ford makes it standard kit. The system lets you hang the GT's tail out substantially before the electronic nannies kick in. A second sport setting is even more lenient for all you Steve McQueen wannabes.

Okay, there's still that truck suspension out back in the Ford coupe, while the Chevy and Dodge sport 20th-century independent rear set-ups.

But the GT now rolls much less when cornering hard than the less buttoned-down 2004-09 version by adding the Bullitt's rear springs and recalibrated shocks (more compression damping and stiffer rebound damping). But maybe the best part of the GT is its refined ride.

It's a huge improvement over last year's Mustang GT but you still can't really feel what's going on at road level through the Ford's steering rack. It's no Genesis Coupe, in that regard. At least it has good weighting, is fast, and is largely accurate.

If only the Ford had upgraded the Mustang's front buckets as well. They're particularly flat, offering little lateral support.

I'd pass on the $2,300 navigation system and $2,200 glass roof. Instead, go for the $2,100 GT Track Package II (stiffer springs, shocks and anti-roll bars; summer tires; quicker limited-slip rear end; stability control system "off" button) and make the car ready for the occasional day at the track (see accompanying story).

Feel free to take Ford to task for not doing a more thorough upgrade to a car whose last big redo was more than five years ago – especially as it knew what the competition was up to.

But it has carefully addressed most of the flaws that the 2004-2009 Mustang was born with.

And by keeping the car tight and light, it's competitive with its newer rivals not only in a straight line, but also when the road gets curvy.

In a suddenly crowded American muscle-car segment, the 2010 Mustang GT is arguably the choice for those who love to drive.

Toronto Star

CAW optimistic on Chrysler

Alisa Priddle / The Detroit News

Leaders of the Canadian Auto Workers union left a six-hour meeting with Chrysler Group LLC executives with substantially more optimism about the future of the automaker than they had going in.

"I left feeling pretty good, and, frankly, I went there pretty down," said CAW President Ken Lewenza, describing Thursday's meeting with Chrysler Chief Executive Officer Sergio Marchionne, which stretched from a scheduled three hours into six and included an impromptu dinner.

Lewenza said the five union leaders who met with Marchionne and members of his management team went into the Auburn Hills briefing believing analyst projections that Chrysler has only a 50-50 chance of survival given the dearth of new products in its first year of an alliance with Fiat SpA and with projections of a continued market share slide.

Chrysler officials would not comment on the meeting with the CAW.

But Lewenza said Marchionne's five-year business plan, the details of which are to be unveiled publicly Nov. 4, is refreshingly grounded in reality. The union was given some details of the plan but could not disclose all the specifics.

Market share projections are conservative and anticipate an initial loss, Lewenza said. Chrysler had 8.3 percent of the market at the end of September, down from 11.1 percent a year ago.

The business plan also is designed to succeed at low annual sales volumes in the United States, Lewenza said.

The CAW was given assurances that the automaker is pleased with the efforts of its two Canadian plants and has long-term plans for minivan production in Windsor and the Chrysler 300 and Dodge Charger and Challenger made in Brampton, Ontario.

The CAW leaders got a sneak peek of the new 300 that will be introduced next year as a 2011 model. The all-new sedan has undergone additional changes since Marchionne's team took over.

Lewenza was not at liberty to elaborate, but a source said the car is lower and sleeker with a new grille and LED headlights.

The CAW president said he is encouraged by plans to upgrade the interiors of a number of vehicles, addressing a widely held area of criticism.

The first vehicles to receive makeovers are the minivans and the Jeep Compass and Patriot, which will be relaunched a year from now with new interiors.

The minivans also will get new front grilles to better differentiate the Dodge Grand Caravan from the Chrysler Town & Country. Redesigned rear ends will have taller taillights. Down the road, a compact minivan similar in size to the Mazda5 will be added to the lineup, sources say.

The Jeeps will reportedly adopt design cues from the new Grand Cherokee that goes into production in the spring.

Lewenza said he asked Marchionne if Alfa brand vehicles will be built in Brampton, but Marchionne said those plans are too far in the future to discuss. The CEO told Lewenza only that Fiat vehicles will be built in North America and Chrysler vehicles will be better distributed globally.

Union leaders said they left struck by the focus, intensity, work ethic and confidence of Marchionne and the ferocity with which the CEO holds managers accountable with no excuses. An overview of the management structure revealed a streamlined approach and the speed with which change is being directed from the top, Lewenza said.

"We got a lot off our chest," Lewenza said of the meeting, adding that he was also surprised by the fact that "there was nothing negative in the meeting."

Ford employee arrested for
stealing trade secrets for China

October 16, 2009
Bryce G. Hoffman / The Detroit News

A Ford Motor Co. employee has been charged with stealing its trade secrets for the Chinese, according to the U.S. Attorney for the Eastern District of Michigan.

Xiang Dong Yu, also known as Mike Yu, 47, of Beijing, China, was arrested on Wednesday at Chicago O'Hare International Airport when he tried to re-enter the country from China. He has been charged with theft of trade secrets, attempted theft of trade secrets and unauthorized access to a protected computer, according to U.S. Attorney Terrence Berg.

According to the indictment, Yu was a product engineer for Ford from 1997 to 2007 and had access to Ford trade secrets. Law enforcement officials say that just prior to leaving Ford, Yu copied approximately 4,000 Ford documents, including what they described as "sensitive Ford design documents" onto a portable hard drive.

"Included in those documents were system design specifications for the engine/transmission mounting subsystem, electrical distribution system, electric power supply, electrical subsystem and generic body module, among others," the Justice Department said in a statement released this afternoon. "The indictment also alleges that Yu took Ford design documents to China in July 2005 in conjunction with his efforts to obtain employment with a Chinese automotive company. Lastly, the indictment alleges that Yu used stolen Ford documents in an effort to secure employment with a Chinese automotive company in 2008."

The theft and attempted theft of trade secrets counts each carry a maximum penalty of 10 years in prison and a $250,000 fine. The computer-related charge carries a maximum penalty of five years and a $250,000 fine.

"Protecting the competitive edge technology of our companies through vigorous enforcement of our federal trade secret laws is a top priority of this office," Berg said in a statement. "Both employees and employers should be aware that stealing proprietary trade secrets to gain an economic advantage is a serious federal offense that will be prosecuted aggressively."

The FBI was in charge of the investigation that led to Yu's arrest.

"Michigan, as well as the rest of the United States, is significantly impacted by the auto industry. Theft of trade secrets is a threat to national security, and investigating allegations involving theft of trade secrets is a priority for the FBI," said FBI chief Andrew Arena. "The FBI will continue to aggressively pursue these cases."

Ford said it was aware of the situation.

"We're fully cooperating with authorities as they pursue the case," said Ford spokeswoman Marcey Evans.

Yu remains in federal custody and is scheduled to have a detention hearing in Chicago on Tuesday.

CAW CONTACT
Volume 39, No. 35 – October 16, 2009

CONTACT is the CAW's national newsletter, one of the longest running and widely circulated union newsletters in the country.

Nortel Pensioners and Employees Demand Government Action

Pensioners, long-term disabled and former Nortel employees gathered at Queen’s Park in Toronto recently to demand justice and action from the Government of Ontario and the federal government to overhaul the country's unfair bankruptcy system. 

They crowded the lawn outside the Ontario legislature on October 7 waving banners and signs as speaker after speaker blasted the McGuinty government and the Harper Conservatives in Ottawa for not protecting the pensions and benefits of Nortel retirees and others who are suffering the fallout of an employer bankruptcy.

CAW President Ken Lewenza said seniors and pensioners helped build the wealth and success of Canada and must be treated with respect.

“All Canadians deserve pension income protection,” Lewenza said. “This is a national crisis we have here today.”

He called for increased funding for the province’s Pension Benefits Guarantee Fund so that it provides $2,500 per month instead of the current maximum of just $1,000. He also called for improvements to the public pension system, including a doubling of the replacement earnings under the CPP.

"This travesty is being ignored by the Government of Ontario and the federal government," said Lewenza. "Governments in other countries where Nortel operated are taking action to secure pensions and not punish retirees for their years of service."

Ontario NDP leader Andrea Horwath said the government of Ontario has a responsibility to ensure pensions are in place when people need them. 

Former CAW national secretary-treasurer Bob Nickerson thanked Nortel retirees and employees for attending the rally and received a huge cheer after demanding that “Premier McGuinty must listen to us.”

Among the other speakers were former Nortel President Bob Ferchat; President of Nortel Retirees and former employees Protection Canada (NRPC) Don Sproule; former Nortel worker in Belleville and former president of CAW Local 1530 Mary Jane MacKinnon.

The CAW once represented several thousand Nortel workers in Ontario. In its prime Nortel had manufacturing plants in Belleville, Kingston, London, and the Toronto area. Today CAW represents only about 40 members in Belleville and Brampton, Ontario.  

CAW Urges Federal and Provincial Support for Navistar

The CAW is calling on the Ontario and federal governments to ensure U.S. based Navistar trucks, which was given more than $60 million in taxpayer support six years ago, maintains its manufacturing site in Chatham, Ontario.

“Federal and provincial governments must play a role in defending workers and the community,” CAW President Ken Lewenza said. “Despite this funding, the company continues with its plan to eliminate products from the plant, which will mean the loss of hundreds of jobs. This will have serious consequences not only for workers and their families, but also the entire community of Chatham.”

Negotiations between the CAW and the company broke off in June with no further talks planned. The plant has been idled and more than 1,000 CAW members remain on layoff from the plant which has operated in Chatham for more than 60 years.

CAW representatives have met with Ontario Economic Development and Trade Minister Sandra Pupatello and Federal Industry Minister Tony Clement to discuss Navistar, but no progress has resulted so far. Lewenza sent Clement a written message on October 8 asking for a response on the future of Navistar in Chatham and whether the government required guaranteed job levels.

Cathy Wiebenga, chairperson of CAW Local 127 representing production workers at Navistar, said “as taxpayers we must wonder how our governments could provide $60 million in loans to Navistar without any guarantees that secure work for Canadians.”

Sonny Galea, chairperson of the CAW Local 35 Navistar office workers unit, said members are increasingly concerned about their future at the plant and that the government must do more to protect their jobs.

“Our federal government has shown no continuing interest in securing a future for the Navistar facility,” Galea said. “Now is the time for leadership. We need laws that ensure if a corporation wants to sell their goods in Canada then they have to build in Canada too.”

Minister Clement has not responded to the CAW’s letter, which according to Galea is further proof of his lack of interest in supporting Navistar workers.

CAW Resumes Formal Negotiations with Ford

The CAW will resume formal contract talks with Ford Motor Company on October 26. The union will bring in its entire CAW-Ford master bargaining committee for the discussions.

The two sides are attempting to reach a cost-cutting agreement which would well position the company’s Canadian facilities for future investment.

“We’re hopeful that we will be able to reach a new agreement with Ford that will suit our members’ need for better job security,” said CAW President Ken Lewenza.

Talks have been ongoing since early September on economic issues, with little success. 

CAW Highlights Rising Tide of Precarious Jobs

A growing number of Canadians are finding work in jobs that are considered precarious and that provide less than a decent standard of living as employers continue to eliminate or outsource hundreds of thousands of full-time jobs, said CAW President Ken Lewenza.

Precarious work is a term widely used to characterize jobs in the labour market filled on a temporary, contract, part-time or an impermanent basis. These jobs generally offer workers below average wages, few (if any benefits), and limited protections under labour laws.

Lewenza’s comments were echoed by labour union leaders around the world on October 7 as the international labour movement celebrated the World Day for Decent Work (WDDW), a day devoted to highlighting the need for good jobs that enable individuals to meet their basic needs and that promote freedom, equity, security and human dignity.

Precarious jobs in Canada have grown since the 1970s and have accelerated over the last decade. In 2008, more than one-third (36 per cent) of Canadian workers were considered employed in precarious jobs.

Since the start of the economic crisis, Canada has shed 485,000 full time jobs while gaining nearly 100,000 part time jobs over the same time period.  

“Precarious jobs are steadily becoming the norm rather than the exception in Canada,” Lewenza said. “This is a dangerous trend that will continue to have severe impacts on workers, their families, communities as well as Canada’s social services.”

“So many of our country’s social support mechanisms are tied to our jobs and the number of hours we work. Workers’ access to pensions, unemployment insurance, child care, health benefits, parental benefits and others are all impacted by our work arrangement.”

As part of the International Metalworkers’ Federation (IMF) week of action against precarious work, and the World Day for Decent Work, the CAW held a round table discussion in downtown Toronto with labour activists, researchers, community advocates and others dealing with the issue of precariousness. The round table was an opportunity to develop a set of common demands and objectives for an ongoing campaign.

Newfoundland Employment Support Program Falls Short

The CAW/FFAW says a temporary employment support plan announced by the Newfoundland government October 5 for hard-hit harvesters and plant workers is of little or no value to those struggling under the weight of a disastrous 2009 fishing season.

“This plan announced today just shows a complete lack of understanding and a blatant disregard for the impact this year has had on people in the province’s fishing industry,” said CAW/FFAW Secretary-Treasurer David Decker in a news release.

He said under this plan even best case employment support scenarios would amount to little for plant workers and fish harvesters.

“I cannot imagine many harvesters or plant workers in this province who will see any tangible benefit from this plan this year,” Decker said. “It’s like throwing a glass of water on a five-alarm fire.”

Price declines in several fisheries, reduced landings in others and the overall increase in expenses have created widespread hardship this year.

After meeting with provincial officials in early August to discuss the need for emergency help for people struggling because of depressed seafood markets, Decker said it took far too long for the government to announce any plan at all.

“The premier said his government would be there to help people in this industry who have been pushed to the brink of ruin this year – if this plan is the result of that promise then government has failed to realize the depth of the problems being faced in coastal communities this year,” Decker said.

CAW Local 2000 Opens Talks with MTS/Allstream

The CAW and MTS/Allstream are currently in bargaining for a new collective agreement to cover 600 CAW members who work for the company, a provider of telecommunications and converged IP services.

Bargaining between CAW Local 2000 and MTS/Allstream, Canada’s third largest telecommunications company, got underway the week of October 6.

"Although the company paints a bleak picture of today's economy, everyone clearly understands that there is a tremendous opportunity for growth in this industry and we're bargaining for the future,” said Dylan Gadwa, CAW Local 2000 president.

“There are serious issues that need to be resolved around the company's continued desire to contract out and see our hard-earned benefits eroded,” said Gadwa, who stressed the solidarity of the membership and the continued support of the national union as keys to winning a fair agreement. 

“The bargaining committee is determined to protect bargaining unit work which is under constant pressure because of the speed at which technology evolves in the high tech telecommunications sector,” said CAW national representative Joel Fournier.

United Way Campaigns Underway

Annual United Way campaigns are underway and the need for support of local campaigns has never been greater, CAW President Ken Lewenza says.

“In each of our communities the United Way has a proven ability to make a real difference in people’s lives,” Lewenza said.

The negative impact of job loss right across the economy will hurt all of our communities. Lewenza said in many cases it will mean that CAW members, who in the past have been strong supporters of United Way, will now be looking for support from United Way agencies.

“Increasing poverty, particularly among the youngest and oldest in society, is but one manifestation of this need,” Lewenza said. “The lack of affordable housing and the ensuing crisis of homelessness is another. What is not so obvious perhaps are the other symptoms: violence, alienation, substance abuse, neglect, etc,” Lewenza states in an October 5 letter to CAW local union presidents.
 
Revitalizing Canada’s Manufacturing Sector

How can the Canadian manufacturing sector adapt and thrive in the 21st century? This, along with a number of other pressing questions, will be explored at the upcoming conference “Revitalizing Canadian Manufacturing” hosted by Ryerson University, in Toronto on November 10.

The conference will feature speeches by leader of the Green Party of Canada Elizabeth May, RBC CEO and President Gordon M. Nixon, Ontario Premier Dalton McGuinty, CAW Economist Jim Stanford, Canadian Manufacturers & Exporters President and CEO Jason Myers as well as others and will be moderated by former CAW National President Buzz Hargrove.

For more information on the conference, please visit: www.ryerson.ca/manufacturing.

Canadian Content Rules at Work
 
Pictured above is a new, $1.5 million (U.S.) milling machine, which can handle very large metal parts with a high degree of accuracy at Bombardier’s Thunder Bay, Ontario plant. This machine, along with a laser cutting machine, a new robot welding machine, and new measuring machinery, have all been installed since the TTC subway and streetcar contracts worth a combined $1.9 billion were secured.

“This new machinery will enhance the plant's capability for producing primary parts, and is an indication that Bombardier intends to increase production at its Thunder Bay site,” said CAW Local 1075 President Paul Pugh. “Based on these upgrades and subway production soon to commence,it’s expected that CAW membership will increase substantially from the current 500. This is proof that Canadian content provisions work,” Pugh said.

Challenges and Renewal

The CAW Aboriginal/Workers of Colour Conference will be held November 13-15 at the CAW Family Education Centre in Port Elgin, Ontario.

The theme for this year’s conference is “Challenges and Renewal.” The deadline for registration is October 23, 2009. Our union’s commitment to human rights and equality can only be met with the total involvement of our leadership and activists. In order to fulfill that commitment the CAW is urging every local union to send their full complement of delegates to the conference.

For more information contact CAW Human Rights Department Director Vinay Sharma at 1-800-268-5763 extension 8469.

Bud Jimmerfield Award 2009

The CAW Council meeting in December of 1997 included a moving address by CAW Local 89 President Bud Jimmerfield, who at the time had only a couple of months to live.

Bud had contracted cancer of the esophagus from exposure to metalworking fluids during 30 years of work at an automotive parts plant.

Bud was a tireless health, safety and environment and workers’ compensation activist and it’s for this reason CAW Council established the annual Bud Jimmerfield Award to recognize the contribution of an outstanding CAW Health, Safety, Environment or Workers’ Compensation activist. The award is made each year at the CAW Council meeting in December.

Eligible health, safety, environment or workers compensation activists must be CAW members and be nominated by their local union leadership or local workplace leadership. Activists must have shown leadership in helping their fellow workers as well as participated in activities beyond the workplace.

Nominations for the Bud Jimmerfield Award must be received by the CAW Health and Safety Department no later than Friday, November 13, 2009 at 205 Placer Court, Toronto, Ontario, M2H 3H9, fax 416-495-3785 or email cawhse@caw.ca

CAW Communications Conference

The CAW Communications Conference will be held November 13 to 15 at the CAW Family Education Centre in Port Elgin, Ontario.

The conference will explore the world of social media (Web 2.0) and will feature plenary and smaller group workshops for both new and experienced local union communicators. The CAW Local Union Media Association awards will also be held.

The registration deadline and the deadline for entering the awards presentation is Friday, October 16. For more information contact CAW Communications at cawcomm@caw.ca or call 1-800-268-5763 ext. 3771.

Ford dealers host evening events
for Lincoln MKT debut

Bryce G. Hoffman / The Detroit News

Ann Arbor -- If you want to see the new shape of Lincoln, look at the MKT.

Ford Motor Co.'s new luxury crossover is the first vehicle to incorporate all of the major design elements, technological innovations and product strategy that the Dearborn automaker hopes will define the brand.

Lincoln has languished as a lackluster marque that struggled to sell rebadged Ford products at a premium. Sales are down 44 percent over 2000, according to Bloomberg News.

For the past four years, Ford has been working to give the brand a distinctive look and feel that justifies a higher price tag on Lincoln models. The MKT, for example, starts at $44,200.

That evolution did not happen overnight. The first attempts to take Lincoln in a new direction -- vehicles like the MKZ and MKX -- still bore a strong family resemblance to the Ford models they were based on: the Fusion and Edge.

But the MKT, which is arriving in dealer showrooms, does not share a single interior or exterior body panel with the Flex, upon which it is based.

Where the Flex exults in its boxiness, the MKT is all about curves, from its bow-wave grille to its bustle-back tail. These are design cues that hearken back to Lincoln's glory days, as are other features like the high belt line and strong rear pillar, but they are put together in a thoroughly modern way.

"MKT is the first full embodiment of that design language," said chief nameplate engineer Ron Heiser, who said the MKT also is the first Ford product to incorporate cutting-edge technologies like automatic parking. "MKT has literally been a test lab for Ford."

And Ford is holding a coming-out party for the MKT at dealers across the country tonight.

These invitation-only events are designed to showcase the new MKT. As an added draw, Ford is donating $20 for each person who test-drives a new Lincoln to Susan G. Komen for the Cure in honor of Breast Cancer Awareness Month.

"It's a great opportunity to build some excitement at our dealerships, launch the newest vehicle in our lineup and support a great charity," said marketing manager Kate Pearce.

But analysts say Lincoln's rebirth still has a ways to go.

"They're not quite there yet," said Jim Hall of 2953 Analytics LLP in Birmingham, who said the MKT and the MKS sedan that preceded it represent a good start. "You won't know if they've got their mojo back though until you see the second generation of each of these vehicles."

UAW leaders back
concessions at Ford

Wage, strike give-backs bring promise of work; union reps OK contract

Bryce G. Hoffman / The Detroit News - October 14, 2009

Detroit --Top UAW leaders called on rank-and-file members Tuesday to approve a tentative agreement reached with Ford Motor Co., saying concessions are necessary to keep the automaker competitive.

If approved, the deal would freeze wages for entry level workers and limit the union's right to strike. In exchange, Ford would make new sourcing and production commitments and give workers a $1,000 bonus in March.

That was enough to quell the opposition of many local UAW leaders from across the country who had opposed reopening the contract, which expires in 2011.

At a meeting here Tuesday, the local leaders voted overwhelmingly to recommend ratification.

"Failure to act in this situation will undermine our efforts to continue to win new work, to protect U.S. jobs long-term and to ensure that Ford can continue to make contributions to our pension funds," United Auto Workers President Ron Gettelfinger and Vice President Bob King, head of the UAW Ford section, said in a statement to members, a copy of which was obtained by The Detroit News.

"Although the company reported a small profit last quarter, this does not change the underlying dynamics of the business."

Ford is the only U.S. automaker that did not take a government bailout and avoided bankruptcy.

General Motors Co. and Chrysler Group LLC won significant concessions from the UAW during their Chapter 11 reorganizations. Ford had hoped to match those givebacks, and the tentative deal comes close.

Labor expert Harley Shaiken of the University of California Berkeley, said UAW members feel like they have already given a lot, but remain concerned about their future and are likely to endorse the deal.

"It's a volatile mix, but what I think is key is that the leadership has strong support and sought to gain something for what they had to give," Shaiken said.

Most significantly, Ford failed to win the restrictions on skilled trade job classifications that the UAW granted to GM and Chrysler.

Instead, the union agreed to expand the use of mechanical skilled trades teams, which would give the company more flexibility in how it deploys workers to all of its U.S. facilities. Ford is satisfied with the terms.

"(This) would help Ford improve its current and long-term competitiveness in the United States," said Joe Hinrichs, Ford's head of labor relations.

Just as significant is the fact that Ford avoided making the sort of new product commitments that GM and Chrysler made in exchange for concessions.

However, Ford agreed to in-source some components. Some of these commitments were targeted at plants where opposition to additional concessions had been strongest.

Now, union members will vote.

If Tuesday's meeting of local UAW leaders was any indication, approval is likely. The mood inside the UAW-Ford National Programs Center was more positive than in August. Then, the sentiment against further concessions was so strong that Gettelfinger and King postponed a planned vote to reopen the contract, according to sources. "It's been a delicate balance throughout this process," Gettelfinger told reporters after the local leaders voted. "We want Ford to do well, and we knew as they continue to improve that it would make ratification a little more difficult. But at the same time, this is not really a concessionary agreement. It's got more positives for our members than it has negatives."

Few spoke against the deal on Tuesday but one who did was Gary Walkowicz, a member of the bargaining committee at UAW Local 600, which represents workers at Ford's River Rouge complex. He was opposed to the limits on the union's right to strike and will urge his co-workers to vote no.

"To give up any part of that is like destroying the union," Walkowicz said after the meeting, adding that he also opposes the limits on entry level wages. "I don't like the idea of taking things away from the new guys. That's going to divide the union -- and they are the ones who are going to be voting on our retirement benefits when we're gone."

But other workers said they are more concerned about protecting what they already have.

"We're likely to support it if it doesn't affect us now," said John Kotronis, who works at Ford's Wayne Assembly Plant. "I'm glad they're not taking anything more away from our wages and benefits."

UAW Ford locals are scheduling informational meetings and voting could start as early as this week.

*************************

The following are highlights from the proposed agreement, which would amend the four-year contract reached in 2007 between the union and Ford.

* UAW-represented workers at Ford would get a $1,000 bonus paid in March 2010.

* Entry-level workers, who would start at $14 per hour, would have their wages frozen for the duration of the agreement.

* There would be no cap on the number of such entry level workers Ford could hire until 2015, when entry-level workers would be capped at 20 percent of the factory work force. That would force Ford to grant traditional employee wages by seniority to new hires after that date.

* UAW would submit wage and benefit provisions of the 2007 contract to binding arbitration when the contract expires in 2011. The union would reserve the right to call a strike at Ford over other issues.

* Skilled trade job classifications would be simplified and workers would be placed in "mechanical teams" handling a range of assignments in the plants. That plan would be implemented in all Ford's U.S. factories by June 2011.

* Ford made a number of production commitments to the UAW intended to preserve union jobs. These included a renewed commitment by Ford to bring new products to assembly plants in Ohio, Kansas, Michigan, Kentucky and Illinois.

* New production commitments by Ford include bringing a new vehicle to Ford's Michigan Assembly Plant, building hybrid battery packs at a plant in in Rawsonville, Michigan and bringing a new vehicle to the Louisville Assembly plant that Ford could also export for sale to other markets.

* Ford agreed to build its Transit Connect commercial van at a UAW-represented U.S. factory if it decides to build the vehicle in North America and factory capacity is available. The van is currently exported from a Ford factory in Turkey.

* Ford agreed to study the cost of producing dies in China in conjunction with the UAW and to consider whether to bring that work to the United States. Dies are tools used in auto manufacturing.

Dollar soars, retailers hold breath

Loonie's near-parity with greenback stirs fear of consumer revolt and recovery slowdown

As the Canadian dollar soars toward parity with the U.S. greenback, Canadian retailers are bracing for a possible consumer backlash against the widening price gap between Canadian and U.S. goods.

Prime Minister Stephen Harper echoed the Bank of Canada's concerns a rising dollar "poses a risk" to Canada's economic recovery.

And Canadian exporters, who ship more than three-quarters of their goods south of the border, are worried less competitive prices will mean lost sales and jobs.

Cross-border travellers will welcome the news. Canadians took 18.9 million overnight trips to the U.S. in 2008, spending $12 billion. An estimated 7,000 Canadian "snowbirds" who spend up to half the year there will find their dollars go further.

The Canadian dollar closed up nearly three-quarters of a cent at 96.48 cents U.S. Tuesday on rising prices for oil and other commodities, a strong employment report for September, and worries about the U.S. deficit.

The loonie's rapid rise in recent days, up 5 per cent in the past week and 26 per cent since early March, has forecasters predicting it could reach parity sooner than expected.

"We could easily reach parity by the end of the week," said John Curran, a Toronto-based senior vice-president at Canadian Forex Ltd., an online foreign-exchange dealer.

Derek Holt, Scotia Capital's vice-president of economics, said it "could happen (by the) middle of next week."

While that's good news for consumers if it helps drive down retail prices, it can be bad for Canada's manufacturers and exporters.

For every one per cent rise in the value of the dollar, Canada's economy can lose up to $2 billion in exports and 25,000 jobs, according to the Canadian Manufacturers and Exporters. "We're telling members coming out of the recession, business as usual is no longer an option. You'd better be willing and capable of competing at par going forward," said spokesman Jeff Brownlee.

Canadian retailers say they're watching closely for any signs of a consumer revolt like the one that took place two years ago when the loonie soared above the greenback. At the time, angry consumers demanded Canadian stores lower their prices to more closely match those in the U.S., especially on books and magazines, which published both prices on the covers.

"Retailers in Canada understand they are serving customers without borders," said Mark Beazley, spokesman for the Retail Council of Canada. "With fierce competition in Canada, across the border and online, retailers know that they will have to work harder than ever to remain competitive as the loonie rises against the U.S. dollar."

Consumers are unlikely to see price cuts any time soon, as cost savings can take three to nine months to flow through to the retail level, he said. "That being said, Canadian retailers are sensitive to the needs of their customers and will ultimately make pricing changes based on their demands."

Goods in Canadian stores are now 13 per cent more expensive on average than in the U.S., up from 7 per cent last summer, says Doug Porter, deputy chief economist with BMO Capital Markets.

"This big run-up is coming at a very sensitive time as we head into the key shopping season of the year. Unfortunately, this is going to put renewed pressure on domestic retailers," Porter said.

"We could start to see cross-border shopping start to pick up again. It had almost whittled away to nothing by last summer, partly because of the hassles of crossing the border, needing a passport and so on."

So far, there are few signs cross-border shopping is picking up.

Despite reports of long lineups at some Canada-U.S. bridges over the Thanksgiving weekend, traffic remained down by about 10 per cent compared to last year, bridge operators at Niagara and Windsor said Tuesday. That's roughly where it has been all year.

But consumers can comparison shop on the Internet, Porter noted.

In Vancouver Tuesday, Harper said the Bank of Canada governor has expressed concern about the rapidly rising dollar and he deferred to his judgment on the effects of the loonie's rise.

"We note that Canada's economy is relatively stronger than virtually any of the G7 economies and stronger than most in the world. Obviously, some of these factors will have something to do with the rise of the Canadian dollar," he said. "The value of the Canadian dollar is a risk to recovery. It's not a risk to choking off the recovery but if it rises too rapidly it does have an effect."

With files from Petti Fong

Ford, UAW reach tentative
deal on contract changes

* Deal to be presented to National Ford delegates Tuesday
* Tentative agreement subject to ratification of members
* Ford, UAW discussions began on Aug. 25

DETROIT, Oct 13 (Reuters) - The United Auto Workers has finalized a tentative agreement with Ford Motor Co on contract changes the automaker has sought to bring its labor costs in line with those of U.S. rivals, the union said on Tuesday.

The UAW will present the tentative pact to its National Ford Council delegates on Tuesday afternoon in Detroit and then put it to a member vote should the group agree, it said.

Ford, the only large U.S. automaker not to undergo a government-supported bankruptcy in 2009, has aimed at bringing its contract in line with those of General Motors Co and Chrysler Group LLC, which received deeper union concessions earlier in 2009.

Ford opened talks with the UAW on the latest concession requests on Aug. 25 for changes to a historic four-year contract from 2007 that covers about 42,000 workers.

The UAW reached four-year contracts with all three Detroit automakers in 2007 but has agreed to make unprecedented mid-contract concessions to the companies amid the severe recession and deep downturn in auto industry sales.

FORD OF EUROPE REPORTS STRONG SEPTEMBER SALES TO BREAK 10 PERCENT MARKET SHARE BARRIER

October 13, 2009

• Ford increased market share to 10.1 percent in September in its 19 European main markets – the best share for any month for Ford of Europe since September 2001
• Ford sold 51,400 new Ford Fiesta cars in September – the best September for Fiesta since 1994
• September was the ninth consecutive month of year-over-year monthly share improvement and the fourth successive month of year-over-year monthly volume increase

COLOGNE, Oct. 12, 2009 – Ford today reported that strong sales in September drove market share for its 19 European main markets to 10.1 percent – the highest share for any month since September 2001, and a 0.8 percentage point increase over the same month a year ago.

Ford of Europe sold 152,600 new vehicles in its 19 main markets in September, a gain of 12.3 percent over the same month a year ago, and better than the industry increase of 2.9 percent. Ford has now reported year-over-year sales gains for four months in a row, and market share increases for nine consecutive months. 

“Traditionally we expect Ford to have a good month in September given the surge of new car sales in the U.K. due to the registration plate change. But September 2009 has surpassed expectations,” said Ingvar Sviggum, Ford of Europe’s vice president for marketing, sales and service. 

Ford’s September share increased in 14 of its 19 European markets versus the same month 2008.   The new Fiesta contributed to the strong results, with sales of 51,400 units registered in Europe last month – the best September for Fiesta since 1994. 

“Market share and volume success are only valuable if they are achieved through high quality sales that generate good revenue, and we certainly saw that in September with retail sales accounting for 60 percent of Ford passenger car sales,” said Sviggum. 

Sviggum said Ford remains concerned about the fragility of the underlying market. “With the sudden ending of some scrappage schemes and the more-controlled phasing out of others, the industry faces an uncertain future in terms of market demand as 2010 approaches.  It is clear that there is still a need for government intervention in Europe to help bolster the market until demand reaches a more sustainable level,” he said. 

September year-to-date
Ford succeeded in increasing its share by 0.5 percentage points to 9.2 percent, the best year-to-date September share for Ford in its main 19 European markets since 1999.  Share was up in 17 out of the 19 main markets. 

In the first nine months of 2009, Ford of Europe registered 1,097,100 vehicles in these 19 European markets, a reduction of 51,100 units or 4.5 percent, than in the same period in 2008.  This compares with a total industry decline of 9.7 percent in the period.  Year-to-date across its 51 markets, Ford of Europe sold 1,243,700 vehicles, a decrease of 172,000 units, or 12.2 percent fewer than in the same period in 2008.

Widow of Ohio officer
sues Ford over crash

Associated Press

Oct 12, 2009

Cleveland -- The widow of an Ohio patrolman is suing Ford Motor Co., blaming the officer's death on engineering problems with the cruiser he was driving when it crashed into a pole and caught fire on Interstate 90 near Cleveland.

Linda Brentar says in a lawsuit filed this week that the fuel tank on the Ford Crown Victoria Police Interceptor is so vulnerable to puncture that it exploded in the 2007 accident that killed her husband, 49-year-old George Brentar.

Ford spokeswoman Marcey Evans says the Ford Crown Victoria is designed to the highest rear-crash safety standards in the industry and that no vehicle can be expected to prevent all injuries in that type of collision.

After Brentar's death, the Euclid Police Department, where he worked, installed fire suppression systems in its fleet of Crown Victorias.

CARP wants Dhalla to
reel in pension bill

October 11, 2009

A national seniors organization issued an open letter to Brampton MP Ruby Dhalla asking her to drop proposals for changes to the Canadian pension act.

The letter, released by the Canadian Association of Retired Persons (CARP) Thursday, held back no punches in telling the Brampton-Springdale MP her Private Member's Bill has very little chance of surviving the parliamentary approval process. Susan Eng, the organization's vice-president of advocacy, also said her proposal is doing more harm than good.

Last June, Dhalla introduced a Private Member's Bill to amend the Old Age Security Act so immigrant seniors can qualify to receive monthly benefit payments after three years Canadian residency instead of 10 years.

Last June, Dhalla introduced a Private Member's Bill to amend the Old Age Security Act so immigrant seniors can qualify to receive monthly benefit payments after three years Canadian residency instead of 10 years.

While there has been support from various communities and organizations, there has also been a hue and cry from many Canadians. Emotional opposition and criticism from Canadians, who believe recent immigrants have not earned the right to access a government-funded pension program, have drowned out any cheers of support for the bill.

Many feel the proposal could leave a much smaller pie for Canadians who have toiled decades and now rely on the program in retirement. Opposition in some circles has been tinged with anti-immigrant sentiment.

Even Liberal Leader Michael Ignatieff and other members of her party have told Dhalla they would not be supporting the bill. It is estimated the proposal will cost $300 million to $700 million to implement.

According to Eng, response from members of CARP and comments to the organization have been uniformly negative.

"CARP requests that you withdraw Bill C-428 in order to prevent the further corrosion of the public discourse on immigration and stem the tide of anti-immigrant sentiments that Bill C-428 has provoked," Eng said in the open letter.

The organization supports efforts to address poverty amongst all seniors, but believes this particular bill and legislative approach is the wrong way to go about helping that segment of Canadian society.

Private Member's Bills are rarely approved in the House of Commons. The process is much more difficult when the MP does not have government backing, let alone their own party's support.

Dhalla has conceded parliament would have to sit for at least a couple of years for her bill to even have a chance. However, she is hopeful it will trigger productive debate and action on the issue of poverty amongst the elderly.

UAW, Ford to start formal
talks on contract concessions

Bryce G. Hoffman / The Detroit News

The United Auto Workers has summoned local union leaders to Detroit on Tuesday to discuss calls by Ford Motor Co. to match recent concessions the UAW gave to its cross-town rivals.

A UAW source said the union's national leadership is expected to ask for permission to begin formal negotiations with the Dearborn automaker on the proposed contract changes, which include a freeze on entry level wages, fewer job classifications for skilled trades workers and a "no strike" pledge.

The two sides have been talking informally for several weeks.

"We continue to work with the union on ways to make the company more competitive," said Ford spokeswoman Marcey Evans. "We continue to make progress, but we have no announcement to make right now."

The UAW made concessions to General Motors Co. and the Chrysler Group LLC as part of their bankruptcy reorganizations earlier this year. Union leaders have said publicly that Ford will not be left at a competitive disadvantage, but selling that to union members has been a challenge. Many rank-and-file UAW members say they oppose further concessions to the company, which is seen as being in better shape.

"I'm certainly opposed myself," said Gary Walkowicz, a member of the bargaining committee at UAW Local 600 in Dearborn. "Any agreement to take away our bargaining power in 2011 would be a terrible decision."

Government wants us to
believe suffering is inevitable

Oct 10, 2009
MLA Norm Macdonald

As I write this report, I am clearing off my desk at the Legislature before the Thanksgiving long weekend.  I am looking forward to spending next week back in my communities where I will have the opportunity to talk with you and hear what is on your mind.

I know that I will meet with parents who care about their children, with seniors and the family members who love them, and with volunteers who are working to make their community a better place to live.  I will meet with people who have clearly established priorities; they put children, seniors and their community first.

The last two months in the Legislature have made it absolutely clear to me that our government does not share our priorities.  This is a government that is willing to put children at risk, reduce services to seniors and gut community programs with no regard to the impacts.

This government wants us to believe that we all must suffer because economic times are tough, but you don’t have to dig very far to find that some sectors are doing better than others in British Columbia.

Who are the winners and who are the losers in these examples?

The Harmonized Sales Tax (HST) will transfer a $1.9 billion tax burden away from corporations onto individual tax payers.  For instance, a senior couple on a fixed-income will spend more than $1000 a year extra just on HST.

When former Finance Minister Carole Taylor eliminated the Corporate Capital Tax on financial institutions she eliminated $100 million a year in tax revenue that previously funded healthcare and education.

Health Minister Kevin Falcon has just announced that the cost to seniors for residential care is going up as much 29% starting January 2010.  Seniors with yearly incomes as low as $22,000 will pay a further $2000 a year for residential care.  That’s a whopping $53.7 million that is being taken out of the pockets of vulnerable seniors.

Here is a shocking fact: post-secondary students will contribute more to general revenue through taxes by 2011 than corporations will contribute through corporate income tax.  Think about that one for a minute.

In my communities, we believe that we all need to work together to build our communities.  We believe that our tax dollars should be spent building a healthcare system that works for us when we need it.  We believe that our tax dollars should provide high-quality education for all our children.  And we believe that our seniors deserve quality affordable care.

Each day, in my work as your MLA, I remember the message that you sent the government on Election Day.  In Columbia River-Revelstoke we believe that every sector has to make a contribution.  And we  want a government that places the highest priority on protecting the public good.

Norm Macdonald is the NDP MLA for Columbia River-Revelstoke

Ford Flex is for those needing a bigger people-hauler

Scott Burgess / The Detroit News

There's something about the 2010 Ford Flex.

Entering its second model year, the Flex is Ford's answer to people who need a big people hauler. It stretches more than 200 inches and can carry up to seven people, depending upon how it's configured. (Though I would suggest selecting the captain's chairs for the second row because they are so comfortable.)

For the vehicles it replaces -- the minivan and Taurus X (the crossover formerly known as the Freestyle) -- the Flex offers a much more stylish solution.

But sometimes it looks goofy. Take those big slab sides and pseudo wood panel grooves on its sides. It could almost pass for a giant Mini with dual chrome exhaust tips. Then at other times, the Flex looks intriguing. It's the John C. Reilly of vehicles -- you give it a pass on its looks because it can perform with the best of them.

For 2010, Ford has added its soon-to-be legendary EcoBoost engine. The 355-horsepower direct injection twin-turbocharged V-6 may have better fuel economy through technology, but it's also a beautifully powerful engine.

There is no turbo lag, that lull between hitting the accelerator and the car launching forward. It just takes off and keeps going. The idea behind the EcoBoost engine is to provide V-8 power with a V-6. And this engine surpasses many V-8 engine when it comes to power.

Additionally, while pushing a 4,400-pound seven-passenger vehicle down the road, it still manages to get 16 miles per gallon in the city and 22 mpg on the highway. Both respectable, though not overwhelming mileage figures.

During my week of testing, I averaged 19 mpg in a good mix of highway and city driving. And that was while using regular unleaded gasoline, which the engine has been designed to handle. To get the maximum power out of the Flex, you need to use premium fuel.

Nice driving features

The all-wheel drive system, which is standard on the EcoBoost model, also is excellent, helping you through corners and ideal for bad weather traction.

By dropping two cylinders, the Flex is also very quiet on the road. On the highway, no road noise leaks into the cabin and the engine makes hardly a peep. Around town, you don't hear anything unless you roll your window down.

The ride and handling are deceiving. The body doesn't roll much through corners and you often feel as if you're driving much slower than you really are. On the highway, it can easily hit 80 mph without a strain.

The upright seating position makes you feel like you're much higher than you really are. The electric power steering feels exact and provides nice feedback at any speed. This is another gas-saving technology that we will, no doubt, start seeing on more vehicles.

The electric power steering also makes it possible to use the Flex's active park assist. This is the self-parking system made famous by the Lexus LS460. But the Flex can park a bigger vehicle in a smaller space and it actually works great. As you cruise along the road looking for a parking space, the Flex will help with the search, and determine if you can fit easily into a spot. Then, once you're ready, it will take over and walk you through the parking procedure. It's easy to use, and while it's unnerving the first few times to watch your car do something you used to do, it quickly becomes a friendly feature.

And when you open the door and step out, you almost expect a big step down, like you would from an SUV. Instead, it's an easy jump out of the vehicle.

A luxurious interior

Much like its performance, the Flex rewards you with lots of little surprises inside the cabin.

The big seats are very comfortable and the thick stitching makes the interior feel a little more rugged. There's something trucky about the interior in a very good way. Tough and luxurious is the perfect combination for someone looking for a vehicle that is fun to drive but can withstand the stampeded of children.

The second row offers more legroom than the front (43 inches compared with 41 inches) and it's here that the Flex really stands out. If you choose the optional captain chairs over the standard bench seat, you may loose space for one passenger but did you really need it? You feel like Capt. Kirk in the second row of the Flex.

The second row seats also fold up quickly at the touch of a button. Because of the low step into the Flex, it's also easy to jump into the third row. While I wouldn't want to spend a day in the third row, it was comfortable enough for short trips and small children would be very comfortable.

Loaded with options

The Flex comes loaded with comfort and features. There are driving enhancements such as the blind spot detection system that is simple and direct. If someone is in your blind spot, a little yellow light appears on your outside mirror.

The Flex also comes with Sync, an infotainment system that I have probably raved too much over. But it's just that good. Sync, when incorporated with the navigation system, has the best touch screen set up in the automotive world. It's easy to use manually and just as easy through voice commands. Of course, Sync doesn't punish you if you don't get the navigation system, because it will still work easily without it. It's nice to have those choices.

There are a few silly options that feel more like kitsch than anything else. Flex offers a small refrigerator in the second row, which can hold a few cans of soda for those long trips. An Igloo cooler can do the same thing and costs hundreds of dollars less.

Finally, the Flex can even carry more than just people. The second and third rows can fold nearly flat and create more than 83 cubic feet of space. You also have the option of folding only one seat in the second row. The variety of options makes this space so useful.

The Flex may not be every person's cup of tea and that seems to be just what Ford wants. Some people may find the exterior downright ugly, other people may love it. At least it makes you think about it and in a day when so many crossovers look the same, the Flex stands out. Now, with the addition of the Ford's EcoBoost engine, it will stay in front of the competition.

That's not a bad place to be.

Canadian Auto Workers,
Ford to resume formal talks

* Full-scale talks to resume on Oct. 26
* Union looks for production guarantees
* Ford looking to reduce Canada labor costs

DETROIT, Oct 8 (Reuters) - The Canadian Auto Workers expect to return to full scale formal contract negotiations with U.S. automaker Ford Motor Co on Oct. 26, the union said on Thursday.

The CAW and Ford opened negotiations in early September toward a contract agreement that could preserve jobs in Canada by allowing for future investment, while addressing a wage gap compared with workers at Ford plants in the United States.

The two sides had working level teams gathering information and the union said it would bring its entire committee to the talks when they resume.

"We're hopeful that we will be able to reach a new agreement with Ford that will suit our members' need for better job security," CAW President Ken Lewenza said in a statement.

Labor costs are about $16 an hour higher for Ford in Canada than they are in the United States, but the CAW wants production guarantees before it agrees to level the field.

The talks with the Canadian union in part are expected to address concessions that the CAW gave to Ford rivals General Motors Co and Chrysler during their bankruptcies and whether those deals leave Ford at a disadvantage in Canada.

Ford and the United Auto Workers union also are in talks about their labor agreement in the United States following the bankruptcies of Chrysler, which is now under management control of Italy's Fiat SpA , and GM.

Ford executives have said they do not believe their UAW agreement leaves them at a cost disadvantage with GM and Chrysler in the short term, but could leave them with a disparity over the longer term.

Planned meeting signals
progress for Ford-UAW talks

The UAW has scheduled a Ford National Council meeting for Tuesday — a sign of progress for talks between Ford Motor Co. and the union.

Gary Walkowicz, bargaining committeeman at Ford Motor Co.’s Dearborn Truck Plant, said UAW leaders from plants across the country received an e-mail about the meeting today.

When asked about the meeting at a charity appearance tonight in Washington, D.C., UAW President Ron Gettelfinger declined to discuss specifics, and said, “What happens at Ford stays at Ford.”

Ford met with top UAW negotiators on Aug. 25 in an attempt to obtain cost cuts that more closely match those obtained by General Motors Co. and Chrysler last spring and has been in informal talks since then.

“We continue to work together, and we are making progress,” Ford spokeswoman Marcey Evans said today.

Many UAW members and some UAW leaders have said they would oppose any further modifications to their labor contract with Ford because of the company’s recent successes and an agreement approved in March that cut workers’ benefits.

Ford also has been seeking additional cost cuts from the CAW. Today, the CAW issued a statement saying it has agreed to resume formal contract talks with Ford on Oct. 26.

CAW CONTACT Newsletter
OCT 9, 2009

New Agreement at Zellers Warehouse: Strike Over

CAW Local 1000 members at the Zellers warehouse in Scarborough, Ontario have voted 83 per cent in favour of a new three-year agreement that brings to an end a lengthy strike by 310 workers.

Bob Orr, assistant to the CAW president, said it was a tough and at times frustrating dispute that required great solidarity from the membership. The new agreement provides wage increases in the second and third years as well as a $1,000 signing bonus.

“We were able to move the employer away from several of their harshest proposals,” Orr said.  

“The time and effort that our members spent in fighting the employer’s agenda was nothing short of courageous,” Orr said. “The involvement of other CAW Locals and area offices from coast to coast was extremely helpful in sending a message of solidarity to our Zellers Local 1000 members and the employer.”

CAW plant chairperson Stephen Moses said the settlement underscores not only the importance of solidarity among the workers, but also the importance of belonging to a strong national union. “Without the backing and support of a strong national union like the CAW we would not have been able to fight back effectively,” Moses said.

Moses thanked CAW National President Ken Lewenza, Bob Orr and other staff as well as the membership for working hard to raise awareness of the struggle of this group of workers and for keeping the dispute in the public eye.

In support of these striking warehouse workers, many of who are new Canadians, CAW members and locals held protests, demonstrations, information pickets and other events from British Columbia to Pointe-Claire, Quebec.

The strike, which began July 16, was a direct result of the employer’s demands for far reaching concessions. 

Women can Change Political Direction, says Horwath

The presence of more women in politics could have a real impact on how our governments are run and the decisions they make, said Ontario NDP leader Andrea Horwath to a crowd of nearly 200 women and men. Horwath’s speech was part of an evening dedicated to encouraging more women to enter politics, held on October 5 at the CAW Local 1285 Hall in Brampton, Ontario.

“It is still very difficult to be a woman in elected office because of the perceptions of what you should be doing with your life,” said Horwath. She recounted a story of how her entry into municipal politics a little more than 10 years ago was met with disapproval by other Hamilton city councilors on account of her having small children. She said that her male colleagues did not face the same criticism.

Peggy Nash, assistant to CAW president, federal NDP president and former MP, said that women can get involved in politics by putting their passion about a particular issue into action. “Whatever your passion is, there’s a political aspect to it.”

She said that although some women may not want to run for office, they must put their efforts into electing those women who are willing to go into politics. “We need women’s voices in the House before we’re going to make a difference for all Canadians.”

MPP for Parkdale-High Park in Toronto Cheri DiNovo also weighed in on political life. She spoke about an initiative called Girls Government which invites six girls from two different elementary schools to participate in the year long program where the girls not only see through a chosen project, but also experience the political processes at Queen’s Park and Parliament Hill first hand by working with women MPs and MPPs. She said that years down the road, she hopes these same girls will be running for office – municipally, provincially or federally.

The evening was emceed by CAW Local 1285 Women’s Committee Chair Gwen Campbell and included addresses by Edna Toth of Elect Women Everywhere and ONDP Women’s Committee President Effie Vlachoyannacos and entertainment by the Peel Aboriginal Network (PAN) hand drummers.

Good Green Jobs for All

The Good Green Jobs for All conference promises to bring together participants dedicated to creating green jobs, including green manufacturing jobs in the Greater Toronto Area.

The conference runs Saturday, November 7 at the Allstream Building at the Princes’ Gate in the Canadian National Exhibition. Presentations, speakers and workshops on the environment, green jobs, equity and social justice will run throughout the day.

The registration fee is $75. Anyone interested in taking part is urged to register online at www.goodjobsforall.ca or to contact Ana Fonseca at 416-441-3663 ext. 221.

Workers Compensation Conference

More than 90 delegates and presenters took part in the CAW Ontario Workers’ Compensation Conference at the CAW Family Education Centre in Port Elgin, Ontario.

Delegates heard presentations on the new policies and practices in the workers’ compensation system and the appeals tribunal and from various unions and injured workers’ organizations on the direction they are taking to deal with the problems with Ontario’s WSIB.

One of the highlights of the September 25-27 conference was the Saturday evening voluntary session where delegates had a lengthy discussion about how to take on the fight to challenge the failures of the compensation system and defend union members who are being impoverished because of workplace injuries.

Scott McIlmoyle – new chair of the CAW Council Workers’ Compensation Committee – will initiate an email list serve to: co-ordinate the fight back – including building for successful injured workers demonstrations across the province on June 1st next year; as a contact point for compensation reps with mentors who can assist newer reps regarding case strategies; and to share new developments in compensation law and experiences representing CAW members.

CAW Members Take Part in Etobicoke Creek Clean-Up

A small but determined group of volunteers including a number of CAW Local 1285 members took part September 26 along Etobicoke Creek in the TD Great Canadian Shoreline Clean-up.

Forty volunteers were on hand to remove, as much as possible, the footprint of man from the creek, its banks and the surrounding wetlands.

Two municipal trucks winched old sofas from a bend at the center of the creek and many shopping carts and household furnishings followed.

Volunteers were surprised by the number of old shopping bags, discarded pop cans and water bottles along the creek banks and nearby walking paths.

Michel Le Page, CAW environmental committee member at the Brampton Assembly Plant (BAP), said volunteers worked hard to clean up the creek in an effort to ensure wildlife like the family of Mallard Ducks swimming near where volunteers worked would continue to thrive, while at the same time ensuring people could enjoy a more pristine environment.

New Ford tech gives
cars sound start

Bryce G. Hoffman / The Detroit News

Oct 7, 2009

Dearborn -- Ford Motor Co. is using technology from the video gaming industry to evaluate sound levels in its new cars and trucks before the first prototype is even built.

Using a system that looks like a gamer's dream machine, Ford engineers are able to simulate the interior sound of a vehicle under a variety of driving conditions, at different speeds and on various road surfaces.

"We can actually drive it with real context and see if there are any failures that are occurring or whether it's sporty enough or if it's too smooth or too rough. We can drive it against key competitors and evaluate it with customers. And we can do all that before we even make a prototype," said Mark Clapper, technical leader for noise, vibration and harshness at Ford. "We aim to hit the bull's-eye on the first pass."

Before they began using this system six months ago, Clapper and his team were limited to testing the sound quality of individual components under a single driving condition. Now, they can hear how they sound together as their simulated car accelerates and decelerates along a virtual roadway complete with passing vehicles and wind noise.

Ford is the first North American automaker to employ the technology and is currently using it to refine the design of a luxury vehicle that will not hit showrooms for another four years, as well as other future products.

Though that car does not yet exist in physical form, Clapper and his team were able to identify an unacceptable noise level caused by engine vibration. Within this virtual world, they substituted one type of engine mount for another and eliminated the noise. Though the new mounts cost a little more, they were able to convince Ford executives that it would be worth using the more expensive mounts in the actual vehicle.

Analyst Erich Merkle of Autoconomy.com says vehicle sound is "the last frontier."

"Sound is a very important aspect of the product," he said. "It plays a key role in conveying a sense of quality or performance. It's the icing on the cake."

Merkle said Ford has done a better job of using sound to its advantage than most of its competitors, pointing to the throaty exhaust note of the Mustang by way of example, but said a lack of sound can be just as powerful.

PENSION RALLY QUEENS PARK

For Picture Gallery Click Here
(Controls are on the lower right of screen)
************************

Nortel pensioners protest pay
loss as 'corpse being cut up'

Mary Jane MacKinnon, recently turned 60 and the grandmother of two, spent 30 years as a customer service representative at Nortel Networks Corp. in Belleville, Ont.

She retired two years ago on a reduced pension to make sure her husband had a survivors benefit, she said, since he doesn't have a pension of his own.

Then in January 2009, along with thousands of other retired Nortel workers across Canada, she watched her former employer enter bankruptcy protection. She began to wonder about the future of her loved ones.

"I was counting on that pension to keep us going – and the kids. And now it's uncertain and the benefits are going to be gone as soon as they go into bankruptcy," she said on Wednesday as hundreds of people in her situation gathered around her at Queen's Park. "This will seriously impact our family."

Under grey skies and cold rain, with a brisk wind unfurling and snapping their Canadian Auto Workers flags, Nortel's retired, long-term disabled and former employees gathered at the legislature.

It was fitting weather for a similarly bleak task: demanding that the provincial government step in to secure their rights to full and protected pensions, severance pay and benefits during the veritable yard sale of Nortel's global assets after the company entered creditor protection earlier this year.

Wednesday also saw the announcement of Ciena Corp.'s opening bid for Nortel's Ethernet division, which employs 1,430 in Canada, and is likely to see a 15 per cent cut in its global workforce.

"The corpse is being cut up, dissected, and handed all around," said Eddie Halpin, 70, who stopped working for Nortel in London, Ont., in 1994. "They are taking the money and running."

Currently, under terms of the Companies' Creditors Arrangement Act (CCAA), Nortel does not need to give notice of termination or severance pay, and people laid off in the current restructuring receive only 69 per cent of their earned pension assets. There are now more former Nortel employees receiving pensions in Ontario than are currently paying in.

Signs at Wednesday's rally called the CCAA "legalized theft."

"This is a national crisis," said Ken Lewenza, national president of the CAW, as a crowd of several hundred roared in support. "To think, now that workers are retired, that they may take a 30 per cent reduction in their pension, after 30, 35, 40 years of deferred wages – it should be unlawful in Canada."

In Quebec, Employment Minister Sam Hamad said he would attempt to give Quebec's Régie des rentes, which regulates pensions, the ability to manage the Nortel plan, should employees choose the option. But from Queen's Park or Ottawa, there has been no clear indication of whether the government will intervene.

"This is a difficult time for Nortel employees, retirees, and their families," Ontario Finance Minister Dwight Duncan told the Star. "Ministry officials have met with the pensioners to hear their concerns and recommendations."

Members at GM Upset
over Pay Increases

The Canadian Auto Workers is under fire from some of it own members upset over recent pay raises awarded to the union’s shop committee at the General Motors Transmission Plant.

“The plant is in an uproar,” said Gene Locknick, a 28-year employee who retired in August. “While the rest of us had to accept wage freezes, they arbitrarily gave themselves a raise.”

At issue are hikes of $3.50 that boosted the hourly pay to $37.58 for five of seven shop committee members who work full-time as union representatives at the plant.
The raises — which were negotiated between the shop committee and plant management and took effect in August — were designed to bring their pay in line with that of shop committee members at other GM plants, said Bill Reeves, president of CAW Local 1973. “General Motors is paying it,” he said, noting that plant-based union reps are paid directly by the company. “It didn’t take anything out of anyone’s pocket; General Motors is paying it. It’s just for a small group and some people are making it a bigger issue than it really is.”

He also rejected Locknick’s claim that there is widespread anger over the raises. “I was just in the plant when two people talked to me about it, and they were fine with it. It was raised at our last membership meeting. It was addressed and everyone who left there, they were fine with it.”

Stew Low, GM director of communications, said in a statement that “There is an interpretation issue with repect to what is allowed under the collective agreement. When we learned of this we began discussions with the union and we expect to resolve this issue shortly.”

As part of a massive restructuring, GM and the CAW negotiated a new agreement which slashed hourly labour costs by $19. It also froze wages and pension during the life of the deal, which expires in 2012.

Wages for GM’s CAW workers range from about $34 to $41 an hour.
CAW negotiators managed to preserve the closure agreement for about 1,200 workers at the transmission plant, which is slated to shut down permanently next June. That deal offers employees — most of whom have earned enough seniority to retire — buyouts of up to $125,000, plus a $35,000 car voucher. Currently, about 500 employees remain at the plant after more than 600 opted for retirement this summer.

Locknick said wage parity with union reps at other GM facilities “was not the tradition at GM transmission. So, hourly pay rate was based on seniority and current job classification.”

The pay hikes were not driven by parity but enriching the pensions of the union representatives, he said. “It all makes sense. Because the plant’s shutting down next year, not only do they get an hourly pay increase that shows up on their cheque every week, this also affects the pension they’re going to get. It gives them $500 a month extra in their pension. They did it to top off their pensions.”
Reeves admitted that the timing of awarding the pay hike was related to the impending plant closure. “GM’s closing the plant, so if you’re going to get it, you might as well get it now, right?”

Locknick said he also objected to the “secretive” way in which these raises were negotiated. “During contract negotiations you have the published documents that govern the agreement. Then, people find out there are unpublished documents and these are secret agreements they make.”

When asked why the pay hikes weren’t spelled out in the collective agreement, Reeves said, “There’s a lot of things that are done under memorandum of understanding.”

Locknick said he is among a group of six, including five active workers, who are taking further steps against the pay hikes. He said they are circulating a petition at the plant as well as writing letters to the federal and Ontario governments. “We’re going to go to the government who gave a bailout to GM. This is taxpayers’ money that they shouldn’t be getting to boost their pensions.”

He said other angry employees were unwilling to comment on the record for fear of union retribution.

Labour costs threaten
CAW jobs, Ford says

Automaker revs up drive for wage concessions while union seeks deals to retain production levels

Tony Van Alphen
Business Reporter

Ford Motor Co. of Canada is warning that future investment and jobs could be in jeopardy here because its labour costs are now higher than in any other country in the world.

The news came as talks with the Canadian Auto Workers show no sign of progress. The company is pushing for concessions, while the union is seeking future production commitments in exchange.

A senior Ford official close to negotiations said the company is under heavy pressure to consolidate its manufacturing operations around the world in "competitive labour cost jurisdictions."

"We hope the rank and file workers understand that the best way to earn future investment is to be competitive," the official added. "We are now making decisions on product allocation for the next couple of years. There are enormous pressures."

The official said Ford's current labour costs, including benefits and pension obligations in Canada, are $16 (U.S.) an hour more than any of its plants south of the border and even higher elsewhere. Ford's labour costs in the U.S. are in the range of $50-$52 an hour.

"The labour costs in Canada are the highest of any jurisdiction where we operate in the world," the official added. "It's difficult to make the business case for investment."

Although labour costs represent less than 10 per cent of the cost of making a car, experts say it is still a critical factor that an automaker must take into account in the intensely competitive international auto industry.

The union represents more than 7,000 production and skilled trades people at operations in Oakville, St. Thomas and Windsor. Ford wants similar concessions that the union negotiated with General Motors of Canada and Chrysler Canada earlier this year. Those concessions – which include wage and pension freezes plus some reductions in benefits – have left Ford at a disadvantage here.

But the union is demanding commitments for future assembly or parts production so Ford of Canada would continue to maintain 13 per cent of the automaker's North American production here. Ford has announced no products for an assembly plant in St. Thomas after 2011 and there are rumblings the company will reduce engine operations in Windsor. The union says these cuts would reduce Ford's production to 9 per cent of North American operations. CAW negotiators argue GM and Chrysler made product commitments in exchange for concessions but Ford counters that those assurances were necessary for the two rivals so they could qualify for billions of dollars in government aid and stay alive.

Talks between Ford, which did not receive any government aid, and the union started about a month ago and the two sides are exchanging information and proposals.

While Ford presses for concessions to stay competitive, the union is also in a difficult position. Union sources say members in St. Thomas and Windsor would not support a deal that would put them out of work.

"We would never be able to get anything like that ratified if people know they're going to lose their jobs anyway, especially in St. Thomas," said one CAW insider.

Workers at the company's Oakville complex could also show resistance. In bargaining last year, their local became the first one at Ford to reject a major contract in the union's history. But other Ford locals voted in favour of the deal and assured overall support.

Union sources say the CAW believes it won't lose any further existing jobs so it would let the current contract expire in 2011. But at that time, the union would have to face the same GM and Chrysler concessions under the traditional concept of pattern bargaining at the three North American base automakers, according to the sources.