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September 1, 2012 to January 31, 2013

Hybrids, electric cars lead charge
in January sales for Ford

Workers make final tweaks to a C-Max Hybrid at the assembly plant in Wayne. Ford is on pace to sell a record number of electrified vehicles. (Todd McInturf / The Detroit News)

By Karl Henkel
The Detroit News
January 31, 2013

Ford Motor Co.'s electrified vehicles will help boost its January auto sales, an early indicator of what could be a record-setting year for the Dearborn automaker's growing hybrid and electric lineup.

Led by the new Fusion Hybrid midsize sedan, Ford said it expects to report sales of at least 5,500 hybrids for January, which would shatter the company's sales record for the month.

Sales of the Fusion Hybrid will comprise a chunk of the projected 21,000-plus sales of all Fusion models, which will also set a new January sales record for the automaker.

Ford, barring catastrophe, will sell a record number of electrified vehicles in 2013 because of its expanded lineup, which includes the new C-Max Hybrid and C-Max Energi plug-in hybrid, new Fusion Hybrid and Focus Electric. A Fusion Energi plug-in hybrid will debut this year, too.

Though hybrid vehicles presently make up about 3 percent of all new vehicle sales in the industry, the segment is expected to become extremely competitive as it continues to grow.

Before Ford's C-Max launch last fall, Toyota Motor Corp.sold about two-thirds of all hybrids in the U.S., according to Edmunds.com.

Since then, Ford has quickly chipped away at Toyota's lead. Ford data shows Toyota's market share of the hybrid market has fallen from 68 percent to 60 percent, while Ford's has jumped from 7 percent to 16 percent.

Ford's hybrid sales are a result of conquest buyers — drivers who leave one automaker for another. Nearly 70 percent of Fusion Hybrid sales are comprised of conquest buyers, the company said.

The Dearborn automaker has also been a hit with a new demographic: Younger buyers.

"We're bringing new hybrid buyers into the market, many of whom wouldn't be considered traditional hybrid buyers," said Amy Marentic, Ford's marketing manager of global small and medium cars. "There's a sense hybrid buyers represent a pragmatic or green ethic."

Ford said new Fusion Hybrid buyers are five years younger than buyers of the previous-generation Fusion Hybrid — 48 years compared to 53.

Hybrid owners are typically older than the average new-car buyer; most fall in the 55-to-64 age bracket, according to Edmunds.com data.



Ford will pay down pension deficit

Carmaker to add $5B in 2013 as global gap widens to $18.7B

By David Shepardson and Karl Henkel
The Detroit News
January 30, 2013

Ford Motor Co.'s pension deficit widened in 2012 by 21 percent and the Dearborn automaker vowed Tuesday to boost contributions to its underfunded pensions by $5 billion in 2013.

Despite the fact that Ford pumped $3.4 billion into its worldwide pension plans in 2012 — over the $1.1 billion it infused in 2011 — the underfunding of the automaker's pension plans widened.

Ford said its pensions are now underfunded by $18.7 billion worldwide, up from $15.4 billion. The automaker's U.S. pensions are underfunded by $9.7 billion, up from $9.4 billion.

Low interest rates mean that companies must recalculate the "discount rate" in determining pension funding.

"It's a real liability as of this minute but it's not something they have to worry about or pay now," said Van Conway, CEO of Birmingham-based advisory firm Conway MacKenzie in a telephone interview.

Ford dropped its discount rate 0.8 percent, accounting for the pension plan underfunding boost.

"Anyone that has a defined benefit plan is suffering from these record-low discount rates," Ford CFO Bob Shanks said in a teleconference with analysts and reporters Tuesday morning. "We do expect discount rates to start to increase as we move forward."

Ford said its pension plans earned 14.2 percent in 2012, up from 7.7 percent in 2011. Ford's pension plans beat the S&P 500 index, which was up 13 percent last year.

The automaker said in reviewing its 2012 performance that it "began actions to de-risk our funded pension obligations."

Ford offered pension buyouts to 98,000 qualifying white-collar retirees and former workers. Those buyouts will continue through the end of the year.

Ford did not disclose Tuesday how many have accepted the buyout, but said it spent $1.2 billion of its $3.4 billion in 2012 pension contributions on its lump-sum payout program.

U.S. automakers are putting billions into their pension plans to offload some of the risks, offering pension buyouts — and in the case of General Motors Co., selling pension liabilities to an outside insurer.

But the United Auto Workers has shown no interest in agreeing to pension buyouts.

UAW Vice President Joe Ashton, who oversees the GM bargaining unit, said this month the union reviewed the pension buyout deal made to salaried workers.

But he said deciding on a similar offer for union retirees "would be a long-term process that we would have to look at." No such offer is on the table.

"God knows — maybe by the next (contract) agreement (in 2015), it would be something that we would be ready to look at," Ashton said. "We'd be very concerned that an individual or many individuals would take the cash — after working your whole life — 30, 40 years — and us negotiating those benefits, it would be tough for us to worry about our retirees."

UAW President Bob King said the union hasn't been interested because "the pension program we have does give a lot of security."

Last year, about 30 percent of GM's eligible U.S. salaried retirees opted for lump sum payments instead of regular monthly pension payments.

The automaker offered pension buyouts to 42,000 salaried retirees who left the automaker between Oct. 1, 1997, and Dec. 1, 2011.

That deal was part of a broader plan with Prudential that GM had estimated would cut its pension liability by $26 billion, and eliminate a significant drag on its bottom line.

GM moved about $29 billion in pension liabilities off its balance sheet through the buyout.


Ford Posts Highest Fourth Quarter Pre-Tax Profit in More Than a Decade; Full Year Pre-Tax Profit
of $8 Billion and Net Income
of $5.7 Billion+

Tuesday January 29, 2013

  • Strong full year pre-tax profit was $8 billion, or $1.41 per share, a decrease of $797 million from a year ago
  • Full year net income was $5.7 billion, or $1.42 per share; excluding impact of 2011 changes in valuation allowance against deferred tax assets, full year 2012 net income was $307 million lower than 2011 
  • Positive Automotive operating-related cash flow was $3.4 billion for the full year and $1 billion for the fourth quarter — the 11th consecutive quarter of positive performance. Ford ended 2012 with Automotive gross cash of $24.3 billion, exceeding debt by $10 billion, and a strong liquidity position of $34.5 billion, an increase of $2.1 billion over 2011
  • Ford had its highest fourth quarter pre-tax profit in more than a decade — when trucks and SUVs were a more significant portion of the U.S. product mix — at $1.7 billion, or $0.31 per share, an increase of $577 million from fourth quarter 2011. Ford has now posted a pre-tax operating profit for 14 consecutive quarters
  • Total company fourth quarter net income was $1.6 billion, or $0.40 per share; excluding impact of 2011 changes in valuation allowance against deferred tax assets, fourth quarter net income was $565 million higher than 2011  
  • Total Automotive full-year pre-tax profit of $6.3 billion was driven by Ford North America results, which set fourth quarter and full year records for pre-tax profit and operating margin since Ford began reflecting the region as a separate business unit in 2000. For the full year, Ford North America's pre-tax profit was $8.3 billion with an operating margin of 10.4 percent
  • Ford Credit reported continued solid performance with a full year pre-tax profit of $1.7 billion
  • For 2013 outlook, Ford expects another strong year, with Total Company operating profit to be about equal to 2012, Automotive operating margin to be about equal to or lower than 2012, and Automotive operating-related cash flow to be higher than 2012


King: UAW needs to
refocus, re-energize

He sets sights on organizing in South,
unseating gov, aiding Dems

By Bryce G. Hoffman
The Detroit News
Jan 28, 2013

United Auto Workers President Bob King said his union is stepping up its efforts to organize foreign automakers and advised Michigan Democrats to rethink their strategy for countering the "war on the middle class" being waged by "right-wing" Republicans.

The past 12 months have been tough for the UAW and its leader. The union — desperate to fill the widening gaps in its membership rolls — is no closer to realizing King's dream of organizing one of the foreign automakers' factories in the South than it was at the beginning of 2012.

Meanwhile, in the UAW stronghold that was Michigan, voters rejected pro-union ballot proposals that King strongly and publicly backed, while Republicans pushed through right-to-work legislation that will allow workers to opt out of paying union dues.

And just last week, the federal government released its latest statistics showing that union membership declined nationwide last year.

"Labor has got some huge challenges in front of it. It's a labor movement issue. It's not unique to the UAW," King told The Detroit News in an interview at Solidarity House in Detroit on Friday. "The labor movement has got to come together and have new strategies, new ideas and a new level of focus on rebuilding their ability to get fairness and justice for their members."

King said a good place to start is right here in Michigan.

"We've got to re-energize and rebuild the Democratic Party. I'm not blaming anybody; it's all of us. So, all of us have got to accept responsibility. We're not accomplishing for our members, their families or working people in general what we need to be," he said.

"We're going to work together with a whole broad array of allies to re-energize the Democratic Party in Michigan."

King said his goal is to unseat Gov. Rick Snyder and help the Democratic Party win back the Michigan Legislature in 2014.

In the past, King steered clear of calling out the governor by name. But he said all that changed because of Snyder's decision to sign right-to-work legislation and other bills King finds offensive.

"My views on the governor have changed because of the broad list of extreme-right legislation he has signed," King said. "He says (right to work) is about worker freedom, that workers should have the choice whether to pay dues or not. "Why doesn't that correlate to taxpayer freedom? Why don't I get to say, 'I don't want to pay my taxes because I don't agree with Gov. Snyder?' He says that this gives unions more accountability. Well, hell, it would give him a lot more accountability if I could say (that)."

The governor's office said King's rhetoric is not constructive.

"The governor understands there were divisive issues at the end of 2012. He has acknowledged that change is difficult, but Michigan is now the comeback state and we are on the right path to reinventing Michigan, creating an environment where families and businesses can grow and thrive," said Kurt Weiss, a spokesman for Snyder.

"The governor has always partnered in good faith, and he will continue to do so as Michigan continues to move forward."

While some analysts say Michigan's new right-to-work law could accelerate the UAW's membership decline, King says he is not worried.

Bigger concerns ahead

"Our membership has been very strong in their beliefs about the importance of being in the union. They may disagree with some issues or some policies. But they've got a great understanding that they would not have the wages and benefits, the security, the due process, the democracy that they have — the voice they have in the companies — without the UAW," he said.

Membership rates have remained high at UAW-organized factories in other states that have adopted similar legislation, he noted.

"We're not taking it for granted; we're going out and talking to our members and making sure that the members feel like they've got a good sense of what the vision and the plan of the UAW is," King said.

"It is a concern. (But) a greater concern is the shrinking middle class, the lessening of funding for K-12 education, the taxation of retirees pensions, the attack on women's rights, the attack on immigrants — all this broad extreme-right agenda that right to work is just one piece of — and, in many ways, is not as harmful to workers as the attacks on kids, the attacks on education, the attacks on community colleges."

He may not be worried about right to work, but Detroit's Big Three automakers are. Privately, senior executives at General Motors Co., Ford Motor Co. and Chrysler Group LLC worry about the impact it will have on worker morale. King said they should be.

"If your neighbor didn't pay his or her share of the police, the fire, the road crews, the snow cleanup, and you had to pay more, would you be happy about that? That's just unfair on its face," he said. "This is going to create divisions in the workplace."

Nissan remains big target

King's political involvement has made for a difficult balancing act. On the one hand, he is trying to persuade foreign automakers that they have nothing to fear from today's UAW. After all, the union helped GM, Ford and Chrysler make it through their recent near-death experiences, he says.

But King is also getting embroiled in contentious issues like last year's "99 Percent Spring" movement and Michigan's ill-fated Proposition 2, which would have strengthened collective bargaining rights.

All that makes some of the foreign automakers wonder just how much the UAW has changed.

"If those companies knew all the background, they would understand," King said. "We're not saying we're going to stop working for the benefit of workers."

What he is saying is: "Nobody has more of a stake in the long-term success of the companies than the people in the plants."

But, so far, the companies are not listening.

And in the case of the UAW primary target — Japan's Nissan Motor Co. — King says they are doing too much talking of their own.

"In Nissan Canton, every level of management in that plant has been involved in threats and intimidation of workers," King said, adding that workers at the Mississippi plant have been told the factory will be closed or future vehicles will be produced elsewhere if they vote to unionize. "It is an attack on human rights, civil rights, worker rights."

Nissan says King is not telling the truth.

"The UAW's continued attempts to disparage Nissan are unfounded. Over the last 30 years Nissan's U.S. manufacturing operations have built a hard-earned reputation for being ethical, honest and transparent in our dealings with our employees and the communities where we do business," said company spokesman David Reuter.

"Nissan employees in Canton enjoy jobs that offer some of the highest manufacturing wages in the state, strong benefits, a working environment that exceeds industry standards and an open dialogue based on transparency and mutual respect. Our results and our reputation in Canton speak for themselves, and they contrast sharply with the negative image that the UAW is attempting to paint of Nissan."

In fact, Nissan just announced that it will build its next-generation Murano crossover in Canton instead of Japan.

King acknowledged that Nissan and the other foreign automakers are proving tougher nuts to crack than he expected.

"It's taken more time than I thought, for sure," he said, blaming "regressive" laws that he says make it hard for the union to organize in the states where most of the foreign-owned factories are located.

But King said he is still confident that he will succeed: "God willing and the creek don't rise!"

He will have to hurry. King's term as president is up next year


Ford restarts production at Genk plant after parts blockade ends

By Chris Reiter
Bloomberg News
January 25, 2013

Ford Motor Co. restarted production at its factory in Genk, Belgium, after a blockade by workers over plans to shut the site ended.

"We are pleased to be building and shipping vehicles again and are working to get the factory quickly up to full production," said Adrian Schmitz, a spokesman for the carmaker's European operations in Cologne, Germany.

An agreement between Ford and unions approved by workers earlier this month had failed to result in a resumption of auto assembly after protesters blocked an adjacent supplier area. The dispute included union leaders being confined in a conference room last week after demonstrators disrupted a meeting with Ford suppliers.

Before this week, Ford hadn't shipped a vehicle from Genk since saying Oct. 24 that the plant will shut for good in 2014, as walkouts compounded the effects of scheduled suspensions. The permanent shutdown is part of an effort to end losses in Europe that may exceed $1.5 billion a year in 2012 and 2013.

The agreement with Genk labor leaders, which outlines extra money paid to workers for meeting production targets, was slated to allow Ford to restart production Jan. 9 and ramp up output to 1,000 vehicles a day at the factory, according to unions. The factory builds the Mondeo mid-sized sedan and the S-Max and Galaxy minivans.


Canada to invest $16.9M to
produce Toyota hybrid vehicle

By Sean B. Pasternak
Bloomberg News
January 24, 2013

The Canadian government will provide Toyota Motor Corp.'s Canadian manufacturing unit a loan of about C$16.9 million ($16.9 million) to help produce a hybrid version of the Lexus sport utility vehicle in Ontario, Prime Minister Stephen Harper said Wednesday.

The project will create about 400 jobs at Toyota's Cambridge, Ontario plant and the vehicle is expected to begin production in 2014, according to a statement. The investment is part of the government's Automotive Innovation Fund, a five-year, C$250-million plan to support research and development for automotive companies in Canada


GM wants to open talks early with Ontario plant for possible Equinox production

January 22, 2013
Detroit News

General Motors wants to negotiate a fresh labor deal at an Ontario plant where it could produce the next-generation Chevrolet Equinox if the business case makes sense.

Canadian Auto Workers Local 88 President Dan Borthwick confirmed that the automaker has asked to open labor negotiations early at the CAMI plant in Ingersoll, whose contract was set to expire in September.

“My understanding is General Motors wants to know their long-term costs going forward,” Borthwick said.

The automaker is weighing whether to make the next version of the popular Equinox crossover at the plant, where it currently produces the Equinox and the GMC Terrain. The plant made 305,415 vehicles in 2012.

Successful negotiation of a labor deal with terms similar to the general CAW contract signed in the fall could pave the way for GM to locate the next-gen Equinox at the CAMI plant.

“There’s always concern about future products,” Borthwick said. “We can do everything we need to do here cost-wise, quality-wise and productivity-wise, and we believe if we do that we should have future generations of product.”

Borthwick said the CAW Local 88 bargaining committee has recommended that members approve early bargaining. The chapter will meet Feb. 10 to vote on whether to approve early negotiations. Toronto’s Globe and Mail first reported that GM had asked for early negotiations at the plant.

Borthwick said “we haven’t heard any negative feedback” from members yet. He said the chapter would request at least the pattern that was established last year by CAW contract agreements. The plant is not covered by that deal.

A GM spokeswoman could not be reached for comment.

GM North America President Mark Reuss said last week that the company would soon announce fresh investments of $1.5 billion in its North American operations. He declined to offer specifics.


Mulally: Ford learning
from Escape's recalls

Alan Mulally said the No. 1 focus is on quality at Ford. “That’s why we hold vehicles up when they are not ready,” he said. (Elizabeth Conley / The Detroit News)

Redesigned SUV has required 4 fixes since going on sale in June

By David Shepardson
Detroit News Washington Bureau
January 16, 2013

Detroit — Ford Motor Co. chief executive Alan Mulally says the automaker is learning from its four recalls of the new 2013 Ford Escape, including two that required owners to stop driving their vehicles until they could be repaired.

Mulally said the Dearborn automaker is improving processes to reduce issues with new vehicles.

"We learned from every one of them. A couple of them were a surprise. One was a manufacturing issue," Mulally told reporters after speaking at the Automotive News World Congress Tuesday at the Renaissance Center. "Nothing is going to change about that No. 1 focus is on quality. That's why we hold vehicles up when they are not ready."

The redesigned Escape went on sale in June and is a key vehicle for the Dearborn automaker.

In late November, Ford issued its fourth recall on its 2013 Ford Escape since June. The automaker recalled 89,000 Escapes and Ford Fusions for fire risks — and said it didn't have a fix.

About 10 days later, Ford unveiled a software upgrade to fix the vehicles.

Ford urged owners of the vehicles with 1.6-liter engines to contact dealers immediately get alternative transportation.

Ford said it issued the recall after reports of engine overheating followed by engine fires while the vehicle was running. There were reports of 13 fires, including 12 in Escapes.

In July, Ford recalled 11,500 new 2013 Ford Escape SUVs with 1.6-liter engines and urged owners to stop driving them immediately because of fire dangers caused by damaged fuel lines.

In that recall, the risk stems from a possible damaged fuel line that may lead to a significant fuel leak that could lead to a fire if the vehicle is running.

Ford reported there have been three fires since June 9, including one in a customer vehicle in Canada and two at its Louisville Assembly plant.

In September, Ford issued another recall for its 2013 Ford Escape, saying an improperly installed part could lead to a risk of a fire.

That recall covers 7,600 2013 Escape SUVs built with 1.6-liter engines, including 6,150 in the United States and 1,300 in Canada. Ford said the recall is to prevent a dislodged plug in the engine cylinder head.

"Those are great lessons learned. We're dealing with them now," he said.

"We were very disappointed it happened on a fantastic vehicle. ... We're always learning new things and we'll fix the process."


After the verdict, what's
next for Nortel pensioners?

CTV News
January 15, 2013

When a judge dismissed fraud charges against three former Nortel executives Monday, more than 12,000 pensioners were left hoping that a third round of mediation talks might restore their stake in the company's remaining assets.

On Monday, former Nortel executives Frank A. Dunn, Douglas C. Beatty and Michael J. Gollogly were found not guilty of defrauding the company and investors of millions of dollars after a year-long trial. Ontario Superior Court Justice Frank Marrocco said he was "not satisfied beyond a reasonable doubt" that the three men "deliberately misrepresented the financial results of Nortel Networks Corporation."

The executives were each facing two counts of fraud, one for defrauding "the investing public" and one for defrauding the company.

Marrocco delivered his verdict on the same day that another round of mediation talks aimed at dividing up the $9 billion remaining in Nortel's accounts started in Toronto.

The talks will run until Jan. 18 and representatives from all the major stakeholder groups have been asked to attend with respective legal counsel capable of conducting settlement negotiations.

Attendees include lawyers from the company's entities in Canada, the U.S. and Europe, as well as Nortel retirees fighting for their pensions.

Prior to this round of talks, Ontario Chief Justice Winkler, the presiding judge over the mediation, asked each affected group for a confidential settlement proposal. He received the proposals last year and has since reviewed them with advisors.

Following the ruling, Michael Moorcroft, director of the Nortel Retirees Protection Committee for the Greater Toronto Area, told CTV News Channel that stakeholders are hoping that this round of talks will lead to a settlement, to keep the case from dragging on indefinitely in the courts

"Really if mediation doesn't solve the problem, this is likely to go on in the courts for years," Moorcroft said.

"We need a fair settlement out of this mediation to recover any of the money -- serious money -- lost through this bankruptcy."

Previous attempts to broker a settlement failed, as competing stakeholders argued over who should get what piece of the pie. Moorcroft said there are about $25 billion in claims.

Among the 20,000 stakeholders from Nortel are 12,000 pensioners, 5,000 deferred pensioners, 3,000 former employees and 400 people who had been receiving long-term disability benefits.

Moorcroft said he was "not really surprised" by Monday's verdict, after reviewing the evidence that was brought against the three men in court.

"Most of us who had looked over it and talked over it were pretty sure there wasn't much evidence of fraud, if any," Moorcroft said.

He said many affected stakeholders have lost between 30 and 50 per cent of their gross pensions, as well as supplementary benefits, life insurance, medical and dental coverage and long-term disability benefits.

"Many of the people I know personally have had to downsize fairly quickly," Moorcroft said. "They've moved houses, they've moved out of the city or out of the suburbs to other municipalities where the taxes aren't as high. They've had to sell their houses and move in together or with their children."

Nortel was once one of Canada's biggest business success stories, employing more than 90,000 employees around the world, and was valued at nearly $300 billion. Share prices were once as high as $124.50 before plummeting to penny stock status.

The company filed for bankruptcy in 2009, throwing thousands of employees out of work.


Ford to show F-150 concept
truck at Detroit auto show

By David Shepardson and Karl Henkel
The Detroit News
January 14, 2013

Ford Motor Co. will unveil a concept version of its next-generation F-150 on Tuesday, two people briefed on the matter said.

The F-150 is the best-selling pickup truck 36 years running, and has been the best-selling vehicle — car or truck — in the U.S. for 31 consecutive years.

The Dearborn automaker wants to send a message to potential truck buyers who might be tempted by General Motors Co.'s new trucks to wait for Ford's. The new F-150 is likely to be a 2015 model that will come out in 2014.

The Ram 1500 already is at dealerships, and GM's new Sierra and Silverado are due in showrooms in the second quarter of this year. All will be at the Detroit auto show.

Ford has posted a giant banner outside Cobo Center, where the North American International Auto Show opens to the automotive press Monday, with the phrase: "The Truck You Trust."

To meet higher fuel efficiency demands set by the federal government, the truck must shed several hundred pounds.

A source familiar with Ford's plans acknowledged the automaker has tested aluminum and magnesium parts. But it is unclear how much of the next-generation F-150 will be composed of the metals, because they're more expensive.

Although the truck is not due out until 2014 as a 2015 model year, Jim Tetreault, Ford's vice president for North American manufacturing, told The Detroit News last month that the Dearborn-based automaker is prepping four new press lines for the truck at Dearborn Stamping Plant.


Simple, elegant Lincoln MKC debuts Monday at Detroit auto show

Lincoln MKC

By Karl Henkel
The Detroit News
January 13, 2013

Lincoln Motor Co.'s new concept MKC is unmistakably a Lincoln.

Ford's luxury brand has managed to individualize Lincoln's new compact crossover, leaving few similarities with the Ford Escape, which shares the same platform.

And that — at least initially — is a victory for Lincoln, which has for years battled perceptions that its vehicles are nothing more than souped-up Fords.

"It's definitely not a jazzed-up Escape," said Dave Sullivan, manager of product analysis at research and forecasting firm AutoPacific Inc. "It's definitely an original-looking design; it's not copying anything else."

The MKC — "C" as in crossover — will debut Monday at the North American International Auto Show and represents new territory for Lincoln. The MKC is an advancement from the MKZ sedan, which debuted at last year's show and is hitting dealer lots now.

This new Lincoln, part of the small luxury segment that has grown by 200 percent in the past four years, isn't slated to arrive until sometime next year, but when it does, it will compete with the likes of the Acura RDX, Mercedes-Benz GLK and BMW X3.

The concept is the first Lincoln completely designed by Max Wolff — director of design at Lincoln and a former Cadillac designer — and he made sure to let consumers know they're driving a Lincoln.

The interior is peppered with hundreds of Lincoln star lattices, most of them stitched into leather on the doors, seats and dashboard.

A panoramic roof — optional in the new MKZ — makes the car feel more spacious than it actually is; the concept is currently a tight squeeze for anyone 6-feet and taller, though once inside, legroom is plentiful.

A deep crease streaks across both sides of the vehicle starting at the headlamps — a modest but emphatic look.

"It's relatively simple, but all the lines contribute to a simple, elegant look," said Murat Gueler, MKC Concept lead exterior designer.

The MKC concept features Lincoln-centric tail lamps. A side-view cutline — a Lincoln first — means the stretched-out U-shaped tail lamp is uninterrupted and that the rear hatch is wider, providing more space for cargo.

Inside, the MKC has Lincoln's push-button shift, clearing space in the center console.

Bolstering the interior ambience — and acting as a support structure — are two chrome bars that run from the windshield to the rear windshield, embedded with LED ambient lighting. In fact, ambient lighting is practically everywhere, including cup holders, doors and even inside the plastic, leather-wrapped seat pockets.

"It doesn't all have to be right in your face," said Soo Kang, Lincoln interior design chief. "It's a quiet way to be pure luxury."

There's even ambient lighting inside a rear center console that can double as a mini refrigerator, similar to the high-end Ford Flex models.

That console featured in the concept, however, would limit the seating capacity in the MKC to four; a standard rear bench seat should also be available, though Lincoln remains mum on exact vehicle specifications.

"They might have two seats to have something different, but I'd expect a five-seat option," Sullivan said.

Behind the bench seat? You guessed it: More leather and more chrome. The decorated floor panel flips up and hugs the back seats, too, stretching storage space a foot deeper.


GM, Ford to add 3K workers

Hiring binge is the biggest for Ford in more than a decade

By Karl Henkel and David Shepardson
The Detroit News
January 12, 2013

Ford Motor Co. and General Motors Co., which shed white-collar workers during the industry downturn, plan to hire more than 3,000 salaried workers this year.

Ford said its intention to hire 2,200 salaried workers in the U.S. this year includes a "significant number" in southeast Michigan. And General Motors Co. says it will add about 1,000 high-tech jobs in suburban Atlanta.

Ford said today it will add white-collar employees in product development, information technology and manufacturing, and as interns. The 2,200 hires would represent Ford's largest single-year increase of salaried workers in more than a decade.

"As we expand our product lineup of fuel-efficient vehicles, we need more people in critical areas — such as in a range of engineering activities, vehicle production, computer software and other IT functions," Ford's President of the Americas Joe Hinrichs said in a statement.

Ford has about 28,400 salaried workers throughout North America, most of them in the United States. That's 10,000 fewer than it had in 2006. The number of Ford salaried workers bottomed out around 25,000 in 2009, a company spokesman said, and has steadily risen since then.

Ford last year added about 8,100 hourly and salaried jobs in the U.S., including 1,000 jobs it moved from other countries.

The Dearborn-based automaker said there is no planned cadence to the hirings, in terms of locations and dates; they will happen sporadically throughout 2013.

Applicants can find potential jobs by following a special Ford Twitter account (@FordCareers); "liking" Ford's Career Facebook page (search "FordMotorCompanyCareers"); or visiting www.careers.ford.com.

The automaker says it will rely heavily on social media to recruit potential employees, and is ramping up efforts to hire military veterans. It has used similar social media outreaches to market vehicles and improve customer service.

Ford's hiring comes in addition to 2,350 hourly jobs that Ford plans to add in southeast Michigan this year; most of those jobs will be at the Flat Rock Assembly Plant, which is undergoing a renovation.

Meanwhile, GM said its new Information Technology Innovation Center in Georgia will employ software developers, project managers, database experts, business analysts and other IT professionals.

"Locating this center in Atlanta makes good business sense," said GM Chief Information Officer Randy Mott. "We can draw from a deep pool of high-tech expertise through the surrounding colleges, universities and talent residing in the area."

GM already has hired more than 700 information technology employees to work at the Innovation Centers in Austin, Texas, and Warren in Macomb County. GM plans to hire up to 1,500 for the center at its Warren Tech Center over the next four years.

Mott is leading a rebalancing of information technology at GM under which the majority of information technology work will be done by GM employees instead of being outsourced, which has been the GM model for most of the last three decades.

"We look to the Innovation Centers to design and deliver IT that drives down the cost of ongoing operations while continuously increasing the level and speed at which innovative products and services are available to GM customers," Mott said.

GM said the location of the fourth site will be announced later, but said it is looking for "geographic diversity" in the offices.


Retiree Edward Davis Passes Away

Ed DavisEddie Davis, 91

Passed away peacefully on Monday January 7, 2013. A gentle and kind soul who loved to laugh; bringing a smile to those around him. Living a full and spirited life he cherished family, friends and a "good pint". He is survived by sons James, Ian, Edward and wife Francy. Grandfather "Papa" to Nicole, Natalie, Sarah,Olivia and Madeleine.
Predeceased by wife Sadie in December 2000. They will now be together again.

Donations to Alzheimer's Society graciously accepted in lieu of flowers

In Memory of
Edward Davis

October 17, 1921 to January 7, 2013
Retired November 1, 1988
16 Years Service

Funeral Service

Monday, January 14, 2013

Andrews Community Funeral Centre
8190 Dixie Road
Brampton, Ontario L6T 5N9

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Afternoon Visitation

Sunday, January 13, 2013
2:00pm - 4:00pm
Andrews Community Funeral Centre

Evening Visitation

Sunday, January 13, 2013
7:00pm - 9:00pm
Andrews Community Funeral Centre



Ford family to collect
$28M in dividend rise

By Karl Henkel
The Detroit News
January 11, 2013

The Ford family, which owns more than 70 million shares of the Ford Motor Co., stands to make $28.3 million this year with the news that the automaker is doubling its quarterly dividend.

Ford's dividend, which sat at 5 cents per share for the past year, will bump up to 10 cents per share, a sign analysts say points to strong 2012 financial results and a promising 2013 outlook.

"We believe the timing suggests that (the fourth quarter) was likely solid," said analyst Itay Michaeli of Citi Investment Research. "Second, the timing suggests that Ford is comfortable with 2013 outlook scenarios despite global macro uncertainty, mainly in Europe."

Among the biggest beneficiaries of the increased dividends is Executive Chairman Bill Ford Jr., who has 14.5 million common shares of Ford stock and more than 4 million Class B shares, according to last year's company proxy statement. He will make nearly $7.5 million this year in dividend payments.

And outside the Ford family, company CEO Alan Mulally, who owns nearly 22.4 million shares of Ford's common stock, stands to receive about $9 million this year in dividend payments.

Ford through the first three quarters of 2012 has increased its liquidity position by $2 billion and generated 10 consecutive quarters of positive automotive operating-related cash flow.

For a five-year span dating from late 2006 through 2011, Ford paid no dividend.

It announced in late 2011 the return of a nickel-per-share dividend.

The higher first-quarter dividend is payable on March 1 to shareholders of record on Jan. 30. A date for Ford's year-end financial results has not been scheduled.


UAW retiree health care trust takes first step toward Chrysler IPO

By Bryce G. Hoffman
The Detroit News
January 10, 2013

A trust that's run by the United Auto Workers has taken the first step toward taking Chrysler Group LLC public again, submitting a "registration demand" to the company Wednesday.

But there is no guarantee the move will result in Chrysler's shares being traded on the public market.

On Wednesday, the UAW Retiree Medical Benefits Trust formally asked Chrysler to register 16.6 percent of the company's shares with the U.S. Securities and Exchange Commission. The trust owns 41.5 percent of the Auburn Hills automaker. The rest of Chrysler — and controlling interest — is held by Italy's Fiat SpA, which gained control of the bankrupt company as part of a 2009 bailout deal brokered by the Obama administration.

"Chrysler Group will comply with the request to register shares as is called for under its operating and shareholders agreements," said company spokeswoman Shawn Morgan.

Once those shares are registered, the trust could sell them privately or begin the initial public offering process, which would result in them being traded on the public market.

"There can be no assurance that a registration statement will be filed with the Securities and Exchange Commission, or that if filed, that any such offering will be made or as to the timing of any offering that is made," Chrysler said in a statement released Wednesday.

The UAW trust declined to comment, but the fact that the trust is only asking Chrysler to register 16.6 percent of the company's shares would seem to auger against an IPO. That is because the biggest opportunity for the trust to sell its shares at a premium would come the day they went public. On the other hand, a private sale of some of the trust's shares would allow it to diversify its investment, which is currently limited to Chrysler.

However, if the trust tries to sell its shares privately, Fiat has the first right of refusal under the terms of the 2009 bailout agreement.

The trust was set up to provide health care coverage to Chrysler's retired hourly workers in the United States. Fiat-Chrysler CEO Sergio Marchionne has criticized the fund for not diversifying its assets. But Marchionne has also made it clear that he wants to buy out the UAW trust so that he can complete the merger of Fiat and Chrysler.

At least he did until last October, when Marchionne announced a major investment plan aimed at saving Fiat's struggling European operations. After writing the check for that, Marchionne acknowledged that he would no longer have enough cash to buy the rest of Chrysler. At the time, he said the way was clear for the trust to take Chrysler public again if it so desired, and he said neither Fiat nor Chrysler would stand in the way of that.

But experts say it would take six to eight months to complete the IPO process, and some industry insiders suggest that still gives Marchionne time to realize his dream of purchasing the rest of Chrysler.

There are other ways for Fiat to come up with the necessary cash. Fiat owns 90 percent of Ferrari SpA and could raise a lot of money by selling part of its stake in the legendary marque.

At this point, though, the company and the UAW trust cannot even agree on a price.

Fiat has exercised options to purchase another chunk of Chrysler's shares from the retiree health care fund — enough to raise its stake in Chrysler to more than 65 percent. The trust is required to sell, but the two sides disagree on the formula for pricing those shares. Last year, Fiat asked a federal judge to decide for them.

Marchionne had hoped the issue would be resolved by the end of 2012, but the matter is still before the Chancery Court in Delaware.


Carmakers air new options
for listening to music, news

Visitors flood the 2013 International CES electronics show, where automakers stressed efforts to ramp up more advanced Internet-based radio and other music streaming. (Joe Klamar / Getty Images)

By David Shepardson
Detroit News Washington Bureau
January 9, 2013

Las Vegas — The AM/FM car radio is getting a run for its money.

Automakers are adding more options for drivers to hear their favorite music or news — from satellite radio, cloud-based music and Web-based applications.

Carmakers highlighted their efforts to ramp up more advanced Internet-based radio and other music streaming for vehicles Tuesday at the 2013 International CES electronics show, organized by the Consumer Electronics Association.

More automakers, including Detroit's Big Three, are adding Internet-based radio services to vehicle dashboards.

Ford Motor Co. unveiled a host of new applications that allow drivers to listen to millions of songs through a service called Rhapsody, or listen to a favorite Detroit radio station, even while driving in Los Angeles.

Other new applications allow drivers to listen to their digital music bought from Amazon.com or listen to newspaper stories read out loud from USA Today or other newspapers.

Paul Mascarenas, chief technical officer and vice president, Ford Research and Innovation, said the automaker doesn't know whether traditional radio will survive. "Our approach has been to offer the choice to our customer," he said.

Several Internet-based radio services announced new auto partners.

Aha Radio said it was adding Ford, Chrysler Group LLC and Porsche. Aha offers access to more than 30,000 stations of audio content including radio, news, audiobooks, Facebook and Twitter.

Clear Channel's iHeart Radio, which provides users with 1,500 radio stations and more than 15 million songs, said it was adding Chrysler Group LLC and General Motors Co. vehicles.

Pandora Radio announced that Chrysler is the 20th auto brand to offer its streaming music service through its in-vehicle electronics called the "Uconnect Access" platform.

Pandora said 1 million users have used its music service in a vehicle through an integrated system — "enjoying Pandora as easily as they would listen to traditional radio." Pandora is available on 85 car models with more coming in 2013.

Drivers are already using the streaming music services via a mobile device. Cell phone companies are also eager to keep providing music services to drivers.

Like Ford, Chrysler's UConnect system allows users to use other streaming radio services. Chrysler says its new service integrates Aha, iHeart Radio, Pandora and Slacker into the vehicle.

"The Uconnect team at Chrysler is committed to delivering connectivity solutions that enable drivers to further enjoy the in-vehicle experience without compromising the task at hand, which is driving," said Marios Zenikos, vice president of Chrysler's Uconnect Systems and Services.

Chrysler owners can use vehicle navigation tools to register preferences and block songs they don't like. Chrysler owners will also be able to send cloud-based, hands-free voice-activated texting from behind the wheel. The service will start on the 2013 Ram 1500 pickup and SRT Viper.

Toyota Motor Corp. announced that SiriusXM is now standard on a majority of Toyota's multimedia systems.

Toyota said the new Lexus IS that will debut at the North American International Auto Show in Detroit will be the first car in the industry to offer subscription-free traffic and weather on an integrated audio system — part of a new integrated HD radio, digital audio entertainment and information system.

Troy-based Delphi Corp. unveiled a connected navigation radio at CES that integrates and maximizes "in-vehicle computer power for easy and flawless entertainment and navigation."

"Internet radio is here to stay but I don't see traditional radio going away," Delphi CEO Rodney O'Neal said.


Ford China reports 21%
sales increase in 2012

By Karl Henkel
The Detroit News
January 8, 2013

Ford Motor Co.'s China operation posted its best annual sales figures as the automaker continues to play catch-up with its competitors.

Ford China sales rose 21 percent in 2012 on sales of 626,616 vehicles, and also set a record for annual passenger car sales.

"Record 2012 sales highlight the positive response our customers have for our full portfolio of high-quality, safe, fuel-efficient and smart vehicles," said John Lawler, chairman and CEO of Ford Motor China, in a statement.

"Their enthusiasm for Ford cars validates our aggressive plan to introduce 15 new vehicles, double production capacity and double our China dealership network — all by 2015."

Ford's passenger car joint venture — Changan Ford Automobile (418,500 sales) — and Ford's commercial vehicle investment — Jiangling Motors Corp. (200,008 sales) — also set annual records.

For comparison, General Motors Co. sales totaled 2.59 million in 2011. Full-year 2012 totals are not yet available.

China is the world's largest car market and is expected to continue to grow despite an economic slowdown.

Ford has five manufacturing facilities in China and is building five more with its partners in an effort to increase production to compete with other automakers in the region. Ford says its capacity in China should reach 1.2 million by 2015.

The Dearborn automaker is also growing its SUV and truck lineups.


Harper renews $250M
auto innovation fund

Automotive Innovation Fund established
in 2008 to support auto industry

By Leslie MacKinnon, CBC News
January 7, 2013

Prime Minister Stephen Harper was at the Ford Motor Co. plant in Oakville, Ont. Friday to announce the renewal of a fund to stimulate research and innovation in Canada's automotive industry.

The fund was first established in 2008 as part of efforts to bail out Canada's struggling automotive industry early in the last recession.

The five-year Automotive Innovation Fund required manufacturers to put up some of their own money before applying for funding targeted at specific research and development projects. The subsidy program was touted as an incentive for automakers to keep their Canadian plants open and protect jobs here.

Harper described the government's renewal of the fund as an investment.

"Any analysis of this fund is what we have invested from taxpayer dollars has been paid back many, many times to the taxpayer and will be continued to be paid many, many times to the taxpayer in terms of direct repayments but also economic activity," he said.

The government says its original outlay stimulated some $1.6 billion in innovative projects across the industry, and resulted in half a million spin-off jobs. Harper said Friday that the payoff been six times the amount the government put in the fund.

The announcement Friday commits another $250 million to the fund over five more years.

Under the original fund, the federal government contributed repayable loans to four companies, providing up to:
$80 million to Ford to establish a flexible engine assembly plant and an advanced powertrain research centre in Windsor, Ont.
$54.8 million to Linamar Corporation, to develop advanced components for transmissions, engines and drivelines.
$70.8 million to Toyota Canada to develop more fuel-efficient vehicles, including electric vehicles.
$21.7 million to Magna International to develop energy-efficient components for vehicles and powertrain components for next-generation vehicles.

Industry on rebound from recession

Despite the government's embrace of austerity and deficit reduction in its spring budget, the renewal of the fund signals the government is still willing to commit to the automotive industry.

In 2009, the government made a huge investment in the car business by bailing out the recession-battered General Motors to the tune of $9.5 billion. Since then, GM has repaid the loan part of the deal, but the government is now a part owner of the automaker.

The Ford plant, where Harper made the announcement, has said recently that it would be starting a third line at its body, paint and pre-trim sector in Oakville, creating 300 jobs which are promised first to laid-off GM workers. Ford said that the third shift was necessary due to a high demand for its products.

According to auto industry analyst Dennis Desrosiers, the new vehicle market in Canada is rapidly recovering. On his website, Desrosiers notes that light vehicle sales in November were 125,000, the second-best number on record. In October, Canada saw the highest number of vehicle sales ever.

Desrosiers has predicted that by the middle of this decade, automotive sales in North America will be back to record numbers.

Resource boom fueling domestic sales: Harper

Friday Harper pointed out that while the Ford plant in Oakville has sold 6,000 of its Edge crossovers to China, and 4,000 to Brazil, the record sales within Canada are coming in large part from resource-producing Saskachewan and Alberta.

"So let us have no doubts about this, friends: a strong resource sector in the West means high-quality manufacturing jobs in the East," Harper said, attacking the idea that a high dollar due to oil revenues hurts manufacturing in eastern regions.

Chris Taylor, president of CAW Local 200, which represents approximately 800 hourly employees at the Ford Essex Engine Plant in Windsor, called the announcement "fantastic" and "quite substantial."

"We obviously want investment," Taylor said. "It's a hell of a lot better than plant closures. This tells me the government realizes the importance of the auto industry to Canada and wants to partner with us."

While this is good news for the Canadian market, Canada still faces competition from Mexico and from some U.S. states that benefit from generous government subsidies.

A sore point with the government is that General Motors announced in late December that it will move production of the Chevrolet Camaro from Oshawa to a plant in Michigan in 2015.

Ken Lewenza, head of the Canadian Auto Workers union, suggested that the government should pressure GM to make up the loss of 100,000 units it plans to outsource to Michigan in some other way in Canada, given the fact that the government's bailout helped rescue the Canadian plant.

But Lewenza also stressd that the government must play an investor role in the auto industry, because other countries such as China and India are doing so. "If there's no partnership with government whatsoever, there would be no auto industry in Canada," he said.


2012 new car sales surge in
Canada as Ford stays No. 1

Toronto Star

Jan 5, 2013

Canadian vehicle sales rose a sturdy 5.7 per cent last year to 1.68 million, their second highest level on record, lifted by demand for fuel-efficient passenger cars, stylish European imports and well-priced Korean models.

Ford Motor Co of Canada was the top-selling automaker in Canada for the third year in a row while Chrysler, which was in third place in 2011, knocked General Motors from the No. 2 perch.

Vehicle sales are expected to continue to increase this year, nearing—or even exceeding—the record of 1.7 million set in 2002, on the back of pent-up demand left over from the recession and higher employment especially in Western Canada, analysts said.

"Expect another good year," said independent auto sector analyst Dennis DesRosiers, adding, however, that the softness evident in late 2012 "concerns us."

Ford said on Thursday it sold 276,068 vehicles in Canada last year, just 90 more than in 2011, including more than 100,000 F-Series trucks, which remained the bestselling vehicle in Canada for the third consecutive year.

Chrysler Canada's vehicle sales rose 6 per cent to 243,845 last year, its best for retail sales results since 2000.

"Our investment in fuel-efficient new vehicles and powertrains has propelled us to be the number two seller," President and Chief Executive Reid Bigland said, forecasting continued strong sales in 2013.

Dianne Craig, president and CEO at Ford of Canada, also said the company was optimistic about growth.

Vehicle sales at General Motors of Canada fell 6.6 per cent in 2012 to 226,825, putting it in third place for the year. GM of Canada President and Managing Director Kevin Williams described Canada's auto market as "highly competitive."


Although the Detroit Three automakers kept their long-held lead in the Canadian market last year, their market share dipped to 44.5 per cent from 47.2 per cent in 2011 as sales of imported vehicles grew at their expense, data from DesRosiers showed.

Japanese automakers reported strong annual sales growth in 2012 but that was off a low base in 2011 when a devastating earthquake and tsunami in Japan disrupted production and sales.

Toyota Canada said its sales rose 18.4 per cent to 192,058 last year while Honda Canada said combined Honda and Acura sales jumped 21 per cent to 148,712. The Honda Civic retained its position as Canada's top-selling passenger car for the 15th consecutive year.

Korean brands Hyundai and Kia both set new sales records in 2012, as did several European brands including BMW, Mercedes, Audi and Mini.


Vehicle sales in Canada overall dipped 4.9 per cent in December, DesRosiers figures showed.

Ford said its vehicle sales slipped 13 per cent to 16,874 in the month while GM Canada, whose lineup includes Chevrolet, Buick, GMC and Cadillac vehicles, said its sales fell 20 per cent to 14,623.

Sales at Chrysler Canada, which includes its Chrysler, Jeep, Dodge, Fiat and Ram models, rose 1 per cent to 14,756 vehicles. Chrysler Canada is wholly owned by Chrysler Group LLC, which in turn is controlled by Italy's Fiat SpA.

South of the border, U.S. auto sales rose 9 per cent in December, led by foreign manufacturers, capping off the best year for the industry since before the recession. The year's sales were driven by a slowly recovering economy, more available credit and the need for consumers and businesses to replace aging cars and trucks.


Ford said to plan first 30-year benchmark bond sale since 1999

Jan 4, 2013
By Matt Robinson
Bloomberg News

Ford Motor Co., the second-largest U.S. automaker, is planning its first benchmark offering of fixed-rate bonds maturing in at least 30 years since 1999.

Proceeds from the sale of debt due January 2043 will be used to refinance obligations and to fund its pension plan, according to a person with knowledge of the offering. The securities may be rated Baa3, the lowest level of investment grade by Moody's Investors Service, said the person, who asked not to be identified because terms aren't set.

The offering from Ford, which was lifted last year to investment grade at Moody's and Fitch Ratings, comes as auto sales surge and with borrowing costs touching record lows. Ford's U.S. light-vehicle sales rose 1.6 percent in December, the company said Thursday, exceeding the 1.2 percent increase forecasted by analysts surveyed by Bloomberg.

Ford's $1.8 billion of 7.45 percent bonds due July 2031 traded at 128.5 cents on the dollar to yield 5.06 percent Wednesday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The automaker issued $4.95 billion of 4.25 percent, 30-year convertible securities in December 2006.

Ford was raised to investment grade by Moody's in May and by Fitch in April. Standard & Poor's rates the company's debt BB+ or the highest level of speculative grade with a positive outlook, according to data compiled by Bloomberg.

Borrowing costs for investment-grade American companies have declined to 2.8 percent from last year's high of 3.93 percent, according to the Bank of America Merrill Lynch U.S. Corporate index data.

Barclays Plc, Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley are managing the Dearborn-based company's sale, the person said. General Motors Co. is the top- selling automaker in the U.S


Defined-benefit pension plans healthier in 2012: Mercer

The Globe and Mail
January 3, 2013

The solvency of Canadian defined benefit pension plans improved in 2012, a new Mercer study says.

The consultant said Wednesday that its Pension Health Index stood at 82 per cent on Dec. 31, up two percentage points for the fourth quarter and up six percentage points for the year.

However, the global pension, health and investment consultancy said economic factors were largely a non-factor.

Most of the improvement was due to increased employer contributions to fund deficits.

"The good news is that the financial position of Canadian pension plans improved during 2012," said Manuel Monteiro, partner in Mercer's financial strategy group.

"The bad news is that plan sponsors had to do most of the heavy lifting," added Mr. Monteiro, who noted that economic factors contributed only one percentage point to the improvement.

The Mercer Pension Health Index shows the ratio of assets to liabilities for a model pension plan with valuations filed on a calendar-year basis.

Among other things, it assumes a 50-50 split between active and retired members, contributions equal to current service cost, no plan improvements and special payments to fund deficits over a five-year period.

It also assumes a passive portfolio with asset mix of 42.5 per cent DEX Universe Bond Total Return Index, 25 per cent S&P/TSX Composite, 15 per cent S&P 500 (Canadian), 15 per cent MSCI EAFE (Canadian) and 2.5 per cent DEX 91 day Treasury bills.

Mr. Monteiro said that 2012, after a "devastating 2011," was not the bounce-back year that pension plan sponsors had hoped for.

"We estimate that only about one in 20 pension plans are fully funded on a solvency basis as of Dec. 31," he said.

"This will translate into higher cash funding requirements over the next few years, although this impact could be deferred through the use of temporary funding relief legislation as well as the use of letters of credit."


F-150's chief engineer
is no lightweight

First woman to steer iconic pickup aims to broaden appeal

By Karl Henkel
The Detroit News
January 2, 2013

Two years ago, Jackie DiMarco helped Ford Motor Co. break away from the traditional V-8 engines in its F-150 pickups for lighter, more fuel-efficient offerings.

Now, with the next-generation F-150 coming out in 2014, an even bigger proposition awaits her: Making the vehicle lighter — hundreds of pounds lighter, in fact — without losing durability or performance.

DiMarco is chief engineer for the F-150, which has been the best-selling pickup for nearly 36 years, and is poised Thursday to again be crowned the biggest selling vehicle — car or truck — of the year in the U.S.

She's the first woman to hold that position in the six-plus decades of the truck's existence. The 40-year-old, who grew up a short drive from a General Motors plant near Youngstown, Ohio, has worked on the F-150, plus the Expedition and Navigator, for two years.

Stepping in as chief engineer of the F-150, she faced a challenge: Swapping in a new line of powertrain options in 2010 that included a new V-6, V-8, and most significantly, a 3.5-liter EcoBoost V-6.

"There's been a lot of product change," DiMarco said. "On paper, the EcoBoost engine is a fantastic truck engine, and we knew it was the right thing to do. The challenge was the mindset that you need eight cylinders and you need the displacement."

Ford wildly underestimated the receptiveness of drivers to the smaller EcoBoost engine. In fact, the automaker now sells more EcoBoost-equipped F-150s in one month than it thought it would sell in a year.

"They've done a very good job convincing consumers that's the way to go," said Michelle Krebs, auto analyst at Edmunds.com. "The EcoBoost has almost become a brand in itself, which is brilliant."

With more than 40 percent of F-150 buyers opting for the EcoBoost engine, DiMarco said the new challenge has become trying to find enough of the engines to meet demand.

Versatility sought

When DiMarco parks her F-150 at her home in rural Ann Arbor, it's as if she just brought home a new swing set for her 9-year-old twin daughters, who would rather play in the bed of the truck than on their swings. "It's almost like a treehouse," DiMarco said.

While that's not exactly the intent of an F-150, the makeshift play place is representative of what DiMarco envisions for the truck. It will do much more than haul and tow — it will be versatile enough to be a family vehicle.

"We've got many different series within F-150," DiMarco said. "Certainly, the work truck business is important to us … but we really run the whole gamut. There are a lot of women driving the trucks."

She says there's a challenge in re-engineering the truck, but it has nothing to do with being a woman overseeing what has been the most masculine of vehicles. (She previously worked on the Mustang.) She sees her perspective as an advantage on the job.

"You feel a lot of pressure, but I never thought of it as being a female and having added pressure," said DiMarco, who has been with Ford since graduating with a pair of engineering degrees from Ohio State University. "Maybe there was. But I guess this is just what I've been doing for the last 16 years."

Appeals to women, too

Most truck purchasers will continue to be male — more than 8 in 10 F-150 buyers, according to R.L. Polk & Co. But DiMarco says women will continue to find the vehicles an attractive alternative.

She says the fuel efficiency of future trucks will continue upward. There will be enough room in the crew cab for child safety seats. And the trucks will still be able to tow about anything.

Or as DiMarco puts it, "nice enough to take to a black-tie event and strong enough to haul your boat."

She envisions the F-150 as a no-compromise vehicle capable of capturing a greater audience.

But broadening the truck's reach could be limited, Edmunds.com's Krebs said.

"I don't think we will return anytime soon to 10 years ago, where people who didn't really need trucks were using them as personal vehicles," she said. "But we know that the average age of trucks on the road today is nearly 13 years, and obviously there are going to be people coming back to the market, and people are living a very active lifestyle."


EI premiums & Passports
lead list of price hikes for 2013

Toronto Star
Joanna Smith
Ottawa Bureau

January 1, 2013

OTTAWA—Prepare for higher payroll taxes and pricier passports after ringing in the new year, but if you have any money left over then you can put some more of it into your tax-free savings account.

Canadians will see more money taken off their paycheques in 2013, with the federal government increasing Employment Insurance rates for both employees and their bosses.

That means the maximum annual EI premium you'll pay will increase to $891.12 this year, up from $839.97 in 2012.

As a small consolation, the maximum weekly EI benefit will rise to $501 in 2013 from last year's $485.

Meanwhile, the maximum annual EI premium for employers will rise to $1,247.57 in 2013 from $1,175.96 in 2012.

The bad news, as many will see it, is that the rules are getting stricter.

The Conservative government announced controversial changes to the employment insurance regime this spring that are coming into effect on Jan. 6.

The new rules, which redefine what constitutes a "reasonable job search" and "suitable employment," are meant to discourage claimants from turning down job opportunities while receiving benefits and to ensure that Canadians receiving EI benefits fill vacant positions before they are offered to foreign workers.

The changes will also divide claimants into three categories: long-tenured workers, occasional claimants and frequent claimants.

Frequent claimants will be required to accept any job they are qualified to perform and wages starting at 70 per cent of their previous hourly earnings after having received benefits for seven weeks.

Meanwhile, it will cost more to get a new Canadian passport this summer.

Other increases scheduled for 2013 include:

• Passport Canada says the cost of a new five-year passport for adults will increase to $120 from $87 beginning July 1, while the cost of a child's passport will increase to $57 from $37.

At the same time, the agency will also begin offering a new 10-year passport for $160.

Passport Canada says it has been in deficit since the 2008-09 fiscal year — losing about $4.59 per passport over the past four years — and has been making up the difference with previous surpluses that run out next year.

"The current fee structure hinders Passport Canada's ability to cover costs and expenditures while maintaining existing security and service standards. It also makes implementing enhancements such as the electronic passport (ePassport), one of the Government of Canada's commitments, financially impossible," the agency said in a statement posted to the Canada Gazette website on Nov. 30.

• Canada Pension Plan benefits will increase by 1.8 per cent for those retired people already receiving them. The maximum benefit for new recipients will now by $1,012.50 per month, an increase of $25.83.

• Old Age Security benefits will also increase by 0.2 per cent. This increase will affect the basic OAS pension, the Guaranteed Income Supplement and the Allowances.

The maximum basic OAS monthly pension someone can receive will increase from $544.98 to $546.07. These new benefit rates will remain in effect until Dec. 31, 2013.

• The cost of stamps is also going up, with the price of mailing a regular letter within Canada will rise 2 cents to 63 cents on Jan. 14.

• The amount of money Canadians can contribute to the Tax Free Savings Account per year will increase by $500 to $5,500 in 2013.

Gregory Thomas, the federal director for the Canadian Taxpayers Federation, sees that as the silver lining to a year that will otherwise bring increased payroll taxes, but notes the new contribution limit remains far below what Prime Minister Stephen Harper promised during the 2011 election is on the horizon.


In Memory of Terry Gorman

Terry Gorman
Oct 16, 1928 - December 29, 2012

Passed away peacefully at Trillium Hospital-Mississauga on December 29th 2012. Will be missed by beloved wife Maria Zenaida and loving children Brian Raymond, Mike (Lucy) and Peter Leo. Proud grandfather of Tanasa and Peter Christopher. Loving brother of Peter (Marilyn). Terence will be missed by his many nieces, nephews, extended family and co-workers in the Union (CAW) Local 1285 and National. Terry was elected CAW Local 1285 President in 1975 and served in that position for 18 years. He retired in October 1993.


Wheels Newsmaker of the
Year: Sergio Marchionne

Sergio Marchionne

December 29, 2012
Toronto Star - Wheels

By all accounts, the CEO of Fiat is a hard taskmaster. He works all the time and expects his managers to do the same. He carries five cellphones to keep track of all the companies he heads. He has two corporate aircraft at his disposal and maintains homes and busy offices in both Michigan and Italy. He wakes at 3:30 in the morning and tries to go to bed at 10 at night, seven days a week.

In 2012, he toughed home an auto contract for Chrysler with the Canadian Auto Workers union and gave a presidential hopeful a tongue-lashing, which helps to make Sergio Marchionne Wheels' Newsmaker of the Year.

What sets him apart from other managers?

"I think it's charisma," says Joseph D'Cruz, professor emeritus of strategic management at Toronto's Rotman School of Management. "He's got a lot of charm and when he chooses he can turn it on, but underneath it all there's steel."

Marchionne, now 60, learned a lot of his technique in Toronto, where his family moved when he was 14 years old; his father was a senior police officer in Chieti, Italy, who wanted to ensure a good education for his children. Young Sergio excelled, earning a law degree from Osgoode Hall and an MBA from the University of Windsor. He took on various financial management positions and was promoted all the way up to the board at Fiat, where the ailing company gambled in 2004 and made him CEO. Marchionne changed its entire top-down executive structure and turned the company around in 18 months.

Now he's done the same thing at Chrysler, in which Fiat bought a majority ownership in 2009. Under his direction, the company went from bailout basket-case to profitability, and paid off its $7.6 billion in government loans in less than two years.

Marchionne did not respond to requests for an interview with Wheels, but in September he described Chrysler's revival to the TV news show 60 Minutes. "I remember when I came here in 2009," he said. "There's nothing worse for a leader than to see fear in people's faces. It's been a long, rocky road, but the fear is gone. There's nothing worse in life than to sit there and be the victim of a process that's outside your control."

As CEO now of Chrysler, he's very much in control, wherever he may be in the world.

"One thing about Marchionne — he's hands-on, and I know he's always just a phone call away," says Ken Lewenza, the president of the Canadian Auto Workers who hammered out the Canadian contract this year for 8,000 Chrysler unionized employees.

During the entire negotiating period, Marchionne was at Fiat's Italian head office in Turin, but Lewenza says the CEO was in direct contact with his team and aware of everything on the table. This year, unlike Ford and General Motors, Chrysler did not agree to create new jobs.

"Marchionne is absolutely hands-on, and when it comes to the decision-making process, he's got to give the final stamp," says Lewenza. "There's no doubt about that.

"He's very focused on product quality — which the union always was, though sometimes it fell on deaf ears; he's focused on design; he's focused on how you grow market share. Admittedly, what makes or breaks a company is product, and he spends a hell of a lot of time — I tell you, a hell of a lot of time — with his product development team."

Chrysler's new vehicles are influenced by the European-styled cars that Fiat sells, which include the exotics of Ferrari and Maserati. Marchionne invested much of the government's bailout money in domestic research and development, says D'Cruz, adding that "he seems to have a flair for deciding what kind of design strategy Chrysler needs to follow. In the last few years, the designs have improved significantly, and he's brought an Italian flair to them."

The affordable Dodge Dart and the SRT Viper supercar were both introduced this year and there are more in the pipeline. In 2014, Alfa Romeo's sexy sportscars are expected to return to the U.S., though this is not yet confirmed for Canada.

Production is ramping up throughout the company, including at Jeep, although former U.S. presidential hopeful Mitt Romney suggested in an October campaign ad that Jeep assembly lines would soon be moved to China. U.S. President Barack Obama, "sold Chrysler to Italians who are going to build Jeeps in China," said the Ohio ad, which promised to protect American jobs.

Marchionne was swift to react, telling employees in a letter that U.S. Jeep employment had tripled since Fiat bought into the brand, and local assembly lines in China would have no effect on American assembly, which will "remain in operation in the United States and will constitute the backbone of the brand. It is inaccurate to suggest anything different."

Workers cheered his charismatic confidence in their product. Lewenza, however, is a bit more practical in his assessment of Marchionne.

"I don't know if it's charisma — I would say it's stamina right now," he says.

"He's a global CEO who's going through incredible pressures in Europe. He's publicly challenged the European auto industry to restructure. It's no secret that in Italy he's not seen as being as popular as in North America."

But in 2012, Marchionne succeeded in what he set out to do — and did so with very little sleep.

"I think that what he's done is empower confidence in his top management team and they're producing the results based on good leadership," says Lewenza.

"I don't think one man in isolation can save a company, but he certainly deserves credit for playing the lead role in doing so."


Ford to invest $773M in Metro Detroit plants in 2013, add jobs

By Karl Henkel
The Detroit News
December 28, 2012

Ford Motor Co. is preparing for its next wave of products with investments in southeast Michigan that will total $773 million in 2013.

The Dearborn automaker will modernize its Dearborn Stamping Plant with four new press lines for its next-generation F-Series trucks, due in 2014. It will retool its capacity-constrained Michigan Assembly Plant to increase the output of small cars.

In addition, Ford is making significant investments at the Van Dyke Transmission Plant, Livonia Transmission Plant and Sterling Axle Plant.

The investments are part of a nationwide $6.2 billion investment promise — which includes the addition of 12,000 new hourly jobs — Ford made to the United Auto Workers in 2011 when the last contract was signed. In all, Ford's 2013 investments will add 2,350 jobs in southeast Michigan.

"We're absolutely on track with all of the commitments," said Jim Tetreault, Ford's vice president of North American manufacturing, in an interview.

Ford will revamp facilities to increase flexibility at a time when plant space is at a premium. The automaker's North American plants are running at 114 percent capacity; General Motors Co. and Chrysler Group LLC are also running above 100 percent capacity.

Ford's $335 million investment in the Dearborn Stamping Plant will be critical for the automaker's next-generation F-Series trucks, specifically the best-selling F-150, which will need to shed weight to eventually meet federal fuel economy standards.

Joe Langley, senior analyst of North American forecasts at Troy-based market intelligence firm LMC Automotive, said Ford's retooling for the next-generation F-150 must be done strategically to avoid shortages.

"They can't afford to turn it off for even a month and retool factories," Langley said of Ford's Dearborn Truck Plant, home to three shifts of F-150 production.

Ford is also making a substantial investment in another Wayne County plant. The automaker is pumping $161 million in upgrades at the Flat Rock Assembly Plant, which by mid-2013 will be the company's most flexible plant, capable of building any type of car on any size platform.

The plant will initially handle spillover production of Ford's Fusion midsize sedan, currently built in Hermosillo, Mexico, and is slated to eventually produce the Taurus and Lincoln MKS.

The upgrades will mean 1,200 new jobs at Flat Rock. Ford expects to begin hiring for those positions during the second quarter of 2013; nearly all will be new to the company.

Ford's Michigan Assembly Plant in Wayne, which currently produces five cars, will get about $60 million to expand its stamping plant and add two stamping lines, allowing the automaker to insource manufacturing and increase plant production capacity.

That plant is running above capacity, but can still achieve greater output through improved in-plant efficiencies.

Tetreault said Ford achieved a 3 percent production increase in plant production efficiencies this year through small, in-plant changes.

Ford in 2013 will finish investing approximately $85 million at its Sterling Axle Plant, $87 million at its Van Dyke Transmission Plant and $74 million at its Livonia Transmission Plant.


Suit alleges false mpg
claims on Ford cars

By Karl Henkel
The Detroit News
December 27, 2012

A California-based law firm has filed a class-action lawsuit against Ford Motor Co., alleging the company has led a "false and misleading" marketing campaign for its 2013 C-Max and Fusion hybrid vehicles.

Law firm McCuneWright alleges fraud and negligent misrepresentation, among other things, by Ford in U.S. District Court in the Eastern District of California. The suit seeks punitive damages, including reimbursement for the purchase price of Ford's new hybrid vehicles.

"In its advertising and marketing campaign for the vehicles, Ford claimed that the C-Max Hybrid and Fusion Hybrid achieved a class leading 47 Miles Per Gallon," part of the 17-page suit read. "These materials helped Ford achieve record sales for the first two months of C-MAX Hybrid sales, outselling its rival, hybrid sales leader Toyota, but there was a problem. These ads were false."

The plaintiff in the suit is Richard Pitkin of Roseville, Calif., who purchased a C-Max Hybrid in October and says he averaged only 37 miles per gallon, lower than the Environmental Protection Agency rated 47 mpg.

Ford Motor Co. declined to comment Wednesday.

The EPA this month said it would review Ford's fuel-efficiency claims after Consumer Reports found the C-Max Hybrid and Fusion Hybrid got significantly worse fuel efficiency than the EPA window sticker suggests.

Consumer Reports said on Dec. 6 that in testing, the car's fuel efficiency fell 10 miles per gallon short: It got 37 mpg overall, with 35 mpg for city driving and 38 mpg highways. The Fusion Hybrid, certified for the same 47 mpg, got 39 mpg in testing overall, with 35 mpg city and 41 mpg highway.

"These two vehicles have the largest discrepancy between our overall-mpg results and the estimates published by the EPA that we've seen among any current models," Consumer Reports said in a statement.

One day later, McCuneWright, which has filed similar suits against General Motors Co. and Honda Motor Co., filed suit against Ford.

Consumer Reports said Toyota Motor Corp.'s Prius falls short of mileage expectations by 6 mpg and the Prius c Two falls short of mileage expectations by 7 mpg.

Ford says its hybrid vehicles are built to give customers a choice: a driver can operate the vehicle conservatively and achieve EPA mileage claims or drive the car for fun, because Ford hybrids get significantly better horsepower than competitor vehicles.


Ford sets '13 Lincoln sales goal

Automaker says 'good year' would be 18%
gain; experts say that's not high enough

December 22, 2012
Detroit News

Ford Motor Co. is eyeing double-digit sales gains in 2013 for its lackluster Lincoln Motor Co. brand.

The Dearborn automaker has set the bar for its Lincoln brand, telling dealers at a recent dealer meeting that an 18 percent rise in sales in 2013 would constitute a "good year," said a company source with knowledge of the meetings.

Any sales gains will benefit the brand, which has experienced more than a 60 percent sales decline from its peak two decades ago. But an 18 percent boost may not be enough for the struggling luxury brand.

"An 18 percent increase from this point will probably be a modest increase," said Jesse Toprak, vice president of industry analysis at TrueCar.com. "For them to show any kind of momentum, they need to have a 25 percent-plus year."

Ford and Lincoln do not release specific sales targets, but a 25 percent boost — a sales bump of about 20,000 units — would outpace TrueCar.com's luxury segment projections of double-digit sales growth.

But Lincoln is starting from a low point and Jim Farley, Ford's executive vice president of global marketing, sales, service and Lincoln, has said the brand — renamed Lincoln Motor Co. after a refresh earlier this month — is not aiming to be the luxury volume sales leader.

Lincoln, beginning with its new MKZ sedan out this month, hopes to distinguish itself in the segment by introducing new and unique designs, color schemes and technologies. The MKZ has been Lincoln's biggest seller, and dealers have said preorders of the new model are the highest for any Lincoln since the Navigator launched in the late 1990s.

A luxury adaptation of Ford's Escape SUV — the Lincoln MKC — will be shown at the North American International Auto Show next month. And in February, Lincoln will have its first ever Super Bowl ad, an $8 million investment. But some initial reviews of the MKZ signal more tough times for the Lincoln brand.

Edmunds.com, in a review of the MKZ this week, suggested Ford executives "cut their losses and get the head stone ready" if indeed the new sedan "is the best Ford can do." Detroit News auto critic Doug Guthrie said the MKZ is the "best-handling Lincoln yet," but that the car will not compete with the likes of Mercedes-Benz, Cadillac, BMW or Audi. The MKZ is also battling perceptions that it is simply a souped-up version of Ford's Fusion midsize sedan; the two vehicles


GM to shift Camaro production from Oshawa to Michigan plant

CTV News
December 20, 2012

General Motors is moving production of the Chevrolet Camaro from its Oshawa, Ont., plant to a Michigan facility, the company said in a statement denounced by the Canadian Auto Workers' union as a "betrayal."

GM said Wednesday that "lower capital investment and improved production efficiencies were key factors" in the move.

But CAW president Ken Lewenza said the automaker's decision is "a betrayal of the commitment made to the Canadian government, to Canadian taxpayers."

"It's a betrayal to our CAW membership and it's a betrayal to Canada relative to Canadian jobs in a very important industry in the province of Ontario," he said at a news conference in Oshawa.

However, the CAW's latest contract with GM guaranteed Camaro production at the Oshawa flex plant only until the end of the current generation. GM said production of the new Camaro will be consolidated with the production of the Cadillac CTS and ATS in Michigan because they are all rear-wheel drive vehicles and rolling them out from the same facility will improve efficiency.

The CAW said the move will cut production in Oshawa by as much as one third starting in late 2015 or early 2016. The union said it doesn't know exactly how many jobs will be lost as a result, but warned that auto parts companies in the region could also be affected.

"We are obviously very much frustrated today," Lewenza said, adding that he has already spoken to Prime Minister Stephen Harper's chief of staff and Ontario Premier Dalton McGuinty about the issue.

"I asked (McGuinty) to use all of his political will to talk to General Motors about this very terrible decision," he said, calling on GM to replace 100,000 vehicles a year worth of production once the Camaro is gone.

Federal Finance Minister Jim Flaherty said Wednesday that GM remains committed to the Oshawa flex plant, which employs about 2,000 people.

"I haven't heard a word about job losses, I can tell you that. So I think if anyone is presuming that there will be job losses two and a half years from now, I think that's a huge presumption," he said.

The most recent labour deal between CAW and GM includes a commitment to create or maintain 1,750 jobs.

GM invested $740 million in 2006 to build a flexible assembly line at its Oshawa operation, where it will produce the new versions of the Cadillac XTS and the Chevrolet Impala. The company has said that it will add a third shift in Oshawa to build the Impala.

Ottawa and Ontario contributed $13.7 billion to help bail out GM and Chrysler more than three years ago and own about nine per cent of GM's common shares.


Ford aims to keep improving

By Karl Henkel
The Detroit News
December 19, 2012

Detroit — Ford Motor Co.'s chief operating officer said Tuesday the company is working toward improving the quality of its products amid multiple recalls and continued issues with its infotainment system.

"I think overall, if you take the long view over the past five, six years, our quality has improved significantly," said Fields, speaking at an event where the Ford Motor Company Fund made a $10 million commitment to strengthening neighborhoods in Southwest Detroit.

"Clearly over the last couple of years, we've had some isolated areas, particularly around MyFord Touch and some of our transmissions. We've seen improvements and we realize we have to keep at this, and we will."

But Ford's MyFord and MyLincoln Touch infotainment systems continue to frustrate some consumers, though Ford recently came out with another software update and has since extended warranties for the tech systems. Fields said the company continues to listen to customers in an effort to make MyFord Touch more intuitive.

Ford has also had two important vehicles — the Escape SUV and Fusion midsize sedan — recalled on multiple occasions for possible engine fires. Fields stressed that the automaker gave dealers "carte blanche" to satisfy customers with rental cars to make up for multiple recalls.

"We've had a few issues but our approach with any of our launches is if we see an issue, we proactively go out and fix it for our customers," Fields said. "In the case of the recent recall, we tried to minimize the inconvenience for our customers."

Ford has also had the fuel efficiency of its newest hybrids questioned by drivers; the fuel-efficiency claims are being reviewed by the Environmental Protection Agency.

Fields said the best indicator of the company's reliability is brand recognition and sales of new products.

"Our brand favorability is very healthy," said Fields, who took over as Ford's first COO in six years on Dec. 1. "The proxy for that is, how are our new products doing in the marketplace?"

Fields said Ford's C-Max Hybrid, Fusion and Escape are some of the fastest-turning on dealer lots.


Toyota pays $17.35M
for delaying recall

Fourth time since 2010 maximum
fine set for holding up call-backs

Washington — Toyota Motor Corp. said today it will pay a record-setting $17.35 million U.S. fine for delaying the recall of 154,000 Lexus SUVs over pedal entrapment issues, and promises that it will make significant changes in how it responds to safety issues.

In a significant blow to the Japanese automaker, the National Highway Traffic Safety Administration said it was imposing the largest fine in U.S. history for a single recall campaign over the June call-back of 154,000 2010 Lexus RX 350 and RX 450h vehicles.

The fine, and stiff government conditions that Toyota agree to monthly meetings and significant internal reforms, are dramatic setbacks for the automaker that had vowed to work more closely with U.S. safety officials.

It's the fourth time since 2010 that Toyota has paid the maximum allowable fine for delaying recalls. In 2010, Toyota paid $48.8 million in civil penalties for failing to recall millions of vehicles, in three separate campaigns, in a timely manner.

In a draft five-page agreement with the U.S. government obtained by The Detroit News, Toyota said it will restructure its organization to consolidate responsibility for quality assurance and review of safety-related issues in the United States. It did not admit any wrongdoing.

Toyota also agreed to meet with NHTSA monthly for six months to report on all "alleged floor mat pedal entrapment issues in vehicles manufactured by Toyota, as well as any other actual or potential safety-related defect issue." NHTSA may extend Toyota's monthly meetings for an additional six months.

U.S. officials said they expect Toyota to do better. "With today's announcement, I expect Toyota to rigorously reinforce its commitment to adhering to United States safety regulations," Transportation Secretary Ray LaHood said in a statement.

Toyota issued a statement that didn't address the allegation it again failed in ordering timely recalls. "We continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customers' needs," said Ray Tanguay, chief quality officer for Toyota North America. "We agreed to this settlement in order to avoid a time-consuming dispute."

This is the latest in a series of recall setbacks for Toyota. In October, Toyota recalled 7.43 million vehicles worldwide, including 2.5 million in the United States over faulty power window switches. It was the largest single recall in the company's history.

So far this year, Toyota leads all automakers in the United States with 5.3 million vehicles recalled in 13 campaigns. That's about 2 million more than Honda Motor Co., which has the second-highest number.

The new fine is still a small fraction of the automaker's global profits, expected to total $9.7 billion for its fiscal year that ends in March. But could dent Toyota's reputation for quality — an image it has been working to restore.

Toyota, which has recovered from supply disruptions linked to natural disasters in Asia in 2011, is almost certain to reclaim the mantle of world's largest automaker for 2012.

3100 complaints

Toyota and NHTSA have been dealing with pedal entrapment issues in floor mats for more than a decade.

Despite a half-dozen NHTSA investigations into sudden acceleration claims in Toyotas starting in 2000, the automaker initially did little. In September 2007, Toyota agreed to recall 55,000 all-weather floor mats.

Internal documents obtained by Congress show Toyota repeatedly bragged about saving more than $100 million by not conducting a more expensive recall.

The high-profile deaths of four people, including an off-duty California Highway Patrol officer behind the wheel, near San Diego in 2009 brought the issue to the headlines. The officer, his wife, daughter and brother-in-law were killed when a Lexus SUV sped out of control. Investigators blamed a wrongly installed trapped floor mat in a dealer loaner.

Over 10 years, NHTSA received nearly 3,100 complaints, alleging at least 93 deaths from Toyota sudden acceleration incidents, but has confirmed a link in just five deaths.

In January 2010, pedal problems forced Toyota to temporarily stop selling more than 60 percent of its vehicles in the United States as it searched for a fix. Its top executive, Akio Toyoda, was called to testify before Congress. Toyota still faces lawsuits in connection with its recalls, though it has settled some.Since 2009, Toyota has recalled 7.1 million vehicles for pedal entrapment issues, all in the United States. Another 5.3 million have been recalled worldwide for other pedal issues, including sticky pedals.

Fine costs to climb

The latest pedal entrapment recall for 154,000 2010 Lexus SUVs that led to the new fine came after NHTSA began an investigation in May after it saw an increase in complaints.

Toyota told NHTSA in June it knew of 63 reports of possible floor mat pedal entrapment.

NHTSA sought an immediate recall for what it deemed "a serious safety issue" and then opened an investigation into Toyota's conduct. Toyota said in June it knew of at least 12 reports of accidents and two minor injuries.

NHTSA Administrator David Strickland called on automakers to follow the law. "Every moment of delay has the potential to lead to deaths or injuries on our nation's highways."

Toyota paid the maximum statutory fine in the three earlier recall probes by NHTSA. Fines increase yearly to account for inflation, which is why the current maximum fine is $17.35 million.

Congress earlier this year agreed to hike maximum recall fines to $35 million. The new maximum fine will take effect next year.

History of fines

Today: Toyota says it will pay a record-setting $17.35 million fine for delaying the June call-back of 154,000 2010 Lexus RX 350 and RX 450h SUVs.

December 2010: Toyota pays $16.4 million after delaying recall of nearly4.9 million vehicles for pedal entrapment. It also pays $16 million to settle an investigation it delayed a 2005 recall of 980,000 4Runners and pickups for faulty steering rods.

April 2010: Toyota pays $16.4 million for failing to notify NHTSA of when it learned of a "sticky pedal" defect.


Ford unveils updated
family of Transit vans

2014 Ford Transit Van

By Karl Henkel
The Detroit News
December 17, 2012

Detroit — Ford Motor Co.'s new Transit family of vans will be larger, more customizable and more fuel-efficient when they make their U.S. debuts next year.

The Dearborn automaker on Friday unveiled the full-size Transit commercial van and compact Transit Connect van, and also revealed some of the vehicles' specifications. The reveal came in advance of next month's North American International Auto Show in Detroit. Like General Motors Co. with its new pickup trucks unveiled Thursday, Ford is aiming to get maximum exposure in the buildup to the show.

"This is a really important, profitable part of our business," said Jim Farley, Ford's executive vice president of global marketing, sales, service and Lincoln. "The commercial (vehicle) part of the business for us is part of the company's DNA."

The Transit full-size commercial van will eventually replace Ford's E-Series vans, which have been produced for more than a half-century. For 33 years they have been the best-selling commercial vans in the U.S., with widespread use throughout the business and medical communities.

The automaker's new Transit — to be built in Kansas City, Mo. — has been dubbed a "game changer" as one of Ford's global products by Joe Hinrichs, Ford's newly named president of the Americas. Ford already sells its Transit commercial van in Europe.

Global commercial vehicle sales are expected to grow by nearly 5 million during the next five years. GM last year sold more than 1.76 million commercial vehicles worldwide compared to Ford's 1.69 million, according to Ward's Automotive Reports.

For its new Transit, Ford will abandon larger, gas-guzzling engines for smaller, efficient and more powerful powertrains, as it has throughout its vehicle lineup. Those engines should help the Transit get 25 percent better fuel efficiency than its similar E-Series predecessors.

The 2013 E-Series vans have three engine options: a 4.6- or 5.4-liter V-8 and a 6.8-liter V-10.

The new Transit will come with a standard 3.7-liter V-6, or can be equipped with a 3.5-liter EcoBoost (turbocharged) V-6 and a 3.2-liter turbocharged diesel engine.

The 3.5-liter EcoBoost V-6 is the same engine Ford offers in its F-150. Currently, 42 percent of F-150 customers choose the smaller V-6. Tim Stoehr, Ford's commercial truck marketing manager, expects the same from Transit customers.

"It's a proven powertrain now," Stoehr said.

Ford will offer the 3.7-liter V-6 with a compressed natural gas and liquid propane gas prep kit for customers who prefer to use the cheaper fuels.

The new Transit will have many configurations, including three body lengths, two wheelbases, three roof heights and van, wagon, chassis cab and cutaway variations.

The largest Transit will have nearly 500 cubic feet of cargo room, more than twice the volume of the standard E-Series.

Details about pricing and fuel efficiency have not been released.

The all-new compact Transit Connect commercial van will have two wheelbase lengths, two trim levels and two engine options, including Ford's 1.6-liter EcoBoost that could put the van's fuel efficiency above 30 mpg highway.

The current generation Transit Connect van was named North American Truck of the Year in 2010 and now sells at an annual rate of about 35,000.

The two commercial vehicles join the previously introduced Transit Connect Wagon: a new five- and seven-seater van that is also expected to get better than 30 mpg.

Both the Transit Connect and Transit Connect Wagon will be built in Valencia, Spain.


Ontario Tories like American-style right-to-work legislation

Richard J. Brennan
Toronto Star
December 15, 2012

Tories are eager to follow in the footsteps of Michigan's anti-union legislation next week and turn Ontario into a right-to-work jurisdiction where workers can opt out of joining unions and paying dues.

The move is a near the top of the agenda for the Progressive Conservatives led by Tim Hudak should they be elected come the next general election.

Senior Tory MPP Christine Elliott said Friday that only then will new businesses pick Ontario because they will have the "flexibility" they need to get the job done without tangling with a unionized workforce.

"What we really need to do is develop a very nimble workforce and that's what the right-to-work legislation is intended to deal with so that businesses when they need to adapt to changing conditions in the workplace they have the flexibility to be able to do that. That's what we don't necessarily have here right now …," she said.

"We believe that people should have the right to decide whether to join a union or not . . . ."

The Tories would rip up the Rand Formula that has been around since 1946. It requires that all members of a bargaining unit pay dues even if they hadn't voted to join the union when it was formed.

Michigan politicians earlier this week passed two laws that would weaken unions in the labour stronghold, dealing a blow to both private and public sector unions.

During a visit to a Michigan automotive engine plant Monday, President Barrack Obama said, "What they're really talking about is giving you the right to work for less money."

David Doorey, an associate professor of Labour and Employment law at York University's School of Human Resource Management, says on his blog "the purpose or result of a 'right-to-work' law is to render meaningless any collective bargaining relating to union dues collection." And that he suggested could result in a challenge under Canada's Charter of Rights and Freedoms.

University of Toronto Professor Brian Langille, who specializes in labour law, said Hudak is talking about "tinkering with something pretty basic and structural to our system . . . (of) labour relations" that could result in labour chaos.

CAW National President Ken Lewenza said he hasn't spoken to one employer who agrees with Hudak, "because they know it is going to result in a labour relations climate comparable to the Mike Harris days," referring to the former Ontario Tory premier who battled with unions.

NDP Leader Andrea Horwath said the Tories are going in a "wrong-headed direction."

"Driving down wages and turning Ontario into the next Alabama is simply a recipe for more people being squeezed out of the middle class, more hardship and more difficulty and will not stimulate local economy because people won't have any money to spend," she said.

But Elliott insisted that taking away the power of unions will result in higher wages "because we will have more businesses locating here. They will do well, they will be able to hire more people and pay higher wages."


CPP reform back on
the national agenda

OTTAWA — The Globe and Mail
Friday, Dec. 14 2012

Canada's finance ministers are reopening the debate on reforms to the Canada Pension Plan with an aim to increase benefits as governments come to grips with the reality that Canadians are not saving enough for retirement.

A calmer economy, continued concerns over lack of savings and new leadership in Alberta and Quebec appear to have changed the political dynamic that had pushed CPP reform onto the back burner of the national agenda.

Federal Finance Minister Jim Flaherty remains reluctant to approve CPP reforms, however, and is expected to try to focus the discussion on Ottawa's preferred option, which is voluntary pooled registered pension plans (PRPPs) that would be privately managed. Other finance ministers, including Ontario's Dwight Duncan and Manitoba's Stan Struthers – plan on advocating for an expanded CPP.

The Globe and Mail has learned that a policy paper on CPP reform prepared by federal and provincial public servants will be presented to the ministers during their yearly December gathering for two days of meetings, which will be held this year at Meech Lake. Not enough Canadians are taking advantage of existing voluntary options such as RRSPs, say supporters of CPP expansion, including the seniors' lobby group CARP.

They also stress that CPP has a proven track record as a low-cost, well-run and fully funded public program.

Officials will lay out several options, including one described as a "three 10" plan, sources say.

Under that scenario, the year's maximum pensionable earnings for CPP would increase by $10,000 (it is currently at $50,100), the maximum benefit would increase by 10 percentage points – to 35 per cent from 25 per cent – of pensionable earnings and the changes would be phased in over 10 years. Increased benefits would require higher premiums, but the size of proposed increases is not clear. Similar options are also expected to be presented.

Public-sector unions had been calling for benefits to be increased to 50 per cent of pensionable earnings, but officials are attempting to craft a plan that would fit the expressed political desire for a "modest" increase to CPP.

Mr. Flaherty had initially supported some form of CPP increase, but he surprised and upset some provinces in December, 2010, by reversing that support. He argued at the time that not enough provinces were on board and it was a bad time economically to increase premiums. A federal source said Ottawa's position has not changed.

Altering CPP requires the support of two-thirds of the provinces representing two-thirds of the population. In 2010, both Alberta and Quebec opposed CPP enhancements, and the two provinces are big enough to block any changes.

As a result, work focused on what Ottawa and the provinces could all agree on: pooled plans. These privately managed savings vehicles are aimed at providing a low-cost option for employers who do not currently offer a pension plan. Employees could contribute to a PRPP via automatic payroll deductions.

Several provinces are still studying whether to approve the plans. Only Quebec is clearly moving ahead with one.

But several influential voices have chimed in to say PRPPs are not enough on their own.

David Denison, who stepped down this year as chief executive of the Canada Pension Plan Investment Board, recently spoke of pooled plans' limitations in an interview with The Globe.

"As they are designed right now, I don't think they'll make an impact," said Mr. Denison, who is widely respected for his seven years managing CPP's $170-billion in investments.

Ontario has said it will not approve PRPPs without a plan to enhance CPP.

The resistance to CPP changes appears to be weakening. Alberta remains opposed, but its rhetoric has softened under Premier Alison Redford. Quebec's new Parti Québécois government says it now supports both PRPPs and work on CPP enhancements. Quebec has its own version of CPP called the Quebec Pension Plan.

In its November budget, Quebec's Parti Québécois government said it would work with the other provinces and Ottawa "to assess the possibility of making a gradual and fully funded improvement to the Quebec Pension Plan and the Canada Pension Plan."

Alberta Finance Minister Doug Horner told The Globe his government is focused on a potential PRPP, but said he'll listen to what others have to say on CPP reform.

"I'm always open to the discussion," he said.

Saskatchewan Finance Minister Ken Krawetz said he wants PRPPs to succeed.

"But at the same time we have to be open to what might changes to the CPP be on a modest basis," he said.


It's not the political right
that's killing unions

December 13, 2012
Thomas Walkom
Toronto Star

For the conservative right, trashing unions is great sport.

The fun just keeps happening. On Wednesday evening, Conservative MPs (with the exception of five brave souls) pushed Bill C-377 through the Commons. It's designed to tie unions up in red tape and — its backers hope — embarrass labour's leadership.

A day earlier, Michigan's Republican-dominated legislature rammed through a so-called right-to-work law aimed at weakening unions in that state.

And Ontario Conservative leader, the rollicking Tim Hudak, says if his party wins power he'll scrap what's known as the Rand formula — which requires all employees represented by unions to pay dues.

Meanwhile, Conservative backbench MP Pierre Poilievre is agitating for Canadian right-to-work measures that would hamstring unions under federal jurisdiction, particularly those that represent public sector workers.

All of this comes as Conservatives and their media allies rage non-stop against what they call union bosses.

In the Commons last week, backbench Conservatives levelled almost as many attacks on "union bosses" for sins they didn't commit as they did on the New Democrats for their non-existent support of a carbon tax.

So it's no wonder that the unions are worried. This federal government has a hate on for organized labour. And if Hudak wins in Ontario, the hate could spread.

But labour's real problems go far beyond the provocations of the right. Indeed, what little research does exist suggests that right-to-work laws have little effect.

One classic study, published in the 1975 Journal of Political Economy, concluded that the effect of U.S. right-to-work laws was mainly symbolic and that other factors better explain why unions have had such a tough time in places like the U.S. south.

Another piece earlier this year by the publication Investors Business Daily came to similar conclusions. It noted that the rate of unionization among employees in the right-to-work state of Nevada, for instance, is well above that of many pro-union jurisdictions and exceeds even the national average.

What's really killing unions is not the political right. It is that, for too many workers, organized labour is no longer relevant.

In 2011, federal figures show, 31 per cent of Canadian workers overall were unionized. Of these, the vast majority are middle-aged or older. For younger workers between the ages of 15 and 24, the rate of unionization is just under 16 per cent.

Moreover, union membership is concentrated increasingly in the public sector. Only 16 per cent of all Canada's private sector workers are members of labour unions. When Conservatives rant on about the fat-cat public workforce, they find a ready audience.

The reasons for all of this are well-known. Manufacturing, which had been the bedrock of unionism, has collapsed in North America. Part-time and contract employment are the new norms.

Unions — which understandably pay attention first and foremost to their own members — haven't lobbied hard enough to tighten up the employment standards legislation that allows these low-wage practices.

Nor have most unions figured out a way to deal with a new kind of workplace, where people no longer labour in large factories and where strikes can be circumvented by technology.

The Canadian Autoworkers and their soon-to-be merger partner, the Communications Energy and Paperworkers, say they want to expand their reach into the ranks of the unemployed and underemployed. We shall see how that works out.

But until labour addresses these fundamental issues, the hardest of hard-line Conservatives will continue to smirk and poke.

They are jackals circling their prey. They can't bring the beast down themselves. But they eagerly anticipate its collapse.

Note to readers: Most Star writers, including me, are members of the Communications Energy and Paperworkers Union of Canada. Managers, who determine what is published in the Star, are not.


Michigan Legislature gives final approval to laws limiting unions
in huge defeat for labour

Union members from around the U.S. rally at the Michigan State Capitol to protest a vote on Right-to-Work legislation Dec. 11 in Lansing, Michigan.

December 12, 2012
John Flesher and Jeff Karoub
The Associated Press

LANSING, MICH.—Two laws that would weaken union power in the labour stronghold of Michigan awaited the governor's expected signature after the Republican-dominated House of Representatives passed them Tuesday, a devastating and once unthinkable defeat for organized labour in a state considered a cradle of the union movement.

The House passed the anti-union bills Tuesday as hundreds of protesters shouted "shame on you" from the gallery and huge crowds of labour backers massed in the state capitol halls and on the grounds. Gov. Rick Snyder says he will sign the laws — one dealing with private sector workers, the other with government employees — as early as Wednesday.

Foes of the laws, including President Barack Obama, are trying to keep the spotlight on this latest battleground in the war over union rights. Democrats offered a series of amendments, one of which would have allowed a statewide referendum. All were swiftly rejected.

"This is the nuclear option," Democratic Rep. Doug Geiss. "This is the most divisive issue that we have had to deal with. And this will have repercussions. And it will have personal hard feelings after this is all said and done."

Once the bills are enacted, it will mark another defeat for the labour movement in the industrial Great Lakes region, known as the Rust Belt for its once-booming manufacturing sector. Michigan, the centre of the U.S. auto industry, will become the 24th right-to-work state, banning requirements that nonunion employees pay unions for negotiating contracts and other services.

"This is about freedom, fairness and equality," Republican House Speaker Jase Bolger said. "These are basic American rights — rights that should unite us."

In recent years, legislatures in states like Michigan, Ohio and Wisconsin have been taken over by an aggressive Republican majority that vowed to curtail union rights. Even with the outcome considered a foregone conclusion, the heated battle showed no sign of cooling as lawmakers prepared to cast final votes.

Hundreds of protesters flooded the state capitol hours before the House and Senate convened, chanting and whistling in the chilly darkness. Others joined a three-block march to the building, some wearing coveralls and hard hats.

Sen. John Proos, a Republican who voted for the right-to-work bills when they cleared the state Senate last week, said opponents had a right to voice their anger but predicted it would fade as the shift in policy brings more jobs to Michigan.

In an interview with WWJ-AM, Snyder said he expects the bills to be on his desk later this week. He said the intention is to give workers a choice, not to target unions.

"This is about being pro-worker," Snyder said.

In other states, similar battles were drawn-out affairs lasting weeks. But Snyder, a business executive-turned-governor, and the Republican-dominated Legislature used their political muscle to rapidly introduce and force legislation through the House and Senate in a single day last week. Demonstrators and Democrats howled in protest, but to no avail.

On Tuesday, asked about the speed at which the legislation moved forward, Snyder said the issue wasn't rushed and that the question of whether to make Michigan a right-to-work state has long been discussed.

For all the shouting, the actual benefit or harm of such laws is not clear. Each camp has pointed to studies bolstering their claims, but one labour expert said the conclusions are inconclusive.

"Very little is actually known about the impact of right-to-work laws," Gary Chaison, a professor of labour relations at Clark University in Massachusetts, said Monday. "There's a lot of assumptions that they create or destroy jobs, but the correlation is not definite."

Democrats contend Republicans, who lost five Michigan House seats in the November election, wanted to act before a new legislature takes office next month. In passionate floor speeches last week, they accused the majority of ignoring the message from voters and bowing to right-wing interest groups. But they acknowledged there was little they could do to stop the fast-moving legislation.

Obama highlighted the issue during his visit Monday to an engine plant in Michigan.

"These so-called right-to-work laws, they don't have anything to do with economics, they have everything to do with politics," Obama told cheering workers. "What they're really talking about is giving you the right to work for less money."


Ford: Software upgrade will
fix fire risk on recalled cars

By David Shepardson
Detroit News Washington Bureau
December 11, 2012

Ford Motor Co. said it will install a software upgrade to repair nearly 90,000 vehicles that were recalled for engine fire risks.

The Dearborn automaker said Monday the software fix will solve the problem on recalled 2013 Escapes and 2013 Fusions with 1.6-liter engines.

Ford announced the recall Nov. 30 after reports that fluid leaks caused by overheating had caused 13 fires, including 12 in Escapes. There have been no reports of injuries.

The original cooling system design, Ford said, was unable to address a loss of coolant system pressure under certain conditions. Updates to the cooling system software will better manage engine temperatures.

Beginning early next week, customers will be able to get the software update at their dealer. Ford said the repairs should take about a half-day. Some vehicles that had overheating may require dealers to replace some parts.

"We remain absolutely committed to continuously improving and providing the highest-quality vehicles to our customers. When a potential issue is identified, we act promptly on behalf of our customers, as we did this time," said Raj Nair, Ford Group Vice President, Global Product Development.

Nair said "there's no mechnical problem with the engine. This is how we're electronically controlling some of the valves."

The recall covers 73,320 Escapes and 15,833 Fusions in North America.

The recall is only for Escape SE and SEL models with 1.6-liter engines, most of which were sold in the U.S.

The recall was the fourth for Ford's 2013 Escape since its introduction in June.

The redesigned Escape is a key vehicle for the Dearborn automaker. Ford said sales of the new Escape were up 4.1 percent in October to 19,832. Escape sales overall this year are up 6.3 percent, though that includes the older models sold before the 2013 models went on sale.


Ford will import second diesel engine for its Transit van

By Karl Henkel
December 10, 2012
The Detroit News

Ford Motor Co. says it will bring a second turbocharged diesel engine to North America next year in its new Transit full-size commercial van.

The Dearborn automaker will import a 3.2-liter five-cylinder engine from South Africa as an option for the 2014 Transit, which will be built at Ford's Kansas City Assembly Plant in Missouri.

"Commercial van drivers spend most of their working hours behind the wheel," said Joe Bakaj, Ford's vice president of powertrain engineering. "We know they want a fuel-efficient diesel engine with smooth, responsive performance and low operating costs."

The power for the 3.2-liter engine has not yet been certified. In Europe, the engine, in the six-speed automatic transmission Transit, produces 197 horsepower and 347 pound-feet of torque.

Fuel-efficiency ratings and prices for the vehicle also have not been released.

The Transit van, which will eventually take over for Ford's E-Series vans here in North America, will also come with an optional 3.5-liter EcoBoost gasoline engine.

Ford already offers a 6.7-liter V-8 diesel engine in its F-Series Super Duty trucks.

More passenger vehicles are being equipped with diesels as they become more powerful and fuel-efficient.

Sales of cars with diesel engines are up more than 25 percent this year, led by automakers Volkswagen, Mercedes-Benz and BMW


EPA will review Ford C-Max, Fusion 47 mpg claims

By David Shepardson and Karl Henkel
December 9, 2012
The Detroit News

Washington — The Environmental Protection Agency said Saturday it will review claims that two new Ford Motor Co. vehicles aren't getting the advertised 47 miles per gallon.

Consumer Reports on Thursday said the C-Max hybrid's fuel efficiency fell 10 miles per gallon short in testing — it got 37 mpg overall, with 35 mpg for city driving and 38 mpg highway. The Fusion Hybrid, certified for the same 47 mpg, got 39 mpg in testing overall, with 35 mpg city and 41 mpg highway.

"These two vehicles have the largest discrepancy between our overall-mpg results and the estimates published by the EPA that we've seen among any current models," Consumer Reports said in a statement.

The EPA said in a brief statement Saturday it "will look at the report and data."

Last month, Hyundai Motor Co. and Kia Motors admitted overstating mileage claims on 1.1 million vehicles in the U.S. and Canada, in the face of an EPA investigation

The EPA's investigation is ongoing; the agency may seek civil penalties over the misstated claims. A Senate Committee has also asked for more information on the automaker's plan to compensate owners for the mileage claims and the companies face several lawsuits.

EPA said this week that hybrids have far more variability in miles per gallon.

"There's absolutely no doubt: A hybrid is going to be far more variable than a conventional vehicle," said Linc Wehrly, director of light-duty vehicle center compliance division at the EPA's Ann Arbor laboratory.

"If you said that I could operate in EV-mode until 60 miles an hour for a period of time, you go a long portion on (the EPA) test cycle without the engine going on. That's going to improve your fuel economy."

But Ford says customers so far have been impressed with both C-Max and Fusion hybrids.

"Early C-Max Hybrid and Fusion Hybrid customers praise the vehicles and report a range of fuel economy figures, including some reports above 47 mpg," Ford spokesman Wes Sherwood said in an email. "This reinforces the fact that driving styles, driving conditions and other factors can cause mileage to vary."

All vehicles are run through the same EPA fuel-efficiency test; that test, however, is not administered by the EPA. The automakers conduct the test, but the EPA often conducts reviews.

Most vehicles' real-world gas mileage is less than the EPA sticker number, and can often be 20 percent less than the sticker number depending on speed, temperature and other factors.

With hybrids, however, the gap is much wider — as high as a 30 percent drop, the EPA says. And as the fuel efficiency of hybrids continues to climb, the gap is growing wider between EPA figures and real-world fuel efficiency.

Consumer Reports says Toyota Motor Corp.'s Prius falls short of mileage expectations by 6 mpg and the Prius c Two falls short of mileage expectations by 7 mpg.

The C-Max can travel at a top speed of 62 mph in electric-only mode. Above 62 mph the car's four-cylinder gasoline engine starts and helps to recharge the battery.

That top electric-only speed means that for the portion of the EPA's highway fuel-efficiency test, which maxes out at 60 mph, the car can travel in electric-only mode without the gasoline engine kicking on.

In large portions of the United States, the EPA testing protocols deviate far from real-world driving scenarios: At 60 mph, the speed is approximately 10 mph below most highway speed limits in Metro Detroit (and most Midwestern cities), but is more indicative of the often-gridlocked and much slower highways in California.

But for drivers in Middle America who regularly drive faster than 62 mph, the benefits of a hybrid vehicle are diminished.

Ford admits that speed is one of the biggest factors when it comes to fuel-efficiency fluctuations, but said customer reaction to the vehicle has been overwhelmingly positive.


Ford recalls '13 Fusion
for faulty headlights

By David Shepardson
Detroit News Washington Bureau
December 7, 2012

Washington — Ford Motor Co. said Friday it is recalling its 2013 Fusion for the second time in less than a week, calling back more than 20,000 new sedans in North America to replace faulty headlights.

The Dearborn automaker said Friday that some low-beam headlights may not be bright enough. Some 2013 model year Fusion vehicles produced at Ford's Hermosillo Stamping and Assembly Plant in Mexico were built with headlamp assemblies that may not have had the low-beam headlamp projector coating properly cured during its manufacturing process.

Improperly cured lamp projectors will become hazy through operation, over time, reducing the brightness of the low-beam lamp, Ford told the National Highway Traffic Safety Administration.

The recall covers vehicles built between February and Oct. 20, including 19,106 in the United States and 1,098 in Canada.

Ford said no injuries or crashes have been reported related to the problem. Ford first received reports of the problem in early October and an investigation discovered the problem.

Letters to owners will be sent next week.

Ford said last week it was recalling 89,000 2013 vehicles — including 15,833 Fusions in North America with 1.6-liter engines for fire risks. The recall included 73,000 2013 Escapes — the fourth recall for the new SUV since June and the third for fire issues. Ford said it had reports of 12 fires in Escapes and one in a Fusion, but said there have been no injuries.


Ford's rivals catching up in technology race

Systems like GM's MyLink hookup with Apple make headway

By Karl Henkel
The Detroit News
December 6, 2012

Ford Motor Co. was among the first out of the starting blocks with its innovative Sync voice-recognition system and MyFord Touch infotainment console.

But some automakers, including General Motors Co., have taken the tech race at a more measured pace and are now true competitors with Ford when it comes to in-car information and entertainment.

Even Mark Fields, Ford's chief operating officer, admits a system like GM's updated Chevrolet MyLink and new Apple Inc. Siri personal assistant may be the way of the future.

That's a deviation from Ford's consistent backing of Sync and MyFord Touch, which despite complexities and problems have resonated with customers, the Dearborn automaker has said.

"It might end up being a hybrid (system)," Fields said in an interview at the Los Angeles Auto Show last week. "From an (automaker's) perspective, we want to ensure safety and integration into the rest of the vehicle that are so important.

"As we go forward, I think just plugging in a smartphone and allowing that to do a lot of operations in the vehicle, there could be some issues with that."

Though Fields acknowledged the ever-changing nature of technology and the need to re-evaluate plans and work more closely with the consumer-electronics industry, he would not speak specifically about GM's simpler in-car tech systems.

GM's tech splash at the Los Angeles Auto Show was the addition of Siri and a reformulated Chevrolet MyLink system with a cleaner interface, larger buttons and more personalization.

Ford took its MyFord Touch screen and downsized it to 61/2 inches from 8 for its Fiesta subcompact and new Transit Connect Wagon, due out next year. It also simplified many Sync voice commands, cutting out some of the cumbersome steps needed to make a phone call or change the radio station.

"I can't speak to GM's strategy," Fields said. "In our strategy, we've been at this for a while now. We think the upgrades … really bring (Sync and MyFord Touch) to the next level."

But analysts maintain Ford will eventually be a follower to General Motors because of GM's partnership with Apple.

"Everyone uses the iPhone as the benchmark for simplicity," said Larry Dominique, president of ALG, a TrueCar company. "I think eventually Ford is going to have to go down that road."

Ford's moves will be even more closely watched as other automakers, including Acura and Kia, bolster their technologies and as automakers team up with technology companies and even wireless communications providers like Sprint Nextel Corp. and T-Mobile.

Mark Reuss, GM's North American President hinted at, but carefully danced around calling GM the new leader in the in-vehicle tech space.

"The market will speak and we'll retain people," Reuss said in an interview in Los Angeles. "And rather than another PR exercise or press release from General Motors, it will be the results of hearing from our customers."


This may be Lincoln's
last shot at revival

Daniel Howes
December 5, 2012
Detroit News

Ford Motor Co.'s umpteenth rebranding of its hapless Lincoln division, poster child for an auto industry also-ran, is one of two things: a corporate conversion in Dearborn or the triumph of hope over experience.

But it can't be both.

The brand-meisters promise a new image and a smart website, a sufficient (if undefined) financial commitment and peerless product execution, a new customer experience and fancy gifts upon taking delivery from Lincoln Motor Co.'s suite of new Lincolns that will, really will, be different from their blue-collar Blue Oval parentage.

They promise. There will be four new vehicles over the next four years, starting with the Ford Fusion-derived MKZ. There will be fewer dealers theoretically selling more Lincolns across the United States. And come 2014, the brand will arrive in three of China's largest cities — Beijing, Guangzhou and Shanghai, the first step in demi-globalization of a domestic brand.

How Lincoln can become a credible American alternative to BMW or Lexus or even Cadillac after decades of drift, badge engineering and half-hearted attempts at rebirth is a mystery, even more so because members of the German-controlled luxury club don't admit new members casually. If at all.

"You're smart to look at the reinvention of a brand like Lincoln with skepticism and respect," Jim Farley, Ford's executive vice president of global marketing, sales and service and Lincoln, said in an interview Monday. "I understand exactly what you're saying. Trust me. The real proof point of Lincoln will be the execution of the product."

That and commitment measured in time, discipline and consistently exceeded expectations — not the balky false starts and faux luxury marking the downward arc of Lincoln over, oh, the past 15 years.

The history of Detroit's automakers is littered with ambitious plans that wither into irrelevance once the executive suite changes hands, the business cycle tanks or both. Few examples rival the repeated comebacks of Lincoln that too often culminated, especially over the past decade, in fewer sales and less product cred.

In 2003, Lincoln sold 158,839 cars and SUVs. Last year, its dealer body peddled 85,643 vehicles, and through the first 11 months of this year it has sold 74,766. By comparison, Audi sold more than 124,000 through November; BMW more than 244,000; Cadillac more than 131,000; Lexus more than 213,000 and Mercedes-Benz more than 264,000.

"Lincoln is just starting out on a long journey to gaining luxury car credibility and it is miles behind its competitors," Michelle Krebs, senior analyst at Edmunds.com, said in a statement. "Even moderate success will take a long time and significant resources and will require a constant stream of compelling vehicles substantially differentiated from Fords."

Exactly. Ford's latest vision for Lincoln requires the automaker and its management to depart from the deeply held tradition of deriving luxury cars from the mass-market parts bin, building them alongside Ford models and selling them through the same dealer network.

The departure mostly isn't going to happen, to listen closely to Farley. For now, new Lincoln models will be based on Ford's robust global vehicle architectures, not a purpose-built luxury set in vogue a decade ago. For now, new Lincoln models will issue from Ford plants, upping pressure to deliver tight builds.

In short, new Lincolns may look different from Fords — and that's good — but they'll come to showrooms pretty much like the old ones. What's changed from a decade or so ago when Ford used Mondeo parts from Europe to develop the Jaguar X-Type? Maybe enough, BMW and Mercedes-Benz notwithstanding.

Toyota Motor Corp. uses Toyota parts in Lexus models and builds some alongside Toyotas. Volkswagen AG's profit and sales growth hinges on common parts and assembly lines to develop and build VWs, Audis and Porsches. Fiat-derived parts and plants will produce a new generation of compact Jeeps.

The difference is less in what's under the skin and more in what meets the eye and the touch, a delicate balance Lincoln has long struggled to manage … and its leadership knows it. If Ford doesn't get it right this time, there probably won't be a next time.


Ford of Canada remains
top-selling automaker in
November and year-to-date

Best November since 2001


OAKVILLE, Ont., December 4, 2012 – Ford Motor Company of Canada, Limited continues to be Canada’s top selling automaker in November and year-to-date. This marks Ford of Canada’s best November since 2001 with sales driven by both cars with a 14 per cent increase, and trucks with a rise of 6 per cent.

“November was a record-breaking month for Ford of Canada,” said Dianne Craig, president and CEO, Ford of Canada. “We saw strength across the entire lineup from the fun Ford Focus, to the nimble Transit Connect, Canadian built Ford Edge and the ever popular F-150.”

“The Canadian auto industry has seen incredible growth in 2012, and we are pleased that Ford of Canada has out-paced it in November," said Craig.

Ford Focus saw its best November since 2003 with a 37 per cent rise. With a 93 per cent increase Ford Transit Connect had a record breaking month, as it achieved its best November on record, as did the Ford Escape with a 47 per cent jump in sales. The Ford Explorer saw its best November since 2003 and Ford F-150 recognized its best November on record. The Canadian built Ford Edge, Flex and Lincoln MKT also saw positive sales results with increases of 21 per cent, 25 per cent and 34 per cent increases respectively.




Ford rebranding Lincoln in
effort to stand out among rivals

By Karl Henkel
The Detroit News
Decemeber 3, 2012

Ford Motor Co.'s Lincoln brand will take a page from its history with its new rebranding, "Introducing the Lincoln Motor Company," the Dearborn automaker will announce today.

Lincoln's new theme — which will include image-free, minimalist newspaper ads and a transformed online appearance — will stretch across print, broadcast and digital media beginning today and will focus on the new Lincoln MKZ and MKZ hybrid, the first of the brand's transformational vehicles in coming years.

Lincoln was originally known as Lincoln Motor Co. in 1922. Ford believes Lincoln's rebranding "captures the founding principles of the company and brings them forward to a new generation" of luxury buyers. Print advertisements will touch on the past while reintroducing the Lincoln brand and its principles to consumers.

The possibility of reemphasizing the Lincoln Motor Co. name had been rumored for quite some time, but Ford had remained mum, instead shifting focus to the MKZ and most, recently, the first Lincoln-dedicated design studio since the 1970s.

It's the latest move for Lincoln, Ford's struggling luxury brand, in an effort to stand out in a crowded market. To do so, Lincoln is introducing four new vehicles, which aim to offer consumers a more personalized and premium feel.

Lincoln's rebranding should help distinguish it from Ford products; one of the knocks against the luxury brand is that its vehicles are too similar to Ford vehicles.

But the new vehicles will not necessarily send Lincoln to the top of the luxury segment. Ford executives have said the goal now is quality over quantity.

Lincoln's remake unofficially kicks off this month with the launch of the new MKZ sedan. Lincoln's plan will include three additional new vehicles in the next few years, and comes at a time when the brand's sales have been — at best — stagnant.

The Lincoln brand has struggled as sales have fallen about 2.7 percent through the first 10 months of this year. In 2011, Lincoln sales were relatively flat, declining 0.2 percent, according to sales data.

Lincoln, beginning with its MKZ, hopes to distinguish itself in the luxury segment by introducing new and unique designs, color schemes and technologies. It's also offering more hand-crafted, personalized options than its competitors.

"We are trying to do something different," said Jim Farley, Ford's executive vice president of global marketing, sales and service, and as of Saturday, Lincoln, too, at an October event at Lincoln's new design studios in Dearborn. "We have to be different."

Farley at the time said Lincoln's approach won't be to challenge luxury leaders Lexus, Cadillac, Mercedes and BMW in sales totals, but to attract a die-hard core of Lincoln loyalists.

"Our ambitions are not to be No. 1," Farley said in October. "We'd rather have a few people love us, than everyone like us."


Ford recalls 89K Escapes,
Fusions over engine fires

By Melissa Burden and David Shepardson
The Detroit News
Dec 2, 2012

Ford Motor Co. issued its fourth recall Friday for its 2013 Ford Escape SUV, citing a fire risk.

The recall affects 73,320 Escapes, as well as 15,833 midsized 2013 Ford Fusions. Some 80,000 of the recalled vehicles were in the U.S.

It's the latest setback for the Escape, introduced in June and a key vehicle in Ford's lineup.

The Dearborn automaker urged owners of the vehicles with 1.6-liter engines to contact dealers immediately, to arrange loaners. But unlike an earlier Escape recall, this one didn't caution drivers to stop driving them.

"We have identified an issue and are taking actions in the best interest of our customers," Steve Kenner, director of Ford's automotive safety office, said in a statement. "It is important that affected customers not ignore this recall and contact their dealer as soon as possible. While we recognize the inconvenience recalls cause our customers, we are taking these actions on their behalf to help ensure their safety."

The recall is for Escape and Fusion SE and SEL models with a 1.6-liter engine.

The company said it has not yet established repair procedures, and can't say when owners will be able to get their cars fixed. Ford spokesman Said Deep said engine overheating can lead to fluid leaks, which may come in contact with a hot exhaust system and trigger a fire.

"We're developing a fix which is designed to keep the fluids from reaching the hot exhaust components," he said. "We'll update our customers as soon as we can."

Ford said it received 13 reports of engine fires that followed overheating. No injuries have been reported.

Ford told the National Highway Traffic Safety Administration late Friday that the first report of an Escape fire was Sept. 7 in Florida from a vehicle that didn't have an engine dipstick, which allowed oil to be expelled. A second fire was reported Sept. 24 in Virginia and a third fire Oct. 22 in Arizona. Since Nov. 8, Ford has become aware of five more fires. Ford formed a task force Nov. 12 to investigate the fires, finding a pattern.

The fire issue may stick in some people's minds but with so much recall news today, consumers are likely to remember less about it over time, said Jessica Caldwell, senior analyst for automotive research site Edmunds.com. "Over the long term, it's not going to do a lot of damage" to sales, Caldwell said.

Dave Sullivan, manager of product analysis for AutoPacific Inc., said a recall involving the high-volume 1.6-liter engine means anything that goes wrong with it will affect a lot of customers, Sullivan said.

Ford issued its first 2013 Escape recall in July, saying incorrectly positioned carpet padding may lead to interference with braking in more than 10,000 vehicles.

Also that month, Ford recalled 11,500 2013 Escape SUVs with 1.6-liter engines and urged owners to stop driving them immediately because of fire dangers. Ford says more than 90 percent of those have been fixed — and the number may be higher because dealers have 30 days to submit reimbursement claims.

The third recall, on 7,600 1.6-liter Escapes, came in September; Ford said an improperly installed part could lead to a fire risk.

Customers should contact their dealer for free alternative transportation. U.S. owners can call 866-436-7332 and Canadian customers can call 888-222-7814 for details on securing transportation.

Ford says customers can find out if their vehicle is part of the recall by checking their VIN number on Ford.com under the Support tab and View Notices and Recalls, or by contacting their dealer.


Ford to extend warranty, update software for MyFord Touch

Alisa Priddle
Detroit News
November 30, 2012

Ford is extending the warranty and offering another upgrade that enhances the voice-recognition and navigation technology on its much-criticized MyFord Touch infotainment system, Mark Fields, soon to be the automaker's chief operating officer, told reporters Wednesday at the Los Angeles Auto Show.

The latest version will debut next spring on the 2014 Ford Fiesta, which gets a new 6.5-inch touch screen, updated software, better voice-recognition and simplified commands.

Current Ford customers will be able to download this newest software from a Ford website starting Dec. 10.

Customer complaints about MyFord Touch -- also known as MyLincoln Touch for Ford's luxury brand ---- have been cited by Consumer Reports and J.D. Power and Associates as a significant reason Ford has received lower marks on annual customer satisfaction surveys. Ford's namesake brand slipped to second from the bottom in J.D. Power's annual reliability survey released in October.

Some respondents said the voice-recognition software often didn't understand certain commands. In the original version, there were almost no conventional buttons or knobs to control temperature, the radio or other features, a situation that has since been addressed in newer models.

The warranty on the MyFord Touch system will now last for five years, up from three years. MyLincoln Touch will carry a six-year warranty, said Ford spokesman Alan Hall.

Ford also offered a software upgrade to 377,000 vehicle owners in March, but it may have arrived too late to improve feedback from those surveyed by J.D. Power.

More recent models have restored manual controls, simplified the screen's graphics and refined the voice-recognition software. MyFord Touch reflected an evolution of Ford's Sync connectivity system developed jointly with Microsoft and introduced five years ago.

Fields said the company saw a significant improvement in customer satisfaction based on its internal surveys.


Brampton a dangerous
place to drive

Brampton Guardian
Nov 29, 2012

Brampton ranks among Ontario's more dangerous cities in which to drive when it comes to car crashes, according to a report (released Nov. 27) by the Allstate Insurance Company of Canada.

Brampton ranks among Ontario's more dangerous cities in which to drive when it comes to car crashes, according to a report released this morning (Tuesday, Nov. 27) by the Allstate Insurance Company of Canada.

Except for Hamilton, Ontario's most populous cities were all ranked in the bottom quarter of frequency collision rates, Allstate reported in its fourth annual Ontario Safe Driving Study.

Brampton experienced a claim rate of 46 collisions per 100 cars insured by AllState.

Brampton's crash rate compared with rates of 37 for Oshawa, 39 for Ajax, 40 for Thornhill, 41 for Pickering 43, for Toronto, 45 for Milton and 46 for Brampton.

The nine GTA municipalities had the highest collision frequency rates.

However, the overall number of collisions in the GTA dropped from the previous survey period.

The GTA had a collision rate of 5.6 per cent from July 1, 2010 to June 30, 2012, a drop of 6.2 per cent from the previous 24-month period.

Brockville had the lowest collision rate.

The survey examined claims from Allstate Canada customers across the province. It found Ontario drivers were involved in 3.3 per cent fewer collisions from July 1, 2010 to June 30, 2012.

"We're pleased to see fewer collisions in the province. Whether this is because of an increased awareness of the dangers of hand-held devices starting to take effect, drivers reducing their speed, increased police activity or other influences we don't yet know, we hope to see this trend continue," said Saskia Matheson of Allstate Canada.

The study did report a "worrying trend" about when collisions take place and the severity of injuries.

"Ontarians may be surprised to learn that our claims data shows, and this is backed up by provincial road safety studies, that more fatal collisions happen when conditions are clear and roads are dry," said Matheson. "Speed is often the issue."
Almost 80 per cent of all fatal crashes in Ontario happen in clear driving conditions. A total of 12.8 per cent of fatal collisions happen in rain and 3.7 per cent in snow.

While there are more collisions in winter, more fatal crashes occur in summer.


Ford exec: Industry needs
new way to show fuel claims

By Karl Henkel
The Detroit News
Nov 28, 2012

Los Angeles — Ford Motor Co.'s top marketing executive says the automotive industry needs to be more creative when it comes to fuel economy claims.

"It's becoming more important for us to be consumer-centric," said Jim Farley, Ford's executive vice president of global marketing, sales and service and Lincoln. "I think people are interested in new claims. We'll have to be more creative as an industry."

Fuel economy claims, upon certification from the Environmental Protection Agency, usually appear in advertising and promotions in two ways: as a general "best-in-class" disclaimer for that particular automaker, or with a specific number.

But after Hyundai Motor Co. and its Kia Motors unit admitted they overstated gas mileage claims by 1 to 6 miles per gallon for more than 1.1 million vehicles, many in the industry have questioned the strategy of promoting numbers only. Ford, for example, with its new Fusion Hybrid, has decided to promote the vehicle in television advertisements by saying the car, which gets 47 combined miles per gallon, "doubles the fuel economy of the average vehicle."

Whether that strategy resonates with consumers is yet to be seen, though the Fusion is one of Ford's fastest-turning vehicles on dealer lots. But it does represent a changing mentality for automotive marketeers.

"We, as an industry, have to challenge ourselves to find something compelling that people will find useful when shopping for a car," Farley said. "We don't have an answer (yet)."

One alternative is to shift to real-world numbers. Most consumers couldn't tell you — without scratching out some numbers on a notepad — how the specific fuel-efficiency marks on their vehicles help (or hurt) their pocketbooks.

Window stickers calculate average fuel cost and how much a driver will save compared to the average vehicle over five years. For example, an owner of a manual transmission Chevrolet Spark with a 1.2-liter engine saves $3,750 in fuel costs over five years, says the window sticker. Consumers can also find that information online.

"We're trying new things (with Fusion)," Farley said, "and we will continue to try new things."


Fiesta's in-car tech to tweak

Ford will downsize its MyFord Touch screen and streamline Sync voice commands on the 2014 Fiesta. (Ford)

By Karl Henkel
The Detroit News
November 27, 2012

Ford Motor Co. plans to scale down the size of its MyFord Touch infotainment screen and simplify its Sync voice-activation systems in its new Fiesta subcompact due out in 2013.

The automaker said it will reduce its MyFord Touch screen from 8 to 61/2 inches and streamline Sync voice commands beginning with the redesigned Fiesta, which should hit dealer lots during the second half of next year.

Sync, which debuted in 2008, will come with simplified Bluetooth phone pairing and more natural voice-recognition of commands.

For instance, a driver will be able to say "play" followed by an artist name, song, album or genre of music, wiping out an entire voice command step.

Sync will also come with improved voice-recognition accuracy and simplified audio commands. At any time, a driver can say the frequency — for instance "FM 97.1," avoiding denoting whether the station is a terrestrial or satellite radio station.

The new 61/2-inch MyFord Touch screen will first be available on the Fiesta and the new Transit Connect vehicles. The technology upgrades are part of a reinvention of the Fiesta subcompact. Ford has announced a new appearance for the vehicle and a new powertrain option: the 1-liter EcoBoost engine.

The MyFord Touch and Sync changes are part of Ford's evolving in-car technology strategy. The Dearborn automaker was first-to-market with many aspects of in-car entertainment and voice-activation controls, but many analysts think Ford overreached because of reported problems with Sync and MyFord Touch. Consumer Reports recently said MyFord Touch "frustrates us like few other control systems in any other brand's automobiles."



Ford leads rivals on
profits per vehicle

Carmaker's N. American operating
margin is 12 percent in 3rd quarter

November 26, 2012
By Bryce G. Hoffman and Melissa Burden
The Detroit News

With car and truck sales on the rebound, all of Detroit's automakers are making money. But Ford Motor Co. is making a lot more on each vehicle it sells than its crosstown rivals do.

Ford's third-quarter operating margin in North America was 12 percent — the highest since the company began breaking out regional margins in 2000.

Simply put, the operating margin is a company's net profit presented as a percentage of revenue. As such, it is a useful metric for comparing the performance of different-size companies.

"You get a good sense from margins about efficiency," said analyst Itay Michaeli of Citigroup. "It's a great measure of pricing power."

For automakers, it is essentially the average profit they make on each car and truck they sell. And none of the Detroit automakers is making more than Ford.

By comparison, General Motors Co.'s margin was 7.8 percent, down 2.2 percentage points from the same period a year before. Chrysler Group LLC does not break out margins by region. But the Auburn Hills automaker, which does most of its business in North America, reported a 4.6 percent operating margin.

"Ford seems to be in a good place," said Jessica Caldwell, an analyst with Edmunds.com. "A lot of their volume vehicles are new, and newer vehicles generally command higher prices."

The new versions of the Ford Escape and Ford Fusion are near the top of their segments in transaction pricing, Caldwell said, noting that they are second to Volkswagen AG's competing models. The Ford Focus, which launched last year, is still going strong, too.

Ford also is exercising considerable restraint on incentives, Caldwell said.

The company is offering less cash than many of its competitors and focusing instead on attractive financing offers — something that is easier for Ford to do because it still owns its own finance company, Ford Credit. And when it comes to options, Ford has abandoned a la carte offerings in favor of packages that push consumers to spend more than they might otherwise.

"Ford has done a really good job with its premium packages," Caldwell said. "A lot of other automakers are doing the same thing, (but) they are doing fairly well at commanding a price premium."

But rival automakers say there are other reasons why Ford's margins are higher. For example, the company is a leader in pickups, and trucks have historically commanded significantly higher margins than cars. Ford's F-Series is not only the best-selling pickup in America, but also the best-selling vehicle of any type.

"I like the pickup truck business a lot. I drool over it actually," Fiat-Chrysler CEO Sergio Marchionne told analysts and reporters on Oct. 30, when asked about the gap between his company's margins and Ford's.

Marchionne optimistic

"There are number of products that Ram brand is launching in 2012 and 2013, which I think are going to create an unsurpassed fleet of pickups," he said.

"I think we'll be serious contenders in the U.S. market for certainly better market share than we currently have."

Marchionne said that will translate into higher margins.

Even without the new trucks, Chrysler has been gaining share steadily in the United States since emerging from bankruptcy in 2009. Analysts say it is stealing that share from General Motors and Ford. However, part of Chrysler's secret for sales success may be a big part of the reason why its margins are lower than its cross-town competitors.

Chrysler has been winning converts with class-leading technologies like eight-speed transmissions.

The fuel-saving gearboxes were only found in high-end luxury vehicles until Chrysler started putting them in more mainstream vehicles such as the Chrysler 300 and Dodge Charger. They gave those cars mileage numbers that were hard for consumers to ignore. But they also increased the cost of building them, particularly since Chrysler purchases the transmissions from the German manufacturer ZF Friedrichshafen AG, which originally designed them for the über-expensive BMW 7-Series.

Such expensive technology makes Chrysler's products more competitive, but it also eats away at the company's margins.

Chrysler sources say it is a price they are willing to pay to make their vehicles competitive again. And they point out that the strategy is working.

GM works to narrow gap

Chuck Stevens, GM's chief financial officer for North America, said his company is working to make its margins more competitive with Ford's.

"We've got a good understanding of the gap," he said during an Oct. 31 conference call with analysts. "Obviously, it's widened thus far this year."

Stevens said the solution is more new product, increased use of global architectures and reducing fixed costs.

"We're going to go from having the oldest portfolio in North America to the freshest product portfolio in North America over the next couple of years," he said.

"A big portion of that portfolio refresh is going to roll through to the bottom line when you think about full-size pickups and the improvement in margin versus Ford, where we're currently at a pretty significant discount."

Stevens said Ford is about two years ahead of GM in achieving scale on global architectures. "We've talked about increasing our volume on global architectures from somewhere around 40 percent to 80 percent, which would put us in the range of Ford and Volkswagen," he said. "And I think that's going to be, obviously, a big opportunity for us that's got a bit longer tail."

GM also believes it will make up ground against Ford when next year it rolls out the all-new 2014 Chevy Silverado and GMC Sierra pickups.

"We've been tracking for the last couple of years, give or take, a discount of $500 to $1,000 a vehicle," Stevens said during the call. "I would say that our expectations, at a minimum, would — we'd be able to close that gap once we launch the next-generation truck."


Chrysler dodges touch screen
woes by letting Ford blunder

By Craig Trudell
Bloomberg News
Nov 25, 2012

Chrysler Group LLC is emerging a leader in touch screens by letting Ford Motor Co. and General Motors Co. jump ahead and stumble.

Blunders with the systems, which handle tasks from entertaining with Pandora Internet radio to reading text messages and mapping out directions, have dragged on Ford's showings in surveys by Consumer Reports and J.D. Power & Associates. The No. 2 U.S. automaker said last month that it expects to fall short with quality metrics for a second straight year. GM's system for its Cadillac brand has drawn negative comparisons with Ford's in early reviews by Consumer Reports.

While its rivals plunged ahead with advanced controls and abandoned trusty knobs and buttons, Chrysler has moved more slowly with its simpler Uconnect system.

"We've definitely seen a shift in terms of what breaks," said Jake Fisher, the director of Consumer Reports' Auto Test Center. He picked up his iPhone from a conference room table: "Now, it's this as opposed to transmissions and engines."

Consumer Reports, regarded as credible because it forgoes advertising and buys the cars it tests, published an Aug. 22 post on its website: "Why the MyFord Touch control system stinks." Plagued by issues with its electronics, Ford's namesake brand fell seven spots to second-to-last place in the magazine's auto-reliability survey announced last month. Its luxury nameplate Lincoln plunged 12 spots, the biggest drop.

"We want to be a leader in technology, and so we're having a few growing pains," Bill Ford, the chairman of Dearborn-based Ford, said last week. "Our customers are telling us it's absolutely the right way to go."

Without improving its system, Ford may be unable to keep David Cheslow as a customer. The 65-year-old life insurance agent said that the screen in his 2013 Ford Edge "froze" and went black on three separate occasions one day. He's had similar problems since buying the sport-utility vehicle in July.

"I wouldn't go for another Ford unless I knew that it was working the way that it's supposed to," said Cheslow, who lives in Elizabeth, N.J, and owned two other Ford vehicles before purchasing the Edge.

GM sought to top Ford early this year with its Cadillac User Experience, or CUE, system with tablet computer-style touch screens. Early indications from Consumer Reports' testing is that CUE is "not any better" than Ford's system, Fisher said.

Chrysler, which introduced its Uconnect system in 2003, has been relatively quiet in marketing its technology compared with GM and Ford. The automaker has introduced updated versions of its touch screens into new models as they debut rather than blanketing its whole lineup with its latest up-to-date system.

"We're doing more thoughtful integration," said Marios Zenios, Chrysler's head of connectivity.

When Zenios joined Chrysler in 2008, the automaker employed three people who specialized in the field of human machine interface, in which designers and engineers work on the layout and software of devices to make them easy to use. Chrysler now has "quite a force" of such personnel, he said, declining to provide a specific figure.

Chrysler has reason to be mum about details concerning its Uconnect staff, said Andrew Watt, chief executive officer of iTalent LLC. Watt's recruiting firm has been tapped by automakers and suppliers for eight to 10 searches this year to fill positions related to mobile technology in vehicles.

"Any intelligence about what's going on when it comes to this talent, you keep to yourself," said Watt, who is based in Troy. "These are niche skills and this is the kind of content that attracts young buyers to cars. The only way to get these people is to take them from someone else."

Automakers face a challenge because virtually all consumers say they want technology and tie-ins between their mobile phones and cars, Zenios said. Customers, though, vary in how much they use in-car systems. Also, users are less forgiving of technological mishaps from behind the wheel.

"As long as you manage technology, it will be your friend," said Zenios, who worked on in-car telecommunications systems for GM, Daimler AG, and BMW AG during his 22 years with Motorola Inc. "The minute you do something for technology's sake, it may not work out very well for you in automotive."

Chrysler, majority-owned by Italian carmaker Fiat SpA, "didn't reinvent the wheel" in developing features such as the navigation system within Uconnect, said Consumer Reports' Fisher, a former engineer for Detroit-based GM.

"The Chrysler system is probably the best one that I've used," said Dave Sullivan, a product analyst for Tustin, California- based AutoPacific Inc. "It's the fastest, it's got great resolution. The screen has nice, big buttons on it. It doesn't crash. The navigation is simple."

Like Bill Ford, AutoPacific's Sullivan attributes Ford's first-mover strategy for the automaker's ills in consumer surveys. The namesake Ford brand slid to 27th from 23rd a year ago and fifth in 2010 in J.D. Power's initial-quality study that was released in June.

"There's a learning curve for all these automakers," Sullivan said. "They've never really been software people before. They've always been engineering nuts and bolts. This is what happens when you want to be first."

The Cadillac CUE system debuted in the XTS and ATS sedans that GM introduced this year and is spreading throughout the brand's lineup. The world's largest automaker equipped its touch controls with haptic feedback — meaning that the car's buttons vibrate when touched — in an effort to outdo Ford's systems.

"The haptic feedback is nice, but we found that you still have to take your eyes off the road to make sure you're tapping the right spot," Jim Travers, a Consumer Reports associate editor, wrote in a June 22 review of the XTS. "Having to relearn how to use a button just for the sake of looking 'high tech' — as there are no functional advantages to these flush controls — is misplaced progress."

The CUE system's buttons are "fussy" and flipping through screens is a "chore," Tom Mutchler, a Consumer Reports engineer, said in an Oct. 19 review of the ATS. "That's really something of a shame, because the annoying controls detract from what otherwise is a really rewarding car to drive."

GM is taking a different approach from Cadillac for Chevrolet, its high-volume brand, with a system branded as MyLink, and for Buick and GMC with IntelliLink. With MyLink, GM uses a concept it calls "smart phone, dumb radio," in which the in-car system embeds features from the phone and amplifies them over a display, said Scott Fosgard, a GM spokesman.

"If you set CUE aside, GM's got a system in the Sonic and the Spark that's pretty competitive," said AutoPacific's Sullivan, referring to MyLink.

In addition to competitive pressures, U.S. automakers are being scrutinized by regulators led by Transportation Secretary Ray LaHood, who has said his department is on a "rampage" against behind-the-wheel distractions.

The government issued guidelines this year to quell in-dash distractions, recommending that no task for drivers take longer than two seconds and that cars be stopped and in park before users can enter navigation commands or use social networking sites such as Facebook and Twitter. The guidelines stop short of recommending limits on devices.

Chrysler put its latest Uconnect system in new pickups introduced late this year with a feature intended to curb distraction from texting while driving. A phone paired with the Uconnect system can notify a vehicle's occupants of a received text and "read" the message over the audio system. A reply to the message can be made audibly, using voice-to-text software developed by Nuance Communications Inc.

"I don't want the people touching the phone no matter what," Zenios said. "Keep it in your pocket or keep it in your purse, and then let the system alert you in the right way."


CAW Grieves the Passing
of Labour Icon Cliff Pilkey

Cliff Pilkey

November 23, 2012

CAW leadership and membership across the country are grieving the passing of former CAW Local 222 President and OFL President Cliff Pilkey on Saturday, November 17, 2012.

Cliff, who was 90 years-old, spent his life advocating on behalf of workers, human rights, women's rights, workplace health and safety and his community of Oshawa, where he served as alderman and deputy mayor, and later as NDP MPP.

Labour and community leaders lamented the loss of drive, determination and leadership that Cliff's death means for progressive causes and the broader labour movement.

"Cliff Pilkey's visionary and determined leadership inspired a better world and his legacy of accomplishments stands tall with the very best labour leadership Canada has ever had," said Ken Lewenza, CAW National President.

Former CAW National President Buzz Hargrove said Cliff was truly an inspiring leader. "Nobody loved the labour movement any more than Cliff Pilkey. He loved the solidarity and camaraderie. He used his incredible sense of humour to bring people together and he always had his feet on the ground and had an eye to what was achievable," Hargrove said.

Bob White, former CAW National President and former CLC President, said Cliff will be missed.

"Cliff was a leader who cared deeply about his union - the UAW/CAW - and Canada's labour movement. He learned about women's commitment to affirmative action, child care and choice and put those issues at the forefront of the OFL's agenda. He won great respect and support from women in the labour movement. Cliff had a great sense of humour and loved to laugh, which endeared him to all. He was a great personal friend to Marilyne and I. He introduced us to one another at the CLC Convention in 1976. We will always hold him dear in our hearts."

Cliff was actively involved in numerous causes. He was Past-President and Founder of the Workers' Health and Safety Centre, a President of the Oshawa and District Labour Council from 1957 to 1967 and a UAW National Representative from 1967 to 1973. Cliff was also UAW Director of the Citizenship and Legislative Department from 1973 to 1976. He was President of the Canadian UAW Council in 1957.

He served on various boards and committees including the Board of Directors of Green Shield Canada, York University and Durham College, and was a founding board member of the Oshawa Senior Citizens' Centre. Cliff was a World War II veteran and a 62-year member of the Royal Canadian Legion.

Cliff was also a recipient of the Order of Ontario and a Recipient of the Queen's Diamond Jubilee Medal


GE buys 2,000 Ford
plug-in hybrids for fleet

By Associated Press
Nov 23, 2012

Dearborn — GE is buying 2,000 plug-in hybrid cars from Ford for its corporate fleet.

Ford and GE announced the purchase Tuesday.

GE has set a goal of converting half its fleet to alternative energy vehicles. With the Ford purchase, GE now has 5,000 alternative-fuel vehicles, or about 10 percent of its fleet.

Ford will promote GE's electric vehicle charging stations as part of the agreement.

The two companies also plan to work with researchers from Georgia Tech University to study employees' driving and charging habits. The results of those studies will be shared with other companies that want to add electric cars to their fleets.

The C-Max Energi went on sale this month. It can go around 20 miles in all-electric mode before a gas engine kicks in.


'Fiscal cliff' may hurt car sales

Bill Ford

Fate of alternative minimum tax patch tops among worries

November 21, 2012
Detroit News

Detroit automakers are expressing concern about America's looming "fiscal cliff" and say going off it could spell disaster for an industry still recovering from the last economic crisis.

The fiscal cliff refers to the billions of dollars worth of automatic tax increases and spending cuts that will begin taking place on Jan. 1 unless the Obama administration and Congress do something to stop it before then. If not, government analysts say another recession is likely.

"It is vitally important for the economy that we work this out," Ford Motor Co. Executive Chairman Bill Ford Jr. told reporters Monday. "We (Ford) are not isolated from what happens in the rest of the country."

Fiat-Chrysler CEO Sergio Marchionne expressed similar concerns last week.

"I've been following this with much anxiety," he said Thursday. "I'm relying on the wisdom of the political leadership to avoid this — for all of us."

Auto industry analysts are confident that a compromise will be reached in Washington to avoid some, if not all, of these cuts and tax increases. But they say a failure to avert the crisis could deal a big blow to the industry.

"That would certainly impact car sales," Edmunds.com Chief Economist Dr. Lacey Plache said Monday. "But the likelihood that all these changes would occur is not high."

Plache is confident that the president and lawmakers will reach some form of compromise, and she analyzed a number of potential scenarios to see how they might impact new-vehicle sales.

A failure to extend the long-running patch on the alternative minimum tax, an additional tax on income above a certain level, would have a significant impact on car sales. The patch raises that threshold. Without the extension, an estimated 33 million Americans would pay significantly higher taxes. Both parties want to avoid this.

There is far less agreement on extending the Bush-era tax cuts set to expire at the end of the year. Republicans want to extend them for all Americans, but President Obama wants to eliminate the tax breaks for the richest 1 percent. Plache believes it is likely that they will be extended, at least for middle-class taxpayers, and she said eliminating them for the wealthiest Americans would have little impact on auto sales.

That is because the top 1 percent of Americans account for only 4 percent of the automobiles purchased in the United States.

Since some of those wealthy individuals will buy new vehicles even if their taxes rise, Plache estimates that eliminating their tax breaks would lead to no more than a 2 percent drop in sales.

Nor does she think a failure to extend the reduction in payroll taxes introduced by President Obama would have a significant impact, as these were never intended to be anything more than a short-term stimulus. The same goes for the extended unemployment benefits that are also set to expire at the end of the year.

"Even if the long-term unemployed are out buying cars, they're not out buying new cars," Plache said.

Overall, she expects the direct risk to auto sales to be no more than 3 percent. That is partly because some consumers will have to purchase a new car or truck regardless of any changes to their tax rate. Too many of them have been putting it off for too long.

"We still have millions of units of pent-up demand," Plache said. "We're (also) expecting there to be a surge in lease returns in 2013."

Edmunds still expects sales of new vehicles to increase to about 15 million units next year.



Ford's Fiesta redesign
firing on all 3 cylinders

    Ford Motor Co. introduced the Fiesta ST as a production-ready model at the 2012 Geneva Motor Show and will introduce it in Europe in 2013. On Nov. 19, 2012, the automaker announced that for 2014, it will introduce its award-winning 1-liter, three-cylinder EcoBoost engine in the Fiesta for the U.S. market. (Ford Motor Co.)

    By Karl Henkel
    The Detroit News
    Nov 20, 2012

    Dearborn — Ford Motor Co.'s reinvention of the Fiesta took another step forward Monday.

    Sales of the subcompact haven't set the world on fire, in part because the Dearborn automaker's larger Focus has been cannibalizing sales of its smaller sibling. To raise Fiesta's appeal, Ford unveiled a dynamic new design for Fiesta that it unveiled in September. On Monday, Ford added a new powertrain option for the little car.

    Ford's award-winning 1-liter, three-cylinder EcoBoost will be an option in the redesigned 2014 Fiesta, giving the vehicle a fuel-sipping and power-packed engine to differentiate the car from its competitors and Focus.

    The new Fiesta, which will hit showrooms during the second half of 2013, coupled with the small EcoBoost engine, will target drivers who are seeking "a fuel-efficient small car, but can't stretch the budget for diesel or hybrid" vehicles, said Bob Fascetti, director of Ford's global engine engineering. Though exact specifications will come at a later date, the engine should produce about 123 horsepower and deliver a projected 148 foot-pounds of torque, Ford said. In other words, it packs quite a punch for a small engine.

    The German-built engine, which has only been available in Europe, should make the small car the most fuel-efficient non-hybrid available in the U.S., though Ford declined to give fuel-efficiency estimates.

    The current Fiesta has a 1.6-liter four-cylinder engine that produces 120 horsepower and gets approximately 40 highway miles per gallon.

    Environmental Protection Agency fuel-efficiency estimates will come at a later date. Pricing for the new Fiesta also will be announced later.

    The Fiesta will be shown at the Los Angeles Auto Show later this month.

    Ford's 1-liter EcoBoost is Ford's first three-cylinder and one of the smallest-displacement engines the Dearborn automaker has ever built. The engine won the 2012 "International Engine of the Year" by a jury of 76 journalists from 35 countries, and this year was honored with a Breakthrough Award from Popular Mechanics magazine.

    The awards speak volumes about the engine, especially considering that three-cylinder engines — particularly those from the 1990s — don't have a strong reputation.

    EcoBoost has been a success since its 2009 launch. The Dearborn automaker has already sold more than 389,000 larger EcoBoost-equipped vehicles in North America.

    Ford's engine announcement is the second move to upgrade the Fiesta. In September, the Dearborn automaker in Amsterdam unveiled a new look for the subcompact car that rivals the trapezoidal grille on the new 2013 Fusion midsize.

    Fiesta sales have suffered because the vehicle has competed with Ford's Focus compact car. Analysts have said the two vehicles are too closely priced and are too similar.

    "That's been the issue," said Michelle Krebs, auto analyst at Edmunds.com. "I think buyers are looking at for a little bit more money and a little bit more size, they just pile them on top of each other too closely."

    The proof is in Fiesta sales, which through October are down nearly 23 percent from a year ago. The Fiesta now trails General Motors Co.'s Chevrolet Sonic, which has gained momentum this year. Kia Motor of America's Rio and Honda Motor Co.'s Fit are also gaining traction in the subcompact segment.



Hot hatches back in the spotlight

Hatches like the 252-hp Ford Focus ST are drawing attention from driving enthusiasts. (Ford)

Today's lift-back models pack power,
prestige, fuel efficiency, affordability

By Karl Henkel
The Detroit News

November 19, 2012

When it comes to hot hatches — performance variations of hatchback vehicles — the Volkswagen Golf GTI was the car that started it all.

Now, more than three decades after the GTI was first announced in Frankfurt, automakers including the Detroit Three are driving hot hatches back into the spotlight.

Ford Motor Co. has its Focus ST and could soon add a sport-performance Fiesta like the one coming to Europe. Fiat SpA, the parent company of Chrysler Group LLC, has the 500 Abarth. General Motors Co. has its Chevrolet Sonic RS. Volkswagen still has its GTI, along with a Golf R. And don't forget about the Mini Cooper S, Mazdaspeed3 and Subaru Impreza WRX.

Automakers are primed to add more hot hatches to their vehicle lineups, and for good reason: Dynamic styling, powerful little engines and the flexibility to haul considerable cargo make today's hot hatches stand out from sedate sedans.

"We're seeing interesting advances in getting interesting amounts of horsepower out of small engines," said Bill Visnic, senior editor at Edmunds.com. "With the original hot hatches, it was really about getting a modified version of the everyday engine in cars that otherwise weren't as overt as a sport coupe."

Hot hatches of old had flair, considering they were economy cars, and they handled well. But popularity fizzled in part because the souped-up small cars lacked sound insulation and were noisy. And they weren't all that powerful.

Now, the performance hatchbacks — which are popular in Europe — are filling out U.S. automaker vehicle rosters. They are more refined versions of their predecessors.

Fun and functional

Today's lift-back sports models have a healthy combination of power, prestige, fuel efficiency and affordability.

Take for instance the 252-horsepower Ford Focus ST. Powered by a 2.0-liter turbocharged engine, it gets 32 highway miles per gallon at a base price of $23,700.

The smaller Fiat 500 Abarth gets 160 horsepower from a 1.4-liter turbo engine at a price of $22,000. And the 2013 Chevrolet Sonic RS, at $20,995, boasts a 1.4-liter turbo engine that produces 138 horsepower.

Today's hot hatches come with more options on the inside: premium seats, leather-covered steering wheels and the latest in-car technologies, which means more options for buyers and — in many instances — a higher profit margin for automakers.

There's also more utility. The back seats fold down, turning hot hatches into mini cargo vans, Visnic said, which broadens their appeal to target both a 50-something father of two or a 25-year-old looking for a thrill.

But targeting the younger drivers may come with a drawback: Most of the hot hatches are sold with manual transmissions in a country where student driver training is done in automatic-transmission vehicles and the great majority of vehicles sold have automatic transmissions. The Chevrolet Sonic RS comes with an automatic transmission as an option, while the Ford Focus ST and Fiat 500 Abarth are offered only with manual transmissions.

"As far as younger buyers go, it could be a limiting factor," Visnic said.

Design in demand

It's not just hot hatches that are catching on with consumers.

Non-sport-performance hatchbacks already make up a significant portion of the small-car segment and are gaining ground among compact cars as American consumers become more European in their tastes.

About one-third of small cars sold in the United States are hatchbacks. In California, a barometer for the rest of the nation, the rate is about 10 percent higher.

As automakers look to shave costs by manufacturing global vehicles, cars are becoming more adaptable to multiple markets. It's likely that automakers will begin offering hatchback versions of current models, if they aren't already, particularly in the U.S.

"There's a certain level of fixed costs on a new vehicle," said Larry Dominique, president of ALG, a TrueCar company. "It's easy for OEMs (automakers) to convince themselves to build a derivative of something already in the market."


Why the one per cent has it all

By Thomas Walkom
National Affairs Columnist
Toronto Star

November 18, 2012

These are not good times. The young graduate with no work in sight. The old fear retirement because their pensions and savings (if they existed in the first place) are no longer sufficient.

The notion of the disappearing middle class is so commonplace that mainstream politicians — from Barack Obama on down — routinely talk of it.

Yet there is plenty of wealth around. Most of us don't own much of this wealth. But if we're willing to borrow to the hilt and max out our credit cards, we are allowed — briefly — to take part in the great barbeque.

Even those juggling two or three part-time jobs can, if they are lucky, enjoy an illusory sense of well-being — a trip to Vegas here, some sharp clothes there.

So it's an odd as well as a bad time.

In these days, it's useful to try to figure out why all of this is going on. And that's where the Canadian Centre for Policy Alternatives, an openly leftish think tank, performs a handy service.

The centre's latest effort is a broad and rather subtle study by George Brown College political scientist Jordan Brennan that tries to come to grips with why so many people are, in relative terms, so badly off.

I say broad because it's hard to summarize A Shrinking Universe in one paragraph which, I suppose, is why the centre flogged it to me rather than television.

Brennan's paper is a critique not only of the economy but of the way most of us look at the economy. He takes on the widespread, if unstated, assumption that people get what they deserve — that CEO's or derivative traders earn their seven-figure paycheques because they are in some way uniquely productive, while the rest of us don't because, well, we're not.

He advances a view that is not new but that is rarely heard today — that income is not distributed through the competitive magic of the impersonal market, but through naked power struggles in institutions that are near-monopolistic. Think National Hockey League.

Brennan starts with the growing income inequality in Canadian society between those at the very top — the so-called one per cent — and the rest of us. He makes the point, which should be obvious but isn't, that in the developed world relative poverty not absolute squalor is the problem — that social pathology is not solved in Canada just because the underclass has enough SpaghettiOs to eat.

He then asks why society is becoming more unequal. When did this start to happen?

The answers are complicated and interwoven. Brennan chooses to focus on corporate concentration, arguing that as big companies eat up more of their competitors the huge gap between the wealthy and the rest expands.

For me, his look at timing is more telling. Brennan makes a good, if not entirely new, argument that the real turning point in Canada occurred in the 1990s when globalization pacts, including the North American Free Trade Agreement came into play.

This was also the time when the developing world, led by China and India, began to sign on enthusiastically to an agenda of trade and investment liberalization.

The effects of this are now well-known. Free trade with the U.S. and Mexico sandbagged much of Canada's manufacturing base. Trade with China sandbagged the rest. Investment protection deals such as NAFTA and the new Canada-China pact have weakened government's ability to regulate. All of this has decimated unions, allowing bosses to pay their workers less and themselves more.

Non-union shops, as always, have quickly followed suit.

Brennan points out that, on average, the country's top 60 corporations did particularly well. He also argues that foreign investment — by both Canadian firms acquiring outside assets and outsiders acquiring Canadian companies — has accelerated the trend toward inequality.

Experts in the field can argue over the details of this paper. I think he's, at the very least, on the right track.

More than that, I'm just pleased anyone is bothering to explore these questions.


Ford Fusion Hybrid rolls with
Aston Martin grille, 47 mpg

013 Ford Fusion Hybrid (Ford Motor Co.)

November 17, 2012
By Jason H. Harper
Bloomberg News.

Driving through New Jersey in the days following Superstorm Sandy, I gaped at gas lines not seen in the United States since the 1970s.

I was in a German sports car that sucked down gas by the keg, so I kept the pressure on the gas pedal light. How I wished for the super-efficient car I'd driven weeks before in Michigan. Not a Toyota Prius or an all-electric Nissan Leaf, but a $28,000 Ford.

The new Ford Fusion Hybrid gets 47 miles per gallon, both in the city and on the highway. With that kind of economy and its 13.5-gallon fuel tank, I could have whooshed between my homes in New York and Pennsylvania seven times without worrying about stopping at a gas station overseen by the National Guard.

The hybrid is one of several powertrains offered in the new Fusion. The low-end model starts at only $22,500, with a 2.5-liter four-cylinder that gets 34 mpg highway. There are also two turbocharged engines available, with 1.6 liters or 2.0 liters, which have more pep and still get up to 37 and 33 mpg.

A plug-in hybrid will also be available down the line. Perhaps Ford is doing penance for all the oversize SUVs foisted upon us in the 1990s and 2000s, because it's taking efficiency seriously.

Ford's ambition is for the Fusion to become as wildly popular as the Taurus once was. After all, it's a midsize sedan with a midsize price and great gas mileage. (Ford still offers the Taurus, but it hasn't been a big seller for years.)

Completely revamped inside and out, the Fusion takes on the other middle-class stalwarts in the field, like the Toyota Corolla (which is as beige as a car that you'll likely to find), the redesigned Honda Accord and the Nissan Altima.

Too often midsize cars are studies in bland design. The Fusion neatly avoids this foible by grafting on the front end of an Aston Martin.

No, really. Take a look at the flat-faced, oval grille laced with horizontal lines, and note the uncanny resemblance to models found on Aston Martins, a high-end brand that Ford once owned.

Would James Bond himself be found driving it? Not terribly likely, as the novelty of the front end only goes so far. The Fusion looks sturdy, but it lacks overall harmony or any real sexiness. You really can't hope for supercar proportions from a one-size-fits-all sedan.

Park it next to the Accord and Altima, and you'll find that their shapes and dimensions are awfully alike. I don't envy the guy who buys any one of the models in silver paint, and then forgets where he parked it at the mall while Christmas shopping.

The similarities are due, in large part, to regulations, both in the United States and worldwide. Europe, for instance, has pedestrian impact regulations that require hoods to be a certain height and a crumple zone between the top of the engine and the hood. You can no longer get away with the kind of low hoods or rakish fins once found on cars of the 1950s and 1960s.

And buyers want rear seats that are comfortable and an ample trunk. It's no wonder that the result is a glut of midsize cars that would look depressingly similar if you took away the different grilles, the brightwork and the badges.

My Fusion Hybrid had options including navigation, adaptive cruise control and active parking assist, so it came to $34,770. I drove over three days around Michigan, starting at an early hour. It was very dark and quite chilly, and the roads were empty.

Once the heater kicked on and the car warmed, so too did I to the hybrid system. I'm generally lukewarm on hybrids. Tricks with gas engines like direct fuel injection and turbo-charging have offset the gas mileage perks of a hybrid, which has to carry a load of heavy batteries. Hybrids are best around town.

The Fusion cruised capably on the highway, however, the 2.0-liter four-cylinder engine spinning merrily in the background. The electric motors added more juice on demand, for a total of 188 horsepower, and I had no issues powering past other cars.

The continuous variable transmission is exceptionally well- mated to the powertrain, and all the systems work quietly and without vibration. The car drives really nicely, and isn't too loud, even on hills.

The top-of-the-line Fusion with the turbocharged 2.0-liter engine has 240 horsepower and 270 pound-feet of torque. That would have been nice, but I might have had to stop for gas — something I never even had to consider over 400 miles of driving the hybrid.

I didn't, however, actually see 47 mpg. With my typically leaden foot, I averaged 36.9 mpg. No worries, I have only myself to blame.

Ford Fusion Hybrid

Engine: 2.0-liter four-cylinder and a 35kW electric motor with a combined 188 horsepower
Transmission: Continuous variable
Speed: 0 to 60 mph in about nine seconds
Gas mileage per gallon: 47 city, 47 highway
Price as tested: $34,770
Best feature: That gas mileage!
Worst feature: Ford's infotainment system is still clunky.
Target buyer: The driver who wants to avoid those gas lines.



Ford donates $1M to Red Cross

By David Shepardson and Tony Briscoe
The Detroit News

Detroit — Ford Motor Co.'s charitable arm said Thursday it is donating $1 million to the American Red Cross for workplace development training for veterans, military members and their families, as well as to disaster relief through the Red Cross Disaster Responder program.

In this two-year commitment, the Ford Motor Company Fund will boost its longstanding support of the American Red Cross by awarding "200 Blue Oval Scholarships" for nurse assistant training in the Red Cross Service to the Armed Forces program.

These scholarships will allow veterans, those soon to exit military service, and their families to receive training for careers in the health field in five cities: Detroit; Atlanta; Washington, D.C.; Nashville, Tenn.; and Louisville, Ky. Forty of the 200 scholarships will be given to veterans and their relatives in the Metro Detroit area.

Southeast Michigan Red Cross CEO La Forice Nealy emphasized Thursday at a press conference in Detroit the importance of these scholarships for an area that has the 11th-largest veteran population in the U.S. with a veteran unemployment rate much higher than the state's level.

"These scholarships will enable our military veterans, their families and our current personnel to access opportunities in the growing health care field," Nealy said.

Jim Vella, president, Ford Motor Company Fund and Community Services, noted that recent government data shows unemployment among post-9/11 veterans at 9.7 percent.

"This expansion of our Red Cross partnership provides deserving veterans and their family members the chance to build new careers in the nursing field, which is a win-win-win for them, the Red Cross and our communities," Vella said.

The Red Cross nurse assistant training program equips trainees to achieve state-level certification as nurse assistants and obtain sustainable and competitive employment.

One of the scholarship recipients, 24-year-old Nick Turner of Chesterfield Township, said the program has opened doors for him to start life outside of the military.

Turner, who joined the military right after high school, couldn't deploy with his unit after developing tendinitis in his hip flexor two years into his service. He was medically discharged soon after and returned home.

"From then, I kind of bounced around from job to job," Turner said. "I worked at Subway, Walmart, Meijer, just kind of doing little jobs, but nothing to really set up my career. I was of hurting financially, and I moved back in with my parents."

Turner heard about a job fair in Selfridge and learned of the program with the Red Cross. After attending an orientation, he found out he qualified and is only two days away from receiving his initial nurse assistant certification.

The 90-hour nurse assistant training includes classroom instruction, clinical training followed by a certification exam.

Ford's support boosts an initial $50,000 in company grants in the past two years for the southeastern Michigan health care career training program and disaster services programs.


New Ford COO sees
pressure on profit margins

November 15, 2012

DETROIT (AP) — Ford Motor Co. said Wednesday that a switch to smaller cars and an increase in incentives will narrow the profit margins in its core North American business.

Mark Fields, who becomes chief operating officer on Dec. 1, said higher inventories will force some automakers to raise rebates and other incentives, and that is likely to cut into what has been stable pricing for Ford. Fields said U.S. car and truck inventories rose to 3.1 million at the end of October, the highest number since December of 2008.

"Even in the last couple of months the competitive environment has gotten tougher," he told analysts at the Barclays Global Automotive Conference. "We've seen incentives go up."

Some unnamed manufacturers are discounting vehicles after a year on the market at levels not normally seen until three years after launch, said Fields, currently Ford's president of the Americas.

Ford's North American operating profit margin, the portion of its revenue left after production costs, was 12 percent last quarter, aided by strong prices for new products such as the Ford Escape SUV and Fusion midsize car. Ford predicts that will drop to 8 to 10 percent by the middle of the decade, squeezed by competition and an ongoing shift from higher-profit trucks to lower-profit cars.

The Edmunds.com automotive pricing site says U.S. incentives grew only 1 percent from September to October and now average $2,180 per vehicle. But it's difficult to track payments that manufacturers make to dealers for hitting sales targets, so those figures may not be included.

Ford raised its average incentives 3.5 percent from September to October, to $2,810 per vehicle. Its main competitors, General Motors and Chrysler, cut their incentives during the same period. Chrysler incentives are down almost 6 percent to an average of $2,671, while GM's are down 3 percent to $3,145, according to Edmunds.

Fields also said there's potential for growth in full-size pickup truck sales, even with competition from a new Ram pickup and new Chevrolet and GMC trucks coming out early next year. Almost 53 percent of the full-size pickups on the road now are above 10 years old; 27 percent are over 15 years old and nearly 13 percent are more than 20 years old, Fields told the analysts.

"You can see there's a lot of pent-up demand out there," he said. "There could be a lot of opportunity."

He wouldn't comment on reports that Ford plans to refresh its top-selling F-Series trucks in 2014, but said the company takes leadership in the truck market seriously. "We also know that as a leader you have a target on your back," he said.

Fields, 51, was named chief operating officer on Nov. 1, a new post under iconic CEO Alan Mulally. As COO, the entire company will report to Fields. Mulally will stay with the company at least through 2014. The promotion of Fields is a strong sign that he will replace Mulally when he leaves.

Ford shares fell with the broader market Wednesday, dropping 32 cents, or 2.9 percent, to $10.68.

Rising U.S. car and truck inventories, price cuts through incentives and a continuing switch from big vehicles to smaller ones will put pressure on Ford Motor Co.'s North American profit margins through the middle of the decade, the company's soon-to-be chief operating officer said Wednesday.

Mark Fields, Ford's president of the Americas who becomes COO on Dec. 1, said U.S. car and truck inventories rose to 3.1 million at the end of October, the highest number since December of 2008. Higher inventories will force some automakers to raise rebates and other incentives, and that is likely to cut into what was stable pricing for Ford, Fields said.

Some manufacturers, which he did not identify, are discounting vehicles that have been on the market for only a year as much as they used to discount after three years on the market, Fields said.

Ford's North American operating profit margin, the portion of its revenue left after production costs, was 12 percent last quarter, aided by strong prices for new products such as the Ford Escape SUV and Fusion midsize car. But the company predicts that will drop to 8 to 10 percent by the middle of the decade, squeezed by competition and the continual shift from higher-profit trucks to lower-profit cars.

The Edmunds.com automotive pricing site says U.S. incentives grew only 1 percent from September to October and now average $2,180 per vehicle. But it's difficult to track payments that manufacturers make to dealers for hitting sales targets, so those figures may not be included.

Ford raised its average incentives 3.5 percent from September to October, to $2,810 per vehicle. Its main competitors, General Motors and Chrysler, cut their incentives during the same period. Chrysler incentives are down almost 6 percent to an average of $2,671, while GM's are down 3 percent to $3,145, according to Edmunds.

Fields also said there's potential for growth in full-size pickup truck sales, even with competition from a new Ram pickup and new Chevrolet and GMC trucks coming out early next year. Almost 53 percent of the full-size pickups on the road now are above 10 years old; 27 percent are over 15 years old and nearly 13 percent are more than 20 years old, Fields told the analysts.

"You can see there's a lot of pent-up demand out there," he said. "There could be a lot of opportunity."

He wouldn't comment on reports that Ford plans to refresh its top-selling F-Series trucks in 2014, but said the company takes leadership in the truck market seriously. "We also know that as a leader you have a target on your back," he said.

Fields, 51, was named chief operating officer on Nov. 1, a new post under iconic CEO Alan Mulally. As COO, the entire company will report to Fields. Mulally will stay with the company at least through 2014. The promotion of Fields is a strong sign that he will replace Mulally when he leaves.

Ford shares fell with the broader market in Wednesday afternoon trading, dropping 28 cents, or 2.6 percent, to $10.72.


Ford Transit Connect
a new minivan breed

Ford Motor Co.'s new Transit Connect Wagon will look like the European Tourneo Connect, pictured here. Ford Motor Company

Family mover Wagon shares platform with Focus, Escape

November 14, 2012
By Karl Henkel
The Detroit News

Ford Motor Co.'s new Transit Connect Wagon is many things: stylish, spacious and practical.

But the vehicle is hardly a minivan — at least not like the crop of current minivans. The Dearborn automaker hopes its "family vehicle" or "people mover" will be a hit with consumers and buck the trend of subpar minivan sales.

"There really is a gap in the marketplace for a low-price minivan, even if you don't want to call it a minivan," said Larry Dominique, president of ALG, a TrueCar company. "It's a pretty well-dominated segment by a few players."

The Transit Connect Wagon, which debuted at an event in Amsterdam this fall as Europe's Tourneo Connect, will be available in North America by the end of 2013. Ford will show the Transit Connect Wagon at the Los Angeles Auto Show this month.

The vehicle will be manufactured in Valencia, Spain

Aimed at consumers of all ages, the Transit Connect Wagon will come as a five- or seven-seater and offer two engine options: a conventional four-cylinder engine or Ford's patented 1.6-liter EcoBoost engine. Ford anticipates 80 percent of consumers will choose the seven-seater option.

The Transit Connect Wagon could get better than 30 miles per gallon and top other comparable minivan models, Ford said. When properly quipped, it can even tow up to 2,000 pounds.

The vehicle will come in three trims -- XL, XLT and Titanium.

Options will include a full-glass panoramic roof, rear view camera, 6.5-inch touch screen display with navigation and Sync with MyFord Touch.

Pricing information and specific fuel efficiency estimates will come at a later date, though Ford said Tuesday it is aiming for the vehicle will be the most affordable seven-seat vehicle in the market.

The Transit Connect Wagon will be built on Ford's global C-segment platform shared by models like the Focus compact and Escape SUV. The vehicle will follow Ford's latest design templates, which include the trapezoidal grille like on the Fusion and the next-generation Fiesta.

Ford hasn't had a minivan since the Freestar, which was discontinued in 2007. The segment is currently dominated by three major players: Honda Motor Co. and its Odyssey; Toyota Motor Corp. and its Sienna; and Chrysler Group LLC and its Town & Country and Dodge Grand Caravan.

Annual minivan sales have plummeted by nearly 1 million units since the mid-1990s.

The Transit Connect Wagon will be built on Ford's global C-segment platform shared by models like the Focus compact and Escape SUV. (Ford Motor Co.)


Ford Raptor has fans in China

Ford Raptor

Pickup sells for up to $160K as wealthy seek specialty cars

Nov 12, 2012
By Karl Henkel
The Detroit News

Ford Motor Co.'s off-road SVT Raptor has a devoted following in an unlikely place: China, where Ford doesn't even sell the tricked-out, bad-boy F-150.

Buyers on the gray market — outside authorized dealer channels — pay four times the U.S. sticker price for the pickup.

Newly wealthy truck fans in China are lusting over the SVT Raptor with its aggressive styling, heavy-duty skid plates and long-travel suspension, and big-bore 6.2-liter V-8.

The SVT Raptor has a starting price of $43,340 in the U.S. In China, it can command the equivalent of $160,000, or 1 million yuan in the local currency, according to the CarNewsChina.com enthusiast site. The website documented a used 2010 model purchased for $109,000.

Other Chinese websites show several Raptors for sale at significant markups. Autohome.com.cn has an SVT Raptor SuperCrew for sale for the Chinese equivalent of about $145,000.

As the Raptor craze continues to grow, entrepreneurs are bringing more of the pickups into the country.

The supply is now surpassing demand, and prices are starting to deflate as a result, CarNewsChina's Tycho de Feyter said in an email. It's unknown how many have been sold there.

But Raptors — and pickups as a whole — are niche products in China.

"Unlike in the U.S., the pickup is hardly associated with a symbol of lifestyle in China. Instead, it is mostly used for utility purposes (transporting goods)," said Lin Huaibin, IHS Automotive China light-vehicle forecast manager. "The sales volume of pickups such as the Ford Raptor … is very small not only because of its high price, but also because of the taste of local consumers who do not see the pickup as a 'car,' per se."

But the fascination with specialty vehicles is rising in China, said Michael Dunne, an expert on the Chinese auto industry.

Wealth is growing, and Dunne said that until now — when Chinese are becoming more interested in owning automobiles — interest in specialty cars has been minimal. But in China, with a market of 20 million vehicles, Dunne estimates specialty vehicles could comprise a few hundred thousand units annually.

"I think there's a lot of potential for specialty vehicles," Dunne said. "It's going to be a trend."

One noteworthy instance was the Chinese fascination with the Hummer last decade.

"It all started with the Hummer," de Feyter said. There was enough demand for Hummers in China that after General Motors Co. liquidated the brand, it tried selling it to a Chinese industrial equipment maker.

The Chinese government, which approves vehicles that can be manufactured in the country, rejected the transaction for the gas-guzzling brand.

The Hummer primed the market for the SVT Raptor.

"When the Ford Raptor arrived in 2010, the Chinese Internet went completely crazy, that was the monster they wanted, and the first cars arrived on Chinese shores in early 2011," de Feyter said.

There is no law prohibiting importation of vehicles like the Raptor into China, and Dunne said the government does not want to alienate some of its wealthiest citizens by banning such vehicles. But it isn't an easy or inexpensive venture: Chinese import taxes increase the price on American-made products — especially those with large engines — by at least 50 percent, Dunne said, which explains some of the inflated cost of the Raptor. But those who want to acquire the truck as a status symbol are willing to pay the price.

Ford itself doesn't sell or promote the Raptor in China. Brokers or Chinese auto dealers purchase Raptors from American dealers and ship them overseas.

The practice is known in the industry as the "gray market": Consumers go outside authorized dealer channels to buy cars they otherwise couldn't get.

Europeans for years have turned to the gray market for Ford Mustangs. Ford, in response to European demand, announced in September it will begin exporting Mustangs to Europe in 2014.

Ford has no such plans to export the SVT Raptor to China. So drivers who want to traverse the rugged streets of Beijing in the 411-horsepower American four-wheeler must continue looking beyond their local Ford dealer.


Ford stays flexible with
small cars plant

Automotive journalists are greeted by five, 2013 vehicles at the Michigan Assembly Plant in Wayne, including, from left, C-MAX Hybrid, gas-powered Focus 5-door hatchback ST, Focus 4-door sedan SE, C-MAX Energi SEL and the Focus Electric during a tour, Thursday, November 8, 2012. (Todd McInturf / The Detroit News)

Michigan Assembly retooled line allows
5 autos with 4 powertrains

November 10, 2012
By Karl Henkel
The Detroit News

Wayne — Ford Motor Co.'s retooled and flexible Michigan Assembly Plant will test the company's small-car sales forecasting abilities as the automaker mixes production of five different small cars with four different powertrains.

The Dearborn automaker will alter production plans as often as twice each month to meet changing market demand, Jim Tetreault, Ford vice president of North America Manufacturing, told The Detroit News on Thursday.

About 5,170 workers on three shifts build the gasoline-powered Focus and Focus ST, an electric Focus, a C-Max Hybrid and most recently, a C-Max Energi plug-in hybrid.

"We're flexible to meet demand whether gas is $6 a gallon or $2.80 a gallon," Tetreault said. "And we're capable of manufacturing any combination of these vehicles."

Michigan Assembly Plant, which underwent a $550 million overhaul as part of a $5.9 billion Energy Department loan to become a flexible facility, is Ford's fourth flexible assembly plant. It joins operations in Louisville, Ky., and Hermosillo and Cuautitian, Mexico. A fifth — the Flat Rock Assembly Plant — will add a flexible line next year.

The flex-plants allow Ford to produce a broader variety of vehicles in fewer plants. The plants have helped Ford reach 114 percent plant capacity, the highest rate Tetreault can remember in his 30-plus years at the automaker.

Ford trained plant workers to assemble the five different vehicles, production of which can alternate with each assembly job, through "an intense training program." Different models take longer to manufacture; the C-Max Energi plug-in, for instance, with its 360-pound lithium-ion battery, takes longer than the Focus compact.

"From a manufacturing standpoint, it's probably not the most ideal way to do things," Tetreault said. "But from a big picture view with my manufacturing hat on, it's the right thing for the company because we can give the sales guys whatever they want, whenever they want it."

Hybrid vehicle sales currently make up slightly more than 3 percent of overall new vehicle sales. Ford has said it expects as many as 25 percent of its U.S. new vehicle sales — approximately 500,000 — to come from sales of electrified vehicles by 2020. That's also the year Ford could compete head-to-head with Toyota and its class of hybrid vehicle options, according to intelligence firm Pike Research.

Of Ford's current-generation hybrid and electric vehicle options, the C-Max Hybrid may have the most immediate success.

Ford sold 4,007 of the vehicles in the past month-and-a-half, including 3,038 in October, the vehicle's first full month on dealer lots. That figure, as Ford proudly points out, was higher than the sales total for the vehicle's chief competitor, the Toyota Prius v. Ford also sold 144 C-Max Energi plug-in hybrids last month.

Ford’s C-Max Energi takes longer to build than a Focus but can be built in the same flexible facility. / Todd McInturf / The Detroit News


Ford adds fifth vehicle to the line
at Michigan Assembly Plant

November 9, 2012
Detroit News

Wayne — Ford Motor Co.'s Michigan Assembly Plant is now producing five different vehicles on flexible assembly lines.

The plant's nearly 5,170 workers build a gasoline-powered Focus and Focus ST, an electric Focus, a C-Max Hybrid and now, a C-Max Energi plug-in hybrid.

"Michigan Assembly Plant is setting a new global standard for flexible manufacturing, and is a central part of Ford's important milestone, sweeping Toyota across the board for fuel economy leadership," said Jim Tetreault, Ford vice president of North America Manufacturing, at a plant event Thursday.

The Michigan Assembly Plant, which underwent a $550 million overhaul as part of a $5.9 billion Energy Department loan, is now the only plant in the world to produce five vehicles with four different powertrain options. Those powertrain options include a hybrid and plug-in hybrid.

Hybrid vehicle sales currently make up slightly more than 3 percent of overall new vehicle sales. Ford has said it expects as many as 25 percent of its U.S. new vehicle sales — approximately 500,000 — to come from sales of electrified vehicles by 2020.

That's also the year Ford could compete head-to-head with Toyota and its class of hybrid vehicle options, according to intelligence firm Pike Research.

Of Ford's current-generation hybrid and electric vehicle options, C-Max Hybrid may have the most immediate success.

Ford sold 4,007 of the vehicles in the past month-and-a-half, including 3,038 in October, the vehicle's first full month on dealer lots. That figure, as Ford proudly points out, was higher than the sales total for the vehicle's chief competitor, the Toyota Prius v.

Ford also sold 144 C-Max Energi plug-in hybrids.

The Dearborn automaker hasn't been as successful with its Electric Focus. Ford sold 118 of the all-electric vehicles in October — the car's best sales month since retail sales began in June.

The automaker is also selling a Fusion hybrid and will begin selling a Fusion Energi plug-in hybrid next year. Those vehicles are manufactured in Hermosillo, Mexico.


Ford workers riot
over plant closing

Detroit News
November 8, 2012

Ford workers angry about the automaker's plans to shutter a plant in Genk, Belgium, broke windows and burnt tires in a demonstration outside the company's European headquarters in Germany.

Cologne city police spokesman Karlo Kreitz said about 100 of the protesters were taken into temporary custody after three officers suffered minor injuries in the fracas Wednesday.

Police say the protesters arrived on buses from Belgium and blocked the entrance to the plant. Then a group of 20 to 40 stormed the building and threw stones through windows while others burned tires and set off firecrackers.

Harper congratulates Obama, applauds Michigan's bridge decision

Prime Minister Stephen Harper visits the Taj Mahal in Agra, India on Monday, November 5, 2012.

The Globe and Mail
November 7, 2012

Stephen Harper congratulated Barack Obama on his re-election victory and signalled his relief at the defeat of a Michigan ballot measure that could have delayed a new Windsor-Detroit bridge.

"I know it was a very hard fought election," Mr. Harper said of the U.S. presidential race that saw the Democratic candidate beat Republican rival Mitt Romney.

"We look forward to working with the president for the next four years," the Prime Minister told reporters after touring a Sikh heritage centre in India's northern Punjab region.

"We've had a very good and productive working relationship; we're both focused on jobs and the global economy, particularly in North America," he said while in Anandpur Sahib, about 82 kilometres outside the regional capital of Chandigarh.

Mr. Harper said he looks forward to working with Mr. Obama on a perimeter security agreement, which will see Canadian and American authorities work more hand in glove on screening cross-border travellers and commercial traffic.

The Prime Minister made special mention of the defeat of a ballot campaign that tried to throw a roadblock in the path of a recently-announced Windsor-Detroit bridge.

Ambassador Bridge owner and billionaire Manuel "Matty" Moroun had spent tens of millions of dollars trying to convince Michigan voters they should change their state constitution to require a referendum before any publicly-funded span to Canada is built.

The proposal was rejected November 6 by Michiganders.

"I should also mention very briefly the fact of the result of the referendum in Michigan. We're very pleased to see the support of the people of Michigan for the new bridge between Detroit and Windsor which is very important to the economies of our countries."


Hyundai may lose
$100M in mpg case

But Moody's says lowered mileage estimates
won't reduce automaker's credit rating

By David Shepardson
Detroit News Washington Bureau
November 7, 2012

Hyundai Motor Corp. and its Kia Motors unit's decision to revise downward its North American fuel economy estimates and reimburse owners for gasoline will cost the Korean automaker $100 million, Moody's Investors Service says.

But Moody's said the move would not prompt a lowering of the Korean automaker's credit rating.

On Friday, Hyundai and Kia said that they would reduce the fuel economy estimates on nearly 1.1 million vehicles sold since 2010 in North America, including about 900,000 in the United States, in response to an Environmental Protection Agency investigation.

Hyundai is reducing the combined Hyundai-Kia 2012 fleetwide mpg by 3 percent to 26 mpg from 27 mpg.

"This incident will damage their brand recognition," Moody's said. "However, there will be no impact on the Baa1 ratings and stable outlooks, because Moody's believes both companies have adequate financial cushions and the impact on their competitive positions will be manageable."

Moody's, one of the nation's major ratings houses, said it estimates that Hyundai Motor — including Kia — "will incur additional annual costs of about $100 million until the affected models are largely scrapped, which is less than 1 percent of its adjusted" earnings.

Last week, Hyundai's top U.S. executive John Krafcik told The Detroit News the costs would be "a big amount," but declined to estimate. "Our focus is on making it right for the customers. We're honestly not so focused on that cost," he said.

Still, the issue could hurt the fast-growing brand. In recent years, the automaker has been hindered in the U.S. by capacity constraints; dealers have pleaded with the company to allow them to buy more vehicles.

"The impact on the companies' brand recognition and sales performance in North America could be more material, given that high fuel efficiency has been one of their key selling points and the region is the group's largest market," says Chris Park, a Moody's vice president and senior credit officer.

Hyundai is the world's fifth-largest automaker, selling 6.7 million vehicles worldwide. North America accounted for about 24 percent of Hyundai's global sales units during the first nine months of 2012.

Moody's said the gas mileage fallout "along with the lack of major new model launches in the near term, means the group's market share in the U.S. is likely to decline to some degree in 2013 from 9.2 percent during the first nine months of 2012."

"The damage to the companies' brand image and their sales performance in North America is unlikely to have a profound impact on their credit profile," Park said.



Harry Crossley

(July 25, 1917 - November 6, 2012)

Retired January 1, 1983
39 Years of Service

It is with great sadness that we inform you of the passing of Retiree Harry Crossley on November 6, 2012

Our condolences go out to his Daughter Sharon and the Crossley Family.

Henry George Crossley, age 95, of Mississauga died peacefully surrounded by Harry Crossleyfamily on Tuesday, November 6th, 2012.  "Harry" was a proud retiree of The Ford Motor Company with 39 Years of Service, retiring Jan. 1, 1983.  Predeceased by his cherished wife Dorothy and son Brian, loving father to Maureen and Sharon. Father in-law to Jeanette, Robert and Paul.  Harry loved sports, travel but most of all time with his family and friends.  He will be greatly missed by his four grandchildren and six great grand children. Memorial Service will  be held at Cawthra Park United Church on Friday November 16, 2012 at 11:00 am. with reception to follow. Donations can be made in his memory to Cawthra Park United Church or the Canadian Cancer Society

Funeral Arrangements:

A Celebration of Life
November 16, 2012
Cawthra Park United Church
1465 Leda Ave, Mississauga

Parking is available behind
the church on Garnet Ave


Condolences to the family in the care of
Turner & Porter

Donations to Cawthra Park United Church 

Here are some pictures from a Few weeks ago
at our Retirees Thanksgiving  luncheon:

Sharon Crossley with her Dad Harry

Eli Worniuk, Harry Crossley and Norm Collins

Don Farquason, Konrad Wilski Harry Crossley and Chris Wilski

Harry Crosley with Konrad Wilski

Harry Crossley with Craig Howard


UAW's King, Dems keep
pressure on Romney

By David Shepardson
Detroit News Washington Bureau
Nov 6, 2012

Manchester, N.H. — United Auto Workers President Bob King and two senators rallied autoworkers ahead of Mitt Romney's final rally of the presidential campaign here and accused the GOP candidate of dishonesty.

Standing before a row of a half-dozen Jeep Grand Cherokee SUVs and an Obama campaign bus, King and Sens. John Kerry, D-Mass., and Jeanne Shaheen, D-N.H., criticized Romney's opposition to the $85 billion auto bailout and recent comments that suggested Chrysler would move Jeep jobs to China.

"What makes me so angry about Mitt Romney … this industry that he came out of — that his family got their wealth out of — that he lies about it, he changes his position on it all the time," King said. "This guy will do anything to get elected."

On the final day of the campaign, the three kept up a nearly two-week effort to highlight controversial comments Romney, a Detroit native, made about moving auto jobs to China.

The election may hinge on blue-collar states, especially Ohio. The Obama campaign focused on the auto message after Romney mentioned at a speech near Toledo he had read a story that falsely claimed Chrysler planned to shift all Jeep production to China.

Romney is appearing with Michigan native Kid Rock at his final rally, although he is planning stops on Election Day in Ohio and Pennsylvania at campaign phone banks.

Newspaper editorial pages across Ohio and fact checkers have denounced Romney's Jeep comments and TV and radio ads that also suggest General Motors Co. was moving jobs to China.

The election, King said, "is about integrity. It's about who is telling the truth. To me, it's about who can you trust," he said. Romney "doubled down on the lies" when he kept running ads in Ohio that are misleading.

Shaheen noted 23,000 auto jobs — most at dealers and parts shops — are in the Granite State. The auto bailout "has not just been important to Ohio and Michigan. It's been important right here in New Hampshire."

The Romney campaign has emphasized the bailout's costs. "American taxpayers stand to lose $25 billion and GM and Chrysler are expanding their production overseas," spokeswoman Kelsey Knight said. "Unlike President Obama, Mitt Romney has a comprehensive plan to revive manufacturing, create millions of good-paying jobs, and deliver real change and a real recovery."

Romney has refused to discuss the Jeep issue since he made the comments and his campaign has never retracted the initial comment.

King is flying back to Michigan today to campaign for Obama and to try to win passage of Proposal 2, which would enshrine collective bargaining rights in the state constitution.


'Ageism' widespread in
Canada, survey finds

CTVNews.ca Staff
Nov. 5, 2012

So many Canadians look down on seniors that ageism has become the most tolerated form of social discrimination in Canada, a new survey concludes.

A poll of 1,500 Canadians found eight in 10 believe seniors age 75 and older are seen as less important and are more ignored than younger generations.

Six in 10 seniors age 66 and older say they have been treated unfairly because of their age, while 35 per cent of Canadians admit they've treated someone differently because of their age.

The survey was conducted by Leger Marketing on behalf of Revera, a provider of seniors' accommodation, care and services.

According to the survey, the three most common forms of age discrimination faced by Canadian seniors are:
• being ignored or treated as though they are invisible (41 per cent)
• being treated like they have nothing to contribute (38 per cent)
• assuming that seniors are incompetent (27 per cent)

Jane Barratt, the secretary general of the International Federation on Ageing, says it's unfortunate that so many Canadians have such negative views about aging and the value of seniors, especially given that almost all of us will become seniors ourselves one day.

"By 2050, one in four Canadians will be a senior, and we all need to look at our behaviour because ageism is alongside racism and sexism as social prejudices. It's a serious problem not only in Canada, but worldwide," she told CTV's Canada AM Friday.

The vast majority of Canadians -- 89 per cent -- associate aging with negative outcomes such as being alone and losing independence, the survey found. And yet older Canadians are more likely than all other generations to say that "age is just a number." In fact, 40 per cent of those 66 years of age and older say they believe the "best is yet to come."

"As we grow older, we become much more optimistic," says Barratt. "Younger Canadians might see older people as burdensome and grumpy, not involved in the community. But that's a real misconception that we need to end."

Ageism is not just reflected in the negative attitudes and stereotypes many younger Canadians have. It's also seen in the way society is structured based on the assumption that everyone is young. That assumption often means that society fails to respond to the real needs of older people.

That may be why one in four Canadians (27 per cent) say they've experienced age discrimination from government, meaning they've noticed programs, policies and services that do not take into account the needs of older people.

One-third of seniors also say they've faced discrimination from health-care professionals and the health-care system because of their age. Many of these seniors say health-care professionals tend to dismiss their complaints as inevitable parts of aging, rather than fixable problems.

The solution to ageism, say the authors of the Revera report , starts with understanding that ageism is not just an old person's problem: it's a societal problem. Previous Revera research suggests that 85 per cent of baby boomers, who are now just beginning to retire, say they want a different aging experience than that of their parents or grandparents.

"Against this backdrop, we need to challenge our assumptions of aging and recognize the valuable contributions of older adults to society," the report concludes.

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Kia, Hyundai to repay car owners

By David Shepardson
Detroit News Washington Bureau
November 4, 2012

Washington — Hyundai Motors Co. and Kia Motors said Friday they will reimburse owners of nearly 1.1 million vehicles in North America after admitting they overstated gas mileage claims on vehicle window stickers.

The Korean automakers disclosed Friday the issue impacts 172,000 vehicles in Canada. That's in addition to the 900,000 vehicles in the United States reported by The Detroit News early Friday. The issue came to light after an Environmental Protection Agency investigation turned up discrepancies between the window stickers and EPA testing.

The automakers will reimburse owners for the overstated fuel efficiency for as long as they own the cars, plus 15 percent. Hyundai said a typical owner of a vehicle in Florida driving 15,000 miles a year could get a $88 refund this year, in addition to future refunds for as long as they own the car.

The bill could top $100 million. EPA's investigation is ongoing; the agency may seek civil penalties over the misstated claims.

The restatement will reduce Hyundai-Kia's fleetwide average fuel economy from 27 miles per gallon to 26 mpg for the 2012 model year. Individual ratings, depending on the car, will fall from 1 mpg to 6 mpg. Most vehicles will see combined city-highway efficiency drop by 1 mpg.

Hyundai has tweaked rivals for claiming 40 mpg in a specialized model, such as an Eco version, through its "Save the Asterisks" campaign. The automaker has touted its fuel efficiency and prodded others to be more forthcoming about the overall mileage average of vehicles that are actually sold. Some automakers have grumbled that because Hyundai doesn't sell pickups, it keeps its overall average high.

Now, because of the faulty testing, Hyundai is retracting claims that three of its four 2013 models get 40 mpg.

Analysts said the issue could hurt Hyundai's reputation for fuel efficiency.

"Whether an honest mistake or a deliberate corporate effort to fudge the numbers, the fact that the companies' ballyhooed 40-mpg cars are no longer members of that august club — and that Hyundai and Kia are repaying customers who relied on the faulty mileage claims when purchasing their cars — will be something that haunts the companies for a long time to come," said Edmunds.com senior green-car editor John O'Dell.

Jesse Toprak, senior analyst at TrueCar, said the correction by Hyundai may have a negative impact on consumers who are currently in the market but undecided about vehicle choice. "However, even with the correction, the fundamentals of what made Hyundai and Kia brands a success in the U.S. do not change," he said. "They still offer some of the best value propositions in the industry, along with attractive styling and low cost of ownership."

Hyundai and Kia share the same parent company. The automakers said the fuel consumption rating discrepancies resulted from procedural errors during a process called "coast-down" testing at the companies' joint testing operations in Korea.

Coast-down testing simulates aerodynamics, tire rolling resistance and drivetrain friction to program test equipment.

Consumer Watchdog, a consumer group, said that following a barrage of consumer complaints, it had asked the EPA to audit mileage of the Elantra in January. It ultimately filed a false advertising suit against Hyundai for widely advertising the "40 mile per gallon Elantra."

"The EPA rightly audited Hyundai and the public deserves to know the whole truth about why these test results were inaccurate and whether or not they were intentionally falsified, " said Jamie Court, president of Consumer Watchdog.

The lawsuit, filed in July in California, claims Hyundai misled consumers about gas mileage. It asserted "illegal advertisements caused tens of thousands of California drivers to purchase or lease 2011 and 2012 Elantras and consequently incur unexpected fuel costs."

Hyundai and Kia have set up websites to address consumer questions. In the U.S., they are www.hyundaifuelconsumption.com and www.kiafuelconsumption.com. In Canada they are: www.hyundaifuelconsumption.ca and www.kiafuelconsumption.ca


13,200 retirees take GM buyout

By Melissa Burden
The Detroit News
November 2, 2012

General Motors Co. on Wednesday said it spent $3.6 billion on lump sum payouts to about 13,200 eligible U.S. salaried retirees who earlier this year accepted one-time payments over opting to receive monthly pension checks for life.

GM said it offered lump-sum payments to 44,000 retirees, according to a filing with the U.S. Securities & Exchange Commission. The average check that GM cut was just under $273,000.

"A lot of retirees valued having that alternative put in front of them," GM Chief Financial Officer Dan Ammann said in a call Wednesday with analysts. "It was a good deal for them."

The Detroit-based manufacturer also said it expects to close its transaction this month with Prudential Insurance Co. of America, which is assuming responsibility for U.S. salaried pension obligations.

The automaker is expected to purchase a group annuity contract today and GM's U.S. salaried retiree pension plan will terminate effective today, according to the filing.

On June 1, the automaker announced it would offer the lump sums to an estimated 42,000 salaried retirees who left GM between Oct. 1, 1997, and Dec. 1, 2011. That deal was part of a broader plan with Prudential that GM had estimated would cut its pension liability by $26 billion.

On Wednesday, GM said that it will move $28.7 billion in pension liabilities off its balance sheet. It will settle pension obligations of about $25.1 billion in the fourth quarter, GM said.

"We were very pleased with the outcome of this transaction," Ammann said in a call with reporters Wednesday. "It's good for the company."

In total, 118,000 white-collar U.S. GM workers will be affected by the changes; those who did not take lump sums will continue to receive monthly payments through Prudential.

The company said it will make cash contributions of about $2.6 billion to its U.S. salaried pension plan; it will record an about $2.9 billion in a pre-tax, one-time charge in the fourth quarter. GM had said it expected to make a cash contribution of $3.5 billion to $4.5 billion, and record a charge ranging between $2.5 billion to $3.5 billion.

GM said it loaned $2.2 billion and contributed $650 million to the U.S. salaried retirees' pension plan. It said money loaned over what is required will be repaid to GM.

Ammann did not comment on an analyst question about possibly working with the UAW on a similar pension buyout plan for its hourly retirees.

"We see continued opportunity to further manage our pension obligation as we move down the road," he said.

"Arguably 30 percent could be enough to make it worth their while (to offer a plan to hourly retirees), assuming the terms they would agree upon with UAW would be acceptable," Itay Michaeli, a Citi Investment Research analyst, said in an interview Wednesday.

Ford Motor Co. also is in the process of offering pension buyouts to 98,000 qualifying white-collar retirees and former workers.


Pensioners, unemployed still facing long waits with Service Canada

Gloria Galloway
Globe & Mail
November 1, 2012

Attempts by the federal Conservatives to provide benefits and information more quickly to the unemployed and the elderly have done little to reduce the frustrations with Service Canada, government documents suggest.

Seniors who call the agency to ask about their pension and Old Age Security benefits are still reaching jammed phone lines. And many jobless Canadians are waiting months for the agency to mail out their first cheques.

After a barrage of criticism last year over the inability of Service Canada to render assistance to Canadians in a timely fashion, Human Resources Minister Diane Finley agreed to hire temporary employees and reassign hundreds of existing staff.

But documents provided this month to Chris Charlton, the Human Resources critic for the NDP, suggest there was little subsequent improvement in the sluggish pace at Service Canada, where hundreds of workers have been laid off and thousands of others have been told their jobs are on the line.

"Obviously, we haven't recovered from the last round of cuts and now there's more," Ms. Charlton told The Globe and Mail this week. "We were told that frontline services wouldn't be affected, but obviously people aren't answering the phones."

The government says 80 per cent of calls to Service Canada should be answered within three minutes. But, according to the documents, calls about OAS and CPP that met that standard fell to 40.43 per cent in the period between April and July, 2012, from 53.92 per cent in fiscal 2011-12 .

"When staff are laid off and offices are shut down, people are now being referred to the phones, except the phone isn't being picked up," Ms. Charlton said.

At the EI call centres, the response times improved slightly between this year and last – to 35 per cent of calls being answered within three minutes from 29 per cent meeting the target.

But the processing times for EI applications are worse than last year. In June, for instance, 24 per cent of jobless Canadians waited more than the department's prescribed maximum of 28 days to get their claims through the system. That compares to 17 per cent in June of last year.

Jason Erb, a 34-year-old computer programmer in Waterloo, Ont., who was laid off in April after six years with the same company, was one of those people. He has since found another job, but it took 47 days to get his first EI cheque. "It was very frustrating at times, not knowing whether we would have to borrow money just to make our rent payment, and whether we would have enough money for my wife to further her education by the application deadline."

Human Resources officials said in an e-mail that processing times for August and September of 2012, which were not included in the documents given to Ms. Charlton, were better than the year before.

As for the call centres, the officials said long times spent waiting on the phone can be attributed to the growing number of Canadians who are retiring every year and increasingly complex inquiries .

"We continue to move forward with our modernization agenda," they said, "which aims to introduce new technologies and service delivery strategies as part of our ongoing effort to improve client service, support staff and increase resolution on first contact."

But Service Canada staff suspect politics is also at play. They point to the Ottawa Service Canada call centre that was moved in 2012 from the riding held by Liberal MP Mauril Belanger to Cornwall, Ont., in Conservative MP Guy Lauzon's riding. Or the EI processing centre that was moved from Rimouski, Que., where there was a Bloc Québécois MP followed by a New Democrat, to Thetford Mines in the riding of Industry Minister Christian Paradis.

The employees say that means experienced workers are being forced to move. And, because many can't or won't, the centres are understaffed and are undertrained.

Service Canada's service: By the numbers


In January, Human Resources Minister Diane Finley authorized hiring 165 temporary employees to process EI claims and the reassignment of 214 Service Canada workers to the processing section.


The percentage of calls to Service Canada that Ottawa says should be answered within three minutes. Calls about OAS and CPP fell to 40.43 per cent in April-July, 2012, from 53.92 in fiscal 2011-12.


In June, 24 per cent of unemployed Canadians waited more than the department's prescribed maximum of 28 days to get their claims through the system. That compares with 17 per cent in June of 2011.

Ford's earnings outpace forecast

Ford Earnings

North America carries load in third quarter; profit hits $1.63B

October 31, 2012
Karl Henkel
Detroit News

Ford Motor Co.'s robust North American profits outweighed the automaker's growing European losses in the third quarter and beat analysts' expectations, though it is still unclear whether North America can carry Ford until Europe's economic woes subside.

Ford on Wednesday posted a $1.63 billion profit in the quarter — a slight decline compared with the $1.65 billion profit from the same period a year ago, due in part to a substantially higher tax rate.

Ford's pre-tax operating profit was $2.2 billion, or 40 cents per share, topping Wall Street predictions. A survey of 19 analysts conducted by Thomson Reuters anticipated earnings of 30 cents per share.

Analysts responded positively to Ford's results.

"Today's results show that regardless of how things go in Europe, they are going to be fine," Morningstar Inc. analyst David Whiston said Wednesday.

Analysts were particularly pleased with Ford's North American operations, which posted a pre-tax profit of $2.3 billion, the best third quarter for North America since Ford began separating finances by region in 2000. In contrast, Ford's European branch lost $468 million in the quarter.

"North America will continue to carry the load," Ford Chief Financial Officer Bob Shanks said in a conference call.

More impressively than the profits, however, was the 12 percent profit margin Ford posted in North America — an "extraordinary" number, Jeffries & Co. Inc. analyst Peter Nesvold said in a report.

Nesvold pointed out that there was no single reason why Ford's profit margin was so high.

Rather, it was due to sales— including those of higher-priced models.

The third quarter marked the third in a row that the region had a profit margin of 10 percent or better, partially due to the fact Ford's North American assembly plants are running at nearly 100 percent, said Arthur Wheaton, an automotive industry expert and senior extension associate at Cornell University.

Shanks emphasized consistency in profit margins; Ford can't hit a home run every quarter.

"That isn't a number you should expect to sustain," Shanks said, citing increased seasonal costs. "We would not expect to have the same margin in fourth quarter. We'll have a good quarter. It just won't be as strong as (last) quarter."

More losses seen in Europe

Europe, meanwhile, is not expected to have a strong fourth quarter.

Ford said it could lose $500 million, up $32 million from the amount it lost during the third quarter.

The Dearborn automaker so far this year has lost $1 billion in the region.

Last week, the company said it stands to lose about $1.5 billion in Europe in 2012 and 2013; the company also unveiled a massive restructuring that will close three European plants and lay off or buy out 6,200 workers in the next two years.

"I think this is the time to do it there," Ford CEO Alan Mulally said of the restructuring in a conference call. "No business is sustainable if it continues to lose money."

Mulally pointed to Ford's North American restructuring a few years back, where the automaker matched supply to demand while revamping its product line.

Mulally said while Ford made the biggest and boldest European restructuring plan among any automaker during the current economic crisis, he expects more dominos to fall in the future.

"I think a lot of people are coming to the same realization (we did)," he said.

Shanks said Ford will not restock its European auto supply in the fourth quarter like it typically would because of plummeting demand; instead, Ford will maintain about a 40-day supply of inventory.

Ford made $45 million during the third quarter in its Asia-Pacific-Africa region, mostly because of a favorable volume and mix of vehicles and higher net pricing, though Ford still expects to lose money there this year due to higher costs associated with new products and investments.

Rapid growth in Asia

Shanks noted the rapid growth in the region.

Ford sold more of its Focus compact cars in Asia-Pacific-Africa than in either Europe or North America during the third quarter.

In South America, Ford posted a $9 million profit, down compared with the same period a year ago.

Profits were constrained because of growing competitive and pricing pressures, weakening currencies and adverse changes in government policies, the company said.

Ford shares remained unchanged at $10.36 per share Tuesday as the New York Stock Exchange remained closed in the aftermath of Superstorm Sandy.


Ford posts Q3 net of $1.63
billion as record N.A. profits
offset European losses

Bradford Wernle
Automotive News
October 30, 2012

DETROIT -- Ford Motor Co. posted a $1.63 billion third-quarter net profit, nearly matching its year-earlier total, as record high profits in North America more than offset mounting losses in Europe.

Pretax operating profit rose to a record $2.16 billion from $1.94 billion a year earlier, the company said in a statement today.

Pretax operating profit in North America increased to $2.33 billion -- a record for any quarter since 2000, when Ford began tracking the region as separate business unit -- from $1.55 billion a year earlier. The pre-tax loss in Europe widened to $468 million from $306 million in the third quarter of 2011.

"The Ford team delivered a best-ever third quarter, driven by record results in North America and the continued strength of Ford Credit," CEO Alan Mulally said in a statement. "While we are facing near-term challenges in Europe, we are fully committed to transforming our business in Europe."

Total global revenue was $32.1 billion, down from $33.1 billion a year earlier. Last year's net of $1.65 billion was Ford's second-highest quarterly profit ever.

The rise in North American pretax profit came as revenues in the region rose 8 percent to $19.5 billion. Ford launched three important new or redesigned vehicles in the quarter: the Fusion mid-sized sedan, the C-Max Hybrid and Escape compact crossover.


Ford Earns Record Third Quarter
2012 Pre-Tax Operating
Profit of $2.2 Billion, Net Income
of $1.6 Billion

DEARBORN Oct 30, 2012 – Record profit and operating margin in North America and continued solid performance from Ford Credit drove the best-ever third quarter profit for Ford Motor Company as it reports quarterly results today.

The company reported a pre-tax profit of $2.2 billion, or 40 cents per share, and net income of $1.6 billion, or 41 cents per share. The company also continued to generate positive Automotive operating-related cash flow, and ended the period with a strong liquidity position of $34.4 billion, an increase of $500 million from the second quarter.

"The Ford team delivered a best-ever third quarter, driven by record results in North America and the continued strength of Ford Credit," said Alan Mulally, Ford president and CEO. "While we are facing near-term challenges in Europe, we are fully committed to transforming our business in Europe by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business."

Automotive operating-related cash flow was $700 million, the 10-th consecutive quarter of positive performance. Ford finished the third quarter with Automotive gross cash of $24.1 billion, exceeding debt by $9.9 billion. This is a net cash improvement of $1.8 billion compared to a year ago, and an increase of $400 million from the second quarter. Automotive debt of $14.2 billion at the end of the third quarter was unchanged from the end of the second quarter. Ford completed its last drawdown of low-cost loans for advanced technologies in August, and began repayment in September.

Ford also made payments of $600 million to its worldwide funded pension plans. This included $500 million in discretionary payments to U.S. funded plans in line with the company's previously disclosed long-term strategy to de-risk its funded pension plans. Dividends paid in the quarter totaled nearly $200 million.

The increase in total Automotive pre-tax profit and operating margin is more than explained by the record quarter in North America. This was driven primarily by higher net pricing and lower contribution costs, offset partially by higher structural costs and unfavorable exchange. Lower contribution costs reflect primarily favorable commodity hedge effects.

Ford North America
For the third straight quarter, Ford North America pre-tax profit exceeded $2 billion, and its operating margin exceeded 10 percent. The improvement compared with third quarter 2011 reflected favorable volume and mix, higher net pricing and lower contribution costs, mainly favorable commodity hedging effects; higher structural costs and unfavorable exchange were partial offsets. Ford North America's pre-tax profit through the first nine months of 2012 exceeded its 2011 full year profit.

The company's outlook for North America for full year 2012 remains unchanged. Ford expects significantly higher pre-tax operating profit and margin compared with 2011, as consumers continue to respond to the company's strong product lineup. Ford also remains committed to maintaining its competitive cost structure as it grows its business in North America.

During the quarter, the company added a shift to its Louisville Assembly Plant, where it builds the all-new Escape. This was the last major action in the company's plan to add 400,000 units of annual incremental capacity by the end of the year.

Pre-tax profit and operating margin, while slightly positive, declined substantially compared with a year ago primarily due to unfavorable exchange – mainly a weaker Brazilian real – unfavorable volume and mix, and higher costs. Volume was affected in the quarter by the launch ramp-up of new products and production reductions in Venezuela related to currency restrictions. Although net pricing was higher, it was constrained compared to prior years by a more intense competitive environment.

Ford continues to expect Ford South America to be profitable for the full year, but at a level substantially lower than 2011, consistent with prior guidance.

Ford Europe
Ford Europe's results compared with a year ago largely reflected unfavorable market factors, including the lowest level of industry sales in almost 20 years. The decline is more than explained by lower volume, including lower industry, lower share and unfavorable dealer stock changes; lower costs and favorable exchange were partial offsets.

With industry sales for the 19 markets the company reports having dropped by 20 percent in the past five years and only modest improvement expected by mid-decade, the company reported that it believes the changes in the European business environment to be structural, rather than cyclical, in nature. Against this backdrop, Ford last week announced a series of actions to accelerate its European transformation and restore its European operations to profitability by mid-decade, targeting a long-term operating margin for Ford Europe of 6 to 8 percent.

The strategy under the One Ford plan focuses on all parts of the business – product, brand and cost. The approach includes an aggressive new product rollout of 15 new global vehicles within five years, along with the introduction of a broad array of smart technologies. The company also announced new initiatives to continue strengthening the Ford brand, including strategic destocking of dealer inventories in the fourth quarter of 2012.

Finally, Ford announced a plan to close three facilities and relocate products for a more efficient manufacturing footprint, including leveraging One Ford operations outside of Europe for some of its new products. The planned facility actions would reduce Ford Europe's installed vehicle assembly capacity, excluding Russia, by 18 percent or 355,000 units, affect 13 percent of its workforce, and yield gross cost savings annually of $450 million to $500 million when completed. Some actions are subject to an information and consultation process with employee representatives in Belgium.

Ford reiterates its Oct. 25 guidance that, as a result of the deteriorating environment in Europe, as well as elements of its transformation plan, the company now expects Ford Europe’s pre-tax loss for full year 2012 to exceed $1.5 billion.

Ford Asia Pacific Africa
Ford Asia Pacific Africa and Ford China set market-share records in the third quarter as the company began to benefit from increased capacity and strong sales of the recently launched Focus in China and Ranger pickup in the region.

The third quarter profit improvement was explained by favorable volume and mix, higher net pricing and favorable exchange, offset partially by higher costs associated with new products and investments to support higher volumes and future growth.

For the full year, Ford expects Asia Pacific Africa results to be a loss, roughly in line with 2011.

Other Automotive
In the third quarter of 2012, Other Automotive reported a loss of $139 million, about unchanged from a year ago. The loss mainly reflects net interest expense. For the full year, Ford expects net interest expense to be about $500 million, consistent with the low end of prior guidance.

Ford Motor Credit Company
The decrease in Ford Credit's pre-tax results was in line with expectations and was more than explained by fewer lease terminations, which resulted in fewer vehicles sold at a gain, lower financing margin and the non-recurrence of credit loss reserve reductions.

Ford Credit now expects full year pre-tax profit of about $1.6 billion, and total distributions to its parent of about $600 million. Ford Credit continues to project managed receivables at year end to be in the range of $85 billion to $90 billion.

Ford Credit remains a strategic asset for Ford, delivering high levels of quality and customer satisfaction with operating efficiencies that are among the best.

In the third quarter, total company production was about 1.4 million units, 24,000 units higher than a year ago. This is 45,000 units below the company’s prior guidance, reflecting primarily parts supply issues on several products.

Ford expects total company fourth quarter production to be about 1.5 million units, up 112,000 from a year ago, reflecting higher volume in all regions except Europe. Lower production volumes in Europe reflect lower industry as well as Ford's strategic decision to reduce dealer stocks to generate ongoing benefits for Ford, its customers and dealers.

Planned fourth quarter production is more than 100,000 units higher than third quarter, reflecting Ford's seasonal operating pattern, as well as added capacity in North America and Asia Pacific Africa.

Ford's planning assumptions and key metrics include the following:

Going forward, Ford remains committed to all aspects of its One Ford plan, which is unchanged:

  • Aggressively restructure to operate profitably at the current demand and changing model mix
  • Accelerate the development of new products that customers want and value
  • Finance the plan and improve the balance sheet
  • Work together effectively as one team – leveraging Ford's global assets

Overall this year, Ford expects its total company pre-tax operating profit to be strong and its Automotive operating-related cash flow to be positive – driven by outstanding results in North America and solid performance by Ford Credit.

"Our record quarterly profit and operating margin in North America, the acceleration of the transformation of our business in Europe that will return it to profitability by mid-decade, and the achievement of record quarterly Ford market share in both Asia Pacific Africa and in China all demonstrate that our One Ford plan is working," said Bob Shanks, Ford chief financial officer. "We will continue to assess opportunities to strengthen our business and achieve profitable growth in all the regions in which we operate."

The company continues to work toward its mid-decade guidance and remains confident in its plan and ability to deliver profitable growth.

To read the full release with charts, click here.


Recession's legacy has food-bank usage soaring in Canada

Thanksgiving Food Drive at The Knights Table October 2012

October 30, 2012
The Globe and Mail

A record number of Canadians visited a food bank this year, an indication the recession's legacy continues to bite.

More than 882,000 people used a food bank this March, a 2.4-per-cent increase from last year. Demand is now 31-per-cent higher than before the recession, a study to be released Tuesday says.

Food banks were never supposed to be a permanent part of Canada's landscape. They sprang up during tough economic times in the early 1980s as a temporary way to alleviate hunger. Thirty years later, more than three quarters of a million Canadians are using food banks each month.

This year's elevated numbers show "the recession is still affecting us, while low-paying jobs and inadequate social programs continue to challenge a lot of Canadians," said Katharine Schmidt, executive director of Food Banks Canada, which is releasing its 16th annual tally.

Need has broadened in the past four years to "those who we might least expect visit a food bank," from employed people to homeowners and two-parent families, the report said.

Nearly a fifth of employed Canadians are working poor, earning less than $17,000 a year, reflecting a shift in the economy towards lower-paying services jobs, Ms. Schmidt noted.

The statistics show nearly 93,000 people are first-time clients of a food bank.

Cashama Charlery is one of them. She arrived in Canada last December from St. Lucia with her now seven-month-old son, hoping he would have a brighter future here. She holds a college degree in hospitality from her home country and has two years' experience as a customer services rep for the cellphone company, Digicel.

The only work she's found since, however, is erratic shifts at a frozen food manufacturer that pay $8-an-hour (below minimum wage) with no benefits. After paying for a babysitter and medical bills, she has no money left.

"People don't see this struggle, they don't know how hard people are trying to make it here," said Ms. Charlery, 22, who gets diapers, baby food and basic staples from a food bank in north Toronto. "I'm very ambitious and I know I can make it. ... I just want to have a chance to show how I can work and give back to this country."

Demand varies by province. Newfoundland and Labrador is the only place to see lower rates of food-bank usage in both the past year, and the last four years – a reflection of that province's vastly improved labour market.

Elsewhere, Manitoba saw the biggest jump in food-bank clients in the past year. Usage also rose in Ontario, British Columbia and the other three Atlantic provinces.

Food inflation is putting particular pressure on people in the North. One Iqaluit food bank saw an 18-per-cent jump in the past year, with reports of $12 milk and $29 cheese spread. Soaring food prices prompted protests in the region earlier this year.

The paper recommends boosting access to affordable housing, creating a new model for food security in the North (where it says food insecurity has become a "dire" public-health emergency) and revamping social assistance programs to support self-sufficiency.

The increased demand may seem at odds with Canada's modest economic growth in recent years. But it's typical to see food bank and welfare rates rise two to three years after a recession, says John Stapleton, an independent consultant in Toronto.

"It's counter-intuitive, because people think, 'Oh, well, if the recession's over, everybody's fine.' It just doesn't work that way."

Rather, it takes time for the recession to hit home, which might begin with a job loss, and spiral as severance runs out, support ebbs from family and friends and savings dry up. "You don't immediately go into poverty after a recession starts."

Social researchers tend to scrutinize food bank numbers as a proxy for how low-income people in Canada are faring. Unlike the United States, Canada doesn't produce statistics on national welfare rates or the number of people whose jobless benefits end without landing work, while information on incomes is published with a two-year lag.

The annual release is based on counting the number of people who get groceries and meals over the month of March. It is not independently verified, though its numbers typically tend to move in tandem with the unemployment rate.


Ford skid in ratings
true test of mettle

Low reliability rank in magazine calls for proactive response

Daniel Howes
Detroit News
October 30, 2012

Could another crack be appearing in the foundation of Ford Motor Co.'s rebound?

In a survey garnering keen attention at the highest levels of Ford and its Detroit rivals, influential Consumer Reports said Monday that the reliability of Blue Oval-brand vehicles plunged to second to last in its annual assessment of 28 brands — and Lincoln placed only one spot higher.

The influential magazine for discerning car buyers attributed Ford's steep slide to a perfect storm of problem-plagued launches (Fiesta, Focus and the Explorer SUV) and continuing problems with the MyFord Touch infotainment systems. Also problematic for Ford has been the PowerShift manual transmission imported from Europe for the Focus compact.

The dismal showing and the stronger performance of Ford rivals are reminders that staying at or near the top can be as difficult as getting there. They're also evidence that CEO Alan Mulally's widely touted turnaround is less than perfect — would-be customers are getting more reasons to shop elsewhere.

That ain't good, no matter how well Ford is faring in "shopping consideration" and "purchase intent" numbers compiled by Edmunds.com. Make a few too many bold missteps with technology and take too long to fix the problem, and an asset like Ford's revived product cred can be squandered in an age where information and bad news travels at the speed of light, 24-7.

"It's brutal," a ranking source familiar with the situation said of the Consumer Reports reliability rankings. "It's tough. They're going to be in a hole here until they get this ironed out. It's extremely urgent, but it's not panic."

Not surprising inside Mulally-era Ford. Like its hard-nosed response to rapidly deteriorating business conditions in Europe, where the company expects to lose $1.5 billion this year, Ford is tackling nagging problems with its infotainment systems, complaints with transmissions and problems plaguing recent launches in a way similar to its deep restructuring of North America, its product portfolio and the global operating structure:

First, do not tolerate denial. Second, acknowledge the problem and listen to the complaints from real customers paying real money for cars and trucks they expect to work properly. Third, devise fixes to existing systems. And, fourth, accept public criticism of the problems as legitimate because it is.

"Clearly, Ford is not off the hook," Michelle Krebs, a senior analyst at the online car-shopping site, Edmunds.com, said in an email. "Ford needs to take the criticisms of its infotainment systems and other quality issues noted by Consumer Reports— as well as others who have lodged the same criticism —seriously and fix them.

"They also need to take good care of current customersexperiencing these problems.Lack of action in either regard could hurt Ford's sales and reputation."

The temptation here is to lambaste Ford for reaching too far in its product development, to argue that its quest to claim younger, hipper buyers with leading technology ended up being a figurative bridge too far for a Detroit automaker. Partly, as I have said repeatedly.

But as much as MyFord Touch, to name one controversial step, may symbolize over-reach by the Dearborn automaker, an organization that first steps out, stumbles and then corrects itself is an organization that learns from its mistakes, makes fewer of them in the future and can still reap the benefit of first-mover advantage.

Fair enough, but Ford's bootstraps workout is not without its flaws. The unintended consequences of simplifying the product portfolio have produced a lineup that generates excitement akin to household appliances; the reach to claim tech leadership inside the cabin has boomeranged into a series of embarrassing problems; whatever luxury strategy exists is a generation or two behind the closest competitor.

A measure of good management is not whether it can avoid every pitfall because even the best never can. The test for customers, investors and employees is whether leadership recognizes its mistakes and how effectively it responds to them — a test Ford is taking right now.


CAW members on strike
at Whitby Lear plant

The Canadian Press
October 29, 2012

Workers at Lear Whitby have gone on strike.

The 400 workers, members of the Canadian Auto Workers union, set up picket lines at midnight after contract talks collapsed late Saturday night.

The two sides remain far apart over what the union says are Lear's demands for deep concessions at a time when the company is making significant profits.

Last week the workers voted 97 per cent in favour of a strike to back their demands.

Lear Whitby manufactures seats for vehicles produced at General Motors in Oshawa and there were fears a strike could have a major impact on GM operations in the city.

The Lear strike comes on the heels of another strike at auto parts company Wescast, in Strathroy Ontario which began Saturday morning.

The Wescast strike resulted from a decision by General Motors which would see the current work performed at the facility go to China.


NHTSA investigating 310K Ford Taurus, Mercury Sable cars

By David Shepardson
Detroit News Washington Bureau
October 28, 2012

Washington — The National Highway Traffic Safety Administration said Friday it is opening an investigation into 310,000 older Ford Taurus and Mercury Sable cars over reports of unintended sudden acceleration.

Ford spokeswoman Marcey Zweibel said the company is "aware of NHTSA's preliminary investigation on the 2000 to 2003 Taurus and Sable models, and we will cooperate fully with the agency as we conduct our analysis. We have just begun our investigation and have very limited information at this time."

NHTSA said it is opening an investigation into the 2000-03 models after receiving 50 complaints alleging incidents of stuck throttle due to a broken plastic bracket that holds the speed control cable in place.

The vehicles under investigation are equipped with 4-valve 3.0L V6 Duratec engines.

NHTSA said the speed control cable assembly is unique to the subject vehicles and the subject failure mode has not been observed in MY 2000 through 2003 Taurus/Sable vehicles equipped with the 2-valve 3.0L V6 Vulcan engine or in any of the MY 2004 through 2007 Taurus/Sable vehicles.

The fractured bracket allows the cable to move, which may result in a stuck throttle condition. This condition has resulted in throttles stuck at approximately 26 percent open.

Many of the failures are in vehicles with more than 100,000 miles of service. NHTSA hasn't identified any crashes or injuries related to the problem.

Earlier this week, NHTSA closed an investigation into 360,000 2005-006 Taurus and Sable for a speed control cable issue that was alleged to create a stuck throttle condition. The agency said after testing that drivers were generally able to stop their vehicles even if the cable failed.

In a complaint filed in March, the owner of a 2002 Taurus SES that works at a car dealership said his wife started to accelerate on a highway "but needed to slow down for a call in front of her that was turning" but wasn't able to slow down. "Finally she shifted the car into neutral and turned the engine off so she could bring the car to a halt."

The owner of a 2001 Sable told NHTSA in August that while driving on the Capital Beltway outside Washington that the "car began accelerating on its own. The only way I could get the car stopped was to put it in neutral."

The owner of 2002 Sable told NHTSA that after picking up his two dogs at the vet the cable came loose: "I could not stop car no matter how hard I pushed the brake pedal… I was able to quickly put the car in neutral and turn off the engine."

He said this is a serious issue. "I believe Ford has a bigger problem than they are admitting," he wrote.

The owner of a 2001 Taurus — a driver for 37 years — said after he merged onto a highway "the vehicle continued to accelerate. … I braked hard and the vehicle slowed to 60 mph. I released the brake pedal and the car began accelerating again. To keep from rear-ending the car ahead of me, I downshifted and stood on the brake pedal."

After shifting into neutral, he was able to stop the car with the brakes smoking as "the engine continued to race."


AJAC picks 'best new'
rides for 2013

The 2013 Ford Fusion Hybrid won Best New Family Car (over $30k) at AJAC's 'Best New' vehicle awards event.

Ford drives away with four category wins;
Hyundai, Porsche take two each

October 27, 2012

NIAGARA-ON-THE-LAKE, Ont. – More than 80 Canadian automotive journalists have concluded four intensive days of real-world testing of 180 2013 model year vehicles to determine the 'Best New' winners in 11 different categories as part of AJAC's annual Canadian Car of the Year program.

The journalists are all members of the Automobile Journalists Association of Canada with the potential to reach every Canadian consumer with their message, in print, audio and video broadcast, web and social media.

The results were compiled by the international accounting firm of KPMG and kept confidential, even from AJAC, until the announcements.

Before submitting their ballots, the AJAC journalists completed almost 2,000 individual road-tests during TestFest, comparing vehicles-back-to-back on the same roads under the same conditions. These tests were conducted as part of AJAC's mission to serve consumers by providing them with factual, objective information versus just personal opinion.

"Once again, a wide array of Canada's most experienced and respected automotive journalists have wrung out the full slate of new vehicles offered to Canadian consumers," said Richard Russell, chair, 2013 Canadian Car of the Year Awards.

"The week-long process results in unbiased and accurate information that equips Canadian consumers with readily-accessible, objective data that can be used as a reliable resource when shopping for a new vehicle. The process and program have evolved over more than two decades and each year becomes more exacting and informative."

Based on the audited results of all that testing the 'Best New' vehicles in the 11 categories tested are:

City car: Ford Focus EV**

Best new small car (under $21k): Mazda3 Skyactiv Sedan

Best new small car (over $21k): Hyundai Elantra GT

Best new family car (under $30k): Honda Accord Sedan

Best new family car (over $30k): Ford Fusion Hybrid**

Best new luxury car: Cadillac ATS

Best new prestige and performance car (over $75k): Porsche 911 Carrera S

Best new sports/performance car (under $50k): Ford Focus ST**

Best new sports/performance car (over $50k): Porsche Boxster

Best new SUV/CUV (under $35k): Ford Escape 1.6 L EcoBoost**

Best new SUV/CUV ($35k-$60k): Hyundai Santa Fe Sport 2.0T

The 11 category winners will go on to compete for 2013 Canadian Car of the Year or the 2013 Canadian Utility Vehicle of the Year. These overall winners will be announced Feb. 14 at the Canadian International Auto Show in Toronto.

Award winners for Best New Design and Best New Technology 'Best New' winners in 11 different categories as part of AJAC's annual Canadian Car of the Year program will also be announced at that time.


Ford cuts in Europe
as industry struggles

A security guard locks a gate after workers left the Ford Transit Assembly Plant in Southampton, England after being told that the site will close. (Chris Ison/PA/Associated Press)

Downsizing may stir trend as automakers' losses abroad mount

October 26, 2012
Karl Henkel
Detroit News

Ford Motor Co. unveiled a bold plan Thursday to reduce its work force and production levels in economically troubled Europe, setting the stage for other automakers to follow its lead.

The Dearborn automaker plans to shutter three plants, reduce production capability by nearly 20 percent and slash 13 percent of its European work force as it faces an estimated $3 billion in losses this year and next year.

"I think they're absolutely appropriate for the current reality," Ford CEO Alan Mulally said of the restructuring plans announced during a conference call Thursday.

Just about every automaker is struggling in Europe, where vehicle sales have dropped to the lowest level in two decades.

General Motors Co. is stepping up restructuring efforts to stem losses that could exceed $1 billion this year.

More details about its efforts are expected Wednesday when GM releases third-quarter earnings.

The Detroit automaker has already shortened some worker hours and consolidated some plant operations.

Even Volkswagen AG, the strongest player in Europe, reported a dip in third-quarter operating earnings because of economic weakness.

In contrast to the radical restructuring in the United States during the 2008-09 economic downturn, automakers in Europe have been generally slow to close plants and shed staff.

"So far, it's been weather the storm, but there are still a lot of clouds out there," said Jeff Schuster, automotive forecaster at Troy-based LMC Automotive. "But it'd be fair to say that the European automotive market is heading into a further phase of economic restructuring."

But with auto sales continuing to deteriorate throughout most of Europe, Ford has launched a more aggressive effort to cut costs and place the company on better financial footing.

Ford, which predicted a $600 million loss in Europe earlier this year, on Wednesday upped it projections to $1.5 billion, matching revised analysts' estimates.

The company's restructuring plan calls for cutting 6,200 workers and closing three plants: The company plans to close its Genk, Belgium, assembly plant; a vastly underutilized van plant in Southampton, England; and a stamping and tooling plant in Dagenham, England. The moves will save the automaker $450 million to $500 million a year.

Underused plants are plentiful on the Continent and include those of Ford, GM, Fiat SpA — the parent company of Chrysler Group LLC, which has no manufacturing presence in Europe — Renault SA and PSA Peugeot Citroen. Some analyst estimates pegged Ford plants as running at half capacity.

"It's fairly evident that there's surplus capacity across most manufacturers," said Ford of Europe CEO Stephen Odell.

'A question of survival'

A sovereign debt crisis and high unemployment have taken a toll on consumer confidence and automobile sales in Europe, which have dipped 7.6 percent this year. The continent has experienced five consecutive years of declining vehicle sales.

Sales at Ford and GM have been worse than the industry average, dipping more than 12 percent, said the European automobile manufacturers' association, ACEA. At Fiat SpA, sales this year have dipped nearly 18 percent.

GM lost $617 million in the first half of this year in Europe, and analysts expect losses of more than $1 billion this year. The automaker has lost $16 billion in Europe over the past 12 years.

The Detroit automaker is working to reduce capacity in Europe and has implemented 20 short workdays at Opel facilities in Germany throughout 2012. On short workdays, employees don't come to work. Analysts said that move could help the company save about $50 million a year.

GM and PSA Peugeot Citroen this week announced some details of an alliance announced in February. GM has a 7 percent stake in struggling Peugeot, Europe's second largest automaker, which this week received loan guarantees from the French government.

Fiat-Chrysler CEO Sergio Marchionne has said Europe "is a question of survival for many manufacturers" but has not announced plans to close plants, though he has called on European leaders to begin an organized restructuring of the automobile industry similar to what occurred in North America during the recent recession. Fiat, which had lost more than $450 million in Europe during the first half of the year, had closed its Termini Imerese plant in Sicily in 2011.

Ford shares gain on plan

Analysts were enthused with Ford's European restructuring plan, and Ford's stock rose as much as 3.2 percent early Thursday before closing at $10.39 per share, a 2.2 percent gain.

Citi Investment Research raised its guidance on Ford after the automaker said earnings per share and pre-tax profits would be higher during the third quarter than in the second quarter despite deeper Europe losses. Analysts surveyed by Thomson Reuters estimate Ford will post a 30-cents-per-share third-quarter gain, in line with second-quarter results.

The automaker will report Tuesday its preliminary third-quarter earnings.

Jefferies & Co. Inc. said Ford's moves will allow it to operate at nearly 90 percent capacity. Odell said should the European market rebound, Ford would still have the flexibility to increase production or imports.

"Certainly in the near term we believe we have very adequate capacity. We also will have flexibility to import to Europe," Odell said, noting vehicles such as the Ford Mustang.


Ford begins to retool,
cut expenses in Europe

By Karl Henkel
The Detroit News
October 25, 2012

The first step in Ford Motor Co.'s European restructuring took shape Wednesday after the Dearborn automaker said it plans to close its assembly plant in Genk, Belgium, by the end of 2014. Ford will further detail restructuring plans for Europe today.

The Dearborn automaker is expected to announce the shuttering of its Southampton, England, van plant, home to some 500 workers, in a call with investors and the media.

Ford remained mum Wednesday on additional plans, though it is known both Genk and Southampton are two plants running significantly under capacity.

The Belgium proposal will cease vehicle production and cut 4,300 jobs, saving Ford billions of dollars in the long term. Ford had sought a way to shed expenses in Europe, where the company expects to lose at least $1 billion this year, though some analysts predict the company could lose up to $1.5 billion there in 2012.

Morgan Stanley Research estimates Ford could lose more than $500 million in Europe during the third quarter; the automaker will report preliminary third-quarter earnings results on Tuesday.

Itay Michaeli, analyst at Citi Investment Research, told The Detroit News this week that closing the Genk plant could reduce Ford's European costs by $300 million to $500 million annually, though the cost of closing the plant could cost upward of $1 billion.

Morgan Stanley said Ford — which is running at about half capacity — can reduce its European capacity by 15 percent to 20 percent by closing the plant.

If the plan is finalized, Ford would shift production of several vehicles — it builds its Mondeo, S-MAX and Galaxy at Genk, but will likely build the next generation in Valencia, Spain — to more fully utilize its European plants.

Ford's C-MAX and Grand C-MAX vehicle production could then shift from Valencia to Saarlouis, Germany, Ford said.

A sovereign debt crisis coupled with high unemployment has taken a toll on consumer confidence and automobile sales in Europe, which are at their lowest level in 20 years.

Ford's sales in Europe's traditional 19 markets are down 12.4 percent through the first nine months of the year. The industry has had a sales decline of 7.7 percent this year.

The automaker previously implemented shorter workdays and line reductions and had laid off temporary workers and offered buyouts to a few hundred salaried workers.


Ford Closes Factory
Causing 4,300 Job Losses

Workers gather outside the Genk plant

October 24, 2012
Sky News

Ford has confirmed it will close its "under-utilised" factory in Genk, Belgium, resulting in 4,300 job losses, as it attempts to deal with a slump in demand across Europe.

Hundreds of employees gathered outside the gates of the plant, as the US car maker said it would end production in the town in 2014.

"Ford announced its plans to end production at a major production plant in Genk, Belgium, by the end of 2014," the company said in a statement, adding that the closure would entail a "reduction of approximately 4,300 positions".

Ford of Europe's chief executive Stephen Odell added: "The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford's business in Europe."

Production of the company's new Mondeo, S-Max and Galaxy models will be transferred to Valencia, Spain, in a move that could see a further 5,000 subcontractors lose their jobs.

Union representative Johan Lamers said: "This is taking us by surprise and is an extremely bitter pill."

The development comes after the French government offered Peugeot Citroen a 7bn euro (£5.6bn) lifeline following another drop in sales.

The Paris-based company said it was also close to agreeing a 11.5bn euro (£9.3bn) refinancing deal with creditor banks, in addition to the state guarantees, for its lending arm Banque PSA Finance.

Following the announcement, Peugeot shares fell 6.5% - hitting their lowest levels since 1986.

Car sales in Europe have slumped as consumers in the region find their budgets hit by unemployment and government austerity.

Earlier this month, industry figures revealed that the market shrank at its fastest pace for 12 months in September.


Royal Bank buys Ally in Canada

By David Shepardson
Detroit News Washington Bureau
October 24, 2012

Ally Financial, the largest new car lender in the U.S., reached a deal to sell its Canadian operations to the Royal Bank of Canada for $4.1 billion, the company said Tuesday.

Detroit-based Ally, once a wholly owned General Motors Corp. subsidiary known as GMAC, is shedding its foreign operations to repay the U.S. government's $17.2 billion bailout. The U.S. government owns a 74-percent majority stake. Ally so far has repaid $5.7 billion of its bailout.

"This transaction represents another significant step toward our plans to pursue strategic alternatives for our international operations and accelerate plans to repay the remaining U.S. Treasury investment," said Ally CEO Michael A. Carpenter.

Ally's remaining international businesses include automotive finance operations in Europe and Latin America. The company expects to identify plans for these operations in November.

David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, said Ally is focusing on its core business.

"They are getting out of other markets and distractions like mortgages to focus on U.S. auto lending," Cole said.

GM is a bidder for some of Ally's foreign operations; an announcement on the fate of Ally's European and Latin American operations could be announced in the next few weeks.

Toronto-Dominion bank was also a bidder. It acquired Chrysler Financial in December 2010 for $6.1 billion.

Last week Ally said it reached a deal to sell its Mexican insurance business, ABA Seguros, for $865 million.

Ally said it was selling its Mexican unit to the ACE Group, one of the world's largest multiline property and casualty insurers. ABA Seguros is the fourth-largest insurer in the Mexican auto insurance market.

Ally has been reviewing bids for other parts of its business.

Its former parent, General Motors Co., was among about 30 bidders for its operations in September.

In August, Ally swung to an $898 million second-quarter loss on costs connected to the bankruptcy filing of its troubled mortgage subsidiary, ResCap. Ally had reported a first-quarter profit of $310 million.

The auto lender and bank holding company, took a $1.3 billion charge resulting from Residential Capital LLC filing for bankruptcy protection May 14 and a proposed settlement between ResCap and Ally


Ford may close Belgian plant

By Karl Henkel
The Detroit News
October 23, 2012

Ford Motor Co. has plans to close its factory in Genk, Belgium, according to multiple overseas media reports, which could help it save millions of dollars in Europe, where the automaker this year expects to lose $1 billion.

German national newspaper Frankfurter Allgemeine Zeitung said sources within the company's business circles have confirmed that Ford would like to close the Genk Assembly Plant by the end of next year, but unions would vehemently oppose any such decision.

The Dearborn automaker has requested a meeting with three unions representing workers at Ford's Belgian assembly plant, which produces three vehicles and employs about 4,300 workers, according to Belgium business publication De Tijd.

A Bloomberg News report quotes a union official who says he does not know what the meeting — to be held Wednesday — will be about.

The De Tijd report says Ford wants Flemish politician Kris Peeters to speak at the meeting.

Ford declined to comment on any union meetings. A spokesman, when asked about future Mondeo production — the vehicle is manufactured at Genk — also declined to comment.

"We believe it is one of their highest costing plants," said Itay Michaeli, analyst at Citi Investment Research, who estimated Ford could reduce costs by $300 to $500 million annually by closing the plant. "This will take out a major plant operating with low capacity utilization."

Michaeli said closing one plant won't return Ford's European operations to profitability — and the potential move will further strain Ford's bottom line in the short term because of the costs associated with closing a plant — but said the restructuring is necessary.

Ford has many underutilized plants in Europe and could shift production of the Mondeo and two other vehicles to one or more of those plants.

Ford lost $404 million in Europe during the second quarter of this year and anticipates losing more than $1 billion there this year.


Autoworkers earning less in U.S. happy to compete globally

By Jeff Green and Keith Naughton
Bloomberg News
October 22, 2012

Debbie Werner is the face of an American workers' revolution.

In a break with decades of U.S. auto-union tradition, the prevailing wage paid to new unionized autoworkers is less than that of the average labourer producing items ranging from metal and wood products to food and beverages.

Werner has lived through it all: She joined General Motors Corp. in 2008 before its bankruptcy, lost her job when the factory closed and then was rehired in 2011 when it opened again after the bailout — joining thousands of new workers earning about half what autoworkers were paid before 2007 and without traditional pensions and retiree health care.

Part of President Barack Obama's re-election platform is his 2009 decision to support an $85 billion bailout for the U.S. auto industry, the subject of a vigorous exchange at this week's presidential debate. Less understood is the new class of autoworkers who, even before the bailout, started taking jobs that gave up decades of union gains and agreed to an uncertain economic future to bring thousands of jobs back to American factories.

"In 1960, an autoworker was the symbol of high productivity, global leadership and a middle-class future," said Harley Shaiken, a professor of labor relations at the University of California at Berkeley. "Today, an autoworker is a symbol of all the pressures of the global economy."

Werner, though, said she couldn't be happier.

"It's just an opportunity for me," said the 30-year-old, who installs seat-belt covers and dashboard parts on Chevrolet Sonic and Buick Verano cars at General Motor Co.'s factory in Orion Township. "It's a better life for my kids."

Union concessions

Since 2007, the United Auto Workers has agreed to let automakers hire new workers who forgo traditional retiree health care, equal pay for equal work, job security and pensions in exchange for jobs that would have gone to Mexico or Asia. About 13 percent of GM, Ford Motor Co. and Chrysler Group LLC hourly workers, or 15,155 employees, now are entry level.

The union's concessions were inconceivable — and easily rejected by labor leaders — just a few years before. Now, as many as half the workers at the Orion Township factory assembling Sonic and Verano subcompact cars make less than the $19.10 hourly average U.S. manufacturing wage and lack traditional union retiree benefits.

The U.S. economic recovery has been built on the shoulders of autoworkers such as Werner, who left a $9 an hour job at a nursing home in November for her $16.78 an hour at GM, and David Ramirez, 39, who earns $18.41 an hour installing mounting brackets for transmissions at the same plant. In August 2011, he escaped an $8 an hour job making doughnuts at Wal-Mart.

Significant gains

While the rest of the U.S. economy continues to lag, the significance of the auto industry's comeback is hard to overstate. Autos contributed 18 percent of the 2.2 percent average rate of growth for gross domestic product in the recovery that began in the third quarter of 2009 — when GM followed Chrysler out of U.S.-backed bankruptcy — to the second quarter of 2012, according to data from the Commerce Department.

The U.S. auto industry sold cars in September at a faster rate than in any month since March 2008, before the failure of Lehman Brothers Holdings Inc. GM earned $9.19 billion last year. Automakers throughout the U.S. have been on a binge of hiring that has led to third shifts in eight states.

"This is the reason we have job growth in the United States," Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, said in an interview. "I don't think we would have seen the new investments and the job growth in the United States without some movement in labor costs."

Closing gap

The compromises will close the labor-cost gap at GM, Ford and Chrysler factories with those at U.S. plants for Toyota Motor Corp. and Honda Motor Co., Dziczek said. By 2015, GM's total cost for wages and benefits will be about $59 an hour, compared with $56 at Toyota. In 2007, GM estimated the gap with Toyota at $25 to $30 an hour. Chrysler's average hourly labor costs may fall by 2015 to $53, lower than Toyota's, CAR said.

The price is steep in terms of an elite working-class standard of living that has been a hallmark of the UAW, said Shaiken, the labor professor. The risk is that the concessions will spread through the U.S. labor market in much the same way union gains of the past seven decades have benefited workers, he said.

'Reasonable' lifestyle

"They're making a wage where hopefully they can have a reasonable family life," Mich. Gov. Rick Snyder, a Republican, said in an interview at Bloomberg's New York headquarters. "Everyone had to make some sacrifice. The cost structures were so high."

Until now, autoworker pay hasn't dropped below the average industrial wage since Henry Ford instituted the $5-a-day wage for factory workers in 1914, according to a comparison of historic prevailing UAW wages provided by Ford in 2011 and pay data from the U.S. Bureau of Labor Statistics.

Applying the hourly rate for Werner and Ramirez to a 40-hour week, 52 weeks a year, would total about $35,000 to $38,000 annually. Overtime and other premiums, such as for working night shifts, can increase those totals. This is unfamiliar territory for a U.S. autoworker: between the 2011 median income of $50,502, and the poverty line of $23,000 for a family of four.

"Henry Ford pioneered it and the UAW and other industrial unions ensured it became a feature of life for the American worker," Shaiken said of the middle-class lifestyle. "This just underscores that we're in a very troubled time."

Werner's arrival

Werner doesn't feel troubled by her new job at GM. It's much better than what she confronted four years ago, when she came to GM for a temporary job at the Orion plant, which was then building Malibu sedans. Her cousin, who works at another GM factory in Michigan, helped her get that job. GM was about to enter bankruptcy and the plant was expected to close.

"In 2008, it was very depressing," Werner said in an interview over lunch at a Denny's restaurant not far from the elementary school her two sons attend in Sterling Heights. "Both the permanent employees and the temps knew they were going to get let go."

She said she didn't want to live on unemployment benefits after the plant shut down, so she took the job at the nursing home. In the meantime, she went back to school to add a bachelor's degree in health-care management to her associate's degree in business from Baker College. Her bills mounted. Her sons, ages 6 and 8 now, heard "no" way more often than "yes," she said.

"I gave up on GM," she said. "I didn't think I'd ever go back."

'Amazingly hard'

The Orion plant closed in November 2009. While GM said at the time it might open at some point, workers weren't sure.

One of them was Rachelle Wakefield, 27, a lower-paid, entry-level worker who got into the plant originally thanks to a referral from her father, Pat Sweeney, president of UAW Local 5960, which represents workers there. After Orion closed in 2009, Wakefield landed a different job with the union: calling members to help them find services and support to get back on their feet. In many cases, the phones of the 40 or so workers she tried to reach each day were disconnected because they couldn't afford service. Many lost their homes.

"It was amazingly hard," Wakefield said. "It was scary. We didn't know if we were ever going to come back."

Factory changed

In August 2011, Orion did open, as a very different plant. The agreement means there are fewer of the expensive, specialized workers known as "skilled trades." In addition, union workers share some of the 4.3 million square feet under the factory roof with outside subcontractors who do nonassembly jobs for even lower pay than entry-level GM workers, Sweeney said.

Orion began making Sonics in August 2011 and in November added the Verano.

On Nov. 24, Debbie Werner got a call to be at the Orion Township plant the next day if she wanted her old job back. She was a temporary worker until June, when she was hired full-time. All her benefits will kick in shortly after a probationary period expires, she said.

Suddenly, this $16.78 an hour job that seems austere by auto standards looks to Werner like a comfortable life, an escape from the hardship facing so many other people still struggling to dig out from the 2009 recession.

Decades past

Werner's relative prosperity is a sharp contrast with the lives autoworkers lived in past decades when UAW members often made 20 percent to 50 percent more than the prevailing manufacturing wage — particularly from the mid-1980s, according to U.S. data. Overtime during a truck boom in the late 1990s meant some workers cleared $100,000 a year.

The pay, which is still about $58,500 before overtime for a traditional worker, meant they could afford a robust middle-class life with perks such as cottages in Michigan's northern vacation areas and collections of snowmobiles, jet skis or motorcycles. A fixed pension and health care plan helped workers maintain many of those perks in retirement.

The onslaught of cheaper models churned out by non-union workers with lower labor costs at the U.S. factories of Toyota and Honda finally weakened U.S. automakers to the point where the union was forced to make compromises in 2007 they had long resisted, said Art Schwartz, a top GM labor negotiator who worked on the agreement that created the entry-level workers before he left GM in 2009.

UAW gains

As U.S. automakers hire new, lower-cost workers, the UAW has posted two straight years of membership gains, to 380,719 members last year, according to a March union filing with the U.S. Labor Department. UAW membership peaked at 1.5 million members in 1979.

The UAW has said that Chrysler and GM can have as many as 25 percent of their workforce represented by entry-level workers by 2015 and Ford is capped at 20 percent. If the automakers have more workers than that in 2015 at the entry-level wage, some of those workers may be eligible to make $28 an hour.

Already, 9 percent of GM's 49,500-member UAW work force is entry-level, according to the automaker's data. About 12 percent of Ford's 42,700 hourly workers are new hires and 20 percent of Chrysler's 27,000 hourly workers were entry level in June.

The UAW wasn't allowed to strike GM and Chrysler in 2011, a condition of the bailout. In 2015, it will be a traditional bargaining session and if companies are still posting healthy profits, workers may try to get back some of the benefits they gave up, Dziczek said.

"What I make right now, I could live off of it," Werner said. "Do I want to live off of it the rest of my life? No — $16 an hour, single mom, is not going to put two kids through college."


UAW retiree trust reports
larger shortfall in 2011

October 20, 2012

(Reuters) - A healthcare trust for retired U.S. autoworkers was $33 billion short of meeting obligations to cover medical costs of those retirees at the end of 2011, newly released federal documents show.

The funding shortfall of $33 billion in the second year of the healthcare trust was 63 percent higher than the gap from the previous year.

Healthcare costs grew as the trust's assets shrank.

The United Auto Workers Retiree Medical Benefits Trust saw the value of its assets drop about 11 percent to $52.4 billion in 2011 while the S&P 500 index was flat.

Meanwhile, the trust's benefit obligation rose 8 percent to $85.3 billion, an amount that is about $5 billion more than what U.S. taxpayers spent to prevent the collapse of General Motors Co, Chrysler Group LLC and Ally Financial during the financial crisis three years ago.

The trust managed benefits for 824,000 retirees from affiliated with the United Auto Workers union in 2011.

The UAW trust, which is known as a VEBA or voluntary employee beneficiary association, was created in 2007 during labor talks with the UAW. The union-affiliated trust took on the retiree health care burden from GM, Ford Motor Co and Chrysler.

The landmark deal was designed to protect UAW retiree benefits if the companies' finances deteriorated and to remove an ever-increasing liability that the automakers said added as much as $2,000 to the cost of a vehicle.

The trust's first year of operations was in 2010, when it was underfunded by roughly $20 billion.

In 2011, the VEBA was hit by the loss in value of its investments in GM, the largest U.S. automaker.


Lincoln preps design studio it
hopes will be 'small first step'
back to luxury crown

The 2013 Lincoln MKZ (preproduction model shown) is the first milestone vehicle for the all-new Lincoln brand created by the dedicated Lincoln team in its new Design Studio. / Courtesy image

By Alisa Priddle
Free Press Business
October 19, 2012

Lincoln offered a peek Thursday at its first dedicated design studio since the 1970s as the luxury brand continues its makeover.

Decades ago Lincoln was the best-selling luxury brand in the U.S., but Mercedes-Benz, BMW, Lexus and Infiniti raised quality and technology expectations. Ford stopped investing in new products. Many Lincolns were just rebadged Fords with more chrome.

Lacking an identity, sales continued to fall. The 2013 MKZ that will go on sale later this year will be the first all-new Lincoln in what is expected to be a revival that includes three more new products over the next three years.

"The MKZ is a first small step for the brand," said J Mays, head of Ford's global design.

The midsize car enters a $274-billion luxury market forecast to grow almost 8% globally next year, double the rate of the rest of the market, according to IHS Automotive.

Mark Fields, Ford president of the Americas, said competition to win the luxury crown in the U.S. seems to be heating up already – the battle for the top spot usually doesn't hit its final aggressive strides until December. But this year Lincoln is not in contention.

"Our ambition is not to be No.1," said Jim Farley, head of global sales and marketing. "We'd rather have a few people love us than everybody like us."

To keep its identity separate from the Ford brand, Lincoln now has its own studio in space carved out in the Product Development Center. Lincoln's chief designer, Max Wolff, was recruited from Cadillac nearly two years ago.

Ford brand people are not allowed. This is the Lincoln nerve center and think tank, housing a team of about 130 including designers and 28 of the company's 120 clay modelers. Within the creative firewall, future products for Lincoln will be envisioned, designed and engineered.

"Style is not just poured over the top of engineering. The combination of style and engineering is design," said Mays.

The brain trust housed here will also oversee unique Lincoln marketing and a leaner, more upscale dealer network. Each showroom and service center is charged with offering an upscale customer experience.

Lincoln has remained North America-centric as it works to rebuild. But recently Ford CEO Alan Mulally announced plans to expand to China in the second half of 2014.

Lincoln's success depends on how quickly they raise their volumes and globalize," said Michael Robinet, managing director of IHS Automotive Consulting in Northville.

"Lincoln doesn't have the right products to make an impact in global markets. They need a compact car," Robinet said, in addition to the compact crossover that is planned. "They will have no engine, globally, until they have a compact car."

As an international brand, Lincoln will better compete with Cadillac, BMW, Mercedes-Benz, Audi and Lexus..

Ford did not change any dimensions of the MKZ for the China market, but some of the colors and materials will be different to match Chinese consumers' preferences, said Moray Callum, head of North American design.

There are more controls in the backseat where owners in China sit. These include a "dump switch" that controls the front passenger seat and lowers the headrest in front for a better view.

Farley said standards for dealers in China have been set and hundreds of applications have been received as the recruiting process continues.

"We want our dealers to be extremely successful in China," Farley said.


Ford recalls 182,000
Fiestas for air bag fix

Ford recalled its 2011-13 Fiesta subcompacts because of a problem where the rear right seat side air bag may not inflate in a crash. (Ford)

By David Shepardson
Detroit News Washington Bureau
October 18, 2012

Ford Motor Co. is recalling more than 182,000 Fiesta subcompacts to fix a problem with the side air bags.

The recall covers 2011-13 Fiesta subcompacts built at Ford's plant in Cuautitlan, Mexico.

When the front passenger seat is empty, the rear right seating position side-curtain airbag may not inflate in a crash.

The new recall includes more than 154,000 in the United States and nearly 28,000 in Canada.

Ford will reprogram the vehicles to ensure that the air bag in the rear deploys. Ford said there are no crashes or injuries related to the issue in the United States.

The issue came to light when the Canadian government's road safety arm — Transport Canada — asked Ford about a report of a 2012 model year Ford Fiesta involved in a side crash with no other occupants than the driver in which the seat-mounted side air bag and side air curtain on the impacted side of the vehicle did not deploy.

Ford notified dealers Oct. 3 to stop selling the vehicles until the issue was fixed. Motorists in Canada were alerted to the issue on Oct. 5, but because of how long it takes the National Highway Traffic Safety Administration to post recalls after receiving them from an automaker, the agency only posted the Ford recall Tuesday.


King: UAW supports 2nd Detroit-Windsor bridge as long as union labor used to build it

By David Shepardson
Detroit News Washington Bureau
October 17, 2012

United Auto Workers President Bob King said the union supports building a second bridge between Detroit and Windsor, but will remain neutral on a ballot proposal that seeks to block a government-funded crossing because of "strong concerns."

"We have long supported another bridge. We think there definitely should be another bridge," King told The Detroit News.

But King said he wants guarantees that union labor would be used to build the bridge — along with an agreement to ensure it benefits Detroit residents and that U.S. and Canadian union-made steel is used, not Chinese-made steel.

The comments came Monday night, a day before a letter from King to Transportation Secretary Ray LaHood was released that suggested King supported the crossing.

"This important project will create many thousands of well-paid construction jobs and additional spin-off jobs during construction, and up to 750 permanent jobs to operate the facility," King wrote in the June 6 letter posted Tuesday on a Transportation Department website.

The letter asked LaHood to waive "Buy America" provisions and use some Canadian iron and steel to build the bridge.

The UAW said the letter didn't conflict with King's earlier statements, issuing a statement reading "the UAW has always been in favor of construction of a new bridge … but has concerns about the New International Trade Crossing."

In The Detroit News interview, King also wants to make sure there is a "fair balance" of work between Canadians and Americans in building the new bridge.

He said the bridge deal does not do enough "in writing" to help people in southwest Detroit.

King declined to directly comment on reports that the UAW was considering supporting the ballot initiative Proposal 6 — which would require state voters to approve spending money on new international crossings — in exchange for millions of dollars of support from Ambassador Bridge owner Manuel "Matty" Moroun for another ballot initiative, Proposal 2, which would enshrine collective bargaining rights in the state constitution.

King said the UAW has had talks with businesses — both small and large — to try to get them to support Proposal 2, including seeking financial donations. "We talked to a lot of people in the business community about supporting" the labor measure, King said.

Asked if there was a proposed "quid pro quo" with Moroun, King said: "Obviously, there is no deal because we've announced that we're going to maintain neutrality."


CEP backs merger with CAW
to create 'super-union'

Dana Flavelle
Business Reporter
October 15, 2012

The move to create Canada's largest private sector union took another major step forward as the Communications, Energy and Paperworkers voted over 90 per cent in favour of joining forces with the Canadian Auto Workers.

The delegates to a CEP convention in Quebec City endorsed the merger on Monday, paving the way for creation of a new super-union with the financial resources and political clout to tackle the challenges facing the labour movement.

The new union would represent 320,000 workers across some 20 industries, including manufacturing, communications and transportation, and to a lesser extent public health care, education and transit.

"Today we witnessed history being made. This isn't just a step forward for the labour movement. It's a step forward for progressive people in this country," said Dave Coles national president of the CEP. "It sends a very clear message, we believe, to the conservatives and any other political group that thinks that they can attack workers.

The merger comes as organized labour faces growing pressures in both the private and public sector partly because of plant closures, the changing nature of work and eroding labour laws.

Union membership has fallen to 30 per cent from 40 per cent in the 1970s,. In the private sector, the rate is even lower, at 17 per cent.

The number of strikes in Canada, a measure of union clout, has fallen by 90 per cent during the same time period

The creation of a "super-union" is necessary because of the declining power of the labour movement, said Pradeep Kumar, a school of policy studies professor at Queen's University.

The two unions plan to hold a founding convention next year to create the blueprint for a constitution and new name.

Together, they hope to reinvigorate the labour movement by including non-traditional members, such as the unemployed, retirees, and students with similar social goals.

They also plan to double their spending to $50 million over the next five years to boost their presence and their bargaining power in key economic sectors.

The Canadian Auto Workers voted unanimously to join the CEP on Aug. 23.

The unions entered formal merger talks earlier this year.

In initial discussions for a new name, the two sides have agreed the words autoworkers and paperworkers will disappear. Instead, they'll focus on a name that reflects their new mandate.


Ford gets high EPA rating
for C-MAX Energi plug-in

The base C-MAX Energi, priced at $29,995 after a federal tax credit of $3,750, will roll out nationally early next year. (Ford)

By Karl Henkel
The Detroit News
October 15, 2012

Ford Motor Co.'s new C-MAX Energi plug-in hybrid has received an Environmental Protection Agency-certified fuel-efficiency rating of 100 miles per gallon equivalent.

The 100 mpge (108 city and 92 highway) tops the Chevrolet Volt, at 98 mpge, and the Toyota Prius Plug-In Hybrid, which gets 95 mpge.

Electricity is not measured in gallons; a conversion factor is used to translate the fuel economy when running on electricity into miles per gallon of gasoline equivalent. The combined mpge estimate includes a mix of gasoline and electric energy use.

The base C-MAX Energi, priced at $29,995 after a federal tax credit of $3,750, will roll out nationally early next year.

The 2012 Toyota Prius Plug-In Hybrid costs $32,760 and qualifies for a $2,500 federal tax credit. The 2013 Chevrolet Volt plug-in hybrid has a retail price of $39,995 and qualifies for a $7,500 federal tax credit.

Ford's C-MAX Energi gets 20 miles of driving range in electric-only mode, compared to 11 for the Prius. The new Volt — technically a range-extended plug-in hybrid — gets 38 miles.

Overall driving range, combined with gasoline and electric-only mode, favors the Energi (550 miles) and Prius (540) over the Volt (380).

With the C-Max, Ford believes it can become a player in the plug-in hybrid market, which is composed mostly of consumers on the East and West coasts.

Chevrolet has a stronghold on plug-in sales, selling 16,348 units through the first nine months of the year. Toyota has sold 7,734 Prius Plug-In Hybrids.

Overall plug-in vehicle sales, if they follow the trend from the first nine months of the year, could double the 17,000 units sold in 2011.


Lincoln lessees get
chance for early exit

By Karl Henkel
The Detroit News

Oct 14, 2012

Ford Motor Co.'s Lincoln brand is allowing some customers a chance to get out of their leases early in an effort to boost sagging sales and clear out inventory.

Customers who currently lease a Lincoln MKZ or a Mercury product can terminate their lease up to six months early through the end of the quarter.

Lincoln is trying to clear 2012 inventory; it has an all-new MKZ luxury sedan that it will launch late in the fourth quarter. Current MKZ lessees can trade in their vehicle for a 2012 Lincoln MKZ.

Ford killed its Mercury brand in 2010, though there are still customers who have a Mercury lease. Mercury customers can trade in a vehicle for a new Lincoln product.

"It's not an unusual practice where you have a new model and, in this case, a new model that is redefining the brand," said Michelle Krebs, an auto analyst at Edmunds.com. "And with Mercury, they are trying to keep those customers in the Ford family."

A Lincoln spokesman said the program allows Lincoln MKZ and Mercury lessees the opportunity to get into new Lincoln vehicles "sooner rather than later."

The Lincoln brand has struggled as sales have fallen about 1.5 percent through the first nine months of this year. In 2011, Lincoln sales were relatively flat, declining 0.2 percent, according to sales data.

The brand continues to fall further behind other luxury name-plates such as Lexus, Cadillac, Mercedes and BMW.

Ford is attempting to save the struggling brand, which includes adjustments to help reduce the age of the average Lincoln customer, which at 65 is one of the oldest for any vehicle brand. Ford is spending $1 billion on the Lincoln revamp


Unions back plan for
new public bridge

The Ambassador Bridge spans the Detroit River. / ROMAIN BLANQUART/ Detroit Free Press

October 13, 2012
Brent Snavely, Alisa Priddle
and Nathan Bomey
Detroit Free Press

Unions on both sides of the border support a new publicly owned international bridge and are surprised that UAW President Bob King might not.

"I am shocked," said Canadian Auto Workers President Ken Lewenza, who was planning to call King on Friday for clarification. "Until I talk to Bob, I won't believe it."

Lewenza said the New International Trade Crossing "is the most significant infrastructure project in Canadian history. The CAW supports the bridge."

Mike Jackson, executive secretary-treasurer of the 14,000-member Michigan Regional Council of Carpenters and Millwrights, said Friday the new bridge "seemed like a no-brainer to us" and would put many of its members back to work.

"We believe it's a game-changer, we really do," he said.

King was expected to return from South Korea on Friday. But the UAW provided no updates on its stand as of Friday evening.

Lewenza and Jackson are among those who reacted to media reports Friday that the UAW and Ambassador Bridge owner Manuel (Matty) Moroun have discussed a deal that would have the billionaire donate to the Proposal 2 campaign, a labor-sponsored ballot initiative, in exchange for the UAW's support for Proposal 6, which is designed to scuttle Gov. Rick Snyder's plans for a new bridge between Detroit and Windsor.

Proposal 6 would require a statewide vote for Michigan to spend money on international crossings. And Proposal 2 would enshrine collective bargaining rights in the state constitution.

The People Should Decide, the Moroun-backed group pushing Proposal 6, said reports of an alliance were nothing but "rumors and speculation." The statement from Mickey Blashfield, Moroun's director of governmental affairs, did not deny the reports.

The UAW has not taken an official position on Proposal 6.

It's unclear how much money would go into backing the UAW effort, how it would be spent or how effective UAW higher-ups could be in delivering votes for Moroun's Proposal 6, if a deal was consummated.

Many key labor groups on both sides of the border support the proposed new public bridge because it could create up to 10,000 construction jobs.

The bridge's labor supporters include the Michigan State AFL-CIO, Michigan Regional Council of Carpenters and Millwrights, Canadian Auto Workers, Utility Workers Union of America Local 223, International Union of Operating Engineers Local 324 and Canadian Teamsters Local 879.

Jackson said Friday he had not spoken to King, but said the possibility of a UAW deal with Moroun was perplexing.

One contentious issue for the labor community has been where workers and materials will come from for the massive international project that would span two countries.

Some union activists have grumbled that Snyder approved a waiver allowing the bridge to be built with steel from Canada and the U.S. But Jackson said the carpenters group supports the measure.

"I think it's fair," he said. "I mean, Canada is putting up the initial money. I think it's a little ridiculous to expect Canada to pay for it but not be able to use any Canadian steel."

On the Canadian side, the CAW and the Canadian Automotive Partnership Council, a group of automakers, suppliers, unions, academics and politicians, have said the countries should use domestic content, employees and businesses.

Lewenza said bidding for contracts always creates controversy, but the bounty of work should be shared and balanced.

"The two sides should have a shared opportunity to supply steel and labor as part of the stimulus even though the Canadian government is fronting all the money," Lewenza said. The Detroit Three automakers along with many major Michigan companies, including Meijer and Kellogg, also back the new bridge because it's expected to make it easier to ship parts across the border.

Chrysler moves more than 1,300 parts shipments, 2,000 cars and trucks and logs more than 1,600 customs entries daily.

Billed as an enabler of future economic growth, the new bridge would offer direct freeway-to-freeway connections on both sides of the border.

That would eliminate massive traffic jams in Windsor along a stretch of many traffic lights between the Ambassador Bridge and Canada's 401 highway.

Ford's strong support of a new border crossing is unchanged, said spokesman Todd Nissen. The automaker opposes Proposal 6 and is neutral on Proposal 2.

"GM supports a New International Trade Crossing spanning the Detroit River," GM spokesman Greg Martin said in a statement. "This initiative is necessary to ensure the region's ongoing competitiveness and quick, reliable and cost-effective transportation."


Corporate Canada's pension hole

Globe and Mail
Oct. 11 2012

The rock-bottom interest rates and volatile equity returns of recent years have wreaked havoc on many investors' portfolios — and that includes the managers of corporate pension plans.

Disappointing returns have set up a vicious cycle in which pension plans become underfunded, and the companies that sponsor them have to pump in more money. That cash comes right out of operations, making the companies' shares less attractive than before.

Investors should take into account the possible effect of the pension gaps that are developing. A good place to start is with a sobering report from the folks at Veritas Investment Research, which examines Canada's corporate pension plans, focusing on the 45 companies in the S&P/TSX 60 that offer defined-benefit plans.

(A defined-benefit plan specifies what benefits it will pay, leaving the onus on the plan's sponsors and managers to come up with the cash. Defined-contribution plans only define what goes in, meaning that if there's not much there for you when you retire, well, tough.)

The report spotlights the large deficits at several of Canada's largest companies, ranging from BCE Inc. to Bombardier Inc. But its findings range across a broad swathe of the corporate sector.

Veritas found that, despite an increase in cash contributions since the 2008-2009 financial crisis, pension deficits keep rising because of falling interest rates and the "sluggish" returns on plan assets in 2011. Going into last year, the 45 companies combined for a cumulative $10.4-billion pension deficit. By the close of 2011, the shortfall had ballooned to $18.8-billion, an 81-per-cent increase, according to the report's authors, Dimitry Khmelnitsky and Diana Akmal.

To some extent, you can see the problem in companies' bottom lines, as they deduct what's referred to as "pension expense" before arriving at net income each quarter. But the true cost of an underfunded pension is actually worse because, in a quirk of accounting, the cash contributions can and do exceed the expense recorded on the income statement.

Pension expense "materially understates" the cash amount, the Veritas analysts say, as the total cash contributions of the companies they examined – $6.4-billion – were more than double the recorded expense of just over $3-billion.

Now, to be fair, a big part of this problem is record-low interest rates. When pension plans put a value on what they owe their retirees — their total liabilities — they have to count up all the expected future payments and put a present-day value on that stream of cash. To calculate that number, the plans need to use a discount rate. And the way the math works, the lower the interest rate, the bigger the current-day number. (The opposite is true: The higher the interest rate, the smaller the current-day liabilities number looks.)

If interest rates moved upward, a lot of these pension problems would be sorted out. Veritas figures that many of the companies could wipe out their pension deficits if interest rates rose 0.5 to 1 percentage points. Others, with larger deficits, probably need interest rates to rise 1.5 to 2 percentage points.

The problem is that interest rates show no sign of co-operating. They have remained parked near the bottom, year after year.

"Over all, we do not expect a meaningful reduction in deficits by the end of 2012," the Veritas analysts say. "The prospect of elevated deficits implies that future cash contributions and pension expenses are likely to keep rising for many members of the S&P/TSX 60."

Who, specifically?

Bombardier, with a $2.3-billion pension deficit, equal to more than one-third of its market capitalization, "is most likely to experience a material hike in cash contributions," Veritas says.

Bombardier spokeswoman Isabelle Rondeau says the company's pension numbers represent plans throughout its worldwide operations, and other countries may have less-stringent funding requirements than Canada. Ms. Rondeau adds the deleterious effects of low interest rates on the company's plan, and said Bombardier has been consistent in putting hundreds of millions of dollars in its plan each year, recently.

Veritas says other companies that "may also face higher than average contribution requirements" are BCE, Canadian Pacific Railway Ltd, Imperial Oil Ltd. and George Weston Ltd. Their pension deficits, as a percentage of their market value, range from about 11 per cent down to about 4 per cent.

BCE and CP both made major cash contributions to their plans in 2011, which means they "should enjoy greater contribution stability" than the others in coming years, Veritas says. "The other companies may face the unattractive prospect of an additional rise in cash contributions over the next few years, assuming no change in discount rates and asset returns."

Unattractive, indeed, given how long pension managers have been waiting for good, consistent news on discount rates and asset returns.


Toyota recalls 7.4 million
vehicles globally, including
240,000 in Canada

Yoko Kubota
TOKYO — Reuters
October 10, 20122

Japan's Toyota Motor Corp. announced a massive recall on Wednesday to fix malfunctioning power window switches, saying it will pull back 7.43 million vehicles worldwide in the biggest single recall since 1996, performed by Ford Motor Co.

The move comes as Japan's biggest auto maker tries to rebuild trust after a series of recalls between 2009 and 2011 in which it pulled back around 10 million vehicles, and as it struggles with plummeting Chinese sales as a result of a Sino-Japanese territorial dispute.

The recall primarily affects cars in the United States, China and Europe. Toyota's main rivals in the U.S. include Ford and General Motors Co., while in China they include Volkswagen AG, Hyundai Motor Co. and Nissan Motor Co. Ltd., and in Europe Hyundai and Nissan.

The recall will include some Yaris and Corolla models on which the power window switches can be repaired in about 40 minutes, the company said.

"The process to repair (the power window switch) is not an extensive one," spokeswoman Monika Saito said, adding that it would involve putting heat-resistant lubricant on the switches, or exchanging them.

Toyota declined to disclose how much the recall would cost, or how it might affect its earnings.

The recall will include 2.47 million vehicles in the United States, as well as 1.40 million vehicles in China and 1.39 million vehicles in Europe.

In Japan, Toyota is recalling about 459,300 vehicles, including the Vitz, produced between 2006 and 2008.

The firm is also recalling 650,000 vehicles in Australia and Asia, 490,000 vehicles in the Near and Middle East, 240,000 vehicles in Canada and 330,000 vehicles elsewhere, said Shino Yamada, another spokeswoman for Toyota.

The vehicles recalled outside Japan include certain models of the Yaris, Vios, Corolla, Matrix, Auris, Camry, RAV4, Highlander, Tundra, Sequoia, xB and xD produced between 2005 and 2010.

The first time the problem was reported was in September 2008 in the United States, Ms. Saito said.

No accidents, injuries or deaths have been reported as a result of the problem, though there is a possibility that the malfunctioning switches could emit smoke, she said.

The move comes a day after Toyota reported that its sales fell 48.9 per cent year-on-year in China in September. Japanese car brands have suffered as a result of an outbreak of anti-Japan sentiment in China in response to a territorial dispute between the two countries.

In 1996, Ford pulled back 8 million vehicles to replace defective ignition switches that could have caused engine fires.

Shares in Toyota ended down 1.90 per cent, while the broader Nikkei index fell 1.98 per cent.


London families struggling
months after Caterpillar layoffs

Deborah Baic and Tavia Grant
The Globe and Mail

Oct. 08 2012

Caterpillar Inc. closed its 62-year-old locomotive plant in London, Ont. in February, putting about 700 people out of work, including 485 unionized members.

The heavy-equipment maker cited a need to stay competitive as the reason, and had asked its London workers to take pay cuts of up to 50 per cent. It is now beefing up operations in lower-cost centres in Muncie, Ind. and Sete Lagoas, Brazil.

Half a year later in Canada, the headlines have faded, the story largely forgotten. But for many of the former workers at Electro-Motive Diesel, the grind only started with the job loss. As the severance runs out and bills pile up in a still-soft jobs market, the financial and emotional strain is showing

Click here to see short video

So it is this fall for hundreds of families in London, Ontario, a manufacturing and health-care hub in southwestern Ontario.

At least 15 marriages are either in crisis or have ended since the plant’s close, according to the local United Way, which is also seeing more clients report addiction and mental health challenges. Food bank usage in the city hit a record in August, of which more than a dozen visitors are former Caterpillar workers.

The city’s situation is emblematic of other towns in transition across Canada, where a strong dollar and heated global competition are forcing factories to close and paper mills to shut down. New jobs are coming on stream, but they’re often not in the same spots, or in the same sectors as before.

As a result, many workers displaced in the old economy lack the skills or mobility to find their feet in the new one.

Here are some of the ways that stress is playing itself out in London – not just among the affected workers, but in their families and the community as well.


Just one in four of the factory’s 485 unionized workers have found work since the plant shut its doors, according to the job action centre, whose staff phones them monthly to track their progress.

Of the ones who are working, 68 have full-time jobs, with the rest in part-time and contract positions or self-employment.

A bulletin board of job postings at the action centre reflects the tough jobs market. For London, there are about 20 postings pinned to the wall. Most are minimum wage, shift work or temporary.

“I’m sending my resume out, but there’s nothing,” says Ted Radaczynski, who had worked as a machinist. “Eleven or twelve dollars an hour, that’s what there is if anything in London, Ontario.”

Of the minority with full-time work, most have had to relocate or commute outside of the city. Fifty-five of them, all told, are working outside the city of London.

Severance has run out for all but 180 people, so the majority of people have been on jobless benefits since June.

London’s jobless rate, at 8.5 per cent, is more than a percentage point above the national average.

It’s not uniformly bleak; Ross Seeley, 53, a former pipefitter, is working part-time at a restaurant and taking care of his grandson. Brandy Damm, a former welder, has been working on call delivering the mail. She likes it, though she’d prefer more hours.

Mental health

“We’re hearing stories of addictions, mental health challenges and marriages coming to an end very abruptly,” says Andrew Lockie, chief executive of the United Way of London, which funds three dozen social agencies in the city.

“We’ve been seeing in our community conversations [including a forum in May, where 70 people turned up] a very clear pattern of people who are really challenged and stressed.”

It’s not just the worker affected by a job loss – the impact spills over to spouses and children as well, says Mr. Lockie, whose agency has been running workshops for workers on How to Stretch Your Dollar.

“We’ve realized that the implications of this challenge can carry on for years.”

Studies have shown layoffs have a negative impact on mental health including increased depression and a loss of self-esteem.

Bonnie Williams, who heads Daya Counselling Centre, has already seen former workers come through her doors. Anger is still palpable, she says.

“The jobs that are available are not the same jobs they had in terms of pay or benefits, and they may not be as long term either,” she says. “It’s a new world and it’s hard for people to adjust to that.”

Impact on children

Stress is trickling down to children.

Glen Pearson, co-director of the London Food Bank, has spoken with many affected parents and students.

Parents have told him they can’t afford music lessons any more, nor competitive hockey for their kids. A “large number” of children are now in breakfast programs at school because one parent is out getting retraining or looking for work.

“Families are breaking up, or being separated as the father or mother go out to look for work in other parts of the country. There is this feeling that their own particular lifestyle is falling apart – they can’t join the ball team this year, or play hockey, or go on the school trip to Ottawa.”

Aspirations have been ratcheted down, he says. Before the layoffs, many high-school students figured they’d go to university, maybe out of town. Now, they’re looking at local trade schools.

Back to school has meant no new clothes for Kelly Gordon’s daughter, nor can they afford repairs on their truck. They’ve been scrambling to cover school costs, given that student loans were late in coming through.

“It’s been really tough,” says Ms. Gordon, who had worked as a welder.

Food bank usage

Normally, January is the busiest time for the local food bank, when budgets are strained.

Not this year. London’s food bank recorded its busiest August on record last month, serving 3,840 families. Of those, at least 15 were families with former Electro-Motive employees, all of whom have children.

Some are now single mothers, visiting because their husbands have moved out to Saskatchewan or Alberta for work. Others starting coming even before the plant’s close as a month-long lockout put a stress on household finances.

“The Caterpillar situation is still the defining moment for us, eight months later,” says Mr. Pearson at the food bank. “There’s still this feeling in the community that if Caterpillar treats us like that, others will too...the worry is there is a race to the bottom. ”

Commuting vs. migrating

If opportunities are scarce in London, the most logical option would seem to be moving, or commuting.

Indeed, some workers are doing just that – commuting to Windsor (2.5 hours, each way) or Guelph (1.5 hours).

Wade Purdy, 47, is starting a job that is an hour and 10 minutes each way. It’s also $15 an hour below what he used to make with EMD. His son-in-law and nephew had worked in the same plant and lost their jobs – both have yet to find anything. The job market these days is “horrible,” Mr. Purdy says, leaving him with little choice but a lengthy commute.

“How bad it’s going to wipe me out driving that far with fuel costs and whatnot – sometimes you wonder if it’s even worth having the job, but what do you do?” he said, adding that moving is still better than uprooting his family, selling his home and leaving London.

About 15 people have moved West, to work in Alberta’s energy sector, where they spend three weeks on the job and the last week back at home.

A few have even headed to Indiana, or Brazil, to train new workers for the jobs they used to do.

Some are using this time after the layoff to renovate their homes themselves, preparing to list them on the market.

Kelly Gordon hasn’t yet found work, and can’t afford to retrain in another field. So she’s wondering whether to head West to work as a welder. That would mean leaving her daughter behind for two-week stretches – but better that, she says, than no job at all.

Would you take a 50% Wage cut? - Video


CAW Local 584 Thanksgiving
Food Drive was a Huge Success!

Food Drive

Donations Doubled from last year

This years 3rd Annual Food drive was the best one yet thanks to CAW Local 584 retirees and active members. Sim-Tran (Ontario) Inc was a big supporter of our drive and were instrumental in us achieving those high numbers. We would also like to thank Colony Ford for their support.

Our total weight of food donated to the Knights Table was a whopping 2,347 lbs and we also raised $280.00.

Thanks again to everyone that donated, thanks to the Brampton Guardian for their usual support and getting the word out there and thanks to Doug Berry, Dave Champagne, Brandy Lafortune and Thayne Smith for their hard work in making this all possible.

We all made a big difference in our community that we can all be proud of.


Feds may open Escape inquiry

2009 Ford Escape

By David Shepardson
Detroit News Washington Bureau
October 7, 2012

Washington — The National Highway Traffic Safety Administration said Friday it is considering opening a formal investigation into 1.6 million Ford Escape SUVs for engine problems.

The NHTSA said it had agreed to review a request by the North Carolina Consumers Council to open an investigation into alleged electronic throttle body failures resulting in engine stall or surge in 2005-12 Ford Escapes.

The petition cites two recent complaints of motorists stalling while driving 2009 Escapes that were diagnosed as having failed throttle bodies.

The petition said owners of both vehicles reported experiencing repeated incidents of stalling and engine surging.

Ford has "released a number of technical service bulletins that cover a wide range of vehicles and throttle body issues related to hesitation and stalling" including in 2008 and 2009.

Ford spokeswoman Marcey Zwiebel said the company also is looking into the issue.

"Ford is aware of NHTSA's opening resume on 2005-2012 Escape models, and we will cooperate fully with the agency as we conduct our analysis into the issue.We have just begun our investigation, and we have very limited information so far," she said.

Ford has issued four recalls for the Escape in the last three months.

In July, Ford said it was recalling 485,000 Escapes to repair sticky gas pedals that can lead to unintended acceleration.

The recall covers 423,000 2001-04 Escape SUVs with 3-liter V-6 engines and cruise control, plus 60,000 outside the United States.

Ford said that because of a lack of clearance between the cruise control cable and engine cover, a driver may be unable to disengage the throttle when the cruise control is on.

Also in July, Ford recalled 11,500 2013 models with 1.6-liter engines because the fuel lines could leak, and warned owners to immediately stop driving the new Escapes after three reports of fires in June.

The company also recalled 10,000 2013 Escapes to fix carpet padding that could interfere with brakes.

NHTSA opened an investigation in July of 730,000 Escapes and their sister SUV, the Mazda Tribute, for possible unintended acceleration, after a 17-year-old died in a January crash in Arizona.

In addition to the fatality, 13 crashes and nine injuries were reported.

Mazda also agreed in July to recall the vehicles.

NHTSA has 99 reports alleging incidents of stuck throttles in 2001-04 Escapes and Tributes with V-6 engines.

Last month, Ford issued a recall for the 2013 Escape, which went on sale in June, saying an improperly installed part could lead to a risk of fire.

That recall covered 7,600 of the vehicles built with 1.6-liter engines, including 6,150 in the U.S. and 1,300 in Canada.

The recalled vehicles were built between Oct. 5, 2011, and Aug. 31.

Ford says the recall is to prevent a dislodged cup plug in the engine cylinder head.

A dislodged plug could result in an immediate expulsion of the engine coolant. If that happened, it is possible that this rapid loss of coolant could result in a combustible glycol concentration near hot engine components and create a risk of fire


Toyota on Ford's heels in U.S. sales

By Karl Henkel
The Detroit News
October 5, 2012

Toyota Motor Co.'s is closing the gap between itself and Ford Motor Co. — the No. 2 automaker in U.S. sales — as it continues to rebound following last year's earthquake and tsunami.

Ford edged Toyota in total sales in September by 3,066 units, the second-smallest monthly margin of victory for the Dearborn automaker over Toyota since Ford regained its No. 2 ranking in April 2010, according to data from TrueCar.com. However, Ford still holds a substantial edge over Toyota in total sales through September.

"Toyota has had a remarkable recovery this year," said Jesse Toprak, vice president of industry analysis at TrueCar.com. "I think Ford will still have an advantage, but it's going to be a very close race. We can't write off Toyota."

Previously, Toyota had taken the No. 2 sales spot from Ford in March 2008 and held that advantage for most of the next two years, TrueCar.com data show.

So far this year, Ford has sold 113,644 more vehicles than Toyota, according to AutoData, a nearly insurmountable lead in the race for the No. 2 spot in 2012. General Motors Co. remains the No. 1 automaker in U.S. sales, having sold 210,245 vehicles in September and 1.97 million during the first nine months of the year.

Troy-based LMC Automotive has Ford extending a slim lead over Toyota for the rest of the year. LMC projects Ford will sell 2.2 million vehicles to Toyota's 2.05 million.

Toyota's resurgence comes after a year of plummeting sales due to an inventory shortage in 2011, a resurgence that should continue for at least a few months, said Aaron Bragman, senior analyst at IHS Automotive.

Ford, however, should have an advantage over Toyota during the last few months of the year due to an increase in SUV and pickup truck sales, but at least during September that seasonal change has not yet taken effect.

Toyota in September beat Ford in many segments including the compact segment, where the Corolla topped the Focus. In the midsize segment, Toyota's Camry walloped the inventory-constrained and outgoing 2012 Fusion model by nearly three-to-one. The 2012 Fusion, however, will soon be replaced by an all-new Fusion, which Ford hopes will help it gain market share in the fast-growing segment.

The Japanese automaker is also walloping Ford when it comes to luxury sales. Lexus sales totaled 20,386 in September, besting Ford's Lincoln brand sales, which totaled 6,802. The gap is even wider during the first nine months of the year.

"Lincoln needs attention and it needs attention quickly," Bragman said. "It is, in many ways, uncompetitive."

Toyota has expanded its wildly successful hybrid lineup, but Ford is adding two important hybrid vehicles to its lineup this fall: the Fusion Hybrid and the C-MAX Hybrid, a small car that bests Toyota's Prius v in fuel economy, horsepower and price.


The virtues of freely
reaching a deal

October 4, 2012
Ken Coran and Ken Lewenza
Toronto Star

The labour relations scene in Ontario has been focused recently on two crucial sets of negotiations: education workers and auto workers. The contrast between the two should remind policy-makers of an important, enduring lesson. When parties are allowed to freely reach a labour agreement, the resulting deal works better for them and for the whole economy. But when they aren't allowed to freely negotiate, the consequences can be costly, unintended and far-reaching.

In the private sector, the Canadian Auto Workers union has just concluded new contracts with the Detroit Three automakers. This was a pivotal round of contract talks, the first since the companies emerged from the near-death experience of 2009. The challenge was to bargain a contract that recognizes and rewards auto workers for their contribution to the industry's turnaround – but to do so in a way that enhances the case for critical future investments in Canadian plants.

The contract contained several innovative features aimed at achieving this goal, including lump sum bonuses to protect workers' real incomes against inflation, and a new wage grid that encourages new hiring but without creating a permanent second tier of workers.

Anti-union critics might have argued that Canada's economy was "too fragile" to risk a possible work stoppage in this vital industry, and that government should intervene to force a settlement. Wisely, government stayed out of the picture, and a mutually acceptable deal was reached without disruption. Secret-ballot ratification is the ultimate tool that holds negotiators accountable to the workers they represent; CAW members ratified their new contracts in strong numbers.

Compare this to the negotiations involving teachers and educational support workers. Here, too, all sides recognized that bargaining must reflect Ontario's continuing economic challenges: including a shaky recovery, and a significant (if shrinking) provincial deficit. The unions' goal was never to somehow wrest a big fat wage gain from cash-strapped school boards. In fact, the OSSTF indicated early on that it would accept a two-year freeze for teachers and support staff in line with the government's stated guidelines.

But the government quickly sabotaged chances of a voluntary deal by demanding additional, very specific concessions in the contracts – while at the same time indicating it would interfere in any work stoppage long before that prospect was even a possibility. That's not just a violation of the Charter rights of Ontario teachers and education support staff (as the courts will almost certainly confirm), it's also a recipe for dysfunctional, inefficient labour relations and for continuing turmoil in our classrooms.

This government meddling shifts the expectations of the employers (who now know they can demand all kinds of things without risking a work stoppage). It also reduces the compulsion on both sides to seek compromise, because they know someone else will have to eventually step in to make the difficult, final decisions.

Bargaining in a tough economic environment is never fun. But experienced negotiators can find their way through, crafting solutions that work for both parties. In the case of teachers and education support staff, however, government never allowed this process to do its job. Now, even worse, Queen's Park wants to apply the same ham-handed approach to the entire broader public sector.

Here's the core difference between the two sets of negotiations. In the auto talks, government allowed the parties to find their own way to a compromise. Because the deal was negotiated, not dictated, it could be tailored to reflect the industry's particular circumstances: delivering gains to the workers, but savings and efficiencies to the companies at the same time. Both sides took responsibility for making difficult choices and trade-offs. And both sides would have to face the consequences if discussions broke down. Because it was attained voluntarily, the new contract enjoys a "buy-in" from both sides that will be essential for continuing to advance productivity in Ontario's world-beating auto plants.

In our schools, however, government just charged right in, trying to predetermine and micro-manage the final outcome. Driven by optics more than economics, the McGuinty government is sabotaging the whole process of collective bargaining, and undermining the important improvements in education that have been a hallmark of its time in office.

Finance Minister Dwight Duncan and other government leaders have been telling teachers and support staff to "suck it up," stop whining, and learn from the hardships experienced in recent years by Ontario autoworkers.

But in fact, the lesson from the auto industry for our education system (and all our public services) is quite different. The lesson is that free collective bargaining works. Times may be tough, but experienced, sensible negotiators can craft solutions that reflect the times, and that work for all sides. To do so, however, they must be given the tools, and the freedom, to do their job.

Ken Coran is president of the Ontario Secondary Schools Teachers' Federation. Ken Lewenza is president of the Canadian Auto Workers.


Ford sales slip, but claims top sales title in Canada for September

Ford Motor Co. of Canada has reported a dip in September sales compared with a year ago, but still claimed the title of top-selling automaker in Canada last month. REUTERS

Toronto Star
The Canadian Press
October 3, 2012

Ford Motor Co. of Canada has reported a dip in September sales compared with a year ago, but still claimed the title of top-selling automaker in Canada last month.

The automaker said Tuesday that new vehicle sales for September were down eight per cent compared with a year ago as sales fell to 23,600 from 25,656.

Total sales of Ford cars slipped 11 per cent for the month compared with a year ago to 4,994 from 5,667, while truck sales fell 6.9 per cent to 18,606 from 19.989.

The results at Ford came as Chrysler Canada reported its best September sales since 2000 as improved car sales more than offset lower truck sales to bring the total for the month to 19,555 vehicles, up 1.6 per cent from a year ago.

Chrysler said car sales were up 35.6 per cent compared with a year ago, while truck sales were down 3.9 per cent.

"Fuel efficient vehicles like the Dodge Dart and Fiat 500 helped grow our passenger car sales by 36 per cent in September," said Dave Buckingham, chief operating officer of Chrysler Canada.

"In addition, record sales of the Chrysler 200 have propelled Chrysler to be the number one seller of mid-size cars in Canada."

The results follow the most recent round of contract talks between the U.S. automakers and the Canadian Auto Workers union that were completed without any strikes or lockouts.

The agreements saw the union accept no wage increases and lump sum payments instead of cost-of-living increases.

The new contract also set a lower starting wage for new employees and extended the time it will take them to reach the top of the scale.

Meanwhile, the Honda and Acura divisions of Honda Canada Inc. reported combined September sales of 12,911 units, an increase of 16 per cent compared with last year.

The Honda Automobile Division reported September sales of 11,457 units, up 21 per cent from September 2011, led by record sales of its Ridgeline pickup truck, which were up 112 per cent. The Acura Division reported September sales of 1,454 units.


Contracts buy Canada auto
workers time, not expansion

By Susan Taylor and Nicole Mordant
October 3, 2012

TORONTO/VANCOUVER (Reuters) - New Canadian labor contracts secured by the Detroit Three automakers last week are unlikely to lower costs enough to persuade the industry to make fresh investments in the country and reverse a decade-long contraction.

A strong Canadian dollar and cheaper labor elsewhere remain powerful forces discouraging Ford Motor Co, Fiat, Chrysler Group, and General Motors Co from making new commitments to assemble vehicles in Canada, industry experts say.

Unless there is an unexpected economic resurgence in North America, the best that the Canadian Auto Workers union can expect is for the industry to maintain current production levels over the next four years, auto analysts say. At the same time, the country will likely lose more market share to Mexico and the southern United States, where output is expected to rise.

"The sector in Canada is really suffering greatly. Not at the hands of the CAW, but at the hands of the loonie," said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, Michigan, referring to the Canadian dollar by its colloquial name.

"No matter what the CAW did, lowered costs, kept things the same, a dollar in the U.S. goes a little farther than it does in Canada. And it's not just for wages, but also for that investment dollar," she said.

Her remarks came as the CAW wrapped up six weeks of tough negotiations with the Detroit Three, sealing a tentative agreement with hold-out Chrysler late Thursday. Ford, Chrysler and GM workers have ratified their deals.

The Chrysler deal largely mirrors the four-year pacts reached last week with Ford and GM. The deals freeze wages for existing workers for three out of four years, and cut pay and pension benefits for new employees.

While the union pushed hard to secure new vehicle production for Canadian plants, the companies held back such promises.

There were some new jobs promised, including 600-plus at Ford and 1,000 at GM, but at best that will only offset other losses. For example, GM's consolidated line, which employs 2,000 workers, is set to shut down in 2014.


Canada's auto industry reached peak employment and output in the late 1990s when the Canadian dollar was near record lows. A weaker Canadian currency reduced the cost of Canadian-sourced labor and materials when costs were converted back to U.S. dollars.

But a 50-percent-plus surge in the value of the Canadian dollar over the past decade - on Friday it was worth $1.01 - reversed those cost advantages and has made Canada the most expensive place in the world to assemble vehicles, according to the Detroit Three.

The companies insisted in this round of talks that Canadian labor costs had to fall to match those of employees in the United States, or there was a risk that production could exit Canada, particularly in the case of Chrysler.

With the new agreements fresh off the drawing board, calculations of future Canadian labor costs are hard to come by and the companies will not provide precise figures. But Ford chief negotiator Stacey Allerton said the pact gives the automaker significant cost savings.

While base wages for existing workers were unchanged at an average of $34 an hour versus an average of $28 for United Auto Workers members in the United States, some health benefit costs were trimmed. New hire costs are "in the ballpark" of the UAW's contract, Allerton said.

Even so, Tony Faria, an auto industry expert and professor at the University of Windsor in Ontario, said the CAW didn't go far enough to cut costs and level the field, even with the United States, where labor rates are much higher than in Mexico.

"We are not going to see investment from the Detroit Three in the short run. I would find it hard to imagine new investment in the long term," he said. "The companies can put any new investment elsewhere at a lower labor cost."

If Canada maintains production of 2.5 million-2.7 million vehicles a year, with North American production expanding, the country's share of the market would shrink to 14-15 percent over the next decade from about 15.7 percent now, said Dennis DesRosiers of Richmond Hill, Ontario-based DesRosiers Automotive Consultants Inc.


Although labor costs are undoubtedly important, they are "not a game changer" for automakers' overall costs, said UBS auto sector analyst Colin Langan.

Analysts estimate that labor represents between 5 and 10 percent of the total cost of a vehicle.

Parts can contribute up to 70 percent, CAW economist Jim Stanford said. Although the bulk of these are imported, some are sourced locally, he said, comprising roughly 17 percent of vehicle cost.

"We've been talking for the last four months, non-stop, about how workers have to be competitive with other jurisdictions," he said.

"Now it's time to talk about how policy must be competitive with other jurisdictions, and that includes the Brazils and the Koreas and even the Americas of this world, where their governments are fully engaged in enhancing and motivating investment in the sector," he said.

Bill Pochiluk, CEO of Automotive Compass LLC, a consulting firm in West Chester, Pennsylvania, said that if Canada wants to halt a long-term auto industry slide, it should introduce a similar policy to Brazil. Faced with a strong local currency and a flood of cheap Mexican vehicle imports, Brazil insisted that vehicles assembled in Mexico have a higher portion of parts sourced from elsewhere in Latin America.

"I'm concerned about the pathway to the long term and what needs to be done. And I think improving Canadian content is the best way to get there," Pochiluk said.

The CAW has lobbied federal and provincial governments in Canada to adopt policies to better protect the auto sector, but the current government's track record of favoring free-market policies suggests little likelihood of success.


Honda recalls 600,000
Accords in Canada

Toronto Star
October 2, 2012

DETROIT—Honda is recalling 600,000 Accord midsize cars in the U.S. and Canada to fix a faulty power steering hose that can leak fluid and cause a fire.

The recall affects Accords with V-6 engines from the 2003 through 2007 model years.

Honda has a report of one fire but no injuries or crashes.

The U.S. National Highway Traffic Safety Administration says the Accord's power steering hose can deteriorate with prolonged exposure to engine heat.

The agency says the hoses can crack and leak, possibly causing a fire or loss of power-assisted steering.

Honda will replace the hoses for free, but it won't have the parts available until early next year.

Any owner who suspects a leak should take their car to a dealer for inspection, Honda spokesman Ed Miller said Monday.

The company that makes the Accord's power-steering hoses had to ramp up manufacturing to make them since the affected cars are more than five model years old and the hoses were out of production, Miller said.

"We're going to start making them and getting them out there as soon as we can," he said.

The Accords are being added to a May recall of 53,000 Acura TL midsize luxury cars in the U.S. from the 2007 and 2008 model years. Acura is Honda's luxury brand.

The replacement hoses for the Accords are different from the hoses in the original Acura recall, Honda said.


CAW at Chrysler accept tentative contract reached last week

The Canadian Press
October 1, 2012

Unionized workers at Chrysler's Ontario plants voted to accept a new contract on Sunday, marking the Canadian Auto Workers' successful negotiation of fresh agreements with the three big U.S. automakers.

The Chrysler workers voted 90 per cent in favour of the tentative deal which was reached last week.

It was not immediately clear how many of the 8,000 workers at Chrysler's plants in Toronto, Brampton and Windsor cast ballots in the ratification votes held this weekend.

The deal was based on agreements already accepted by CAW members at Ford and General Motors by margins of 82 per cent and 73 per cent.

The four-year contract includes lump sum payments as well as job security provisions.

It also pays new employees less and extends the time it takes them to get to the top of the pay scale.

Chrysler was the last of the Detroit Big Three automakers to hammer out a contract.

CAW President Ken Lewenza said the ratification of all three new agreements will now allow the union to focus on winning a national auto policy for Canada.

"One of our objectives coming into these talks was to position our industry for future growth and success, and we did as much as we possibly could on that front," Lewenza said in a statement released Sunday evening.

"But without a comprehensive sector development strategy, the future of auto manufacturing in Canada remains uncertain, at best."

He said a national auto policy could lay the groundwork for the industry's ongoing competitiveness and success and added that the union would be renewing efforts to win federal support for the issue.

The CAW's proposals for a national policy include the development of an auto investment policy, building a green industry and a buy-Canadian vehicle purchasing strategy.

The CAW represents 21,000 workers at the Big Three automakers.







2013 Fusion: The new face of Ford

The 2013 Ford Fusion Energi plug-in hybrid will deliver more than 100 mpg-e, a miles-per-gallon equivalency metric. (Ford Motor Company)

Doug Guthrie
Dertroit News
September 30, 2012

Ford's 2013 Fusion is a tasty new offering on the notoriously bland mid-size car menu.

Oh, we drool over hot performance machines, long for full-size luxury, and order heaping helpings of tough trucks. But the vast majority of U.S. car consumers responsibly spend their hard-earned money on dependable, practical, mid-size oatmeal.

Thus, we have the most popular car in America, the Toyota Camry, an uninspiring but dependable family sedan Americans have trusted for two decades as a smart choice. Even recalling 9 million Camrys worldwide in 2009-10 for unintended acceleration did less to slow sales than production delays last year following Japan's earthquake and tsunami.

But while Toyota played it safe, making only uncontroversial upgrades to Camry, the competition — the Fusion, Nissan's Altima, Honda's Accord, Chevrolet's Malibu, and Hyundai's Sonata — added considerable spice over the past six months. All feature new styling, better fuel economy and interior materials with technology previously seen only in luxury cars.

The Fusion can be ordered with sensor and camera arrays that: provide blind spot and cross traffic alerts; run adaptive cruise control to maintain a set distance from the car ahead by autonomously applying the brakes; nudge the steering wheel in the right direction if you wander from your lane; and even help parallel park.

The massive makeover in the mid-size segment concludes with today's debut of an all-new Mazda6 sedan at the Paris Motor Show. The Fusion is no longer built on the platform it previously shared with Mazda's mid-size car.

The Fusion is Ford's most important car, selling 248,067 vehicles last year and ranking fourth in total U.S. sales behind the Camry, the Altima and the Accord. More than 3 million mid-size cars are expected to be sold in the U.S. this year. The innovative challengers are all aiming at bigger market shares.

The Fusion's new Ford family face looks like an Aston Martin sports car with its horizontally elongated hexagonal grille. Gone are the shiny broad chrome bars that gave the previous Fusion's grille a kitchen appliance look. Also gone are the crate-like braces on the chins of Ford's Focus and Escape.

The Fusion's roof is long with a slow windshield slope and fastback window at the rear. Deep sculpted horizontal lines, slit-like headlamps and LED taillights emphasize the Fusion's 112-inch wheelbase, five inches more than the 2012 model and the longest in the class.

Inside, the Fusion's long, wide cabin provides plenty of leg and shoulder room. Lots of glass and a dash that slopes away from the occupants give a sense of spaciousness.

Ford continues to pioneer a modern interior look and approach to infotainment, navigation and climate controls, focusing on voice commands, shiny, smooth, touch-sensitive console surfaces and the optional MyFord Touch screen. Other manufacturers offer redundant old-fashioned push buttons to avoid the frustration of learning new-fangled ways. This is why I suggest taking a dealership tutorial and spending time in the driveway with the owner's manual. It is the only way to learn the amazing things new cars can do.

The Fusion offers five engine options, and none is a V-6 cylinder, available in previous models. All come standard with six-speed automatic transmissions. An optional 1.6-liter EcoBoost turbocharged engine can be ordered with a manual transmission, aerodynamic underbody cladding, electronically shuttered grille openings and a system that shuts the engine off while stopped at a traffic light, then turns it back on when the brake is released. This combination earns Fusion its top gasoline-fueled economy rating of 23 mpg city and 36 highway. This is still short of Altima's class-leading 27 city and 38 highway mpg.

The 240-horsepower 2.0-liter EcoBoost turbocharged engine makes 270-pound-feet of torque for a powerful V-6 feeling in the all-wheel-drive model I drove. Still, I felt the manually shifted 1.6-liter Fusion was the most engaging. It left me to discover the well-tuned suspension and enjoy the engine's bass exhaust note that gets a little help from the audio system. The interior is kept quiet with new sound insulation and active noise canceling that senses annoying mechanical noises and blanks them out by broadcasting the opposite frequency through the audio system.

Ford didn't provide any $21,200 base model cars for testing. That model comes with cloth seats, Bluetooth for hands-free cellphone operation and a 2.5-liter engine that develops 175 horsepower and gets 22 mpg city and 34 highway.

The Fusion's new gas/electric hybrid model will launch at the end of the month with a class-leading EPA-estimated 47 mpg city and 47 mpg highway. The engine combined with a lightweight lithium-ion battery-powered electric motor and a constantly variable transmission (CVT) demolishes the 43 city / 39 highway mpg produced by Camry's Prius-sourced hybrid powertrain. Fusion's hybrid will start at $27,200, slightly less than Camry's.

The well-equipped hybrid I tested had a $30,975 price tag. It rode quietly, comfortably and handled better than I expected. The driver instrument cluster included several data displays that made a game out of economy driving.

There are graphical "coach" displays to improve energy conserving acceleration and power regenerating braking. Another display grades your eco-driving very simply, growing images of green leaves in the display.

A plug-in electric model goes on sale early next year.

The Fusion's established reputation for dependability combined with the variety of new models, attractive styling, luxury and high-tech options means you no longer have to settle for oatmeal when shopping for a mid-size car. There are a lot of tempting new choices on the menu. Bon appétit.

2013 Ford Fusion
Price: $22,495 (includes $795 destination fee)
Type: Mid-size, five-passenger sedan in front- or all-wheel drive

2.4-liter four-cylinder standard
Optional turbocharged 1.6-liter four-cylinder EcoBoost
Turbocharged 2.0-liter four-cylinder EcoBoost
Hybrid Atkinson cycle 2.0-liter four-cylinder and electric motor

175-horsepower; 175-pound-feet of torque with standard 2.4-liter four-cylinder
178-horsepower; 184-pound-feet of torque with turbocharged EcoBoost 1.6-liter four-cylinder
240-horsepower; 270-pound-feet of torque with turbocharged EcoBoost 2.0-liter four-cylinder
141-horsepower; 129-pound-feet of torque with gas/electric hybrid for 188 combined total horsepower


Six-speed automatic standard with all but hybrid
Six-speed manual transmission optional with 1.6-liter EcoBoost
Constantly variable transmission (CVT) with hybrid

EPA gas mileage
22 city / 34 highway with standard 2.5-liter engine and automatic transmission
23 city /36 highway with turbocharged 1.6-liter engine and automatic transmission
25 city / 37 highway with turbocharged 1.6-liter engine and manual transmission
22 city / 33 highway with turbocharged 2.0-liter engine and front-wheel drive
22 city / 31 highway with turbocharged 2.0-liter engine and all-wheel drive
47 city /47 highway with hybrid gas / electric engine

Report Card
Overall: HHH
Interior: Spacious and quiet
Exterior: Dramatic, long and lean
Performance: A pleasant car to drive
Pros: Another smart mid-size choice with good looks
Cons: Narrow door openings limit access to back seats
HHHH Excellent HHH Good HH Fair H Poor


New CAW contracts do little to reduce U.S. labor cost gap

Automakers' savings are dependent on retirement incentives

By Bryce G. Hoffman and Karl Henkel
The Detroit News
September 29, 2012

The Canadian Auto Workers union will allow all three Detroit automakers to offer rich retirement incentives to thousands of Canadian factory workers.

Retirement-eligible production workers would receive a lump-sum payment of $50,000 (all amounts Canadian) and a $20,000 voucher for the purchase of a new vehicle. Skilled trades would receive the same voucher and a lump-sum payment of $60,000. Workers who take advantage of the incentive could be replaced by lower-paid entry-level workers.

It is a key provision of the new contracts — one that experts say could go a long way toward closing the labor cost gap between Canada and the United States.

Ford Motor Co. told The Detroit News that it plans to offer retirement incentives to about 1,000 of its Canadian employees this year. Stacey Allerton, vice president of human resources at Ford of Canada, said "historically less than half" have accepted similar offers in the past.

Asked about the retirement incentives Thursday, CAW President Ken Lewenza said General Motors Co. does not plan to offer them to its workers until 2014, when the company is due to close one line in its Oshawa Assembly Plant. Lewenza said he does not expect Chrysler to offer any, because the Auburn Hills automaker does not want to add to its pension costs.

Neither GM nor Chrysler responded to requests for comment.

Aside from these retirement incentives, the new contract does little to narrow the labor cost gap.

"This is really attrition-dependent," said Kristin Dziczek, a labor expert at the Center for Automotive Research. "It remains to be seen how successful the companies will be in (reducing) the work forces they have."

She estimates that about a quarter of the factory workers employed by GM, Ford and Chrysler in Canada could be eligible for the offers — if the companies decide to extend them. GM, which has the oldest work force, has the biggest opportunity for cost reduction.

But if few workers head for the exits, the new contracts will do little to reduce hourly labor costs.

"The worst case is that they stand still," Dziczek said.

Going into this year's negotiations, executives from all three companies said Canada had become the most expensive place in the world to build cars and trucks. Chrysler's hourly labor costs, for example, are about $7 higher than in the United States.

The difference is partly due to the more generous benefits enjoyed by Canadian workers and partly due to the strength of a Canadian dollar that is now trading at historic highs.

"We don't have any control over the Canadian dollar," CAW President Ken Lewenza said during a press conference following the announcement of a tentative agreement with Chrysler Wednesday. But he said members will make up for the unfavorable exchange rate by working harder.

"We'll provide the highest productivity," Lewenza said.

In addition, the CAW agreed to extend a controversial two-tier wage structure that pays new hires 60 percent of the $34.33 hourly rate veteran workers earn. Unlike the U.S. system, the Canadian one allows those employees to work their way up to full wages over 10 years.

The CAW refused to support a permanent two-tier structure. Lewenza said the animosity created by having two people do the same work for different wages is a recipe for disaster in the long run.

But Lewenza said it would be a mistake to link the retirement offers with the opportunities created by the two-tier wage system.

"They are not offering retirement incentives to get to the new-hire situation," he said, adding that the two-tier system is aimed at creating new jobs in Canada.

Dziczek said the only openings new hires will be filling are ones created by retiring workers.

Ford and GM would first have to offer new jobs to the hundreds of laid-off workers still in their systems. Chrysler only has about 100 workers on layoff, but it has not expressed any intention of expanding production in Canada.

Unlike Ford and GM, which both made concrete commitments of new jobs and new investments in Canadian factories, Chrysler only agreed to maintain its current level of employment.

There are other gains for CAW members in the contracts, though. All three agreements require the automakers to pay CAW members a $3,000 signing bonus this year and $2,000 "cost-of-living improvement" payments each year for the rest of the four-year contract.

"They would have preferred giving us nothing," Lewenza said. "It's a question of providing some modest support to workers who have been to hell and back."


CAW members accept
four-year deal with GM

Globe & Mail
September 28, 2012

Canadian auto workers at General Motors have voted to accept the new contract that their union leadership negotiated last week, the union said Thursday.

The Canadian Auto Workers union said 73 per cent of its GM members accepted the four-year deal. The union said about half of the 5,500 workers at GM Canada cast ballots.

The union leadership also reached an agreement with Ford last week and Chrysler this week. Ford workers voted in favour of their deal last weekend, and Chrysler workers are set to vote on their tentative agreement this weekend.

GM and Chrysler matched the deal the union reached with Ford.

The contracts cut wages for new hires and freeze pay for current workers. But the contracts also give them lump-sum payments to cover inflation and for ratifying the deal.

The deals with the three Detroit automakers avoided strikes and the possibility production will move to the United States in the next four years.

David Wenner, a general director at GM, said Thursday they would work with the union over the next four years to enhance the competitiveness of the Canadian operations.

The auto companies had said Canada was the most expensive place in the world to make cars and trucks, and warned they could move production south if the CAW didn't cut costs. The CAW represents about 21,000 auto workers in Canada and about 16 percent of auto production in North America.

Canada's advantages in the past – a weak Canadian dollar and government health care – have all but vanished compared with U.S. factories.

Under the agreement new workers will receive 60 per cent of the current top wage of $33.89. That would mean new workers would be paid around $20.33. They can move up the wage scale and reach the top wage in 10 years.

U.S. workers at the Detroit automakers approved a similar two-tier wage agreement five years ago, but in those agreements, workers don't automatically get the top wage after 10 years.

In addition, the United Auto Workers union in the U.S. has agreed to steeper concessions than the CAW, making U.S. labour costs cheaper. Going into the talks, the Detroit automakers were paying an estimated $60 to $62 an hour for labour and benefits in Canada, compared with $50 an hour at Chrysler, $56 at Ford and $58 at GM, according to the Center for Automotive Research, a non-profit research group.

The federal Canadian and Ontario province governments worked in tandem with the U.S. government on auto bailouts in 2009 to maintain Canada's share of North American auto production. Canada's share peaked at 3.2 million cars in 1999, about 17.4 per cent of North American production. In 2011, Canada produced 2.1 million vehicles, or about 16 per cent.


CAW wins labour
deal with Chrysler

Greg Keenan
Globe & Mail
Sept 27, 2012

The Canadian Auto Workers union has reached agreements on new contracts with all three Detroit auto makers, avoiding a crippling strike and keeping labour costs low enough to win new jobs and new investments from the companies at their Canadian operations.

The final deal was reached late Wednesday with Chrysler Group LLC, which agreed to match key wage and benefit clauses negotiated first at Ford Motor Co. last Monday and General Motors Co. last Thursday.

Chrysler chief negotiator Al Iacobelli confirmed the agreement, but would not comment on how the deal affects the company until it is ratified.

Among the key victories for the union are a promise of $675-million worth of new Canadian investment from GM, 650 jobs at Ford operations in Canada and a commitment by Chrysler to maintain five shifts of operations and about 7,500 jobs at two Ontario assembly plants for the next four years.

The companies get a deal that holds the line on wage costs with a four-year freeze on pay and gives them an opportunity to begin cutting hourly labour costs through a reduction in pay and benefits that will apply to any employees hired between now and 2016. How much they save depends on how soon they are able to hire new employees and how many they hire.

CAW president Ken Lewenza hailed the agreements as a recognition by the union that it needs to help keep the companies competitive in Canada while still permitting workers to share in the auto makers' return to profits after the 2008-09 recession that sent two of them into bankruptcy protection.

"We should be able to defend good, value-added jobs; jobs that provide for our families, jobs that provide us the opportunity to send our kids to college and university to get the education they need," Mr. Lewenza declared before General Motors of Canada Ltd. workers in Oshawa Wednesday as they prepared to vote on the agreement.

The union fought off the companies' initial demands for drastic cuts in wages and benefits and insistence that Canadian workers match the 2011 agreement the auto makers reached with the United Auto Workers in the United States, which calls for permanently lower wages for newly hired workers and pay increases that are based on profit.

In the Canadian plants, newly hired workers will start at about $20 an hour and progress to full wages of $34 an hour after 10 years. Existing workers will receive a $3,000 signing bonus and bonuses of $2,000 in each of the final three years of the contract – whether or not the companies are profitable.

GM spelled out in its agreement with the CAW that the wage and benefit scheme for new hires will help make Canada more competitive when decisions on new investments are made.

"The company acknowledges that the recently negotiated new-hire provisions substantially enhance the labour cost competitiveness of new employees in the Canadian operations, which is one of the several important factors of consideration for investment."

The CAW and the companies avoided the worst-case scenarios, said industry analyst Dennis DesRosiers, which would have been an announcement of more plant closings or a strike at one or more of the auto makers.

The agreements indicate that "Canada is now moving toward being competitive with the U.S. industrial north," said Mr. DesRosiers, president of DesRosiers Automotive Consultants Inc.

The danger ahead for the industry in Canada – both the Detroit Three and the two Japan-based auto makers that build vehicles here – is that the Canadian dollar continues to soar against the U.S. currency. That would further harm the competitive position of auto makers and the manufacturing sector as a whole, which has already been battered by the dollar's rise to parity with the U.S. currency in recent years.

The most positive scenario, Mr. DesRosiers said, is a return to record vehicle sales levels in the U.S. market, which is the destination for about 80 per cent of the cars, minivans and crossover utility vehicles assembled in Canada.

Record sales would require all companies to throttle up vehicle production in Canada, providing more jobs and boosting the overall economy.


Culture of concessions has
gutted organized labour

Sam Gindin
Toronto Star
September 26, 2012

At the end of the 1970s, just before the era of concessions began, the U.S. section of the United Auto Workers included some 700,000 members at the Big Three (GM, Ford and Chrysler). In each subsequent round of bargaining, the union accepted concessions in exchange for the promise of “job security.” Today, after three decades of this charade — sold by the union as well as the companies — there are 110,000 UAW members left at these companies, a stunning loss of almost 85 per cent of the jobs.

The Canadian section of the union resisted this direction for a time. In fact, it was tensions over the response to concessionary demands that led in 1985 to the Canadians breaking away from their parent and establishing the Canadian Auto Workers. As it turned out, the new union did somewhat better in terms of jobs for a significant period, but today their numbers too are dramatically down: from some 70,000 at the end of the 1970s to under 21,000 today, a fall of some two-thirds.

Since the early 1980s, real productivity in the Canada-U.S. auto industry (i.e. after discounting for inflation) has more than doubled. Real wages, on the other hand, have actually fallen in the U.S. and only increased moderately in Canada.

For new workers, the change is even more shocking. An American autoworker hired at the Big Three today will be working at a lower inflation-adjusted wage than he or she would have gotten a half-century ago. In Canada, the real starting rate will now be 12 per cent below where it was when the Canadians split from the Americans a generation ago. And whereas new workers could expect to reach the top rate in 18 months then, they will now have to wait 10 years.

There are four crucial lessons to be taken from all this.

First, it is simply not credible to argue that concessions are a strategy for autoworkers “ultimately” achieving a better life. Concessions not only increase inequality and dampen demand, leaving corporations reluctant to invest, but also are a diversion from addressing what really needs to be done to create jobs.

Second, the great productive potential of this sector cannot be met if we restrict that potential to making cars. With productivity improvements in the auto industry of 3 per cent per year when long-term demand is growing at less than 2 per cent per year, jobs will inevitably shrink over time — and this is aside from whether we really want or can sustain more cars on the road.

Rather than watching the disappearance of the productive assets we have in this sector, we should be talking about how to convert its flexible tools and equipment, creative engineering capacity and proven worker skills into meeting the obvious needs that environmental pressures will imply through the rest of the century.

Such transformations will have to include not just our energy and transportation systems, but also our factories and offices, the nature of our homes and appliances. This cannot happen, as experience shows, through reliance on markets and unilateral corporate decisions; a sustainable future demands placing some notion of democratic planning back on the agenda. (The technical feasibility of such changes was demonstrated as long ago as World War II when industries were converted to war production and back again in remarkably short periods.)

Third, it is hard to imagine a significant move in this direction without a push from a renewed labour movement. Unions themselves need to radically rethink their structures and role as representatives of working people. It isn’t enough to lament corporate and government attacks or to look to better PR or technical fixes. Two-tier wages for the same work, for example, alienate the very young workers on whom unions depend for their revival, and that lack of solidarity within the workplace destroys credibility in promises of broader solidarities beyond the workplace.

Unions will have to demonstrate in practice that they are leaders in the fight for needed social services, that they have ideas for job creation, and that they are ready to put their organizational resources into winning such directions. The right has radically and aggressively championed an agenda that has brought greater inequality and greater insecurity for working people. Only an equally radical and determined response can reverse this course.

Finally and more generally, we must come to grips with the fact that private investment is not going to lead us out of the immediate economic crisis. Though productivity has grown and costs have been restrained, the resultant hordes of cash — as has been much noted — are only sloshing around in corporate treasuries or in the financial ether. Neither further cuts in interest rates nor tax cuts will change this reality. Only direct government intervention in massive infrastructural spending and the expansion of needed public services will create jobs — and induce the private sector, in spite of itself, to meet the consequent spending.

Sam Gindin is retired from the CAW, where he served as assistant to the president. He is the co-author with Leo Panitch of the recently released The Making of Global Capitalism: The Political Economy of the American Empire (Verso, 2012).


Chrysler gets a break in CAW talks

By Bryce G. Hoffman and Karl Henkel
September 26, 2012

Negotiations continued Tuesday between Chrysler Group LLC and the Canadian Auto Workers as some union members expressed outrage at their leadership's apparent willingness to negotiate more flexible terms with the Auburn Hills automaker.

On Monday, CAW President Ken Lewenza said he would not require Chrysler to make the same commitment of new jobs in Canada that Ford Motor Co. and General Motors Co. have already agreed to. He said Ford and GM both have large numbers of laid-off hourly employees in Canada and said the promise of new jobs was aimed at getting them back to work. Lewenza said Chrysler does not have any laid-off workers. But employees at the company's Brampton Assembly Plant tell a different story. They say the company has laid off scores of workers this month and is threatening to pass out even more pink slips.

"I have people in my group that were laid off," said team leader Karen Zulynik, a CAW member who has worked at the plant since 1994. She and many of her co-workers were upset when they learned that the union was not going to demand their reinstatement, particularly because they say the company has brought in part-time temporary employees to do some of the work that had been done by the laid-off union members. "When they read that and they see that Ford's giving these guarantees, they get upset. There are people on layoff, so it's wrong."

Brampton assembles the Chrysler 300, Dodge Charger and Dodge Challenger.

Chrysler says it has no workers on permanent layoff in Canada.

In other developments Tuesday, the CAW said union leaders from locals representing GM workers voted overwhelmingly in favor of ratifying the union's tentative agreement with the company. Rank-and-file members are scheduled to vote on the contract Wednesday and Thursday. Results are expected Thursday evening.

Workers at Ford Motor Co.'s Canadian factories voted in favor of ratification of a similar agreement over the weekend.

Negotiations are continuing between Chrysler Group LLC and the CAW, but union leaders say they do not expect an agreement before the end of the week.


Auto industry deals mark move to more 'self-financing' pensions

Greg Keenan
Sept 25, 2012
Globe & Mail

The new labour deal that Ford Motor Co. and General Motors Co. reached with their unionized Canadian workers includes significant reforms to pension financing, a liability that came close to crippling the Detroit auto makers during the 2008-2009 recession.

New employees at both companies will pay for an increasing share of their own pensions, under separate agreements negotiated last week between Ford and GM and the Canadian Auto Workers union. That's a significant change from just four years ago, when the Detroit Three contributed 100 per cent of their unionized employees' pensions in Canada.

The deal underscores Detroit's relentless push to drive down so-called "legacy costs" – namely, pensions and health care – that have put the companies at a competitive disadvantage against Japan-based auto makers operating in North America. Meagre investment returns and a rising number of retired workers have made it far more onerous for the auto companies to keep the financial promises they made to generations of employees.

GM's Canadian pension plans, for example, soaked up about $5-billion of the $10.6-billion the federal and Ontario governments contributed to the bailout of its parent company in 2009.

The Detroit Three pension plans in Canada will become "much more self-financing" under the changes the CAW and the companies agreed to last week, Bill Murnighan, the union's director of research, said in an interview Sunday.

Workers at the Detroit Three in Canada began contributing to their pensions a few years ago when the union agreed that newly-hired employees would begin contributing $1 to the defined benefit plan for every hour worked.

The companies actually hired few employees after that agreement because they were still restructuring. But the latest collective agreement, which 82 per cent of Ford Canada's workers voted in favour of over the weekend, gives them a greater incentive to bring in new staff. Wage rates for new employees are being cut to about $20 an hour from the current $24, and it will take them 10 years to reach the full rate of $34 an hour.

But Mr. Murnighan and other CAW officials outlined changes to pension plan funding on Sunday that will also help the companies cut costs. The pension payment of $1 per hour worked by new employees still applies in their first four years of work. But it rises to $1.50 an hour in years five, six and seven, and to $2 an hour in year eight and beyond.

Once the employees hit the 10-year mark and are earning $34 an hour, they will be contributing between 5 per cent and 6 per cent of their wages to their pensions.

In addition, new workers will be part of a combined pension scheme that includes both a defined benefit plan – that is, one that guarantees payments at retirement – and defined contribution plan, which contains no such guarantees. That structure will reduce the amount of money the companies contribute.

In a third change, CAW employees will have the option for the first time of taking the lump value of their pension at retirement instead of receiving monthly payments.

That's a change Ford offered salaried employees of its American operations in a bid to reduce the pension liability arising from its U.S. pension plans.

Talks with Chrysler Group LLC on the agreement reached with Ford and GM continued over the weekend, but at a slower pace as CAW leaders travelled to ratification meetings of Ford employees to explain the deal.

Sources close to the Chrysler talks said the third-largest Detroit auto maker was balking at paying employees a $3,000 ratification bonus for agreeing to a new deal, asking instead if it could be split into several payments.


Canadian Ford Workers
Approve New Deal

September 23, 2012

(Toronto) CAW members at Ford have approved a new collective agreement by 82 per cent.  Voting took place at a series of ratification meetings Saturday and Sunday in Hamilton, Windsor and Brampton, Ontario.

The agreement with Ford was the first deal established at the Detroit Three companies and serves as a model for pattern bargaining with General Motors and Chrysler.

“Our members at Ford recognize that in these uncertain economic times, some of the most important elements of a new collective agreement are future investment and improved job security,” said CAW President Ken Lewenza. “This new agreement will ensure that our facilities are well-positioned for a strong future in the North American auto industry.”

The CAW reached an agreement with Ford on September 17 and General Motors on September 20, 2012. The union has yet to reach an agreement with Chrysler but will continue talks with the hope of reaching a new deal this week.

Download Brochure here

Breakdown By Location:

Bramalea : 72.6 % (109-Yes, 41-No)
Oakville: 81%
Windsor: 84%

Below is the breakdown by classification:
Production – 81 per cent
Skilled Trades – 87 per cent
Office – 100 per cent
Ratification meetings are scheduled for CAW members at Wednesday and Thursday for General Motors.

Ratification Meeting Results
Bramalea : 72.6 %
(109-Yes, 41-No)
Oakville: 81%
Windsor: 84%

For Ford/CAW Contract Brochure download here


CAW members vote on
Ford deal this weekend

The Canadian Press
Sept 23, 2012

Ford workers in Hamilton and Windsor, Ont., vote today on a four-year deal reached this week that has been endorsed by their union leadership.

Other Ford ratification meetings will be held Sunday in Windsor and Brampton, Ont.

The Canadian Auto Workers says the proposed contract would create new employment opportunities for hundreds of laid off workers and provide cost of living lump sum payments.

CAW President Ken Lewenza says despite the endorsement from union negotiators, it's up to rank-and-file members to decide.

Ratification meetings for General Motors employees on a tentative deal that will maintain 1,750 jobs that had been in question will be held next Wednesday in Oshawa, Ont.

New hires paid at a lower rate
The CAW says it hopes it's just days away from reaching an agreement with Chrysler, though Chrysler has been reluctant to follow a pattern deal reached with its rivals.

"I'm optimistic that within the next three or four days we can get the job done," Lewenza said Friday.

Lewenza said Chrysler is fully aware that following the pattern set by its American rivals is essential for the union.

"If it breaks down in any way, we'll give the 24-hours notice and we'll utilize the tool but I'm anticipating we won't need to do that in the next three or four days," he said.

The GM and Ford deals will see new hires paid a lower rate, $20.40 an hour, which equals 60 per cent of current base pay and progressing to full pay in 10 years, longer than the six years agreed upon in the last agreement.

They will also be converted to a hybrid pension plan, which is less burdensome to the company than the defined benefit plan that current employees receive.

All employees at both automakers will receive a $2,000 annual cost of living lump sum payment and a $3,000 ratification bonus.


CAW moves ahead with Ford

Union chief expects proposal from Chrysler
this weekend, possible deal by Monday

September 22, 2012
Detroit News
By Karl Henkel and Bryce G. Hoffman

Talks between Chrysler Group LLC and the Canadian Auto Workers are expected to remain on the back burner this weekend as the union concentrates on winning ratification of its tentative agreement with Ford Motor Co.

But CAW President Ken Lewenza told The Detroit News that he does expect a deal with the Auburn Hills automaker on Monday.

"My anticipation as of right now is to work through the preliminary stuff this weekend, and I'm anticipating on Monday to dot the I's and cross the T's," Lewenza said.

Chrysler is the only one of the three Detroit automakers that still has not reached an agreement on a new national contract with the Canadian union. Experts say the company has little room to maneuver now that Ford and General Motors Co. have agreed to similar terms. But Chrysler CEO Sergio Marchionne — no fan of pattern bargaining — has been a wild card in past labor negotiations, and union leaders in Canada say his negotiating team has been the toughest.

The CAW said it has provided Chrysler with the terms of the Ford and GM agreements. But, as of Friday afternoon, the union had not received an economic proposal from the company.

"Chrysler knows what the pattern looks like," said Jerry Dias, Lewenza's assistant. "There is no reason for any prolonged set of negotiations."

Chrysler did not respond to requests for comment.

Ford and the CAW reached a tentative agreement Monday. GM followed on Thursday. In both cases, the union made significant concessions — giving up guaranteed annual pay increases and extending a controversial two-tier wage system — in exchange for promises to add jobs and make new investments in Canadian factories.

"It's not like we're starting at step one," Dias said.

But Chrysler's Canadian labor costs are higher than its U.S. competitors. The company also has the largest manufacturing presence in the country of the Detroit automakers. And Marchionne has already warned that if Canadian workers insist on getting paid more than their U.S. counterparts, he is prepared to move production elsewhere.

Lewenza said he expects an initial Chrysler proposal sometime today, though he did not expect it to meet the pattern set by Ford and GM.

"I don't know if Chrysler took the last three or four days that seriously," Lewenza said. "We were getting in some significant arguments with GM. They were watching that instead of their own negotiation."

Weekend discussions will take place without Lewenza, who will be in Oakville, Ontario, today and in Windsor on Sunday for ratification votes at Ford plants. Ford employees will cast votes this weekend; voting results are expected on Sunday. A vote from GM workers is tentatively scheduled for Wednesday and Thursday, though those dates had not been set in stone


CAW reaches tentative contract agreement with GM

September 21, 2012
Dana Flavelle
Toronto Star

The Canadian Auto Workers union has reached a tentative agreement with General Motors that is says preserves all the features of the pattern laid down by the Ford agreement from Monday.

The deal allows GM to cut costs and also preserve jobs, CAW national president Ken Lewenza told a press conference late Thursday.

"By the end of the collective agreement the seniority workforce will be fully employed," Lewenza said.

The contract maintains a total of 1,750 jobs with a capital expenditure of $675 million at GM plans in Oshawa and Brampton.

"This set of talks with our labour partner have been candid and constructive, reflecting the challenges facing Canadian manufacturers," said David Wenner, GM's general director of labour relations.

The deal offsets the impact of a previously announced closure of GM's consolidated line in Oshawa. The line employs 2,000 people.

The deal avoids a permanent two-tier wage system, which had been a major sticking point earlier in the day, Lewenza said.

Among the commitments in the agreement, GM said it would create a third shift at its flex plant in Oshawa starting next year. The move will create 900 jobs.

At the consolidated plant, production will be extended until June 2014, preserving 750 jobs.

Also, the category of temporary worker, a lower paid group, has been restricted.

The consolidated plant could get a second shift in June 2014, but, if not, the laid-off workers will get full benefits, he said.

The 8,000 CAW workers at GM will get the same deal as Ford.

That means new hires come in at a lower rate, $20 an hour instead of $24, and take longer to reach the top rate — 10 years instead of six years. The top rate is $34.

They also receive a hybrid pension plan that combines a defined benefit plan with a defined contribution plan.

Existing employees will receive annual bonuses instead of a pay raise. The four-year deal includes a $3,000 signing bonus and annual bonuses of $2,000 in each of the following three years.

The union has yet to reach a deal with Chrysler.

Negotiations with Chrysler will resume in earnest Friday, Lewenza said.

The settlement with GM came just hours after Lewenza threatened to put the company on 24 hours strike notice.


Talks making headway with GM, Chrysler lagging: CAW

If a company refuses to meet the pattern agreement established by one of its rivals, the union will go on strike, says CAW chief Ken Lewenza, seen here at a news conference in Toronto on Sept. 17, 2012.

Greg Keenan
Globe & Mail
Sept 20, 2012

The Canadian Auto Workers union is closer to a new deal with General Motors Co. than it is with Chrysler Group LLC, union officials said Wednesday afternoon as they tried to wrap up negotiations on a new contract with the Detroit Three auto makers.

"Talks with GM have bogged down on some local issues," Peter Kennedy, the CAW's secretary-treasurer said. It's not clear when those will be resolved, Mr. Kennedy said, noting that union and company officials were trying to get them solved.

The union is trying to secure agreements from both companies that match the terms of a contract it negotiated earlier this week with Ford Motor Co.

The union is pushing Chrysler and GM to match the Ford deal in what is known as pattern bargaining, where an agreement reached with one of the Detroit Three auto makers serves as a template for all of them.

"The facts of the matter is the company hasn't met the pattern," CAW president Ken Lewenza said earlier Wednesday about GM, which submitted a proposal to the CAW that seeks ways of offsetting the costs of the deal the union and Ford signed.

If a company refuses to meet the pattern agreement established by one of its rivals, the union will go on strike.

As for Chrysler, "I think Chrysler is waiting to see what happens with GM," Mr. Lewenza said outside the downtown Toronto hotel where the union and officials from all three companies have been meeting since mid-August.

The GM talks are hung up on local issues that include language in the contract regarding work standards and job security for skilled trades workers.

Mr. Lewenza said morning discussions with GM on Wednesday were the equivalent of "pushing against a 100 mile an hour wind."

Another key issue in the GM talks is the union's attempt to convince the auto maker to reverse its decision to close one of its assembly plants in Oshawa, Ont., a shutdown that is scheduled to begin later this year and will eliminate more than 2,000 jobs.

"Our objective is to keep that plant running as long as we possibly can," Mr. Lewenza said, noting that the union has been unsuccessful at the bargaining table in convincing GM to keep it open.

The union leader said he's not yet ready to notify Chrysler and GM that a strike at their plants will begin in 24 hours.

The CAW extended its contracts with the two companies after reaching the deal with Ford on Monday.

At the time, the union agreed to the companies' request for more time to study the Ford agreement and assess how it would affect their operations.

The four-year tentative agreement with Ford calls for a four-year wage freeze, a signing bonus of $3,000 and annual bonuses of $2,000 in each of the second, third and fourth years of the contract. Cost-of-living adjustments are suspended until the final quarter of the final year of the deal.

Ford will hire about 600 workers – most of them at its assembly plant in Oakville, Ont., where it will start a partial third shift as soon as possible, and in 2014 begin assembling a new generation of the crossovers now made at the plant.

The union agreed to cut the starting wage rate for newly hired employees to about $20 and hour from $24 and stretch out the time it takes them to reach the full rate of $34 to 10 years from six. A new hybrid pension plan that combines defined benefits and defined contributions will also help reduce hourly labour costs of newly hired employees.


Auto talks with GM, Chrysler "challenging," CAW says

September 20, 2012
Dana Flavelle
Toronto Star

Two days after extending its strike deadline, the Canadian Auto Workers union says contract talks with General Motors and Chrysler continue to prove "challenging."

But as long as negotiations are progressing the union will remain at the bargaining table, CAW national president Ken Lewenza said.

Talks with GM are further along than with Chrysler, the union said, though some GM issues are proving tricky to resolve. That includes how the company will handle the closure of its consolidated plant in Oshawa, which employs 2,000 CAW members.

"There are still a number of challenging issues to work through," Lewenza said in a statement Wednesday. "We're not there yet, but as long as we keep making progress at the bargaining table, we will continue to negotiate."

The union has previously said it would call a strike on 24 hours notice if it felt talks were not progressing. A strike would be a last-resort tool, the union said.

The union has been meeting with both companies since extending a midnight deadline Monday in hopes they'll agree to the same tentative deal reached with Ford Motor Company of Canada.

The four-year deal with Ford, which covers 4,500 Canadian workers, allows the automaker to cut its costs by lowering wages and pension benefits for new hires and giving existing workers lump sum bonuses instead of yearly wage increases.

Ford workers are to vote on the tentative contract over the weekend. The results will be released Sunday evening, the union said.

The union is pressing GM and Chrysler, who each employ just over 8,000 CAW members, to accept the overall wage and benefits "pattern" set by the deal with Ford.

However, there are also many individual issues that have to be worked out with each company. For example, GM has announced plans to close the consolidated line in Oshawa, which employs 2,000 workers. It's also planning to add a third shift to its Oshawa flex plant, which could mean 1,000 new jobs.

The deal with GM could spell out how all that would be handled.

In the tentative agreement with Ford, for example, the company has said laid off workers from its now closed assembly plant in St. Thomas will get first crack at 600 new jobs planned for Oakville. The company will also offer its older workers incentives to retire. About 800 Ford workers are on layoff.

Talks "are progressing slowly," CAW national secretary treasurer Peter Kennedy said later Wednesday. "We've got some local issues (with GM) that have presented a little bit more of a challenge than we thought they may have been earlier in the day."

Chrysler doesn't have any workers on layoff. However, its chief executive officer, Sergio Marchionne, has taken the toughest public stance on his desire to achieve a two-tier wage structure that would see part of the workforce at permanently lower pay rates.

The CAW is adamantly opposed to a permanent two-tier pay scheme. Instead, Ford accepted the union's "made in Canada" solution that would see new hires start at a lower rate (roughly $20 instead of $24 in the current contract) and take 10 years (instead of the current six) to reach the top wage, which is $34.

In comparable U.S. plants, new hires start at $16 an hour and up to 25 per cent of the workforce is capped at a top wage rate just under $20 an hour.

The Ford deal appears to be "cost neutral" for the automakers and a "pretty damn good one" for the auto workers, said industry observer Tony Faria, a business professor at the University of Windsor.

He predicted GM and Chrysler would adopt the Ford agreement, saying they can't afford a strike.

Under the Ford agreement, existing workers would get a $3,000 signing bonus and $2,000 a year in each of the next three years. There would be no cost-of-living increases until the final quarter of the last year.

New hires would be enrolled in a "hybrid" pension plan, similar to the one the CAW proposed at Air Canada, where half their pension would be in a defined-benefit plan and half in a defined-contribution plan.

Defined contribution pension plans don't contain a guaranteed payout at retirement.

The tentative deal with Ford contains no new investment commitments but preserves the ones negotiated in the 2009.

An auto industry strike would have a serious impact on Ontario's already fragile economy growth rate, economists have said. The industry accounts for a quarter of all manufacturing in the province.


How some unions make the best — and worst — of tough times

September 20, 2012

By Martin Regg Cohn
Toronto Star

Here's some good news on labour relations you might have missed amid the bad news from the schoolyard: The Canadian Auto Workers reached a last-minute deal this week after going to the wall against Ford.

It's a bittersweet victory for a union that has long led the labour movement in fighting for workers' rights (full disclosure — my own union at the Star is likely to merge with the CAW soon): more takeaways, notably a weaker pay scale (the so-called grid); lower wages for new hires; and diluted pensions for all.

The CAW didn't just roll over. Nor did it squawk about big bad corporate bullying or bolt from the bargaining table.

No, this savvy union took stock of the ugly reality of a stagnating economy, cognizant of the fact that a work stoppage could be ruinous — not just for their arch-capitalist employers, but ultimately their working-class members. The suspense isn't over yet, because the Ford deal serves as a template for GM and Chrysler negotiations — a traditional "me-too" tactic that ensures parity.

Contrast that strategic approach — weighing the pain of compromise with the peril of confrontation — against the recent tactics of public school unions. In its dubious wisdom, the elementary teachers' union boycotted bargaining from the get-go (complaining of tough-talking provincial interlocutors) and insisted on talking only with powerless local school boards — unlike the CAW, which talked at every level, top to bottom, simultaneously.

They were followed out the door by their high school brethren, who played negotiating footsie all summer. Two other unions representing Catholic and francophone teachers stayed at the table to thrash out a tough tradeoff (inserting the customary"me-too" clause to get whatever other unions get, just as in 2008, and much like CAW's template tactic).

Now, after eschewing serious talks for six months, the public school unions are righteously apoplectic about anti-strike legislation passed pre-emptively by the governing Liberals with Tory support this month. But the high-minded union campaign on a point of principle will fall on deaf ears for very practical reasons.

Yes, teachers have every right to withdraw from voluntary extracurricular activities, even if that angers parents and flusters students. Many teachers are genuinely exercised, having heard only their unions' self-pitying rhetoric about ruthless attacks on workers' rights, pay scales, sick day payouts, and so on.

But they are wrong to expect sympathy or understanding from people who question the union strategy of orchestrating a de facto work-to-rule campaign that uses kids as pawns. Nor will they persuade people that teachers are hard done by after gaining 25 per cent in cumulative salary hikes since 2003. While autoworkers were taking pay cuts, giving up paid holidays or losing their jobs during the 2008 economic crisis, the government honoured its generous 3 per cent annual pay hikes to teachers through 2012.

Now, the jig is up. With a $14.5-billion deficit, the Liberal government has faced up to economic realities. The Tories would do the same. So would the NDP (as they once did). All three have pledged a balanced budget by 2017-18 — which requires reining in payroll costs.

The political devil is in the economic details, but not everyone is closing their eyes to it. College teachers represented by OPSEU signed a little-noticed pay freeze this month that preserved their grid, thanks to other savings. Like the CAW, it recognized the art of the possible — as opposed to posturing over process. Even the doctors have belatedly returned to the table, despite lingering bad blood.

Everyone in the broader public service is being zapped. In mid-July, Finance Minister Dwight Duncan issued a little-noticed letter to employers across the 1-million strong public sector that they were next up.

Essential workers — who are entitled to arbitration because they can't strike — will also feel the pinch. Arbitrators who have long defied government pleas to take into account "ability to pay" (blithely suggesting tax increases) will also face new legislation to rein them in by requiring written decisions under tighter deadlines. Arbitrators will also have a harder time awarding generous settlements when everyone else in the public sector is getting zero.

After a long hot summer of often fruitless negotiations, a chill wind is blowing — with a winter pay freeze coming fast and furious


Re: Unions make best, worst of tough times, Column, Sept. 20

I appreciate Martin Regg Cohn's attention to our negotiations with Ford and hope that he will note some corrections from the CAW on his story.

The CAW entered negotiations with the Detroit 3 automakers demanding concessions from current employees and a two-tier system for new hires. The union did a remarkable job to achieve a fair agreement with Ford.

The union accepted a fixed-cost agreement for current employees. We did not agree to a “weaker pay scale,” as Cohn states, but instead we held the current pay scale and bargained lump sum annual payments to reward employees and recognize inflation. Cohn is somewhat correct in saying that the union agreed to “lower wages for new hires.” New hires will start at 60 per cent of the current wage rate but they will, over 10 years, reach the full wage rate. The CAW held to our principle that new hires must have the right to grow into the same wage scale as their co-workers. That the CAW resisted the grossly unfair U.S. two-tier wage scale was a significant victory.

Finally, it is simply wrong to say that we negotiated “a diluted pension for all.” The union refused employer pension demands to convert the defined benefit plan to a defined contribution plan or delay the age of retirement. The defined benefit plan remains in place for current employees. We did agree to a split “hybrid” defined benefit-defined contribution pension for new hires. The hybrid is a creative solution for employers and employees to share the risk of pension funding.

Jo-Ann Hannah, Director, Pensions and Benefits Department, CAW-Canada


Chrysler poised to gain
from deal on new workers

The Globe and Mail
September 19, 2012

Ford Motor Co. led the way in contract talks with the Canadian Auto Workers union, but Chrysler Group LLC stands to benefit most from a key provision of the new agreement.

Chrysler, which has no employees on layoff, is the only one of the Detroit Three companies in a position to immediately capitalize on a change in the way newly hired employees will be treated – if the auto maker's recent success translates into new jobs.

First, though, the CAW must reach labour agreements with Chrysler and General Motors Co. Whether those companies will accept the deal the CAW reached with Ford on Monday is still subject to intense negotiations taking place at a downtown Toronto hotel. "I think they're trying to get to grips with what the total cost of the agreement is," CAW president Ken Lewenza said late Tuesday.

Chrysler's decision on the contract has taken on added importance in this round of talks because its ranking among auto makers in Canada has improved in recent years as its rivals closed plants. Chrysler is poised to supplant GM as the largest car manufacturer in Canada next year and it has a larger share of its North American vehicle production in this country than any other company.

If Chrysler accepts the terms of the Ford deal, newly hired employees will be paid $20.34 an hour compared with the $33.90 paid to longer-term workers.

That's just the savings on wages. Other changes such as placing new workers in a hybrid pension that combines a defined-benefit plan with a defined-contribution plan will cut total hourly costs for new employees to somewhere in the low $30 range, compared with about $60 now.

"How much they save from that obviously depends on how many [people] they hire," said CAW economist Jim Stanford.

The strongest possibility for new hiring at Chrysler is at its assembly plant in Brampton, Ont., where it could add a shift of workers to assemble its flagship large cars, the Chrysler 300 and Dodge Charger and Challenger models. That would add about 1,000 jobs to the plant and immediately put 11 per cent of Chrysler's Canadian work force at the lower tier.

Sources involved in the talks have identified Chrysler as the most rigid on the issue of newly hired employees, with the company insisting it needed a permanent second tier of workers and not the gradual wage progression to full pay over 10 years that Ford accepted. That rise to full pay after 10 years is a better proposition for the companies than the current system, in which they reach full pay after six years.

Sergio Marchionne, Chrysler's chief executive officer, has been the most vocal about the need to match labour costs in Canada and the United States and how a refusal by the CAW to reduce those costs might lead to decisions to stop investing in its Canadian plants.

The deal with Ford has not widened the gap in labour costs between plants in the two countries, but it's not clear yet if it reduces the gap, said Kristin Dziczek, director of the labour and industry group of the Center for Automotive Research in Ann Arbor, Mich.

Another feature of the CAW deal is that there is no limit on the number of workers the three companies can hire in Canada at the lower rate. That differs from the contract the companies signed with the United Auto Workers, which restricts the percentage of so-called second-tier employees.

Chrysler has also benefited most from the permanent two-tiered wage system at its U.S. plants that Mr. Marchionne also wanted to put in place in Canada.

"They've been able to take more advantage of the entry-level provisions so they have a higher proportion of their work force in the entry level," Ms. Dziczek said. "That in and of itself makes Chrysler cheaper per hour in the U.S. by $8 (U.S.) an hour" than Ford and Chrysler.

The CAW provision on new hires will also benefit GM, but to a smaller extent and not as soon because it's planning to close one of its assembly plants in Oshawa, Ont., next year, which will eliminate about 2,000 jobs and likely lead to some layoffs.

But about 75 per cent of the 1,400 workers at GM's St. Catharines, Ont., engine and transmission plant will be eligible to retire in the next few years so new hiring is a possibility there.


CAW, Ford reach
4-year labour deal

Greg Keenan
The Globe and Mail
Sept 17, 2012
5 PM

The Canadian Auto Workers union reached a deal with Ford Motor Co., that will create about 500 jobs at a plant in Oakville, Ont., and cuts hourly labour costs for newly hired employees.

The four-year agreement includes bonuses of $2,000 for cost-of-living adjustments, and a $3,000 signing bonus but no increases on base wages.

The deal averts a strike at Ford's Canadian operations that was scheduled to begin at 11:59 p.m. ET Monday. The union was in negotiations with Chrysler Group LLC and General Motors Co. Monday about whether they would accept the agreement and head off a strike scheduled to shut their operations in several Ontario cities.

Those discussions were proceeding slowly without much movement, CAW officials in talks with Chrysler and GM said.

The Ford deal will help open up jobs for some of the 1,200 CAW members on layoff after the company closed its St. Thomas, Ont., assembly plant last year.

Assembly of a new vehicle that requires more workers will create jobs at the Oakville plant, CAW president Ken Lewenza said. A partial third shift at the Oakville plant will create 230 jobs.

Ford agreed with the CAW in 2009 to spend more than $1-billion redeveloping the plant so that it can manufacture vehicles for global markets, but said that plan depended on government financial assistance.

The government has been negotiating with the federal and Ontario governments for more than a year for about $400-million in assistance.

The union narrowed its focus to Ford Sunday after company officials expressed a willingness to reach an agreement, he told reporters Sunday, including accepting the union's position that permanent two-tier wages are unacceptable to the CAW.

"Ford has agreed that the principle of a two-tier wage system is not something that is sustainable long-term and they've supported the union's argument that we can be flexible recognizing the economic challenges and they recognize at least on paper that the two-tier system is not something they're going to extract out of the union," Mr. Lewenza said Monday afternoon.

Both Chrysler and GM had insisted on permanent two-tier wages - similar to an agreement all three companies made with the United Auto Worker in 2011 - but the question is whether they will maintain that position in the face of a potential strike that would shut down Chrysler assembly plants in Brampton, Ont., and Windsor, Ont., and GM's operations in Oshawa, Ont.

The three companies started out negotiations demanding that hourly labour costs be reduced at their Canadian plants, which they pointed to as having the highest such costs in the world.

The CAW disputed that, but agreed that the rise in the value of the Canadian dollar had severely harmed the competitiveness of the Canadian operations.

The union offered to cut labour costs by changing the way newly hired workers are paid. New employees now start at wages of $24 an hour and take six years to reach full wages of $34 an hour.

The CAW offered to cut that starting rate and stretch the time employees would reach full wages to 10 years.


CAW deal with Ford 95 per
cent complete: Lewenza

September 17, 2012
Globe & Mail
2 PM

A deal with Ford Motor Co. is 95 per cent complete, Canadian Auto Workers president Ken Lewenza said early Monday afternoon.

"Last night was an incredibly constructive evening," Mr. Lewenza said of negotiations with Ford, which the union chose to focus on for a new agreement in contract talks with the Detroit Three auto makers.

There were some tweaks that needed to be made and there's always a danger of last-minute hitches, he warned, but he was hoping to have a written four-year agreement Monday afternoon.

Any agreement will be taken to negotiators for Chrysler Group LLC and General Motors Co. to determine whether they are willing to match the deal ahead of a strike deadline of 11:59 p.m. Monday.

"I'm trying to get this done early enough that I can run to GM and Chrysler and not tell them verbally what I anticipate but show them what's been signed and agreed upon by the committee," he said.

Negotiations with Chrysler and GM were proceeding much more slowly, CAW officials said.

At GM, it's up to the auto maker to reach a deal before the deadline, Chris Buckley, chairman of the CAW's GM bargaining committee said.

One of the key issues for the union in the Ford talks concerns about 1,200 employees who are on layoff after the closing last year of the company's St. Thomas, Ont., assembly plant.

Employees on layoff will be given employment opportunities during the terms of the next contract if Ford and CAW officials reach a final agreement on what has been negotiated, Mr. Lewenza said.

There will be jobs at Ford's assembly plant in Oakville, Ont., he said.

The deal with Ford would include incentives for older workers to retire which will help create more than 500 jobs at Ford's Oakville, Ont., plant sources said.

Ford agreed with the CAW in 2009 to spend more than $1-billion redeveloping the plant so that it can manufacture vehicles for global markets, but said that plan depended on government financial assistance.

The government has been negotiating with the federal and Ontario governments for more than a year for about $400-million in assistance.

The union narrowed its focus to Ford Sunday after company officials expressed a willingness to reach an agreement, he told reporters Sunday, including accepting the union's position that permanent two-tier wages are unacceptable to the CAW.

Both Chrysler and GM had insisted on permanent two-tier wages - similar to an agreement all three companies made with the United Auto Worker in 2011 - but the question is whether they will maintain that position in the face of a potential strike that will shut down Chrysler assembly plants in Brampton, Ont., and Windsor, Ont., and GM's operations in Oshawa, Ont.

The three companies started out negotiations demanding that hourly labour costs be reduced at their Canadian plants, which they pointed to as having the highest such costs in the world.

The CAW disputed that, but agreed that the rise in the value of the Canadian dollar had severely harmed the competitiveness of the Canadian operations.

The union offered to cut labour costs by changing the way newly hired workers are paid. New employees now start at wages of $24 an hour and take six years to reach full wages of $34 an hour.

The CAW offered to cut that starting rate and stretch the time employees would reach full wages to 10 years.

Mr. Lewenza said Sunday that Ford accepted the union's position that permanent two-tier wages are unacceptable and told the CAW that what was most important was making the Canadian operations competitive.


CAW says can see finish line in contract talks with Ford

TORONTO, Sept 17 (Reuters) - A senior official at the Canadian Auto Workers said the union hopes to reach a labor contract agreement with Ford Motor Co before Monday's end-of-day strike deadline, but added there is still work to do to get a deal.

The union, which represents about 20,000 workers at the Detroit Three automakers in Canada, chose Ford on Sunday as the lead company in contract talks, saying it has been most receptive to a CAW proposal to cut labor costs.

Talks continue with both Fiat SpA's Chrysler Group LLC and General Motors Co.

Peter Kennedy"We can see the finish line at Ford so I'm hopeful we can wrap up a deal with Ford today and announce a tentative agreement. But we still could stumble before we get there," CAW National Secretary-Treasurer Peter Kennedy told Reuters.

The union will meet with Ford later Monday morning and hopes to "put all of the final pieces together," he said.

Talks with GM have had a more positive tone than those with Chrysler, he added, but major hurdles remain.

"We're still running the race - we can't see the finish line at either General Motors or Chrysler, but I guess we're a little further around the track with GM than we are at Chrysler."


CAW picks Ford as
target; Chrysler 'very
concerned' about choice

September 17, 2012
Detroit Free Press

Ken Lewenza, 58, president of the Canadian Auto Workers, is known for being a tough negotiator. The Canadian Auto Workers shifted all of its attention to Ford on Sunday in the hopes of getting a deal that it can use as a pattern with Chrysler and General Motors.

"(Ford) has showed our membership a tremendous amount of respect," CAW President Ken Lewenza said Sunday. "We hope to get a reasonable deal."

Chrysler, which has the highest percentage of its North American production in Canada, said it is "very concerned" about the CAW's decision.

"While we respect Ford as a competitor, we do not think they are in the best position to take on this role given the significant reduction in their Canadian footprint in recent years," Chrysler said in a statement.

Lewenza said both GM and Chrysler are insisting on a second-tier wage for new hires that the CAW finds unacceptable.

"We are not ever going to agree to a permanent two-tier wage system," Lewenza said.

With just hours left before the union's agreement with all three automakers expires at 11:59 tonight, Lewenza said he is optimistic about reaching a deal with Ford that he will present to GM and Chrysler. At the same time, he reiterated the CAW's willingness to call a strike.

A strike would deplete the dealer inventories of certain models, which, in turn, could cause at least one company to lose market share, revenue and profits. It won't disrupt the shipment of parts to assembly plants in the U.S.

"We have the resources, and we have the solidarity of our members, and we have the support of the entire labor movement," Lewenza said.

Who has the leverage?

Thanks to a strong Canadian dollar that makes labor costs in Canada among the highest in the world, and to concessions the UAW made a year ago, the odds have appeared to be stacked against the CAW since negotiations began in August.

But in the short term, the CAW still holds significant leverage. Many of the cars, trucks and engines the CAW's 21,000 members produce are key products, and the CAW also has a hefty $90-million strike fund at its disposal.

Lewenza, 58, is a tough negotiator who -- like his predecessors -- is known for being willing to negotiate through the news media to get the his message out.

Lewenza said Sunday that the CAW entered contract talks with modest goals because he recognizes that although the Detroit Three have recovered from their economic crisis, their profitability is under pressure from tough competition and a recession in Europe.

"We want our companies to make incredible profits to invest back in their workplace," Lewenza said.

Market share at risk

The Detroit Three have collectively lost 2.1 points of market share in the U.S. this year as Asian automakers have recovered from the 2011 earthquake and tsunami in Japan.

Ken Lewenza front with Gary Beck in backgroundCars and trucks made in Canada accounted for nearly 28% of Chrysler's U.S. sales, 15% of General Motors' and 7.5% of Ford's through the first eight months of the year.

None of the automakers has stockpiled Canadian-made vehicles in preparation for a strike.

Chrysler had an 87-day supply of the Chrysler 300 and 82 days of the Challenger at the end of August, according to WardsAuto. That's not much more than the 65-70 days' supply considered ideal for the industry.

Chrysler makes its popular and profitable Dodge Grand Caravan and Chrysler Town and Country minivans in Windsor. The flagship Chrysler 300, Dodge Charger and Challenger are produced in Brampton, Ontario, near Toronto.

GM makes its all-new Cadillac XTS, Buick Regal, Chevrolet Camaro, Chevrolet Impala and overflow production of the Chevrolet Equinox in Oshawa, Ontario.

Ford builds Ford Edge and Flex crossovers, Lincoln MKX and MKT crossovers, as well as V8 engines, in Ontario.

Fiat and Chrysler CEO Sergio Marchionne has threatened to move production if the CAW doesn't agree to the automaker's demands.

But it would take months, if not years, to pull that off.

Meanwhile, most of the CAW's members are employed somewhere other than the Detroit Three, so they would continue contributing to that fund if striking members had to draw on it.

"The fact that only 13% of our members are employed at the Detroit Three is another asset, since the other 87% of the membership would keep paying dues," CAW economist Jim Stanford said in an e-mail last week. Those non-auto members work in aerospace, electrical, trucking, food and beverage, retail and health care industries.

Long-term risk

The problem for the CAW is that even a short work stoppage could cause any of the automakers to cut future investments.

"A strike is possible, but it would be suicide," said Dennis DesRosiers of DesRosiers Automotive Consultants near Toronto. "It would result in disinvestment in Canada and the loss of jobs."

Ford closed St. Thomas Assembly in Ontario in 2011 and just began retooling its Flat Rock Assembly Plant so it can build its next-generation Ford Fusion there and add 1,200 workers.

GM just announced plans to follow through on plans to close an assembly line in Oshawa and has agreed to reopen its idled Spring Hill, Tenn., plant.

Chrysler is adding third shifts at plants in Detroit; Toledo; Belvidere, Ill., and possibly Warren, but has held back in Canada.

"These negotiations are pivotal in shaping the future of the automotive landscape in this country," Chrysler said in its statement Sunday. "Chrysler's goal in these negotiations is to develop an agreement that is conducive to long-term job security in Canada."

Labor costs for the CAW are among the highest in the world. The rising value of the Canadian dollar and the deeper concessions that the UAW has accepted in recent years have put the CAW at a competitive disadvantage.

In U.S. dollars, the CAW's total labor cost for hourly wages and benefits is about $60 per hour, compared with $58 for U.S. workers at GM, $56 at Ford and about $50 at Chrysler, according to the Center for Automotive Research.

Selling the deal

Lewenza and his leadership team understand that global forces have pinned the union against the wall.

But any new contract must be ratified by the CAW's members, who are more familiar with the concessions they accepted in 2008 and 2009. According to the union, CAW workers sacrificed total hourly wage and benefit costs of $19 per hour in 2009.

The CAW has a large percentage of workers who are nearing retirement and don't want to give up additional pay and benefits, DesRosiers said.

"Nobody wants to take a cutback at all," said Shawn Bezaire, a plant representative and strike marshal for CAW Local 444 in Windsor, which represents workers at Chrysler's Windsor Assembly Plant.

Peace offering

Amid the tough talk, the CAW also has been sending signals that it is willing to accept a variety of concessions as long as its core principles can be preserved.

For example, the CAW remains opposed to a separate wage structure for new hires. But on Wednesday, the union told all three companies it would accept a lower starting wage for new hires and a longer path to the top wage of about $34 per hour for current workers.

"I've said all along that they are not likely to agree to a made-in-the-U.S.A. type agreement," said Kristin Dziczek, a labor economist with the Center for Automotive Research. "Instead, they will find a way to reach an agreement that maintains their principles and achieves some of the company's demands."

CAr Sales In Canada 2012


CAW suspends high-level talks with Chrysler, GM to focus on Ford deal

The Globe and Mail
Sept 16, 2012

The Canadian Auto Workers has narrowed its focus to Ford Motor Co., as talks with the Detroit Three auto makers edge closer to a strike deadline Monday night.

High level talks with Chrysler Group LLC and General Motors have been put on hold.

The union's decision came after marathon weekend negotiations during which the Canadian Auto Workers union insisted it was prepared to shut down the Canadian operations of all three companies if they maintained their insistence on substantial cuts in pay and benefits.

A deal would avert a threatened strike that would put 20,000 auto workers on the street and deal a blow to an already sluggish economic recovery.

Sources said Ford has been the most flexible company all along, even as it insisted that its hourly labour costs in Canada match those at its U.S. operations.

The union is pushing hard, however, to win new investments from Ford.

About 1,200 CAW members at Ford's Canadian operations are on layoff.

"We've got to find them work," Gary Beck, chairman of the CAW's Ford bargaining committee said earlier Sunday. "If we don't have that in this agreement then we won't have any agreement."

The union's GM membership is seeking new investments in Oshawa, Ont., where a car assembly plant will close next year.

The CAW has offered to cut hourly labour costs for the three companies by reducing wages for newly hired employees to less than 70 per cent of the $34 an hour paid to longer term workers.

In addition, the union told the companies it would stretch the time it takes new employees to reach the full wage rate out to 10 years from the current six.

It also offered different pension schemes that would reduce the companies' costs.

"There hasn't been a proposal to the Chrysler bargaining committee that provides any reason for hope at this particular time," CAW president Ken Lewenza said earlier Sunday

He said CAW negotiators met with Ford Motor Co. officials Saturday night and settled some issues but several more remain outstanding.

Gary Beck, chairman of the union's Ford bargaining committee said the company has not offered any plans to invest in Ford manufacturing facilities in Canada.

Ford is insisting that the union first agree to make labour costs more competitive in Canada, Mr. Beck said.

Negotiators are trying to avert the first ever simultaneous strike by the union against all three auto makers.

About 20,000 employees at Detroit Three operations in the Ontario cities of Oshawa, Oakville, Brampton, Windsor, St. Catharines and Toronto are poised to go on strike.


CAW hopeful one of Detroit Three will accept new hires proposal

Globe & Mail
September 16, 2012

Two days ahead of a strike deadline, a senior official at the Canadian Auto Workers said on Saturday the union is hopeful one of the Detroit Three automakers will accept its proposed concessions on compensation for new hires, clearing the way for contract negotiations to address other issues.

The union, which represents some 20,000 workers at Fiat SpA's Chrysler Group LLC, Ford Motor Co and General Motors Co, is trying to reach three-year agreements before a contract and strike deadline of 11:59 p.m. ET on Monday.

CAW National Secretary-Treasurer Peter Kennedy told Reuters he hoped a morning meet with one of the companies, which he did not name, would lead to a conclusion of "discussions on our proposal, with respect to the new employee, and then move full speed from there to try and get the rest of the issues cleared up."

"In the case of at least one of the companies, you can see the finish line," he said. "That's just on this one issue. There's still a lot of outstanding issues. I wouldn't want anybody to think that we're close to a deal here."

Mr. Kennedy could not be reached later in the afternoon to discuss that meeting. GM said it continues to have open and constructive talks with the CAW while the other two companies were not immediately available for comment.

Jerry Dias, assistant to CAW National President Ken Lewenza, said in the early afternoon that nothing has been "buttoned down" on the new hire rate.

"We're making different inroads in different areas with different companies," he said.

Dias said talks with Ford were the "most respectful" but would not say whether negotiations with Chrysler and GM were farther apart on key issues.

On Thursday, the CAW offered the automakers key concessions on wages and pensions for new hires, yielding ground that might not overly upset current union members who must ratify any contract agreement.

In return, the union wants automakers to commit to investing in Canadian plants and allocating new product, ensuring members' job security.

Under the CAW proposal, new hires would start at lower wages than the approximate $24 an hour they currently get and be paid less than current workers for a longer period of time.

This is the so-called "two-tier" wage scale that the three Detroit automakers and the United Auto Workers in the United States have used for the past several years to bring labour costs closer to those of foreign automakers.

The CAW is adamant that new workers must over time reach the same pay scales as existing workers. It may be willing to extend its "earn-in," the time it takes new hires to reach the highest end of the pay scale, from six to as many as 10 years, a union source close to the talks told Reuters earlier this week.

"It's critical to moving forward as we've been saying from the outset. We're prepared to discuss and be flexible and entertain alternatives – except a permanent two-tier, second-class worker," Mr. Kennedy said.

Current employees do not contribute to their pensions but under the union's proposal, new workers would do so. The new workers still would be entitled to a defined-benefit pension, not a defined-contribution pension.

The union also has said it could relax the "30-and-out" provision for new hires. Instead of being allowed to retire after 30 years under any circumstances, they would be able to retire after 30 years only if they were above a particular age.

The more promising tone comes after Mr. Lewenza said late on Friday that all three companies had rejected the proposal, insisting on permanently lower wages for new employees.

"Somebody ultimately put pencil to paper and did some costing ... and said, 'Hey, this is a good proposal and we can work with it," Mr. Kennedy said of the shift.

The talks, which began last month at a downtown Toronto hotel and are now going around the clock, have been challenging, with labour costs a key sticking point.

Automakers adamantly argue that Canadian labour costs are the highest in the world and must drop to match those of the UAW or future production and investment will be put in question.

The union counters that its members deserve some payback from the now-profitable automakers after the their concessions in 2009 during a North American auto sector meltdown that pushed GM and Chrysler into bankruptcy.

CAW workers at the Detroit Three earn an average of $34 in a base hourly wage, compared with an average $28 for UAW employees, the CAW says.

Including benefits such as pensions, health care and overtime pay, the CAW's total average labor cost is about $60 an hour, according to the Center for Automotive Research in Ann Arbor, Michigan. That compares with $58 for U.S. workers at Ford, $56 for GM and about $52 at Chrysler.

The CAW says that the companies also want to permanently eliminate the cost of living allowance, move current and new hires to a defined contribution pension plan from a defined benefit pension plan, and eliminate the "30-and-out" pension.

The automakers have not publicly discussed what they propose to bring Canadian labour costs in line with those of the United States.

Canada's auto industry has suffered five plant closures and the loss of a third of its assembly jobs in the past decade as costs climbed along with a stronger Canadian dollar.


Concessions from CAW come
with a Canadian catch

The Ford's Essex Engine Plant in Windsor, Ont.

Greg Keenan
Globe & Mail
September 14, 2012

The Canadian Auto Workers union wants new investments at the Canadian plants of the Detroit Three auto makers in return for the concessions it has put on the table.

"We think the proposal we've made keeps us competitive with the U.S. plants and the all-in active wage costs in the U.S. and it won't handicap or hurt us in terms of investments in Canada," CAW secretary-treasurer Peter Kennedy said Thursday.

The CAW has offered reduced wages and changes in pensions for newly hired employees that it says will cut overall hourly labour costs in Canada to the same level as unionized plants in the U.S. That would meet the key demand the companies made when talks started last month. Talks are continuing ahead of a strike deadline on Monday.

The move to match U.S. costs underscores a critical concern for CAW president Ken Lewenza and his lieutenants – how to ensure the medium-term future of the companies' operations here in the face of a high Canadian dollar and U.S. labour agreements that have clamped down on rising costs.

The proposal to cut costs "comes hand in hand" with investments by the companies that would secure jobs at the plants – and possibly add new ones – for the better part of a decade, one senior union source said Thursday.

At General Motors of Canada Ltd., for example, the union is seeking new investments at the company's Oshawa, Ont., operations, where one assembly plant is scheduled to close by the middle of 2013, eliminating as many as 3,000 jobs.

"We need to make sure General Motors has a long-term commitment to our country," Chris Buckley, chair of the CAW's GM bargaining committee, said earlier this week.

An investment in Oshawa would show the taxpayers that their $10.6-billion contribution to the bailout of GM's parent General Motors Co. in 2009 was worthwhile, Mr. Buckley said.

At the moment, he said, GM has made no firm commitments at its Canadian operations beyond an agreement – in return for the bailout money – that through 2016, it will produce 16 per cent of all its North American-made vehicles in Canada.

Union representatives for Ford Motor Co. of Canada Ltd. employees are seeking investment promises for the auto maker's Windsor, Ont., engine plant, which has no new products earmarked for it and is making V-8 and V-10 engines that are declining in popularity as gas prices soar.

For union officials at the negotiating table with Chrysler Canada Inc., the priority is a new paint shop at the company's large-car assembly plant in Brampton, Ont.

That's an investment of at least $400-million, and it would be in doubt if the CAW does not agree to reduce labour costs to match those at U.S. plants, Chrysler Group LLC chief executive officer Sergio Marchionne told The Globe and Mail last week.

The union has offered to cut wages for newly hired employees to less than the current level of about $24 an hour and stretch to 10 years from six the so-called grow-in period during which those wages rise to the level of those paid to longer-term employees.

Mr. Kennedy said Thursday that the union has also offered to cut pension costs for newly hired employees while maintaining the defined-benefit pension plan that now covers all CAW workers at Detroit Three plants.

"The costs associated with it for the companies would be less than what would be associated with the current defined-benefit plan," Mr. Kennedy said.

The union proposal could include newly hired workers contributing more than the $1 an hour to their pension plans than they currently pay, he said.


CAW offers lower
wages for new hires

CAW national secretary treasurer Peter Kennedy says the union's proposal is not a two-tier wage system but will deliver the same economic benefits to the employer. TORONTO STAR


September 14, 2012
Dana Flavelle
Toronto Star

The Canadian Auto Workers appears ready to make some wage concessions in talks with the Detroit Three automakers in a bid to avert a strike and win new investments in Canada.

The auto makers are reviewing a union proposal that would see new hires start at lower wages and take longer to progress up the ladder to the top rate, a union official confirmed Thursday.

It's not a two-tier wage system but delivers the same economic benefits to the employer, CAW national secretary treasurer Peter Kennedy said in an interview.

"Ultimately the new employee would get the prevailing rate so that you don't have a permanent, entrenched two-tier system," Kennedy said.

The auto makers are reviewing the proposal and at least one seems open to it, he said.

"We have a strong indication from one of the companies that our proposal makes sense and is workable. If we can get this behind us, we're cautiously optimistic we can get a deal here," Kennedy said.

The union is bargaining on behalf of 20,600 Canadian employees of General Motors, Ford and Chrysler. A strike deadline is set for Monday at midnight.

The auto makers have been demanding wage cuts to make their Canadian plants more competitive with other North American jurisdictions. The top Canadian rate, $34 an hour, is about $6 an hour higher than in comparable plants in the States.

The Canadian union said it is not proposing a "permanent" two-tier wage where both the starting rate and top rate for new hires is lower than for existing workers. It has adamantly opposed the structure agreed to by its American counterparts, the United Auto Workers.

Instead, the Canadian union is proposing that new hires start at a lower rate and take 10 years to progress up to the ladder to the same top rate as current employees. That's four years longer than in the current contract.

In exchange, the union wants commitments from the auto makers that they will invest in their Canadian plants to secure the workers' future. All three auto makers have been shifting more production to lower-cost regions, such as the southern U.S. and Mexico.

News of the proposal comes just days before Monday's midnight strike deadline.

The union has threatened to strike all three automakers, a departure from previous practice where it targeted a single company.

The proposal delivers the same economic benefits to the auto makers as a permanent two-tier system, Kennedy said. In the U.S. agreements, the companies are limited to hiring up to 20 or 25 per cent of new hires at the permanently lower rate, he explained.

The Canadian proposal wouldn't contain a cap on new hires


CAW Offers Wage Cuts
to Head off Strikes

Greg Keenan
Globe & Mail
Sept 13, 2012

The Canadian Auto Workers union has laid out a proposal to cut wages for new employees – a move it says will meet a key demand of the Detroit auto makers as the clock ticks toward a strike deadline just four days away.

The union, which has been at an impasse in negotiations with the Canadian units of General Motors Co., Ford Motor Co. and Chrysler Group LLC, has agreed to chop wages for new hires to less than the current rate of about $24 an hour, sources told the Globe and Mail.

It also agreed to extend the time frame on a "two-tier" system of paying workers. Currently, newly hired workers start at lower wages for their first six years on the job; the CAW proposal extends that to 10.

It is still unclear whether the union's move will be enough to satisfy the auto companies, which have told the CAW that labour costs in their Canadian plants must come down to match those in their U.S. factories. But the proposed compromise illustrates the huge stakes in the negotiations.

A strike deadline looms for next Monday and could involve walkouts by workers at the Canadian operations of all three companies, a disruption that would deal a serious, if temporary, blow to Ontario's economy.

The two sides are also discussing lower benefits for newly hired employees, sources involved in the talks confirmed Wednesday.

"Go lower [on wages], stretch longer and tie in more benefits [to that lower wage rate] and you get some pretty big savings," said one source involved in the discussions.

If wages for new employees were cut to 60 per cent of established employees' wages, it would mean a starting rate of about $20.40 an hour.

The gap in total labour costs between plants in the two countries varies by company, but it ranges between $2 an hour and about $8 an hour. Ford Motor Co. of Canada Ltd. has said wages alone are $6 an hour higher in Canada than they are in the United States.

Changing the existing rules on newly hired employees would move the Canadian operations closer to the full two-tiered wage system in place at the three companies' U.S. plants, but the difference is that the U.S. agreement set up a permanent two-tiered system.

CAW president Ken Lewenza has said the union opposes a permanent two-tier system.

The union said Wednesday that the tone of the talks has improved and Mr. Lewenza said he sensed more urgency on the part of the companies to get a deal done.

Sources involved in the talks said the two sides were taking "baby steps" toward a deal but that Chrysler Group LLC was taking the firmest stance.

Chrysler would benefit most from lower wage rates for newly hired employees in Canada because it's most likely to be in need of new employees soon.

It is considering adding a third shift of workers at its Brampton, Ont., large car assembly plant and has no employees on layoffs at its other Canadian plants – a minivan assembly plant in Windsor, Ont., and an engine parts casting plant in Toronto.

Ford Motor Co. of Canada Ltd. has about 1,200 employees on layoff after shutting its St. Thomas Assembly Plant near London, Ont., last year and is scaling back production at an engine plant in Windsor.

General Motors of Canada Ltd. is scheduled to begin laying off employees at its Oshawa, Ont., operations later this year when it begins the process of closing one of its car assembly plants in that city.

The CAW has still not chosen a so-called target company, with which it would reach an agreement that would serve as a template for the other two auto makers.


CAW says talks moving
but few results so far

Toronto Star
Sept 12, 2012

The Canadian Auto Workers union says the pace of meetings with the Big 3 U.S. automakers have picked up ahead of a strike deadline next week, but are cautioning they have yielded little results so far.

In a bulletin to its members, the union says the threat of a strike has captured the attention of the auto company executives.

However, the CAW says all three companies appear to be fixated on concessions.

The union has said that General Motors, Chrysler and Ford are demanding a two-tiered workforce, the elimination of cost-of-living adjustments and dramatic changes to their pension plans.

The automakers are seeking the elimination of a full pension for employees with 30 years service, a shift to a defined contribution pension plan for current workers, as well as cuts to prescription drug benefits.

For their part, the automakers are looking to pare costs labour costs in Canada, which they say are higher than in the United States.


As it gears up for the future, Ford
to add 1,200 workers in Flat Rock

By Alisa Priddle
Detroit Free Press
Sept 12, 2012

Ford's $555-million investment at the renamed Flat Rock Assembly Plant will start paying off next spring with the hiring of a second shift of 1,200 workers to add production of the 2013 Ford Fusion.

UAW officials hope demand for the new Fusion, the Mustang -- which is already built in Flat Rock -- and the possibility of adding more Ford or Lincoln vehicles will require a third shift.

"With these new products, we'll have the opportunity to gain share," Mark Fields, Ford president of the Americas, said Monday at an event marking the plant's transition to building Fords only.

Mazda still owns half the plant, which is a joint venture with Ford. Mazda was producing the Mazda6 midsize sedan there, but the last one rolled off the line Aug. 24. The Mazda6 is now made in Japan.

Flat Rock is being retooled to build the Fusion in the freed-up space.

"As of today, Flat Rock Assembly is only building Ford vehicles," Fields said, stressing the importance of the Fusion.

Frederick Ray of Ann Arbor, a 25-year veteran who remembers doing daily exercises under Mazda before each shift, said he hopes to be able to build the new Fusion.Mazda bought the Flat Rock plant in 1987. In 1992, Ford bought a 50% share, and the joint venture was renamed AutoAlliance International. Fields said Ford is now looking at changing the plant ownership arrangement with Mazda.

On Sept. 1, Ford assumed full management control and will accrue all profits from production. The shift will trigger accounting changes when Ford reports third-quarter earnings, said Rodney Haynes, the plant's chief financial officer.

Ford is expecting the Fusion, which will also continue to be built in Hermosillo, Mexico, will be successful enough to restore Ford's falling market share, along with expected strong sales of the new Escape.

Ford has said it will lose market share this year because of inventory constraints, but Fields said a third of retail sales will come from the Fusion and Escape.The new flexible body shop will be capable of making six vehicles from three platforms and the investment provides job security, said Jim Tetreault, head of manufacturing.

"There could be even more jobs in the future if all goes well and we get another vehicle," said Steve Gonzales, president of UAW Local 3000.

"If we need another vehicle, this plant will be in the running for it," Tetreault said.

The paint shop will be upgraded and the final trim line rebalanced to add gasoline-powered versions of the Fusion. The Fusion hybrid and Fusion Energi plug-in hybrid will be made in Mexico which has 2 1/2 times the Fusion capacity that Flat Rock will have for the sedan, but Tetreault said if demand for the hybrids escalates, Ford will look at adding them in Flat Rock.

The Lincoln MKZ is also being built in Mexico, but UAW officials hope Lincolns will be added to Flat Rock in the future.

Much of the retooling will be done during a three-week shutdown in November. By March, prototypes could be coming down the line, Gonzales said.

Meanwhile, Local 3000 reached a tentative local agreement over the weekend. Highlights are being provided this week; a vote is set for Monday. Monetary and other issues were covered in the national agreement ratified last fall. At the local level, a contentious issue was preserving annual bidding for jobs, based on seniority.

Marty Mulloy, Ford vice president of labor affairs, said he is satisfied with the local agreement.

Work at the plant

Laid-off Ford workers will get first crack at the 1,200 positions for a second shift at the Flat Rock Assembly Plant, followed by new hires. Applicants should contact the Michigan Works! agency near the start of hiring next spring. For more information, go to www.michiganworks.org. Ford added 4,600 workers at U.S. plants in the first six months of this year.


CAW turns up the
heat on Detroit Three


Toronto Star
Dana Flavelle
Business Reporter
Sept 11, 2012

The Detroit Three auto makers are seeking major concessions in this round of bargaining, including an end to an early retirement provision and the creation of a two-tier workforce, the auto workers union says.

With less than a week to the strike deadline, the Canadian Auto Workers union has turned up the heat on the Detroit Three auto makers by releasing what they say are the companies’ “unprecedented demands.”

The auto makers declined to comment on the specific proposals in the union’s allegations. They have previously said they need to reduce labour costs in Canada to be competitive with other North American jurisdictions.

The union says the auto makers’ demands include the following:

 • Eliminating the 30-and-out pension.

 • Creating a two-tier workforce, mirroring the United Auto Workers agreement in the U.S.

 • Moving to a defined contribution pension plan from a defined benefit plan even for current workers.

 • Permanently eliminating the cost of living adjustment.

 • Further reducing health care benefits, including access to prescription medication.

The companies are also refusing to commit to any new investments in Canadian plants, which puts workers’ jobs in jeopardy, the union says.

Instead of seeking more cuts, the union says its members should be sharing in the gains the companies have made since government bailouts and worker concessions in 2009 helped GM and Chrysler avert financial collapse.

The companies are insisting any reward or bonus will be paid for by additional cuts to other areas of the agreement, the union said Monday.

In response to the union’s allegations, GM Canada said it “continues to have open and constructive dialogue with our CAW partners. We are optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our competitive position.”

Ford of Canada said “negotiations are ongoing and we remain open to discussing any proposal that will improve labour cost competitiveness. We continue to work collaboratively with the CAW to find solutions that meet our mutual interest, which is to position our Canadian operations for future success.”

Chrysler Canada said simply that negotiations are ongoing.

The 30-and-out provision allows workers with 30 years on the job to retire with an unreduced pension plus a special allowance that brings their monthly benefits to $3,515 until they turn 65.

The two-tier workforce would see new hires brought on at a lower wage grid.

The union has set midnight of Sept. 17 as its strike deadline. It was given a strong strike mandate at all three companies.


Windsor jobs top priority in
CAW-Ford talks: Union

Windsor Star
Sept 10, 2012

The CAW is trying to secure a new product for the Windsor Engine Plant in contract talks that appear to have picked up steam after the union threatened to strike all three Detroit automakers, Gary Beck, head of the Ford master bargaining committee, said Friday.

"Windsor is the No. 1 priority in our discussions right now," said Beck, president of CAW Local 707. "We want to make sure all those people on layoff get back to work."

Of the almost 1,000 laid off Ford workers in Ontario, more than 600 reside in Windsor, said Beck.

On Wednesday, the CAW said it was growing increasingly frustrated with the lack of progress in the negotiations and threatened to "shut down" all three automakers if a deal couldn't be reached before the Sept. 17 deadline.

The union has been meeting with Chrysler, Ford and General Motors negotiators at a Toronto hotel.

"It's still fairly slow, although it has picked up a bit of momentum," Beck said of the Ford talks.

"Some of the local issues are seeing more progress, and the company requested some clarification on some of the proposals we've put forward," he said. "They're asking questions, which is a good sign."

While the companies have been demanding that the CAW lower hourly labour costs, the union has been pressing for product investment in Canada as well as higher compensation, in the form of signing and Christmas bonuses, for its members.

As well as its assembly plant in Oakville, Ford operates two engine plants in Windsor. The fate of the Windsor Engine Plant, which employs about 500 hourly workers, is uncertain since it has yet to secure new product.

Though talks are continuing, strike preparations may rev up if progress stalls, said Beck.

"Starting this week if we don't start seeing any movement, we're quite sure they're going to start preparing this week, just like we will as well."


Marchionne throws down gauntlet, says Chrysler has 'other options'

Globe & Mail
Sept 8, 2012
Greg Keenan

Chrysler Group LLC chief executive officer Sergio Marchionne issued a warning to the Canadian Auto Workers union in the midst of contract negotiations, saying the auto maker has "other options" than Canada for assembling vehicles.

Hourly labour costs at Chrysler's plants need to be the same on both sides of the Canada-U.S. border, Mr. Marchionne told The Globe and Mail on Friday, just 10 days before a deadline for a strike that would halt more than one-quarter of the company's North American production.

"Nobody in their right mind would continue to create an unlevel playing field in its own organization," he said in an interview at the annual Spruce Meadows Round Table south of Calgary. "It's impossible. We have other plants, other options."

The issue of hourly labour costs at Canadian assembly plants operated by Chrysler and its Detroit-based rivals – and how to reduce them to match U.S. costs – is at the heart of the negotiations between the three companies and the CAW.

"You need to deal with the question of the disparity of the Canadian manufacturing environment and the American one," Mr. Marchionne said.

At Chrysler, he said, the difference will be a factor in whether the company spends $400-million to build a new paint shop at its plant in Brampton, Ont., which builds the company's flagship full-sized sedans.

"The question is: Do you commit capital when your overall [cost] structure is higher than it is in the best alternative, which is the U.S."

A new paint shop could trigger the addition of a third shift of workers and about 1,000 new jobs, and secure the plant's future for almost a decade.

The Brampton plant is the only source of those cars.

Chrysler's Windsor, Ont., assembly plant is the only location where its minivans are assembled.

It's unusual for chief executive officers to make such blunt comments with the deadline for an agreement in crucial contract talks just days away, but it's par for the course with Mr. Marchionne, who has ignored many of the unwritten rules that have traditionally bound the leaders of the Detroit Three auto makers.

CAW president Ken Lewenza issued a warning of his own when informed of Mr. Marchionne's comments.

"He's doing incredibly well on the retail side in Canada and you can't expect our wages and benefits to be identical to the UAW," Mr. Lewenza said. "It's impossible. If he's suggesting that's the outcome of these negotiations, we've got problems."

Earlier this week, the union said there was so little progress in negotiations that it is prepared to go on strike against all three companies simultaneously.

The union and the companies are still "miles apart," Mr. Lewenza said Friday, but he added that the discussions had become more constructive in the past few days.

Each of the three companies has tabled what are effectively the 2011 UAW agreements, he said.

Those four-year deals provide annual profit-sharing cheques instead of prescribed wage increases and a two-tiered wage system in which newly hired workers are paid slightly more than half of what longer-term workers receive.

Mr. Marchionne said he hopes profit sharing will generate higher wages for U.S. workers than they would have earned under guaranteed annual wage increases.

"People have got to get it through their heads that I'm not Mr. Scrooge here," he said.

"I've got to run the business and the business says that, if I do well, I'm willing to distribute that wealth.

"I cannot institutionalize and guarantee you that wealth. I don't have it and you shouldn't have it."


Ford unveils 15 new cars
to revive European sales

Toronto Star
Sept 8, 2012

MILAN – Ford Motor Co. on Thursday unveiled 15 new or restyled vehicles for the European market that it will launch over five years to revive slumping sales.

While other carmakers are holding back on new car launches due to tanking European demand, Ford executives announced that the Detroit carmaker will accelerate new car launches, expanding its lineup of SUVs, restyling the hot-selling Fiesta, redesigning its commercial vehicles and launching the iconic Mustang sports car in Europe.

Ford Europe CEO Stephen Odell said improvements in the "brutal" European market are not expected soon. Ford's first-half European sales dropped 10 per cent to 517,094 units, a 7.8 per cent market share for the fifth-largest carmaker in Europe.

Consumer demand for cars in Europe has plummeted as the sovereign debt crisis has spread to the real economy, cutting economic production and forcing up unemployment in the region. Vehicle sales in the European Union dropped 6.8 per cent in the first six months of the year to 6.64 million, from 7.1 million in the same period a year earlier — raising concerns about factory overcapacity across the continent.

But Odell said Ford wants "to demonstrate that despite the economic crisis, we are investing in the future. … We want to make a statement loud and clear that we believe there is great opportunity in Europe."

Ford forecasts that car sales in Europe, including Russia, will increase by 20 per cent in the next five years to 23 million vehicles. Many of the new vehicles announced at a gathering of Ford dealers in Amsterdam, broadcast live on the Internet, are either restyled versions of existing vehicles or European launches of vehicles available in other world markets, as the car company accelerates its global model strategy devised six years ago to confront the economic crisis in North America.

Ford CEO Alan Mulally said the so-called "One Ford" strategy has helped the automaker post 12 straight quarters of profits.

"In 2017, our European showrooms will feature 15 truly global vehicles," Mulally said, bringing to 71 per cent the share of global models in Europe, compared with 43 per cent currently.

The refreshed lineup includes a second-generation Kuga midsize SUV to be launched this year, as well as a new Ecosport compact SUV and the European launch of the larger Edge. The new Fiesta small car features a sharper exterior design and will be available with technology aimed at parents of young drivers that sets maximum vehicle speed or volume for in-car audio.

Ford is targeting the lucrative midsize car market with a restyled Mondeo, incorporating the carmaker's new inverted trapezoidal grill. The Mondeo will be available in four-door, five-door, wagon and a four-door gas hybrid electric version, Ford's first full hybrid car for Europe. After shrinking over the last decade, the midsize market has stabilized and Ford is forecasting growth of 15 per cent by 2015.

Many of the vehicles will be offered with Ford's 1.0 litre EcoBoost engine that increases performance while achieving greater fuel efficiency.


Ford to add iconic Mustang to Europe lineup

By Karl Henkel
The Detroit News
Sept 7, 2012

Dearborn — Ford Motor Co. is accelerating its product lineup in Europe, and joining that lineup is one iconic American vehicle: the Mustang.

Ford's pony car will be introduced in Europe, though the Dearborn automaker remains mum on the details. Europeans won't see the Mustang until Ford unveils the next generation, expected for the 2015 model year.

Ford announced the move during an event Thursday in Amsterdam. The automaker also revealed the rest of its revamped European lineup, including an expanded SUV selection, new commercial vans and a new-look Fiesta small car. But the Mustang made the biggest splash.

Mark Truby, vice president of communications and public affairs for Ford of Europe, said a strong Mustang following there has reached "a critical mass," prompting Ford's decision.

"The Mustang is uniquely Ford and has a huge fan base here in Europe," said Stephen Odell, chairman and CEO of Ford of Europe. "Now those fans have something to look forward to."

The Mustang, however, will have stiff competition from a variety of automakers. Europeans have a full slate of options when it comes to performance vehicles, led by BMW, Mercedes-Benz and Audi.

Another American muscle car, General Motors Co.'s Chevrolet Camaro, has been in Europe since 2011.

"The current Mustang doesn't fit international tastes right now," said Aaron Bragman, an industry analyst at IHS Automotive. "It's not a global vehicle. It's in tune to the American pony car market."

Bragman said the next-generation Mustang could shift from its retro-1960s updated-for-today appearance to a more modern styling. He said the vehicle will most likely offer an optional EcoBoost V6 engine. Bragman said it will need fuel-efficient options if it wants to make headway in Europe.

Ford will build its next-generation Mustang at its Auto Alliance International plant in Flat Rock.

The company did not say where Europe's Mustang will be manufactured, but Flat Rock is the only plant currently building Mustangs.

The Mustang originally hit the U.S. market in 1964, and was an immediate best-seller.

Consumers for years have been able to purchase Mustangs in Europe on what's known as the "gray market" at a marked-up cost. Ford in the late 1960s and early 1970s exported some Mustangs to Europe. Those sold in West Germany were known as the T-5; an industrial company had a trademark on the Mustang name.

Ford already exports the Mustang to 30 markets outside the United States, including the Philippines, Japan, Chile and many Middle Eastern countries.

Other European product announcements Thursday included the introduction of the Edge SUV currently sold in North America, the all-new global small SUV EcoSport and an all-new Kuga SUV.

Ford will have 15 new or restyled vehicles in Europe by 2015 in an effort to boost sagging sales.

"Despite the economic crisis, we are investing in the future," Ford's Odell said. "We want to make the statement loud and clear that that there is a great opportunity in Europe."

The automaker also unveiled an all-new Mondeo, known in North America as the Fusion. It introduced a lineup of commercial vans, which include the Transit and Transit Connect, which will debut in Europe before coming to North America as 2014 models.

Ford earlier this week unveiled the all-new Fiesta, which launches in Europe later this year and in North America next year


Ford Escape hit with 3rd recall

New model may have faulty plug that could cause
coolant fire; sales likely won't be hurt

By Karl Henkel and David Shepardson
The Detroit News
September 6, 2012

Ford Motor Co.'s third recall of its all-new 2013 Ford Escape is beginning to cast a cloud over the SUV's important launch, but industry analysts say the latest recall is unlikely to significantly affect future sales.

Ford said Wednesday that the Escape, which went on sale in June, could have an improperly installed plug in the engine that could leak coolant and catch fire.

"It's not good," said Michelle Krebs, auto analyst at Edmunds.com, referring to the Escape's third recall since mid-July. "It's a critically important vehicle to Ford because it's a significant amount of volume."

Since its launch, the new Escape has had two of its best sales months ever, including in August, when Ford sold 28,188 Escapes; 80 percent of those were the redesigned 2013 models.

"We have not seen a direct correlation between these types of relatively smaller recalls and sales performance historically," said Jesse Toprak, vice president of industry analysis for TrueCar.com. "However, recalls never help."

So far, the recalls don't appear to have had a measurable effect on sales of the new Escape. But a third recall in such a short time frame — and during a launch — could have broader implications beyond the Escape.

"Ford's about to launch a lot of other new vehicles," Krebs said, noting an "even more important" launch of its all-new midsize Fusion later this month. "This may make a very savvy, knowledgeable consumer wonder if they (Ford) can get the launch right."

The new Escape recall covers 7,600 2013 SUVs built with 1.6-liter engines, including 6,150 in the United States and 1,300 in Canada. The recalled vehicles were built between Oct. 5, 2011, and Aug. 31.

Ford says the recall is to prevent a dislodged cup plug in the engine cylinder head.

A dislodged plug could result in an immediate discharge of engine coolant. Rapid loss of coolant could result in a combustible glycol concentration near hot engine components, creating a risk of fire. The recall covers manually installed cup plugs; Ford expects just 0.4 percent of vehicles recalled will have faulty parts.

Ford said it has no reports of fires from customers, but one fire in an Escape SUV on a dealer lot was reported in Tennessee. Ford said a dealership employee was taking the Escape on a test-drive before it was to be delivered to a customer and noticed steam. He quickly returned to the dealership, and that's when the vehicle caught fire. The fire was quickly extinguished at the dealership and nobody was injured.

Ford learned of the fire on Aug. 8 and decided to recall the vehicles after a 19-day investigation. Dealers will install an additional plug sealant, and a secondary cap will be installed over the original plug. The repair will take 31/2 hours and parts are in stock.

This is the second recall for fire risks issued since July after it was discovered an engine compartment fuel line could split and leak gasoline, potentially resulting in an underhood fire. In that recall, Ford recalled 11,500 new 2013 Ford Escape SUVs with 1.6-liter engines and urged them to stop driving immediately.

Ford spokeswoman Marcey Zweibel said the automaker is not issuing a similar warning with the latest recall, saying the risk of a fire is much lower.

In mid-July, Ford issued its first 2013 Escape recall. More than 10,000 new Escapes were recalled because incorrectly positioned carpet padding could lead to interference with braking.


CAW threatens to
strike Detroit Three

September 5, 2012
The Globe and Mail

The Canadian Auto Workers union told its members Tuesday that they need to be prepared to shut down the Canadian operations of all three Detroit auto makers.

“None of the three companies have demonstrated that they are serious about reaching an agreement,” the CAW said in a leaflet distributed to employees that ratchets up the rhetoric in negotiations that began in August.

The union has won strike mandates from its members at Chrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd.

“The corporations are refusing to add any costs whatsoever – instead they insist on cutting costs from our existing agreements,” the leaflet says.

“Worse still, the corporations fail to recognize the sacrifices our members at General Motors, Chrysler and Ford made during the economic crisis.

The union accused the three companies of a “co-ordinated effort” that insists any additions to hourly labour costs in Canada will have to be offset by savings elsewhere.

“This message has been repeated in every subcommittee, at every local [negotiating] table and in every master meeting,” the leaflet said.

“We must be prepared to shut down operations at all three [companies], should we be unable to reach an agreement,” the document added.

The three auto makers, all of which reported profits in the second quarter and for the first half of 2012, have maintained that they need to reduce or eliminate the gap in labour costs between their U.S. and Canadian operations, which ranges from about $2 an hour to about $8 an hour.


Ford of Canada leads
auto sales in August

Dana Flavelle
Toronto Star
September 5, 2012

Canadian auto sales rose 6.4 per cent in August, driven by higher sales of Japanese cars and luxury vehicles while the Detroit Three auto makers continued to struggle.

Consumers bought 149,300 vehicles in August, the highest number since 2007 when sales were almost 160,000 units, according to DesRosiers Automotive Consultants.

“Great but not spectacular is a good way to describe light vehicles sales in August,” Dennis DesRosiers said in an email.

The market is up 6.7 per cent year to date, which on a seasonally adjusted annual basis means sales this year are at 1.66 million units, DesRosiers said.

“In previous cyclical upswings Canada normally was able to grow double digits and should be above 1.7 million units. So, this year the market is good but not great and is underperforming compared to previous cycles,” DesRosiers concluded.

Among the Detroit Three, Chrysler had the best month with sales rising 9.2 per cent. For the year to date, the company is tracking right at the overall market.

Ford’s sales slipped 1.8 per cent, which is still good considering they no longer sell a small pickup. Ford also remains the top seller of vehicles in Canada.

General Motors sales were down again, 15.9 per cent in August, and 7.5 per cent for the year. This has put them in third place for the year behind Chrysler.

The latest sales data comes as the Canadian Auto Workers union negotiates new contracts with all three Detroit auto makers. The union normally picks a “target” company. The deal struck with the first company sets the pattern for the rest. In the past two negotiations, Ford has been the target.

For the moment, the union has nothing to announce, a spokesperson said. Negotiations are continuing with the individual companies. The two sides are trying to hammer out an agreement before the contract expires Sept. 17.

Picking a ‘target’ firm may be less important than in the past, said DesRosiers. With their combined market share down below 45 per cent, it’s tougher for the union to play one Detroit auto maker off against the other when consumers can simply switch to the imports, he said.

Having said that, DesRosiers said he’d place his bet on Chrysler if a target is chosen since it’s made the most gains this year so would have the most to lose from a work stoppage.

Among the auto makers reporting sales in August, Ford held the lead with 25,461 vehicles sold. Truck sales rose 8.1 per cent, partly on the strength of strong sales of the F-150 series, while car sales fell almost 30 per cent to 4,882.

“The Canadian industry continues to show steady growth, and at Ford we are seeing an increasing number of customers in our showrooms,” Ford of Canada president and chief executive officer Dianne Craig said in a statement.

In the year to date, Ford’s sales are up 1 per cent to 195,559.

Chrysler sold 20,569 vehicles in August, as sales of passengers cars jumped 84 per cent to 3,202, led by higher demand for the mid-sized Chrysler 200 and compact Fiat 500.

“With the fuel-efficient, stylish and affordable Dodge Dart just starting to arrive across Canada, we’re positioned for even further growth.” said Dave Buckingham, chief operating officer, Chrysler Canada.

Chrysler’s truck division grew 1.7 per cent to 17,367 as sales of its Windsor-built Dodge Grand Caravan held their ground at 5,490 vehicles.

For the year, Chrysler’s sales are up 6.8 per cent at 175,017 vehicles, its best performance since 2000.

GM said car sales fell 31.7 per cent to 6,475 while truck sales declined 6.2 per cent to 14,595.

“GM Canada dealers continue to offer a broad range of high-quality, fuel-efficient cars, trucks and crossovers at tremendous value for customers including the all new Chevrolet Spark, revolutionary Chevrolet Volt and the new Buick Verano,” said Marc Comeau, vice-president of sales, service and marketing at GM of Canada.

In the year-to-date, GM’s sales are down 7.5 per cent at 157,423.

Among the Japanese carmakers, Toyota/Lexus, Honda/Acura and Subaru are all tracking above the market both for the month and the year to date, as are Kia, Volkswagen and Land Rover.

As well, most luxury brands are doing well.

Of the best-selling Japanese brands, Toyota sales rose 25.9 per cent to 16,125 vehicles in August while Honda rose 49.9 per cent to 12,081.

Kia rose 32.4 per cent to 7,682.

Volkswagen jumped 34.4 per cent to 5,782.

Brands that saw sales fall included Nissan, Mitsubishi, and Volvo.

In the U.S., strong pickup demand fueled a big jump in auto sales last month.

GM's August U.S. sales rose 10 per cent compared with a year earlier, while Ford's rose 13 per cent and Chrysler's 14 per cent.

Most automakers reported strong gains as Americans flowed into dealer showrooms, drawn by model-year closeouts, low-interest financing and appealing new models.

Analysts expect overall sales to rise around 20 per cent when companies finish reporting later Tuesday.

Asian companies and Germany's Volkswagen did well in car sales.

Top five auto sales in August

Ford of Canada: 25,461, down 1.8 per cent

General Motors of Canada: 21,070, down 15.9 per cent

Chrysler Canada: 20,569, up 9 per cent

Toyota Canada: 16,125, up 25.9 per cent

Honda Canada: 12,081, up 49.9 per cent


The weakening state of
Canadian labour unions

The Globe and Mail
Sep. 03 2012

Although four million Canadians are members of unions, organized labour is nonetheless facing shrinking coverage across Canada’s work force.

Unions are coping with growing pressure from employers and governments to accept wage freezes and reduced benefits, while they are also being asked to become active partners in boosting company productivity and improving work processes.

Labour leaders are confronting growing hostility about their role from both governments and broad swaths of the non-unionized public. In this difficult and complex climate, we talked to leaders in labour, business and education about their take on the challenges and new roles facing unions this Labour Day.

Ken Georgetti

President of the Canadian Labour Congress

Ken Georgetti doesn’t like to say that unions are shrinking as a proportion of Canada’s work force.

Instead, the head of the CLC – an umbrella group for unions representing 3.3 million Canadian workers – prefers to say the work force “is growing faster than we’re organizing.”

But the more optimistic spin cannot change the fact that 17.4 per cent of private-sector workers in Canada belonged to unions in 2011, down from 21.3 per cent in 1997, offering telling evidence of a long, slow decline in the scope and power of unions over the past 15 years.

Mr. Georgetti is far from defeated, however, blaming the slide on the fact that large manufacturers in Canada have slashed jobs over the past decade – almost all of them unionized positions – while new-economy jobs in sectors such as technology and professional services are much less likely to be union positions.

He is optimistic there is room for unions to grow in new sectors, especially if workers grow more discontented with slowing wage growth, growing income disparity and declining public services.

“The desire to join unions is not any lower than it was before, but it’s much more of a challenge to organize a work force of 30 or 40 people than one of 500 or 600,” he says.

And he believes there is strong evidence to sell the merits of unions to employees who have no experience with unionization and are skeptical about what it can accomplish.

“This is how I sell the union movement,” Mr. Georgetti says. “Do you want your kids to earn $600,000 more in their lifetime? And if the answer is ‘yes,’ then all they have to do is join a union. The union advantage will give the average worker in Canada $600,000 more in cash – that’s not benefits, just wages – over their lifetime.”

He acknowledges, however, that unions have to overcome “outdated” public perceptions that they create rigid work forces where strict job classifications allow little flexibility and seniority trumps skill and work accomplishments.

“I think there’s been an image challenge that the right wing, to this point, has had better success with than we have,” he says. “We have to spend some time on that issue, no doubt about it.”

Ken Lewenza

National president of the Canadian Auto Workers union

No “myth” about unions appears to rile Ken Lewenza more than the perception that unionized workers are inflexible and uncreative.

The head of the 200,000-member CAW jumps to the defence of his members, arguing they deal daily with demands to expand their skills, learn new technologies and adapt to growing automation.

“If you talk to someone who has never worked in a union facility, they actually think workers have their hands tied,” he says. “They talk like it’s the fifties or the sixties and you have these airtight roles and an electrician can’t fix a water fountain without a pipe fitter. It’s ridiculous to hear these kinds of comments.”

Mr. Lewenza argues unions today are being forced by economics and global competitiveness to focus on the same issues of productivity as employers.

“If somebody would have said in 1940 or 1950, ‘Is the union concerned with productivity,’ the answer would have been ‘no,’<TH>” he says. “That wasn’t our priority ... But today we know that a productive work force is normally rewarded better than a non-productive work force.”

And if unions need proof, he says companies now come to them armed with reams of data about workload and output, creating a far different dynamic in negotiations.

“Everything is a statistic today, like the data that’s provided today about lost time from work, or productivity per square footage. Even a custodial worker – a janitor – is measured on the square footage of the average person cleaning the average amount of dirt.”

Mr. Lewenza’s hope for the future of the labour movement is that it can reach out to the people most frustrated by Canada’s shift into “a low-wage, insecurity economy,” including young people and new graduates who are having difficulty finding good jobs.

Paul Moist

National President of CUPE

It’s a difficult time to head a public-sector union as governments throughout Canada look to slash budgets, but Paul Moist says government workers shouldn’t have to pay for a global economic crisis reducing government revenues.

“I don’t think public-employee costs caused this, but we’re in the post-recession, pay-down-the-deficit era that puts a strain on the public sector,” he says.

To protect the jobs of public servants, Canada’s largest union, representing 618,000 public-sector workers, has urged union locals to become partners and even innovators in the search for better work processes.

“I still maintain the best job security for a CUPE member is the efficiency of the work force,” Mr. Moist says. “For example, the way we serve patients at bedsides in hospitals bears no resemblance with what existed with orderlies 20 or 25 years ago. All that has been done without fanfare between the parties. This doesn’t make the news.”

Mr. Moist argues the best way to find solutions to Canada’s looming work-force problems – notably chronic unemployment in some sectors and a shortage of workers in other areas – is to bring labour, business and government together to develop joint strategies.

Yet with several key planning councils losing funding from the Harper government, he says venues for such dialogue are disappearing.

“We need some more tables to talk about things like retirement issues for all Canadians and labour-force development issues,” he says. “I think the country badly needs that, but I don’t see it being imminent with the current crowd in charge.”

Peter Birnie

President of Wabi Iron and Steel Corp.

Peter Birnie doesn’t spend much time thinking about working with a unionized labour force at his New Liskeard, Ont., manufacturing plant, where workers are represented by the United Steelworkers Union.

Instead, he says his worries are the same as those running non-union plants: how to compete with global competition and the rapid pace of change in every industry sector.

“In a unionized environment there are some work rules and there’s a more rigid job-classification process, but in every work environment, whether it’s unionized or non-unionized, it really comes down to individuals,” he says. “Some people have an inability to change faster than other people, and I think that’s really the fundamental issue.”

Workers and their unions, he says, have no choice but to accept the new need for flexibility and lifelong learning in the workplace, although he says it is undeniably stressful for older workers with less formal education.

“The pace of change may slow or speed up, but it’s not going backwards to where we were. So our ability to absorb change is going to continue to be an important aspect of all our careers. And I think we’re all going to have to understand that it’s not a choice that any one person may choose, but it’s actually fundamental in the sense that, like it or not, it’s going to happen.”

The president of Wabi, which makes mining equipment such as mining cages and ore loading systems, adds he has been impressed by the extent to which union leaders understand the current work and economic environment.

“It would be a terrible mistake on the part of a business manager to think that labour doesn’t understand, or that they’re not watching the news,” he says.

It would be naive to argue unions won’t struggle with the new environment, he adds, “but at the end of the day it really becomes an issue of survival, and I think there’s a new reality emerging.”

Jayson Myers

President of the Canadian Manufacturers & Exporters

The message from business today is that companies need employees – and their unions – to be more flexible, says Jayson Myers, who heads Canada’s largest industry and trade association.

“What I see today is that a lot of newer companies in particular, they need flexibility and they really do not want to see themselves in a situation where they have to deal with a bureaucratized work force,” says the head of the CME, which represents companies that account for 82 per cent of Canada’s manufacturing production.

While the best unions are at the progressive forefront of helping adapt to change, he says, others “are reactionary and stand out there and impede change.”

Mr. Myers says a major challenge for labour unions is helping workers understand that the old “pick and play” system of hiring is dead, which means adapting to a new reality in which companies can no longer pick workers to fill narrowly defined jobs.

“That’s an old way of thinking and an old work-force culture,” he says. “Today it is really about bringing skills to bear, but also about solving problems, being flexible, doing various jobs, multitasking. That requires a very different type of business culture.”

Many of the conditions that led to the formation of unions 40 or 50 years ago – such as unsafe work environments – no longer exist, he argues, and unions must now deal with new issues, including the need for companies to attract new kinds of workers in new areas even as they downsize workers in other areas.

“The situation is so fluid today that the expectation from business today is that the labour movement and organized labour needs to be as flexible,” he says.

“I don’t want to classify all unions as regressive. I think there are some very progressive unions out there. And many unions are at the forefront of not only representing workers but also helping business find the workers they need.”

Charlotte Yates

Dean of Social Sciences at McMaster University

Labour specialist Charlotte Yates believes the union movement needs a clearer strategy to hold on to past gains and win back lost influence.

The key task, she says, is to regain public support in an era when many Canadians think union members have excessive entitlements or union leaders have unrealistic expectations.

While unions used to have more input in politics – at least with left-leaning parties – their role in the public realm has diminished and it has led to an erosion of popular support for union causes, Prof. Yates says.

“Unions have forfeited a lot of the ground they once held in terms of political and policy ideas,” she says.

“They need to have a concerted political strategy, because they cannot win at the collective bargaining table on their own. There has to be a more concerted political and social strategy that starts articulating alternatives and talks about the need for governments to play a role.”

How can they win public support? Prof. Yates says unions need to advocate broadly on issues that affect all workers, especially low-income workers who lack a voice. Otherwise, she says many in the public look at labour-union members with resentment.

“Labour becomes vulnerable when they speak for their small group,” she says. “If you also pick up on issues that resonate more broadly, I think that holds hope for strengthening the position of unions.”

On the other hand, she also warns companies that they need to be careful not to excessively exploit their advantage in a period of economic weakness because they will risk doing significant damage not only to employee loyalty, but to company productivity.

“There’s lots of evidence to suggest that if you treat people badly then, yes, they will leave, but they will also tend to be less productive. We know that.”


Obama aide: U.S.
automakers would have
disappeared under Romney

By David Shepardson
Detroit News Washington Burea
September 2, 2012

Charlotte, N.C. - A top adviser to President Barack Obama said Sunday that the U.S. auto industry would have disappeared if Republican Mitt Romney had been president.

White House senior adviser David Plouffe — previewing a theme of this week's Democratic National Convention here — told ABC that Romney would have let U.S. automakers die.

"The American automotive industry was close to extinction. Mitt Romney would have let it go away, by the way. We wouldn't have an automotive industry if he was president. President Obama secured that," Plouffe said.

Romney has denied that. He has repeatedly said that he would have been willing to provide General Motors Co. and Chrysler Group LLC with government financing - but only after they entered bankruptcy.

Obama campaign senior adviser David Axelrod told Fox News that many people are better off today than four years ago - including the nation's autoworkers.

"Are people better off? I think those autoworkers whose industry would have collapsed if the president hadn't intervened are certainly better off," Axelrod said.

The Romney campaign rejected the comments.

"What's notable about both Mr. Plouffe and Mr. Axelrod's statements is their admission that under President Obama, we are not better off than we were four years ago. The fact is President Obama's hostility to job creators has failed the economy and failed Michigan. Mitt Romney and Paul Ryan will get our economy moving again and provide the environment for the American auto industry to thrive," said Sean Fitzpatrick, a Romney campaign spokesman.

Chicago Mayor Rahm Emanuel - a former chief of staff to Obama - said Obama's first term could be summed up simply.

"People want to know about the first term, very simple. General Motors is alive and well and Osama bin Laden is not," he told NBC's "Meet the Press."

Emanuel argued that Romney only backed policies that helped lead to the near collapse of the auto industry in 2008.

"All he advocated was the policies that led to the economic recession, the financial meltdown and auto industry that collapsed. And the American people know that the president inherited those things and through tough, hard work has begun to turn the corner on exactly what he inherited," Emanuel said. "The auto industry isn't near collapse, but actually it's thriving."

Emanuel said voters should consider the impact of the $85 billion auto bailout.

"This is an election about a clear choice. One person who said when it came to the auto industry that had literally two weeks left before it was going to collapse and implode, let Detroit go bankrupt," he said referring to Romney. "The president had another four-letter word — or four-word — four-word statement, not on my watch."

In fact, GM and Chrysler filed for bankruptcy under President Obama in 2009.

Romney has insisted the auto industry would not have collapsed if he had been in charge.

"They needed to move into a managed bankruptcy process rather than getting money up front by President Bush or President Obama," Romney said in a Detroit News interview last year. "They wasted a lot of money."

Critics of that approach say automakers were unprepared for bankruptcy in late 2008 and that without immediate government assistance they would have been forced into an uncontrolled bankruptcy or outright collapse.

President George W. Bush agreed to save GM and Chrysler and their finance arms in the final weeks of his presidency with a $25 billion bailout.

"Under ordinary economic circumstances, I would say this is the price that failed companies must pay, and I would not favor intervening," Bush said in December 2008. "But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."

Obama added about $60 billion to the auto sector bailout and put GM and Chrysler through quick bankruptcy restructurings in 2009.

The Treasury Department said this month the government expects to lose more than $25 billion on the $85 billion auto bailout, 15 percent higher than prior estimates.

The government still holds 500 million shares of GM stock - or 26.5 percent of the automaker — and needs to sell them for about $53 each to recover its entire $49.5 billion bailout. At the current price, the Treasury would lose more than $16 billion on its GM bailout.

Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.

Plouffe also said the U.S. was making improvements in advanced vehicles.

"We are beginning to really make advances in alternative energy in things like batteries," Plouffe said.

Obama pledged to get 1 million plug-in hybrid electric vehicles on US roads by 2015 and helped push through $2.4 billion in funding for advanced batteries and electric vehicles as part of the $787 billion stimulus in 2009. But demand for EVs has been far less than the White House estimated, and there's little chance the U.S. will have 1 million plug-in vehicles on the road by 2015.


Ford Focus on track to beat
Toyota Corolla as best-selling car

By Dee-Ann Durbin
Associated Press
September 1, 2012

Rayong, Thailand — Ford Motor Co. says its Focus small car is on track to become the best-selling car in the world this year, trumping the Toyota Corolla.

Ford sold 489,616 Focus sedans and hatchbacks worldwide in the first half of 2012. That was almost 27,000 more than the perennial best-seller, the Toyota Corolla.

Ford made the announcement at its assembly plant in Rayong, which opened in May to build the Focus. The Thailand plant, which is one of Ford's most advanced, has the capacity to produce 150,000 cars per year for sale in Thailand, Vietnam, Australia and other countries in the region.

Ford's recently revamped Focus is sold in more than 100 countries worldwide. It's a strong seller in the U.S., where Focus sales were up 31 percent in the first half of the year compared with 2011. But the Corolla is still king in the U.S., where it outsold the Focus by nearly 27,500 in the first half of the year.

The Corolla could still top the Focus worldwide, too. Last year at this time the Focus was ahead of the Corolla, but the Corolla pulled through in the end, outselling the Focus by around 100,000 vehicles, according to IHS Global Insight, an industry consulting firm.

At the plant Friday, Ford executives were also celebrating the production of the 350 millionth vehicle Ford has made since its founding 109 years ago








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