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July 1, 2013 to December 31, 2013


Ford expects to remain No. 1

It would be fourth straight year carmaker
claims title as the best-selling U.S. brand

Karl Henkel
The Detroit News
December 31, 2013

Ford Motor Co. expects to remain the best-selling vehicle brand in the U.S. this year, widening its lead over No. 2 Toyota Motor Corp.

Ford's U.S. sales could top 2.4 million in 2013, up from 2.24 million in 2012. It would be the fourth straight year Ford has claimed the title of best-selling U.S. vehicle brand.

Ford will likely widen its lead over Toyota to about 400,000 sales, though Toyota will likely sell more cars, trucks and sport-utility vehicles to Average Joes. Ford sells a higher percentage of its vehicles to fleet customers.

Automakers will report December and full-year sales results Friday.

The Dearborn automaker attributes this year's sales growth to an improved lineup that covers all segments.

Ford's Fiesta subcompact will set a sales record in 2013 and the Fusion midsize sedan will fall just short of 300,000 sales. F-Series, Ford's most profitable nameplate, will continue as the nation's best-selling vehicle — car or truck — for the 32nd consecutive year.

"The Ford brand has had more retail share growth than any other brand in the country, with our most significant gains coming from import-dominated coastal markets," said John Felice, vice president, U.S. marketing, sales and service, in a statement. "With 16 launches next year, we're looking to keep our sales momentum going."

The gap between Ford and Toyota, through November, was 396,041 sales. But the gap between second and third place is much tighter.

Toyota is ahead of General Motors Co.'s Chevrolet brand by 12,477 sales. Honda and Nissan are fourth and fifth, respectively.

Though the Ford brand remains the best selling vehicle brand, GM will sell more total vehicles. GM has four U.S. brands — Buick, Cadillac, Chevrolet and GMC — while Ford has two — Ford and Lincoln. Lincoln sales, through November, represent 3 percent of Ford's overall sales.


The highs and the lows of
the auto world in 2013

The Globe and Mail
Dec. 29, 2013

This year, 2013, arrived with promises of bold models from a resurgent Detroit Three but, in the end, General Motors had the best year of any global car company.

At the end of this year, GM ceased to be (U.S.) Government Motors with a final stock buyback (though Canadian governments still have a stake in the General). GM CEO Dan Akerson promptly retired and global product czar Mary Barra became the first woman to be CEO of a major car company

On the product front, the 2014 Chevrolet Corvette Stingray lived up to the hype. The seventh-generation 'Vette is monstrously impressive, capable of 0-100 km/h in about four seconds and dynamic enough to go head-to-head on the track with the Porsche 911 Carreras and Audi R8s of the world.

Then there's the 2014 Chevrolet Impala. Consumer Reports says it's the best sedan tested and I'd agree. The fact that it's assembled in Oshawa, Ont., is nice, too. And Cadillac's lineup is rounding into form. The latest CTS is extremely good.

On the other hand, GM has stubbed a toe with the reinvented 2014 Silverado and GMC Sierra pickups. They're good, but Ford is still outselling GM's rigs with its aged F-Series and Chrysler's Ram keeps winning awards and pushing innovations like a diesel engine in a light-duty version. GM's trucks are solid, they can tow, they have new and fuel-efficient gas engines, but they have uninspired styling, the pricing is off and GM has had trouble getting the launch cadence to match market demand. So the GM pickups are a lowlight of 2013 – primarily because expectations were so high going into the launch.

But it wasn't all GM in 2013. Here's a look at the rest of the highs and lows of the year:


2013 Ford Fusion Hybrid: If I were going to buy a "green" car, this is the one. No styling sacrifices, all-new lithium-ion batteries, horsepower at a combined 188 and fuel economy of 4.0 litres/100 km in the city, 4.1 on the highway. Exceptional for a big four-door that weighs 1,640 kilograms and can do 100 km/h under electric-only power.

Tesla and the Model S: I've argued long and hard that Tesla isn't a real car company. Yet. Tesla is only an intriguing start-up with not enough product in the market. We'll wait to take its full measure. But the battery-powered Model S is a wondrous engineering achievement and has set the bar for all other EVs.

Sebastian Vettel: The four-time Formula One champ is a young buck with a deft racing touch and a drama-free personal life. Infiniti, his big auto sponsor, needs to make cars as good as he can drive them.

2013 Porsche 911: This is a brilliant car. As Automotive News recently said about it, "Porsche has made the driving process easier, without losing that man-machine connection."

Jaguar Land Rover: Jaguar and Land Rover's revival plan is sharpening for all to see thanks to the heavy and consistent investment of the deep-pocketed Indian owners from Tata – who can now thank JLR for all of Tata Motors' profits.

Mazda and the 2014 Mazda3: Mazda has made an affordable compact car that is interesting to drive and easy on fuel. Also, Mazda is the only car company being honest about the long road ahead for electric vehicles and hybrids. Diesel first, says Mazda, and it's the truth.

2013 Mercedes-Benz GLK diesel: The gas version of this compact SUV is more expensive, uses more fuel and has less range. Why buy gas?


Acura: Acura talks the talk, but has yet to walk it. For all the promises of a re-thought Acura lineup, the new MDX is a small disappointment and the ILX is nothing special, either. The final verdict is out on Acura, though, because a new NSX should arrive in the next 12 months.

Electrified cars: The world is a simmering stew of interest in EVs, hybrids and anything else that might nudge us in the direction of "greener driving." But what we've seen so far is too expensive and too limited. Canadians will buy 1.7 million-plus new vehicles in 2013, with perhaps 17,000 of them hybrids and the like.

Small crossovers: Little rigs like the Buick Encore are not overly interesting or terribly useful and I don't fit in them.

2013 Fiat 500 Sport: Actually, it's the seats that are so sad. But Fiat is not alone – more cars have mediocre seats than good ones.

2014 Mercedes-Benz CLA: A sub-$34,000 Merc sedan truly is luxury on the cheap. But it's small inside, the seats aren't great and the ride quality is rough. Not much of a looker, either.

Ford quality: This company is profitable and is making some terrific cars and light trucks, but it's time for Ford to climb up from the lower ranks of various quality studies – and get a grip on all the recalls, too.


Our Deepest Condolences
go out to Retiree
Phil Coleman & Family

On the passing of his wife

Lillian Grace Coleman

September 27, 1946 - December 25, 2013

Lillian Grace Jordan Coleman (née Caines) was born near Gros Morne National Park on the west coast of Newfoundland, which instilled a lifelong love of the ocean.

At age nine, she moved with her family to Brampton, Ontario, where Grace met and later married Phil Coleman, after graduating from business college. Daughter Pamela arrived in 1973.

When Grace returned to work in 1979, she established a career at Nortel Networks, retiring from her position in wireless customer service in 2000. Grace and Phil relocated to Nova Scotia then. A person who always needed to be on the move, Grace didn't stay retired long, obtaining a part-time position working with building permits at Canada Housing and Mortgage Corporation in Halifax, where she remained until her death. Grace loved to cook and bake and was especially renowned for her clam chowder and her oatmeal chocolate chip cookies.

Grace is survived by her husband and daughter, her mother Mildred, her three sisters and their children and grandchildren.

No memorial service will be held in accordance with Grace's wishes. In lieu of flowers, donations may be made to the SPCA, Grace's favourite charity.

The family would like to thank the staff of Ward 8.1 at QEII Hospital in Halifax for their bottomless compassion and amazing care of Grace in her final days.


Venezuela car owners may have
to give up nickel-a-gallon gas

Fabiola Sanchez and Jorge Rueda
Associated Press
Dec 23, 2013

Caracas, Venezuela — Owners of the 1970s-era gas guzzling trucks and sedans that have long reigned over Caracas' smog-filled roadways will soon have to pay a bit more to keep flaunting their energy-inefficient monsters.

As an economic crisis drains government coffers, President Nicolas Maduro is putting motorists on notice and taking on one of the nation's biggest sacred cows: nearly free gasoline. With cut-rate prices for fuel, Venezuelans have never felt compelled to buy smaller, more environment-friendly vehicles like motorists in many other countries, often favoring decades-old clunkers or newer SUVs.

Prices at Venezuelan gas pumps have been frozen for almost 20 years with politicians hesitant to repeat the mistake of rising prices in 1989, triggering days of deadly rioting. The late President Hugo Chavez once confessed it pained him to practically give away fuel to luxury car owners, but during 14 years of rule he never dared to touch the gasoline subsidy that consumes upward of $12.5 billion a year in government income.

But all good things must come to an end. For Venezuelan motorists, to whom cheap gas is something of a birthright and fuel efficiency a foreign concept, that means having to pay more than the 5 cents a gallon that gas currently costs at the official exchange rate, or less than a penny at the widely-used black market rate.

For now, motorists seemed unfazed by the idea of paying more at the pump because it's unknown how much prices will rise. Maduro is still testing the political waters to see if Venezuelans already squeezed by 54 percent inflation and a collapsing currency are willing to fork over more to fill up.

The lobbying began the day after Maduro's party prevailed in Dec. 8 mayoral elections, when Vice President Jorge Arreaza said it was time to debate raising gas prices. The idea gained steam when Oil Minister Rafael Ramirez declared that having the world's cheapest gas "isn't a record to be proud of."

Then last week Maduro said he favored raising prices gradually over three years, making sure it doesn't add to inflation.

"As an oil nation, Venezuelans should have a special price advantage for hydrocarbons compared to the international market," the former bus driver told mayors on Dec. 18. "But it has to be an advantage, not a disadvantage. What converts it into a disadvantage is when the tip you give is more than what it cost to fill the tank."

Politically, the timing is right to increase gas prices. After four elections in little more than a year, Venezuelans aren't scheduled to go to the polls again until late 2015. That gives Maduro a rare opening to push unpopular reforms that analysts say are long overdue. Coupled with a devaluation of Venezuela's currency, the bolivar, eliminating the gas subsidy will help close a budget deficit estimated at 11.5 percent of gross domestic product, among the world's largest.

Unlike the well-maintained 1950s-era American automobiles gracing the streets of Communist Cuba, Maduro's staunchest ally, there's nothing majestic about Venezuelans' beloved steel behemoths.

Most of their cars are clunkers, Dodge Chargers and Chevy Malibus from a bygone era many Americans would rather forget. Some are held together with wire and rope, and driven as unregulated taxis that take the place of public transport in major cities.

Ruben Ruiz is the proud owner of one: a 1975 Ford LTD station wagon that he affectionately nicknamed his "poverty spook," because the vehicle keeps him gainfully employed transporting everything from eight passengers at a time to crates of fresh fruit. He once even transported a cadaver.

The car was purchased new during the height of the oil boom known as Venezuela Saudita, or Saudi Venezuela, when a super-strong currency spurred frequent foreign travel and frenzied consumption.

He's held onto the rusting hulk though subsequent oil booms and busts, its velvet upholstery ripped apart and passenger doors impossible to open from the inside. He said modern cars don't afford the same heft or trunk space. Having paid for his initial investment several times over with cheap gas prices, Ruiz said he can easily afford a little more to keep filling up.

In Venezuela "you spend more on liquor than you do on gas," said Ruiz, who pays 6 bolivars to fill the 60-Liter tank every two days.

Many Venezuelans seem similarly unconcerned about the prospect of higher fuel prices. Despite mounting economic troubles and deep political divisions, it's hard to imagine a repeat of the deadly looting triggered in 1989 when then-President Carlos Andres Perez raised gas prices as part of an austerity package pushed by the International Monetary Fund. The unrest, in which at least 300 people died, became known as the Caracazo and remains a powerful deterrent against policies affecting people's wallets.

Maduro himself has taken care to dismiss any parallels.

"We don't come from the neoliberal school," Maduro said, referring to free-market policies that Chavez rallied Latin American leaders to oppose.

Indeed, Maduro is selling the price hike by promising to reinvest the savings to build schools and homes. It's a path pioneered by Indonesia, which cushioned the effects of a 44 percent fuel increase in June with $900 million in cash transfers to the poor. In 1998, an IMF-mandated fuel increase sparked protests that toppled the three-decade Suharto regime.

But in Indonesia, prices at the pump are $2.50 per gallon — 50 times higher than what Venezuelans currently pay. Even if the government ramps up prices to the level it says is needed to cover production costs, a liter will still only cost around 2.50 bolivars, about 40 cents on the dollar at the official exchange rate, compared with the 12 bolivars it costs for a liter bottle of water

"Prices are so cheap in Venezuela that they may make Saudi Arabia and Iran look expensive," said Lucas Davis, a University of California-Berkeley energy specialist.

The distortions created by such a low price are easy to spot. Lines at gas stations get longer every year as more cars come on the road, pushing up per capita gas consumption that is 40 percent higher in Venezuela than any other country in Latin America, according to Davis.

The subsidies also contribute to pollution, encourage the smuggling of oil to neighboring nations with much higher prices and handicap state-run PDVSA's efforts to develop the world's largest oil reserves. The IMF said in 2011 that a whopping 16 percent of Venezuela's public income is spent on energy subsidies.

Davis said economic theory holds that higher prices, if sustained, over the long run will push the guzzlers off the road and force Venezuelans to fall in line with a global trend toward cleaner, more fuel-efficient vehicles.

But in Caracas' urban jungle, where multi-lane roadways are the norm, sidewalks few, and crime rampant, old habits die hard.

Homemaker Patricia Lira says she has no plans to stop driving her 4x4 Jeep Cherokee to buy bread a few blocks from her house, even if prices go higher.

"I'm embarrassed to admit it," she said, "but I'll use my car the same way I do now."


Ford: About 35K retirees accept lump-sum pension buyout offers

Karl Henkel
The Detroit News
Dec 21, 2013

Ford Motor Co. said Wednesday that approximately 35,000 white-collar retirees accepted lump-sum pension buyout offers that started in the summer of 2012.

The 35,000 workers represent about 37 percent of the 98,000 Ford retirees who were eligible for the lump-sum program, aimed at reducing Ford's unfunded pension liabilities. Ford said the plan settled $4.2 billion in pension obligations.

Ford's financial results will take a hit — via special item charges — that will total about $850 million. About $600 million in special items will impact 2013 results, and of that total, about $150 will impact fourth-quarter results, due out mid-winter.

The automaker's pension deficit widened in 2012 by 21 percent, even though Ford pumped $3.4 billion into its worldwide pension plans last year. At the end of the 2012 fiscal year, Ford said its pensions were underfunded by $18.7 billion worldwide, up from $15.4 billion the year prior. About half of the underfunded pensions — $9.7 billion — were from the U.S. alone.

The shortfall in Ford's global pension obligation is expected to be about $10 billion by the end of this year, down by nearly half from 2012.

The automaker says it will contribute about $1 billion to $2 billion annually for its funded pension plans, down from about $2 billion to $3 billion annually. Ford had planned to boost contributions to $5 billion for 2013.

An effort to unload liabilitiesFord was the second U.S. automaker to recently offer a broad pension buyout plan in an effort to unload pension liabilities. All three Detroit automakers have modified pension strategies. Chrysler Group LLC said in June it will freeze the pensions of about 8,000 U.S. salaried employees on Dec. 31. In January, the Auburn Hills automaker will shift those employees to a defined-contribution, or 401(k), retirement plan. Chrysler stopped offering traditional, defined-benefit pensions to salaried employees hired on or after Jan. 1, 2004

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 had 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.

Companies strugglingMany companies — automakers included — have struggled with ballooning pension funding requirements because of low interest rates on the money they invest for their pensioners.

Low interest rates have meant that companies must recalculate the "discount rate" in determining pension funding. Companies use a discount rate to show the value of pension obligations over time. The lower the discount rate, the higher the liabilities.

But as interest rates rise — as many expect they will — those liabilities will decrease.

"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 earlier this year.


Ford’s good ride suggests
auto cycle is ending

The Globe and Mail
Dec. 19 2013

What does the North American automotive market look like at the top? On Wednesday, investors had a glimpse: Shares in Ford Motor Co. fell more than 8 per cent in early trading after the automaker issued a profit warning.

Of course, the decline comes after a remarkable period of recovery. Ford’s quarterly earnings have risen from a loss of $3.89 (U.S.) a share at the depths of the financial crisis and global recession to 44 cents a share in the third quarter of this year. Sales have risen early 48 per cent over this period and the share price has surged 880 per cent – including a 29 per cent gain this year, prior to Wednesday’s sudden retreat.

The dip – the worst one-day performance in two years, according to Bloomberg News – followed news that Ford had lowered its profit expectations for 2014. It expects that operating profits at its North American operations will be between 8 and 9 per cent of sales, down from a high of 12 per cent last year.

For sure, the news isn’t all grim. The profit warning is due to the planned introduction of 23 new vehicles in 2014, or more than double the number of vehicle introductions this year. New vehicles can be costly because of plant updates.

Still, it raises some concerns that the best days of the automotive rebound are over, leaving investors to mull where gains can possibly come from in the years ahead. U.S. auto sales bottomed out at 10.4 million in 2009; they have rebounded to a six-and-a-half year high in November, of 16.4 million (at an annualized rate).

At the same time, competition is heating up. The Wall Street Journal noted that Volkswagen AG, Daimler AG and BMW AG are pushing new modes, while the decline in the value of the yen is providing a nice boost to the likes of Toyota, Honda and Nissan.

Ford investors have enjoyed a fine ride during the bull market. But car makers have always been a cyclical investment – and Wednesday’s news suggests that they still are.


CPP reform: Four scenarios
for what Ottawa and
provinces can do next

The Globe and Mail
Dec. 18 2013

Federal Finance Minister Jim Flaherty threw cold water on proposals to expand the Canada Pension Plan, saying it is not the time to raise premiums while the economy is weak.

But his decision will not end the CPP debate with provinces such as Ontario threatening to act alone Monday to expand the benefits. Expert studies have identified people earning between $30,000 and $100,000 a year as the group most likely to face a large drop in their standard of living in retirement, leading many policy experts to propose reforms that would target that group.

Here are some of the key policy options:


The NDP and the Canadian Labour Congress (CLC) have championed plans in recent years to double the CPP for all income earners. Currently, the CPP is designed to provide income in retirement equal to about 25 per cent of an employee's working income, up to a maximum benefit of just over $12,000 a year on income at the cap of $51,100 a year.

The CLC says the CPP should instead set its payment target to 50 per cent of working income in retirement, effectively doubling the annual payout, but also requiring higher premiums to fund the expansion.


This appears to be the favoured option of many provincial leaders in Canada, although there doesn't appear to be unanimity on what a "modest" expansion should mean.

Prince Edward Island Finance Minister Wes Sheridan – with Ontario's support – has suggested expanded premiums and benefits only for people earning more than $25,000 a year, so that lower-income earners wouldn't face new payroll deductions they can least afford. He also supports raising the cap on CPP income to $100,000 a year from $51,100 currently, which means paying higher annual premiums but also receiving more retirement benefits above that level.

Some have proposed making the higher tier of benefits voluntary, or creating different premium tiers at different income levels, but the options become more complex to administer.


The Canadian Federation of Independent Business and other critics have rejected the idea of expanding the CPP, arguing the higher premiums required to fund it amount to a new payroll tax at a time when business can least afford it. Instead, they have championed a new personal savings plan option, known as a Pooled Registered Pension Plan (PRPP), which has already been embraced by some provinces such as Quebec and Alberta and has been championed by Mr. Flaherty.

Under the PRPP proposal, workers without a company pension plan could voluntarily agree to set aside savings in a pooled fund that would be professionally managed by a financial institution such as an insurance company. Payouts in retirement would depend on how well the investments perform.


Ontario Finance Minister Charles Sousa said Monday the province could move ahead on its own to expand CPP benefits after Mr. Flaherty rejected the options.

Mr. Sousa told reporters Monday the plan needs to be amended now while most baby boomers are still working so that there is time for their benefits to grow to help fund their retirements. He says Ontario has the "critical mass" to pull off a CPP expansion on its own.


Old Age Security: Better
to wait or take it now?

As of last July, Canadians turning 65 and so who are
eligible for Old Age Security payments can choose
to defer the money for up to five years.

By: Sheryl Smolkin

Dec 17 2013

As of last July, Canadians turning 65 — and thus eligible for Old Age Security payments — can choose to defer the money for up to five years.

If you choose to do nothing, you will be automatically enrolled on your 65th birthday. It may make sense to wait, however, if at age 65 your income is still high enough that your benefits would be fully or partially clawed back. That would be income between $70,954 and $114,973 on your tax return, and assuming you expect it to decline in future.

OAS is paid to seniors over 65 who are Canadian citizens or legal residents and have lived in Canada for at least 10 years after turning age 18. People living outside Canada at the time of application must have resided in Canada for at least 20 years after their 18th birthday. Your employment history is not a factor. A full OAS benefit is based on 40 years of Canadian residence.

For the period October to December 2013, maximum OAS benefits are $551 per month or $6,612 per year. Benefits are indexed to inflation and adjusted quarterly. If you decide to delay collecting OAS beyond age 65, the benefit will be increased by 0.6 per cent for each month of delay to a maximum of 36 per cent.

Therefore, based on the current annual benefit level (excluding future inflation), the pension you receive beginning at age 70 will be $8,976.

Marissa Verskin, a senior tax manager at Toronto accounting firm Crowe Soberman, says the decision on whether to delay collecting OAS or do it right away should depend on your personal situation. This includes your life expectancy, current and projected future income level and your expected rate of return.

Some of the other circumstances that may influence your decision are if you have chosen to work beyond age 65 or if you anticipate receiving a large one-time capital gain or lump sum at retirement (i.e., for accumulated sick leave credits or severance pay).

Doug Runchey, who spent 32 years with Human Resources and Skills Development Canada and now runs a consultancy, says if you choose to defer receiving OAS beyond age 65 you can't "double dip."

That means if you are only eligible for a partial OAS pension because you have less than the 40 years of residence required for a full benefit, you can't use the deferral period to both increase your OAS pension by counting it as additional years of residence and also receive a 0.6 per cent per month increase for voluntary deferral. The deferral period will first be applied to increase your years of residency to the maximum.

Runchey also says there could be another collateral advantage to voluntary deferral of OAS. "If you delay and increase your OAS by 36 per cent to $8,976 per year, you also effectively increase the maximum income claw back threshold to $130,794 from $114,973," he says.

If you have started receiving your OAS benefits within the last six months but think you can benefit from the deferral, you can write to Service Canada and ask them to cancel your benefits for now. Once your request is approved, you will have to pay back the benefits received. Then you can reapply for OAS at a later date.

By 2023, gradual changes in the age of OAS eligibility from age 65 to age 67 will be fully phased in. This change will not affect OAS applicants or recipients born before March 31, 1958. But people born between April 1, 1958 and January 31, 1962 will have a date of eligibility between ages 65 and 67. For example, a person born in June or July 1961 will be not be eligible to collect OAS until age 66 plus eight months.


Retiree Nick Gramada
Passes away

Nicholas Alexander Gramada

Nicholas Alexander Gramada
June 2, 1940 - December 15, 2013

Passed away suddenly on Sunday December 15, 2013 at age 73. Survived by his best friend and wife of 50 years, Kaye. His three sons Mark, Wade (Christina) and Jason (Laura). Grandchildren, his pride and joys, Quinn, Saige, Mackenzie, Sam and Molly. Visitation will be held at the Barthel Funeral Home, 566 Queenston Road, Cambridge, Ontario on Friday December 20, 2013 from 2-4 pm & 6-8 pm. A Private Family Memorial Service will follow. Please no arrangements of flowers. If so desired, donations to Kids Ability or charity of your choice would be appreciated by the family.

Our deepest condolences
go out to his family

Retired October 1, 2000
37.2 Years of Service

Visitation is Friday Dec. 20, 2013

Hours are 2:00 pm- 4:00 pm
and 6:00 pm- 8:00 pm.

Barthel Funeral Home
566 Queenston Road
Cambridge Ont
N3H 3J8.


Tel ( 519) 653-3251.


Michelin recalling 1.3 million
tires used in larger vehicles

David Shepardson
Detroit News Washington Bureau
Dec 15, 2013

Michelin North America Inc. said Saturday it is recalling 1.3 million tires — including some used on Ford Motor Co. trucks — after receiving reports of tread separation that could lead to a crash.

The recall includes 1.2 million tires in the United States.

The French tire maker said it had received 20 claims of property damage, but no claims of death or injury. "Several instances of tread/belt endurance issues (exhibited as ride vibrations, irregular wear, tread loss, or rapid air loss) were observed for the subject tire in the third quarter of 2013," Michelin told the National Highway Traffic Safety Administration.

Ford spokeswoman Kelli Felker said the recalled tires are on some 2010 – 2013 Ford E-Series vans. "We are working with Michelin to determine the best course of action for our customers," she said.

She didn't know how many vehicles or tires are impacted by the recall or if there have been any complaints reported on Ford vehicles.

The recalled tires are typically used on such vehicles as commercial light trucks, full-sized heavy duty vans, small RVs and some large pickup trucks.

Michelin will contact owners by early January. The owner will receive a letter, approved by NHTSA, which will explain the issue, and include specific instructions as to how to obtain replacement products, as well as procedures for collecting reimbursement

The recalled tires were produced at the company's Nova Scotia plant from January 2010 through June 2012 and are LTX M/S tires, size LT225/75R16 115/112R LRE.

The U.S. customer returns for these conditions are currently 0.015 percent of the total population, or less than 200 tires. No returns for tires with these conditions have been reported outside the U.S.


Ford to hire 5,000 U.S.
workers in 2014

Alisa Priddle
Detroit Free Press
Dec 14, 2013

Ford said Thursday it plans to hire about 5,000 employees in the U.S. next year, during which it plans to launch 16 new vehicles in North America, including the 2015 Mustang and F-Series, and seven in the rest of the world.

The jobs will include salaried and hourly positions and are in addition to 14,000 added during the last two years in preparation for the new product onslaught, said Joe Hinrichs, Ford president of the Americas.

Separately, Ford's board of directors met in Dearborn amid reports it wants CEO Alan Mulally to clarify his plans either to stay at Ford or take the helm at Microsoft, which has courted him for several months.

Ford issued a statement that Mulally plans to stay through 2014. Neither the board nor Microsoft issued a statement on the matter.

The jobs announcement comes as the U.S. industry wraps up its best sales year since 2007, fueled by easier credit and rising consumer confidence. Ford will launch 23 vehicles globally, 16 in North America, including the Ford F-150, Mustang and Transit. Lincoln will expand its lineup with the MKC compact crossover.

"2014 will be our biggest year for product launches in our 111-year history," Hinrichs said. "We keep investing in product."

General Motors and Chrysler also have been adding jobs and new vehicle launches the past two years as the improving economy has unleashed a torrent of pent-up demand in the post-Great Recession and post-bankruptcy era. Ford, GM and Chrysler products have won accolades for higher quality and winning new designs.

For Ford, about 2,000 hourly jobs, including 1,000 new hires, will be added at the Kansas City, Mo., plant where Ford has spent $1.1 billion to retool to make the new Transit commercial van next spring.

Ford is adding 3,300 salaried workers in 2014 after adding 3,000 white-collar workers already this year.

Many of the salaried jobs are in product development, manufacturing, quality and information technology. Of the 400 engineering positions that will be filled, a quarter will work on hybrids.

To ensure quality with so many launches, Hinrichs said the automaker has hired technical engineers to help suppliers prepare for the year ahead. Suppliers are crucial to the launch of any new vehicle because they often are delivering new components and adjusting to a new production process.

Ford has had some quality problems with vehicles launched in the last two years. The new Lincoln MKZ sedan was delayed this spring to fix some quality issues. The company recently recalled its Escape SUV for the seventh time, this time to fix oil and fuel leaks.

Ford will open three new plants next year. Two are in Asia Pacific, where it will be hiring about 6,000 workers, and one is in South America. In North America, there has been much retooling and adding of shifts to handle demand for hot-selling products.

Ford also unveiled the Ford Fusion hybrid research car. The third-generation research vehicle has been in the works for a year and is the culmination of a decade of work under the company's Blueprint for Mobility.

The goal is safer driving with the aid of automated driving technology to park, accelerate, brake and steer, allowing the car to do the stops and starts of bumper-to-bumper traffic.

The research car has a 360-degree camera that takes data from four laser sensors that generate a three-dimensional map of everything around it so the car can make its own driving decisions.

The expensive equipment is akin to that on the Google self-driving car.

Raj Nair, head of global product development, said much of the technology, such as self-parking and traffic jam assist, will be on vehicles during the next five years, but the driver will remain in control.

He said he hopes scale and advances will bring the cost of the technology down to make self-driving vehicles affordable.


Ford plans to add thousands of
jobs, 3 plants and 23 vehicles

Dave Guilford
Automotive News
December 13, 2013

DETROIT -- A confident Ford Motor Co. said today that it plans to add 5,000 U.S. jobs in 2014, open two plants in Asia Pacific and one in South America, and launch 23 vehicles globally.

"Next year, we are embarking on our most ambitious global launch year ever to meet customer demand for our products around the world," Raj Nair, group vice president for Ford global product development, said in a statement.

Ford plans 16 launches in North America. They include the Ford Mustang, Ford Transit Connect, Ford Transit and Lincoln MKC.

"We saw unprecedented growth in the United States this year, especially in the midsize and utility segments," Joe Hinrichs, Ford president of the Americas, said in the statement. "With the addition of 16 new products to our showroom, including Ford Mustang, our momentum continues."

Hinrichs said Ford has learned from the problems it had with launches this year. It has taken steps including adding launch engineers at Ford factories to help suppliers gear up.

"We're focusing a lot of energy getting ready for these launches," he said.

Kansas City expansion

Production of the all-new Transit will begin in the second quarter of 2014 at Ford's newly retooled Kansas City Assembly Plant. Ford is investing $1.1 billion to retool and expand the facility.

Ford will add more than 2,000 jobs at the Kansas City plant -- more than 1,000 of them new hires -- to support high demand for Ford F-150 plus production of the Transit family of commercial vehicles starting next summer, the company said.

Dave Schoch, president of Ford Asia Pacific, said new capacity in that region will allow Ford to "take another significant step in the implementation of our Asia Pacific growth plan."

To support its new products, Ford will open three plants -- two in Asia Pacific and one in South America.

Next year, Ford plans to open the Changan Ford Assembly Plant No. 3 and Changan Transmission Plant in Chongqing, China, as well as the Camacari Engine Plant in Brazil. The Chongqing assembly plant will increase the company's production capacity in China by 300,000 units next year.

"This is the fastest and most aggressive manufacturing expansion the company has undergone in 50 years," said John Fleming, executive vice president of Ford global manufacturing. "The last time Ford was growing like this, Dwight D. Eisenhower was the U.S. president."

Global expansion

To fuel this growth, Ford plans to hire more than 6,000 employees in Asia next year, the vast majority of them hourly employees. In the United States, Ford expects to create more than 5,000 jobs, including 3,300 salaried positions, the largest hiring initiative since 2000. In the past two years, the company has created more than 14,000 jobs in North America.

More than 80 percent of the new salaried jobs will be technical professionals who work in product development, manufacturing, quality and IT, a company statement said.

Ford also will offer two additional EcoBoost engines next year -- a new 2.3-liter engine and another for which Ford did not release details. Also, Ford's 1.0-liter EcoBoost engine offered in the Ford Fiesta goes on sale in North America for the first time.

*Editors Note: Strange, but I think they forgot to include Canada in this article!


Advocates see support for CPP expansion growing in advance of ministers meeting

Julian Beltrame,
The Canadian Press
Dec 11, 2013

OTTAWA – Advocates for enhancing the Canada Pension Plan say they are approaching the consensus required to press ahead with reform that would see both premiums and benefits rise in the future.

Expansion of the pension plan will be the No. 1 item under consideration at the annual end-of-year meetings of federal and provincial finance ministers, which take place Sunday and Monday in Ottawa, and some see momentum building for an agreement in principle.

Pressure has been growing since Prince Edward Island's Wes Sheridan released his modest proposal in early October to nearly double contributions over three years, resulting in a near-doubling of maximum annual benefits to $23,400 from the current $12,150.

While no plan is likely to win approval Monday, Sheridan believes that ministers will be able to agree on a statement in principle that the pension plan must be enhanced, with the details to be hammered out later, possibly as soon as next summer.

"All of us want to do what's right for Canadians, we just have to find a middle ground to make sure there's a compromise where we can bring forward an enhancement that is modest and fully funded, and I think we will do that on Monday," Sheridan said in an interview.

"What we need to come out Monday is that we all say, 'Yes, CPP enhancement must be part of the overall retirement system in Canada."

Sheridan admits that he does not have as yet all the necessary provincial support — seven out of 10 provinces representing at least two-thirds of the population — with hold-outs including Alberta, British Columbia and New Brunswick.

Finance Minister Jim Flaherty has also been cagey about his position.

Flaherty has said enhancement is not a bad idea, adding that the economy has to be able to afford it "at the appropriate time." Kevin Sorenson, the minister of state for finance, has been much more unequivocal: raising premiums would "take more money out of the pockets of employees and force employers to cut jobs, hours and wages," he wrote in a recent newspaper column.

The federal ministers have often cited the Canadian Federation of Independent Business for their claims that enhancement would kill jobs, although advocates say the alarms are unjustified. They point out there was little evidence of Canadians losing jobs the last time pension premiums were raised in the 1990s.

Aside from P.E.I., the most vocal advocate for pension reform is Ontario. Finance Minister Charles Sousa has introduced a motion in the provincial legislature that warns the province would seek to go it alone if Ottawa does not lead the way.

The motion, which says "Ontario should pursue its own solution to enhancing retirement security should the federal government not respond in a timely fashion," resembles one debated Monday in the House of Commons.

The Ottawa and Ontario resolutions are likely meant more to apply pressure and to flush out party positions on the issue than achieve results, since no one level of government or jurisdiction can act alone.

But Susan Eng of the Canadian Association of Retired Persons said she believes the chances of some agreement on enhancement have improved since the last time it was on the agenda in 2010. At that time, it was considered too soon after the 2008-09 recession, so the ministers opted for a voluntary program called the pooled registered pension plan, which has met with sporadic support.

Eng is not above applying pressure herself. On Sunday, the organization released results of a survey of over 2,000 members showing that 71 per cent "do not believe the current government deserves power if it does not expand CPP."

The survey also found that more CARP members support the Liberals than the Conservatives by a margin of 43 per cent to 31 per cent.

The results are not "a whim," Eng said. Her members have been polled repeatedly on the issue, she said, and have consistently supported reform even though they know they won't personally gain from higher benefits, since the payout will be for future generations.

"People understand there is a necessity for it," she said, pointing out that more and more of today's workers have no company pension plan.

Sheridan agreed, saying that Canada's workforce is increasingly either self-employed, on contract or part-time, meaning they do not have access to company pensions.

Alberta Finance Minister Doug Horner, regarded as the biggest roadblock to enhancement, said he is open to looking at all the options, but remains a skeptic.

"I've had several businesses who have told me what the impact would be and it's significant, it's not something we should take without due caution and attention," Horner said.

"While we're open to discussion, we don't want to do something that impairs the ability of employers to employ people."

One possible compromise, he said, would be a supplementary CPP plan in which employees can voluntarily increase their contributions, which would be automatically withdrawn from their paycheques.

Another is that contributions would only start being raised once certain economic "triggers" — such as a bar for employment levels and economic growth — are met.

That would be acceptable to Eng, who noted any change in premiums would not take effect for three years, after which hikes can be phased in over a longer period. That should give the economy plenty of time to recover fully from the recession and employers to adjust, she said.


Tories vote down CPP expansion
as seniors warn of waning support

OTTAWA — The Globe and Mail
Dec. 10 2013

Conservatives are losing support among Canadian seniors for refusing to expand the Canada Pension Plan, warns a national seniors group.

On the same day that the Conservative majority voted down an NDP motion calling for CPP expansion, the seniors lobby group CARP released a survey showing Conservative support is slipping among its members.

A survey of 2,654 members found 71.5 per cent of respondents felt the government should not stay in office if it chooses not to expand the CPP. The survey also found the Conservatives had the support of 31 per cent of CARP members, trailing the 43-per-cent support for the Liberals and 21 per cent for the NDP.

The polling by CARP shows support for the Conservatives is down three percentage points from October, with all of those gains moving to the NDP.

Susan Eng, the vice-president of advocacy for CARP, said the survey results show Canadian seniors – who are more likely to vote than younger Canadians – consider the CPP to be a "ballot box" issue that will affect how they vote in the next election.

Ms. Eng said seniors feel strongly about the issue even though any changes to the CPP would be phased in and would not affect current seniors.

"They know very well that this has nothing to do with their personal lives, but they do care about what happens to their children and grandchildren and the state of retirement security for everybody," she said.

Debate over the future of CPP is heating up ahead of the annual meeting of federal, provincial and territorial finance ministers, which will take place Dec. 16 at Meech Lake, Que.

A day-long House of Commons debate Monday triggered by the NDP indicated that months of lobbying by groups such as CARP and some Canadian provinces – including Ontario and Prince Edward Island – have not won over the federal Conservatives.

The federal minister of state for finance, Kevin Sorenson, maintained his strong opposition to higher CPP premiums, warning that it would hurt employment.

"The NDP's plan would send thousands of workers to the unemployment lines and would definitely endanger economic growth," he said.

The minister noted that CPP expansion has been opposed by employer groups and think tanks like the C.D. Howe Institute.

New data released Monday by Statistics Canada show the Canada Pension Plan and the Quebec Pension Plan grew faster in 2012 than registered savings plans. The CPP and QPP reported total assets of $213-billion at the end of 2012, up 13.7 per cent over 2011. Individual registered savings grew by 8 per cent to $928-billion.

The report from Statistics Canada did not say how much of the pension growth was from investment returns versus new contributions.

NDP MP Murray Rankin, who put forward Monday's motion, said the government's position is unfortunate given the success of the Canada Pension Plan Investment Board at generating high returns at low cost.

"I just find it inexcusable," he said of the Conservative position, calling the CPP "one of those great success stories in Canada."

Mr. Rankin noted that it was Mr. Sorenson leading the government's response and not Finance Minister Jim Flaherty, who had urged the provinces and territories in 2010 to support a modest increase to the CPP but was unable to secure enough support.

Liberal MP John McCallum raised Mr. Flaherty's past comments during Monday's debate, speculating that the minister "was overruled by his boss," Prime Minister Stephen Harper, who Mr. McCallum said has long been a critic of the CPP.

"He does not like the Canada Pension Plan, so I believe that as long as he is the Prime Minister of this country, no time will be the right time for any infinitesimal increase in CPP premiums and benefits," he said.


Ford's Mulally talks cars, bankruptcy on 'Colbert Report'

Tony Briscoe
The Detroit News
Dec 7, 2013

Ford Motor Co. President and CEO Alan Mulally appeared on the "Colbert Report" on Thursday night to talk about the unveiling of the 2015 design for the iconic Mustang brand's 50th anniversary.

The conversation with host Stephen Colbert quickly turned from the car's design to its legacy and a little ribbing.

When asked what makes a brand iconic, Mulally said: "The Mustang changed the world in 1965 because it was the first real sports car."

The answer wasn't exactly what Colbert was looking for, who joked the real answer was about what happens in the back seats of a lot of cars.

Mulally blushed and demurred.

Colbert then teased about General Motors and Chrysler for filing for bankruptcy, calling the two companies "Bolsheviks." .

Their bankruptcies quickly transitioned to ... well, the low hanging fruit — Detroit.

"Do we pay off the debts by pulling the gold fillings out of pensioners or do we just let the great north woods reclaim Detroit?" Colbert said.

Mulally rolled with the comic punches and said he was optimistic about the city's future.

"I think they are doing the right thing and that is addressing all the areas ... because it's taken a lot of years to get to that position, but now everyone has to pull together and develop a plan." Mulally said


CPP expansion would cost Canadians too much, federal minister says

The Globe and Mail
Dec 6, 2013

The Conservative government is warning against an expansion of the Canada Pension Plan ahead of a key meeting with the provinces, raising the possibility that years of talks will not produce a decision to act.

Prince Edward Island and Ontario have rallied provincial support throughout the fall for a national agreement on what they call a "modest" enhancement to the CPP.

Ontario Premier Kathleen Wynne is expected to bring up the issue on Thursday when she meets with Prime Minister Stephen Harper on Parliament Hill.

But the federal minister responsible for pensions – Minister of State for Finance Kevin Sorenson – is rejecting the suggestions from PEI and Ontario.

"I've studied that plan. It is not a modest proposal," he said in an interview with The Globe and Mail. "There would be a huge cost to Canadians."

Mr. Sorenson and Finance Minister Jim Flaherty are scheduled to meet their provincial and territorial counterparts for a dinner on Dec. 15, followed by a day of meetings at Meech Lake, in Quebec's Gatineau Park.

When the group met there last year, they asked officials to come up with a plan for a modest enhancement of the CPP for them to consider, a subject that had been on the agendas of previous sessions. But some provinces, including Alberta and New Brunswick, fear that forcing Canadian employees and employers to pay higher premiums now to receive higher benefits in retirement would be bad for the economy.

An analysis from Finance Canada concludes higher CPP premiums would have a negative impact on the economy because higher labour costs would mean less hiring by businesses.

Ottawa's preference is to encourage more savings through voluntary pooled registered pension plans (PRPP), which involve payroll deductions towards an option similar to registered retirement savings plans (RRSP). That concept got a boost this week when Quebec's National Assembly voted overwhelmingly in favour of a bill that would offer Canada's first PRPPs next year.

Quebec's plan goes beyond what Ottawa first proposed, because it would force companies with at least five employees to enroll their staff in a PRPP. Employees could opt out, but most are expected to stay in. The savings would be managed by private sector groups such as life insurance companies.

The plans would be a boost for firms that are approved to invest the funds.

Tom Reid, the vice-president of group retirement services for Sun Life, said the plans would make Canadians save more for retirement and all provinces should follow Quebec's lead.

"Politics is the art of the doable," he said, noting that while CPP enhancement is also a good idea, voluntary pooled plans have more support.

Wes Sheridan, the PEI finance minister, said his province will not bring in pooled pensions until Ottawa agrees to boost the CPP. He said Ottawa should make a counter-proposal if it thinks PEI's plan is too expensive.

"There's never going to be a perfect time, but we can't kick this can down the road any further," he said.

A CIBC Economics report warned this year that middle-income Canadians are not saving enough for retirement. The report said the situation "will be at its worst decades from now," when people born in the 1970s and 1980s retire and face a drop of 20 per cent or more in living standards.

The household savings rate was in the 15-20 per cent range during the early 1980s, but since the late 1990s, it has hovered below 5 per cent.

The CIBC report said the reality is not as simple as saying today's working Canadians are more irrational and irresponsible than their parents. Returns on fixed income and equity are down, and record low interest rates discourage saving and encourage consumption.

CIBC economist Benjamin Tal said enhancing the CPP and pooled pensions would help boost savings.

"The CPP is a good one," he said. "The CPP has the scale to make big investments and get better returns with relatively low cost."


2015 Mustang:
A makeover with muscle

Ford Motor Co.'s 50th-anniversary Mustang won't change radically from the first five generations of the iconic pony car. The 2015 Mustang, which Ford will officially unveil on Dec. 5, 2013 in six cities will pay tribute to the car's rich history. (Ford Motor Company)

The Detroit News
Dec 5, 2013

Ford Motor Co. shows its sixth-generation Mustang pony car to the world today, with a back-to-the-future fastback roofline, an all-new independent rear suspension — and for the first time ever, the option of a turbocharged four-cylinder EcoBoost engine.

Fifty years ago, Ford revolutionized the auto industry by offering a sports car for the everyman, and now the Dearborn automaker is taking that idea to the rest of the world. Ford today will simultaneously unveil the 2015 Mustang in six cities, on four different continents. But that doesn't mean Ford has erased five decades of American swagger.

"The new Mustang is evolutionary, not revolutionary," said Jacques Brent, Ford's group marketing manager of large cars and SUVs.

The latest Mustang — the first significant do-over since 2005 — borrows styling cues from the horizontal grille found on other Ford cars like the Fusion midsize sedan, but maintains the Mustang's bold, open-mouth look. The new wrap-around headlights have a more European feel than the current Mustang, but the bulkier haunch above the rear tires is unmistakably American. The car's rear stance is two inches wider. And the optional 2.3-liter EcoBoost four-cylinder, which is specially tuned for the Mustang, is expected to deliver as much horsepower and more torque than the 3.7-liter V-6 that comes standard on the current Mustang.

But overall, the new Mustang still looks like a Mustang, and that should be soothing to many of the car's loyalists after Ford announced last year that it planned to sell the pony car in Europe and Asia. Today's reveal of the 2015 Mustang will be in its hometown, Dearborn; New York, where it was first shown to the public in 1964; Los Angeles; Barcelona; Shanghai; and Sydney.

The swoopy, aerodynamic Ford Evos concept, which debuted at the 2011 Frankfurt Auto Show, had many speculating that designers and engineers would draw heavily from that car for the next-generation Mustang. There are many similarities, but Ford also used cues from previous Mustangs that harken back to the car's rich history.

For 2015, the Mustang loses the matching, colored B-pillar that splits the area between the front and back seats, a flashback to the Mustangs of the 1970s. The new car retains the traditional long hood, short deck and small rear window. Designers looked to the past to revive the exotic fastback rear.

Dave Pericak, chief engineer of the Mustang, said the goal was not to reinvent the car. Mustang lovers across the globe — who often pay three and four times sticker price to import the car in markets where it's not sold at dealers — want the same true, American-style Mustang, he said.

"We did not design a global Mustang," Pericak said at Ford's design studio in Dearborn this week. "We designed a Mustang and decided to take it global."

That, however, wasn't an easy task, as Ford had to grapple with the difficulty of creating both left- and right-drive cars. They tinkered with designs, a process that disrupted deadlines, to ensure it will meet regulatory and consumer standards worldwide.

Aluminum fenders
The front fenders of the 2015 Mustang are made of aluminum. It has extra cargo space — enough for two golf bags and a subwoofer — and a plane cockpit-themed interior decorated with aluminum and large, round analog gauges. There's a more compact steering wheel for easier handling, and 50th-anniversary Mustang badging. And for convertible models, Ford is ditching the vinyl and going with all-cloth tops; those tops will be controlled with an electric motor, not a hydraulic system.

There will be no key to put in the ignition — the Mustang will start with a push-button. Drivers can select driving modes based on weather conditions. The popular TrackApps, which allows for the recording of key performance measurements such as acceleration and braking times, is available, as is a new audio system.

The optional four-cylinder 2.3-liter EcoBoost is expected to produce 305 horsepower and 300 pound-feet of torque; the current 3.7-liter V-6 makes 305 horsepower and 280 pound-feet of torque.

The new Mustang comes standard with a 3.7-liter V-6 that produces 300 horses and 270 pound-feet of torque. A 5-liter V-8, which puts out 420 horsepower and 390 pound-feet of torque, is an option.

Six-speed automatic and manual transmissions are slightly modified from current specs.

Fuel economy estimates are not yet available, but Ford projects the new EcoBoost engine will top the fuel efficiency of the current V-6.

Pricing for both the fastback and convertible models will be announced closer to its launch date in late 2014, but buyers shouldn't expect a big price hike.

The new Mustang, like the current one, will be produced exclusively at Ford's Flat Rock Assembly Plant.

Challenges ahead
The 2015 Mustang faces challenges, including the fact U.S. enthusiasts haven't bought the Mustang with the same intensity as in past decades.

Sales this year assuredly won't exceed 80,000 and haven't topped 100,000 since 2007. Ford has upped incentives since the turn of the millennium and now offers nearly $3,000 off the $22,200 base price, according to data compiled by Kelley Blue Book.

General Motors Co.'s Chevrolet Camaro, which the Detroit automaker brought back from the dead in 2009, has topped the Mustang in U.S. sales the past three years and should cruise to a fourth-straight title this year.

Ford does not expect global sales of Mustang to rise exponentially with its introduction in large and growing markets like Europe and Asia, but Jack Nerad, executive editor and analyst at KBB, says Ford could see moderate sales growth here in the U.S. thanks to the new four-cylinder option, which may resonate with more buyers.

"This is a North American phenomenon, and has been since the beginning," Nerad said. "It's an interesting oddity in Europe, in Asia, but here it's been a volume play."



Ford to trim Q1 output to
keep stockpiles in check

Automotive News
Nick Bunkley
Dec 3, 2013

Ford Motor Co. says it plans to build 2 percent fewer vehicles in North America during the first quarter of 2014 than it did in the same period of this year, which would be the automaker's first year-over-year decline in nearly five years.

Ford officials said the company could increase output if sales during the next few months are stronger than expected but that it needs to keep supplies from rising further. Ford currently has 682,000 vehicles in inventory, 32 percent more than it did a year ago.

That is the equivalent of an 89-day supply, up from 73 days at the end of November 2012.

"We do have that ability to add some production back in if necessary," Ford's chief sales analyst, Erich Merkle, said on a conference call today, "but for right now, we're going to watch this market very carefully as we match supply with demand."

Ford's sales rose 7 percent overall last month. Its retail sales increased 9 percent to 147,021 units, the highest volume for any November since 2004. Fleet sales accounted for 23 percent of the month's deliveries, versus 29 percent year-to-date.

Sales of the F-series pickup rose 16 percent to 65,501 units, topping 60,000 for the seventh consecutive month. Ford's total pickup sales for the year are on pace to exceed 750,000.

"You look at trucks and they're hot right now," Merkle said. "We're looking at some really strong F-series numbers."

Sales of the Fusion mid-sized sedan posted a 51 percent increase, despite what executives described as "a very aggressive competitive environment" in that segment during the month.

Merkle said Ford is trying to hold back on incentives, even as rivals such as Toyota Motor Sales USA ramp up discounts, "to keep those residuals strong and not degrade the brand."

Other high-volume models, including the Focus, Edge and Explorer, posted declines. Sales of the Escape, which has now been recalled seven times in the 2013 model year after two additional recalls were announced last week to address fire risks, were flat.

Sales of the C-Max plunged 51 percent to 2,398; its sales have dropped 27 percent over the past three months after Ford revised its fuel-economy rating downward in August.

The Lincoln brand posted a 17 percent gain, as sales of the MKZ sedan more than doubled to 2,854 units.

Ford sold 32,851 more vehicles in 11 months this year than it did in all of 2012, making it the only one of the eight largest automakers to already top 2012 sales total.

Merkle said Ford is selling its vehicles for an average of $700 more this year while also adding six-tenths of a point of market share.

"There really isn't any other automaker that has increased average transaction prices by that amount and has produced anything more than a tenth of a point gain in share," he said.

The 770,000 vehicles that Ford plans to build in the first quarter would be unchanged from the fourth quarter of this year. It built 784,000 vehicles in the first quarter of 2013. Merkle said the first-quarter forecast calls for building 4 percent fewer cars and utility vehicles and 2 percent more trucks.

The last time Ford's North American quarterly production declined year-over-year was in the second quarter of 2009, according to the Automotive News Data Center.


Ford leads Canada total sales, Chrysler growth soars

TORONTO, Dec 4 (Reuters) - Ford Motor Co's Canadian arm sold more than all other carmakers in Canada in November helped in part by strong sales in the Fusion, according to auto sales data released on Tuesday.

However, in terms of sales growth, Chrysler Canada sales rose almost 13 percent year-over-year in November outpacing all of its Detroit competitors.

Oakville, Ontario-based Ford Canada said November sales rose 1.1 percent. Consumers bought 19,668 Ford cars and trucks last month, slightly higher than the 19,447 it sold during the same month a year ago.

Sales of Ford's passenger car rose 6.1 percent to 4,717, while truck sales declined 0.3 percent to 14,951.

Year-to-date, Ford leads in total sales, with 267,427 cars and trucks sold. This marked a 3.2 percent rise from the same period last year.

Chrysler Canada reported a 12.9 percent jump in November sales, bolstered in part by strong sales of both its 2013 Jeep Cherokee and the all-new 2014 model.

It sold 19,206 cars and trucks, compared with 17,013 sold last November, and extended its year-over-year sales growth to 48 months.

Car sales rose 9 percent to 3,053 last month, while truck sales climbed 13.7 percent to 16,153.

Overall vehicle sales for Chrysler Canada are up 6.8 percent so far this year with 244,570 units sold, and are already ahead of full year 2012 figures, Chrysler said.

General Motors Canada reported a small sales gain of 0.6 percent, and said it sold 17,482 vehicles in November. The Oshawa-headquartered company said that data reflects one less day of sales than in the same period last year.

"Demand continues to build for Chevrolet, Buick, GMC and Cadillac cars and trucks, including the all-new GMC Sierra," said John Roth, vice president of sales at General Motors of Canada.

Car sales climbed 3.1 percent to 5,114 units, while 12,368, or 0.3 percent fewer, trucks were sold.

Overall sales are up 2.7 percent this year, with consumers purchasing 217,908 GM cars and trucks.

In the United States, aggressive discounting and the continued popularity of big pickup trucks helped propel November vehicle sales well past expectations.


Ford gets new U.S.
court hearing on
$445M interest bid

David Shepardson
The Detroit News
Dec 3, 2013

Washington — The U.S. Supreme Court on Monday sent a long-running Ford Motor Co. tax dispute back to an appeals court for further hearings on whether the automaker is entitled to $445 million in interest on taxes it overpaid.

In a unanimous unsigned opinion, the high court ordered the U.S. Sixth Circuit Court of Appeals to hold a new hearing on whether the Dearborn automaker is entitled to $445 million in interest from overpayments of taxes dating back nearly 30 years.

The Justice Department said in briefs before the Supreme Court that the case should have been heard by the U.S. Court of Federal Claims. The high court ordered the Sixth Circuit to hold a hearing on whether the case should have been before that court.

Last year, the appeals court upheld a district court ruling in Detroit that denied the automaker the interest for taxes it owed from 1983-1989, 1992 and 1994. In 1991, 1992 and 1994, Ford made payments to the Internal Revenue Service totaling $875 million after the government said it had underpayed its taxes.

In 1994, Ford asked IRS to treat these as advance payments — rather than a cash bond — because then Ford could be entitled to interest if a court or the IRS found later it had overpayed its taxes. The IRS did later determine Ford had overpaid its taxes and agreed to pay Ford interest, but only from the date it had asked that the funds be treated as advanced payments. The IRS says taxpayers can either treat taxes as a bond — so if the taxpayer did underpay taxes, it doesn’t owe interest on the back taxes.

Ford sued in 2008 and U.S. District Judge Patrick Duggan found in 2010 that while Ford’s argument “may have some merit,” it said the IRS argument was reasonable. The issue is that federal tax law doesn’t define the date of overpayment.



Tailgate thefts soar in U.S.

Bryce G. Hoffman
The Detroit News
December 1, 2013

Police in Garland, Texas, recovered 26 stolen tailgates earlier this year. Most tailgate thefts occur in
Texas, which is the largest pickup market. (Garland Police Department)

If you have a pickup, you might want to think twice about where you park it tonight.

The National Insurance Crime Bureau says tailgate theft is skyrocketing in the U.S. — thanks, in part, to websites that have made it easy for thieves to connect with unsuspecting customers looking to give their trucks a makeover.

Most tailgate thefts go unreported because the cost of replacing the part often is less than the truck owner's insurance deductible. But the bureau said the number of thefts reported to insurance companies nationwide has soared from just three in 2008 to more than 500 in 2012.

"Those are just insurance claims. We know that number is woefully under-representative. The problem is much, much larger," said Frank Scafidi, director of public affairs for the NICB. "There's a huge market, and that feeds the monster."

Now, automakers are beginning to take notice.

"Tailgates can be taken with no effort at all. There's no bolt. There's no tools. I don't know a single manufacturer that makes a tailgate that doesn't pop right off," says Chrysler Group LLC spokesman Nick Cappa. "The incentive for some sort of locking system is pretty high."

That's why his company has become the first to offer a remote locking system for its trucks that secures the tailgate as well as the cab doors. It comes with any 2013 model year or newer Ram pickup that has a remote key fob.

Ford Motor Co. and General Motors Co. also have begun installing tailgate locks on their pickups, but they are manual locks that require drivers to walk to the back of the truck and secure them with a key. As a result, those tailgates often go unlocked.

Chrysler learned about the theft problem during consumer research for its 2009 Ram trucks. A number of existing Ram owners requested a locking tailgate when asked how the company could improve their trucks.

"It's the Number One theft item on a pickup," said Ram's resident truck guru, Bob Hegbloom. "Typically, the thing that's damaged first on a pickup is the tailgate. People are always replacing these things."

The proliferation of backup cameras has made tailgates more valuable. A basic tailgate costs about $1,200 to replace, but the NICB says that figure can easily leap north of $3,500 if it includes a camera or other electronics. And since there are no serial numbers on tailgates, they are impossible to trace.

A search of Metro Detroit Craigslist reveals many apparently new tailgates for sale — though not necessarily stolen.

Hegbloom said Ram customers were not satisfied with tailgates that required insertion of a key.

"People didn't really care for that because you had to go around and lock it," he said. "Our new system makes it simple. It's just like locking your doors. You push the button and you walk away."

The same system also locks the RamBox on trucks equipped with one.

Locking tailgates are a real deterrent, Scafidi said, adding that consumers also can buy aftermarket locks for older trucks that are not equipped with built-in security. While experienced thieves can still defeat them, he said there are so many unlocked pickups to choose from that most will simply move on to one of those.

An experienced thief can steal an unlocked truck tailgate in as little as 10 seconds, Hegbloom said.

Most tailgate thefts occur in Texas, which is not surprising considering the state also is the largest pickup market in the country. Nor is it surprising that most of those recovered by police come off Ford F-series trucks. The F-series is the best-selling vehicle in America.

"We have locks on our truck tailgates today. They're manual locks," said Ford Motor Co. spokesman Mike Levine, though he would not rule out the possibility of adding a remote locking system in the future. "We're always looking for ways to improve our products."

General Motors Co. also is working to make its trucks more secure, said Chevrolet spokesman Tom Wilkinson.

GM's 2014 Chevrolet Silverado and GMC pickups, plus its 2015 Chevrolet Colorado and GMC Canyon pickups coming in 2015, come standard with manual tailgate locks, Wilkinson said. The automaker's previous-generation full-size pickups had a manual locking tailgate as an option for fleet and government orders, and was included in popular option packages for retail customers. But some trucks such as its work truck and LS models had no locks, Wilkinson said.


Retiree Gino Digiulio
Passes away

Gino Diguilio

It is with great sadness that we inform you of the
passing of Retiree Gino Diguilio on November 29, 2013.

Our deepest condolences go out to
his family and close friends.

Retired Feb 1, 1990
20.5 Years of Service

Funeral Arrangements

Monday Dec 2, 2013
6 pm to 8 pm
Tuesday Dec 3, 2013
2pm to 4 pm and 6pm to 8pm

Turner & Porter
2180 Hurontario Street
Mississauga ON, L5B 1M8
Telephone 905-279-7663


Wednesday Dec 4, 2013
9:30 AM

St. Catherine of Siena
Roman Catholic Church

2340 Hurontario St,
Mississauga, ON L5B 1N1 ‎
(905) 272-1454




Congratulations to
Our Most Recent
Retirees Effective
December 1, 2013


Michigan auto jobs go high-tech

Decline in production turns Mich.'s collar white

Karl Henkel
The Detroit News
November 30, 2013

A continued surge in automotive research and development jobs could mean that Michigan will soon have more non-factory auto jobs than assembly plant positions for the first time.

With the recession in the rear-view mirror and the aftereffects of the auto industry crisis winding down — including a 55 percent drop in statewide auto production jobs since 2000 — beefed-up R&D operations continue to solidify southeastern Michigan as the automotive capital of North America, with a different makeup.

The growth rate of research and development jobs in the auto industry has nearly quadrupled in Michigan compared to that sector's growth throughout the rest of the nation over the last four decades, and nearly half of Michigan's quarter-million auto jobs are outside of a factory, according to a recent report compiled by the Federal Reserve Bank of Chicago. Automotive research and development in Michigan accounts for nearly $12 billion in annual spending, according to a recent economic report from Oakland University. That's the most of any state.

"This is one of the things about Detroit that people can't understand in the bigger picture," said Mike Smith, a union archivist at Wayne State University's Walter P. Reuther Library, referencing the Motor City's highly publicized auto manufacturing decline. "Detroit is still the intellectual capital of the global automotive industry."

Michigan's share of U.S. automotive production jobs has shrunk since 1970, taking an especially hard hit since 2005. While jobs were lost here, southern states and California gained production jobs, mostly in factories owned by foreign automakers.

The number of research and development jobs in Michigan's auto sector have fallen since 2000,but not as sharply as manufacturing jobs. But the number of technical positions should grow: Ford Motor Co. this year is completing the hiring of 2,000 salaried R&D workers. General Motors Co. has postings for hundreds of similar jobs. Engineering jobs in the local auto supplier base will be added to help automakers meet federal Corporate Average Fuel Economy standards and to help automate cars.

Foreign automakers are partly responsible for Michigan's upturn in R&D jobs.

Toyota Motor Corp. has technical centers in Ann Arbor, Saline, Plymouth and Livonia; it is spending another $28 million to expand operations. Hyundai Motor America last year announced plans for new expansion and job creation in Superior Township.

Even as other major auto manufacturing states — which include Alabama, California, Indiana, Kentucky, Missouri, Ohio and Texas — continue to fight for a greater share of manufacturing jobs, experts project Michigan will continue to grow its number of research and development jobs faster than the rest of the nation.

Fueled by politics, education
Statewide, automotive R&D jobs have fallen by one-third to 60,000 since 2000 — auto manufacturing jobs fell by 55 percent — but still represent more jobs than the rest of the U.S.

Forty-six percent of Michigan's auto employment is in either R&D or office occupations, up about 15 percent since 2000 and nearly double the 24 percent rate across the rest of the U.S.

"At least by this measure, Michigan remains the nerve center and the creative engine of the U.S. auto industry, even as production jobs have dispersed," Thom Walstrum and Bill Testa wrote in their recent report from the Chicago Fed.

There are three reasons that R&D jobs have stayed in Michigan while manufacturing jobs have dispersed, economists say: education, cost of living and politics.

Auto factory jobs generally don't require the level of education that R&D jobs do; therefore, a state like Alabama is on equal footing for Michigan — which has a more highly educated workforce — for production jobs. But Michigan is home to three major research universities, which has encouraged growth of jobs in engineering and design.

Kentucky, Indiana, Texas, Ohio, Alabama and Missouri have some of the lowest cost-of-living expenses, according to the Council for Community and Economic Research, which can in the case of non-unionized plants result in lower labor costs for automakers. Michigan has a relatively low cost of living, but it's only cheaper than one other major auto manufacturing state: California.

Finally, right-to-work laws — which make financial support of labor unions optional in unionized workplaces — have sparked automotive job growth in states like Alabama and Texas, primarily from foreign automakers. Most southern auto plants remain non-unionized. It wasn't until 2012 that Rust Belt states like Indiana — and later, Michigan — became right-to-work states.

"All of those strategies were designed to cut wages," said George Zeller, a Cleveland-based economist. He said strategies like right-to-work favored moving jobs to typically non-union-friendly states.

Shifting footprint
Five of the major automotive manufacturing states have lost production jobs since 2000, including Michigan, which lost 55 percent of those jobs — about 55,000 positions — from 2000 through August 2013, according to U.S. Bureau of Labor Statistics data.

Alabama, Indiana and Texas — which have plants full of workers not represented by the United Auto Workers — have posted production job gains during the same period.

Alabama has been the biggest beneficiary, adding nearly 9,000 auto manufacturing jobs since 2000, mostly attributed to expansions at Mercedes-Benz, Honda Motor Co. and Toyota factories. Indiana — home to Toyota, Honda, GM, Chrysler Group LLC and Subaru of America plants — has added about 5,600. And Texas — which has GM and Toyota factories — has added about 3,600.

But because automakers have spread out their manufacturing footprints across the nation, when they shift production or retool a plant, moving the corresponding workers has made life more difficult for some assembly shop workers.

Alex Rodriguez, 58, of southwest Detroit, worked as an electrician at General Motors Co.'s Pontiac Assembly Plant for 27 years before the facility closed in late 2009. He was then transferred to GM's Fort Wayne Assembly Plant in Indiana, one of the biggest beneficiaries of new auto manufacturing jobs in the last decade.

"I want to go back to Michigan to be with my wife and family," said Rodriguez, by phone from his apartment in Indiana that he shares with another displaced Michigan GM factory worker.


Ford recalling 7,300
Lincoln MKZ hybrids
2013 Lincoln MKZ 2.0 liter gas electric hybrid. (Mark Lennihan / Associated Press)

David Shepardson
Detroit News Washington Bureau
November 28, 2013

Washington — Ford Motor Co. said it will recall about 7,300 2013-2014 Lincoln MKZ Hybrid vehicles to reprogram the powertrain control module to prevent the vehicles from rolling away after being shifted out of park.

Ford said the vehicles may not meet a federal safety standard that requires the brake be depressed before the transmission can be shifted out of park.

"The vehicles may have been built with transmission range sensors that do not function properly due to a manufacturing error. As a result of this error, the powertrain control module may incorrectly assume the vehicle is in neutral and allow the transmission to shift out of park without the brake pedal applied, increasing the risk of unintended vehicle movement due to an inadvertent shift out of park," Ford said.

The recall covers 7,100 in the United States and 170 in Canada. They were built at Hermosillo Assembly Plant from April 26, 2012, through Sept. 24, 2013. Ford said no injuries or crashes have been reported.


OFL Leadership Acclaimed
At the OFL Convention
November 26, 2014

Sid Ryan
Irwin Nanda Vice President
Nancy Hutchison Secretary Treasurer
Sid Ryan
Irwin Nanda
Vice President
Nancy Hutchison
Secretary Treasurer
Photos by Arnie DeVaan (707)

OFL Resolution on Heinz closing in Leamington


2013 Ford Escape recalled
for seventh time

Globe and Mail
November 27, 2013

Ford Motor Co's bad safety streak with its 2013 Escape continued on Tuesday as the auto maker issued two more recalls for the second most popular sport utility vehicle in the U.S. market.

There have now been seven recalls of the 2013 model of the Escape, a key SUV for Ford, the No. 2 U.S. auto maker. The recalls affected 161,334 Escape SUVs globally, mostly in the United States, and addressed potential leaks that could cause a fire.

Escape sales in the United States were up 14 per cent through October this year to 250,543 vehicles, making it the second-best selling Ford product behind the F-Series pickup trucks, and No. 2 to Honda Motor Co's CR-V in the SUV segment. The Escape was completely redesigned for the 2013 model year.

Ford is recalling the Escape SUVs from the 2013 model year equipped with 1.6-litre engines because the engine cylinder head may overheat and cause cracks that could allow oil to leak, according to documents filed with the U.S. National Highway Traffic Safety Administration. A Ford spokeswoman said there were 13 fires reported related to this issue, but no injuries.

Of the affected vehicles built at Ford's plant in Louisville, Kentucky, 139,228 are in the U.S. market, 18,917 in Canada and the rest in other markets, Ford said.

Within that Escape action, a total of 11,821 globally have been recalled because the engine compartment fuel line may have been installed improperly under a prior recall and could lead to a leak. The U.S. market has 9,469 of those SUVs, according to the NHTSA.

Ford had received warranty reports of fuel odor or leaks of Escape SUVs repaired in a previous recall, according to the NHTSA.

No fires or injuries related to this issue have been reported, the Ford spokeswoman said.

The number of recalls for the 2013 Escape SUV has risen to seven as the NHTSA counts Tuesday's actions as two separate recalls.

Under the larger recall, Ford will modify the engine shielding, cooling and control systems, according to NHTSA documents. In the smaller one, Ford dealers will inspect the engine compartment fuel line and replace it if necessary. Owners will be notified of the recalls by mail by Jan. 23, 2014.

Ford is also recalling 7,329 Lincoln MKZ hybrid vehicles globally from model years 2013 and 2014 to reprogram the power train control module. They may not conform to U.S. requirements that the brake be depressed before the car can be shifted out of park. No accidents or injuries were reported relating to this issue.

In July 2012, Ford took the rare step of telling about 11,500 Escape owners to not drive their vehicles due to the risk of an engine fire. In that case, it offered customers loaner vehicles while their SUVs were inspected and repaired. Earlier that month, the company recalled 8,266 of the SUVs because of a carpeting flaw could reduce clearance for the brake pedal.

In September 2012, Ford recalled about 7,600 of the 2013 models to address potential fire issues. Two months later, it recalled another 73,300 Escapes as a software glitch in the cooling system raised the risk of a fire.

In March, Ford recalled about 5,600 Escapes as part of a larger recall to check the child lock on the rear left-hand door in several vehicles.

In late July, Ford paid a $17.4-million penalty to U.S. regulators for failing to quickly recall nearly 424,000 Ford Escape SUVs from model years 2001 to 2004 regarding stuck throttles when the gas pedal was fully or almost fully depressed. It was the largest possible penalty NHTSA, a unit of the U.S. Department of Transportation, can collect.


Ford nonpursuit police car
gets 30 m.p.g. on the highway

Nov 26, 2013
Alisa Priddle
Detroit Free Press

Ford's newest police car, a model not designed for high-speed chases, will get 24 miles per gallon in combined city/highway driving, according to Environmental Protection Agency certification.

The special service police sedan is not for regular patrol officers, but for detectives, administrators and other law enforcement personnel who don't need to engage in chases. The improved mileage can help cut fuel costs.

The police-equipped Taurus has an EPA certification of 20 m.p.g. in city driving and 30 m.p.g. on the highway. Dodge and Chevrolet police cruisers are EPA-rated at 21 m.p.g. combined.

Ford achieves its fuel efficiency with a 2-liter, turbocharged, four-cylinder EcoBoost engine, augmenting the choice of three V6s already offered in the Police Interceptor sedan lineup.

By Ford's calculations, the special service sedan, driven 30,000 miles per year, would net savings of $1,720 over three years if gasoline prices averaged $3.21 per gallon. For a fleet of 150 vehicles, the savings could be more than $500,000.


Sunday Novemebr 24, 2013

Congratulations! Local 584 Retirees Website has reached the 100,000 Visitor mark!



Thanks to all for your continued support!



First CNG-Capable 2014
Ford F-150 Rolls Off
the Line in Kansas City

F 150

KANSAS CITY, MO., Nov. 24, 2013 - Ford, America's truck leader, began production of the 2014 F-150 with the ability to run on compressed natural gas, making Ford the only manufacturer with an available CNG/LPG-capable half-ton pickup.

The 2014 Ford F-150 with 3.7-liter V6 engine is available with a factory-installed, gaseous-fuel prep package that includes hardened valves, valve seats, and pistons and rings so it can operate on either natural gas or gasoline through separate fuel systems.

When equipped with a bi-fuel CNG/LPG engine package, the 3.7-liter V6 F-150 is capable of achieving more than 750 miles on combined tanks of gasoline and CNG, depending on the tank sizes selected. The Ford F-150 with 3.7-liter V6 has an EPA-estimated rating of 23 mpg on the highway and 19 mpg combined.

"Businesses and fleet customers have been asking Ford to make F-150 available with CNG capability to take advantage of the fuel's low price and clean emissions," said Jon Coleman, Ford fleet sustainability and technology manager.

CNG/LPG engine prep from the factory costs $315 before the customer chooses a Ford Qualified Vehicle Modifier to supply fuel tanks, fuel lines and unique fuel injectors. Upfits run approximately $6,000 to $9,500 depending on fuel tank capacity.

CNG conversions can provide stability against fluctuating fuel prices as well as lower vehicle operating costs for fleet administrators. CNG sells for an average of $2.10 per gallon of gasoline equivalent, and is as low as $1 in some parts of the country, representing a significant savings over unleaded regular fuel. The national average for unleaded regular fuel is $3.29 per gallon.

Customers also can accelerate the payback period by taking advantage of a growing number of state incentives. Nearly 20 states – including Oklahoma, Texas, Pennsylvania and Florida – offer or soon will provide tax incentives or rebates for CNG-converted vehicles. In Florida, fleet customers will be eligible for rebates of up to $25,000 beginning in 2014.

Most CNG Options
By next summer, Ford will offer eight commercial vehicles with a gaseous-prep option, a number no other full-line manufacturer can match:
•Transit Connect van and wagon
•Transit van, wagon, cutaway and chassis cab
•E-Series van, wagon, cutaway and stripped chassis
•F-Series Super Duty pickup and F-350 chassis cab
•F-Series Super Duty chassis cab (F-450, F-550)
•F-650 medium-duty truck
•F53 and F59 stripped chassis
•2014 F-150 light-duty pickup

Customers are enthusiastically responding to this powerful array of choices. Since reintroducing the option in 2009, Ford has established itself as the leader in CNG/LPG engine sales. The company is on pace to sell more than 15,000 CNG/LPG-prepped vehicles this year, an increase of more than 25 percent from 2012.

AT&T is one of many Ford fleet customers that are finding value in CNG. The communications giant recently purchased 650 F-350 chassis cabs with the CNG-prep option.

"We're almost halfway to our company-wide goal of deploying 15,000 alternative-fuel vehicles by the end of 2018," said Jerome Webber, AT&T vice president, global fleet operations. "Vehicles such as CNG F-350s from Ford have helped us avoid purchasing 7.7 million gallons of gasoline over the past five years while reducing our fleet's emissions."

Ford Qualified Vehicle Modifiers
Ford has established a rigorous qualification program for alternative-fuel vehicle modifiers. The QVM program is intended to help modifiers achieve greater levels of customer satisfaction and product acceptance through the manufacture of high-quality vehicles.

Ford Qualified Vehicle Modifiers offer a wide variety of CNG/LPG options to help customers find the most cost-effective solution to their diverse operating needs. Ford maintains the engine and powertrain limited warranty (five years or 60,000 miles); the modifier is responsible for the system component warranty.

Compressed Natural Gas
Compressed natural gas is mainly composed of methane. It is stored and distributed in hard containers at a pressure of approximately 3,600 psi. About 85 percent of the CNG used in the United States is produced domestically.

Another benefit of this alternative fuel includes cleaner emissions. The U.S. Environmental Protection Agency certifies CNG usage can result in up to 30 percent less greenhouse gas emissions


Mustang's 50th birthday
gets 5-day celebration

Karl Henkel
The Detroit News
Nov 23, 2013

Mustang enthusiasts: Mark your calendars.

After announcing earlier this week that the all-new, sixth-generation Mustang will be introduced to the world on Dec. 5, Ford Motor Co. has now planned a slate of events to celebrate the iconic pony car's 50th birthday in April.

Ford, along with Mustang Club of America, will host events spanning five days in April at two locations: Charlotte Motor Speedway in Concord, N.C., and at Las Vegas Motor Speedway in Las Vegas.

The events, which kick off April 16 — one day before the official Mustang birthday — include "pony" drives, track time, car displays, guest speakers, a banquet, and a parade.


Ford to invest $150M at
New York stamping plant

Karl Henkel
The Detroit News
Nov 22, 2013

Ford Motor Co. on Thursday announced plans to invest $150 million at its Buffalo, N.Y., stamping plant, which will make parts for the automaker's next-generation Edge crossover scheduled to hit dealer lots next year.

The investment will add 25 new sub-assembly stations to produce hoods, doors and fenders, and more than 500 new dies plus equipment upgrades.

Buffalo Stamping Plant produces parts such as quarter panels and floor pans for Ford vehicles like the Edge and Flex midsize crossovers, Focus compact car, F-250 and F-350 pickups and Lincoln MKX and MKT.

"We produce crucial components for several key vehicles in Buffalo," said Paul Kosaian, director of manufacturing for stamping operations at Ford, in a statement. "With the help of our UAW and government partners, we were able to secure additional jobs and investment to keep Buffalo Stamping Plant competitive and efficient."

Ford on Wednesday showed off a concept of its next-generation Edge, which is built at the Oakville Assembly Plant in Ontario — less than 100 miles from the stamping plant in Buffalo.

The new Edge is due in the latter half of 2014 and a new Lincoln MKX should debut in early 2015.

Ford will add about 350 new jobs to Buffalo Assembly Plant, which opened in 1950, upping the plant's head count to approximately 1,000.

The new jobs will be a combination of new workers, transfers and employees coming back from temporary leave, Ford said in a statement ahead of the announcement.

The Dearborn automaker says it is more than three-fourths of the way to its 2011 goal of creating 12,000 hourly jobs in the U.S. by 2015.

In 2012, New York offered Ford $7 million in state government incentives to retain 640 jobs and encourage $100 million of investment. Ford will begin receiving this benefit in 2014.

Buffalo Stamping Plant also is one of 12 U.S. Ford facilities to benefit from loans through the Department of Energy's Advanced Technology Vehicles Manufacturing Program


Top 10 honour reflects Unifor’s great work and hope for the future

By Jerry Dias, Unifor National President
November 21, 2013

Today Maclean’s, Canada’s national English-language magazine, has named me as one of Canada’s Top 10 most important people, in the cover story of the current issue.

This is a great honour, of course, but it’s not about me. This about all the hard work Unifor has been doing to address the issues confronting Canadians today.
Since our founding last Labour Day weekend, Unifor has been committed to addressing such issues as youth unemployment, precarious employment, secure pensions and good jobs for all. We’ve spoken out for the disenfranchised in Canada worked hard to make their voices heard.

Within the next year, Unifor will host a Good Jobs Summit, bringing together all stakeholders in the Canadian economy to start a conversation about creating jobs with fair wages – jobs that are safe and secure. The time for talk is over. It’s time now to roll up our sleeves and get to work to make Canada a better place to live and raise our children.

Unifor has also established its unique community chapters program to help those who fall outside traditional union structures – the unemployed, freelance and self-employed workers, those in precarious employment, and more – to join together as part of Unifor to make a difference.

These efforts by Unifor activists across the country have resonated with Canadians, and my being named to the Maclean’s list is a reflection of that.

I would like to thank Maclean’s for this honour – and thank all the Unifor activists across the country for making it possible. To be honest, this is more your honour than mine.

Follow Jerry on Twitter at: @JerryPDias

To see the complete Top 10 list, go to: LINK


Ford shows cutting Edge
technology at LA auto show

These sensor-based technologies form the building blocks for the future of automated driving and will help make driving safer and more efficient. (Ford)

Melissa Burden
The Detroit News
November 21, 2013

Los Angeles – — Ford Motor Co. will debut its 2015 Ford Edge concept at the LA Auto Show today, with several automated driving technologies and a sporty design that likely will be included on the automaker's next global midsize SUV.

The concept Edge includes new sensor-based technologies Ford is developing, such as a self-parking feature that can be activated by a button inside, or by remote outside the vehicle. That feature, which can park the car into tight spaces, builds on the active park-assist that Ford has on 12 models.

"The original Ford Edge offered customers in North America a fresh, compelling choice for an accommodating, efficient and safe medium utility vehicle," Joe Hinrichs, Ford's president of the Americas, said in a statement. "The next-generation Edge — previewed in the Ford Edge concept — will build on these cornerstones to create a global vehicle with technology to make life easier, and design and craftsmanship to appeal to customers around the globe."

Ford isn't saying when the Edge will hit showrooms, but some in the industry expect it will come in the latter half of 2014.

The Edge concept features a swept-back front grille, redesigned headlamps and ribbon-like taillights. There are no door handles. Premium materials such as leather and copper complement the interior.

The crossover was introduced in 2006. Ford has sold 108,270 Edges through October of this year, up 2.7 percent from the same period in 2012. It's on track to top a previous U.S. sales high, when it sold 130,125 units in 2008.

The five-passenger Edge is important for Ford globally in the growing utility vehicle segment, which accounts for more than 13 million sales a year, nearly 1 in 5 vehicles sold across the world.

"There is no other segment in our industry that is growing like utilities," said Jim Farley, executive vice president of global marketing, sales and service and Lincoln.

Ford will position the Edge, Explorer, Escape/Kuga and EcoSport as its four global SUVs.

The carmaker sees the most growth in China. Utility vehicles are expected to grow there by 115 percent from 2012 to 2017. Farley said Ford's growth there will top 2,000 percent in the period.

Growth of utility vehicles of 39 percent in South America and 27 percent in Europe also is expected over the time period, according to IHS Automotive. The next-generation Edge will be sold in Europe for the first time.

The Ford Edge concept includes adaptive steering that gives high-speed control and makes low-speed moves easier, said Jacques Brent, a Ford group marketing manager. Ford says an obstacle avoidance system can warn drivers of slow-moving vehicles or obstacles up to 600 feet ahead. The system can steer and brake for the driver to avoid a crash.

To help boost fuel economy, the Edge concept features start-stop technology and has active grille shutters and air curtains.



Ford to reveal next-generation Mustang on Dec. 5

On Dec. 5, the all-new Mustang will make its debut in six cities on four continents. The reveal events will take place in Dearborn, New York, Los Angeles, Barcelona, Shanghai and Sydney. (Scott Olson / Getty Images)

Karl Henkel
The Detroit News
Nov 20, 2013

Ford Motor Co.says it will take the wraps off its next-generation Mustang on Dec. 5.

The Dearborn automaker confirmed the vehicle showing at the Los Angeles Auto Show after accidently leaking the big date on the Mustang's official YouTube page earlier on Tuesday.

On Dec. 5, the all-new Mustang will make its debut in six cities on four continents. The reveal events will take place in Dearborn, New York, Los Angeles, Barcelona, Shanghai and Sydney.

It had been widely speculated that Ford would unwrap the new Mustang at the 2014 New York Auto Show in April.

Ford did not give any details on the new Mustang. Jim Farley, Ford's marketing chief, said in a statement that "with a new design and greater refinement, world-class power and performance plus innovative new technologies, Mustang is ready for the next 50 years."

Ford's information leak comes as some of its competitors prepare to show off new models at the Los Angeles Auto Show.

"Certainly, Ford loves to one-up the competition," said Michelle Krebs, auto analyst at Edmunds, in a telephone interview. "When they know another company — most of the time GM — is coming out with some news or have an event, they leverage what they have against it."

General Motors Co. is showing off its new midsize Colorado truck this week.

Ford has been silent on plans for the sixth-generation Mustang, which is expected to debut next year — the Mustang's 50th birthday is in April — though it is expected the new version of the pony car will have Ford Fusion-esque grille, shed a few hundred pounds and get at least one new EcoBoost engine offering.

Raj Nair, Ford's product development chief, was mum about the future of the Mustang last April.

"The thing about refresh rates is they are a key factor in your market share," Nair said, when asked what Ford needed to accomplish with the refreshed Mustang.

But Nair also said Ford isn't going to be too radical to boost sales or make hasty alterations to meet the needs of the soon-to-be European Mustang consumer.

"We've got a very strong idea of what a Mustang is," he said. "That's what Mustang will always be."

Sales of the Mustang aren't what they used to be. Chevrolet's Camaro muscle car has topped the Mustang in annual sales in the U.S. for three consecutive years. The difference is about only 1,400 cars but overall Mustang sales are less than half of what they were in the 1990s.

The reason: more choices and waning interest for the current-generation Mustang, and because fans are well aware the next edition will come soon.

"There's a lot of other choices for those wanting to express themselves, which is the basis of what the Mustang is about," said Jack Nerad, executive analyst at Kelley Blue Book, in an April interview. "The Mustang is a 'Hey, look at me' car, and if there's a new car like the Camaro that's even more 'Hey, look at me,' then that's the one I'm going to buy."

Demand, however, has accelerated to what Ford has called "a critical mass" for markets outside the U.S., particularly in Europe, slated to sell Mustangs for the first time since the 1970s.

Nair in April insisted that opening up Mustang sales to such a large market — Ford already sells the pony car in 30 other markets — won't change the time-tested car.

"It's an American icon, but it's not solely an American passion," Nair said. "There's always regulatory requirements, but relative to the car, a Mustang is a Mustang."


The new retiree: Renovating
and on a spending spree

This generation of retirees has new attitudes about life
after work, including spending that is reshaping your neighbourhood.

Adam Mayers
Nov 19 2013
Toronro Star

Popular myth has it that the retired don't spend money, that they fret and fuss over small purchases and harrumph that everything costs too much anyway.

The chances are just as good that the new generation of retirees is doing the opposite. They are setting up the next phase of their life with a burst of spending and reshaping your neighbourhood. They are eschewing monster homes for renovated and updated bungalows, all on one level, but with the latest upgrades. They have long since ditched the minivan for an SUV with blind-zone and back-up detection systems. They prefer cars at the high end where the sales pitch is more speed and performance and less safety and reliability.

If they end up in a retirement community it had better look like a hotel and come with a spa. At all costs, sales people should avoid words like elderly or senior, referring instead to 'active adult lifestyle communities.'

They are likely also still working.

"The Baby Boom is recreating and redefining retirement," says Thomas Klassen, a political science professor at York University. "They do not see themselves as old, but in their prime. They are going to be active and that includes employment, not just sitting on the couch and watching TV all day."

Klassen's recently published book Retirement in Canada (Oxford University Press, $17.95) looks at the changing nature of retirement and how the trends are influencing family life, employers and politicians as they grapple with changes to the Canada Pension Plan and other entitlements.

Klassen agrees with other commentators that we will likely be working well into our 60s, because we're healthier, living longer and want to stay engaged. This will help bridge the savings gap as we "end up working part-time and retiring part-time," moving back and forth as needed.

Not surprisingly, his book finds older Canadians are among the most well off. Households with members in their 60s are more likely to own their home and have fewer costs associated with their children. Many are at their income peak just before retirement, earning two to three times the average of those in their early 30s.

When it comes to housing, Klassen points to a Conference Board of Canada prediction that half of all housing demand in 2030 will come from consumers beyond retirement age. This is fuelling demand for multi-storey residences and condos. The design of suburbs is changing to include more compact designs and layouts that facilitate walking and biking.

"Developers are marketing this type of residence at middle-class baby boomers wanting to downsize without sacrificing comfort and luxury," Klassen says.


Foreign brands top lists of best
auto resale values; domestics gain

Melissa Burden
The Detroit News
Nov 18, 2013

ALG and Kelley Blue Book on Monday both released awards for vehicles they predict will hold the best resale value in the future. The majority of the awards go to foreign automakers.

ALG, a company that forecasts auto values, found Honda tops for residual value for a mainstream brand and Mercedes-Benz the best premium brand. ALG's rankings predict which brands and vehicles after three years will hold the highest percentage of their original manufacturer's suggested retail price.

"Toyota, Audi and Honda captured the most segment honors due to the consistent high value of all their products," Larry Dominque, president of ALG, said in a statement.

Kelley Blue Book said the Toyota brand has the best expected resale values in its 2014 awards, while the Lexus brand is best for luxury vehicles. Both were tops on the car information company's list for a third straight year. Toyota's predicted residual value — the percentage of its original value after five years of ownership — improved by 2.1 percentage points from last year to 46.1 percent.

Kelley's top 10 cars based on how much of the original price they retain after five years includes five domestic brands, including three from General Motors Co.'s Chevrolet brand. Kelley's list had just one domestic last year. The top 2014 cars are Chevrolet Camaro, Chevrolet Corvette, Chevrolet Silverado 1500, Dodge Challenger, Honda CR-V, Jeep Wrangler, Toyota FJ Cruiser, Toyota Tacoma, Toyota Tundra and Toyota 4Runner.

"The domestics have made great strides in some of the new products they've come out with," said Eric Ibara, Kelley Blue Book's director of residual value consulting, in a telephone interview.

Kelley Blue Book estimates the FJ Cruiser has the highest residual value after five years at 70 percent, while all of the top 10 vehicles have resale values predicted to be higher than 50 percent.

"Consumers sometimes make the mistake of looking for the best price when purchasing a vehicle," Ibara said. "But they don't realize that getting a low price at purchase may not necessarily be the best deal because that vehicle may not hold its value well."

Kelley Blue Book says pickups tend to have the highest average resale value, and plug-in cars have the worst. Various factors affect resale value by region: Four-wheel- or all-wheel-drive vehicles command better resale prices in colder climates. Black or dark-colored cars may not have as high a value in warmer climates.

The average 2014 model will keep about 39.7 percent of its original value after five years, up 1.5 percentage points from last year, Kelley Blue Book says. Still, a $50,000 vehicle today may be worth only about $19,850 after five years.

2014 ALG Residual Value AwardsSubcompact car: Honda Fit
Compact car: Mazda 3
Midsize car: Honda Accord
Full-size car: Toyota Avalon
Sports car: Chevrolet Camaro
Alternative-fuel vehicle: Toyota Prius c
Minivan: Honda Odyssey
Subcompact utility vehicle: Kia Soul
Compact utility vehicle: Honda CR-V
Midsize utility vehicle — 2 row: Hyundai Santa Fe Sport
Midsize utility vehicle — 3 row: Toyota Highlander
Full-size utility vehicle: Toyota Sequoia
Off-road utility vehicle: Toyota FJ Cruiser
Midsize pickup: Toyota Tacoma
Full-size pickup: Toyota Tundra
Premium compact car: Mercedes-Benz CLA-Class
Premium midsize car: Audi A5
Premium full-size car: Audi A6
Premium executive car: Porsche Panamera
Premium sports car: Chevrolet Corvette
Premium compact utility vehicle: Acura RDX
Premium midsize utility vehicle — 2 row: Land Rover Range Rover Sport
Premium midsize utility vehicle — 3 row: Audi Q7
Premium full-size utility vehicle: Toyota Land Cruiser
Source: ALG

Kelley Blue Book 2014 Best Resale Value AwardsSubcompact car: Nissan Versa
Compact car: Subaru Impreza
Sporty compact car: Honda Civic Si
Midsize car: Honda Accord
Full-size car: Toyota Avalon
Entry-level luxury car: Lexus ES 350
Luxury car: Audi A5
High-end luxury car: Lexus LS 460
Sports car: Chevrolet Camaro V-6
High performance car: Chevrolet Corvette
Hybrid/alternative energy car: Lexus ES 300h
Plug-in vehicle: Honda Accord Plug-in Hybrid
Compact SUV/crossover: Jeep Wrangler
Midsize SUV/crossover: Toyota FJ Cruiser
Full-size SUV/crossover: Toyota Sequoia
Luxury compact SUV/crossover: Infiniti QX50
Luxury midsize SUV/crossover: Lexus GX 460
Luxury full-size SUV/crossover: Lexus LX 570
Hybrid SUV/crossover: Lexus RX 450h
Midsize pickup: Toyota Tacoma
Full-size pickup: Toyota Tundra
Minivan/van: Toyota Sienna
Source: Kelley Blue Book


Ford's concept to echo
next-generation Edge

U.S. Edge sales have grown in each of the last three years, and sales this year through October are running about 3 percent higher than during the same period in 2012. (Ford Motor Co.)

Karl Henkel
The Detroit News
Nov 17, 2013

Ford Motor Co. will next week show a concept of its next-generation Edge midsize crossover, a made-for-the-Americas vehicle that the Dearborn automaker is also rolling out in many key global markets.

U.S. sales have remained relatively steady since the vehicle's debut in late 2006, and sales volumes are expected to continue to grow in markets like China, Russia and Europe in the next few years. In many markets the Edge will be a larger, complementary option to Ford's smaller crossovers — the EcoSport subcompact and the Escape or Kuga compact, which still will account for a majority of crossover sales.

"The concept will show how Ford will position this vehicle," said Dave Sullivan, an auto analyst at AutoPacific Inc., in a telephone interview. "They have a lot of brand equity in the Edge name."

Though technically a concept, the Edge shown at next week's LA Auto Show won't change much before its U.S. debut in showrooms during the latter half of 2014. The redesigned Edge will come with at least one new EcoBoost engine option and a bolder grille; the current Mazda platform will be dropped in favor of Ford's global midsize platform.

Some new design cues — courtesy of a photo that Ford accidentally leaked in a presentation for the Deutsche Bank Global Auto Industry Conference in January — indicate the new Edge will have more sweeping headlights, similar to those on the new Fusion.

Ford has only confirmed the existence of the next-generation Edge, but has not discussed details.

This much is known: The Edge will continue to be produced at Ford's Oakville Assembly Plant in Ontario, where Ford recently made a $700 million investment. The next-generation Edge will be built alongside the Lincoln MKX, which will be revamped and is scheduled to debut in early 2015.

Analysts say the current Edge is bordering on being outdated; since its introduction in late 2006, it has had one face-lift and still offers only one EcoBoost engine option — Ford's 2-liter. That will change as Ford's EcoBoost engine lineup evolves, and it plans to offer more of the turbocharged engines as standard options throughout its vehicle lineup.

Because the Edge shares a platform with the Fusion — which has a hybrid powertrain offering — some speculate Ford could one day offer a hybrid Edge. The Dearborn automaker previously had a hybrid Escape compact crossover, but eliminated that option when it introduced its compact hybrid C-Max last year.

U.S. Edge sales have grown in each of the last three years, and sales this year through October are running about 3 percent higher than during the same period in 2012. U.S. Edge sales could surpass 130,000 this year, the first time that will have happened since 2007, the first full year of Edge sales.

But sales may flatten as the Edge becomes a tougher sell because of competition from other automakers and even from some of Ford's other crossovers, Sullivan said. The Edge has two rows of seats — just like the smaller Escape — and Ford has three other crossovers in the Flex, Explorer and Expedition.

"It's really tough to sell an Edge right now," Sullivan said.

Remaining a two-row crossover could constrain sales growth in global markets, too, where Ford offers similarly sized vehicles, like the more premium S-Max in Europe.


Political leaders silent on Ontario's manufacturing woes: Walkom

The H.J. Heinz Co.'s decision to close its Leamington plant is the latest blow to the food manufacturing sector in Ontario, costing 740 jobs.

The Leamington Heinz ketchup plant
is just the latest to bite the dust.

November 16, 2013
Thomas Walkom
Toronto Star

Can manufacturing survive in Ontario? A few years ago, this would have seemed an absurd question. Now it is less so.

Certainly, workers are having a rough time. Thursday's announcement that the H.J. Heinz Co. will close its Leamington tomato-processing plant, at a cost of 740 full-time jobs, is just the latest piece of bad news.

The Heinz shutdown was reported widely. So was the recent decision by U.S. Steel to shut its Hamilton blast furnace.

But other Ontario manufacturers have quietly closed their doors without receiving much national attention.

Thus Delhi and Dunnville lost their Bick's pickle plants in 2011. The American owner, J.M. Smucker, had decided to consolidate production in the U.S.

That followed a decision by Kraft Foods to shut canning plants in the Niagara and London areas, in order to move production to China.

And that in turn followed Hershey's 2007 decision to shutter its Smiths Falls chocolate plant in eastern Ontario. That production went to Mexico and the U.S.

In a country where 1.3 million are already unemployed, these shutdowns may not stand out. The Bick's plant closings, for instance, cost only 150 jobs.

But for the communities involved, the decision to close a manufacturing plant can be devastating.

In Leamington, Heinz is not only the town's major employer. It also provides a market for area tomato farmers.

For Ontario, all of this is part of a wrenching change that began 24 years ago. Until Canada entered into its 1989 free trade deal with the U.S., tariff-protected manufacturers had thrived in big cities and small towns alike.

But free trade changed all of that. Entire sectors collapsed, as U.S.-owned companies shifted production south of the border.

That trend accelerated, first when the North American Free Trade Agreement brought low-wage Mexico into the mix and finally when worldwide trade liberalization shifted manufacturing to China.

The current economic slump has only aggravated an already desperate situation. Multinational companies are under pressure to cut costs. At the same time, the high loonie makes branch-plant operations in Canada more expensive.

None of this means that manufacturing in Ontario is dead. Statistics Canada figures show that manufacturing output in the province has finally recovered from the depths of the recession.

Still, the outlook remains gloomy. Food processing, the second most important manufacturing sector in Ontario, is particularly vulnerable. That's the message from Heinz, Kraft and Bick's.

Even the relatively buoyant automakers continue to rationalize their operations worldwide. General Motors has decided to postpone closing a crucial Oshawa assembly line. But the respite is only for two years.

Yet with one exception, the political response to the death of manufacturing has been curiously passive. That exception is the auto sector where both the free-market federal Conservatives and the more interventionist Ontario Liberals have teamed up to shower U.S. car companies with bailouts and cheap loans — with some effect.

Otherwise, political leaders do and say little. Ontario Premier Kathleen Wynne took time to talk about Toronto Mayor Rob Ford on Thursday. But until pressed the next day, she said nothing about Leamington.

From Ottawa too came silence. For Prime Minister Stephen Harper, this is logical. His Conservatives promote free trade, regardless of the consequences.

Yet Liberal leader Justin Trudeau, who talks incessantly of helping the middle class, also had nothing to say. Nor did New Democratic Party Leader Tom Mulcair, a self-styled champion of working families.

Standard economic theory says that the market will work everything out — that laid-off manufacturing workers will, eventually, end up doing something else.

And perhaps they will. Former chocolate hub Smiths Falls hopes to attract one of the new medical marijuana factories authorized by Harper's government. Maybe marijuana processing will become one of Ontario's leading industries.

For a while anyway. Canada has a free trade treaty with Colombia too.


Union vote won't affect VW plans

Erik Schelzig
Associated Press
Nov 15, 2013

Nashville, Tenn. — A top Volkswagen labor official says a pending decision about union representation for workers at the automaker's lone U.S. plant will have no bearing on whether the company will decide to add the production of another vehicle there.

The world's third-largest automaker, which is mulling whether to make a new SUV in Mexico or Tennessee, shocked Southern union foes by engaging in talks with the United Auto Workers about creating a German-style "works council" at the Chattanooga, Tenn., plant.

Southern politicians say they fear a successful UAW organization of the Volkswagen plant would hurt the region's ability to attract future investment, and that it could lead to the spread of organized labor to other foreign car makers.

But labor leaders like Bernd Osterloh, head of the Volkswagen's global works councils and a member of the company's supervisory board, stress that the Chattanooga plant is alone among major Volkswagen facilities around the globe in that it does not have formal worker representation.

Osterloh visited the plant Thursday and later met with Republican Gov. Bill Haslam in Nashville. In his only U.S. interview, Osterloh told The Associated Press that while the company's dedication to "co-determination" supports the creation of works councils at all its plants, market forces will decide whether the Chattanooga plant is expanded.

"Those two things have nothing to do with each other," Osterloh said during the interview, which was conducted in German. "The decision about a vehicle will always be made along economic and employment policy lines. It has absolutely nothing to do with the whole topic about whether there is a union there or not."

Labor representatives, who make up half of the Wolfsburg, Germany-based automaker's supervisory board, have pressured VW management to enter discussions about union representation at the Chattanooga plant because U.S. law would require a works council to be created through an established union.

In Germany, wages are bargained through the union, while works councils negotiate plant-specific matters such as job security and working conditions for both blue and white collar employees.

"It's important to note that the issue for us is works councils, not unions," Osterloh said. "And your law says if I want to transfer authority to a works council, I need to work with a union."

The UAW has said it has collected signatures from a majority of workers at the plant, meaning Volkswagen could recognize the union without a formal vote. Opponents of the UAW, including Haslam and U.S. Sen. Bob Corker, R-Tenn., have called for a secret ballot.

Osterloh said he takes no position on whether the company should automatically recognize the union, and that it's up to management to decide whether to require a vote.

Volkswagen is led by its board, and not by politicians," he said. "The board will certainly make the right decision."

Corker, a former Chattanooga mayor, has been among the most vocal critics of unionization efforts at the plant. He has urged Volkswagen to abandon talks with the UAW, suggesting the company would become a "laughingstock" if it welcomed the union into the plant.

Osterloh shrugged off Corker's comments, and stressed that it's up to the workers at the plant to decide whether to be organized and by whom.

Osterloh said VW's decision to build the plant in Tennessee wasn't an effort to break with the company's close cooperation between workers and management.

"Volkswagen considers its corporate culture of works councils a competitive advantage," he said.


Ford asks Rob Ford to stop using trademarked blue oval logo

Mayor Rob Ford autographs T-shirts made by Ford Nation supporters after bobbleheads of his likeness that were sold to raise funds for the United Way sold out.

Ford Motor Co., the second-largest U.S. automaker, said it will protect its Ford script and oval logo from use by supporters of embattled Toronto Mayor Rob Ford.

Bloomberg News
November 14, 2013

Ford Motor Co., the second-largest U.S. automaker, said it will protect its script and oval logo from use by supporters of embattled Toronto Mayor Rob Ford.

Rob Ford signed shirts emblazoned with "Ford Nation" incorporating the automaker's logo at a United Way charity event on Tuesday. The mayor said for the first time today he bought illegal drugs while in office after admitting last week to using crack cocaine and being drunk in public.

"Ford did not grant permission for use of its logo," Jay Cooney, a company spokesman, said today by telephone. "We view it as an unauthorized use of our trademark and have asked it to be stopped."

Ford reclaimed control of its logo last year after using it and other assets as collateral to borrow $23.4 billion in 2006 that allowed the company to weather the global financial crisis.

The Dearborn, Michigan-based company regained control after Moody's Investors Service became the second major ratings company to upgrade the carmaker to investment grade.

Rob Ford's revelation today that he purchased illegal drugs while in office came amid questioning at a city hall meeting in which a majority of city councilors asked him to take a leave of absence to address his "challenges."


2015 Lincoln MKC separates
itself from Ford pack

The all-new 2015 Lincoln MKC (Ford)

Karl Henkel
The Detroit News

If it looks like a Ford and drives like a Ford, history suggests it may actually be a Lincoln.

But Lincoln's newest offering, the MKC concept crossover, will share little with the Escape, the similarly sized Ford model with which it shares a platform. The MKC will have a new engine option that, for now, will be exclusive to Lincoln. And it will include a handful of technology features that make it an instant competitor in the luxury compact-crossover segment.

"Part of the problem when you looked at what Lincolns have been, it was very hard to tell them apart from Fords," said Dave Sullivan, an auto analyst at AutoPacific Inc. "The MKC is very athletic. The seating positions are different, the roof is different, it's wider. It is not going to be mistaken for the Escape."

The 2015 MKC, which can be configured and priced online beginning next month before hitting dealer lots by next summer, is the second of four all-new vehicles for Ford Motor Co.'s struggling Lincoln brand.

The MKC follows the MKZ midsize sedan, which debuted earlier this year after a four-month production delay. In recent months, MKZ sales have soared, and Lincoln officials are even more hopeful about the MKC, which enters a segment that has grown 25 percent this year and 200 percent since 2009.

"The timing is right for a vehicle in this segment," said Michelle Krebs, a senior analyst at Edmunds.com. "They're getting into a segment that's not heavily populated and is probably going to grow."

The MKC will be "the best example of Lincoln's sweeping grille," said Max Wolff, Lincoln's design director. The crossover will also feature a wrap-around lift gate that encompasses the entire taillight. There will be an optional panoramic, all-glass roof. And inside, leather, wood trim and an all-new leather-wrapped steering wheel accentuate the design enhancements.

The MKC will be manufactured at Ford's Louisville Assembly Plant, alongside the Escape.

Annual U.S. sales should be in the 30,000 range once production is up and running, according to analysts.

Competitors include the Mercedes-Benz GLK, BMW X3, Audi Q5, Acura RDX and Volvo XC60. And analysts expect Lexus and Cadillac will soon have offerings in the segment.

The MKC will have a starting price of $33,995 — including destination charges — the lowest in the segment.

Many past Lincoln vehicles have taken cues from Fords, especially when it came to engines and technology.

But starting with the MKZ's push-button shift — the shift lever is replaced by a column of buttons next to the steering wheel — Lincoln officials have pushed for more unique features.

The MKC will be the first Ford or Lincoln with an optional 2.3-liter EcoBoost engine; it's available only on an all-wheel drive version.

The sixth member of the EcoBoost family, the 2.3-liter will produce 275 horsepower and 300 pound-feet of torque.

The standard engine, available on both front-wheel drive and all-wheel drive versions, is Ford's 2-liter EcoBoost, making the MKC the first Ford or Lincoln offered with only turbocharged engines.

The new concept crossover will come with active grille shutters to improve fuel efficiency on the highway. The shutters close when at constant, high speeds, providing better aerodynamics.

Ford did not provide fuel economy projections for the MKC, though it is expected to compete with the Acura RDX. An all-wheel drive RDX, when equipped with a 3.5-liter V-6 engine, gets an Environmental Protection Agency-certified 27 miles per gallon highway.

The new MKC will be loaded with new, Lincoln-first technology.

The MKC will offer approach detection, which will sense when an owner is near the vehicle and respond by illuminating "welcome mats" in the shape of the Lincoln logo on the ground next to both front doors. Headlamps, tail lamps and door handles also will light up.

The MKC will be the first Lincoln to utilize a MyLincoln Mobile smartphone app which allows owners to start, lock, unlock and locate the vehicle, and set interior temperature gauges.

Also available will be a new park-out assist technology. It is similar to Ford's active park assist, which helps guide drivers into tight parallel parking situations. Park-out assist will help steer drivers out of tight parking spaces.

"It's very important for Lincoln to lead in these different technologies," Krebs said.

The MKC will also come standard with Ford's Sync voice-activation technology and MyLincoln Touch infotainment system.

Lincoln's reinvention, which started with the MKZ, will sink or swim because of decisions and execution over the next decade; the success won't be predicated solely on the MKZ or MKC.

But after a bumpy MKZ launch plagued by assembly-line quality issues and another subpar sales year in 2013 for the brand as a whole, the launch of the MKC — which will come on the heels of Lincoln's introduction to the Chinese market in late 2014 — needs to be seamless.

With so many unique features on a low-volume vehicle made on the same assembly line as the Escape — which itself was afflicted with multiple recalls — there's plenty of concern about quality. Sullivan cited the wrap-around lift gate as one possible trouble spot.

"The tolerances in that vehicle for gaps and door alignment and the lift gate, they seem to be tighter than any Ford product today," he said. "If there is ever an issue I see coming, it's fitting that lift gate and making it look perfect."

Lincoln MKC
Lincoln will enter the growing small luxury-crossover segment with its new 2015 MKC.
Available: Summer 2014
Starting price: $33,995 (includes destination)
Engine options: 2-liter EcoBoost, 240 horsepower, 270 pound-feet of torque (FWD or AWD); 2.3-liter EcoBoost, 275 horsepower, 300 pound-feet of torque (AWD)
Fuel efficiency: To be announced.
Technology (standard and optional): MyLincoln Touch, continuously controlled damping, approach detection, park-out assist, lane-keeping system, blind spot information system, THX II Certified Audio System.
Source: Lincoln Motor Co.


Tory election document
undermines Ontario
unions, critics say

A Tory election document leaked to the Star is
further proof party leader Tim Hudak is bent
on undermining unions, critics say

Richard J. Brennan
Toronto Star
Nov 12, 2013

A secret Progressive Conservative election document leaked to the Star is further proof party leader Tim Hudak is bent on undermining unions, which would drive down wages and hurt the economy, critics charge.

Politicians and labour officials alike on Monday were quick to condemn the leader's detailed election calendar, prepared by the Tories in the event the minority Liberal government had fallen on its budget forcing an election last spring.

One Tory source, who asked not be identified in order, played down the embarrassing campaign breach, denying it was a final draft even though each campaign day had a theme, time and location.

A dominant theme was labour, including so-called worker's choice, which means allowing unionized employees to opt out of paying dues.

"This is confirmation the centrepiece of the Hudak PC platform is their plan to kill jobs and drive down wages," Labour Minister Yasir Naqvi said in an email.

"The leak of internal documents shows even some PCs are uncomfortable with Tim Hudak's reckless plan. This race-to-the-bottom PC approach only means one thing for Ontario — lower wages for every worker in this province."

Many critics have compared Hudak's approach to the right-to-work policies in the United States, where they say unions have been vilified and wages driven down. As recently as Friday, Tory MPP Monte McNaughton (Lambton—Kent—Middlesex) held a press conference to sing the praises of states that have loosened labour laws.

Ontario Public Service Employees Union president Warren (Smokey) Thomas said he hopes "Ontario would reject this kind of negative thinking."

"It just confirmed for me that he doesn't have the best interest of working people at heart," Thomas said.

The Conservatives' policy on weakening unions is one of 14 platform proposals put forward, but Tory MPPs have declined to say which ones they would actually campaign on.

Just seven days into the campaign, according to the calendar, Hudak was to head to Windsor — a Liberal and NDP stronghold — with the message "Fixing Labour Laws" to be explained at a non-union factory.

The Tories want to kill the Rand Formula, which requires all employees in a closed union shop to pay dues whether they join or not. Coincidentally, Supreme Court of Canada Justice Ivan Rand introduced the formula in 1946 as a result of the 1945 Ford strike in Windsor.

NDP MPP Gilles Bisson said Hudak seems to be picking a fight with labour for ideological reasons.

"For the Conservatives to pick a fight essentially with the working class and say, 'We need to move to some other system such as they have in the United States,' I think just tells us volumes about who this guy really is," Bisson said.

"It is an attack on the working class."

Sid Ryan, president of the Ontario Federation of Labour, noted that at Tories' policy convention in September almost half of the PC delegates didn't agree with the anti-union agenda.

"His strategy of going after workers in the province is a strategy that (former Tory) premier Mike Harris used," he said, predicting it would only galvanize union opposition.

Ryan said the Tories' hatred for the union-backed Working Families coalition appears to behind the initiative.

The coalition, which includes the Ontario Secondary School Teachers' Federation, the Elementary Teachers' Federation of Ontario, the Ontario English Catholic Teachers Association, and the Ontario Nurses' Association, spent $1.2 million on ads attacking Hudak during the 2011 election campaign.

Patrick Dillon, business manager and secretary treasurer of the Provincial Building and Construction Trades Council of Ontario, who helped launch Working Families a decade ago, said PC proposal was troubling enough "but you always sort of hope they won't enact it."

"This leaked document is something that is probably real and it is very, very troubling for all Ontarians, not just unionized workers," said Dillon.

"To me it is just not the way you build a society. It is bad feeling in the pit of the stomach to think there are people who would seek leadership based on what they can do to people, not what they can do for people."


Unifor Local 584
Barb Morrison President & Sandy Knight Vice-President
at Swearing in Ceremony November 10, 2013

Dave Champagne performs his last
duties as President swearing in
Barb Morrison and Sandy Knight.

(Gary Rumbodlt, Sandy Knight,
Ken Donaldson, Dave Champagne, Barb Morrison,
Michelle Hilts and Arvin Gangwar).


Ford sales top 1M for first
time in Asia-Pacific region

Karl Henkel
The Detroit News
Novvember 10, 2013

Ford Motor Co. said that sales in its Asia-Pacific region topped 1 million sales for the first time ever, sparked mostly by big sales gains in China.

The Dearborn automaker said sales in China rose 55 percent in October and are now up 52 percent during the first 10 months of 2013. Ford this year has now sold 741,818 vehicles in China, the world's largest auto market, and could come close to topping the 1-million sales mark by the end of December.

By comparison, rival General Motors Co. has sold 2.59 million vehicles in China through October and could sell more than 3 million this year.

Sales of Ford's Focus compact car accounted for more than 40 percent of the automaker's 93,969 October sales in that country.

GM earlier on Tuesday said that it and its joint ventures in China saw a 12.2 percent sales increase in October. The automaker said it sold 282,446 vehicles in China last month, setting a new October record.

GM posted a 15.3 percent sales jump for Buicks, and an 8 percent increase for Chevrolets. Wuling brand sales rose 14.2 percent and Baojun sales fell 27 percent year-over-year. Cadillac sales in China soared 68.7 percent to 4,202 vehicles in October.



A UAW first: Nominee Dennis Williams hasn't had auto plant job

Bryce G. Hoffman and Karl Henkel
November 8, 2013
Detroit News

Union leaders nominated Dennis Williams, who has never built a car, to become the next president of the United Auto Workers and reduced the number of vice presidents from four to three, in moves that highlight the changes sweeping through Solidarity House.

If elected by delegates at the UAW's next annual convention in Detroit — and they have never failed to elect the official candidate for president — Williams, 60, will succeed President Bob King when his term ends in June.

It would be the first time in the union's history that the president was someone who has not worked in an automobile factory. Williams was building tractors for Case when he joined the UAW in 1977. And it marks a major shift in the UAW's emphasis toward the foreign automakers operating in the South that many see as key to the union's future.

"Historically, every president, they all came up through auto plants," said Mike Smith, a UAW archivist at the Walter P. Reuther Library at Wayne State University. "But today, it's a different ballgame."

And it is a game the UAW is in danger of losing.

A union that boasted more than 1.5 million dues-paying members in 1979 now has just 382,513 — and only about 40 percent of those work in the auto industry. The rest include nurses, casino workers and graduate students. They make a lot less than the men and women who toil in the nation's automobile factories, and they pay a lot less in union dues.

Today, some locals are struggling to keep the lights on in their union halls. That helps explain why the UAW also announced Thursday that it is reducing the number of vice presidents from four to three.

"The need is not as great today," Williams acknowledged.

At a meeting in Dearborn on Thursday, the union leaders tapped Gary Casteel, director of UAW Region 8, to replace Williams as the union's secretary-treasurer.

Norwood Jewell, director of UAW Region 1C, was nominated to replace both Joe Ashton and General Holiefield, the vice presidents in charge of the union's General Motors and Chrysler divisions, respectively, who are retiring. Cindy Estrada and James "Jimmy" Settles Jr. were nominated to retain their positions as UAW vice presidents. Settles now handles Ford Motor Co. and Estrada now is in charge of parts suppliers and the public employees sector.

Union leaders said they would decide in June how to divide responsibilities among the three remaining vice presidents.

Working with 'transplants'
The future,experts say, lies in organizing workers at auto plants run by companies such as Volkswagen AG and Nissan Motor Co. in places like Chattanooga, Tenn., and Canton, Miss. Williams has played a prominent role in the UAW's so far unsuccessful effort to organize workers at these "transplant" factories since he was elected secretary-treasurer of the UAW in 2010.

"His experience with the transplants will be critical for where the UAW would like to go," said labor expert Harley Shaiken, a professor at the University of California-Berkeley. "There's a lot of things unprecedented about his candidacy, but as we've seen in the last five years, some things call for unprecedented measures."

Those last five years were tough for General Motors Co., Ford Motor Co. and Chrysler Group LLC. All three Detroit automakers were pushed to the brink of bankruptcy. GM and Chrysler went over the edge and were brought back only by a taxpayer bailout that required the UAW to make painful concessions.

The fact that Williams was not directly involved makes some auto executives nervous. But Shaiken says they should not be.

"Dennis Williams is very familiar with the issues the union faced in that truly traumatic period," he said. "That was a decisive, defining period. He was on the executive board for all of that."

Williams is a former Marine whose job as a salvage welder at Case led first to a seat on the plant bargaining committee, then chairmanship of UAW Local 806 in Illinois.

By 1988, he was an international representative assigned to the UAW's national organizing department. One of his first assignments was negotiating the contract at Mitsubishi Motors' plant in Normal, Ill. It was one of the only foreign-owned plants ever organized by the union.

In 1998, Williams was appointed to the national bargaining department. Three years later, he became director of UAW Region 4, overseeing nine north-central states, including Wisconsin and Illinois. He negotiated painful concessionary contracts with Caterpillar Inc. that included the union's first voluntary employee beneficiary association, or VEBA, to take over responsibility for retiree health care from the company.

The Caterpillar trust ran out of money, but similar deals were later negotiated with GM, Ford and Chrysler.

Williams was back at the bargaining table with Caterpillar in 2011, the "toughest nut the UAW has had to deal with in the last 20 years, aside from the bankruptcies of GM and Chrysler," according to Smith.

Ready to lead
Williams, who said Thursday he will serve one term as UAW president, said he is ready to lead the union.

"You don't have to be an expert. You have to build yourself around a lot of knowledge. I'm not ever concerned about going to the bargaining table," he told reporters Thursday. "I'm pretty frank and upfront. I do what I say. I think people will find my demeanor very businesslike."

At the same time, Williams said he is "not afraid of confrontation."

That is exactly the sort of talk that may make auto execs uncomfortable. It gives them flashbacks to the bad old days of wildcat strikes and work slowdowns. But labor expert Arthur Wheaton of Cornell University said those days are gone for good.

"The UAW is not going back to an adversarial leader. Williams is going to be more businesslike and approachable," he told The Detroit News. "The UAW has learned that banging your fists on the table is not the way to be successful in the long run."

King also sought to downplay concerns about Williams' experience Thursday. "Dennis was an integral part of the 2011 bargaining," he told reporters. "He's got relationships already."


Ford's Focus ST lures new crowd: the young and the affluent

The Ford Focus ST ,has a starting price of $23,625. chosen. Nearly 40 percent of ST buyers have chosen the most expensive interior package, which costs an extra $4,800. (Ford)

Karl Henkel
The Detroit News
Nov 7, 2013

Ford Motor Co.'s Focus ST may appear to be a budget sports car, but the peppy compact has attracted an affluent young male crowd to Ford showrooms.

Those cash-flush buyers are coming to the Dearborn automaker from competing brands and could be a boon for Ford — and possibly the automaker's struggling Lincoln luxury brand — years from now.

At the very least, the car already is drawing non-Ford drivers to dealerships, regardless of whether they buy the Focus ST or another Blue Oval nameplate.

"That's the whole point of the Focus ST," said Seema Bardwaj, Focus marketing manager. "It's a halo product."

The average annual salary for a Focus ST buyer — there are more than 11,000 since the car went on sale in summer 2012 — is $127,000, nearly double the income of the average non-ST Focus buyer. That's also $20,000 more in annual income than the average buyer over the entire Ford brand average.

The car, with Ford's 2-liter EcoBoost engine with 252 horsepower and 270 pound-feet of torque, has a starting price of $23,625. That balloons when options like Recaro leather seats are chosen. Nearly 40 percent of ST buyers get the highest interior package for an extra $4,800.

"It's not about the size of the car or how expensive it is," said Michelle Krebs, a senior analyst at Edmunds.com, of the younger generation's interest. "It's about performance and what the car can do for them."

Most ST buyers — 86 percent — are men who find their way to Ford dealerships after owning brands like Volkswagen, Mazda and Subaru.

Nearly one-third of Focus ST drivers are under the age of 35 compared to one-fifth for non-ST Focus buyers. That means ST consumers are likely to buy a handful of cars during the rest of their lifetime — potentially from Ford — but only if the automaker offers other vehicles that meet performance requirements and adapt to their changing needs.

"They have lured them in, but now they need to find out how they are going to keep them in the fold," Krebs said. "They could just go back and choose the cool new thing."


Ford getting back into
marine engine business

Karl Henkel
The Detroit News
Nov 6, 2013

Ford Motor Co. is re-entering the marine engine business for the first time in more than 20 years.

The Dearborn automaker's 6.2-liter V-8 engines — which are staples in Ford's Raptor off-road pickup and Super Duty trucks — will be available on ski boats.

Ford announced the partnership with Indmar Marine Engines, the world's largest privately held manufacturer of gasoline inboard marine engines, at the 2013 Specialty Equipment Market Association Show in Las Vegas on Tuesday.

"It gets us back into a segment that we used to do well in," said Jamy Hall, president and CEO for Ford Component Sales, a Ford Motor wholly owned subsidiary, in a telephone interview. "We kind of assessed the market, and as we're growing our component sales company, we thought this would be a great opportunity."

Many automakers have been a part of the marine engine business at some point in their history. Former Ford president Lee Iacocca, in an executive memo written in the 1970s, said it did not make sense for the automaker to remain in the marine engine business unless major changes were made and the sales volume increased significantly, a Ford archivist said Tuesday.

Ford will provide Indmar with a specific number of engines — Hall said Ford has an idea of the volumes Indmar sells and has the production capacity to account for that — but did not disclose a target number of marine-bound engines.

And Indmar representative could not immediately be reached for comment Tuesday.

Ford said Indmar will offer three models of varying horsepower and torque, the latter which is most necessary for high-performance watercraft.

"Our sport has evolved, and with heavier boats, bigger wakes and larger ballast and passenger capacity, the demand on the engine is even greater," said Chuck Rowe, president of Indmar Marine Engines, in a statement. "We looked at the total market, and have spent a great deal of time, research and development dollars to find an engine that will best fit the demands of watersports."


Union battles loom after Tories
push to overhaul labour laws

Nov 4, 2013
Josh Wingrove
The Globe and Mail

The Conservative Party's brewing battle with Canadian unions is taking shape, as party delegates have backed a push to overhaul labour laws with a series of new policies – including one backed by a cabinet minister pledging to "alter the dynamics" of federal collective bargaining.

While union members protested outside the party's convention in Calgary on Saturday, Conservative delegates voted to change party policy on a range of motions that would push for federal employees to be switched to a different pension plan, claw back federal employees' benefits, increase requirements on unions to report how they spend their money and allow union members to opt out in part or altogether.

Altogether, six labour-related motions were passed on Saturday, the final day of the governing Conservative Party's biannual convention, and are now party policy. It's not yet clear if the Conservative government will enact all of them, though the government has already revealed plans for a sweeping overhaul of federal bargaining.

One of the motions – to claw back public-sector pay and benefits to private-sector standards – was backed by Treasury Board President Tony Clement, the federal government's point man on reaching contracts with its civil service.

"This is exactly our position going into the next round of bargaining. For too long, there has been this major gap in wages and benefits between the public and the private sector, where the public sector is considerably more than the private sector norms. This is not sustainable, it's not right, it's not conservative and it's not in the public interest," Mr. Clement said to cheers from the convention Saturday, urging delegates to back the motion, which they did.

Earlier, he'd warned of tough negotiations ahead.

"I'm here as the chief negotiator with the public-sector unions. I can tell you we are taking a position that will respect taxpayers well into the future, and I believe are part-and-parcel with our ability to have balanced budgets for the next generation, not just for the next couple of years. So that means taking a position that will alter the dynamics of collective bargaining as it has been done in this country over the last few decades," Mr. Clement said in Calgary on Friday, after he'd sparred on Twitter with Robyn Benson, the National President for the Public Service Alliance of Canada. After the Conservative omnibus budget bill included sweeping changes to federal labour laws, Ms. Benson warned Mr. Clement wants to take away negotiated rights. He replied by telling Ms. Benson online that she "takes 'union boss' to a whole new level."

In Calgary, he invoked taxpayers' rights in signalling a battle with organized labour.

"I'm confident this is in the interest of Canadians and taxpayers. I'm confident they are behind us on this. And we're not here to buy labour peace through caving in to every single public-sector union boss's demands. We're not here to do that. We're here to represent the taxpayer. We're here to represent the public interest, and I will do so in a way I think is fair and reasonable, of course, and in a way which respects good faith bargaining. But let there be no question – I will be here protecting the public interest," he said.

NDP MP Peter Julian, who was attending the convention as an observer, said the union attacks are an obvious attempt to distract from the Senate spending scandal.

"And I don't think that's going to work – Canadians expect answers to the questions they're asking about Mr. Harper's involvement in all of these scandals. And I don't think Canadians will be distracted by this attempt to try to vilify working people," Mr. Julian said in an interview. He said there's "no doubt" collective bargaining delivers benefits to union members across Canada. "So for the government to try to attack those folks, whether it's Tony Clement or anyone else, undermines what I think is a pretty fundamental Canadian value."

The union measures presented to delegates had some overlap, but were all passed, making union rules the subject to see the most amendments.

One motion called on the government to ensure public-sector benefits and pensions are "comparable to those available to similar employees in the private sector," and "made comparable" if they are not. This was the motion backed by Mr. Clement.

Another policy motion called on government to switch its civil servants to defined contribution pension plans, rather than defined benefit plans, to "bring public-sector pensions in line with Canadian norms."

A third called for "full, transparent annual financial reporting" for unions for which dues are tax-deductible. The same motion also called on Ottawa to bring in a law requiring federal unions to "explicitly detail" what money it uses for political donations or activism, and allow members to opt out of paying dues to support political activism.

A fourth calls on the government to "prevent mandatory dues collected by unions from being diverted to fund political causes unrelated to workplace needs."

A fifth amended party policy to state a belief that mandatory union membership – and mandatory dues – "limit the economic freedom of Canadians."

And a sixth would allow optional union membership, including optional membership in students' unions.


Ford top Canadian seller,
GM beats Chrysler in October

November 2, 2013

Ford Motor Co was the top selling automaker in Canada in October and year to date, while General Motors Co' outsold Chrysler in Canada last month, with sales at both Ford and GM jumping 10 percent.

Ford sales rose to 22,647 vehicles, up from 20,565 in October 2012, according to company data released on Friday. The maker of the Ford Escape and Explorer said it was also its best sales month in more than 15 years.

Cars sales slumped 10.2 percent to 4,428 units, while truck sales climbed 16.5 percent to 18,219.

Total sales are up 3.3 percent at Ford so far this year.

GM Canada sold 20,503 vehicles last month, bolstered in part by healthy sales of GM's Cadillac and Buick vehicles. Car sales were off 0.2 percent in October from a year earlier at 6,169 units as healthy retail sales were offset by lower fleet sales. Truck sales climbed 14.9 percent to 14,334 units.

In the year to date, GM Canada sales are up 2.9 percent.

Chrysler Canada reported its best October sales level since 2002 on Friday, bolstered by healthy growth in truck sales.

The maker of Ram trucks and Dodge Darts sold a total of 18,131 cars and trucks, 3.6 percent more than last October's 17,504. It extended its streak of year-over-year gains to 47 months.

Car sales fell 5.5 percent to 2,546 vehicles in October from a year ago, while truck sales rose 5.2 percent to 15,585 units.

Year-to-date, Chrysler sales are up 6.3 percent.

Canadian sales for Japanese automaker Toyota Motor Corp climbed 2.9 percent to 17,594 cars and trucks. Honda Canada had its best October in 11 years, with sales jumping 14 percent from a year ago to 15,302 vehicles.

In the United States, the 16-day government shutdown in the first half of October seemed to hurt sales, as many automakers reported monthly sales on Friday that missed analysts' expectations.


Provinces reach agreement
on CPP reform conditions

Nov 2, 2013
The Globe and Mail

The provinces are moving closer to a deal to expand the Canada Pension Plan, asking workers and employers to contribute a little more in exchange for richer benefits in retirement.

After a day-long meeting in downtown Toronto on Friday, provincial finance ministers emerged with an agreement on four conditions that would have to be met in any CPP reform: Enhancements would have to be fully funded, have a limited effect on businesses that would have to pay higher rates, improve retirement payouts for the middle class, and protect low-income earners.

"I'm leaving very encouraged that we are going to be able to find something that fits very nicely with our business groups and our labour groups," said PEI Finance Minister Wes Sheridan, one of the chief advocates for a richer CPP.

"Something that Canadians can embrace as something that will see the best savings vehicle in the world right now enhanced," he said.

At the meeting, Mr. Sheridan outlined one possible framework. Under his proposal, those earning between $25,000 to $50,000 per year would pay 1.5 per cent more into CPP, with their employers paying a further 1.5 per cent. The maximum insurable earnings cutoff would rise to $101,000 a year. These changes would be phased in over five years.

The provinces, however, did not reach any consensus on what a CPP enhancement would look like. They only agreed that the matter should be studied further.

Key to making a final deal will be Quebec and Alberta, the two provinces that scuttled a proposed CPP enhancement three years ago.

During a break from Friday's meeting, Quebec Finance Minister Nicolas Marceau said his province now supports an enhancement, at least in theory.

"Quebec is in favour of an enhancement of public pensions," he said. "[It must be] gradual, fully funded and happen only once the Quebec economy is growing more vigorously."

Alberta's Doug Horner, meanwhile, said any pension proposal would have to meet some important conditions.

"If we're going to have a CPP enhancement ... we have to have an understanding it's not going to damage economic growth," he said in an interview.

The hope among provinces pushing for improved CPP is that the ministers can reach an agreement on the matter when they sit down with federal Finance Minister Jim Flaherty in December.

Ottawa has consistently left the door open to CPP enhancement, but expressed concern at its possible effect on companies.

Some business groups, including the Canadian Federation of Independent Business, have argued that the federal government should abandon the idea altogether. They maintain that increasing employers' contributions could lead to job losses.

Ontario Finance Minister Charles Sousa tried to assuage such fears on Friday, saying the provinces would take the effect on business into account before deciding how to structure any enhancement.

"We're not going to advance on a number until we've come to an agreement with employers and employees who will be affected," he said at Queen's Park later in the day.


Ford sees 30% jump in U.S.
October sales for Lincoln

Lincoln introduced the Luxury Uncovered campaign for MKZ on Oct. 9. (Ford)

Craig Trudell
Bloomberg News
Nov 1, 2013

Ford Motor Co., a laggard in the U.S. luxury-auto market, said its Lincoln brand sales rose about 30 percent this month as it introduced new advertising for the revamped MKZ sedan ahead of rivals' holiday promotions.

MKZ led the brand's gains, surging about 70 percent from a year earlier, when Ford was selling down inventory of the previous model, Kevin Cour, Lincoln's sales and service operations manager, said Thursday in a telephone interview. The Dearborn-based company introduced the Luxury Uncovered campaign for MKZ on Oct. 9.

"We are very happy that we got engaged in October versus waiting for Wish List," Lincoln's annual holiday sales event, Cour said. "The campaign is now seeded in the market, and as people begin their purchase consideration, Lincoln can be a bigger part of the conversation."

Lincoln has been a vexing challenge for Chief Executive Officer Alan Mulally, with Ford's namesake brand accounting for almost all of the automaker's sales. The MKZ debuted early this year as the first of four new Lincoln models to be introduced in four years to try to resurrect the line, which trails General Motors Co.'s Cadillac and luxury leaders such as Bayerische Motoren Werke AG's BMW and Daimler AG's Mercedes-Benz.

Mercedes's U.S. luxury sales lead over BMW this year expanded in September to 2,491 vehicles, 215,056 to 212,565. Lincoln deliveries fell 6.3 percent to 59,852 for the period.

BMW has sold the most luxury vehicles in the U.S. the past two years. Toyota Motor Corp.'s Lexus led the previous 11 years.

Election for President



Barb Morrison: 111

Tony Gilmour : 70   

Total Votes Cast: 189
Spoiled Ballots: 8

Thanks to everyone who took
time to come out and vote.



October 23, 2013


Barb Morrison     93    Run-off

Tony Gilmour      52     Run-off

John McCloskey 44  Final 

Total Ballots Cast – 189

50% + 1 needed to be Elected

Spoiled Ballots - 0


4th Annual Retirees
Thanksgiving Food Drive
Took Place

Friday October 11, 2013

Many thanks to you and Local 584 Retirees for hosting a Thanksgiving Food Drive to support the work of the KT.

Through your kind efforts you raised 725 pounds of food and $50.00.

We thank Local 584 for their continued support of the Knights Table.

Annie Bynoe
Executive Director




Knights Table

Link to Brampton Guardian Article


Canadian workplace pensions are under threat. Can we save them?

Rob Carrick
Globe & Mail
October 31, 2013

We can assign blame for the decline of Canada's pension system at a future date.

Right now, we have work to do. Workplace pensions are under threat and we need to act now to ensure their long-term sustainability.

That's the message in an important new book called The Third Rail: Confronting Our Pension Failures, by Jim Leech, head of the Ontario Teachers' Pension Plan, and The Globe and Mail's Jacquie McNish.

The book is a surprisingly accessible read and totally persuasive in its argument that workers, unions, politicians and business need to collaborate on ways to help people better prepare financially for retirement. Most importantly, it offers pragmatic solutions that have worked to solve pension challenges in places such as New Brunswick and Rhode Island.

Here's an edited transcript of a conversation I had about the book this week with Mr. Leech.

Why are pensions the "third rail" [a reference to the deadly electrical power source on subway tracks]?

When we asked people involved in pension reform, "Why have you let the system get into the shape it's in," they said this is an issue that politicians, labour leaders and even business would prefer not to touch because you'll get zapped.

Zapped? How, exactly?

Tough decisions need to be made on tough issues, such as intergenerational fairness and people perhaps being required to save more.

What's the matter with the pension system today?

Ground Zero is the wage earner at $30,000 per year up to $100,000 – this group is not adequately prepared for retirement and the CPP [Canada Pension Plan], GIS [Guaranteed Income Supplement] and Old Age Security [OAS] combination really isn't sufficient to give them the funds required for them to live on. Another issue has been the foolhardy rush from defined benefit to defined contribution plans, which is very counterproductive and goes against the sustainability of retirement security. The third issue is that 60 per cent of Canadian workers are not part of a workplace pension plan.

(Note: A defined benefit plan pays out a pre-set amount of money based on factors like salary and years of service, and it's the employer's obligation to make up any shortfalls in the plan caused by weak investment returns; in a defined contribution plan, pension payments depend entirely on the returns achieved by plan members.)

You say in the book that "for many retirees, personal savings won't be much help" in paying for retirement. Why are we doing such a bad job saving for ourselves?

It's really a question of whether I consume today, or whether I save to consume tomorrow. The allure of that latest iPad is very intoxicating.

Can you outline the risk to taxpayers if retiree income falls short?

Right now, OAS and GIS represent about $36-billion annually, which is approximately the largest single expenditure of the federal government, and it's already expected to triple in the next couple of decades. If in fact we have people who are not able to get by on their current retirement incomes, we're just going to end up increasing OAS and GIS, and that comes right out of the taxpayer's pocket.

There's a sense of fatalism about the decline of defined benefit pension plans, as if they were too good to be true. But you raise a very cogent argument in favour of keeping DB plans – can you lay it out for us?

Defined benefit plans have been able to outperform from an investment perspective over defined contribution plans or RRSPs, and they're far less expensive. Also, longevity risk [the risk of outliving your money] can be pooled in a defined benefit plan. If you're in a defined contribution plan you must save enough money for yourself.

Many corporations see defined benefit pensions as an expensive obligation they would like to eliminate. How can you address their concerns?

We say very clearly that the stereotypical, old school DB plan really doesn't cut it any more. We must turn to some sort of risk sharing plan, where some of the benefits are guaranteed but some are also contingent on the financial wherewithal of the plan. That takes a lot of the risk out for the sponsor.

If we were to move to a shared-risk model, would it apply to existing pension plan members or to new ones?

The way the current pension benefits acts are written, one cannot change the benefits that have already been earned. In the New Brunswick case, what they did to conform to that was to form a whole new genre of plan and have people convert to the plan. Indeed, the risk sharing there does apply to current pensioners. If the plan does not have the wherewithal to make an inflation increase this year, that applies to everybody, including those who have been retired for many years.

Governments don't seem to want to do anything that would annoy retirees because they're such a formidable voting bloc. Can retirees be brought on side?

I think people have to understand the fragility of the system and the fairness, or unfairness, of whether putting 100 per cent of the burden on the next generation is the right way to go.

In the book you say the three pension pillars in Canada are OAS and GIS, the CPP and a combination of personal savings and workplace pensions. On a scale of one to 10, where 10 is best, how would you rank the health of each pillar?

I'd give OAS and GIS very strong marks – 10 out of 10. I'd give the CPP a nine out of 10. I'd give the third pillar a failing grade – a four.

The book endorses the idea of an enhanced CPP to help make up the retirement savings shortfall. Why is the CPP option so attractive?

The CPP already exists, so we're not setting up something that is new. Second, it's universal and it's large enough and has the scale to be able to invest across a diverse set of assets to maximize returns. It's very cost-effective.

What do you hope will come out of writing this book?

We're trying to make things simple to allow the ordinary person to enter into the debate and not be confused by actuaries, accountants or economists. This is a people issue and it needs to be dealt with on that level.

To see a video with Jim Leech and Jacquie McNish, click here.


U.S. Steel ends an era in Hamilton

Greg Keenan
October 30, 2013
Globe and Mail

United States Steel Corp. will permanently cease steel production at its Hamilton mill at the end of the year, ending an era that goes back more than a century.

The blast furnaces at the massive Hamilton Works site have been on what U.S. Steel calls "temporary idle" since late 2010. The permanent closure will leave just a coke-making operation, a cold mill that processes steel from the Nanticoke, Ont., operations and the company's Z-line galvanizing operation, which finishes steel for automotive customers and others.

"Decisions like this are always difficult, but they're necessary to improve the cost structure of our Canadian operations," Mario Longhi, president of U.S. Steel said on a conference call for the company's third-quarter financial results Tuesday.

The permanent end of steel making in what was the cradle of the Canadian steel industry is the latest step in what has been a troubled history for U.S. Steel with the operations of the former Stelco Inc., which it took over in 2007. Each set of negotiations with members of the United Steelworkers union in Hamilton or Nanticoke, Ont., led to lockouts of workers.

The Pittsburgh-based giant's shutdown of both mills during the financial crisis in 2008 led to a protracted legal battle with the federal government, which accused U.S. Steel of breaking promises it had made about investment and steel production.

"We kept hoping it would start up again," said Rolf Gerstenberger, president of local 1005 of the United Steelworkers, which represents about 600 of the 875 employees remaining at the Hamilton operations.

Mr. Gerstenberger noted that slabs made in Hamilton were shipped to the Nanticoke mill in 2006-2007 before the recession hit.

But since the recession, the company has not run at more than 80 per cent of capacity, so "I guess they finally decided they're never going to need our slab capacity," he said.

He said it makes no sense to be closing two million tons of steel-making capacity in Canada when as many as eight million tons are being imported annually.

The permanent closing will affect 47 salaried employees, U.S. Steel spokeswoman Courtney Boone said. About 875 people will remain in the coke making operations and the galvanized line.

The steel maker will take a charge of $225-million (U.S.) in its fourth-quarter results, but the closing will improve costs by about $50-million annually, Mr. Longhi said.

The elimination of steel making in Hamilton also means U.S. Steel can cease operations at two of its oldest and highest-cost coke batteries in Gary, Ind., he added.

Operations in Nanticoke, where about 1,000 people are employed making steel and finishing it in a hot strip mill and pickling line.

The original Steel Company of Canada began making steel in Hamilton in 1892, and was incorporated as Stelco in 1910.

The Stelco purchase was the last of a series of buyouts of major Canadian steel makers in the 2000s that eliminated Canadian ownership of such storied Canadian names as Algoma Steel Inc., Dofasco Inc., and Ipsco Inc.

The U.S. Steel purchase of Stelco came about one year after the Hamilton-based company emerged from a lengthy and bitter trip through bankruptcy protection under the Companies' Creditors Arrangement Act.

The deal that settled the legal battle between U.S. Steel and the government stipulated the company would continue making steel in Canada until at least 2015 and invest $50-million in its operations here.

Earlier this month, U.S. Steel said it was writing down the value of goodwill in its North American flat rolled operations, which includes its Canadian mills, by $1-billion.


Analysts raise target
price on Ford stock

Karl Henkel
The Detroit News
October 27, 2013

A number of analysts on Friday raised the target price on Ford Motor Co. stock following the automaker's better-than-expected third-quarter results, particularly outside North America, where Ford turned a cumulative profit for the first time since the second quarter of 2011.

JP Morgan Chase & Co. upped Ford's target price to $23 from $21; Sterne Agee raised theirs to $21 from $20; and Barclays raised theirs to $20 from $19.

Ford's stock on Thursday momentarily topped $18 for the first time since January 2011; on Friday the stock hovered in the mid-$17 range.

The target price jumps come one day after Ford announced a third-quarter net income was $1.27 billion, or 31 cents per share — down $359 million, or 10 cents per share, from the same period in 2012. But excluding special items, the Dearborn automaker posted a $2.6 billion pretax profit, or 45 cents per share (analysts expected 38 cents), and said its 2013 pre-tax profit would top last year's $8 billion total.

The biggest news came from Ford's three regional operations outside North America, which turned a collective profit for the first time since the second quarter of 2011. Ford's South American region posted a $159 million profit and the Asia-Pacific-Africa region turned a $126 million profit. That helped offset a lower-than-expected $228 million loss in Europe.

"We can see a clear path to a return to solid profitability in South America; Europe losses are narrowing sooner than expected as management consults its own playbook from the North America turnaround; and large investments in China are beginning to pay off as sales surge," said JP Morgan analyst Ryan Brinkman in an investor note.

Ford expects South America to be break even or profitable this year; European losses won't match or exceed the $1.8 million pitfall from 2012; and, long term, Ford expects most of its planned 2 million vehicle sales increase — to take place during the next three years or so — to happen because of its growing presence in Asia.

"The (third quarter) results allow investors to envision a Ford in which profits stem from each of Ford's segments, not just North America and (Ford) Credit," said Brian A. Johnson, analyst at Barclays.


Ford settles class action
over Navistar diesels

The engines by Navistar International -- which were in 2003-07 Super Duty pickups -- had myriad problems with the fuel system, turbochargers and other major components

Automotive News
October 26, 2013

Ford Motor Co. has agreed to settle a class-action lawsuit over claims that it sold defective diesel engines in its 2003-07 Super Duty pickups and E-series vans.

The now discontinued diesel 6-liter V-8, manufactured by Ford's former diesel engine supplier, Navistar International, had myriad problems with the fuel system, turbochargers and other major components.

According to the settlement, any U.S. purchaser and lessee of any 2003-07 Ford vehicle equipped with a 6-liter Power Stroke diesel engine is covered if the vehicle's exhaust gas recirculation (EGR) cooler and EGR valve, oil cooler, fuel injectors, or turbocharger was repaired, replaced or adjusted prior to 135,000 miles or six years.

Each component is given a reimbursement limit. In addition, according to the settlement, if a class member paid a $100 deductible more than once for repairs under the five-year/100,000-mile engine warranty, Ford will reimburse $50 each for the second through fifth deductible paid, up to a limit of $200 for four deductible payments.

The settlement resolves dozens of class-action lawsuits against the company and entitles owners to be able to claim between $50 and $825 in reimbursement for post-warranty repairs to their engine and engine components.

Poor engine quality, high repair costs and sinking customer satisfaction ended the relationship between Ford and Navistar, which had built every Power Stroke engine used in Ford's F-Series since 1994. In 2010, Ford replaced the Navistar diesel with a new 6.7-liter diesel V-8 that the company designed in-house. That engine is built in a plant in Mexico.

Some 6-liter failures were so severe that Ford had to replace complete engines. Ford also ended up buying back hundreds of trucks that couldn't be easily repaired. The engine problems dramatically increased Ford warranty costs and led to litigation with Navistar.

According to court documents, Ford will pay roughly 50 percent of the full value of the claims made in the class action and was ordered to pay $150,000, in total, to the 16 named plaintiffs.

Navistar, which was dismissed from the litigation, had no comment, according to a company spokesman.

Ford said customers can visit www.dieselsettlement.com for more information. Those eligible have until Dec. 31 to download and submit claims to the settlement administrator.


Ford's Mulally dodges
question about Microsoft

Karl Henkel
The Detroit News
October 25, 2013

Ford Motor Co. CEO Alan Mulally did little during a conference call Thursday morning to quell rumors that he may leave the Dearborn automaker for Microsoft Corp.

Mulally was asked on three occasions to discuss his future with Ford and the possibility of leaving for Microsoft.

His first response, to a question regarding the speculation, was that "nothing has changed from what we announced last November," referring to the company statement that Mulally plans to remain as Ford's CEO through at least the end of 2014.

When asked whether he has spoken with Microsoft, there was noticeable silence before Mulally answered the question by saying: "We don't comment on the speculation."

Mulally also brushed off a later question as to whether he would consider staying at Ford past 2014.

The 68-year-old CEO, who left Seattle-based Boeing Co. for Ford in 2006, has transformed the automaker's historically divisive corporate culture into a model of teamwork. The company, which mortgaged everything to pay for a sweeping transformation of its automotive lineup, has shattered the barriers that had long divided its regional operations.

Now, many at Microsoft are reportedly hoping that Mulally can work that same magic at their company, which has slumped in the face of growing competition from the likes of Apple Inc. and Google Inc.

At Ford, Mark Fields, 52, was elevated last year to the previously vacated, second-in-command position of chief operating officer and is seen as the eventual successor to Mulally.

Executive chairman Bill Ford Jr., in a recent interview with Bloomberg TV, praised Ford's executive bench and said he feels "really good about where we are in terms of succession."


Ford beats expectations with
$1.27B net income in Q3

Karl Henkel
Oct 24, 2013

Dearborn – — Ford Motor Co. says it will be more profitable in 2013 than it was a year ago, following a better-than-expected third quarter that included revenue growth of 12 percent and market share gains in all four regions of the world.

Ford's net income was $1.27 billion, or 31 cents per share — down $359 million, or 10 cents per share from the same quarter in 2012. But excluding special items, which included a $250 million hit related to plant closures in Europe, and another $145 million associated with Ford's U.S. salaried retiree voluntary lump sum payout, the Dearborn automaker posted a $2.6 billion pre-tax profit, or 45 cents per share.

Analysts had expected 38 cents per share.

The third quarter marked the 17th consecutive quarter that Ford has posted a profit. Revenue was $36 billion, up 12 percent.

The lion's share of the profits continued to come from Ford's North American operations, where the automaker posted a $2.3 billion profit and an operating profit margin of 10.6 percent.

But the biggest news came from Ford's other three regional operations, which turned a collective profit and for the first time since the second quarter of 2011.

"The breadth and the depth and the quality of the growth I think is very exciting," said Ford CFO Bob Shanks on Thursday.

Ford's South American region posted a $159 million profit and the automaker's Asia-Pacific-Africa region turned a $126 profit — a third-quarter record — backed by a record 3.7 percent market share. Ford's market share in China tied a quarterly record at 4.3 percent.

Europe continued to be Ford's weak spot, but Shanks said economic environment is improving. And Ford is already realizing the results of its European restructuring plan, similar to the one implemented in the U.S. during the auto crisis, which right-sized production to better match demand while investing in new vehicles.

The automaker lost $228 million in Europe during the third quarter. That was less than the $468 million it lost in the third quarter of 2012. Ford now expects its full-year European losses to be less than in 2012, when the company lost about $1.8 billion.

"We believe that we have reached a level of stability," Shanks told reporters on Thursday. "It's at the point where we'll start to see very, very modest growth start to take hold."


Tennessee workers file
complaint against Volkswagen

Bryce G. Hoffman
The Detroit News
October 23, 2013

Four Volkswagen AG factory workers in Chattanooga, Tenn., have filed a federal complaint against the German automaker, accusing it of trying to force them to accept representation by the United Auto Workers union.

It is the latest bizarre twist in the UAW's ongoing campaign to organize the one foreign-owned automobile factory in the United States that has not actively rebuffed the union.

While most foreign automakers have fought to keep the UAW out of their factories, Germany's "co-determination" laws have made VW receptive to at least some form of union representation. Those laws give labor a significant voice on Volkswagen's supervisory board, and representatives from the German auto union IG Metall have pressured management to enter discussions about union representation at the U.S. plant — the only major assembly plant without formal labor representation.

Last month, the UAW announced that a majority of workers at the Chattanooga plant had signed cards in support of union representation in creating a German-style works council. Now, a group of workers at the plant has accused VW of making worker acceptance of these works councils a condition of getting future product allocated for the factory.

The Chattanooga plant is competing with a VW factory in Mexico for a new crossover based on the CrossBlue concept shown in Detroit in January.

Last week, four VW workers in Chattanooga — backed by the National Right to Work Foundation — filed a formal complaint against the company with the National Labor Relations Board, accusing a senior manager of hinting that product would only come to Tennessee if workers there accepted UAW representation.

"With reports that Volkswagen is considering Chattanooga to build its new SUV, this is no idle threat," said foundation president Mark Mix in a statement. "If VW management was discouraging workers from joining the UAW with threats, there's little question that an NLRB prosecution would have already begun at the UAW's behest."

Both VW and the UAW declined to comment on allegations.

This is the latest in a series of legal moves, all made with the support of the National Right to Work Foundation, to block or delay the UAW's organizing effort in Chattanooga.

Three of the workers who filed this complaint were parties to another complaint filed last month challenging the UAW's "card check" system


Pension shift puts decades
of progress at risk

Bill Hatanaka,
Jim Keohane, Jim Leech
and Michael Nobrega
The Globe and Mail
Tuesday, Oct. 22

We find ourselves in the midst of a timely pension reform debate: Some advocate for Canada Pension Plan enhancements; federal and provincial governments are moving toward enabling Pooled Registered Pension Plans (PRPPs) for employees who are not members of RPPs; and a number of provinces are introducing significant reforms to their public-sector plans. Missing from this debate is a full understanding of the Canadian pension system and, in particular, the value and importance of the defined benefit model within that system.

Canada's three-pillar retirement income system is largely responsible for the significant drop over the past three decades in the number of Canadian seniors living below the poverty line. Ranked sixth-best in the world in the Melbourne Mercer Global Pension Index, it is anchored by robust government-funded and administered schemes (Old Age Security and the Guaranteed Income Supplement), supplemented by government-sponsored workplace pensions (CPP/QPP) and workplace and tax-deductible personal savings plans. What is sometimes overlooked is that the pension income paid to retirees has had a strongly positive impact on the Canadian economy overall.

It would be tragic to see the past 30 years of progress jeopardized by the unintended consequences of ill-conceived pension system changes – especially calls for the wholesale shift from defined benefit to defined contribution plans.

Canadian public defined benefit (DB) pension plans paid out between $68-billion and $72-billion to their members in each of 2011 and 2012. The vast majority (up to 80 cents) of each pension dollar paid out by our four major Ontario pension plans comes through investment returns, which in turn come from sound funding policies and "best in class" investment results at home and abroad.

The benefits paid to retired DB plan members boost national and local economies. DB pensioners spend an estimated $56-billion to $63-billion annually on consumable and durable goods, shelter, recreation and services while saving only $2-billion to $3-billion, according to a recent study by Boston Consulting Group. They have the opportunity to spend at a higher rate because they can rely on a steady and stable income through their defined benefit plan. They pay $14-billion to $16-billion in taxes annually – money sorely needed to deliver health care, connect our communities and educate our children. As well, it is estimated that only 10 to 15 per cent of DB beneficiaries collect the Guaranteed Income Supplement (GIS) versus 45 to 50 per cent of other retirees. This saves the federal government between $2-billion and $3-billion annually in GIS payouts, freeing up funds for other social spending priorities.

By almost any measure, our defined-benefit pensions, which guarantee a continuing benefit on retirement that is based on a percentage of employee earnings for each year of service, are the most effective retirement savings system in the country. As an expert committee on the future of the Quebec retirement system said this year: "Defined benefit plans provide the type of financial security that should be emphasized … No other supplemental pension plans or personal savings vehicles can provide members with the same level of financial security."

This is not a zero sum game where one group benefits at the expense of the other. Most pension plan members in fact make mandatory contributions of 10 to 14 per cent of their total income throughout their working years. Canada's public pension funds offer financial security to millions of Canadian retirees while providing a major source of patient, long-term capital that funds vital infrastructure projects – roads, bridges, hydro dams, airports and hospitals – in Canada and around the world. They are famous for their independent governance structure that allows them to invest solely in the best interest of their members, for their highly professional management and investing expertise, and for their strength and stability through good times and bad.

Canada's defined-benefit pension funds do more than contribute to a retirement income system that is the envy of the world and offers us a competitive advantage; they are also a key driver of prosperity in Canadian communities large and small, and a cornerstone of our national economy. As we continue to explore options in the face of growing challenges, let us not turn our backs on a true Canadian success story.

Bill Hatanaka is president and CEO of OPTrust; Jim Keohane is president and CEO of Healthcare of Ontario Pension Plan; Jim Leech is president and CEO of Ontario Teachers' Pension Plan; Michael Nobrega is president and CEO of Ontario Municipal Employees Retirement System


Seniors on fixed incomes
particularly vulnerable to
investment scams

By LuAnn LaSalle
The Canadian Press
Monday, Oct. 21 2013

Greedy or naive investors can be easily convinced by scammers to invest in get-rich quick schemes before they've had a chance to do their homework, say experts.

"They're nasty. They're heartless. They're ruthless," said Daniel Williams of the Canadian Anti-Fraud Centre.

"But they're not stupid. They know the buttons to push. They'll spot a weakness from a mile away," he said, adding that scammers can be successful targeting vulnerable people such as those who experienced a death in their family or illness.

Quite often, people will get pitches that offer them a return of 10 per cent a month, said Adrian Mastracci, a financial planner with KCM Wealth Management Inc. in Vancouver. What they should remember is the old adage: "If it's too good to be true, it probably is."

"If you get offered 40 or 50 per cent (return) per year, what makes you so special?" he asked. "Talk to your family members, talk to somebody else, go see an independent adviser," he said.

With a balanced portfolio of stocks and fixed-income investments, investors should be expecting a more realistic return of five to seven per cent a year on an ongoing basis.

Mastracci says seniors can be particularly vulnerable because they often have fixed incomes and can't afford losses.

Investment scams can also come via phone, email, text message, social media and mail.

Common signs of investment scams are being told that you can make a lot of money with little risk in your investment and being given so-called "hot tips" or insider information about companies, said Perry Quinton of Investor Education Fund, a non-profit organization founded by the Ontario Securities Commission.

Other signs include being asked to invest in little-known companies and promised high returns or one-time offers. Scammers may also use high-pressure sales tactics to encourage people to invest in something quickly, she said.

Quinton said that the first thing that consumers should do is check with their provincial or territorial securities commission to find out whether the person making the pitch is licensed to sell securities or give financial advice.

"If they're not registered, it's a scam," she said.

Fraudsters will use such scams as pyramid schemes in which early investors get high returns fairly quickly but when the number of new investors dry up, there's no more money to pay out.

Investors can also be persuaded to pay money up front to take advantage of an offer promising significant returns, Quinton said. The catch is that the scammer will take the money and the victim won't hear back from them again.

In so-called "pump and dump," schemes, investors are offered a deal on a low-priced stock and as more investors buy it, its value increases. Once the stock's price hits a peak, the scammer sells his shares and the value of the stock plummets leaving other investors with worthless stock, says the Investor Education Fund's website, getsmarteraboutmoney.ca.

Last summer, a pump-and-dump scheme that involved penny stock companies bilked Canadian and foreign investors out of more than $140-million. The U.S. Department of Justice said it was masterminded by four Canadians and carried out with the help of five Americans. The authorities called it one of the largest international penny stock frauds in history.

Quinton's organization estimates that 20 per cent of the Canadian population has been approached with an investment scam or fraud and about 5 per cent have been victims.

"Those are the people who will admit it. We think it's quite a lot higher than that," said Quinton.


Ford targets cost savings in next-generation electric vehicles

Karl Henkel
The Detroit News
October 20, 2013

Dearborn – — To make electric cars run farther and cost less, most attention by automakers has been on batteries. Ford Motor Co. has also been working on the power electronics box: Among other functions, it converts direct-current electricity from the battery to alternating-current electricity in order to power the electric motor.

"Power electronics is almost as expensive as batteries," said Anand Sankaran, chief engineer and executive technical leader of energy storage and hybrid vehicle systems, in a recent roundtable discussion with reporters. "And the costs of both are coming down at similar rates."

Sankaran declined to identify cost savings, citing confidential agreements with suppliers.

But even suppliers — including Johnson Controls, which makes battery cells but not power electronics boxes — agree that cost savings will need to be shared between the two components to make electric vehicles more affordable.

"It's being worked on," Brian Kesseler, president of Johnson Controls' power solutions business, said in a recent interview about cost reductions for battery cells. "But the cell costs aren't the whole story; it's not the only answer" for cost savings.

Though the price of hybrids has come down in the past few years, it is difficult to pinpoint the true cost of hybridization because costs vary depending on the powertrain and how many battery cells are included in each battery pack, said Jim Hall, analyst at 2953 Analytics LLP.

Much of the industry focus has been on reducing size and cost of battery packs while increasing power and efficiency.

For instance, Ford has reduced the number of battery cells — which together comprise a battery pack — in its hybrid vehicles from more than 250 in the last production model of the Escape hybrid (discontinued in 2012) to just 76 in the new C-Max and Fusion hybrids.

But increasing efficiency of the battery is only part of the story: The power electronics box is responsible for transferring as much of the current as possible without wasting or losing energy. Ford's most recent production-ready box transfers 93 percent of the energy.

"You want a box that is really efficient," Sankaran said. "Otherwise in every process you're losing energy."


Canada's auto industry
faces sweeping change
with EU trade deal

October 19, 2013
Globe and Mail

Canada's auto sector faces major changes as a result of a wide-ranging new free-trade deal with the European Union that will have an impact on virtually every aspect of the Canadian economy.

As expected, the agreement-in-principle announced Friday in Brussels contains concessions from Canada in areas including cheese imports and extended drug patents for brand-name drug manufacturers. The deal will also permit large increases in Canadian beef and pork exports to Europe and eliminates a wide range of tariffs. However, new details were announced Friday on how the deal will address the thorny issue of how Ontario's manufacturing sector is deeply linked with U.S. production lines.

Canada, which currently exports about 13,000 vehicles a year to the EU, will be allowed to export up to 100,000 vehicles annually, provided they are at least 20 per cent manufactured in Canada. Vehicles with at least 50 per cent Canadian content will enter duty free and would not be subject to the quota.

Under the agreement, both countries will phase out tariffs on vehicles and parts over seven years. Canada's tariff is 6.1 per cent on vehicles. Europe has a 10 per cent tariff on vehicles and a 4.5 per cent duty on parts. Canada has a large trade deficit in autos with Europe.

Cars made in Canada by the Detroit Three and Japanese auto makers typically contain a majority of imported parts. The arrangement is not limited to Chrysler, Ford Motor Co. and General Motors Co., but applies to all auto and parts manufacturers operating in Canada. Should the EU reach a similar Comprehensive Economic and Trade Agreement with the U.S., the distinctions between a Canadian and U.S.-made car would likely be erased for the purposes of European trade.

The agreement would also mean cheaper Volkswagens and Mercedes-Benz for Canadian consumers, provided they are assembled in Europe.

For Prime Minister Stephen Harper, the deal represents a signature accomplishment during his seven years in office. At a media briefing, Canadian reporters were told that all provinces have signalled they will support the deal.

Still, key details remain unclear. Government documents provided at a 5 a.m. media lockup in Ottawa only presented the deal's benefits for Canada, including supportive quotes from Canadian industry leaders. Some of the concessions offered by Canada were mentioned during the briefing, but since there is not yet a final text, it is not clear yet how much Canada has given up.

Information provided by the E.U. throughout the day Friday will shed further light on what the sticking points will be over the coming two years, as EU states, the EU and Canadian Parliaments and Canadian provinces must give their official approval to the deal.

One clear signal of where Canada expects some negative reaction is in its willingness to offer financial compensation in two cases. If dairy producers are negatively affected by a more than doubling of European cheese imports, Canada is prepared to offer compensation directly to producers. The government hopes, however, that Canadians will continue to consume more and more cheese, meaning the growth of the overall market would erase any potential losses.

The second area is in patent protection. Canada agreed to an EU request that brand-name pharmaceuticals be given up to two years more patent protection to compensate for the time it takes for regulators to approve their products. Should this lead to higher drug costs for provincial health systems, Ottawa is prepared to offer compensation.

Though Ottawa insists all provinces are on board, the reaction of three provinces will be watched closely. Quebec's response to the deal's provisions on cheese will be significant. Ontario will be closely watched for its response to both the dairy and auto sections. Meanwhile, Newfoundland and Labrador will have to phase out an existing rule that requires a minimum amount of seafood to be produced in the province. In exchange, the EU is offering greater access for Canadian seafood to its market.

Europe will continue to protect significant portions of its agriculture and agri-food markets. But over all, 95 per cent of products will enter duty-free, versus 18 per cent now. Beef exporters are getting an extra 50,000 metric tonne duty-free quota. Pork producers are getting 80,000 tonnes.

"Canadian farmers will benefit overwhelmingly from this agreement," said Mr. Harper.

From the first mention of an agreement in Wednesday's Speech from the Throne to Friday's tightly scripted release of positive information to the media, Mr. Harper's Conservative government has so far controlled the message on a deal that has been years in the making. Now, the debate moves to the 28 EU-member states, 13 provincial and territorial capitals and the floor of the House of Commons.

The federal government is also touting other benefits of the deal, including provisions to liberalize trade in services, allow easier movement of labour and work on mutual recognition of professionals, including architects and engineers.

Both sides will open most of their government purchasing market to foreign suppliers, with some exceptions. Canada, for example, is protecting its health care and education sectors, as well as keeping smaller contracts for domestic suppliers. For example, contracts worth less than about $630,000 for utilities and construction contracts worth less than $7.8-million will still be excluded from the agreement.


Canada, European Union sign sweeping trade pact

Deal will mean jobs, investment for Canada,
Prime Minister Stephen Harper says.

Toronto Star
Bruce Campion-Smith Parliament Hill,
Fri Oct 18 2013

OTTAWA—Canada's economic life will be merged with the European Union under a historic trade agreement signed by Prime Minister Stephen Harper in Brussels Friday.

When finalized in about 18 months, the sweeping pact will throw open the EU's market of 500 million consumers to Canadian exporters, while for the first time giving Europe's corporate giants the right to bid on local infrastructure projects in Toronto and other Canadian cities.

From high-fashion clothing to perfume and European-made cars, items made on the continent will be coming into Canada with little or no import tariffs, making them potentially cheaper for Canadian buyers.

At the same time, Canada will be entering a new phase in its economic life in which European corporations will be treated the same as domestic companies when it comes to government rules and regulations—a prospect that has raised concerns among some Canadians about handing over too much power to global business interests.

"This trade agreement is an historic win for Canada," Prime Minister Stephen Harper said in a statement issued before he signed an agreement in principle wrapping up more than four years of gruelling negotiations. "It represents thousands of new jobs for Canadians," he said.

Harper made a visit to Brussels—home of the European Union headquarters — to sign an agreement in principle with European Commission President José Manuel Barroso.

It's expected that it will take 18 months to two years for the deal to be finalized and get through the required approvals. Ottawa says it has tentative endorsement from the provinces but will require formal approval, as well as parliamentary approval.

Still, the agreement — three years in the making — marks an important political victory for Harper, whose Conservative government has made liberalized trade a pillar of their economic strategy.

The deal, known formally as the Comprehensive Economic and Trade Agreement (CETA), is billed as the most sweeping and ambitious trade pact ever signed by Canada, going further than the free trade agreement with the United States.

It promises to open the European market to Canadian goods and services, a market with 28 countries and $17 trillion in annual business activity. The deal, which has been lauded by Canadian business, will eliminate 98 per cent of EU tariffs on the day it comes into force.

High-tech companies, manufacturers of machinery and medical devices, service providers like architects and a wide range of other businesses will have better opportunities to land contracts in Europe. Europeans are expected to buy more seafood, agricultural products, lumber, chemicals and aerospace products from Canada. The quota for Canadian-made passenger autos that can be sold in Europe will be vastly expanded.

Negotiations are not entirely finished but the substantive issues have been dealt with, including agreement on market access for beef and dairy, which until recently had been a sticking point.

On that front, Canadian negotiators have secured access for 50,000 tonnes of Canadian beef and 80,000 tonnes of pork, In return, the deal grants access to an additional 17,700 tonnes of cheese from the EU, which is already stirring the anger of Canadian dairy farmers.

However, a government briefing for reporters on Friday sought to downplay the impact of the greater access to European cheese, saying the new quota represents 4.2 per cent of the Canadian market. With cheese consumption rising in Canada, it's thought that the additional EU product will be absorbed into the market. However, Ottawa says it will monitor the impact on dairy farmers and will provide compensation if their revenue takes a hit as a result of the agreement.

The deal also opens up the EU's lucrative seafood market but one that has been highly protected with tariffs that top 20 per cent. But the trade pact eliminates those tariffs for Canadian suppliers.

In an important concession, Canada is extending patent protection on pharmaceuticals for two years, which is estimated to drive up the cost of prescription drugs to consumers and governments by up $3 billion annually. Ottawa says it's willing to compensate the provinces for any additional costs.

The deal also grants European companies the right to bid on billions of dollars worth of large government contracts, subject to certain thresholds that range from $315,538 for goods and services to $7.8 million for construction services.

In particular, the procurement clause opens up the bidding at the provincial and municipal levels, an initiative that had been the European Union's top goal coming into the negotiations.


Ottawa non-commital on Ontario Liberals' idea for pension plan

Adam Radwanski and Bill Curry
The Globe and Mail
October 17, 2013

The federal government isn't saying no to a possible enhancement of the Canada Pension Plan, but is so far avoiding comment on the latest pension idea from Ontario.

In response to questions about the prospect of Premier Kathleen Wynne's government launching a separate pension plan if there are not major enhancements to the CPP, Ottawa provided a statement to The Globe and Mail that made no specific reference to Ontario.

"We share the concerns of small business, employees, and some provinces of increasing costs during a fragile global recovery," said the statement from Kevin Sorenson, the Minister of State for Finance. "We continue to discuss ways to improve the Canada Pension Plan with the provinces. We are working with the provinces to introduce Pooled Registered Pension Plans, which are employer-sponsored private pension plans that help to leave more money in the pockets of retirees."

Meanwhile, at least one of Ontario's opposition parties appears prepared to support the launch of a provincial plan, should Ms. Wynne's minority government decide to press forward with it.

"We're on board with an Ontario pension plan," NDP Finance critic Michael Prue said in an interview on Wednesday, noting that his party put forward its own proposal for a new public pension in 2010.

In light of the federal government's reluctance to increase CPP premiums and payouts to address a looming retirement-income shortfall, he said, the governing Liberals should have already moved on that front.

"CPP is not good enough," Mr. Prue said. "And if the federal government won't move on it, Ontario has to."

The prospect of Ontario starting its own plan drew a considerably frostier reaction from Tim Hudak's Progressive Conservatives. "The whole pension issue should be dealt with at the federal level," Finance critic Vic Fedeli told reporters at Queen's Park. "I would encourage our members to spend more time talking to them about encouraging them to get the solution."

While saying that "everybody deserves a proper pension as we get older," Mr. Fedeli also appeared to be opposed to requiring businesses and their employees to make more contributions toward that goal.

"There are two ways to do it," Mr. Fedeli said of ensuring a secure retirement. "Our way is to grow the economy by reducing taxes, reducing hydro rates and putting people back to work. As always, the Liberals' instant reaction: raise taxes."

Don Drummond, the former TD Bank chief economist who conducted a high-profile 2011-12 review of Ontario's finances, offered a response somewhere between that of the two opposition parties.

By far the best response to a steep projected decline in the income-replacement rate for much of the work force when it reaches retirement age would be to increase CPP contribution limits, Mr. Drummond said; if that's not possible, he said, provinces acting on their own would be better than nothing.

But he described separate provincial plans as "definitely in the second-best world," because of excessive implementation costs and duplication, and he warned that if Ontario were the only province to go that route, the cost to employers could hurt its competitiveness.

As reported on Wednesday morning, Finance Minister Charles Sousa is expected to hint at the prospect of launching a provincial plan in next month's Fall Economic Statement, depending on whether meetings with his federal and provincial counterparts before year's end result in significant "enhancements" to the CPP.

Ms. Wynne's Liberals appear pessimistic about Jim Flaherty's willingness to move on that front, although the federal Finance Minister has been difficult to pin down on the subject.

In June, 2010, Mr. Flaherty wrote a letter to provincial and territorial finance ministers asking them to support a "modest" and gradual increase in CPP premiums in order to fund higher benefits over time, and at a 2010 retreat in Charlottetown he took a clear position in favour of CPP reform. Yet when they met again as a group in Kananaskis, Alta., later that year, Mr. Flaherty said there simply was not the required level of support to move ahead. And since then, he has largely focused his attention on the voluntary pooled pension plans being rolled out by some provinces.

A more ambitious provincial pension plan would be a centrepiece of the Liberal platform in an election widely anticipated for next spring, and some Liberals believe that it would have considerable appeal to middle-income voters whose demographic is at the greatest risk of a steep standard-of-living decline when they reach retirement age. Others in Ms. Wynne's party, however, are nervous about the response to trying to take more money off Ontarians' paycheques, especially considering recent scandals around the waste of public dollars.

Provincial government insiders have told The Globe that in order for the plan to be effective, participation in it by employers and employees could not simply be voluntary.

Ontario would be the first province to launch a mandatory pension plan on top of CPP. Saskatchewan offers an opt-in plan that is available outside that province as well and functions much like a pooled registered pension plan, while the Quebec Pension Plan exists instead of CPP rather than in addition to it.


Ford to export up to
40,000 vehicles to China

Karl Henkel
The Detroit News
October 16, 2013

Ford Motor Co. plans to increase production of U.S.- and Canada-built vehicles that are exported to China by as many as 40,000 per year.

The Dearborn automaker will boost exports of its Edge midsize and Explorer full-size SUVs to China through a shipping port in Portland, Ore., according to vehicle processing firm Auto Warehousing Co.

Auto Warehousing expects to eventually handle the shipping of as many as 40,000 Ford vehicles to China each year. Exports should begin in the coming weeks. Ford vehicles exported to China — from all countries — and sold during the first nine months of 2013 totaled 16,405. A breakdown of vehicles exported from North America to China was not immediately available.

"The vast majority of the vehicles we sell in China are built in China," Ford said in an emailed statement to The Detroit News. "As part of our plan to offer a full family of SUVs to Chinese consumers, we began importing the Ford Explorer from the U.S. to China this year. Explorer joins our locally produced EcoSport and Kuga, as well as Edge, which is imported from Canada."

The Explorer is built at Ford's Chicago Assembly Plant and is exported to 64 countries worldwide. The Edge is built in Oakville, Ontario.

The sport-utilities won't be the only Ford vehicles made in North America and then shipped to China.

Ford plans to introduce its Lincoln luxury brand to the Chinese market in late 2014. Those Lincolns, at least initially, will be built in North America, said Dave Schoch, president of Ford Asia Pacific, during a roundtable interview last week.

While many have feared automakers may shift vehicle manufacturing from the U.S. to China for the American market, Ford is unlikely will take that route anytime soon. The Dearborn automaker can't even meet current demand in China.

IHS Automotive predicts 32 million autos will be sold per year in China by 2020, compared with 20 million last year. China is the world's fastest-growing auto market.


Ford to build Edge,
EcoSport SUVs in Russia

October 14, 2013
Karl Henkel
The Detroit News

Ford Motor Co. will next year begin building its Edge midsize and EcoSport subcompact SUVs in Russia, the automaker's latest effort to increase its sales share there.

Ford and its Russian joint venture, Ford Sollers, will begin manufacturing the EcoSport subcompact SUV at an upgraded assembly plant and the Ford Edge at another plant. Both plants are in the Republic of Tatarstan.

The Edge and EcoSport will join the Explorer full-size and Kuga compact SUVs as offerings for Russian consumers. One in three vehicles sold in Russia is an SUV.

Bill Ford Jr., Ford's executive chairman, made the announcements on Monday as part of a trip to Ford Sollers' Russian operations.

The additional production will result in 500 new jobs. With the new hires, Ford and Ford Sollers will employ about 2,500 in the region.

The passenger car market in Russia could grow by 1 million vehicles annually and top 3.5 million sales, according to PricewaterhouseCoopers, though sales have sputtered so far in 2013.

Automakers in total will invest more than $10 billion in upgrades and expansions in Europe through 2020, according to the Boston Consulting Group.

Ford just finished building a plant and is working on a new $274 million engine plant. The Dearborn automaker will triple its capacity in Russia to about 350,000 vehicles in coming years.

GM is in the midst of a $1 billion investment push in Russia to increase annual production capacity from about 100,000 to 230,000 vehicles.

Those capacity additions will not only help automakers fill the demand for autos in Russia, but also in nearby countries like Kazakhstan, Belarus, Ukraine and Uzbekistan, where auto markets are still in their infancy stages.


Auto industry's shift away
from Canada to gain speed

MISSISSAUGA — The Globe and Mail

Vehicle production in Canada is poised to slump by as much as 25 per cent by 2020, as global auto makers invest heavily in rival auto centres such as Mexico, the United States and other growing markets.

Car makers built 2.454 million vehicles in Canada last year, but that number is forecast to slide by more than 600,000 – to 1.823 million by the end of the decade, Joe McCabe, president of auto consulting company AutomotiveCompass LLC, said.

In North America, "Michigan, the southern U.S. and Mexico are winning at the expense of Canada," Mr. McCabe told the Automotive Parts Manufacturers Association of Canada annual outlook conference in Mississauga.

Mr. McCabe's presentation bolsters data revealed earlier this year, which showed that Canada won only 5 per cent of more than $42-billion (U.S.) in investment by auto makers in North America between 2010 and 2012.

It's the latest indication that Canada is on the road to becoming a second-tier player in an industry that provides tens of thousands of high-paying jobs, makes a huge contribution to exports, and represents about 2.5 per cent of Ontario's gross domestic product.

Canadian industry analyst Dennis DesRosiers has noted that several key indicators of the health of auto manufacturing in the country are showing declines – employment, balance of trade and investment.

A cut in production of 25 per cent would drop Canada to 14th spot among auto-making countries, compared with its No. 9 position last year.

Mr. McCabe's forecast shows big production declines at General Motors Co. and Chrysler Group LLC facilities in Canada.

Output at GM's factories is forecast to fall to 314,000 vehicles by 2020 from 683,000 last year. Chrysler's production is expected to fall to 440,000 units from 577,000.

The key question is what will happen with GM's complex in Oshawa, Ont., where one assembly plant is scheduled to close next year. Industry sources have said no new products have been allocated for the other factory, which assembles the Chevrolet Impala and Camaro and the Buick Regal and Cadillac XTS. Camaro production will be shifted to Michigan in 2015 and Impala is also assembled at a plant near Detroit.

A GM spokeswoman declined to comment on Mr. McCabe's production forecast.

The questions about Chrysler come as it tries to determine what to do with its Dodge Caravan and Chrysler Town and Country minivans, which are put together at a plant in Windsor, Ont., that has been operating on three shifts since the 1980s making one of the most successful products in Chrysler's history.

With the decline in the minivan market in North America, Chrysler plans to eliminate the Caravan and offer only the Town and Country, which raises questions about whether it will produce another vehicle in Windsor to maintain three shifts.

Vehicle production is expected to grow by 48 per cent in Mexico which, beyond the billions of dollars of investment being pumped into its economy, will get the added boost of luxury makers Audi AG and the Infiniti division of Nissan Motor Co. Ltd., assembling vehicles in the country before the end of the decade.

That means any advantage Canada could claim about producing higher-quality vehicles carries little weight, Mr. McCabe said.

His presentation came on the same day that GM Canada held an internal ceremony to recognize a quality award won by the Oshawa factory that is scheduled to close next year. The Oshawa consolidated plant won the J.D. Power and Associates silver award for new vehicle quality.

"Every day the plant keeps working gives us more chance to save it in the long run," Jerry Dias, president of the Unifor union, said in a statement issued after the ceremony.


Lincoln's new ads get more direct

They will tout brands' features versus the luxury competition

Karl Henkel
The Detroit News
October 13, 2013

Dearborn— Ford Motor Co.'s Lincoln brand will target luxury competitors such as Lexus in a new advertising campaign that begins today, despite having limited new products to promote.

Ford's struggling luxury brand will highlight attributes like fuel economy on its Lincoln MKZ Hybrid sedan, and high-end features like a retractable panoramic roof against competing vehicles like the Lexus ES.

"These are definitely more pointed and tactical in their nature," said Jon Pearce, executive vice president and chief creative officer of Hudson Rouge, Lincoln's ad agency, on Tuesday. "We've tried to make spots that display some rational proof points for Lincoln."

The new MKZ, which debuted earlier this year, has set monthly sales records in five of the last six months and has overtaken the Navigator full-size SUV as Lincoln's best-known nameplate. But sales for the brand overall are down 6.3 percent this year and through September have not broken through the 60,000 sales mark. Lincoln has also not yet announced when a concept MKC crossover will go into production; that's the second of four new vehicles, behind the MKZ, that Lincoln hopes to introduce during a four-year span.

In the television ads, the Lincoln cars will be "interviewed" by couples looking to buy a luxury vehicle. The cars will be prodded with questions about fuel economy and high-end features and will "respond" through text that appears above the vehicles. The competing vehicles that are "interviewed" refuse to answer the couples' questions or sheepishly try to change the subject.

The campaign, which spans television, radio, print and digital, will run at least through the end of the year.

Lincoln believes that by focusing more on individual nameplates, it can better connect with potential buyers. In recent ads, including a 30-second spot that aired during the Super Bowl in February, Lincoln focused on the new MKZ midsize sedan, but also on the Lincoln name and the history and popular vehicles behind it.

"It's hard for folks to remember in 30 seconds what the key messages are," said David Rivers, Lincoln's marketing communications manager. "But by staying single-minded, we were able to be more memorable but also break the brand through."


Ford says it will need more expansion in China after 2015 goal

Detroit Free Press
October 11, 2013

Ford likely will need to build even more plants in China when the current expansion is complete in 2015, said Dave Schoch, president of Ford Asia Pacific.

Last year, Ford had 14 vehicle assembly and powertrain plants in Asia. By 2015, that number will grow to 24. Four of the new assembly plants and three new engine plants are in China.

But that might not be enough to meet domestic demand, said Schoch, who met with reporters today in Dearborn.

The expansion is just to keep up with domestic demand in the world's largest automotive market; there are no plans to export those vehicles back to the U.S., he said.

The global auto industry has grown from 58 million vehicles in 2002 with 3% in China to 82 million in 2012 with 24% in China. By 2020, worldwide sales are forecast to reach 109 million vehicles — 32 million in China alone.

"China would be more than North America and Europe combined," Schoch said.

Ford is still playing catch-up in China, where General Motors and Volkswagen remain the largest western players, selling more than 3 million vehicles annually. Japanese automakers' sales have fallen following a dispute between the two countries over some islands.

So far Ford has capitalized on the fallout from that diplomatic clash, selling more than 600,000 vehicles in China this year through September, up 51% from a year earlier.

If Ford exceeds 900,000 sales in China this year, it would surpass Toyota and Honda and creep up on Nissan.

Ford showrooms now offer a dozen models — up from four a year ago — including a full lineup of SUVs.

The other best sellers are premium vehicles, and Ford will introduce Lincoln in the fourth quarter of 2014 with vehicles exported from North America. So far, about 11 dealers have been selected. Four will be ready to go a year from now.

Ford has about 400 passenger car dealers and 200 commercial truck dealers in China with plans to double that by 2015.

The automaker had a 2.5% market share in the first quarter of 2012 and 3.2% by the end of the year. Schoch said Ford's goal is to capture 5% of the Chinese market by the end of this year.

Ford's production capacity in the region will expand from 1.8 million vehicles last year to 2.9 million in 2015. It is also exploring the possibility of launching an indigenous brand of lower-cost vehicles with its Chinese partner, Changan.

John Fleming, head of global manufacturing, said Monday that Ford plans to build 8 million vehicles a year around the world by 2017, up from 6 million today.

China will account for much of the growth. One potential headwind is the possibility that rising fuel costs will slow sales in China, because it imports much of its fuel, Schoch said.

In the larger Asian region, Ford has sold almost 948,000 vehicles through September, up 31%, and is on track to hit a record 1 million next month, Schoch said.

"I'm pleased with the progress we're making. I'd like to be going faster," he said.

As for other Chinese automakers exporting their vehicles, Schoch said to watch out for Great Wall Motors, a maker of SUVs.

"They seem to be coming up with good designs, quality," he said.


UAW's Nissan confrontation contradicts conciliatory approach

Daniel Howes
Oct 10, 2013

The limit to United Auto Workers President Bob King's conciliatory charm offensive begins somewhere outside a town called Canton.

There, a union anxious to bolster its sagging dues base with the ranks of Nissan Motor Co.'s hourly workforce is mounting a campaign stretching from that small Mississippi town to Brazil, Paris, Tokyo and South Africa — all in an attempt to brand the Japanese automaker a violator of "international labor rights," according to a report issued this week in Washington.

"Nissan is not living up to the standards of worker treatment enshrined in International Labor Standards core labor standards, U.N. human rights principles and other international norms," Lance Compa, senior lecturer at Cornell University's School of Industrial and Labor Relations, said in a statement under the banner "Look Under the Shine of Nissan."

Neither the UAW nor its well-publicized organizing campaign in Canton is mentioned in the news release. But Compa's 46-page report, funded by the union, is the latest manifestation of King's vision to achieve a decidedly domestic goal with the help of international pressure and shame: organize foreign-owned automakers in the UAW's patch.

"This UAW-commissioned report is neither objective nor credible and simply restates two-years' worth of false allegations by the union," Justin Saia, a spokesman for Nissan North America, said in a statement Wednesday. "Nissan has never violated labor standards and would never tolerate threats or intimidation of our employees. Nissan will continue to abide by U.S. labor laws and support the rights of employees to decide whether they wish to be represented by a union."

The charges, denials and counter-charges are predictable in a situation where too often spin is loosely affiliated with fact. More important for the union is whether the decision to globalize confrontation, as the UAW is doing in its third run at unionizing Nissan in the right-to-work South, contradicts King's message of the union as 21st-century problem solver and partner with management.

It does, which is little help to the union's flagging growth prospects. How does the UAW engender a feel-good, we're-here-to-help-you vibe in Canton when its organizers are touring the globe pressuring dealers, picketing Nissan facilities and issuing reports accusing the company of human rights violations?

How does internationalizing the case for Canton, where Nissan assembles about 450,000 vehicles per year, address whatever local issues there may be at the plant? For more than 75 years, UAW beefs with the automakers have been local or national affairs bargained — or not — free of global machinations that mean little outside the scope of the local economic conditions, the U.S. market or American labor law.

How does campaigning against a would-be employer, or using Germany's IG Metall union to pressure Volkswagen AG into establishing German-style works councils in its Chattanooga, Tenn., plant, make a positive case for union representation?

This raises all sorts of issues for the union, its members and the UAW's chances for wooing new ones. From Chattanooga to Canton, King is using scarce resources to enlist the help of international union brethren to do what the UAW's organizers have repeatedly failed to do at foreign-owned automakers operating inside the United States.

Only now, their efforts are occurring in a new context that has moved beyond the post-war contract battles so familiar to Detroit's auto communities. Now it is shaped by an epic collapse and historic transformation, the facts of which probably hurt the union's organizing cause as much as they help.

Essentially, organizers are selling the benefits of membership to people who witnessed the embarrassment of congressional bailout hearings; heard about lost jobs and paying people not to work; tracked the federally induced bankruptcies of two Detroit automakers; and learned of contracts that instituted a lower tier of wages for new hires long before the global financial meltdown pushed Detroit and the UAW to the brink.

Whoever emerges victorious, the UAW's campaign against Nissan is shaping up to be the automotive equivalent of a negative political campaign. That is, if the positive case isn't strong enough for your side and what it can do for the voters, tear down the opponent with charges, truths and half-truths that appeals to a relative few.

"Workers' descriptions of how they are treated behind the walls of the massive Nissan plant in Canton, Miss., affirm that Nissan is systematically interfering with the internationally recognized right to form a union," Compa said. One worker, Jeff Moore, accuses managers of saying "unions make plants close."

It's far more complicated than that, as Detroit's subsequent revival over the past five years attests. The challenge for the UAW is showing why.


Mulally 'absolutely focused'
on Ford, Fields says

Mulally, 68, has been mentioned as a candidate to become the next CEO of Microsoft Corp

Oct 1, 2013

Ford Motor Co. CEO Alan Mulally (pictured) remains committed to the company and its future regardless of reports that he might leave for Microsoft Corp., said Mark Fields, the automaker's No. 2 executive.

"There's been no change to what we announced in November," Fields, COO since December, told reporters today at a charity fundraising event in Detroit. Mulally is "absolutely focused on the business, particularly on setting a long-range strategy for the company. He's very engaged."

Mulally, 68, has been mentioned as a candidate to become the next CEO of Microsoft Corp. by technology-news website AllThingsD and Reuters. Mulally told Bloomberg News on Sept. 6 that he planned to remain Ford's CEO through at least 2014. There is no change from that plan, which the company announced in November, said Jay Cooney, a Ford spokesman.

Steve Ballmer said last month he planned to step down as CEO at Microsoft within 12 months, prompting speculation on who will succeed him to lead the U.S. software maker. Ballmer, 57, unveiled a reorganization in July that his company called One Microsoft and was influenced by Mulally's One Ford plan that weaned the automaker away from designing different cars for various regional markets around the world.

Mulally's turnaround

After his arrival from Boeing Co. in 2006, Mulally's efforts and the $23.4 billion that the company borrowed in late 2006 enabled Ford to avoid bankruptcy in 2009, when General Motors Co. and Chrysler Group LLC's predecessors failed and needed U.S. rescues.

Ford earned $35.2 billion from 2009 through 2012 after losing $30.1 billion in the previous three years.
Fields, 52, was promoted to COO in December after he led a transformation of its North American operations to record profits from its worst losses four years ago. He spoke to reporters at an event for the United Way, where he insisted that the reports about Mulally going to Microsoft haven't distracted the automaker.

"Absolutely not," he said. "We have so many opportunities in front of us. We're focusing on those opportunities and not getting distracted by anything."


Ford could reach lofty
300K Fusion sales this year

Karl Henkel
The Detroit News
September 30, 2013

Sales of Ford Motor Co.'s Fusion midsize sedan could eclipse 300,000 this year as the automaker claws away at the lead of segment frontrunners Toyota Motor Corp. and Honda Motor Co. while still maintaining much of its pricing power.

Buoyed by the extra cars being produced at Flat Rock Assembly Plant, which should hit dealer lots sometime next month, the Fusion will assuredly set an all-time annual sales record for the model.

"Three hundred thousand sales is definitely attainable," said Alec Gutierrez, senior analyst at Kelley Blue Book, in a telephone interview. "On paper, in terms of design and aesthetics, they are on par or better than their competitors. The last piece of the puzzle was supply issues."

The Dearborn automaker is likely to have sold about 225,000 Fusions through September, according to projections. Automakers will report monthly results on Tuesday.

The previous annual record for the Fusion, which first went on sale for the 2006 model year, was 248,067 in 2011. During the past decade, the only Ford nameplate to top 300,000 annual U.S. sales on more than one occasion was F-Series pickups.

The sales mix of Fusion's top-level Titanium trim has leveled off in the low-to-mid-teens, but could gravitate toward the 20 percent mark as added production allows Ford to meet demand in mostly untapped, large metropolitan areas like Los Angeles, San Francisco and Miami.

The Titanium trim — which has a starting price above $30,000 — has boosted the average selling price on Fusions by 4.4 percent through the end of August to $26,338, according to data from Kelley Blue Book. The Fusion sells for nearly $2,400 more on average than Toyota's Camry, the perennial midsize sedan sales champion. Camry's average selling price is down 1.9 percent this year to $23,970.

Erich Merkle, Ford's U.S. sales analyst, would not comment on specific sales or sales mix projections for the highly profitable Fusion Titanium, but said continued demand for all Fusions is skewing toward the high-end trim.

"A new automobile is oftentimes an emotional purchase," Merkle said in a telephone interview. "When you execute well on design, the customer views the vehicle as being more aspirational, hence they want more of the technology and luxury features that we've put into the vehicle, which is much different from vehicles that serve more of a utilitarian purpose."

Sales crown
Toyota's Camry has been the best-selling car in the U.S. for a dozen years, but stiff competition from not just Ford, but also Honda, Nissan Motor Co. and General Motors Co. could bring that run to an end as soon as 2014.

Ford is fourth in sales among midsize cars this year, behind Toyota, Honda and Nissan, but will have the capability to build approximately 400,000 Fusions next year, about 100,000 more than it could build during most of 2013.

That will position Ford to directly compete with Toyota (which sold more than 400,000 Camrys in the U.S. last year) on a more even playing field when it comes to production.

But that added supply could ding Fusion's segment-leading average selling price, Gutierrez said, and therefore lower Ford's profits on the car. "I wouldn't be surprised to see transaction prices take a bit of a hit," he said. "But they should remain on par if not slightly stronger than their Japanese counterparts."

Broadening appeal
The five largest-volume vehicles in the midsize sedan segment — Fusion, Camry, Accord, Altima and Malibu — have all recently been revamped and can be optioned with some of each automaker's newest technology.

All except the Altima have hybrid or mild-hybrid models, which has broadened consumer appeal for those vehicles.

"The hybrid is going to be the go-to choice for the person who is focused on fuel economy," said John O'Dell, a senior editor at Edmunds.com, in a telephone interview. "If automakers can keep the price right, midsize cars are where the hybrid volume will come from."


Ford's rising success cuts
bond financing costs

Matt Robinson
Bloomberg News
September 28, 2013

Ford Motor Co. is paying the lowest relative yields in at least a decade on new five-year bonds and less than similar notes from General Motors Co. as it reclaims investment grades from the two biggest ratings companies.

Ford's finance unit sold $1 billion of 2.875 percent securities that yield 145 basis points more than Treasuries with comparable maturities. The automaker, lifted out of high-yield status by Standard & Poor's this month, paid a spread 23 basis points less than that on five-year debt sold in January, while GM, with ratings split between investment and junk grades, is paying 62.5 basis points more for a five-year debt with a 3.5 percent coupon sold at the parent-company level this week.

Along with rising sales and falling costs, the Sept. 6 increase from S&P is boosting demand for the Dearborn-based company's debt, Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, said in a telephone interview. Some buyers are unable to purchase bonds from issuers that have high-yield ratings from S&P or Moody's Investors Service, she said.

"The S&P upgrade probably helped them save about 10 basis points" on Thursday's sale, Matthew Duch, who helps oversee $12 billion as a money manager at Bethesda, Md.-based Calvert Investments Inc., said in a telephone interview.

Jay Cooney, a spokesman for Ford, declined to comment on the sale.

Chief Executive Officer Alan Mulally has revived the company by cutting costs and overhauling a lineup of vehicles that's helped boost sales to the highest level since 2008. Improved profitability, lower pension fund obligations and growth in China led S&P to raise its grade even as Ford faces slow sales in Europe.

"GM is more of an improving story than Ford in the sense that investors are betting they're heading to investment grade," Janney's Lurie said. S&P and Fitch Ratings rank its debt speculative-grade with positive outlooks, making GM a potential rising star, or company that may move to investment-grade status from junk.

Ford's debt has returned 1.97 percent this year through Thursday, more than double the 0.85 percent gain in the Bank of America Merrill Lynch Global Automotive Index. GM's bonds are up 1.72 percent. Yields on Ford's notes, which total about $51.4 billion, have been little changed this year, while the average for the index has risen 8 basis points, or 0.08 percentage point, to 1.79 percent.

The second-biggest U.S. carmaker's previous sale of dollar-denominated five-year notes, $1.25 billion of 2.375 percent debt offered in January, yielded 168 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The securities traded at 99.3 cents Thursday to yield 2.55 percent, or 114 basis points more than government debt, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

GM, the largest U.S. automaker, raised $4.5 billion this week after having its rating lifted to investment grade by Moody's. The Detroit-based company sold securities including $1.5 billion of notes due October 2018, according to data compiled by Bloomberg.

Tom Henderson, a spokesman for GM, declined to comment on the company's borrowing costs in the recent sale.

High-yield, high-risk bonds are rated below Baa3 by Moody's and lower than BBB- at S&P and Fitch.

Ford was stripped of its investment-grade status in 2005, when gasoline prices rose and sales of sport-utility vehicles collapsed. The company founded by Henry Ford in 1903 lost a record $14.8 billion in 2008 as the deepest recession since the Great Depression lowered demand for its vehicles.

Credit-default swaps on the maker of Mustangs and Fusions, which rise as investors' confidence deteriorates, implied a 98.98 percent chance of default within five years on Feb. 10, 2009, according to Moody's Corp.'s capital markets research group. The swaps now match Ford's rating.

Mulally pledged assets including factories and the company headquarters as collateral for $23.4 billion of loans in 2006, helping Ford avoid the 2009 bankruptcies and bailouts that befell the predecessors of GM and Chrysler Group LLC. Ford regained control of the collateral, which included its logo, after Fitch and Moody's upgraded the company last year.

"Alan Mulally is probably one of the best operators out there," Scott Kimball, a fixed-income manager at Taplin Canida & Habacht LLC, a BMO Financial Group unit that oversees about $8 billion, wrote in an e-mail. Buying its debt after the crisis "rewarded those who bought in when others were unconvinced."

Ford's $1.5 billion of 6.625 percent notes due October 2028, which traded as low as 14 cents on the dollar in March 2009, climbed to 113.47 cents on Sept. 25 for a yield of 5.31 percent, Trace data show. Sales are forecast to rise to $147.2 billion in 2014, the most since 2007, according to the average estimates of 11 analysts compiled by Bloomberg.

"Ford has done a remarkable job," in cutting costs and increasing profitability, Hitin Anand, a New York-based analyst at debt researcher CreditSights Inc., said in a telephone interview. "They've done all of this without having to go through bankruptcy," he said, "They've done everything right."


Ford buys Ferndale-based
software developer Livio

Karl Henkel
The Detroit News
Sept 27, 2013

Ford Motor Co.’s latest attempt to elbow its way to the front of the automobile technology world includes the purchase of Ferndale-based software developer Livio.

The acquisition — which cost “less than $10 million” — is another effort by the Dearborn automaker to create standardized software application development interfaces, said Paul Mascarenas, chief technical officer and vice president of Ford Research and Innovation, in a teleconference with reporters Thursday morning.

“For us, standardizing in-vehicle connectivity really helps to ease the burden on content developers,” Mascarenas said. “They currently have to create applications using several difference vehicle interfaces.”

The acquisition of the 11-employee Livio, which will become a wholly-owned subsidiary of Ford Global Technologies, a branch of Ford that manages all aspects of intellectual property for Ford, is effective immediately.

And the acquisition could help Ford parlay a previously announced program, which allows anyone — even competing automakers — access to the technology behind AppLink, a Sync feature that gives drivers voice-control of apps.

Ford wants to take AppLink and Livio’s intellectual property and technology and combine them into one industry standard, which would save developers time and offer more options for tech-savvy consumers.

“We’re very focused on making it fast for developers to be connected,” said Jake Sigal, founder and CEO of Livio, in a teleconference. “We feel that the industry desperately need a standard.”

Typically, partnerships between automakers and developers work something like this: Automakers, armed with their own software development kits, reach out to developers to integrate apps.

Automakers can then use app integration as a selling point, while developers benefit by making their apps available to more people.

But automakers must compete for developers’ time with the likes of Apple Inc., which sold more than 9 million of its iPhone 5s and 5c during its first weekend.

If each automaker has its own technology system, that splits developers’ time between multiple car makers and big-name tech firms.

“Now you face the challenge of how do you converge all of them back to a single standard,” Mascarenas said. “In an ideal world, you’d get everybody together in a room and you’d agree on a standard up front.”


Obama: Ford 'No. 1
automaker' in U.S.

President Barack Obama speaks to workers as he visits the Ford Kansas City Stamping Plant in Liberty, Missouri. Obama toured the facility and spoke to employees. (Jamie Squire / Getty Images)

David Shepardson
Detroit News Washington Bureau
September 25, 2013

President Barack Obama heaped praise on Ford Motor Co. and its best-selling F-series pickups, calling the Dearborn automaker "the No. 1 automaker" in the United States.

Obama visited Ford's Kansas City Stamping Plant in Liberty, Mo., last Friday, mostly to urge Congress to raise the debt ceiling and approve funding to keep the government running after the current budget expires on Sept. 30.

He called Ford President and Chief Executive Officer Alan Mulally "one of our outstanding business leaders, who has helped to lead Ford to be the No.1 automaker in the United States of America."

What the president meant by that is unclear. Ford is not the best-selling U.S. automaker. That's a position General Motors Co. has held for decades. GM sold 1.9 million vehicles in the first eight months of 2012, compared to 1.7 million by Ford. GM is the world's second-best selling automaker behind Toyota Motor Corp.

Obama heaped praise on Ford's F-series pickup, the best-selling vehicle — car or truck — in the U.S.. "The only thing tougher than Ford trucks are American workers, the American people, that's what we've shown" he said. "The new F-150 is built tougher than ever, more fuel efficient than ever. You've got trouble making them fast enough."

Obama compared congressional wrangling over the debt ceiling to going to a Ford dealership to buy an F-150. "Once you bought your truck, you can't say you're saving money by not paying the bills," Obama said. "I can't just say, 'I'm not going make my car payment this month.' "

"Basically America becomes a deadbeat," Obama said, saying a default could raise interest rates — and that could hurt auto sales. "This is not some abstract thing."

"The Big Three are all profitable," Obama said. "The American auto industry has come roaring back."

He said that Ford had made "some smart decisions" before the financial collapse in 2008 and didn't need a government bailout, but said if the rest of the industry had collapsed it would have tanked the supplier base and that could have affected Ford.

Asked by email for his reaction to the president's endorsement of Ford trucks, Mulally wrote: ":)))))))) Go Further with Ford!!!"

GM spokesman Greg Martin noted GM's long-running top position in U.S. auto sales.

"We're clearly No. 1 in sales volume, overall quality, and Consumer Reports' No. 1 sedan and truck," Martin said. " I am sure this is nothing more than a rhetorical device — and whatever plant he visits, that automaker is No. 1 for a day."


GM to buy $3.2B in stock

Melissa Burden
The Detroit News
September 24, 2013

General Motors Co. said Monday that it plans to buy 120 million shares of preferred stock from the UAW Retiree Medical Benefits Trust (UAW VEBA) at a cost of about $3.24 billion or $27.02 a share.

The Detroit-based automaker said the deal is contingent on GM closing an offer ofat least $3 billion in senior unsecured notes by Sept. 30, according to GM's agreement with the VEBA filed with the U.S. Securities and Exchange Commission. GM, in the agreement, said it hopes to complete the transaction around the time of closing on the notes.

GM said it has launched an offering of senior unsecured notes in the bond market, proceeds of which will be used for general purposes including buying back shares from the UAW VEBA. GM said it plans to issue five-, 10-, and 30-year notes.

The UAW VEBAacquiredabout 260 million shares of GM preferred stock as part of the 2009 bailout of the automaker, while the Canadian government owns about 16 million shares of preferred GM stock. The VEBA's8.4 percent ownership of GM with its 140 million common shares of stock doesn't change with this transaction.

The move will allow the automaker to replace some high-cost debt with lower priced debt. GM now pays a 9 percent dividend on its preferred shares and is expected to get a much lower interest rate on the notes. The 9 percent dividend costs GM about $620 million annually.

GM can retire all of its preferred stock at the end of the next year and has indicated it plans to do so.

The automaker said it expects to take a charge of about $800 million in the third quarter associated with the repurchase of the shares.

The VEBA provides health care benefits to nearly 800,000 UAW retirees and dependents. The VEBA said Monday that it confirms GM's announcement, but has no comment regarding the pending transaction.


Ford to keep Edge, MKX vehicle assembly in Ontario -union

By Solarina Ho and Allison Martell

Sept 23, 2013

(Reuters) - Ford Motor Co announced Thursday that its Oakville, Ontario, plant will assemble the next generation of the Edge and MKX crossover utility vehicles that are now produced at the facility, a union official said on Wednesday.

"It's obviously going to give us the next generation of the Edge and the MKX, so it's going to help us for sure. It's going to help the employees and the community," said Gary Beck, head of the union at plant, Unifor local 707, which represents 3,000-plus workers.

Unifor is a new union formed by the merger of the Canadian Auto Workers and the Communications, Energy and Paperworkers union.

Ford sent an invitation to media for an announcement at the plant on Thursday, without disclosing the details. A Ford spokesman could not be reached immediately for comment.

To retool the Oakville plant for the revamped models, Ford executives and representatives of the federal and provincial governments are expected to announce a combined investment of more than C$800 million ($775.38 million), the Globe and Mail newspaper reported this week.

The government funds will likely come from the Automotive Innovation Fund, set up in 2008 for research and development projects in Canada's auto industry. The federal government extended the fund this year by five years and infused it with more cash to lure investment and create jobs in the auto sector.

Last Thursday's announcement will be timely for Canadian auto workers concerned about keeping vehicle production in Canada.

Earlier this year, General Motors Co announced it was spending C$250 million to retrofit its CAMI Automotive Inc assembly plant in Ingersoll, Ontario, for future vehicle production. {ID:nL1N0C09RU]

But last December, union leaders were surprised by GM's decision to move production of its next generation of the Chevrolet Camaro to Lansing, Michigan, from Oshawa, Ontario.

The move was a fresh setback for GM workers in Oshawa, where factory employment has dwindled over the last decade, but a win for Michigan's hard-hit auto sector.

The new, redesigned Edge is expected to go on sale in the spring of 2015 as a 2016 model.

Making the official announcement will be Joe Hinrichs, president for the Americas at Ford, and Dianne Craig, chief executive of the company's Canadian unit.

A year ago, the Ford plant's unionized workers agreed to a new four-year contract that was expected to help create about 600 jobs at the facility, Ford's only production site in Canada. As well as the Edge and the MKX, the plant also assembles the company's Flex and Lincoln MKT models.


Ford to put EcoBoost engines
in police vehicles

Karl Henkel
The Detroit News
Sept 19, 2013

Ford Motor Co. could soon have the first law enforcement vehicle that gets better than 30 miles per gallon on the highway.

The Dearborn automaker will couple its 2-liter EcoBoost engine with its Taurus-based Police Interceptor Sedan to create a "special service police" non-pursuit vehicle.

Ford decided to offer the smaller EcoBoost engine — a marriage of direct-injection, turbocharging, variable camshaft timing and proprietary Ford software — at the behest of police agencies, particularly smaller ones, which have experienced budget cuts and are looking to save money or have no need for pursuit-ready police cars.

While significantly smaller than the three other options available for Ford police sedans, which include a 3.5- and 3.7-liter naturally aspirated engine and 3.5-liter EcoBoost, the 2-liter will produce 240 horsepower and 270 pound-feet of torque.

The special service police sedan is expected to get an Environmental Protection Agency-certified 22 mpg in the city and 30 on the highway, though official EPA estimates aren't expected until December.

That translates to a $5,000 savings — if regular-grade gas is $3.65 per gallon — for the typical police cruiser that drives 30,000 miles per year for three years.

Those fuel efficiency estimates are significantly better than the previous-generation Ford police sedan, the Crown Victoria, which got an estimated 14 mpg in the city and 17 on the highway when equipped with a 4.8-liter V-8 engine.

Ford's special service sedan also edges General Motors Co.'s Chevrolet Impala police vehicle, which gets 17 mpg city and 28 mpg highway when equipped with a 3.6-liter V-6, though the Impala gets better horsepower (302) and similar torque (262).


Ford to announce $700M
investment for Canadian plant

Karl Henkel
The Detroit News
Septmber 17, 2013

Ford Motor Co. on Thursday plans to announce an approximately $700 million investment for its lone Canadian assembly plant, according to a source familiar with the situation.

The Dearborn automaker, which manufactures midsize crossovers including the Ford Edge and Lincoln MKX in Oakville near Toronto, will also get about $135 million from the Ontario and Canadian governments, according to the Globe and Mail newspaper.

A Ford spokesman, when reached by phone Monday afternoon, said the automaker had "nothing to announce today."

Canadian government officials will attend a plant event Thursday, the source said.

Ford's investment is part of a commitment made last year during negotiations with the Canadian Auto Workers union, now known as Unifor.

Ford at the time promised to create 600 jobs over the life of the agreement, many coming at Oakville, which also manufactures the Ford Flex and Lincoln MKT crossovers.

Ford also has two engine plants in Windsor.

The automaker plans to build its next-generation Edge and MKX on the same midsize platform as the Fusion and MKZ sedans.

Ford is looking to reduce its number of platforms to nine. Platform consolidation is a major cost-saving measure implemented by many automakers.

Heading into labor negotiations with the CAW last fall, there was speculation that automakers may wind down operations in Canada, which has become the most expensive place in the world to build cars and trucks, even higher than in the United States.

But Ford, in an effort to reduce costs upon ratification of the four-year contract with the CAW last fall, offered 1,000 hourly employees generous retirement packages in an effort to lower costs.

Newly hired workers will make a lower hourly rate and "grow" into the full-time rate after 10 years.


Unifor Local 88 votes
to approve GM pact

Melissa Burden
The Detroit News
Sept 16, 2013

Members of Unifor Local 88, formerly Canadian Auto Workers Local 88, voted Sunday to approve a new four-year contract with General Motors Co. that will make about 310 temporary workers full-time GM employees and follows the pattern of the agreement the former CAW reached last fall with GM.

GM's CAMI assembly plant hourly employees voted by more than 89 percent in favor of the contract that goes into effect at 11 p.m. Monday, said Dan Borthwick, Unifor Local 88 president, on Sunday. The plant in Ingersoll, Ontario, has about 2,700 hourly workers, including the temporary workers, Borthwick said.

"We went into bargaining to get pattern (agreements) for our existing members, but also to bring in our temporary workers," Borthwick said. "As a local union ... we're very happy. We believe we've turned the tide on temporary employees."

Borthwick said CAMI hourly production and skilled trades workers will receive a ratification bonus worth 3,000 Canadian dollars and annual lump sum payments worth 2,000 Canadian dollars in 2014, 2015 and 2016. That mirrors terms the union reached last year with GM covering more than 5,500 hourly workers at GM's Oshawa Assembly Plant, St. Catharines Powertrain Plant and a parts distribution center in Woodstock, Ontario.

Workers at CAMI build GM's hot-selling Chevrolet Equinox and GMC Terrain crossovers on three shifts. Borthwick said forecasts for the products remain high and projections call for work at the plant to continue six days a week, 24 hours a day through Christmas next year.

GM, which on Saturday announced it had reached a tentative agreement with Unifor Local 88, said it appreciated the "frank and straightforward dialogue" with the union during negotiations.

"Throughout the next four years, we will continue to work with our Unifor partners to identify opportunities to enhance the competitiveness of our Canadian operations," said GM Canada spokeswoman Adria MacKenzie in a statement.

The temporary workers at CAMI will receive the same benefits as the other members and over 10 years will be brought up to the same pay as the other workers, Borthwick said. They had been making 70 percent of a full-time hourly workers' earnings and had scaled back benefits, he said.

Unifor said the new agreement also retains pension benefits for workers and retirees. New hires will have a defined contribution pension plan.

"We've crafted an agreement that creates a much-needed sense of job and income security for our members and their families," Unifor Local 88 plant chairman Mike Van Boekel said in a statement.

The former CAW's contract with GM reached last year also will create or retain 1,750 jobs and spend $675 million at its Oshawa and St. Catharines plants. In March, GM said it plans to invest $250 million into CAMI, adding flexible body shop tooling and equipment and change the manufacturing line to bring vehicles to market quicker.

Unifor also reached contract agreements last fall covering the hourly work forces at Ford Motor Co. and Chrysler Group LLC in Canada.


GM reaches tentative agreement with Unifor Local 88

Melissa Burden
The Detroit News
Sept 15, 2013

General Motors Co. said Saturday that it has reached a tentative contract agreement with Unifor Local 88, formerly Canadian Auto Workers Local 88, representing about 2,500 GM hourly workers at its CAMI assembly plant in Ingersoll, Ontario.

Hourly workers will meet Sunday for a ratification vote. GM said it would not comment on terms of the agreement.

"This set of talks with our labor partners have been candid and constructive, reflecting the challenges facing Canadian manufacturers," GM said in a statement.

Unifor Local 88 President Dan Borthwick on Saturday said the tentative agreement covers four years.

"We are not releasing any details of the agreement until our ratification meeting," Borthwick said in a short telephone interview.

Unifor says CAMI has about 2,700 production and skilled trades union workers. Workers at CAMI build the popular Chevrolet Equinox and GMC Terrain crossovers on three shifts.

Unifor Local 88's contract with GM is set to expire at 11:59 p.m. Monday.

Last fall, the former CAW reached new contract agreements covering more than 5,500 GM's hourly workers at three other GM facilities in Ontario. Hourly workers at GM's Oshawa Assembly Plant, St. Catharines Powertrain Plant and a parts distribution center in Woodstock, Ontario received a ratification bonus of 3,000 Canadian dollars and will get annual lump-sum payments worth 2,000 Canadian dollars in the final three years of the contract. GM also will create or retain 1,750 jobs and spend $675 million at its Oshawa and St. Catharines plants.

Unifor also reached contract agreements last fall covering the hourly workforces at Ford Motor Co. and Chrysler Group LLC in Canada.

In March, GM said it plans to invest $250 million into CAMI, adding flexible body shop tooling and equipment and change the manufacturing line to bring vehicles to market quicker.


Tiny Fiesta a serious competitor
in the subcompact market

The Ford Fiesta still has a few bugs.

The Globe and Mail
Sept 14, 2013

There's a lot to like about the refreshed 2014 Ford Fiesta: hot looks, great fuel economy – even in real-world driving – and a high-tech MyFord Touch infotainment system to give its upscale interior even more futuristic pizzazz.

But Fiesta owners' forums are full of complaints with Ford's smallest North American offering, many surrounding its advanced but issue-plagued PowerShift six-speed dual-clutch automatic transmission, concerns backed up by subpar reliability ratings in Consumer Reports and J.D. Power rankings.

Ford is expanding its 2014 offerings now with the extra-spicy Fiesta ST performance hot hatch, which offers 197 hp and acceleration to challenge its larger and more powerful Focus ST big brother. By the end of 2013, another turbocharged Fiesta will appear, the three-cylinder Fiesta with EcoBoost. It relinquishes the usual fourth cylinder to become the mid-level engine offering that promises notably more low-end oomph than the standard model, while using less fuel than what's already one of the lightest sippers of gasoline among stingy subcompact cars. Ford hasn't released any official fuel consumption numbers for the three-pot, but suggests it will be the most efficient non-hybrid on the market.

We spent most of a day behind the wheel of a fully loaded Fiesta Titanium five-door, back and forth between Ottawa and Gatineau, with a quick sampling of the Fiesta ST on a parking lot autocross course. The ST easily outshone the Hyundai Veloster Turbo dynamically, though it would be a closer battle with the Mini Cooper S.

The regular Fiesta hatchback's playful exterior was left largely untouched for 2014, with reworked spoilers and new 15- and 16-inch wheels the biggest clues for new-car spotters. It's still one of the sharpest dressers in the segment, right at the top in hatchback form perhaps, even if it no longer offers the upscale LED headlights that the Kia Rio5 does.

But you will miss some of the Rio5's more extravagant options inside, especially its optional heated steering wheel or its cooled seats. This latter feature may seem overkill on a budget-minded economy car, but more than once – from both driver and passenger seats – I checked the heated seat switch to see if my driving partner had sneakily set it on a subtle rump roast setting without me noticing.

A loose transmission housing on our test unit suggested that quality questions on the Mexico-built Fiesta have not been resolved. But overall, the vehicle seemed tight and of high quality for the low-budget class.

The Fiesta's rivals don't offer anything like Ford's high-tech MyFord Touch inside, a new option this year that helps modernize the interior with a high-tech look and increased voice and connectivity options. Some drivers may miss the hard radio station preset buttons, or lament the same tight space in the rear seat and trunk, but the push-button starter, leather-capped steering wheel and ice-blue-lit cup-holders further the interior's funky ambience.

The Ford's PowerShift automatic has been noticeably refined in the 2014 model to be less jerky in city traffic especially, though it still doesn't offer the paddle shifters that a dual-clutch transmission should. Instead, there's a subtle plus/minus button on the shifter, which can be toggled back and forth, if you've pushed passed D into S mode.

The Fiesta's fuel consumption numbers suggest it's at the top of its class, with an overall EPA average of 7.4 litres/100 km.

Perhaps the most significant question for potential Fiesta buyers is its out-the-door price. Our fully loaded Titanium worked out to an as-tested MSRP of $25,527 after freight but before taxes, though Ford's Canadian consumer build site noted that current incentives of almost two grand would bring that amount down to $23,563. Most compact cars start around 16 large, with transaction prices right around that same low to mid-20s sweet spot. So even after such rebates, the regular Fiesta is priced close to larger, more comfortable compacts with similarly low fuel consumption.

The Fiesta ST and upcoming EcoBoost models offer more unique appeal, though both will debut with only manual transmissions that will quickly cross themselves off many buyers' shopping lists. That may yet change, as will – hopefully – the Fiesta's reliability record, as Ford has pledged to improve the brand's recent lacklustre results.

Tech specs

2014 Ford Fiesta Titanium 5-door

Type: Subcompact hatchback

Base price: $14,499 for S; as tested, $25,527 ($23,563 w/navi and options, after Employee Discount)

Engine: 1.6-litre, four-cylinder

Horsepower/torque: 120 hp/112 lb-ft

Transmission: Six-speed dual-clutch automatic

Drive: Front-wheel

Fuel economy (litres/100 km): 7.0 city/5.0 highway; regular gas

Alternatives: Chevrolet Sonic, Honda Fit, Hyundai Accent, Kia Rio, Mazda2, Toyota Yaris


King's VW gambit
key to UAW growth

Daniel Howes
Sept 13.2013
Detroit News

Bob King is getting creative — because he has to.

The United Auto Workers president, stymied in multiple attempts to organize foreign-owned automakers operating in the United States, is pushing to install the German labor model of “co-determination” at Volkswagen AG’s Chattanooga assembly plant in the heart of the ol’ South.

He also is preparing to visit the White House today for another in a series of meetings, organized by the Obama administration, to identify ways the feds can help Detroit — short of a bailout. His message from city union leaders grappling with the largest municipal bankruptcy in American history:

“In Detroit, we believe it’s going to take business, labor, the community and government all coming together to bring jobs back to the city,” King told The Detroit News, adding that there can be no recovery without them. “Working in collaboration, we can accomplish that.”

Less than a year after losing a bruising confrontation over establishing right-to-work laws in Michigan, King the Conciliator is back. He wants the union to work with VW management to establish a German-style “works council” in Tennessee, and he says his municipal counterparts should cooperate with business and the city to get Detroit moving forward.

That won’t be an easy sell to fellow union leaders, chiefly because the unspooling municipal bankruptcy is promising to exact a high price from unions and their retirees. And, secondly, bringing “jobs back” to Detroit also depends on stabilizing city government and enabling it to provide basic services at reasonable costs.

How the unions, the city’s bankruptcy team and business leaders can “come together” in “collaboration” is a vague end in search of a yet-to-be-defined process. It sounds good and reasonable, but is it attainable under the current state of perpetual duress, anxiety and litigation?

King understandably wants to replicate the demonstrable successes of the auto bailout’s labor-management cooperation in the parallel contexts of organizing VW and negotiating the perils of Detroit’s Chapter 9 bankruptcy. Why wouldn’t he, considering the upward trajectory of U.S. auto sales, slightly rising union membership and fat automaker profits since?

But reality intrudes. King’s VW gambit is the culmination of a years-long attempt to turn the German model to the UAW’s advantage in the United States, in part because efforts to penetrate Japanese and Korean shops down South have proven to be abysmal failures.

“I was elected two years ago,” he told The News in an interview last December, “and I expected we’d have a couple of transnationals organized by now.” They haven’t, which is why the innovative VW move is so critical to bolstering UAW membership.

King’s move leverages the influence of IG Metall, Germany’s powerful auto workers union, on the board of a VW still 20 percent owned by the government of Lower Saxony. It endeavors to offer a new approach to union representation in American auto plants, just a few years removed from the cataclysm of Detroit’s auto implosion.

And you can bet it enjoys the quiet cheering of Detroit automakers, happy to see UAW representation heading through the doors of a global competitor with outsized (if faltering) designs on the U.S. market. That the plant is the baby of Republican Sen. Bob Corker, a former Chattanooga mayor and nemesis of Detroit in the auto bailouts, makes the prospect just a tad sweeter.

Times change, as the past four years attest — and they don’t. In the auto bailouts, existing members (not including those hired after the meltdown at lower, second-tier wages) preserved base wages, pension and health care benefits. If Emergency Manager Kevyn Orr’s proposed restructuring is any indication, the city’s unions clearly are not on track to emerge from Chapter 9 similarly unscathed.

Wages already have been cut; health care co-pays are up; entire city functions are slated to be privatized (garbage collection) or exited altogether (lighting department); vested pension benefits, pending a blizzard of litigation in bankruptcy court, are in danger of being cut.

In short, the conciliation implied by King’s approach risks dueling with itself. Positive, constructive change is a central tenet in the German-style works councils he envisions for VW in Chattanooga, what he hopes will be a message that Big Labor from up north can be part of the solution.

But for Detroit’s public-sector unions, the path to anything resembling positive change runs through a crucible of restructuring and confrontation that is just beginning. Whether and how King, the UAW, even the White House, can help the process remains to be seen.


UAW: Majority at Tennessee VW plant have signed union cards

Bryce G. Hoffman
September 12, 2013
The Detroit News

Frankfurt, GermanyA majority of workers at Volkswagen AG’s Chattanooga Assembly Plant in Tennessee have signed cards in support of union representation in creating a German-style works council, according to United Auto Workers President Bob King.

“We’ve gone through a very positive organizing campaign down there. Now, we’re going to work through the recognition process with Volkswagen,” King told The Detroit News on Wednesday, praising the German automaker for having “as much integrity as I’ve ever seen a global company have.”

A Volkswagen spokesman at the plant declined to comment on the UAW claim of having signed up a majority of workers, referring instead to a letter issued by the company last week that confirmed it is in talks with the union and stated: “Volkswagen values the rights of its employees in all locations to an operational representation of interests.”

If the UAW succeeds in winning recognition from VW, it would be a major victory for the union, which has tried with little success to organize foreign automakers’ factories in the South. Labor experts say it could also offer an important new paradigm for union-management relations — not just in the auto industry, but for other industries as well.

“It is a major achievement on two levels,” said labor expert Harley Shaiken, a professor at the University of California, Berkeley. “First, this really sets the stage for a Chattanooga model — a highly competitive, pro-union model that has implications for other non-union automakers in the U.S. Second we’re seeing the introduction of a new model that is highly successful in Germany that has implications for other industries.”

In Germany, unions negotiate wages and benefits for their members just like their counterparts in the United States. But German “co-determination” laws require the establishment of elected work councils to handle plant-specific issues, such as work rules and job security. Those same laws give labor half the seats on each company’s governing supervisory board.

“German unions are very powerful, both at the bargaining table and politically. But they also are a vital part of German competitive success,” Shaiken said. “Volkswagen utilizes this model throughout the world, and Volkswagen has become one of the world’s most successful automakers.”

Just how work councils would work at Volkswagen’s Chattanooga plant remains unclear. King said the details still need to be worked out with Volkswagen.

“Our plan is to set it up along the model of the German co-determination laws,” he said, adding that the works council itself would include representatives from both labor and management and be responsible for tackling issues such as quality, productivity, training and safety.

“There would still be periodic economic negotiations (between VW and the UAW),” he said. “I don’t think it will look all that different from what we have at GM, Ford or Chrysler.”

Winning recognition for the UAW from at least one of the major foreign automakers has been a key goal of King’s administration.

Volkswagen was widely seen as the easiest nut to crack because labor representatives on VW’s supervisory board have pressured management to enter discussions about union representation at the U.S. plant. The Chattanooga factory is alone among Volkswagen’s major assembly plants around the world without formal labor representation.

“I don’t think we would be at this point were it not for the VW works council and IG Metall,” King acknowledged.

A breakthrough in Chattanooga is unlikely to do much to change the mind of Asian automakers, which have long resisted the union’s organizing efforts. Japanese and Korean automakers, known for the efficiency of their plants, have balked at adding new layers of bureaucracy and restrictive work rules in their factories.

King hopes to change their mind by making VW’s Chattanooga plant even more successful.

“We are a different union today,” he said. “When other companies see that worker representation really adds value, they would be foolish not to embrace it.”

King also hopes to convince Germany’s other automakers — BMW AG and Daimler XXXX — to embrace the union.

Some politicians in the region have expressed fears that a UAW organizing efforts at Volkswagen could spread to other automakers and hurt future efforts to recruit foreign investment.

Republican Sen. Bob Corker, a former mayor of Chattanooga, said Tuesday that Volkswagen would become a “laughingstock” if it welcomed the UAW into its plant.

King said he has reached out to Corker and invited him to sit down and discuss how the UAW can help bring jobs to his state.


Can you guess how many Canadians bought plug-in cars last month?

The Globe and Mail
Sept 9, 2013

Sales of the Nissan Leaf plug-in car soared 180 per cent in August. On the year, sales of the Leaf have nearly doubled.

Over at General Motors Canada, the Volt plug-in also had a relatively great month. Alas, the Toyota Prius plug-in did not fare quite as well, with a sales number so low I am sad even to mention it. But I will. Be patient.

And Ford? Ford has made the biggest commitment to electrification of any major car maker, if your measure is the number of plug-in models for sale. Ford has three plug-in models in its lineup – the Fusion Energi, C-Max wagon and Focus EV. Together, these three tallied up August sales of 63 and year-to-date Ford has moved 231 plug-ins. For the record, the purest plug-in of the three, the Focus EV was the least popular in August; just seven were sold. What does that say about pure battery cars?

As you can see, Canadians are NOT stampeding to showrooms, desperate to buy plug-in battery cars. Governments may want them, but not real buyers.

Okay, I’ve teased you with Ford’s actual sales numbers, so here are the rest. Despite the big percentage increase in sales, Nissan Canada sold 56 Leafs in August and the year-to-date total is 346. GM Canada sold 84 Volts in August and 597 for the year-to-date through August. Toyota? Toyota Canada sold exactly 21 plug-in Prius hatchbacks in Canada last month. That’s one Prius plug-in for every four Volts sold.

So exactly 224 plug-in cars were sold in August by the four big players in Canada. That in an August when new light vehicle sales hit 159,004, a 6.5 year-on-year increase and an all-time record for any August. If you’re keeping score, the four big guns in plug-in cars accounted for 0.14 per cent of the new vehicle market.

The raw sales numbers in the United States look better, however. As Automotive News reports, sales of plug-in cars likely exceeded 10,000 vehicles for the month.

Many thought plug-in sales might be even stronger in August. After all, GM Canada tried to jolt Volt sales by zapping $5,150 off the price of the Chevrolet Volt. That pushed the price of a 2014 model to $36,850, versus $42,000 for the 2013 version. GM in the U.S. had already done something similar on pricing before its Canadian arm went for the cut. Add in taxpayer-funded incentives ranging from $5,000-$8,231 in Ontario, Quebec and British Columbia, and a new 2014 Volt in some places can be had for less than $29,000, plus fees and taxes.

As a sign of a plug-in price war, earlier in August, Nissan Canada lowered the sticker on a base 2013 Leaf S to $31,698 from $38,395 in 2012 – plus the company was offering a $1,500 factory incentive. And Leaf buyers get that taxpayer subsidy, too. The aspiring Leaf buyer in August could have driven one home for something in the low-$20,000s plus fees and taxes. That is if home was within range of a battery charge – realistically, about 100 km or less and this buyer had time to wait for a re-charge.

What’s obvious here is that the vast, vast, vast, vast majority of buyers don’t see a plug-in car as a practical and affordable option. Car companies make them and sell them because, as Automotive News said this week, they are “under pressure from regulators to sell more electric cars for the benefit of the climate.”

Even though the sales numbers remain dismal, car companies plan to add more plug-in cars to their fleets. Lots and lots of them. Someday plug-ins may even account for one tenth of one per cent of new vehicle sales in Canada, month after month.

Someday. But not until prices come down dramatically and battery technology makes a moonshot-equivalent leap ahead so that a plug-in car – an affordable one, not a Tesla – has the single-charge range of your typical $14,000 gas-powered runabout.

Correction: Plug-in vehicles accounted for 0.14% of new vehicles sold in August, not 0.001, as stated earlier.


U.S. car prices hit record highs
as buyers load up on options

Tom Krisher
Globe & Mail
Sept 8, 2013

Americans are paying record prices for new cars and trucks, and they have only themselves to blame.

The average sale price of a vehicle in the U.S. hit $31,252 (U.S.) last month, up almost $1,000 over the same time last year. The sharp increase has been driven by consumers loading cars up with high-end stereos, navigation systems, leather seats and safety gadgets.

It’s a buying pattern that began around two years ago with low interest rates that let buyers choose pricier cars while keeping monthly payments in check. And auto makers have also offered cheap lease deals that include fancy options.

Add in booming sales of expensive pickup trucks, and you get record high prices. But those conditions could soon change. Although sales are expected to keep rising, auto makers say the next wave of buyers who replace older cars will be more cost-conscious, shunning expensive radios and cushy seats to reduce payments. Ford is starting to see that trend in pickup trucks, and is adding a lower-priced model to its top-selling F-Series line.

Most car buyers shop based on expectations for a monthly payment, with the average running around $450, said Jesse Toprak, senior analyst with the TrueCar.com auto pricing website. Since bank interest rates run as low as 2 per cent and auto makers offer no-interest financing, buyers now have a choice between a lower payment or a nicer car.

Unlike rising mortgage rates, shorter-term auto interest rates have remained fairly stable.“If you can keep your payment the same and get more car, most consumers in the U.S. just get more car,” said Toprak, who calculated the record average price.

The average price, he said, went up about $1,400, or 4.5 per cent, in the past two years, far faster than normal. The result is a dream scenario for auto makers and car dealers: People are paying record high prices just as demand returns to levels not seen since the Great Recession.

It’s also a dream for people like Zachary Bier, a 26-year-old engineer and sales representative in New York City who just leased a $52,000 BMW 335i to replace a 3-Series with an expiring lease. He set out to match his old $650-per-month payment with hopes of getting more features.

For the same payment, he got metallic black paint, upgraded leather seats with red trim and stitching, Bluetooth technology to link his phone to the car, a heads-up display that projects his navigation system and other data onto the windshield, and electronic blind-spot detectors, he said.

“I guess I was surprised based on the sticker price that this car has so much more,” he said. “For everything that comes on this, I feel like it’s a better car.”

The reason car companies can offer cheap leases is because used car values are expected to remain high for the next several years. A company will offer an attractive lease rate now if it feels confident that when the lease is over, it can then sell the returned vehicle for a healthy price on the used-car market.

Those who buy instead of lease also get more for their money because low interest rates can bring lower payments. On average, four-year new-car loan rates are just over 4 per cent this year, according to Bankrate.com. Back in 2007, before the Great Recession, that figure was 7.68 per cent. That’s a big difference for someone buying a loaded-out $31,000 Ford Fusion with a package that includes heated leather seats, premium audio system and 18-inch polished aluminum wheels. Say the buyer trades in a car worth $10,000 and borrows $21,000. At 4 per cent interest for four years, the monthly payment would be $474. But if interest rates return to pre-recession levels, the payment jumps to $510, raising total costs by $1,728. That could cause a buyer to cut features to keep the price down.

Rising demand for cars also is helping to drive up prices. Last month, new car sales jumped 17 per cent to 1.5 million, their highest level in more than six years.

Business is good for Scott Fink, CEO of a small chain of Hyundai, Mazda and Chevrolet dealers in Florida’s Tampa Bay area. His Hyundai dealership in New Port Richey, Fla., sold a record 700 new cars in August. But Fink worries that incomes aren’t rising fast enough to keep pace with price growth. Government statistics show personal income rose only 1 per cent in the past two years, less than a quarter of the auto price increase.

And Fink fears that eventually the Federal Reserve will ease out of buying bonds, allowing interest rates to rise. Long-term mortgage rates already are up more than a full percentage point since May. So far, though, auto loan rates haven’t been affected much, but Fink worries they will go up.

“We know we’re a half a point or a point away from seeing a drop in sales,” he said. “Every time they raise rates, it takes people out of the market.”

Many in the business think prices will moderate some because people who kept their cars through the recession and now need to replace them won’t load up on options.

“They tend to be more price-sensitive,” General Motors Co. Chief Economist Mustafa Mohatarem said.

The message isn’t lost on GM’s crosstown rival, Ford Motor Co., which has seen budget-minded buyers shopping for F-150 pickups.

Eric Peterson, marketing manager for the trucks, said wealthier buyers were first to return to the market after the recession, buying expensive versions like the $47,000 Platinum, which comes with heated leather seats, navigation, a premium audio system and other goodies.

Now, Peterson says, contractors and small business owners are hiring workers who also are looking for pickups. But they want something more reasonably priced to haul gear and families.

Ford will try to please them this fall by adding a four-door cab to its lower-cost F-150 STX line. Previously, the STX only came with a two-door cab. The STX has features not available on a base model, like power windows, keyless entry and cruise control. It’s also more stylish, with machined aluminum wheels instead of steel ones. But it doesn’t have some of the more expensive options like a backup camera or a leather steering wheel.

With a starting price of $34,240 – around $1,500 more than the base model – the new version sits in the fastest-growing part of the pickup market, Peterson says. Forty-six per cent of full-size truck buyers spent $30,000 to $40,000 on a truck in July, up from 42 per cent at the beginning of this year.


UAW says it's in talks with
VW about organizing
Tennessee plant workers

Karl Henkel
The Detroit News
Sept 7, 2013

The United Auto Workers on Friday said it is discussing with Volkswagen Group a plan to organize workers at the automaker's Chattanooga, Tenn., assembly plant through a German-style works council. If the plant became organized, it would be the only U.S. factory owned by a foreign carmaker to be represented by the UAW union.

Volkswagen has faced pressure from its Global Works Council, which represents workers at other major VW plants around the world, to implement a works council system at the automaker's lone U.S. assembly plant. A German-style works council is different than the current labor setup of the UAW. Councils consist of a group of white- and blue-collar workers who meet with company management to discuss plant issues.

The pseudo-union, however, must comply with American labor laws. The council would have to be part of a trade union; otherwise it could be perceived as a company-sponsored union, which is illegal.

UAW Bob King has tried unsuccessfully so far to organize workers at U.S. auto plants run by foreign carmakers. The union is less than one-third the size it was four decades ago.

The UAW, in a statement released Friday, said it met with officials from Volkswagen and the Volkswagen Global Works Council on Aug. 30 in Wolfsburg, Germany. During that meeting, the three sides discussed details of a worker organization.

"The meeting focused on the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council," UAW President Bob King said in a statement. "VW workers in Chattanooga have the unique opportunity to introduce this new model of labor relations to the United States, in partnership with the UAW."

A letter signed by the Chattanooga plant's chairman and CEO, Frank Fischer, and by Sebastian Patta, the facility's vice president for human resources, also confirmed talks with the UAW. The letter discussed "the possibility of implementing an innovative model of employee representation for all employees."

Workers at the Chattanooga plant would have to vote for any works council to take effect. It was not clear Friday if a vote has been scheduled.

UAW membership in 2012 rose by less than 1 percent to 382,513, up about 1,500 members over 2011. It was the third straight year of rising membership, though still down sharply from recent decades. The UAW had 1.53 million members in 1979.

Organizing Volkswagen's Chattanooga plant — which opened in 2011 and currently produces the Passat midsize car — could add more than 2,000 workers to the UAW's rolls.

It would also secure a major victory for King and the UAW, which could use the plant's organization as leverage to unionize workers at other plants owned by foreign automakers, most notably German car makers. Mercedes-Benz has an assembly plant in Alabama and BMW Group has one in South Carolina.


Sales surge lifts Detroit
3 profits, outlook

Detroit's big challenge: Building enough cars

Auto News
Keith Naughton
Craig Trudell
September 6, 2013

DETROIT (Bloomberg) -- The 17 percent surge in U.S. auto sales last month pushed the annualized selling rate to a pre-recession, boom-time level. Even more significant, Detroit automakers are reaping profits not seen since the turn of the century.

Industry sales totaled 1.5 million in August, the most in one month since May 2007.

What's more, the automotive comeback crossed an important milestone as the industry's annual selling rate reached 16.1 million, the fastest since October 2007 and a volume that signifies a robust car market.

As the fifth anniversary of the collapse of Lehman Brothers approaches, Detroit has come full circle, from bankruptcy to boom. General Motors, Ford Motor Co. and Chrysler Group combined to earn $13.5 billion last year, even as industry sales were 17 percent below the peak of 17.4 million set in 2000.

Those fatter profits come from trimmer companies that radically restructured operations, shed debts and overhauled their product lineups to field their most competitive cars in a generation.

"Any question that the industry is back should be put to rest," said Jeff Schuster, auto analyst for researcher LMC Automotive. "In 2007, there was no margin on cars; the Detroit Three were giving them away. Now we're seeing a much different environment, where they're much more competitive."

Strong cars

GM and Ford shares both rose the most since December. GM gained 5 percent to $35.85, and Ford rose 3.5 percent to $16.91.

For the year through Wednesday, Ford soared 31 percent and GM jumped 24 percent, outpacing the 16 percent gain of the Standard & Poor's 500 Index.

GM and Ford shares were trading higher again today.

In the first half of this year, the Detroit 3 made more than $6 billion before the industrywide sales rate breached 16 million from last year's 14.5 million.

They're making money from models that once were loss leaders, such as small cars like GM's Chevrolet Cruze and family sedans like Ford's Fusion, which jumped 14 percent last month.

GM's total sales rose 15 percent last month, making August its best month since September 2008, the month that Lehman Brothers Holdings Inc. collapsed.

Ford was up 12 percent and said it had its best month of retail sales since 2006.

Deliveries for Chrysler, majority-owned by Fiat S.p.A., climbed 12 percent in August, the automaker's 41st straight month of gains.

Asian automakers combined for their best U.S. sales month ever. Toyota Motor Corp. deliveries surged 23 percent, while Honda Motor Co. and Nissan Motor Co. each had their best August.

Different Now

"The new 16 is better than the old 17," said Kevin Tynan, auto analyst for Bloomberg Industries. "It's different now because the products across the portfolio are so much better. Everything is just better, from the cost structure on down the line."

Consumers are willing to pay higher prices for these new models, which are stuffed with technology that keeps drivers more connected and going farther on a gallon of gasoline.

The average price a consumer paid for a Chrysler model rose 3.9 percent from last year to $32,447, according to researcher Kelley Blue Book.

Ford commands an average price of $34,455, up 1.5 percent from last year, and GM gets $34,527, up 0.7 percent.

Now Detroit's greatest challenge is building enough cars, Schuster said.

Ford said Wednesday it plans to boost North American production in the fourth quarter by 6.8 percent to 785,000 vehicles. Ford just added a shift of 1,400 workers at a Michigan factory to build more Fusions.

Three shifts

GM is running its Cruze factory in Ohio around-the-clock on three shifts to keep up with demand for the small car that is up 18 percent this year.

Consumer demand for the Cruze "is unprecedented in Chevrolet for decades," Alan Batey, head of Chevrolet, said on a conference call on Wednesday.

"I don't know when we've been in a situation where we don't have enough inventory because things are good," said Schuster, 45. "It's been a very long time. It's out of my memory bank, for sure."

Factory capacity constraints could be the biggest roadblock to reaching and surpassing the 2000 sales record, Schuster said.

Tynan and LMC each forecast industrywide sales will top 17 million in three years.

"While demand appears strong enough to sustain continued growth, supply could get in the way as many manufacturers already are facing tight inventory for many popular models," said Alec Gutierrez, auto analyst for Kelley Blue Book. "Assuming that the economy remains on stable footing, we should see demand remain strong enough to support annual sales of 16 million units or more moving forward."

'Yellow flags'

Schuster said LMC projects the industry adding 3.4 million vehicles of capacity from 2010 through 2020 in North America, 2 million of which come from new factories in Mexico.

There remain "yellow flags" in the sluggish economy, such as anemic job and income growth, Tynan said.

"There's probably more broad economic weakness than the auto numbers would suggest," Tynan said. "If you just look at the auto sales, you would think we are in full-on recovery and the new boom period. But that's not the case."

Spending on cars and housing helped maintain "modest to moderate" economic expansion even as borrowing costs increased, the Federal Reserve said Wednesday.

The last time the auto industry had 16 million in annual sales, there were excess assembly plants pumping out models consumers didn't want.

U.S. automakers dumped cars into rental fleets to keep factories running because labor contracts at the time required them to pay workers even if they were idled.

The result was high sales and low or no profits, which drove GM and Chrysler into government-funded bankruptcies in 2009.

Real Demand

"In 2007, we were achieving that sales level by giving cars away because the auto companies had too many factories," John Casesa, senior managing director at Guggenheim Partners LLC, told Bloomberg Radio this week. "Today, there's real demand for that product. It's a fundamentally different industry."

Unlike the previous auto boom, demand for Detroit's models is no longer concentrated on SUVs and pickups.

Car buyers are coming to showrooms to kick the tires of cars such as the redesigned Chevy Impala and the Ford Fiesta, which saw sales rise 61 percent last month.

GM said it sold 18,982 Cadillacs at retail for its best August on that basis since 1989.

"This is a new environment for Detroit, which is balanced growth," Schuster said.

Previously, "the concentration had been so heavy on the truck side. Now they're participating in the market gains on both sides of the business, which goes right to their bottom lines," Schuster said.

Pushing economy

And while total economic growth "has been uneven and slow," auto sales are a primary driver, Ellen Hughes-Cromwick, Ford's chief economist, told analysts and reporters on Wednesday.

Auto output has contributed more than 15 percent to the U.S. gross domestic product since the second quarter of 2009, she said.

"The sales pace appears to be galloping ahead as it compares to some of the consumer fundamentals," she said.

Job growth, the recovery in the housing market and the oldest vehicles ever on U.S. roads "should give us some good support going forward."

The new models on the showroom floor also are convincing consumers it's time to trade in the old jalopy. The average age of cars on the road has reached a record 11.4 years, auto researcher R.L. Polk & Co. said last month.

"We expect that more and more people that delayed the decision to buy will keep coming into the market," said Mustafa Mohatarem, GM's chief economist.

Technology that improves fuel economy and enables buyers to connect their smartphones to the car stereo are also enticing buyers to upgrade, said Jim Farley, Ford's senior vice president of sales and marketing.

"The fuel economy gain compared to a five- or six-year-old car now is probably the highest gap it's been in my career," Farley, 51, said in an interview last month. "So when you do the math, the rational side of buying a car is very compelling."


Arguments against unions are ideological, not empirical: Cohn

At his party's upcoming convention, Progressive Conservative Leader Tim Hudak will try to win over dissidents with an ambitious economic strategy for Ontario, writes Martin Regg Cohn: De-unionize to re-industrialize.

As Tim Hudak fights for his own job security as
Tory leader, watch him try to sacrifice the job
security of workers across the province.

Toronto Star
Martin Regg Cohn
Thu Sep 05 2013

The birth of Canada's biggest union over the Labour Day weekend suggests workers are not about to go quietly into the night. But members of Unifor are in for a fight with Ontario's Tories.

The Progressive Conservatives have always had a complicated relationship with unionized working people: At times working with them, at times against them.

Now, as Tim Hudak fights for his own job security as Tory leader, watch him try to sacrifice the job security of workers across the province.

An upcoming Tory convention is officially about party policy, not personal leadership. But in London later this month, delegates will also be deciding whether to hold yet another leadership review.

To survive, Hudak will try to win over dissidents with an ambitious economic strategy for Ontario: De-unionize to re-industrialize.

Undoing unions has been Tory policy since Hudak lost the last election and blamed big labour for working against him. He promptly appointed the most militantly right-wing member of his caucus, Randy Hillier, as the party's improbable labour critic.

Together, they crafted a discussion paper, euphemistically called, "Flexible Labour Markets," that delighted the business press last summer. And bolstered fundraising among bedrock supporters.

At its core, the plan would strip unions of the hard-won right to collect dues from everyone in the bargaining unit. Hudak would unravel the highly regarded Rand Formula, a made-in-Ontario compromise crafted by former Supreme Court judge Ivan Rand to settle a landmark 1945 Ford strike in Windsor.

In 1980, the PC government of Bill Davis sensibly enshrined the Rand Formula into law, on the grounds that everyone in a workplace benefits from the tough bargaining and strikes undertaken by unions to improve wages, benefits and working conditions. Years later, even the Mike Harris PCs maintained that equilibrium, recognizing that there should be no free-riders in the workplace who disown unions but profit from their impact.

Why then is Hudak trying to turn the clock back? He points to the rise of Right to Work states in the U.S., where right-wing legislators have triumphed against unions in a historical battle that has its roots in the Deep South. The movement has recently spread to nearby Michigan and Indiana, so Ontario must now graft this foreign ideology onto its economy to remain competitive, Hudak argues.

The benefits? Lower unionization rates and lower wage rates.

Oh, and supposedly more jobs. The Tories cite research from right-wing think tanks to bolster their case, most of which argues that job gains in Alabama or Texas can be replicated in Ontario if only we lower wages, which will happen if we eviscerate unions. (You could repurpose those same tired arguments against minimum wage laws, but let's save that for another day.)

The latest research — or more precisely, riposte — comes from the far-right Fraser Institute, which showed a flair for provocative timing by releasing it on Labour Day. It concludes authoritatively that Ontario and B.C. could boost their economies by billions of dollars by bashing unions. Its anti-union role model for Ontario is none other than Oklahoma — a prairie state, population 3.8 million, ranked dead last for health care, whose economy is less than one-quarter of ours and has almost nothing in common with Canada's industrial heartland.

Yet Hudak's Tories promptly issued a news release highlighting the hard work of the Fraser Institute in putting workers in their place. The Ontario Federation of Labour countered with its own study this week that comes, predictably, to the opposite conclusion.

You can pick your study to suit your point of view, but it's hard to disagree with the OFL's bottom line: the arguments against unions are entirely ideological, not empirical. And while ideologues get bogged down by unprovable arguments about how destroying unions creates jobs, they ignore the undeniable benefits to workplace health and safety from unionization (which ultimately lowers hospitalization costs for employers and taxpayers).

Once you slip into the realm of slogans, it's a slippery slope: Right to work, as President Barack Obama says mockingly, is "right-to-work for less money." And with the recent anniversary of Martin Luther King's "I have a dream" speech, why not quote from the preacher himself on the peril of "false slogans, such as 'right-to-work.' It provides no 'rights' and no 'work.' "

A belated Happy Labour Day.


Ford recalling 370,000
discontinued vehicles

Karl Henkel
The Detroit News
Sept 1, 2013

Ford Motor Co. said Friday it is recalling about 370,000 Crown Victoria, Mercury Grand Marquis and Lincoln Town Car vehicles because of a potential for loss of steering control.

The recall, which covers vehicles from model years 2005 through 2011, includes about 355,000 vehicles sold in the U.S. and another 15,000 in Canada.

The lower intermediate steering shaft could corrode and “potentially result in loss of steering,” Ford said. The Dearborn automaker said it is not aware of accidents or injuries related to the recall.

Dealers will inspect the recalled vehicle, replace the lower intermediate steering shaft and, if necessary, secure a lower steering column bearing and replace the upper intermediate steering shaft.

The recall specifically targets states, including Michigan, where road salt is used and rust is most likely to occur.

Others states include Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, Wisconsin and West Virginia, plus the District of Columbia.

“Customers located in other states who routinely operate their vehicles in one of these areas, or customers who have concerns regarding their steering, will also be able to have their vehicles inspected and repaired if necessary,” a Ford spokeswoman said in an email.

The Crown Victoria, Mercury Grand Marquis and Lincoln Town Car are no longer manufactured by Ford.


Ford hires three-quarters of
12K workers it promised union

From left, foreground, Tony Bondy, United Auto Workers Local 3000 chairman; Jimmy Settles, UAW vice president; Tim Young, plant manager, and Joe Hinrichs, president of Ford of the Americas, and a group of UAW line workers launch production of the 2014 Ford Fusion at Ford's Flat Rock plant Thursday, Aug. 29, 2013. (Charles V. Tines / The Detroit News)

Karl Henkel
The Detroit News
August 30, 2013

Flat Rock — Ford Motor Co. has hired about three-quarters of the 12,000 hourly workers that it promised the United Auto Workers in 2011 — and one high-ranking union official said Thursday that Ford could eventually add another 8,000 hourly jobs.

UAW Vice President Jimmy Settles said during an event at Ford’s Flat Rock Assembly Plant — which celebrated the U.S. production launch of Ford’s Fusion midsize sedan and the addition of 1,400 new hourly jobs — that the Dearborn automaker could add another 8,000 jobs once Ford completes its original job promise by 2015.

“That’s an interesting number,” said Joe Hinrichs, Ford’s president of the Americas, when asked about Settles’ remarks.

Ford currently employs about 46,000 U.S. hourly workers.

Settles later said that it is “wishful thinking” that Ford would add more U.S. jobs should product demand warrant it, but that no additional job promises are imminent. The next round of negotiations between the union and automaker, where job creation will assuredly be a topic of discussion, aren’t scheduled until 2015.

Settles also said many new jobs would likely be at Ford parts plants, as many of the automaker’s U.S. assembly plants already work three shifts.

“It’s something we are trying to strive for,” Settles said. “We’re trying to see if we can get jobs from outside (the country) and bring them on the inside.”

The new Flat Rock shift will allow the automaker to produce upward of 100,000 more Fusions annually and possibly compete with Toyota Motor Corp.’s Camry for top spot in the midsize segment. The Fusion will continue to be produced in Mexico.

Ford sold more than 181,000 of the Mexico-built cars so far this year through July. Sales of the new Fusion, which went on sale last summer, are up 13 percent in the U.S. this year.

Hinrichs said Ford isn’t focused on taking away the No. 1 spot held by the Camry. And he said upping Fusion production would not erode the per-vehicle profitability. Fusions currently sell for about $2,300 more than Camrys.

If Ford did add more jobs, one possible location could be Flat Rock, which now employs 3,100 hourly workers on two shifts to build the Mustang and Fusion.

The Detroit News reported in May that Ford has plans to add production of next-generation full-size Lincoln MKS at Flat Rock, citing union and supplier sources familiar with the company’s plans.

Union officials hinted Thursday that there is “more to come” at the plant.

Hinrichs admitted that Flat Rock, following the recent $550 million investment that retooled the plant and body shop, is now capable of producing multiple vehicle models on different platforms.

He did not comment on multiple questions regarding specific future vehicle production at the plant.

Flat Rock Assembly Plant, formerly known as AutoAlliance International, built Mazdas until 2012.

Ford adds STX options
to 2014 F-150 lineup

F-150 STX Super Crew (Ford)

Karl Henkel
The Detroit News
August 29, 2013

Ford Motor Co., looking to capitalize on first-time truck buyers and an improving economy, on Wednesday unveiled an STX Super Crew and STX Sport Package to its 2014 F-150 lineup.

The STX, a cab configuration that starts under $30,000 plus destination charges, will come standard with a 3.7-liter V-6 engine that produces 302 horsepower and 278 foot-pounds of torque, and gets an EPA-estimated 17 miles per gallon in the city and 23 on the highway. It includes front and rear step bumpers and 17-inch aluminum wheels.

The STX SuperCrew, a new feature set, starts at $33,145 for the 4x2 version with 3.7-liter V-6 and $37,570 for the 4x4 with 5.0-liter V-8. The truck comes with more cabin space, 20-inch aluminum wheels and black and gray front seats.


Ford poised to ramp up Fusion output to challenge Camry

Craig Trudell
August 28, 2013

DETROIT (Bloomberg) -- Ford Motor Co. has bigger aspirations than challenging Toyota Motor Corp.'s Camry. Its Fusion is about to take on the law of supply and demand.

An assembly plant about 20 miles south of Ford headquarters in suburban Detroit is preparing to roll Fusion family cars off the line for the first time. The additional supply will test the staying power of a more than $2,300 per-sale premium that Fusion has commanded this year over America's longtime best-selling car, the Camry.

"Ford has managed to be a volume player competitive with the Toyota Camry and the Honda Accord while still maintaining a far more competitive price point," Alec Gutierrez, an analyst with Kelley Blue Book, said by telephone. "You might see prices come down a few hundred dollars, but I don't think they face any significant risk of serious price degradation. They're going to hold their premium spot in the segment."

The Fusion is Ford's best shot at eventually reclaiming the car-sales crown it last held in the 1990s heyday of the Taurus, a model CEO Alan Mulally studied at Boeing Co. The Fusion's sale surge -- 13 percent so far this year -- has cut a quarter of Camry's sales lead, demonstrated how much consumers care about attractive design and illustrates how U.S. carmakers can now compete in all segments.

It has also overwhelmed capacity at the only plant where it has been made, in Hermosillo, Mexico, which couldn't make more than about 350,000 Fusions and Lincoln MKZ sedans. The Mustang assembly plant in Flat Rock, Mich., hired 1,400 employees to produce as many as 100,000 more Fusions.

Climbing capacity

The added output draws Ford closer to production levels that Toyota and Honda Motor Co. reach with their Camry and Accord. It also positions the No. 2 U.S. automaker to continue growing in coastal states that were long a source of weakness.

The average price that the Fusion has sold for this year through July climbed 5.8 percent to $26,343, behind only Volkswagen AG's Passat in the mid-size car segment, according to Kelley Blue Book.

Fusions are selling at a premium of $1,176 above the segment average and $2,378 over the Toyota Camry, which ranked No. 11 in segment pricing this year, behind entries such as Chrysler Group LLC's 200 sedan, said the researcher, which includes some incentives in its analysis.

Camry's average prices have fallen 2 percent to $23,965, and the car has slipped from ranking eighth in the segment at this point last year.

Fuel economy

"The Fusion is probably the most interesting mid-size car because it's being sold on a variety of fronts," Alan Baum, an independent auto analyst in suburban Detroit, said by telephone. "No. 1, it's gorgeous, and the fact that design matters in the mid-size segment has not always been a given."

Another selling point has been Fusion's fuel economy, said Baum, whose research on electric and plug-in vehicles was used by the Obama administration to set U.S. green car sales goals.

Ford is offering Fusions powered by a standard gasoline engine, three turbocharged EcoBoosts, hybrid and plug-in hybrid powertrains -- everything but all-electric, Baum said.

The range of options has enabled Ford to generate interest by marketing the 47 miles per gallon highway fuel economy rating for Fusion hybrid, even though the bulk of sales are the traditional gasoline-engine model rated 34 mpg highway.

California gains

Improved fuel economy for the redesigned Fusion sedan and Escape SUV as well as efficient new models such as the C-Max hybrid are fueling Ford's growth in California, a state that has given American carmakers fits for years.

The Ford brand's 18 percent jump in California light-vehicle sales during the year's first half put the marque within 0.1 percentage point of the Honda brand's market share, according to the California New Car Dealers Association.

"It was not because of pickup trucks that Ford became more competitive in California," Baum said. "C-Max is essentially all additive, and the Fusion hybrid has done quite well."

Ford is training new workers at its assembly plant in Flat Rock to help boost inventory in markets such as Los Angeles, San Francisco and Miami. While Ford had about 40 days supply of Fusion across the country at the beginning of this month, the carmaker carried enough stock to last 30 days in those markets, said Erich Merkle, its U.S. sales analyst.

Detroit's cars

"Ford spent a lot of money on the vehicle, it's gotten really good reviews, it looks really nice, and you want to be able to make as many as you can now," said Adam Jonas, an auto analyst for Morgan Stanley.

Even with its looks, prices will probably come down some as Ford accelerates Fusion production, because the earliest models were loaded with content and the extra output may be of lower-priced versions, Jonas said in a telephone interview.

The automaker has said it's on track to increase Fusion production this quarter.

"We have an automobile market unlike any other in the last 40 years, where everybody is equal in that they all have terrific cars," said Maryann Keller, principal at auto-industry consulting firm Maryann Keller & Associates in Stamford, Conn. "Now, everybody is fighting for every sale."

Camry challenge

The Fusion has prompted Toyota to acknowledge the challenge it faces to maintain leadership for its Camry sedan, which has reigned as the top-selling U.S. passenger car for 11 years and 15 of the last 16.

"It is true that rival carmakers have come out with very competitive models in the segment, and that competition in the U.S. mid-size sedan segment is becoming fiercer," Nobuyori Kodaira, a Toyota executive vice president, said last week in Tokyo. "What we need to do is to come out with even more competitive models."

The additional production from Flat Rock could allow Ford to stretch for as much as 450,000 units of combined annual Fusion output from the Michigan factory and its Hermosillo plant in Mexico, said Jeff Schuster, an analyst for LMC Automotive.

The researcher estimates that Toyota has capacity in North America to build about 475,000 Camrys per year, while Honda can assemble about 450,000 Accords.

LMC forecasts Ford making about 350,000 to 360,000 Fusions this year, Schuster said.

"Ford is not saying this extra production is what we're going to do to enable us to be the most popular car in America," said Baum, the independent analyst. "That would be foolish. This car is profitable and can remain profitable even with more volume. The design of it has a longer shelf than most mid-size vehicles."


Fed study boosts pension fight
of Delphi's salaried retirees

Daniel Howes
Detroit News
August 27, 2013

Vindication may be drawing closer for the former Delphi Corp.'s dogged salaried retirees.

Next week, the Treasury Department is to begin releasing documents detailing how President Barack Obama's auto task force worked with the Pension Benefit Guaranty Corp. to seize the auto supplier's salaried pension fund and reduce payouts by as much as 70 percent for roughly 22,000 retirees — even as union employees saw their pensions "topped up" by a then-bankrupt General Motors Corp.

Unlike the United Auto Workers, Delphi's salaried retirees did not possess a pre-existing "top-up" deal with GM, according to a new report by the Special Inspector General for the Troubled Asset Relief Program. Nor did the salaried retirees wield the kind of leverage that could be used to impede GM's exit from its historic bankruptcy.

"Treasury did not view the non-UAW Delphi hourly employees or the Delphi salaried employees as having leverage because they did not have current employees at GM and therefore could not hold up GM's bankruptcy," the report says. Nor could the salaried retirees strike to stall the bankruptcy.

"We had no leverage," Chuck Cunningham, a spokesman for the Delphi Salaried Retirees Association, said in an interview Monday. "They chose to exclude one group — whether it was leverage or political. They don't get to pick and choose. It was the government. They can't act like a private equity company."

But the Treasury's auto task force did just that numerous times in the fraught months that culminated in GM's bankruptcy filing and the intensive negotiations surrounding it. Those included auto czar Steven Rattner's determination that Delphi's salaried pension plan was not "defensible from a commercial standpoint."

"As the buyer" of GM, "Treasury decided which assets to buy and which liabilities to take on," the report says. "Treasury and GM did not agree to top up the pensions of any other Delphi retirees in GM's bankruptcy."

Delphi's salaried retirees have spent roughly $3 million on legal fees to prosecute a flap that isn't going away anytime soon. And it shouldn't, not until the Treasury Department and the PBGC produce the documents and email correspondence demanded by lawyers for the Delphi salaried retirees and the House Oversight and Government Reform Committee.

Treasury is expected to begin complying with the House subpoena next week, when it will begin a "rolling" release of documents that looks more like continuation of the Big Stall than coming clean. Additionally, a magistrate judge in Detroit last week ordered that the PBGC release documents sought by the Delphi retirees.

"If there are things they don't want us to see, we would hope they conclude it's much easier to settle and get this thing over with," Cunningham said. Not likely from an administration whose rhetoric of "fairness" clearly does not extend to Delphi salaried retirees.

And the bureaucratic stonewalling — on Capitol Hill and in courtrooms from Detroit to Washington — strongly suggests the GM bankruptcy paper trail connects disparate actors at GM, Delphi and the PBGC to an Obama Treasury Department calling the shots because it was fronting the cash.

In a filing earlier this month in U.S. District Court in Washington, the Delphi retirees asked that a motion to quash discovery of Treasury documents, granted May 2012, be lifted so their lawyers can press ahead determining who decided Delphi's salaried retirees are expendable — and why.

Days after a critical May 2009 mediation in Delphi's four-year-old bankruptcy case attended by representatives of Delphi, GM, the PBGC, the Treasury's auto task and Delphi's debtor-in-possession lenders, the filing says, an idea emerged for Delphi's salaried pension plan:

"Yet emails produced ... after the mediation suggest that the Auto Task Force — not the PBGC — put forward a detailed proposal at the mediation that would involve the PBGC initiating termination of the Delphi Salaried Plan, the re-assumption by GM of the Delphi Hourly Plan, and a settlement by the PBGC of all its liens and claims."

By its nature, bankruptcy produces winners and losers. The high-priced mechanics engineering the speedy GM bankruptcy determined Delphi's salaried pension plan represented a costly obstacle that could be removed far more easily than its obligation to union pensioners.

" 'We felt bad,' " the inspector general's report quotes Rattner as saying. " 'But we didn't think it was justifiable.' "

Neither did Rattner's boss, President Obama: "After the decision was made not to top-up for salaried employees, the president read a letter from a Delphi salaried retiree and asked his advisers for information.

"Lawrence Summers," a ranking economic adviser under consideration to become chairman of the Federal Reserve, "prepared a briefing memo for the president in August 2009; however, there was no further action."


Unionism, done differently

Dave Coles & Ken Lewenza
August 25, 2013

Progressive voices in this country will soon have a new ally and a new way to come together as two of Canada's leading unions join forces.

These are challenging times for those of us who want to go beyond preserving what is best about this country, but build on it to make Canada a more equitable and more democratic society.

We have leaders in both politics and business who tell us that we can't afford to care for one another, and even claim that Canada only thrives when we compete against each other for scarce jobs and opportunities.

The Canadian Auto Workers union and the Communications, Energy and Paperworkers Union don't agree, and that's why we are coming together Labour Day weekend to form not only a new union -- Unifor -- but a new kind of union.

Unions merging isn't new. CEP itself was born a generation ago out of the joining of three distinct unions who saw the value is working together. Since its founding in 1985, CAW has in turn merged with more than 40 other unions to more than double in size.

But this is different. This is about a new approach to unionism and activism. Through community chapters, Unifor will break out of the bounds of traditional unionism to represent any group, however small or large, that wants to band together to improve things in their workplace or their community outside work.

It's a new kind of unionism. More of a movement than a union, really, that will be dedicated to improving the lives of all Canadians -- not just those holding a union card, as our detractors wrongly accuse us of doing.

Unions have always worked to build a better society for all. Many of the benefits of civilized society we take for granted today -- weekends off, paid holidays, bans on child labour, overtime pay and maternity leave, to mention a few -- began as clauses in a union contract. Unifor will be about expanding that role to more directly fight on behalf of all Canadians.

Let's not kid ourselves. Those who would oppose us are big, well organized and well-funded.

Unifor, as Canada's largest private sector union with more than 300,000 members, will give progressives in this country a louder voice to not only counter the cynical opinions of those who would diminish our cherished social programs, but to fight for something even better.

Our social programs, our rights and our standard of living weren't given to us by benevolent leaders. They were won through the hard work of generations of progressive thinkers and activists who struggled to build a society that benefitted all.

That work isn't done yet, not by a long shot. In fact, if we're honest, it's taken a step back after more than 30 years of Reaganism, Thatcherism and the kind of neo-liberalism that our current prime minister enthusiastically encourages.

We believe a better Canada is possible, building on our instincts for fair play and to help one another, and that's why we're bringing our two great unions together under the Unifor banner.

Unifor will be a union for the future, fighting for its members in the workplace and working with progressive voices across the country to build a better Canada for all.

Ken Lewenza is the national president of the Canadian Auto Workers union (CAW) and Dave Coles is the national president of the Communications, Energy and Paperworkers union (CEP).


New Leadership Team
Proposed for Unifor

August 24, 2013

With the Unifor Founding Convention only a week away, the CAW and CEP have created a Unity Team that is being proposed to lead the new Canadian union.

CAW President Ken Lewenza announced on Thursday that he will not be seeking the nomination for president at a press conference in Toronto. Lewenza will be staying on as CAW National President until the Unifor Founding Convention.  In a heartfelt address, Lewenza said that achieving the goals and ambitions of Unifor is a long-term effort and requires a new generation of leadership to carry it through.

He spoke candidly about how through his membership and involvement in the union, he was able improve his standard of living and that of his family.

"I went from earning a minimum wage to a middle class wage when I got a job at Chrysler," said Lewenza.  "For my family, that meant we could consider buying our own house, buying a car, having independence. For too many families then, and now, that's still only a dream. And that's unfair."

Similarly, CEP President Dave Coles will also be retiring with the formation of Unifor, but staying on as CEP National President until then. 

"I have full confidence in the 'dream team' of leadership candidates being put forward to lead Unifor, and revitalize the Canadian labour movement," said Coles. 

Both leaders endorsed CAW Assistant to the President Jerry Dias as the nominee for President of Unifor. Dias is joined by a team of 24 other trade unionists, all of whom will be nominated to fill each of the 25 positions on the new union's National Executive Board.  This includes the three top officers of the union: President, Secretary-Treasurer, and the Quebec Director. This is the only time that the complete National Executive Board will be presented at a Unifor Convention as a slate.

"CAW Secretary-Treasurer Peter Kennedy, who co-chaired the New Union Project and has served as CAW National Secretary-Treasurer since 2009, has our continuing and unwavering support," Lewenza said. Kennedy will be the Unity Team's candidate for the position of Unifor Secretary-Treasurer.

Michel Ouimet, current CEP Executive Vice President for Quebec, is the Unity Team's nominee for Quebec Director of Unifor.  CAW Quebec Director Sylvain Martin will continue on as Michel's assistant. CEP Secretary-Treasurer Gaétan Ménard will assume the role of an additional senior position called Transition Officer, who will oversee the transition and integration of two unions into Unifor.

Also nominated as part of the Unity Team is CAW Health Care Director Katha Fortier, in the role of Ontario Director, Newfoundland and Labrador Federation of Labour President Lana Payne as Atlantic Director, and CEP National Representative Scott Doherty as Western Director.

There will also be Quebec and Regional Council Chairpersons :

Quebec - Marcel Rondeau (CAW)
Atlantic - Penny Fawcett (CEP)
Ontario - Dino Chiodo (CAW)
Prairie - Christy Best (CEP)
B.C. - Andrea MacBride (CEP)

Industry Council Representatives (11):

Energy - Angela Adams (CEP)
Resources - Earle McCurdy (CAW)
Services - Cheryl Robinson (CAW)
Media - Randy Kitt (CEP)
Health Care - Nancy McMurphy (CAW)
Retail - Christine Connor (CAW)
Forestry - Jean-Pierre Lafond (CEP)
Communications - Marc Rousseau (CEP)
Manufacturing - Roland Kiehne (CAW)
Auto - Gary Beck (CAW)
Transportation - Heather Grant (CAW)

Three other designated NEB positions:

Skilled Trades - Dave Cassidy (CAW)
Retired Workers - Len Harrison (CAW)
Racialized and Indigenous Workers - Ruth Pryce (CAW)

For more information on the Unifor Founding Convention, please visit: http://www.newunionconvention.ca/


Ford says U.S. loses as yen
lets Japan keep excess capacity

Craig Trudell and Ma Jie
Bloomberg News
August 23, 2013

Ford Motor Co., stepping up criticism of Japan's auto industry, said a weaker yen lets carmakers led by Toyota Motor Corp. keep open plants that are producing a vehicle glut and threatens U.S. job growth.

Production for automakers including Ford is constrained in North America as U.S. sales rise, Joe Hinrichs, Ford's president of operations in the region, said in an interview. At the same time, the weaker yen is supporting exports from Japan, which IHS Automotive estimates has 2 million vehicles of excess capacity.

"The industry is growing and capacities are a little tight in North America," Hinrichs said from Dearborn, Michigan, where Ford is based. "Where is the extra available capacity going to come from? If Japan's one of those places, in lieu of more manufacturing in the U.S., the American worker does lose in that proposition."

His comments build on remarks by Chief Executive Officer Alan Mulally, who in June said Japan was manipulating its currency, and reflect a threat that Ford sees to continuing its recent growth in the U.S. While the automaker has been the industry's biggest market-share gainer this year, Toyota outsold Ford in July for its first monthly win since March 2010.

Building new auto plants or expanding existing factories can be costly. Ford committed to $6.3 billion in investments through 2015 for retooling and upgrading plants in its 2011 contract with the United Auto Workers union.

Hinrichs, 46, is voicing concerns as a weaker yen makes cars exported from Japan more profitable for its automakers. Those companies, led by Toyota City, Japan-based Toyota, have production capacity available in Japan, and the U.S. is the most attractive market for those vehicles. Europe's auto market is on pace for its worst year since 1993, and a territorial dispute with China has crimped demand for Japanese autos.

U.S. automakers led by Ford have criticized Japan as the yen has declined 12 percent against the dollar this year. U.S. lawmakers have since pressed for provisions that would prevent currency manipulation to be a part of a trade pact with Pacific- region nations including Japan.

Ford has said it plans to add almost 3,500 hourly workers in the U.S. this year as it increases capacity to build 200,000 more vehicles annually in North America to meet increasing demand for F-Series pickups and Fusion sedans.

The new employees will start at an entry-level wage first agreed to by the UAW in 2007, which brought their pay closer to what workers make at Japanese automakers' U.S. factories. The arrangement was extended by Ford and the UAW's 2011 contract, which called for new workers to start at $15.78 an hour, compared with about $28 for senior employees. The entry wage rises to $19.28 by 2015.

Data released by the Detroit-based union's Ford department this week show the extent of Ford's hiring in recent years. Ford had 8,819 entry-level employees as of earlier this month, according to the first report released from a new section of the UAW department's website.

Ford is permitted to hire 4,058 more employees at the entry level before it has to begin transitioning workers to senior worker wages, according to the report.

The entry-level wage agreement was among the actions taken as the U.S. auto industry restructured, culminating in the 2009 bankruptcies of the predecessors of General Motors Co. and Chrysler Group LLC.

Ford avoided bankruptcy by borrowing $23.4 billion in late 2006 and closing 16 plants from late 2005 through 2009 to bring its production in line with demand.

Japan's auto industry has yet to take similar steps to reduce its output, Hinrichs said. While the nation's automakers have the capacity to build 11 million vehicles this year, they probably will produce about 9 million, said Masatoshi Nishimoto, a Tokyo-based analyst at IHS Automotive.

"North America went through its restructuring," Hinrichs said. "You look at Japan, and for lots of reasons, culturally and otherwise, the industry hasn't restructured the excess capacity."


More police departments
choosing SUVs over sedans

Ford expects police demand to grow more after the announcement today it will offer its 3.5-liter EcoBoost V-6 engine as an option. (Ford)

Sales soar for Big 3 as forces make them their vehicle of choice

Karl Henkel
The Detroit News
August 21, 2013

Sport utility vehicles are quickly replacing cars as the vehicle of choice for police forces across the nation.

Demand for specially equipped SUVs is growing faster than for of sedans, which have been stalwarts in police fleets for decades. Utility vehicles in recent years have become more efficient and are roomier and safer than sedans.

Major police forces, including the California Highway Patrol, have added SUVs to their fleet, and many more — including the Nevada Highway Patrol — are expected to follow suit in coming years.

"It's not a fad," said Jonathan Honeycutt, Ford's fleet brand marketing manager, in a telephone interview. "This is where the industry is moving."

Ford's police version of the Crown Victoria — Ford stopped taking orders in 2011 — was the dominant choice for law enforcement agencies. When it was retired, other automakers saw the chance to seize a greater share of the market.

Ford expected its Explorer-based police Interceptor SUV to comprise about 30 percent of its police fleet sales. But in recent months, that number has approached 70 percent.

Through July, Ford has actually sold 7,288 police SUVs compared to 6,046 Taurus-based police sedans.

General Motors Co. offers its Caprice and Impala as police sedans and the Tahoe as an SUV; Chrysler has its Charger sedan and Durango SUV.

GM expects Tahoe sales to increase in 2013 compared to 2012. Tahoe sales to all government customers including police agencies was about 13,000 vehicles last year, GM spokesman Jim Cain said in an email. Total sales figures for the GM sedans were not available. Chrysler sales figures were not immediately available.

The Dearborn automaker expects demand to grow even more following today's announcement that it will offer its patented 3.5-liter EcoBoost V-6 engine as an option in the Interceptor SUV.

The move toward SUVs represents yet another transition among police vehicle fleets.

In the past, police cruisers were typically rear-wheel drive, body-on-frame sedans with V-8 engines. Ford's Crown Victoria, discontinued in 2011, was the best example of this.

But as automakers began to shift away from rear-wheel drive cars with large engines, the options for police vehicles with those attributes has declined.


Lincoln gets boost with
Black Label premium line

The Center Stage theme for Lincoln Black Label is inspired by fashion and theater. The exterior color is Black Tie, which is exclusive to Lincoln Black Label. (Ford)

Karl Henkel
The Detroit News
August 19, 2013

Lincoln Motor Co. previewed Thursday the next step in its reinvention, showing off Black Label, a line of ultra-premium options that aim to boost the prestige of owning a Lincoln and profit margins for the Ford Motor Co. luxury brand.

The premium options, which include Alcantara-brand suede, Venetian leather and ziricote tropical hardwood, will soon be available on all Lincoln models. They will be combined with "elevated customer services," Lincoln announced in Pebble Beach, Calif.

"The progressive luxury client craves to know the story behind the products and services they engage — they want to feel that personal connection," said Jim Farley, executive vice president of global marketing, sales, service and Lincoln, in a statement. "That's at the heart of Black Label; we want to provide special experiences for every Black Label client before, during and after they choose their new Lincoln vehicle."

Lincoln previewed Black Label on the new MKZ sedan and the MKC compact concept crossover. It is not immediately known when Lincoln Black Label will be available as an option for consumers nor how much extra it will cost. But Black Label is similar to special uplevel models from other luxury brands, which cost more and also come with performance enhancements that are not included in Black Label packages.

"Ford is way behind its competition in transforming Lincoln, so it is trying to do what it can to enhance profits and boost sales as it revamps the entire line, which is going to take several years," said Michelle Krebs, senior analyst at Edmunds.com, in an email. "The jury is very much out on whether Ford will be successful at this Lincoln transformation."

If a product such as whiskey or clothing is classified as Black Label, it is generally perceived as being of very high quality. And that's exactly the perception that Lincoln executives want to create for the brand, which has struggled to find a foothold in the U.S. marketplace for decades.

With Lincoln headed for the lucrative Chinese market next year, and with a string of four new products in four years, the brand seeks to create some momentum with consumers.

The brand's new MKZ sedan has resonated well with buyers, though a timely production delay temporarily halted Lincoln's restart. The brand's MKC concept compact crossover, a unique-to-Lincoln product — instead of a rebadged Ford vehicle — will eventually take aim at the growing small-luxury segment.

Lincoln will start with three Black Label themes: Center Stage, inspired by fashion and theater, featuring Alcantara suede and a dark interior with red accents, similar to the interior of a movie theater; Indulgence, inspired by "the lure of premium chocolate," which features truffle-colored Venetian leather and ziricote wood often used in high-end yachts; and Modern Heritage, a more classic and cleaner-looking black-and-white interior with red accents.


Ford drops C-Max hybrid mpg rating, will compensate owners

David Shepardson
The Detroit News
August 17, 2013

Washington — Ford Motor Co. has agreed to drop the fuel economy rating on the 2013 C-Max hybrid crossover from a combined 47 mpg to 43 mpg — a nearly 10 percent reduction — and will compensate owners for the worse-than-promised fuel economy.

Ford said it will pay 32,000 customers for the gas-mileage discrepancy. Those who purchased vehicles will receive $550; those who leased will get $325. Raj Nair, group vice president, global product development at Ford, said in an interview Thursday that the automaker didn't want to make customers go to a dealership to prove how many miles they had driven to get the payment.

It means Ford will pay between $10 million and $17 million, depending on how many of the vehicles were leased.

The decision came following Environmental Protection Agency testing completed last week.

Under the EPA's rules, in place since 1977, Ford was able to assign the same mileage rating to the C-Max as the Fusion hybrid sedan, which also has a 47 mpg rating, because they are in the same family of vehicles. While the protocol has worked for conventional vehicles, it has not been as effective for hybrids, officials said.

Aerodynamic differences between the C-Max and Fusion largely account for the difference, the EPA said. "Ford didn't do anything wrong. They followed the minimum testing requirements that EPA requires," said Christopher Grundler, who heads the EPA's Office of Transportation and Air Quality. "EPA certainly allows and there are others who put unique labels on different variants."

But the EPA said the C-Max was the only hybrid on the market that hadn't undergone its own test. Toyota for example, chose to separately test all of its Prius family of cars separately.

In a statement, the EPA said it would look at rewriting rules for hybrid systems that are used across multiple vehicles "to ensure that consumers are consistently given the accurate fuel economy information on which they have come to rely."

Ford said Thursday it doesn't plan to change the fuel economy rating for the Fusion hybrid or any of its other vehicles.

SubheadIn July, Ford said it would update software on hybrid vehicles to improve the real-world fuel efficiency for tens of thousands of owners of its Ford Fusion, C-Max and Lincoln MKZ hybrids.

Nair announced the updates, which include increasing the electric-only mode top speed to 85 miles per hour from 62 mph, and optimizing active grille shutters to reduce aerodynamic drag.

The EPA said its testing showed the 2013 C-Max before the upgrades had a combined 41 mpg rating, well below the 47 mpg that was advertised. Last week, EPA completed testing on the 2013 C-Max with new software and moved quickly to get out the information that the car should have been rated at 43 mpg. That latest testing led to Ford's agreement to lower the fuel economy rating.

The EPA emphasized that the Dearborn-based automaker followed the government-specified procedures to reach fuel economy numbers for the 2013 C-Max hybrid. Ford hasn't completed testing to set a rating for the 2014 C-Max hybrid, which will go on sale yet this year.

SubheadMany Ford owners have complained they have not achieved the 47 mpg average for the C-Max hybrid (45 mpg for the MKZ hybrid) that was certified by the EPA.

Ford has faced multiple lawsuits from owners over its fuel efficiency claims. Redlands, Calif., law firm McCuneWright, which on behalf of "hundreds" of C-Max and Fusion hybrid owners is seeking punitive damages because of potentially overinflated fuel-efficiency claims, said in February it would consolidate with a similar lawsuit filed by a San Diego-based law firm. Ford declined to comment on the lawsuit Thursday.

When Consumer Reports tested the C-Max Hybrid late last year, it found the C-Max hybrid's fuel efficiency fell 10 miles per gallon short of what the window sticker promised. The magazine averaged 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 overall in testing, with 35 mpg city and 41 mpg highway.

Government testing requires vehicles to undergo standard fuel-efficiency trials; the testing, however, is not administered by the EPA. Automakers do the testing, but the EPA often conducts reviews. The EPA has increased its own testing in the past year.

In November, Hyundai and Kia Motors — two Korean automakers controlled by the same conglomerate — admitted overstating mileage on nearly 1.1 million vehicles in North America sold since 2010, including about 900,000 in the United States. The automakers set aside about $400 million to compensate drivers for the mileage difference and to resolve lawsuits filed by buyers.

The EPA's investigation into the Hyundai and Kia fuel-efficiency overstatement is ongoing. The agency may seek civil fines over the misstated claims. The EPA's Grundler declined to comment on that investigation Thursday.


Which Ford is more fun:
Mustang or Focus ST?

August 15, 2013
Globe and Mail

It's a classic question of sibling revelry: which of Ford's poles-apart hot rods provides more real-world entertainment – the home-grown, mega-powered, Shelby Mustang GT500 pony car or its Euro-ferocious Focus ST hot hatch?

Last fall, during the AJAC Canadian Car of The Year TestFest, I drove Ford's 662-hp Shelby GT500 and the 252-hp Focus ST back to back on the road and track. Which one would I have taken home if someone from Ford was feeling beneficent? Easy choice, the Focus ST.

The $61,999 Shelby is an over-muscled automotive gym-rat with steroidal styling. A car that may look dangerously cool, in a beefy, belligerent and decidedly retro way, but which can only display its prodigious capabilities (and they truly are) within the narrow confines of a racing circuit's Armco perimeter – with somebody who knows what they're doing behind the wheel.

On the road, its stopwatch-digit-blurring performance is virtually unusable by mere mortals. Don't, for example, get caught in a rain shower with the electronic aids switched off, unless you are familiar with the terms "throttle-modulation" and "counter-steer."

Its owners are destined to spend most of their time cruising around in something that's really not all that nice inside, while experiencing the ride quality of an iron-tired baggage cart, and with its monstrously torquey, supercharged, 5.8-litre V-8 throttled right down and rumbling at just over idle. Perhaps making them wonder why it comes with a six-speed gearbox, when just one gear would be enough to cover the 0-100 km legal speed limit range.

The occasional surreptitious, police-paranoia-inducing squirt is all most owners will, and likely should indulge in – because this thing gets from a standstill to the legal limit in 4.4 seconds.

I suppose if you drive a car like this, whether it carries a Ford Shelby badge, Ferrari's prancing horse, or Lamborghini's raging bull, just knowing – and hoping those who note your passing do, too – you have all that performance at your command is neat. But for day-to-day driving enjoyment, it's rather pointless.

The half-the-price ST on the other hand (base $29,999) is a street tough with a predilection to dice-and-slice through unsuspecting urban traffic, or commit unprovoked assaults on curvy back roads. And in colours other than Tangerine Scream, it can do this without drawing too much unwanted attention. Like the Shelby, it's not subtle in the way it delivers its performance kick, but it still generates way more user-friendly fun.

Which is the reason I recall more positive comments about it than the Shelby, and why it won the AJAC 2013 Best Sports/Performance Car Under $50,000 category. The Shelby didn't win the Over $50,000 segment it was entered in, losing to Porsche's Boxster, a fast but also eminently driveable car.

The Shelby GT500 is the ultimate Blue Oval-badged expression of pure red-blooded, big-bore, supercharged American muscle. The Focus ST, put together by Ford's Global Performance Vehicle division, has the well-blended blood of a European soccer hooligan being pumped, with plenty of turbo-boost, through its small-bore four's injectors.

And, like a Euro soccer fan, it isn't shy about being seen in bright team colours. In the test car's case, the ($300) Tangerine Scream tri-coat was combined with other features unique to the ST: the grille, chin spoiler, trick aero-rocker panels, high-mounted rear spoiler, central dual exhaust outlets and ST badges. All of which suggests you should be circumspect if you're doing anything the least bit naughty. Which you'll tempted to do for a number of reasons.

Near the top of that list are the 2.0-litre, turbocharged, EcoBoost four-cylinder engine stuffed under the hood, and the six-speed manual gearbox that feeds its 252 hp and half-shaft-twisting 270 lb-ft of torque to the front wheels. In AJAC testing, it averaged 6.9 seconds from 0-100 km/h and 4.1 seconds from 80 km/h to 120 km/h. Fuel economy ratings are 8.9 litres/100 km city and 6.2 highway.

Tucked in the wheel-wells are Y-spoke alloy wheels, shod with P235R18 performance tires, bigger brakes, variable ratio electric power steering (that's linked to a torque-steer-mitigation system) and revised front and rear suspension systems. All this is tuned to deliver in undiluted form the handling European enthusiasts expect from this kind of car (unlike some transplants from the past).

Climb in and you slip into form-fitting, full-leather upholstered (with red stitching) and heated Recaro bucket seats up front (there's a 60/40-split rear seat that, when folded, provides 1,296 litres of space under the hatch, to haul that extra set of rims and tires etc. to weekend track day events). Then you grip a business-like, just-right-diameter, leather-wrapped steering wheel.

Equipment includes air conditioning, keyless entry and push-button start, trip computer, a decent audio system, alloy pedals, outside temp gauge and compass. The test car came with a $1,200 moonroof, a $1,000 technology package that added Sony audio and Ford MyTouch screen, plus dual-zone climate control.

Pleasantly sporty and comfortable enough surroundings, and all the good stuff you need and want in a compact hatchback to make duties like motoring to work, dropping the kiddies off at day care or grocery-getting more pleasant.

But twist the key and the sound emitted from those twin exhaust outlets is immediately wicked-grin-inducing. And toeing the alloy throttle pedal is akin to a soccer-thug picking up an empty beer bottle. Side-step the clutch, and it's bar-room brawl time, as all that torque tries, successfully, to twist everything it's connected to into knots.

The ST isn't just about power and torque though, it handles remarkably well for a front-driver, changing directions like a pointed-pistol on an autocross-style track, and hanging on to long curves tenaciously and in control. The brakes are strong too, with good feel.

Unlike the Shelby, the ST is a car you can use every day of the week, and that makes every drive entertaining no matter where you're going in it. And it comes in race red, too.

Tech specs

2013 Ford Focus ST

Type: Four-door hyper-hatch

Base Price: $29,999; as tested, $34,150

Engine: 2.0-litre, DOHC, turbocharged, inline-four

Horsepower/torque: 252 hp/ 270 lb-ft

Transmission: Six-speed manual

Drive: Front-wheel

Fuel economy (litres/100 km): 8.9 city/6.2 highway; premium recommended

Alternatives: Volkswagen Golf GTI, Subaru WRX, MazdaSpeed3, Mitsubishi Lancer Ralliart, Mini Cooper JCW


Focus sales continue
to boom in China

Keith Naughton
Bloomberg News
August 14, 2013

Ford Motor Co. said its Focus compact remained the top-selling car worldwide in the first quarter as sales more than doubled in China.

The automaker, citing data from researcher R.L. Polk & Co., said global Focus registrations rose 18 percent in the first three months of the year to 288,724. In China, Focus sales rose 153 percent to 104,065, making it the No. 1 market for the small car, surpassing the U.S. Ford produces the Focus in nine factories worldwide and sold 1.02 million last year.

Ford has said the Focus overtook Toyota Motor Corp.'s Corolla compact last year, which the Japanese automaker disputed. Toyota, which includes Corolla derivatives such as the Matrix in its count, has insisted its model remains the world's top-selling vehicle. The disagreement shows how heated the battle for bragging rights has become as Detroit has stepped up its game in cars and challenged Toyota and Honda Motor Co.

"Toyota is feeling the pressure right now from all directions," said John Wolkonowicz, an independent auto analyst based in Boston. "Toyota used to be the brand where everybody went, but they're kind of losing their mojo. There's nothing wrong with the product, it's just that everyone else has gotten so much better."

Focus has pulled ahead of Corolla because its styling is more eye-catching, Wolkonowicz said. Both models deliver on other small-car attributes, such as fuel economy and safety.

"People want a car that turns heads and the Focus does that," Wolkonowicz said. "Toyota realizes their Achilles heel is design. Toyota design needs a makeover."

Ford gained 0.5 percent to $17.15 at 10:01 a.m. New York time. The shares climbed 32 percent this year through Monday, compared with an 18 percent increase for the Standard & Poor's 500 Index.

Toyota has a new Corolla coming next month that features knife-edge creases and a gaping, trapezoidal grille. While it's not as edgy as the Furia concept Toyota showed at the Detroit auto show in January, the new Corolla aims to give the company a dash of style as Toyota President Akio Toyoda has demanded.

"The new Corolla is more distinctive and is an acknowledgment that the previous model was too bland," said Tom Libby, Polk's lead analyst for North America. "I talked to a Focus buyer in his 40s and he told me he really likes the look of the hatchback."

Focus global registrations have grown 57 percent since the first quarter of 2009, according to Erich Merkle, Ford's sales analyst. The Dearborn-based automaker redesigned the model in 2010 as Chief Executive Officer Alan Mulally emphasized fielding competitive, fuel-efficient cars with distinctive design. Previously, cars had taken a back seat to trucks and sport-utility vehicles at Ford.

"The Focus goes beyond just being a utilitarian vehicle," Merkle said in an interview. "It provides something more expressive on the road than many of its competitors."

Toyota, which declined to comment for this story, disputed that the Focus surpassed the Corolla in global sales last year. Toyota said it sold 1.16 million Corollas worldwide last year, topping Focus by 140,000 vehicles. Toyota took issue with how Polk, based in Southfield, counted Corolla deliveries, which excluded derivatives such as the Auris in Europe and Verso in Japan.

"Corolla registrations attributed to Polk come up short by nearly 300,000 units," Mike Michels, Toyota's U.S. vice president of communications, said in April. "This discrepancy is glaring and we have requested clarification."

Polk has provided clarification to Michels by explaining that Ford requested all Corolla derivatives be excluded in the registration comparison between the two models, according to Anthony Pratt, a vice president of forecasting for the researcher.

"Ford benefits from the fact that they go to market as the Ford Focus around the world while some of their competitors may use different names in different markets," Pratt said in an interview. "We validate the position as being the highest registration volumes based on a strict interpretation based on the fact that Ford was looking at vehicle nameplate."

While Pratt verified that Ford is using Polk data, he added: "This is Ford's analysis of Polk data. It's not that Polk is issuing a press release or a report."

Pratt declined to provide a figure for first-quarter worldwide Corolla registrations.

In China, Ford benefits from having two versions of the Focus — the new model sold in the U.S. and Europe as well as the previous generation Focus that is sold at a lower price.

Ford isn't the only U.S. automaker gaining on Toyota. Sales of General Motors Co.'s Chevrolet Cruze compact rose 70 percent in the U.S. in July and outsold the Corolla.

"The American auto companies are taking the compact segment far more seriously than they used to," Wolkonowicz said. "If the Japanese automakers don't take Detroit seriously in compact cars, it's going to be at their peril."


U-M study finds boomers
the new-car generation

Keith Naughton
Bloomberg News
August 13, 2013

Last year, Dave Rodham bought two Ford Mustangs — a red one because it looked cool and then a white one with a big V-8 engine because it sounded cool. For Rodham, 63 and retired, those were his 50th and 51st cars.

"I have to have a new car every year-and-a-half to two years," said Rodham, of Virginia Beach, Va., who said he pays cash for his cars. "After I retired 10 years ago, I didn't have anything else to do, so I went out and bought new cars."

For generations, car buying declined as consumers entered their golden years. Now, boomers are refusing to follow their parents' lead and go quietly into the car buying night.

The 55-to-64-year-old age group, the oldest of the boomers, has become the cohort most likely to buy a new car, according to a new study by the University of Michigan's Transportation Research Institute. Graying boomers replaced the 35-to-44 year old age group, who were most likely to buy four years ago.

The findings show there are plenty of miles left in boomers' automotive passions and pocketbooks. They also suggest the billions the auto industry spends to try to woo the elusive Generation Y, the children of the boomers, would generate a higher return on investment if targeted at older drivers.

"You shouldn't be chasing the younger people, you should be looking at the older people," Michael Sivak, author of the study, said in an interview. "Baby boomers are trying to extend their youth as long as they can, both in terms of taking care of their bodies and in their expenditures."

And the recession is extending the working years and peak earnings period of the 76 million Americans who were born from 1946 through 1964 in a post-World War II birth boom.

"People's nest eggs were decreased, including their retirement portfolios, by the recession," said Lacey Plache, chief economist for auto researcher Edmunds.com "We can expect these people to be in the work force longer and, as a result, buying cars longer."

There's also a strong psychological reason driving boomers back to the car dealer's lot year after year: Their cars define them.

"The car was a phenomenon of the 20th Century," said John Wolkonowicz, a Boston-based automotive historian and a former Ford Motor Co. product planner.

"For people who grew up and lived in the 20th century, the car was freedom, it was status, it was an extension of you, a visible expression of you and your personality. A 20-year-old doesn't see the car the same way," Wolkonowicz said.

Indeed, young people don't seem that interested in driving. Just 79 percent of people between 20 and 24 had a driver's license in 2011, compared with 92 percent in 1983, according to the Michigan study.

Conversely, the oldest boomers are trooping down to the Department of Motor Vehicles in growing numbers to remain licensed to drive. Almost 93 percent of those age 60 to 64 had a driver's license in 2011, up from 84 percent in 1983.

That helps explain why consumers age 55 to 64 had the highest rate of vehicle purchases in 2011, while the youngest age groups had the lowest rate. Even consumers age 75 and above bought cars at a higher rate than 25-to-34-year-olds and 18- to-24-year-olds, the Michigan study found.

"I have a son who lives in San Francisco; when I get a new car and I tell him what I got, he couldn't care less," Sivak said. "To him, it's a means of getting from A to B. He goes into great lengths about taking a BART or bus, even though it takes him an hour longer. He does have a car, but uses it very rarely."

Automakers have spent billions to come up with youth vehicles that end up selling better to boomers. A decade ago, Honda Motor Co. fielded the boxy Element sport-utility vehicle with clamshell doors and rubber floors that could be hosed out by on-the-go young people. Instead, Honda's boomer loyalists bought the car until it was discontinued in 2011.

"One of the dirty little secrets of the auto industry is all these cars are positioned in advertising and public relations as something a 25-year-old will buy," said John Morel, a market researcher for Honda. "But your propensity to buy a car at 25 is roughly a quarter of what it is at age 65. By definition, very few cars sell in high volume to 20- somethings."

General Motors Co., Ford and Chrysler Group LLC have had a troubled history with boomers, who migrated to Japanese and German models after being let down by poor quality from Detroit. Now that trend is turning as the revived U.S. automakers field some of its best cars in a generation, such as GM's Chevrolet Impala sedan and Ford's Fusion family car.

This year, Ford has sold 23 percent of its models to 55- to 64-year-olds, outpacing the total auto industry, which sold 22.2 percent of its vehicles to that group, according to Amy Marentic, Ford marketing manager, who cited data from researcher R.L. Polk & Co.

Ford's Escape small SUV has become a boomer magnet since a redesign last year made it more carlike and less rugged-looking, Marentic said.

The average age of Escape buyers this year is 52, up from 51 last year. And 45 percent of the Escape boomer buyers opt for the fully loaded Titanium package, starting at $29,100.

Automakers are rewriting the playbook on marketing to senior citizens. No longer will retirees buy the big, boulevard cruiser and drive it into the grave.

"Boomers have done everything different than previous generations, so why would we expect their retirement to be any different?" said Susan Pacheco, a Ford generational marketing executive.

"Their automotive needs are what we base our product strategy around. If you don't market to them, it would be a very big mistake," Pacheco said.

Rodham, who retired after a military career, is already plotting his next purchase. He's thinking of trading in the 420- horsepower Mustang GT for a $50,000 Ford F-150 pickup.

"I'm 63 and I can't handle 420 horsepower," Rodham said. "You have to be very careful not to get a speeding ticket with that car and I just cleared up all the points on my record."


Ford's supply of Escape
in 40-day range

Trainer Susan Spaulding holds an instruction sheet used by trainees to install parts on July 31, during a demonstration at the Ford Flat Rock Plant in Flat Rock. (Steve Perez/The Detroit News)

Melissa Burden The Detroit News
August 12, 2013

Acme — A Ford Motor Co. manufacturing executive said the automaker still can find ways to increase capacity if needed and is looking at how to keep up with demand for the popular Escape crossover.

Jim Tetreault, vice president of Ford North America manufacturing, told reporters at the Center for Automotive Research Management Briefing Seminars that he expects Ford will increase capacity of some products this year. The company already added 600,000 units of capacity in the U.S. in the past year or so.

"We're still looking at how we get more out of every plant, and that'll be a focus for as long as the demand is as strong as it is," he said.

For example, Ford's Flat Rock Assembly Plant still has capacity available; it will run on two shifts but could go to three shifts.

Tetreault said Ford is "working on" a solution to help meet customer demand of the Escape. Supply of the Escape is running in the low to mid 40-day range.

Ford will look to increase volumes at its Louisville Assembly Plant where the Escape is built. Tetreault said Ford will try to boost the number of vehicles built per hour at the plant. He said even two additional vehicles off the line an hour would give Ford 240 more vehicles a week.

"The plant runs extremely well," he said. "We're very happy with the output in Louisville. But again, we can always do more."

The carmaker has been adding shifts and using relief and floating employees to relieve others as they go on breaks and take lunches to keep production humming.

For example, it is adding a second shift at its Flat Rock plant this summer to build the Ford Fusion. Production there will help boost supply of the hot-selling midsize Fusion, which is also limited to about 40 days' supply. Ford said supply of the sedan is even more limited on the coasts.

Ford meets twice a week with manufacturing, purchasing and supplier technical assistance leaders to talk about constraints in the supply base and look for capacity solutions.

Tetreault said through a strong maintenance operation, Ford was able to boost production last year by nearly 3 percent "just through better up-time."


Ford needs more vehicles
from current factories

By Alisa Priddle
Detroit Free Press
August 11, 2013

ACME — Ford must squeeze even more production out of its U.S. factories, but it will not build new plants even as demand grows to prerecession levels, a top executive said today.

There are many ways to get more vehicles out of existing plants, and plans are to continue to increase capacity at all 30 North American plants, James Tetreault, chief of Ford North American manufacturing, said today at an automotive conference at the Grand Traverse Resort.

"We have increased capacity at every plant," Tetreault said, primarily by adding workers and shifts, new equipment, processes and increasing line speed where appropriate.

The automaker has already added 600,000 units of capacity — 400,000 last year and 200,000 more this year.

Ford marketing executives said July sales of certain models, including the Focus and Fusion, were limited because of tight inventories.

"We have some room to grow in all plants," Tetreault said, vowing to squeeze out one more vehicle an hour wherever he can.

He noted that the Flat Rock plant, where Ford is adding Fusion production to the Mustang, is operating on only two shifts. A third shift can be added "when sales volume dictates," Tetreault said, but demand must warrant it first.

"Our job is to always provide what sales and marketing want," Tetreault said, adding that CEO Alan Mulally has not specifically vetoed the idea of building a new plant, but there are no such plans in the works.

Instead, the manufacturing team will continue to identify and remedy bottlenecks at Ford plants and with suppliers to do more with less at existing facilities.

Adding workers has been part of the solution.

"We've been on a hiring spree like I've never seen," Tetreault said, referring to the 8,000 hourly and 3,000 salaried workers hired in the last 15 months.

In North America, Ford now has 58,000 hourly and 24,300 salaried workers. That is still below prerecession levels. Tetreault said he doubts Ford will ever be staffed at those levels again.

Ford is also working to modify work stations to reduce the risk of injury and make tasks easier.

Ford is also involved in a pilot program to provide medical attention to about 1,500 workers deemed at risk of chronic disease. They would work with physicians and be assigned nurses to monitor diet and other care to try to stave off heart disease, diabetes, asthma and some other common chronic illnesses.

"We need to think of people differently," Tetreault said. "They are an asset to the company if they perform at a high level throughout their career."

Prior to the recession, "it wasn't a big focus, because we weren't hiring. We had almost no attrition and too many workers," he said.


6 small cars ace industry group's tough new crash test

Honda Civic's two-door and four-door finished atop the crash test. (IIHS

6 other models in field fail to garner top ratings from IIHS

David Shepardson
Detroit News Washington Bureau
August 10, 2013

Washington— Half of the dozen small cars tested under tougher new frontal crash tests by an industry group failed.

The Insurance Institute for Highway Safety said it was awarding its "Top Safety Pick +" award to the six models that did pass the new overlap frontal crash test introduced last year, which replicates what happens when the front corner of a vehicle strikes another vehicle or an object like a tree or a utility pole. In the test, 25 percent of a vehicle's front end on the driver's side strikes a five-foot-tall rigid barrier at 40 miles per hour.

Small cars are the second-best-selling segment of cars behind midsize vehicles. As a group, small cars fared worse than midsize cars in the same test but better overall than small SUVs, the IIHS said.

The two-door and four-door models of the 2013 Honda Civic are the only small cars to earn the top rating of good in the test. The 2013 model-year Dodge Dart, Ford Focus, Hyundai Elantra and 2014 model-year Scion tC earned acceptable ratings, which also qualifies them for the "Top Safety Pick +" honor.

The other six vehicles were 2013 models of the Chevrolet Sonic, Cruze and Volkswagen Beetle — all rated marginal — while the 2013 Nissan Sentra, 2013 Kia Soul and 2014 Kia Forte were rated poor.

The Arlington, Va.-based IIHS prods automakers to build safer cars through crash tests and research. IIHS ratings are influential because many prospective owners consult them before buying and many automakers tout the Safety Pick honor in advertising.

So far, 25 models have earned the top honor from IIHS, while others are rated as "Top Safety Picks" without the plus for passing the small overlap test. IIHS also has evaluated midsize luxury cars, midsize cars and small SUVs. Results for minicars will be released later this year.

"Manufacturers need to focus on the whole package," says David Zuby, IIHS' chief research officer.

That means a strong occupant compartment that resists the kinds of intrusion we see in a frontal crash like this, safety belts that prevent a driver from pitching too far forward and side-curtain airbags to cushion a head at risk of hitting the dashboard or window frame."

In a 2009 IIHS study of vehicles with good ratings for crash protection, small overlap crashes accounted for nearly 25 percent of the frontal crashes involving serious or fatal injury to front seat occupants.

Zuby said all of the six models that didn't pass the new test have been honored as "Top Safety Picks" — but without the "plus.

"In the worst cases safety cages collapsed, driver air bags moved sideways with unstable steering columns and the dummy's head hit the instrument panel," Zuby said.

"Side-curtain air bags didn't deploy or didn't provide enough forward coverage to make a difference. All of this adds up to marginal or poor protection in a small overlap crash."

The IIHS said the VW Beetle's steering column moved nearly five inches to the right as the crash test dummy's upper body moved forward and to the left, meaning the dummy's head barely contacted the front air bag. The safety belt allowed the dummy to move forward 13 inches and hit its head on the dashboard, and the side air bag didn't deploy.

In the case of the Kia Forte, the test found that a side-curtain air bag that deployed didn't provide enough coverage and allowed the dummy's head to hit the windshield pillar and instrument panel.

In the Chevrolet Sonic test, the air bag deployed after the dummy had moved toward the open driver window, leaving its head on the wrong side of the air bag, according to the IIHS.


UAW trust to receive $171 million from sale of GM warrants

David Shepardson
Detroit News Washington Bureau
August 9, 2013

The United Auto Workers health care trust is expected to receive $171 million from the sale of warrants in General Motors it received as part of the automaker's 2009 restructuring, GM said Wednesday.

The trust is selling 45.4 million warrants that allow the buyer to acquire shares of GM stock at $42.31 at any time on or before Dec. 31, 2015. GM stock closed at $35.48 on Wednesday, so the warrants are currently "in the red." The price is near the low end of what the trust said it was willing to sell the warrants. When the stock price rises above the warrant price, it can be exercised at a profit.

The offerings were priced at $3.85 per warrant, which lets the holder purchase one share. The trust used a "Dutch auction" to price the offering.

The warrants will be traded on the New York Stock Exchange under the symbol "GM WS C." Buyers were allowed to start selling them Wednesday morning. The sale will officially close on Aug. 12.

Some large Wall Street investors may want to acquire the warrants in order to be able to acquire GM shares down the road without having to lay out significant funds now. GM's stock has jumped by 27 percent this year — trading as high as $37.71, the highest price since January 2011.

In exchange for about $20 billion it was owed in long-term health care costs by GM during the automaker's restructuring, the UAW health care trust received the warrants. It also received $6.5 billion in preferred stock paying 9 percent interest, a 17.5 percent equity stake in the company and a $2.5 billion note. GM redeemed the note in October 2010 for $2.8 billion, but the UAW hasn't sold any of the preferred stock yet.

In June, the UAW trust sold 20 million shares of GM stock at $34.41 a share as the automaker returned to the S&P 500, generating about $688 million. The trust now owns roughly 10 percent of GM, or about 140 million shares, excluding the warrants.

Last month, the U.S. Treasury said it sold nearly $2 billion in GM stock in June as it dropped its forecast of U.S. losses on the $85 billion bailout to $17.9 billion.

The government's estimate of losses on the bailout fell nearly $2.5 billion in the most recent quarterly forecast as GM's stock price rose.

At the current selling pace on the open market, the government could exit in about six months.

With those latest sales, the government has recouped $33.35 billion on its $49.5 billion bailout.

Over the last six months, the Obama administration has cut its forecast of auto bailout losses by 25 percent, down from a Dec. 31 estimate of $24.3 billion. The Treasury in 2009 initially forecast it would lose $44 billion on its bailout of GM, Chrysler and their finance arms.


CAW's Lewenza to step
down as new union emerges


The Globe and Mail
Aug. 0 2013

The labour chiefs who put together a merger of two of Canada's largest unions are retiring, opening one of the most powerful positions in the Canadian labour movement to new leadership.

Ken Lewenza, president of the Canadian Auto Workers union, and Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada, will step aside when the merger takes effect in September. The announcement is expected on Thursday in Toronto.

They will nominate Jerry Dias, a 54-year-old veteran of the CAW, to be president of the new union, called Unifor. The merger will create a single 300,000-member union with employees across the country in manufacturing and autos, telecommunications, health care, cab drivers, pipelines, aerospace and newspapers.

Whoever gets the role will have one of the most high-profile – and difficult – jobs in organized labour.

The Unifor merger comes amid difficult times for unions in Canada. Overall union membership in Canada grew between 1981 and 2011, but the proportion of private sector workers belonging to unions fell to 15 per cent from about 30 per cent.

Some companies with unionized work forces are facing trouble from a high dollar and a sluggish economy, and many of those businesses are insisting on concessions from employees – a current example being the lockout of 900 employees at the Lake Erie operations of United States Steel Corp.

Political winds have also been unfavourable to unions: The federal government has intervened to end legal strikes, and the leading opposition party in Ontario is talking about implementing so-called "right-to-work" laws if elected, which would weaken union power, in a bid to revive the province's battered manufacturing sector.

One purpose of the merger is to create a labour group strong enough to stand up to governments and corporations that began cutting workers' pay, pensions and rights even before the recession, but picked up the pace of that activity during the 2008-2009 downturn, Mr. Dias said in an interview.

"It's not a crime to expect to have a decent standard of living," he said. "People have almost been conditioned that, as a result of globalization, we have to expect less."

Workers are afraid to speak out because of the high unemployment rate and the loss of good-paying jobs, he said.

If Mr. Dias, 54, is elected at a Labour Day weekend convention that will ratify the merger and choose a new president, he will be the first leader of the union that represents auto workers in Canada to come from outside that industry.

He rose in the ranks of the CAW and its predecessor, the Canadian branch of the United Auto Workers, through the aerospace industry. He joined the union in 1978 at what was then de Havilland Aircraft of Canada Ltd., where his first job was in the metal stamping shop.

His father was the president of the UAW local at the plant in the Downsview area of northwestern Toronto from 1967 to 1978.

"That was the focus of all the discussions around the breakfast table, the dinner table. My entire upbringing as a child was in a strong trade union family," Mr. Dias said. "We were a working class family … so it's absolutely in my blood."

His wife, Leslie, is a national representative for CAW workers with Air Canada.

Mr. Dias followed in his father's footsteps to become president of Local 112 and played a key role in persuading the Ontario government to purchase de Havilland and avert the closing of one of the largest industrial employers in Toronto.

In 1993, he joined the national staff of the CAW as aerospace industry co-ordinator and, in 2007, he became an assistant to then-CAW president Buzz Hargrove, a position he kept when Mr. Lewenza was elected president in 2008.

Mr. Dias is also a social activist. This year, for the fourth year in a row, he will participate in the "Hope in High Heels" walk, during which men walk in women's high-heel shoes to raise money for Halton Women's Place, which runs shelters for abused women in Burlington and Milton, Ont.

During his first walk in 2010, he set of goal of raising $30,000, said Carm Bozzo, the organization's development manager. "I thought he was nuts, but he did it."


Growing lifespans the latest
worry for pension plans

The Globe and Mail
Aug. 8, 2013

Canadian companies are facing higher pension costs after an influential group published new research that suggests workers are living longer than previously thought.

For the first time, the Canadian Institute of Actuaries (CIA) commissioned studies based on Canadian lifespans, rather than relying on data from the United States. The studies found that life expectancies are on the rise: A 60-year-old man, for instance, is now projected to live another 27.3 years, up from 24.4 years.

The numbers matter to business because most corporate pension plans use the institute's mortality tables as a starting point when calculating the future cost of pensions. Towers Watson, a consulting firm, says that while the impact will vary from one pension plan to another, acceptance of the new mortality tables could "immediately increase pension accounting liabilities by 5 to 10 per cent for many plans, potentially impacting corporate income statements and balance sheets."

The firm noted that the change comes just as corporate treasurers began to hope that rising stock markets and interest rates would improve the fortunes of their pension plans, many of which are badly underfunded.

"We are edging closer to a crisis," said Jim Leech, chief executive officer of the Ontario Teachers' Pension Plan. "Pension plans and sponsors need to come to grips with the volatility in the marketplace and the fact that people are living longer, and therefore have to save more."

The new mortality tables will not have a direct impact on Teachers, one of Canada's largest pension funds, because it has its own records dating back to 1917 and so crafts mortality tables based solely on the lifespans of teachers. But Mr. Leech knows the added burdens that assumptions about longer lifespans can cause. Like the general population, teachers are living longer, and that finding has already been worked into Teachers' assumptions of future costs.

"Since I've been CEO, we've adjusted the mortality table three times – in 2007, 2010 and again in 2012," Mr. Leech said. "Cumulatively, those three changes amounted to just under $10-billion of increase in liabilities."

Teachers had $129.5-billion of assets at the end of last year.

The Canadian Institute of Actuaries' new numbers are based in large part on a study of pensioners in the Canada Pension Plan and Quebec Pension Plan, which looked at the mortality of people who were collecting from those plans between 2005 and 2007.

The draft tables suggest that the life expectancy of a 60-year-old man is 2.9 years longer than under the current tables, while the life expectancy of a 60-year-old female is 2.7 years longer (rising to 29.4 years from 26.7 years), Towers Watson points out.

Jacques Lafrance, president of the Canadian Institute of Actuaries, said that most corporate pension plans rely on these mortality tables, although they might make their own adjustments based on their employee base. For instance, companies with white-collar employees might expect longer lifespans than average, while companies in the mining sector might expect shorter lifespans, he said.

He added that plans with more active workers and fewer retirees will generally face a larger impact than those with the reverse situation. The new mortality table will have an impact on the cash contributions that must be made into plans, as well as the way corporations account for their plans on their books.

"What the new table is showing is that we were somewhat wrong with our prediction, that it was not conservative enough, and that in fact people are living even longer than we expected," Mr. Lafrance said.

Mr. Leech said pension plans and sponsors need to address longer lifespans by changing the rules around pensions.

"The retirement age needs to go up," he said. "Guaranteed benefit levels shouldn't necessarily have all the bells and whistles. Things like early retirement provisions, the ability to retire when you're 55, it's nice but somebody has to pay for it. … These things need to be made contingent, so they're not guaranteed; they're there if there is enough money for them."


GM, Ford report record
July sales in China

Karl Henkel and Melissa Burden
The Detroit News
August 7, 2013

General Motors Co. and Ford Motor Co. posted record July sales totals in China, the largest and fastest growing auto market in the world.

GM said Monday that for the first time, July sales topped 200,000: 221,580, to be exact. Ford said sales jumped 71 percent to 72,834.

GM sales were up 11.1 percent overall, including a 25.7 percent jump in Buick sales for the month and an 82.8 percent increase in Cadillac sales.

Through July, GM and its joint ventures have sold about 1.79 million vehicles, up 10.7 percent from the same period a year ago and setting a record for the first seven months of the year.

Ford's year-to-date sales are up 50 percent, the automaker said Monday, totaling 480,555 sales for the period of January through July.

Nearly half of those sales are from Ford's compact Focus car. The Dearborn automaker sells two versions — a classic version and its newer global edition. Sales of the EcoSport and Kuga, Ford's subcompact and compact SUVs, respectively, continue to rise after their introductions earlier this year.



Ford to update its Sync software

Karl Henkel
The Detroit News
August 6, 2013

Ford Motor Co. is preparing to launch its latest software update for its Sync voice recognition and MyFord Touch infotainment systems in an effort to streamline both systems and improve customer satisfaction.

The free update should be available by next week for all Ford and Lincoln customers via Internet download. It will allow customers to more quickly pair a smartphone with both systems, will simplify some voice recognition commands and will make touchscreen buttons easier to press.

For instance, one of the chief complaints of MyFord Touch has centered on how a person selects functions on the touchscreen. Using the current software, a driver or passenger must touch the upper or lower portion of one of four quadrants — for phone, navigation, audio or climate.

The new software will allow a customer to touch anywhere inside a quadrant to select and change the associated features.

The update will also allow for more streamlined voice commands that skip many of the laborious commands of past software versions.

Ford's software upgrades are the latest in a series of fixes to the company's tech systems. Third-party reviewers have panned MyFord Touch since its debut in 2010. Frustrated users have caused Ford's quality rankings to suffer in many surveys.

But despite complaints, consumers have still bought into Ford's infotainment system. Ford says nearly 80 percent of U.S. buyers opt for Ford models with Sync or MyFord Touch.


Ford begins training Flat Rock
hires ahead of new Fusion launch

Karl Henkel
The Detroit News
August 4, 2013

Flat Rock – — LaTasha Lucas started her job at Ford Motor Co.'s Flat Rock Assembly Plant on Monday, but it will be at least another week before she's fully trained and ready to produce the automaker's Fusion midsize sedan.

Lucas, a 31-year-old Detroiter, is one of 1,400 new hires at Flat Rock who are going through a week of training over a period of a few months in a simulated factory in the Flat Rock complex. It acts as a kind of tryout period before workers actually hit the factory floor.

Ford says it's beneficial for both the automaker and new hires: Workers are better trained for new vehicle assembly — or like 50 recent Flat Rock hires, able to quickly realize they are not cut out to build cars on an assembly line.

The program is aimed at improving vehicle launches and getting new workers — many of whom have never stepped foot into an assembly plant — acquainted with modern vehicle assembly.

The five-day class allows new workers to refine basic skills. It takes up to 50 employees through an eight-hour shift at one time. They rotate between 10 different stations, doing simulated work on brake lines, installation of radiator hoses and other areas. They are paid their starting wage during the training period.

"Before simulated factory training, you could always tell when it was someone's first week on the line," said Tim Young, the plant manager at Ford's Flat Rock plant. "They were a little unsteady and unsure of what they needed to do, and it usually resulted in having to stop the line multiple times that first week."

Even Lucas, who previously worked for two years at the Faurecia auto parts plant in Saline, admitted that after three days of training, she would have been lost if she started her first day on the assembly line — normal protocol before Ford launched a version of training in a simulated factory at its Louisville Assembly Plant last year.

"I was used to small, little (pneumatic wrench) guns with no torque," Lucas said Wednesday. "This makes you more confident and comfortable with what you're doing."

Ford plans to use the training for all new vehicle launches in the future.

Launches are one area in which Ford sees room for improvement. The automaker had hitches in the launch of its Fusion midsize sedan and Escape compact SUV last year, and launch problems reached their height when Ford couldn't get its Lincoln MKZ sedan to showrooms on time.

It's difficult to imagine a scenario where new, sometimes inexperienced employees stepped right into a factory and, after three days of training alongside another worker on the floor, were given their own manufacturing tasks. But that's exactly how new hires had been trained in the past.

Additional training is a necessity with the hiring of more Tier 2 workers, who are generally younger hires who start at half the hourly wage of veteran workers. Many of the new hires come from non-manufacturing backgrounds like teaching, the U.S. Postal Service, and even fast food and retail establishments. The assembly jobs require a minimum of a high school diploma.

"In the last class, there were actually very few" who had manufacturing experience, said Greg Hounshell, who trains new workers at Flat Rock Assembly. "Today was a little bit of a challenge."

The simulated training also will help with attrition rates of newer workers. Aris Janitens, Ford's manager of launch planning and workforce readiness, said newer workers with little experience would often get discouraged and even quit after a short time working on the assembly line. Ford would then have to again go through the process of hiring someone new.


2013 Ford Explorer Sport

2013 Ford Explorer Sport

This big SUV is a poor Sport

The Globe and Mail
August 3, 2013

If there's an overworked and overused name in manufacturers' repertoire, it has to be "Sport."

It can apply to everything from a bare-bones, entry-level model masquerading as a performance car, to one powered by the most powerful engine the company can find. Not so long ago, any "Sport" model offered by Ford meant one without air conditioning.

Or, in the case of the Ford Explorer, it can mean a combination of fuel economy and performance, courtesy of the company's EcoBoost V-6 engine. Ford describes the Explorer Sport as having a "greater performance feel" than its predecessor, but without the tank-draining fuel consumption that invariably accompanies it.

New for 2013, the Sport is the top of the line for the Explorer in Canada, and propelled by the EcoBoost unit that develops, according to Ford, "at least" 350 horsepower, although the company's website says 365.

The transmission is a six-speed automatic with Ford's Select Shift manual shift feature, and the Sport comes with 4WD with four settings: Normal, Mud/Ruts, Sand and Snow/Gravel/Grass.

Standard equipment includes a hill start assist feature and hill descent control. Towing capacity is 2,268 kilograms and the Towing Package includes a trailer hitch, various connectors and an engine oil cooler.

Perhaps this is where the "Sport" appellation comes into play, because the twin turbocharged V-6 engine is not exactly responsive. A well-tuned V-8 engine, for example, will respond much more snappily and predictably than this powerplant.

I found it to be vague off the line and it had a mind of its own when it came to reserve power and kickdown. Yes, with the pedal buried, it has all kinds of pull, but there's a bit of a no-man's land in between full throttle and around-town cruising and the EcoBoost engine spends far too much time there. That said, the fault could lie with the gearbox.

What about fuel economy? Ford is claiming 14.7 litres/100 km in town and 10.6 on the highway. By way of comparison, Toyota's V-6 Highlander will deliver 12.6 city/8.7 highway, with 270 horsepower on tap. I've driven both, and the Highlander feels more lively to me. Toyota's Sequoia, meanwhile, is priced almost the same as the Explorer Sport and will provide more than 380 horses with its V-8. It's also bigger. Food for thought, if large SUVs appeal to you.

Here's my other major complaint: the accursed MyFord Touch control screen. Man, I grew to hate this thing. Every time I wanted to perform the simplest tasks – changing radio bands, adjusting the HVAC, etc. – I had to resort to the touch screen, which sometimes wouldn't respond right away, requiring me take my mind off the job at hand – driving the vehicle – to refocus. I spent far too much time fiddling around.

Incidentally, I'm not the only one who dislikes this setup; the U.S. Department of Transport and National Highway Traffic Safety Administration both recently issued a bulletin about the dangers of distracting controls.

Describing the situation as being an "epidemic," both NHTSA and DOT are making guideline recommendation to auto makers to change the way they design their controls. Says NHTSA: "There's a serious concern about in-dash controls that may be very distracting when you're behind the wheel. These guidelines are aimed at getting auto makers to focus on safer tools in the dash that take less of your attention away from the road."

Ford's MyFord Touch in particular, is one of the major culprits here (along with Cadillac's CUE) and Consumer Reports says it "stinks." I couldn't agree more. Especially when you factor in drivers' unwillingness to stop texting/phoning while driving. The roads are getting more dangerous these days, and MyFord Touch isn't helping things.

Elsewhere, the Explorer Sport provides 2,285 litres of cargo space, and you can power your cellphone or laptop via a couple of electrical ports located on the centre console – to distract you even more.

2013 Ford Explorer Sport

The Explorer Sport also comes with a dual-zone climate control system, heated front seats, a rear-view camera and remote start. My tester also had a few extras such as a huge moonroof ($1,750), inflatable rear seat belts ($250), and adaptive cruise control and collision avoidance systems ($1,500). Here's something peculiar: Ford claims that the interior for the new Explorer Sport was inspired in part by fashion houses Balenciaga and Prada. Why?

If you're getting the impression that I didn't much care for this vehicle, you're right. It's too big, out of the step with the times, annoying to drive, not particularly thrifty and definitely not sporty.

Tech specs

2013 Ford Explorer Sport

Base Price: $48,299; as tested, $55,079

Engine: 3.5-litre, turbocharged, V-6

Horsepower/torque: 365 hp/350 lb-ft

Transmission: Six-speed automatic with manual shift feature

Drive: 4WD

Fuel economy (litres/100 km): 14.7 city/10.6 highway; regular gas

Alternatives: Toyota Highlander, Volkswagen Touareg, Mazda CX-9, Dodge Durango, Jeep Grand Cherokee, GMC Acadia, Honda Pilot, Chevrolet Traverse, Acura MDX


Ford pays NHTSA $17.35M
fine over recall issue

Karl Henkel
The Detroit News
August 1, 2013

Ford Motor Co. has paid the National Highway Traffic Safety Administration a $17.35 million fine because the automaker did not notify customers of a defect in a timely manner.

Ford had recalled approximately 423,000 2001-2004 Ford Escapes and Mazda Tributes in July 2012, because the gas pedal could remain depressed even after a driver removed their foot from the pedal.

Ford's recall came a week after NHTSA opened an investigation; NHTSA said it did not know how long Ford may have known about a potential problem before the investigation.

"We are absolutely committed to addressing potential vehicle issues and responding quickly for our customers," Ford said in an emailed statement. "We take the safety of our customers seriously and continuously evaluate our processes for improvements. While we are confident in our current processes for quickly identifying and addressing potential vehicle issues, Ford agreed to this settlement to avoid a lengthy dispute with the government."

Federal law requires all auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists or that the vehicle is not in compliance with federal motor vehicle safety standards, and to promptly conduct a recall.

The $17.35 million fine is the maximum allowed. Fines received are paid into the general fund of the U.S. Treasury.

The agreement to pay the civil penalty was reached June 28; Ford paid the fine July 26, it was revealed Thursday.

Ford posted a $2.3 billion North American pre-tax profit last quarter. Based on those figures, Ford can pay the fine with money earned from less than one day of operations.

By agreeing to a settlement, Ford did not admit fault to violating the U.S. Safety Act, but is not released from any possible civil or criminal liabilities.

"The National Highway Traffic Safety Administration is deeply committed to ensuring the highest standards of safety on our roadways," the agency said in an emailed statement. "It is critical to the safety of the driving public that manufacturers address automotive safety issues quickly and in a forthright manner.

"Recalls are a serious safety matter and NHTSA urges consumers who have vehicles that are included in the safety recall to have their vehicles serviced promptly."

Ford is not the first automaker to pay the $17.35 million maximum fine, which is scheduled to double to $35 million beginning in October.

Toyota paid the same fine last year because it delayed the recall of 154,000 Lexus SUVs over gas pedal entrapment issues. The Japanese automaker had previously paid three other maximum fines, which varied in amount because the fines increase yearly based on inflation.


The National Highway Traffic Safety Administration has levied maximum fines in recent years after finding that automakers failed to recall vehicles in a timely manner:

June 28: Ford Motor Co. agrees to pay a $17.35 million after NHTSA says the company delayed a July 2012 recall of 423,000 2001-2004 Ford Escapes and Mazda Tributes because the throttle could stick.

December 2012: Toyota Motor Corp. says it will pay a record-setting $17.35 million fine for delaying the June 2012 call-back of 154,000 2010 Lexus RX 350 and RX 450h SUVs because of gas pedal entrapment issues.

December 2010: Toyota pays $16.4 million after delaying recall of nearly 4.9 million vehicles for gas 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.

Source: NHTSA


Comparing cutes utes

Larry Printz
Aug 1, 2013

Compact sport utility vehicles are nothing new. In fact, the first true SUV, the Jeep Wrangler, was a compact SUV.

But as SUVs exploded in popularity, Toyota did what no other company had done: take an SUV body and its four-wheel-drive system and place them in a car chassis.

The resulting vehicle, the 1994 RAV4 (Recreational Active Vehicle four-wheel drive) became the template for the class.

Since then, cute utes — with their roomy cabins, small footprint, good fuel economy and affordable price — have become the most popular part of the market.

All of them have two rows of seats, automatic transmissions and optional four-wheel or all-wheel drive. All have four-cylinder engines, except for the Jeep and Chevy, which offer V6s. And only the Jeep and Kia have manual transmissions.

And all start at less than $26,000.

So, let's drive.

Honda CR-V
$22,795 — $30,295
Length: 178.3 inches
Passenger volume: 104.1 cubic feet
Cargo capacity: 37.2-70.9 cubic feet
Why it's hot: With its 2012 restyle, the CR-V regained a measure of style lost in the previous model. The interior sports better-quality materials and thoughtful touches such as seats that fold flat into the floor. It's modestly sporting to drive, with nicely weighted steering and an absorbent ride. The four-cylinder engine ably balances fuel economy and power. No, it's not flashy. But it is highly functional.

Ford Escape
$22,470 — $32,120
Length: 178.1 inches
Passenger volume: 98.1 cubic feet
Cargo capacity: 34.3-68.1 cubic feet
Why it's hot: This unprepossessing crossover exchanges work gear for a slim-fit suit, banishing its boxy lines in exchange for the modern design aesthetic of the Ford Focus and Fiesta. The instrument panel has a sporty, over-caffeinated look. Interior space seems a bit snug. There is a choice of engines, and they provide plenty of power. The car has a lively feel and nimble handling to back up its continental look.

Toyota Rav4
$23,300 — $28,410
Length: 179.9 inches
Passenger volume: 101.9 cubic feet
Cargo capacity: 38.4-73.4 cubic feet
Why it's hot: The best part of the 2012 RAV4 remains intact: its perfect size and fuel-efficient, but peppy, four-cylinder drivetrain. But its less desirable traits — like the downscale cabin trim and odd styling — have been ditched in favor of a less-dowdy personality. Its sophisticated new looks, along with improvements in rigidity and sound deadening, make it much more appealing.

Jeep Wrangler Unlimited
$25,795 — $34,195
Length: 173.4 inches
Passenger volume: 104 cubic feet
Cargo capacity: 31.5-70.6 cubic feet
Why it's hot: OK, this is not a cute ute. Not by a long shot. Consider it a counterpoint to other vehicles here. This is a real SUV, not a poser. It's able to go far off-road or easily overcome the most adverse weather conditions. And, when the weather moderates, you can remove its roof. Best of all, this iconic vehicle has a cool factor the others can't match. The trade-off? What makes it great off-road makes it feel unrefined on-road.

Chevrolet Equinox
$25,085 — $31,845
Length: 187.8 inches
Passenger volume: 99.7 cubic feet
Cargo capacity: 31.4-63.7 cubic feet
Why it's hot: Aside from the Jeep, this is the only crossover to offer a V-6 engine. It's also the longest vehicle here and second only to the Jeep in price. The seats are comfortable and the cabin is roomy. Legroom is generous. Acceleration is fairly good, but not as strong as you might wish. On the other hand, fuel economy is better than expected.

Nissan Rogue
$20,310 — $27,950
Length: 183.3 inches
Passenger volume: 97.5 cubic feet
Cargo capacity: 28.9-57.9 cubic feet
Why it's hot: Despite its name, the Rogue is anything but dishonest or unprincipled. Using the platform of the previous Sentra and the four-cylinder engine used in the Altima, the Rogue's tidy size makes it easy to maneuver. Handling is similar to that of a small family car: nimble, but not sporty. With its quiet, roomy interior and firm seats, this is a stylish people-hauler with laudable utility and frugality.

Hyundai Santa Fe Sport
$24,700 — $29,700
Length: 184.6 inches
Passenger volume: 108 cubic feet
Cargo capacity: 35.4-71.5 cubic feet
Why it's hot: Who would think that a Hyundai would be among the most expensive vehicles in this group? It doesn't seem overpriced, though. Four-cylinder engines, with or without a turbocharger, provide power without pain at the pump. Handling is fairly good, but to name this five-passenger wagon Sport is stretching things. It's nimble, but it's not sporty. Still, this cute ute follows the path blazed by the Sonata sedan, with a premium feel at a reasonable price.

Kia Soul
$14,400 — $19,900
Length: 162.2 inches
Passenger volume: 101.1 cubic feet
Cargo capacity: 24.1 cubic feet
Why it's hot: With a new version due shortly, the 2013 Soul soldiers on with minimal changes. This is not just the cheapest set of wheels here, it's also the shortest. That means that the Soul is quite agile, although the ride is very firm. Large bumps upset it, but it's never unsafe, thanks to a host of safety and driveline updates. And its interior is worthy of any nightclub. The Soul's overabundance of attitude belies its price.

Bill Ford Jr. hesitant to declare victory, despite company gains

Karl Henkel
The Detroit News
July 31, 2013

Dearborn— Good news keeps coming for Bill Ford Jr. and Ford Motor Co., with 16 straight quarters of profitability and recent positive momentum in global markets.

But the Ford executive chairman has seen enough ups and downs in his two-and-a-half decades with the automaker, that he's unwilling to call Ford's long-term growth plans a success — yet.

"We're on a growth plan that is not something you've seen from us in many years," he told The Detroit News following an event marking the 150th anniversary of the birth of his great-grandfather and company founder, Henry Ford. "One thing I've learned through many years and many cycles is you set a plan and then you continually adjust. So for me to say, 'Oh yes, we've made it' and 'We're off and sailing,' that's not my inclination.

"My inclination is to fight every day and then see where that takes us."

Ford Motor Co. made $1.23 billion after taxes during the second quarter this year, and nearly broke even in its three international regions — Europe, Asia and South America — for the first time in years. The automaker has posted cumulative profits of more than $30 billion since the beginning of 2009.Ford has drastically cut development costs by reducing its number of platforms faster than originally projected.

Investors are pleased: Ford's stock price is now above $17; it's been more than two years since that was the norm. And market analysts are bullish about the automaker's potential.

"I think there's more to go," Citi Investment Research analyst Itay Michaeli said in a telephone interview.

Bill Ford is more reserved in his analysis. Recent history is still fresh in his mind.

In 2005, the automaker had a goal of $7 billion in annual profits for the coming years. But from 2006-08, it lost $30 billion and escaped a near brush with bankruptcy by eliminating tens of thousands of jobs, closing plants and even hocking the Blue Oval. A global financial crisis played an obvious role in that crisis, but the company created some of its own problems: It had too many plants and spent more on different cars and trucks for new regions than it needed to.

That's why Bill Ford isn't ready to declare victory.

"I think as soon as you declare yourself something, the world changes and you're no longer what you just declared yourself," he said. "All I can say is we've got a really good plan; so far we're executing really well against it, and if we continue to do that, I really love where we're headed."

In the current climate — in spite of slowing growth in China and India and continued economic trepidation in Europe — the company's quest for global profitability is on a positive track.

In Europe, where Ford lost $1.75 billion last year, the automaker will almost assuredly lose a similar amount in 2013. But the company is realizing the effects of restructuring efforts similar to those in North America. Ford has so far closed two plants in Europe, with a third to close by the end of next year.

In South America, where unfavorable exchange rates previously cost Ford a shot at profitability, the automaker made $151 million during the second quarter. In Asia, where Ford's long-term potential is greatest, the automaker expects to turn a profit this year, earlier than originally expected, thanks to new product offerings.

North America turned another $2 billion-plus quarterly profit, an attainable quarterly goal for the foreseeable future, analysts say.

"Internally, our objective is to make sure every part of the business is carrying its weight," Ford CFO Bob Shanks said in a telephone interview last week. "We don't want just North America to be the only one carrying the wagon."

North America has its own challenges. Ford is running out of production capacity, though Shanks said Ford can still accommodate escalating U.S. sales growth through global production facilities.

And Ford has had problems with quality as it brought new models to market. The automaker tried to launch its two midsize sedans — the Fusion and Lincoln MKZ — one after another. Thecars, which are built at the same plant, were marked by recalls and extended production delays.

Bill Ford, who in a previous interview acknowledged Ford is "better than our recent vehicle launches," knows the automaker can't take even North America for granted. And despite the progress in global regions, that can change quickly, too.

"I also know there are no guarantees in this world," he said over the weekend. "The best thing we can do is stay humble and flexible and be aware of the realities that are around us."


Pension gains for Ford, GM
free up cash for core business

Craig Trudell
Bloomberg News
July 28, 2013

While drawing car buyers and praise from the likes of Consumer Reports, General Motors Co. and Ford Motor Co. are getting a grip on pensions that will free up cash to develop future hits.

GM and Ford, burdened by some of the largest pension obligations among all U.S. companies, said last week they see significant improvement in their plans because of rising interest rates used to calculate the cost of future payments to retirees. When rates rise, the cost today of those promises declines. So pension shortfalls that were many years in the making can shrink without ever-larger payments by the companies.

Over the long term, this should allow more spending on the core business and less on retirees. That in turn creates a brighter outlook for the companies, which are already delivering more competitive cars like the Chevrolet Impala and Ford Fusion, and better-than-estimated profits.

"It's one less thing investors have to worry about on the risk side," said Michael Razewski, a New York-based principal at Douglas C. Lane & Associates, which oversees $3.1 billion, including Ford shares. "The less Ford has to focus on funding the pension, the more they can focus on driving innovative products and services and meeting customer demand."

Confounding challengeGM and Ford have shelled out heavily for years to try to shore up their pensions, one of their most confounding challenges. Ford plans to make $5 billion in cash pension contributions this year, on top of $3.4 billion last year and $1.1 billion in 2011. This year's payments are just shy of the $5.5 billion that Ford devoted to capital spending last year on everything from building factories to developing future cars and trucks.

"We won't have to allocate as much capital to pensions as we have the last couple of years and certainly this year," Bob Shanks, chief financial officer of Dearborn, Mich.-based Ford, said during a July 24 conference call with analysts and reporters. "That will give us the ability to take the cash that we're generating and invest it in other parts of the business that can support further growth."

Ford's pension plans were underfunded by $18.7 billion last year. Only Detroit-based GM, with a shortfall of $27.8 billion, General Electric Co. and Boeing Co. had bigger holes at the end of 2012, according to data compiled by Bloomberg.

"We've made good progress since the end of last year from a pension-funded position perspective, given the rise in interest rates that's clearly helped our overall funding position," GM CFO Dan Ammann told reporters recently. On a conference call with analysts, he said the stronger fund "gives us more rather than less flexibility."

$900 millionGM isn't required to make any contributions to its U.S. plans this year, according to last year's annual report. The company said it expects to pay in about $900 million anyway.

Both automakers have taken big steps to contain their pension costs for salaried workers. A year ago, GM said it would spend as much as $4.5 billion to shift salaried retirees to a group annuity handled by a unit of Prudential Financial Inc. The annuity, and lump-sum buyout offers to 42,000 retirees, was forecast by GM to shave $26 billion from its pension load.

Ford is also offering lump-sum buyouts to salaried retirees. The automaker has said it wants to eliminate remaining shortfalls in its pension funds by mid-decade.

Fed actionsFor several years, GM and Ford could blame Treasury yields, a benchmark in their pension calculation, for at least part of their shortfalls. Yields plunged after the 2008 financial crisis as the Federal Reserve embarked on unprecedented bond-purchase programs to lower borrowing costs and encourage spending.

Interest rates have risen the last two months after Federal Reserve Chairman Ben Bernanke said the central bank may reduce its asset purchases this year and stop in the middle of 2014 if economic growth meets policy makers' projections.

The increase in rates will help reduce the funding needs at all types of pensions, whether run by corporations or governments. Detroit, long dubbed the Motor City, this month filed the largest municipal bankruptcy in U.S. history and is struggling under a large unfunded pension obligation that could lead to benefit cuts for 30,000 current and former city workers. Though shortfalls can develop in the private sector, companies have stricter funding requirements than governments and pay into a federal insurance fund.

"If the year ended today, this would be the best year for funded status in the 13-year history of the Milliman Pension Funding Index," said John Ehrhardt, a New York-based principal and consulting actuary for Milliman Inc., which tracks corporate pension performance.

For GM, each increase of 1 percentage point in the discount rate cuts $8.76 billion from the present value of its U.S. pension obligation, according to its 2012 annual report. A similar increase would reduce Ford's U.S. total obligation by $5.2 billion, its regulatory filing shows.

Ford has seen a 70 to 80 basis-point rise in U.S. discount rates this year, Shanks said this week. An increase at the top of that range would narrow Ford's pension gap by 42 percent to $10.8 billion by the end of this year, Matthew Stover, an auto analyst with Guggenheim Securities, wrote in a report yesterday.

By 2015, GM may reduce its pension shortfall by 24 percent to $21 billion, Ryan Brinkman, a New York-based auto analyst for JPMorgan Chase & Co., estimated in a July 15 report.

Pension healthThe current value of promised future payments is only part of the total pension equation. The investment return is also important in assessing a plan's health. GM and Ford have said they were trying to take some of the risk out of their plans by moving to a greater mix of fixed-income assets.

It's unclear whether higher rates might damp the returns on Ford's and GM's investments, said Brian Johnson, a Chicago-based auto analyst for Barclays Plc.

"It depends on the extent to which they might reduce some of these long-dated bond holdings we believe they built up over the last couple years, which served them well when rates were falling," he said in a telephone interview.


Canadians are buying more cars than ever. Why? Deals.

The Globe and Mail
July 27, 2013

Canadians snapped up new vehicles at an unprecedented rate during the first half of 2013. DesRosiers Automotive Consultants says January to June this year was the best first-half ever for new light vehicles sales.

"A total of 883,667 passenger cars and light trucks were sold, up 2.2 per cent from 2012," says DesRosiers in a note to clients.

So we're on a record pace, one being driven in large part by healthy sales incentives – sweeteners that Canadians are finding hard to resist. We're fattening up on new cars and light trucks, as it were.

Within the big story you can find many smaller ones, too. One that's heading to a wham-bam finish is the race to claim the title of best-selling car in Canada. Hyundai's Elantra holds a slim lead over the Honda Civic – about 300 units through the end of June. However, reports indicate that in late July, Hyundai boosted incentives on the Elantra, no doubt in an effort to keep ahead of Honda and its Civic.

The Elantra sedan now has as much as $2,750 in factory money on the table – that on a $20,000-something compact car. In some instances, that money can be combined with financing as low as 3.29 per cent for up to 96 months. By any measure, that's juicy. Hyundai has also upped the offers on other models, such as the Santa Fe SUV and Veloster sporty compact. DesRosiers notes that for the first half of the year, Hyundai's sales were basically flat – up just 0.2 per cent. These new deals surely are there to give Hyundai a boost.

Deal hunters might also want to look at offers from other auto makers who have underperformed the market. Kia sales, for instance were down 6.8 per cent for the first half. Meanwhile, for January to June, Mazda was down 4.4 per cent, Nissan/Infiniti was down 6.5 per cent and Toyota/Lexus was off 0.9 per cent.

What might that mean for hungry shoppers? If you are of a mind to own a 2013 Nissan 370Z roadster, you'll find up to $8,000 or perhaps more in play on a car with, say, a $47,478 sticker price. Similarly, a very affordable Kia Optima sedan listing for $24,395 might be had with discounts adding up to more than $4,000 for the right buyer.

Of course, there are always exceptions to the rule. Honda and its Acura brand have been having a decent year overall, with sales up 6.6 per cent combined. Yet Acura has a $4,000 cash offer on leftover 2013 RDX sport-utilities – with perhaps another $2,000 in play in a dealer discount. Not bad for a rig listing for $41,050. Word on the street is that not all Acura dealers have 2013s in stock, so be warned. If you want a 2014 RDX, the factory money drops to $1,500.

Deals of the Week consulted with carcostcanada.com, unhaggle.com, and other sources on these offers. As usual, pricing information here is subject to change, so consult your dealer for all the final details, including expiry dates for all offers.


Ford surpasses expectations
as profits rise 18.6% in 2Q

Karl Henkel
The Detroit News
July 25, 2013

Dearborn— The bulk of Ford Motor Co.'s second-quarter profits once again came from North America, but financial results in other regions have Ford executives the most excited.

The Dearborn automaker beat analysts' expectations as profits rose to $1.23 billion during the second quarter, the company said Wednesday. Abroad, Ford nearly broke even, despite a tumultuous European market, high infrastructure costs in Asia and unfavorable exchange rates in South America.

"The question for Ford has been, 'Can this really be looked at as a full-fledged turnaround with only one region going so well?'" said Itay Michaeli, analyst at Citi Investment Research, in a telephone interview. "This is huge because the criticism from the investment perspective is that Ford has only made money in one region."

Ford's Asia Pacific Africa region posted its highest quarterly profit ever, Europe's financial results were better than the second quarter last year and South America returned to profitability after a brief period in the red.

"It just demonstrates the power of what happens when we're able to get all parts of the business contributing more powerfully," Ford CFO Bob Shanks said in a teleconference call with analysts and reporters. "It's going to be a dynamo."

Overall, Ford's $1.23 billion profit represented the 16th consecutive quarter in the black, up 18 percent compared to last year.

The automaker earned 45 cents per share — compared to 30 cents last year — topping first-call analyst expectations of 37 cents per share.

Revenue for the second quarter jumped about 14.4 percent to $38.1 billion.

Ford shares jumped about 3 percent in early trading to briefly reach a 52-week high of $17.49 before closing at $17.37.

Ford on Wednesday also upped some full-year expectations, including 2013 pre-tax profits, which now could top 2012's $8 billion total. The automaker also revised upward its prediction for U.S. industry sales to 15.5 to 16 million cars and light trucks.

Shanks on Wednesday characterized Ford's full-year adjustments as being a "green shoot," because previously slow regions like Europe and Asia are gaining momentum earlier than expected. Ford's goal, under the direction of CEO Alan Mulally, has been to build global operations so not to rely solely on North America as its main profit source.

"Over the next several years, you'll start to see operations outside North America take on more and more significance," Shanks said. "I think you're starting to see what's possible."

True to recent form, Ford's bread and butter remained North America, where the Dearborn automaker posted a $2.3 billion profit.

Ford "fired on all cylinders," during the second quarter, said Jesse Toprak, senior analyst at TrueCar. The second quarter also included 15 percent sales growth and nearly a full percentage point market share gain.

"Ford's average transaction prices increased by nearly $1,400 for the same period, impressive considering incentives are up nearly $500 (per) unit, larger than the industry average," Toprak said in a statement.

Ford's profit margin in North America was 10.4 percent, continuing to set the pace among mass-market automakers.

But North American profits were once again partially offset by losses in Europe.

In Europe, the automaker lost $348 million — less than the $404 million it lost there during the second quarter of last year — and Ford changed its full-year projections.

Ford expected to lose $2 billion in Europe this year as auto sales have hit 20-year lows, but revised that figure Wednesday to say it projects losses of about $1.8 billion, about the same as 2012. The company's regional restructuring effort is under way. Ford will close two U.K. plants by the end of the month and an assembly plant in Belgium early next year.

Ford's Asia Pacific Africa region posted its best-ever quarterly profit of $177 million. The automaker reported a $151 million profit in South America.

The company settled another $1.5 billion in pension obligations related to a 2012 U.S. salaried retiree voluntary lump sum program. So far, the company has settled $2.7 billion and has offered the plan to about half of eligible retirees.


Financial Results

Ford Motor Company 2013 Second-Quarter Financial Results
A Note from President and CEO Alan Mulally

Congratulations to the entire Ford team! The strong quarterly financial results we are announcing today – with improved results in every region – are more evidence that our One Ford plan continues to deliver and build momentum.

Thanks to our efforts to serve our customers around the world and deliver profitable growth, we are announcing solid volume, revenue and market share increases in all regions. Importantly, we also are improving our expectations and guidance for full-year profit, Automotive operating margin and operating cash flow.

Our second-quarter earnings are driven by our highest second-quarter and first-half North American profits since at least 2000, our best-ever quarterly profits in Asia Pacific Africa, continued solid performance from Ford Credit and a return to profitability in South America.

Our results also reflect more proof that our transformation plan in Europe is on track to return to profitability by mid-decade, as Europe improved its losses compared with a year ago and the first quarter.

We will continue our laser focus on serving customers with vehicles delivering the best quality, fuel efficiency, safety, smart design and value through our One Ford plan, which remains 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

It is important for all of us to read the below news release and understand the progress we are making against our plan and our outlook for the future.

We will meet with financial analysts and representatives of the news media throughout the day to discuss this information and answer questions.

One Team. One Plan. One Goal. One Ford.

Congratulations and thank you!
Alan Mulally
Alan Mulally
President and CEO
Ford Motor Company

Below is an excerpt of the company's press release regarding Ford Motor Company's 2013 second-quarter financial results. To read the full release, click here.

Record North America and Asia Pacific Africa Results Drive Ford Pre-Tax Profit of $2.6 Billion, Net Income of $1.2 Billion; All Regions Improve
DEARBORN, Mich., July 24, 2013 – Ford Motor Company [NYSE: F] reported second quarter 2013 pre-tax profits of $2.6 billion, reflecting improvement by all business units compared with a year ago. North America, the company's largest region, set records for second quarter and first half pre-tax profits. Asia Pacific Africa, the company's fastest-growing region, achieved its best-ever quarterly pre-tax profit. Ford Credit once again delivered solid performance, with pre-tax operating profit of $454 million, and South America returned to profitability.

Total company second quarter pre-tax profit of $2.6 billion, or 45 cents per share, was $726 million, or 15 cents per share, higher compared with a year ago. The second-quarter profit reflected continued outstanding performance in North America, recovery in South America from the exchange-driven loss in the first quarter, very good progress in Europe in continuing to deliver the company's transformation plan and the best-ever profit in Asia Pacific Africa. Net income for the second quarter of $1.2 billion, or 30 cents per share, was $193 million, or 4 cents per share, higher than a year ago.

Automotive operating-related cash flow was $3.3 billion, an increase of $2.5 billion compared with last year, marking the 13th consecutive quarter of positive performance. The company ended the second quarter with strong liquidity of $37.1 billion, an increase of $2.6 billion compared with the end of the first quarter of 2013.

"Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum," said Alan Mulally, Ford president and CEO. "We remain absolutely committed to our plan of serving customers in all markets with a full family of vehicles offering the very best quality, fuel efficiency, safety, smart design and value. As we do, we are providing profitable growth for everyone associated with Ford."

In the second quarter, the company settled $1.5 billion of pension obligations related to the U.S. salaried retiree voluntary lump-sum program, with $2.7 billion settled since the inception of the program in August 2012. As a result of the second quarter settlement, the company recognized a special item charge of $294 million, reflecting the acceleration of unrecognized losses in the plan. The lump-sum program is about 60 percent complete and concludes at the end of the year.

As a result of the strategic actions the company has been taking, along with recent increases in discount rates, the funded status of Ford's global funded pension plans significantly improved as of June 30 compared with the end of last year.

Dividends paid in the second quarter totaled about $400 million.


White-collar jobs drive
hiring at Ford

July 24, 2013
The Globe and Mail

Americans own fewer vehicles than they did a decade ago and they're putting fewer miles on them, but that's not stopping the hiring spree at Ford Motor Co.

Ford said Tuesday that it plans to hire 3,000 salaried employees this year, 800 more than originally scheduled in January in its biggest white-collar hiring initiative since 2000.

"Engineers and technical professionals are in as much demand as our cars, trucks and SUVs," Felicia Fields, Ford's vice-president of human resources, said in a statement. "Global demand and increasing capacity in North America and Asia requires that we aggressively seek out technical professionals in order to continue our growth."

It's the latest sign of the robustness of the recovery in the U.S. auto industry, which has outpaced the overall recovery from the Great Recession of 2008-2009.

The auto maker is also hiring hourly paid workers at several of its North American assembly plants as it adds shifts to crank out more Fusion sedans, Escape crossovers and F-Series pickup trucks.

That's despite a drop in the number of vehicles on U.S. roads and the fact that those vehicles are spending more time in driveways and garages than they did in 2004, according to a study released Tuesday by the University of Michigan's Transportation Research Institute.

"We now have fewer light-duty vehicles and we drive each of them less than a decade ago," Michael Sivak, the institute's director of sustainable worldwide transportation, said in the study.

Increased telecommuting, greater use of public transportation, changes in the age composition of drivers and the growth of urbanization are among the reasons for the shift, Prof. Sivak noted.

Miles driven per vehicle peaked in 2004 at 11,946 on average, but fell in 2011 to 11,318.

U.S. vehicle sales are heading back up to more than 15 million on a seasonally adjusted annual basis. That's still below the peak of 17.75 million hit in 2000, but Ford and the other Detroit-based auto makers are now in a better financial position after eliminating billions of dollars of costs during the recession by shedding tens of thousands of jobs.

They are racking up profits on fewer vehicle sales – a far cry from the profitless prosperity of much of the 2000s, when Detroit chalked up tens of billions of dollars in losses despite moving record numbers of vehicles off dealers' lots.

The seasonally adjusted annual rate of sales in July is likely to be in the 15-million to 15.5-million range, Deutsche Bank AG auto analyst Rod Lache said in a note to clients Tuesday.

That's less than the 15.9-million level in June, Mr. Lache said.

He chalks up that decline to extremely low inventory of key Ford vehicles ahead of additional shifts coming on stream in the third quarter.

U.S. sales would be 400,000 units higher "if Ford achieved the same proportion of sales that it has been achieving year-to-date."

Ford said its sales last month represented its strongest June performance since 2006.

The auto maker is scheduled to report its second-quarter financial results Wednesday.



Retirees help smooth
GM vehicle launches

They work with suppliers to prevent problems that might delay showroom arrivals

A worker helps assemble a 2014 GMC Sierra at the GM Fort Wayne Assembly Plant near Fort Wayne, Ind.assembles a truck at the GM Fort Wayne Assembly Plant in Fort Wayne, Ind. wAssembly of the 2014 Chevrolet Silverado and the 2014 GMC Sierra Thursday, May 23, 2013 at the General Motors Fort Wayne Assembly Plant in Fort Wayne, Indiana. Team member sets wheels onto 2014 GMC Sierra chassis. (Photo by Shane Pequignot for General Motors) (GM)

Melissa Burden
Detroit News
July 22, 2013

General Motors Co., in the midst of launching 20 new or significantly refreshed vehicles in the U.S. this year, is turning to some former white-collar employees to help it meet the challenge.

Among the most important new vehicles are the 2014 Chevrolet Silverado and GMC Sierra pickups. Those big money-makers, last redesigned as 2007 models, are just hitting dealerships. GM North America President Mark Reuss said the launch is going smoothly, in part because the Detroit automaker has hired back retirees to work with suppliers.

"With the trucks, we hired a lot of our retirees that were experts in these areas of the car and sat them in these suppliers so... they can help impart what's going to happen to the supplier when we start (full production)," Reuss said in an interview.

Full-size trucks typically bring in about $10,000 profit per vehicle for automakers. GM's redesigned trucks and expected higher average transaction prices should help boost GM's profits by more than $1 billion annually, said Joseph Spak, auto industry analyst with RBC Capital Markets, in a June research note.

Production of 2014 Silverados and Sierras trucks began in late April at GM's plant in Silao, Mexico. This month, GM's plant near Fort Wayne, Ind., also began building the trucks. Heavy-duty versions will be built later at its truck plant in Flint.

Reuss said the company's launches are so complex and have so many moving parts that "you almost have to micromanage it."

Competitors including Ford Motor Co. ran into quality problems that delayed the launch of the Lincoln MKZ, while Chrysler Group LLC also has run into delays for its redesigned Jeep Cherokee. GM on Friday recalled a small number of its new trucks — fewer than 850 — to replace the passenger side air bag that might not inflate completely during a crash.

Hiring retirees new concept
GM said the number of salaried retirees it has hired on temporary contracts is fewer than 25 and has varied, but has included trusted expert engineers and people with manufacturing quality backgrounds. Some have been stationed at supplier manufacturing sites or with growing suppliers.

Hiring retirees is a new concept for GM, which previously turned to third-party companies to assist suppliers during vehicle launches.

Ford Motor Co. has brought back some retirees to help in product development assignments and in six- to 12-month roles to support manufacturing, including launches and plant tours; it has tapped some for special assignments for quality initiatives and training new employees, Ford spokesman Mark Shirmer said in an email.

Chrysler Group LLC also has about 50 retirees it uses as "service agreement workers" on contract to help perform important tasks for the company, said spokesman Michael Palese. He said the retirees work in many different areas for the Auburn Hills-based automaker, but none were brought back specifically to work on vehicle launches.

The idea for GM was born last fall with the truck launch, said Sheri Hickok, GM's executive director of for global supplier quality. It began with one retired executive working on one component with a supplier with whom he had experience, she said.

The practice has worked so well for trucks, that GM is using retirees to help key suppliers with other launches, including this spring's 2014 Chevrolet Impala launch. Reuss said the Impala was the "best launch we've had in a while."

GM CEO and Chairman Dan Akerson told reporters recently that GM's 2014 Chevy Silverado and 2014 GMC Sierra launch is probably the best the company has had.

The rehired retirees typically work for months; depending on their specialty, they may work on multiple vehicle launches, said GM spokesman Tom Henderson. Others may come back to work on just one, he said.

GM would not say how much the retirees are being paid, but Henderson said there is no change for their pensions.

While automakers and suppliers dropped salaried workers and offered early retirements and buyouts during the recession, Henderson said GM's current approach is not related to the downturn but gives them the ability to tap into a source of talent when needed.

The carmaker also has reassigned some workers — such as key quality leaders or even plant managers — to work at suppliers to help with launches, she said.

The launch focus with suppliers is part of GM's efforts to improve supplier quality. The company has hired more than 100 employees since last fall to helpimprove relationships with suppliers, Hickok said. Partnering with suppliers has helped to remove roadblocks and resolve issues faster.

GM said its practice of hiring back retirees and reassigning employees for launches is helping to boost quality. "We absolutely believe that this enables in on-time quality launches and reduced costs in the long term," Hickok said.

Supplier names retiree VP
Detroit-based American Axle & Manufacturing, a major supplier for GM's new trucks, announced in February it hired a retired GM engineer to serve as its senior vice president of engineering and quality, a new position.

Terry J. Woychowski last worked as GM's global vice president for quality and launch, where he was GM's global chief engineer for full-size trucks. He retired in late 2012 after 33 years with the automaker. But his retirement was short: Woychowski, 57, of Commerce Township, said he fielded work offers including one from American Axle President and CEO David Dauch.

In Woychowski's new role, he's deeply rooted in the truck launch. Every day, he reviews production information on the front axles, rear axles and driveshafts that American Axle makes for GM's 2014 Sierra and Silverado at American Axle's Guanajuato Manufacturing Complex in Mexico.

The same parts made for the 2013 Silverado and Sierra are produced at American Axle's Three Rivers plant, which also will produce the parts for GM's 2014 trucks this year.

"The ... launch is in a word, critical," he said. "It's critical for our customer. It's a very important product, full-size trucks ... and it's a very important product for us."

American Axle is testing every axle off the line to ensure it's quiet and smooth, Woychowski said.

GM's hectic launch rate doesn't let up much in 2014. The automaker has already confirmed it will launch at least eight new or significantly refreshed vehicles in the U.S.

Refreshes can include changes such as exterior facelifts, refined interiors, improved aerodynamics and upgraded infotainment systems.

Morgan Stanley analyst Adam Jonas said GM must focus on getting its launches right. "The priority is flawless execution," he said in an interview. "Their plants are going through a chaotic level of product introduction."

Reuss said he meets regularly with the launch teams involved with the trucks, all-new 2014 Corvette Stingray and revamped 2014 Cadillac CTS.

Production on the Corvette begins during this quarter, and on the CTS this fall.

"Our focus at GM is launching these products and getting higher margin and growing the business, especially in North America," Reuss said.


New Ford system helps
warn police of approaches

A new surveillance system that displays on the rear view mirror in police cars automatically sounds a chime, locks the doors and rolls up the windows if it detects someone approaching the car from behind. (Carlos Osorio/AP)

Dee-Ann Durbin
Associated Press
July 20, 2013

Police could soon be getting some extra backup — from their cars.

Ford Motor Co. has a new surveillance system for police cars that automatically sounds a chime, locks the doors and puts up the windows if it detects someone approaching the car from behind. The system — which Ford is patenting — is the first of its kind.

"It's like insurance. You hope you never need it. But if you do, it gives the officer a few extra seconds of warning," says Marc Ellison, vice president of operations at Auburn, Calif.-based InterMotive Inc., which helped Ford develop it.

Backup cameras and sensors usually only work when a car is in reverse. The new system, dubbed "Surveillance Mode," allows an officer to use them while the car is parked. An image from the backup camera is beamed onto the rearview mirror, so the officer can keep an eye on the rear of the car. If someone comes too close, four sensors on the rear bumper will detect them. The system works during the day and at night, when officers are often the most vulnerable. It can be turned off if officers are in high traffic areas with a lot of pedestrians.

InterMotive sells Surveillance Mode for $248.33 as a stand-alone option. It's $75 when part of a package of other options, including a dimmer for interior lights if the officer doesn't want to be seen and a system that automatically turns down the radio if a call comes in over two-way radio. If a police car doesn't have a backup camera, the system just uses the sensors.

The company said it anticipates that the system will eventually be available to consumers.

Surveillance Mode is the brainchild of Randy Freiburger, a Ford engineer who works with police and ambulance customers to make sure the company's vehicles are meeting their needs. He got the idea last August while accompanying Yoon Nam, a deputy with the Los Angeles County Sheriff's Department.

Nam was asked to respond to a report of a possible drug offense in a gritty area of Compton, Calif. She told Freiburger to stay in the car and radio for help if he needed it while she went to talk to the suspect. When the suspect took off running and Nam followed him, Freiburger found himself alone, with another suspect approaching him.

Nam tried not to lose sight of Freiburger, and she radioed for help. Both suspects were eventually caught and convicted of drug crimes. But a shaken Freiburger wanted to help make police feel less vulnerable when they're on patrol.

No one keeps track of the number of police officers killed each year in their cars, but it's not uncommon for criminals to target officers there, says Steve Groeninger, a spokesman for the National Law Enforcement Officers Memorial Fund.

In 2011, Virginia Tech police officer Deriek Crouse was fatally shot in his parked patrol car at close range while conducting a traffic stop on campus. Earlier this year, Massachusetts Institute of Technology officer Sean Collier was also killed in his cruiser, allegedly by the suspects in the Boston Marathon bombings.

Nam, who has since been promoted to a detective, says she would often work alone when she was on patrols. When she was making traffic stops, or had a suspect detained in her vehicle, the suspect's friends or family members would frequently approach her car. "We're trained to look up and look around at all times, but having that extra feature in the vehicle would help," she said.

Police are already helping improve the system. Ellison says InterMotive plans an upgrade that will make the brake lights automatically come on when someone is approaching based on comments from an officer who was testing it.

No cars with the new system had been sold as of mid-July, but Ford hopes it will give police departments another reason to consider its cars.

Ford dominated the police market for decades with the Crown Victoria sedan, but it lost some sales after it discontinued the rear-wheel-drive Crown Victoria in 2011 and replaced it with all-wheel-drive police vehicles based on the Taurus sedan and Explorer SUV. Some departments that prefer rear-wheel-drive cars for their speed in chases have switched to the Dodge Charger or Chevrolet Caprice.

Spokespeople for Dodge and Chevrolet said they aren't yet offering systems like Ford's. None of the company's would reveal their current share of the police car market.


Lincoln to double production
of MKZ Hybrid

The Lincoln MKZ hybrid debuted with the 2013 model. Ford's decision to boost production comes as electric vehicle sales are increasing. (Mark Lennihan/AP)

Karl Henkel
The Detroit News
July 19, 2013

Ford Motor Co. will double production of its MKZ Hybrid sedan for the 2014 model year, a top executive said this week.

Forty percent of overall MKZ production will be dedicated to building the hybrid model, said Raj Nair, Ford's group vice president of global product development, at the automaker's Dearborn campus on Tuesday.

That's double the 20 percent production mix from the 2013 model year, the first year for the revamped luxury sedan.

The 2014 model goes on sale later this year, a Lincoln spokesman said in an email.

Ford's decision to boost production comes as sales of hybrid vehicles continue to soar.

Automakers have sold 257,635 hybrids this year through June, according to statistics from the Electric Drive Transportation Administration, up 18.3 percent compared to the first six months of 2012.

Ford, which now has three hybrid offerings — the C-Max, Fusion and Lincoln MKZ — has been the biggest beneficiary of the sales increase.

Ford's share of the U.S. electrified vehicle market is nearly 16 percent, up 12 percentage points compared to last year.

The electrified vehicle sales growth has supported the company's nearly 1-point increase in overall U.S. market share, the automaker said in a statement.

The Lincoln MKZ Hybrid has become popular among consumers in part because it has the same base price as the non-hybrid MKZ: $35,925.

Ford currently produces more than 700 Lincoln MKZ Hybrids each month at its assembly plant in Hermosillo, Mexico, according to a company production report.

The Dearborn automaker has sold 3,090 MKZ Hybrid cars this year — which averages about 500 a month; however, during the past three months, following production delays, Lincoln has sold more than 715 each month.


GM Canada wrong to cut
retirees' benefits, court rules

Linda Nguyen
The Canadian Press
& Globe & Mail
July 18, 2013

General Motors Canada broke an agreement with some of its retired workers when it slashed health care and life insurance benefits in 2009 in a bid to cut costs as part of its restructuring after the financial crisis, an Ontario court ruled Wednesday.

In a 27-page decision, Ontario Superior Justice Edward Belobaba said GM Canada was "not contractually entitled" to make changes to the benefits of salaried retirees.

The ruling comes after a class-action lawsuit was launched against the auto manufacturing giant in May 2010 on behalf of 3,297 retirees and their families.

GM Canada spokeswoman Faye Roberts said the company plans to appeal the ruling.

"We are disappointed with the decision," she wrote in an email.

In some cases, former workers saw their basic life insurance benefit cut from more than $100,000 to $20,000.

Other changes included the elimination of semi-private hospital coverage, a reduction in the annual maximum coverage for dental and orthodontic benefits and an increase in the amount members would have to pay for prescription drugs.

GM had argued that a clause allowing it to make the changes was included in a benefits package booklet that was handed out to employees.

The provision stated the company was allowed to "amend, modify, suspend or terminate" any of the benefit programs "at any time," according to the decision.

But Belobaba ruled that GM was vague about its right to reduce or eliminate these benefits, particularly after the employees had stopped working.

"The salaried retirees, some of whom had worked for decades at GM and were told repeatedly in the benefit documents that they could rely on the promised health care and life insurance benefits, were stunned," said the decision.

"Surely, they said, GM's right to make changes to the benefit programs didn't mean that GM could cut retirement benefits after retirement. If that's what the company intended, they argued, GM should have told them while they were still working, in language that was clear and unambiguous."

In the same decision, Belobaba also ruled that GM was within its rights to reduce or eliminate any additional benefits enjoyed by its executive retirees.

The judge said that in this instance, the automaker had been clear in warning that it maintained the right to do so. The 67 executive retirees in the case are still eligible for their core benefit packages, as the other workers in the lawsuit.

Steven Barrett, a lawyer for the plantiffs, said the court decision is potentially precedent-setting.

"It's a very positive outcome for them and for any Canadian workers who've been promised retirement benefits and after they retire, the employer tries to reduce them or eliminate them," he said.

Co-counsel Louis Sokolov said the cuts left retirees at a loss because many were unable to purchase life insurance or health benefits elsewhere due to their age once their company benefits were slashed.

"If you're going to change the rules of the game for someone after they retire, you better be entirely explicit about it upfront," he said, referring to the ruling.

Sokolov said the plantiffs are seeking a reinstatement of their benefits, and any money they should've been paid since 2009.

The lawsuit named plaintiffs who had retired from the automotive giant between 1995 to October 2011.

Notice of appeal must be filed within 30 days.

The Canadian Auto Workers union agreed in 2011 to allow a trust — funded with $2.5 billion from GM —to take over responsibility for paying supplementary health benefits for 32,000 retired former unionized employees of the automaker.

The Auto Sector Retiree Health Care Trust pays for costs had previously been borne by the company including supplementary health benefits such as prescription drugs, dental care and vision care.

The class action case was originally launched by GM retiree Joseph O’Neill, who retired in 2002 and then saw his health and life insurance benefits slashed in 2007-2009. But he died last year, and another retiree was named as the representative plaintiff in his place.

A lawyer for the retirees, Louis Sokolov, said the plaintiffs were pleased with the decision: “These are people who were planning their retirement based on what was promised to them.”

Mr. Sokolov said the ruling could affect retirees at other companies in distress, depending on how their contracts are worded.

In a 27-page decision, Ontario Superior Justice Edward Belobaba said GM Canada was “not contractually entitled” to make changes to the benefits of salaried retirees. Thats "Salaried" retirees not production or skilled trades. We, the CAW & TCA, opened the contract and gave General Motors of Canada concessions in the areas of wages, paid time-off, health care benefits and to our own retirees even though General Motors manufactured and sold over 10 million vehicles in 2007 and Grossed over 300 billion dollars(GM WorldWide Stakeholders Booklet 2007) . Concessions lead to a demand for more concessions(Sam Gindin - Quote from Toronto Star)


Ford to close plants in UK
as part of restructuring plan

July 17, 2013
Karl Henkel
The Detroit News

Ford Motor Co. says two plants in the United Kingdom will close later this month, part of the company's plan to restructure its European operations by cutting nearly one-fifth of its vehicle capacity.

Commercial vehicle production at Ford's Southampton Assembly Plant and stamping and tooling work at the company's Dagenham Engine Plant will cease July 26, the automaker said in a statement on Tuesday.

Ford last year announced the closure of those two facilities and a major assembly plant in Belgium as part of a plan to reduce production capacity by nearly 20 percent in Europe. Auto sales in the region are at 20-year lows, though Ford has experienced a bit of sales turnaround in the past few months. The Belgium plant is scheduled to close by the end of next year.

Ford said it has reached agreements with all 531 employees in Southampton and 750 in Dagenham to redeploy them to other Ford manufacturing locations or have offered them retirement or separation packages.


Alfie Gay
Passes away!

Alfie Gay
December 26, 1926 - July 4, 2013

Our Deepest Condolences
go out to Larry Gay
and the entire Family


GAY, Alfred December 26, 1926 - July 4, 2013 Peacefully on July 4, 2013, at the Brampton Civic Hospital, while in his 87th year. Beloved husband to Betty for 64 years. Loving father of Dennis (predeceased 1972), Brad (Linda), Larry and Rodney (Sheryl). Proud Grandfather to Jeremy, Sarah, Scott, Nathen, Kyra and Siobhan and great grandfather to Charlee and Tristan. A long time employee and retiree from the Ford Motor Company (Office) in Bramalea. A great man that will be sadly missed by all. A private family gathering and cremation have taken place. Arrangements entrusted to the Andrews Community Funeral Centre - Bramalea Chapel. www.andrewscommunityfuneralcentre.com



Tesla to Ford top 100-week highs
as U.S. automakers surge: Cars

Mark Clothier, Craig Trudell and Alan Ohnsman
Bloomberg News
July 14, 2013

America's oldest car company, Ford Motor Co., and its youngest, Tesla Motors Inc., both reached 100-week highs this past week, the latest in a long list of signs all pointing to the same thing: the U.S. auto industry is hot.

Ford, founded 110 years ago, closed Friday at $17.11, buoyed by a U.S. auto market on pace for its best year since 2007. Ten-year- old Tesla, which makes $69,900 electric sedans, is joining the Nasdaq-100 Index three years after its market debut. General Motors Co., which emerged from bankruptcy four years ago today, rejoined the Standard & Poor's 500 Index last month.

Investors are returning to the resurgent U.S. automotive industry just four years after it wobbled into two government- backed bankruptcies and Ford's self-financed restructuring. The seven-member S&P 500 Automobiles & Components Index, which includes GM, Ford and parts-makers, is the best performer among 24 industries in the S&P 500 during the last three months, rising 21 percent.

"As autos become bigger and bigger pieces of the indices, it commands greater and greater attention from investors focused on the auto industry and those that are not," Matt Stover, an analyst with Guggenheim Securities in Boston, said in an interview. "The folks who were sort of indifferent to the sector saw it moving, and now they're diving in."

Americans are buying cars and trucks this year at a pace not seen since before the recession. Demand is being fueled by pent-up need, historically low interest rates, and newly competitive compacts and family cars that are winning converts to U.S. automakers. The Detroit Three all gained share in their home market in the first half for the first time in 20 years.

Speeding paceJune U.S. light-vehicle sales climbed 9.2 percent to 1.4 million, exceeding the 1.38 million average estimate of 10 analysts in a survey of analysts by Bloomberg News. The industry sales rate surged to almost 16 million, exceeding the 15.6 million average of 17 estimates. That's the best monthly pace since 16.1 million in November 2007, the month before the U.S. recession officially began, and compares with 14.4 million a year earlier, according to researcher Autodata Corp.

Demand has been broad. Buyers have looked to Ford, GM and Chrysler for pickups, a traditional strength, and also compacts and sedans. Sales of Ford's Fiesta compact more than doubled last month, GM's Cruze deliveries jumped 73 percent and Chrysler's Dodge Dart had its best June.

"Investors no longer view the American car companies as a one- or two-segment industry," said Itay Michaeli, an analyst for Citigroup Inc. in New York, who has buy ratings on GM and Ford, which closed Tuesday at its highest price since January 2011. "They are competitive across all segments, so you have that underlying level of comfort that, if there is a shift to small cars or small crossovers, the American car companies will be players there."

That all bodes well for Sergio Marchionne, the chief executive officer of Chrysler Group and majority owner Fiat SpA. Marchionne has said he prefers a New York listing after Fiat acquires the remaining 41.5 percent of Auburn Hills, Michigan- based Chrysler. Chrysler's U.S. sales have gained for 39 consecutive months, making it the Italian automaker's profit driver.

"Chrysler is going to be an issued stock in the future," Stover said. "It's going to demand the attention of institutional investors who will have to have an opinion about whether or not to invest."

Tesla's profitTesla's surge coincides with its first-ever profit, reported by Chief Executive Officer Elon Musk in May, that was aided by environmental-credit sales and a one-time savings for early repayment of the U.S. Energy Department loan that helped get Model S into production. The carmaker's goal is to deliver 21,000 of the sedans this year.

Tesla's admission to the Silicon Valley-heavy Nasdaq 100 validates the company's image that it's as much about technology as transportation. It's also an apt symbol that traditional cars are also increasingly advanced, with 30 to 50 computers on the average vehicle and an array of devices from GPS mapping systems and satellite radio to smart cruise control that matches the speed of the car in front of it.

Tesla, which closed Friday at$129.90, has said results for the quarter that ended June 30 may not be as favorable, in part because of a drop in sales of California zero-emission credits. Tesla may report a second-quarter loss of 17 cents a share, excluding some items, the average of 13 analysts surveyed by Bloomberg.

The run-up in investor demand in Tesla has the shares trading at a price that's more than 8,900 times the Palo Alto, Calif.-based company's estimated 12-month earnings, according to data compiled by Bloomberg.

With market capitalization approaching $15 billion, more than that of larger carmakers including Fiat and Mazda Motor Corp., Tesla is overvalued, John Lovallo, an analyst for BofA Merrill Lynch Global Research, said in July 8 report.

Tesla's "current share price assumes the company can achieve unit sales equal to multiple times our current volume estimates" and attain a 12.5 percent margin on earnings before interest and taxes, Lovallo said. That requires the company to deliver more than 321,000 electric cars annually by 2020 and do so more profitably than Bayerische Motoren Werke AG, Daimler AG's Mercedes-Benz, or Volkwagen AG's Audi, Bentley or Porsche, he said.

"While nothing is impossible, particularly with Elon Musk at the helm, we believe these assumptions warrant a healthy degree of skepticism," Lovallo said.

Skepticism is fair, said Brian Johnson, a Chicago-based auto analyst with Barclays Plc, who has the equivalent of buy ratings on GM and Tesla and rates Ford the equivalent of a hold. What's tantalizing for many investors, he said, is that it's a little like being able to travel back in time to invest in Ford or GM in the industry's earliest years.

"Back in the day, Detroit was Silicon Valley and autos were growth companies," he said yesterday in a telephone interview.


Ford announces 3Q dividend
of 10 cents per share

Karl Henkel
The Detroit News
July 12, 2013

Ford Motor Co. Thursday announced a third quarter dividend of 10 cents per share, double the amount paid in 2012's third quarter.

The 10-cent-per-share dividend is the same amount Ford paid during the first and second quarters this year.

The third quarter dividend is payable on Sept. 3 to shareholders of record on Aug. 2.

Ford made a pre-tax profit of $8 billion in 2012 and is on track for a similar year in 2013, despite big losses in Europe and a still-growing presence in the lucrative China market.


Ford to drop price
of 2014 Focus EV

2014 Focus Electric (Ford)

Karl Henkel
The Detroit News
July 11, 2013

Ford Motor Co. is the most recent automaker to slash the price of its electric model in an attempt to win over mainstream buyers who have been slow to embrace pricey EVs.

Ford will drop the price on its struggling Focus EV by $4,000 for the 2014 model year. The news comes less than a month after a Ford executive said the automaker would not chase price cuts made by competitors.

"It's a price war," Karl Brauer, senior analyst at auto research firm Kelley Blue Book, said Wednesday in a telephone interview. "Incentives have a certain amount of swing, but when people hear a price, that's what sticks."

About 41,000 battery-electric cars sold in the United States through June of this year, accounting for a tiny half-percent of all new cars and trucks sold. Incentives and price cuts have led to a 385 percent increase in sales during the first six months of 2013 compared to the same period last year.

The revised base price for the Focus EV is $35,200, which is down from $39,200. That's still more than $6,000 above Nissan Motor Co.'s Leaf, the most comparable competitor in the electric car segment. Ford, in a statement, said the lower price "keeps us competitive in the marketplace."

Factoring in a $7,500 federal tax credit, a customer could now buy a Focus EV for $27,700; in California, where most Focus EVs are sold, that cost is $25,200 after that state's $2,500 credit.

Last month, Nancy Gioia, Ford's director of global electrification, said the automaker would not match hefty price cuts by competitors.

"We're not going to chase down to the lowest price possible — that doesn't make sense to erode the brand image or the true value of the product," Gioia said at the time.

Ford's price cut comes as some automakers, most notably Nissan and Honda Motor Co., have slashed prices on slow-selling electric cars.

And General Motors Co. is widely expected to cut the price on its 2014 Chevrolet Volt range-extended plug-in. The Detroit automaker is offering $4,000 cash off the 2013 Chevrolet Volt through Sept. 3, which lowers the price of the plug-in hybrid $35,145.

It also is offering zero percent financing for qualified buyers; the offer includes $2,000 cash off the normal starting sticker price of $39,145. The deal, through Sept. 3, is for $473 a month for 72 months, with $3,999 down.

GM is offering a $269 monthly lease for three years with $2,399 due at signing. The lease deal expires Sept. 3.

GM plans to release 2014 Volt product and pricing details in mid-August, as production on the 2014 model is expected to begin, said GM spokeswoman Michelle Malcho. She declined to comment on whether GM will reduce the price.

GM's Chief Financial Officer, Dan Ammann, told The Detroit News this week that when technologies are first introduced, they are expensive. But as technology matures, he said, the cost typically comes down.

"From our perspective, it gets back to what is the customer willing to pay for, what's the value proposition that makes sense for them, making sure that we can deliver a vehicle whether it's in that segment or any other segment that gets to the value proposition that makes sense for the customer," Ammann said. "How electrification plays into broad-based consumer acceptance, I think that is still an unanswered question."

Sales of Nissan's all-electric Leaf have spiked since the Japanese automaker dropped the base price by 18 percent to $28,800 for the 2013 model year; the car is eligible for a $7,500 federal tax credit. Nissan also added extra cargo room, and for higher-end trims, an on-board charger that reduces electric charging times by half.

And Honda Motor Co. said in May it will pare the monthly lease price of its Fit EV from $389 to $259 a month and reduce by $130 a month the cost of existing Fit EV leases. The lease will now come with unlimited mileage.

The News reported last month that Ford planned no base vehicle changes for the new Ford electric vehicle, an unusual strategy for an automaker that often tinkers yearly with vehicle packages and options.

The price drop is significant, but incentivizing the Focus EV to boost sales is nothing new. Ford has offered heavy lease discounts of more than $10,000 and has offered $2,000 off the base price for cash purchases.


Do unions have a future?

Richard Littlemore
The Globe and Mail
July 10, 2013

An acceptance letter already in hand, he only took the hotel server job to get him through the summer. What he expected from the North York Novotel was a little over $10 an hour and some pretty good tips. What he got was a different type of education than he'd ever imagined.

"It was shocking to see how disrespectfully the workers were treated," Bastien, who's now 27, recalls. His conscience pricked, he got involved in a certification drive by the UNITE HERE union, and started signing up co-workers. "I thought it was a good idea, a good cause, and that we'd be done in three months and I could go on to law school."

But Bastien immediately "started getting written up a lot": Managers put a note in his file for every imagined infraction, no matter how minor (for instance, if he punched out on the time clock but didn't also sign out). A delegation from the union went to Novotel's human resources chief on his behalf and pointed out the illegality of targeting union organizers. The write-ups stopped—but Bastien's sympathy for the union was just warming up.

Five years later (and "much to the chagrin of my parents"), he's still trying to win respect for the hospitality and restaurant workers who make up the ranks of UNITE HERE. And now it's gone from a sideline to a full-time mission; last April, he moved from waiting tables to working for the union.

Bastien is not the likeliest union organizer. He is, he says, "no red-diaper baby." His father is a dentist who emigrated from Haiti to Canada in the 1950s to escape the Duvalier dictatorship, his mother an office manager from Belgium. "I was raised on stories of my grandfather's house being sprayed with machine-gun fire, so I realize how lucky I am to be alive and in Canada. And I realize that not everyone has that same luck." Which is to say that, unlike many of the recent immigrants who make up the community of hotel employees, Bastien had choices about his occupation.

Or put it this way—if the union movement in Canada has a future, it will be thanks to employers who piss off young people like Daniel Bastien.

The portents, of course, are decidedly to the contrary. Private-sector union "density"—the proportion of workforce members who belong to a union in Canada—has collapsed. In 1984, it was 26%. Today, says a white paper by the soon-to-merge Canadian Auto Workers (CAW) and Communications, Energy and Paperworkers (CEP), it's "17% and falling." (CEP represents unionized workers at The Globe and Mail.)

Despite the numbers, union central gets huffy at suggestions of decline. "Our density is still higher than most other countries," says Canadian Labour Congress president Ken Georgetti. And it's also pretty close to what it was 10, 20, 30 or even 40 years ago.

But that's only because of this: While private-sector membership has fallen off a cliff, public-sector membership has climbed to a peak. Thus the overall unionization rate today (30.2% by a federal government count) is not that far off from where it was (33.6%) in 1970. Public-sector membership had hit 72% by the mid-'80s and has stayed in that range ever since.

It's not that unions have been doing a bad job in the private sector, says Georgetti. Polling conducted by the CLC shows that more than 80% of members are satisfied with their union's performance. Rather, the world has shifted beneath labour's feet. CEP president Dave Coles says the problem is "de-industrialization," including both automation and the migration of jobs to cheaper labour markets, in the United States and overseas. "Workers didn't run from the unions," Coles says. "Work has run away from the workers."

If the ability of employers to move manufacturing and clerical jobs across borders explains unions' decline, it has also engendered other unhelpful changes. One is the wave of "right-to-work" laws sweeping through the U.S., which has been echoed by anti-union measures and rhetoric in some jurisdictions in Canada. Another is a serious souring of public sentiment. Members may see value in their union cards, but for large swaths of the public, unions have a serious image problem: They've gone from being the folks who brought you the weekend to being the folks who deny you the services for which you pay your taxes.

Before the complexion of unionism went civil-servant, workers in the private sector tended to aspire to union membership. But now, non-union members of the public are more likely to resent union protections, especially when it seems that civil servants are getting fat (and retiring happy) on taxes paid by the unorganized. The workforce is polarizing into a public-sector side that has ample benefits, job security and pensions, and a private-sector side that does not.

These factors have cascaded into a crisis that at least some union leaders recognize as life-threatening. "The trade union movement in Canada faces an enormous and historic moment of truth," says a discussion paper that proposed the CEP/CAW tie-up. "If unions do not change, and quickly, we will steadily follow U.S. unions into continuing decline."

The plan, as always with unions, has to do with organizing workers who aren't unionized. But there's a broader game at play, too.


Last summer, as the sun set over a host of lightly burnt bodies on English Bay Beach, I watched as Stephen Von Sychowski, chair of the British Columbia Federation of Labour's Young Workers' Committee, brought a team of orange-vested activists to work the crowd at the Celebration of Light, Vancouver's annual international fireworks competition.

Roughly 100,000 revellers had jammed onto the city's busiest patch of sand and grass for a party, not a union rally. But Von Sychowski's team was undeterred. The boldest campaigners were both young women: Bonnie Hammond, a bus-company employee and member of Canadian Auto Workers Local 114, and Kassandra Cordero, who's on staff at the BC Federation of Labour. They waded audaciously into the crowd, stepping between blankets, waving a clipboard and asking who'd like to sign a petition to support "Grant's Law."

This is the figurative foot in the door. Grant De Patie was a 24-year-old Maple Ridge, B.C., gas station attendant who was dragged to his death in 2005 after he challenged someone who was driving off without having paid for $12.30 worth of gas. Most Vancouverites know the story; many supported the law that was passed in De Patie's name setting strict rules for young people working the graveyard shift in retail environments. And many more are upset now that the B.C. government has backed away from the toughest provisions, once again allowing people to work alone with scant protection.

The fireworks crowd divided into the uninterested and the enthused. In the search for signatures, "It's unusual to be refused outright," says Von Sychowski. "It's not hard to support this issue." While some people clearly didn't want to be hassled, a huge number called out, asking to sign the petition. It seems that everyone who hasn't personally worked at a McDonald's or a 7-Eleven has a friend or family member who has. And when any of these signatories showed more than a passing interest, the campaigners started digging deeper.

It's a bait-and-switch, true, but a relatively benign one. Hammond's favourite conversation starter is child labour. "Do you think it's legal for 12-year-olds to work in B.C.?" she asks. Most people don't. But it is legal (with a parent's signature). And by the time Hammond has shared the details, many young people have signed up to join EARN, the Employee Action & Rights Network—a labour organization for the unorganized.

Von Sychowski, 28, was the founding chair of EARN, which the BC Federation of Labour developed to bring young workers into the fold, even if on an informal basis. "We were already campaigning on things like raising the minimum wage and increasing health and safety standards," Von Sychowski says. "The idea was to create a network for non-union workers, to campaign on those issues and to provide assistance in cases where people's rights had clearly been violated."

That's why Von Sychowski's team stands at SkyTrain stations or wades through fireworks crowds, chatting up prospective EARN members. It's an exercise in building relationships. In response to a suggestion that EARN looks like an old-fashioned loss leader, the free app that gets you hooked on a new piece of software, Kassandra Cordero says, "Exactly. And joining an actual union would be like getting 'the Premium Edition.'"

This kind of campaign—one that rises above a single group's grievance to champion concerns that span society—would probably be a good idea in any moment. But for the union movement today, it might be the best tactic left.

"The only way you can go on strike in this country today is if you're faster than Lisa Raitt," says veteran B.C. labour operative Bill Tieleman. He's referring, of course, to the federal Conservative Labour minister who in 2011 and 2012 set governmental speed records legislating CP Rail, Air Canada and Canada Post employees back to work. "Labour relations today is based on the ability to affect public opinion," Tieleman says. "It's no longer about withdrawal of service." Indeed, Statistics Canada calculates that person-days lost to strikes and lockouts declined by almost 87% between 1980 and 2010. Even in the labour stronghold of British Columbia, the once-militant BC Federation of Labour has accepted a series of pre-emptive orders restricting strikes and job actions.

Those who do strike do so at their peril, as the Canadian Union of Public Employees discovered in Toronto. Public resentment over the garbage that piled up in parks during the 2009 strike helped catapult the notorious Rob Ford into the mayor's chair. In an administration dogged by controversy, one of Ford's clearest victories has been to contract out a large number of garbage-collecting jobs that had belonged to CUPE members. The public outcry over this was notable by its absence.

So, the most successful unions have had to find other points of leverage. In Vancouver, for example, UNITE HERE doesn't strike—or at least it hasn't struck a major hotel since 2000. And yet, Local 40 president Jim Pearson says the union has concluded a series of agreements that have improved the position of its members, all by using a very simple strategy. "All the companies we deal with put a lot of energy into developing and protecting their brand," Pearson says. "So anything we do that is damaging to that is very effective."

What UNITE HERE does is often akin to street theatre. It picks a hotel with a prominent location and organizes weekly demonstrations. Room attendants take to the street, describing to passersby—and reporters—the worst parts of their workdays. On one recent occasion, Local 40 invited some local politicians to "job shadow" attendants for a day. Pearson says the staff loved the show—and the hotel hated it.

Not every campaign is given to that kind of staging. The 2006 strike at the Ekati diamond mine in the Northwest Territories looked like one that could never be won, says Dave Thompson of the Public Service Alliance of Canada. PSAC, while not a traditional "mining" union, is the biggest union in the NWT and, Ekati workers gambled, their best hope for winning a first-contract fight with the mine's owner, multinational giant BHP Billiton.

When it came time to walk off the job, "There was nowhere to even set up a picket line," says Thompson, who worked on the campaign. The mine is 300 kilometres north of Yellowknife and, for most of the year, can only be reached on the company plane. Employees also tended to fly in from points all over the map, so again, there was no available choke point.

Ekati is also highly mechanized. Having organized 400 of the 1,200 employees and contractors, PSAC still couldn't bring operations to a standstill. And even if that had been possible, BHP could have easily waited the union out. Diamonds don't rot in the ground and there is enough slack in the market to accommodate a decline in supply. So the union wasn't surprised, after more than a year of trying to negotiate a contract, that it was pushed to strike in early April, and was still not surprised when BHP hadn't budged by the beginning of June.

But everything changed on June 13. That's the day the union ran ads in The New York Times and The Wall Street Journal decrying Canada's "dirty diamonds" and calling out BHP for using strikebreakers. It was a direct attack on one of the Canadian mine's principal sales pitches: that its sparkly products were untainted by human-rights abuses associated with diamonds from Africa. The phone started ringing from around the world. Media from Antwerp, Israel, South Africa and Singapore—"everywhere where somebody cares about diamonds"—were calling for interviews, Thompson says. "We had an agreement in two weeks."

The best part for PSAC is that once the company understood the union had leverage, it came to the table and has stayed there. "We've negotiated two new agreements since—and they're good agreements," Thompson says.

Union leaders like Pearson recognize that "brand" cuts both ways—using it as a lever against companies won't be of much use if the union's own brand is not up to snuff.

So, as a "56-year-old white guy," Pearson counts himself an imperfect labour spokesperson. Some 60% of the members of his UNITE HERE unit are women and nearly half belong to visible minorities. "The next person in this job should more accurately reflect our membership," he says flatly.

Pearson makes the argument for reasons of strategy as well as equity. "When it's me or [BC Federation of Labour president] Jim Sinclair standing up defending labour, the public just turns off," Pearson says. They just look like more well-fed white guys protecting their privilege. "It's a lot harder to dismiss a hotel housekeeper who spends every day breaking her back changing rooms."

Tieleman takes this branding discussion a step further, suggesting (to the horror of some in the labour movement) that unions are themselves a kind of free-market entity. "Unions are in the business of representing people," he says, stressing the word "business." Unions—the organizations themselves—are part of what we now understand as "the service industry."

And to succeed—to get back on track—they have to be a "full-service" player, says the CLC's Georgetti, who adds that union leaders can't just drop in at contract time: "You have to be responsive to your members all the time. Otherwise, they just start looking at you like an insurance company: 'I pay dues in case I get fired or there's a strike.'" And no one feels particularly attached to their insurance company.


As for the other piece—the traditional job of organizing the unorganized—the labour movement's targets are fairly obvious: white-collar workplaces and the service sector. PSAC illustrates the point.

Like many public-sector unions, PSAC is fighting off retrenchment. Thompson, who is now an organizer in B.C., says he spends much of his time defending contracts or trying to reorganize workers whose jobs have been contracted out. The aggressive privatization at Vancouver International Airport alone has created a revolving door through which he himself must keep passing in an effort to reclaim members that PSAC thought it had already organized.

But while PSAC membership in B.C. has slipped, from 18,900 in 2009 to 17,900 in 2012, the national count, at 180,000, is growing. This is largely because, over the last five years, PSAC has added 20,000 members in the post-secondary education sector—post-doctoral researchers, teaching and research assistants, support staff, part-time faculty and student employees.

One of the point people in that success is MaryAnne Laurico, who got involved as a student at Queen's University in Kingston. Like Daniel Bastien, she wasn't born or raised a firebrand. A Toronto-born PhD candidate, she was (like most graduate students) just trying to cover her tuition and some of her expenses by working as a teaching assistant.

Depending on your point of view, TAs are either the luckiest or the most vulnerable members of a big-university population. By distinguishing themselves as among the most promising undergrads, they win the right to continue their studies and to perform relevant work—teaching in their chosen field. For this, at Queen's, they get a funding package of $18,500.

Laurico says that if you were to ask most TAs what they thought of this deal (and she did, dozens of times), their usual first reaction would be, "The working conditions are great!"

Still, in 2008, Laurico got caught up in a PSAC organizing drive. It was fun. There were big events—barbecues on campus—and the conversation was all about being part of what Laurico calls "this big movement." But the campaign failed, as had every other TA organizing drive on the campus.

But by the time that happened, Laurico was no longer convinced that the working conditions were all that fabulous. In 2009, she took a position as a PSAC organizer and kicked off a new drive. On nights and weekends, in coffee shops, between library stacks or at kitchen tables in the student ghetto, she interviewed TAs. Were their working conditions good? Yes. Had they ever been bullied? Well, sometimes. Were they paid regularly? Not always. Had their contracts or duties ever been changed mid-semester? Yes. Laurico and other organizers collected a host of complaints, which they used to prepare "Rave Cards" identifying the most common grievances. Then they distributed the cards to other TAs, finding an increasing number of willing takers.

Laurico presents the experience as both counterintuitive and inevitable. It was hard to build union support among a population drawn overwhelmingly from the families of professionals and managers—the upper-middle-class Canadians who typically send their progeny to prestigious schools like Queen's. But as governments have squeezed funding to universities, and as universities have grown more resolutely focused on the bottom line, the stress was bound to concentrate somewhere. Teaching assistants, whom Laurico describes as both "clients" and "employees" of the university, were an obvious pressure point, a group of people who could be directed, by professors and administrators alike, to pick up the slack. Queen's pushed and, through the efforts of Laurico and others, a union finally found a way to push back. PSAC Local 901 was certified in 2010.


The second union target area is the service industry, a category that sprawls from hotel, retail, food services, domestic and private-sector health care workers to administrative staff in the financial industry. From an organizing perspective, there are two great things about the service industry: It's the fastest-growing employment sector in the country; and in most cases, you can't outsource the jobs to Mumbai.

If UNITE HERE is a master of 21st-century union tactics, it also recognizes that its success depends on upholding the historic union role of fighting for the rights of the least privileged. In Toronto, UNITE HERE Local 75 has been fighting the Novotel hotel chain, which has been resisting unionization with mixed success. Novotel's efforts were sufficiently clumsy in its Mississauga hotel, the next location over from Daniel Bastien's former workplace, that the Ontario Labour Relations Board issued a highly unusual automatic certification last October, and ordered the hotel to pay three years of back pay to Rekha Sharma, a young employee whom it had frozen out after she got involved in the certification drive.

The Novotel where Bastien worked is still not organized, but the union is in it for the long haul. "You can't start a drive and then walk away," he says. "We don't want to leave any workers behind, especially those who have stuck their neck out."

From a union perspective, the hotel industry is actually a bright spot in the service industry. Toronto hotels have a union density of 75%. Among the half-dozen unions involved, UNITE HERE is the largest player, with 47 hotels in the GTA.

The result, Bastien argues, is that hotel employment in Toronto is pretty good overall. Most of the jobs are full-time and "even the non-union hotels have to pay higher wages to stay competitive" with the rates that have been won by UNITE HERE. Bastien has friends who work at hotels in Alberta, where the picture is low-density, low wages, no benefits—and high turnover. Toronto, on the other hand, has a comparatively stable workforce, an obvious fringe benefit for employers. "Hotel jobs are good here," Bastien says. They pay enough that "you can raise a family. That's what the union is fighting for."

If unions are to succeed beyond the hotel sector, however, they will have to make more gains not only in the trenches—in the sometimes rough-and-tumble world where the likes of Bastien and Laurico have set up shop—but also in the courts and legislatures of the country.

In the trenches, one of the issues is size: Traditional big employers are easy to organize and easy to service. The CLC's Georgetti says that union density remains relatively high among employers with 500 workers or more. But those large employers are exactly the kind of manufacturing plants and resource-sector processors that have been fleeing the country in large numbers. And among what's left over, Georgetti says, "we have no density at all [with workplaces] under 40."

What's worse, a lot of the "small employers" are actually storefront retail operators that are owned by huge, deep-pocketed (and frequently anti-organized labour) chains. So, labour has a big challenge wrapped in a little package—or a host of little packages, because the low-paid, poorly protected service workers at many of the largest employers are dispersed across hundreds, even thousands, of locations.

Compared to their American cousins, Canadian unions have enjoyed a few successes in organizing these workplaces, including at both McDonald's and Walmart. But those footholds have proven difficult to hold. When a Quebec union organized a McDonald's in Montreal in 2000, the franchisee responded by shutting it down. After Walmart saw workers at its Jonquière store unionize in 2005—the first in North America to do so—the outcome was the same.

This is one of the challenges that precipitated the CEP-CAW merger—an ambitious effort to build a union that is big enough to stand up to big, unco-operative employers. There are two issues here. First, many of the companies that are in the business of fighting unions have deep pockets; Walmart or McDonald's can wait out a small union in the course of a labour battle. Second, in the rare event that a union actually organizes a small operation, it is expensive to service. A local with just 12 or 15 members might consume the same amount of a business agent's time as one with 50 or 100 members. And low-wage employees can't be asked to contribute very much in union dues. Even the union officials who don't want to think of themselves as "businesses" understand how hard it is to maintain a union with that kind of a business model.

In both respects, the new union will be better positioned to take on large companies that have proved to be such a difficult challenge, says the CEP's Dave Coles. "We still have big locals that don't mind paying more than their share" to support brethren in a fight. And improving the ability to organize small workplaces is "an absolute cornerstone of the new project," Coles adds. "We have to make unions relevant in the community again"—a community concentrated in storefront retail.

The other battlefield will most certainly be the courts and legislatures, where the pendulum has been swinging away from union rights and toward restoring a freer hand to employers. The best evidence of this arises mostly south of the border in the increasingly popular "right-to-work" legislation that prohibits closed union shops or any labour contract that requires all workers to pay union dues. These are now in force in at least 23 states—and those jurisdictions have been attracting almost a third of all new manufacturing jobs.

In Canada, pro-management governments are backing away from legislation that had imposed first contracts in cases where organizers had been able to get 50% (or sometimes more than 60%) of employees to sign union cards. The new laws force the union to also clear the hurdle of a secret ballot after the original organizing drive.

Labour leaders say that turns organizing into a contact sport. The problem, says BC Federation of Labour president Jim Sinclair, is this: "How do you make it possible for people in small workplaces to join a union? In 2013, it's not a right; it's a risk"—in part because it is so easy for employers to fire and blacklist anyone who gets a pro-union reputation.


Traditionally, labour organizations have boasted unreservedly about what Georgetti calls the "union advantage," which is most obviously defined by the gap between what you make in a union job compared to a non-union job. On average, Georgetti says it is $7 an hour or $600,000 over a lifetime.

What may be more helpful for the movement's future is another face of the union advantage. A recent Harvard University study showed that the decline of organized labour in the U.S. accounts for between a fifth and a third of the yawning increase in income inequality that is one of the country's most crippling problems.

For young activists, that shows what's at stake. "I'm concerned about the direction that Canada's heading," says Bastien. "So many people my age are struggling for jobs, working contract-to-contract, or going to grad school to avoid the labour market. And that won't change until the rebirth of the labour movement.

"We need good jobs you can build a life on."



Stay Clear of Scab Beer!

As we just celebrated Canada Day, the CAW is still encouraging all union members –and members of the public – to show their support and solidarity to 50 striking Labatt brewery workers in St. John’s, Newfoundland and Labrador.

These workers (members of the Newfoundland and Labrador Union of Public and Private Employees) have been on strike since April 10, in response to massive contract concessions tabled by their employer. The employer has even gone so far as to demand that NAPE members train the replacement workers who are taking their jobs, while on strike! It’s outrageous.

NAPE, along with their national counterpart NUPGE (National Union of Public and General Employees) as well as the Newfoundland and Labrador Federation of Labour and other unions across the country have launched a boycott of all Labatt/AB InBev domestic and import products.

The CAW fully supports this boycott.

To lend your support, please DO NOT purchase any of the following beers:
-        Stella Artois
-        Stella Artois Light
-        Becks
-        Brahma
-        Hoegaarden                              
-        Leffe
-        Staropromen
-        Boddingtons
-        Bass
-        Lowenbrau
-        Ozujsko Pivo

Let’s pressure Labatt to get back to the bargaining table, and negotiate a fair settlement with these sisters and brothers.

For more information about the boycott, and how you can support NAPE members, visit: www.nape.nf.ca

*July 2013


Thieves like Ford's F-250 truck best

The F-250 has a claim frequency of seven per 1,000 insured vehicle years, or six times the average for all autos in a survey of 2010-12 data.The 2010 Ford Super Duty features all-new diesel and gasoline engines and maintains best-in-class towing and payload capability. (Ford)

David Shepardson
Detroit News Washington Bureau
July 9, 2013

Washington— The Ford F-250 has replaced General Motors Co.'s Cadillac Escalade as the favorite target of thieves, a report released today says.

GM's luxury SUV has led the Highway Loss Data Institute's ranking of vehicles with the highest rates of insurance claims for theft since 2003, but fell to sixth in this year's survey of 2010-2012 data. The insurance group's data doesn't distinguish theft of vehicle contents or components from theft of a whole vehicle.

Topping this year's list, the four-wheel-drive F-250 crew cab, has a claim frequency of seven per 1,000 insured vehicle years, or nearly six times the average for all vehicles. An insured vehicle year is one vehicle insured for one year.

The F-250 was ranked second in the survey of 2008-2010 claims.

GM pickups and SUVs hold eight of the top 10 spots for highest insurance claims, but the Detroit automaker is offering new anti-theft devices on its new pickups coming out this year.

The insurance group says new anti-theft technology on the Escalade, as well as declining sales, are two likely reasons the luxury SUV has fallen from first to sixth place in the ranking of vehicles with the highest rates of insurance claims for theft. Escalade sales were down 11 percent in 2012.

"General Motors has put a lot of effort into new anti-theft technology, so that may help explain the decline in the Escalade's theft rate," says Matt Moore, vice president of the Highway Loss Data Institute. "On the other hand, sales of the Escalade have fallen in recent years, so there may be less of a market for stolen Escalades or Escalade parts."

Thieves continue to target large pickups and large SUVs at higher rates than cars and other vehicles, according to the group, a division of the Insurance Institute for Highway Safety, a non-profit research organization funded by the industry.

In this year survey's, following the F-250 are another four pickup trucks and an SUV: the Chevrolet Silverado 1500 crew; Chevrolet Avalanche 1500; GMC Sierra 1500 crew; and Ford F-350 crew. Rounding out the top 10 are the Chevrolet Suburban 1500, GMC Sierra 150 extended cab, GMC Yukon and Chevrolet Tahoe.

Ford Motor Co. said it has taken steps to make its trucks more secure.

"Ford vehicles, including F-Series trucks, offer the latest in anti-theft technologies and features to help provide customers with peace of mind for the security of their vehicles and belongings," Ford spokeswoman Kelli Felker said.

She said that since the 1990s, Ford has offered a standard SecuriLock feature that helps prevent vehicles from being started without keys that have specially coded computer transponder chips.

Many pickup claims result from the theft of equipment or goods left in the truck bed, and that may be the case with some of the F-250 claims.

The vehicles with lowest theft claims were the Dodge Journey 4WD, Volkswagen Tiguan 4WD, Audi A4 four-door, Acura RDX, Toyota Matrix and Lexus HS 250 hybrid four door.


Anthony Bonello Passes
Away July 1, 2013

Anthony Bonello

Anthony Bonello

October 16, 1932 - July 1, 2013
Retired October 1, 1995

It is with great sadness that we inform you of the
passing of Retiree Anthony Bonello on July 1, 2013.

We were just made aware of his passing today
(Sunday) and regretfully missed his Visitation
and Funeral this past weekend.

On behalf of all the CAW Local 584 Retirees we
wish to extend our deepest condolences to his Wife,
Family and his Brothers Charlie and Alfie.

Funeral Information Link


Ford invents new
stamping technology

Innovation funded by U.S. grant cuts
time, cost to craft auto parts

Karl Henkel
The Detroit News
July 7, 2013

Ford Motor Co. says it has used a federal grant to develop a first-of-its-kind stamping technology that will allow it to create low-volume auto parts at essentially no cost.

Dubbed Ford Freeform Fabrication Technology, the process — created at the automaker's Research and Innovation Center — could soon allow consumers to customize bodywork on new vehicles, all while eliminating the high cost and wait that comes with engineering a stamping die.

"As we forge ahead with cutting-edge technologies in manufacturing like flexible body shops, robotics, 3D printing, virtual reality and others, we want to push the envelope with new innovations like (Ford Freeform Fabrication Technology) to make ourselves more efficient and build even better products," said John Fleming, executive vice president, global manufacturing and labor affairs, in a statement.

Ford's process works like this: A piece of sheet metal is clamped on its edges and formed into a three-dimensional shape by two tools that look similar to a stylus that are set up tip-to-tip on either side of the metal. The process can shape the metal so that it meets strength tolerances and surface finish requirements.

The Dearborn automaker says the new technology could deliver a steel metal auto part within three business days; with current technology, parts can take two to six months to deliver.

Though the technology will help Ford save on cost and improve flexibility of creating auto parts, it is not seen as a replacement for high-volume stamping.

High-volume stamping will still require the use of stamping dies. Creating those dies is still a long and drawn-out process.

But the new technology will help immensely when it comes to crafting prototypes and concept cars.

Ford says it can take six to eight weeks just to create a prototype die and several months and hundreds of thousands of dollars before a final die begins creating parts for a prototype.

The project is part of a three-year, $7.04 million U.S. Department of Energy grant to advance next-generation, energy-efficient manufacturing processes.

Ford spent the past four years developing the process in a laboratory; the DOE award will allow the automaker to use the process for larger applications.


Fiat's Chrysler deal faces extra borrowing costs with delay

Stephen Morris
Bloomberg News
July 5, 2013

Sergio Marchionne's Fiat SpA faces an escalating bill to complete the acquisition of Chrysler Group LLC as a dispute with the United Auto Workers' union stalls the deal amid a surge in borrowing costs.

The chief executive officer of the Italian automaker may raise as much as $4.5 billion in bridge financing to buy the 41.5 percent of Chrysler it doesn't own, according to BNP Paribas SA, at a time when investors are deserting junk-rated debt. The extra interest bond buyers demand to hold speculative- grade securities over government bonds jumped 1.21 percentage points from a low on May 10 to 5.14 percentage points, the Bloomberg Global Corporate High-Yield Index showed.

Marchionne wants Chrysler because it's profitable, with net income that reached $1.7 billion last year, while Fiat is burning cash as auto sales slump to a 20-year low in Europe. The dispute with the union's retiree health-care trust VEBA over share valuations means Turin-based Fiat may have to wait as long as a year to put the deal in place, Widener University law professor Larry Hamermesh said, even as debt costs rise after the Federal Reserve signaled it may curtail its stimulus.

"The timeframe is being extended, and in the meantime you've got ongoing cash burn at Fiat so it's not ideal," said Rob Orman, an analyst covering automakers at Henderson Global Investors Ltd. in London. "It would be better for them if the whole process was able to move forward much quicker."

Orman has an "underweight" recommendation on Fiat bonds, which means that investors should hold less of the debt than indicated by benchmark indexes.

A Fiat official, who asked not to be identified, citing company policy, declined to comment when asked about the deal for Auburn Hills-based Chrysler.

Junk-rated companies agreed to boost interest rates on more U.S. loans last month than any time since at least 2011, as lenders extracted compensation with prices of the floating-rate debt tumbling.

The maker of Ferrari and Maserati sports cars was downgraded to BB-, three steps below investment grade, by Fitch Ratings in February. Fiat's standalone gross adjusted leverage increased to more than six times last year from four times in 2011, Fitch said in a report.

Fiat may replace bridge financing for the Chrysler deal with equity because it can't take on more debt without risking further downgrades, Timothy Rea and Belle Yang, London-based credit analysts at BNP Paribas, wrote in a June 18 report.

"Fiat will be more inclined to consider a capital increase, asset disposals, or a convertible bond sale and in all likelihood some combination of the three to help repay the bridge loan," they wrote.

The company may burn through as much as 2.2 billion euros this year, according to Christophe Boulanger, a London-based credit analyst for Barclays Plc.

"Fiat should burn cash in the next two-to-three years, as we expect underlying profitability to remain weak," Fitch analyst Tom Chruszcz wrote in the report. "The downgrade reflects chiefly the persistent weakness of Fiat's standalone results, excluding Chrysler, notably in Europe."

Marchionne started building a stake in Chrysler in June 2009 after the U.S. carmaker sought bankruptcy protection from creditors. His ambition is to create an automaker to rival global leaders Toyota Motor Corp., General Motors Co. and Volkswagen AG, and he said in June that Fiat has enough cash to complete the deal.

As part of the Chapter 11 reorganization, the union's health-care trust wound up with the Chrysler stake in exchange for wiping out retiree claims against the carmaker.

The trust says the call option on the shares is worth $342 million. Fiat puts the value at $139.7 million and the decision on whether the dispute will go to trial, delaying the takeover, may be taken by the Delaware Chancery Court as soon as this month.

The longer the deal is delayed the more expensive it will become,'' said Boulanger at Barclays. "They need to hurry to do it."

The amount Fiat needs to raise for the acquisition is increasing as the U.S. car market recovers, according to analysts at UBS AG. Chrysler's U.S. sales rose 8.2 percent to 156,686 vehicles in June, a 39th consecutive monthly increase.

"We estimate the value of the Chrysler stake has gone up by about $1 billion to $4.5 billion in the past few weeks," UBS analysts led by Philippe Houchois in London wrote in a note last month. "While neutral to positive for group valuations, it increases the amount Fiat needs to raise."

Fiat sold 245,000 passenger cars and light commercial vehicles in the first quarter this year in Europe, the Middle East and Africa, a decrease of about 15,000 units, or 6 percent, compared with the similar period last year, according to its results statement. Fiat-brand car sales in Italy fell 8.6 percent last month, the Transport Ministry said July 1.

Henderson's Orman said Fiat missed an opportunity to raise money by issuing bonds before debt costs started rising in the past month when the Federal Reserve triggered speculation it may be poised to slow stimulus measure.

"Debt markets were primed for issuance in April and May, but now in early-July things aren't quite so optimal," he said. "There's no certainty that the appetite will be there."

Fiat is paying annual interest of 325 basis points, or 3.25 percentage points, more that the euro interbank offered rate on a 2 billion-euro revolving credit facility maturing in three years that it arranged last month, according to data compiled by Bloomberg. That compares with a spread of 35 basis points that Volkswagen paid when it arranged a 5 billion-euro credit line due in five years in 2011, the data show.

Chrysler last month cut the interest margin it's paying on a new $2.95 billion term loan saving it about $50 million in interest, Bloomberg data show.

Both Fiat and Chrysler run high-debt, high-cash balance sheets and have any short-term liquidity needs covered by existing debt, according to Brian Studioso, a London-based analyst covering European automakers at independent research firm CreditSights Inc.

Even so, "any extended run in difficulties in credit markets would obviously be a bad thing," he said.


Ford of Canada Leads Sales
in Canada at Mid-year

 June Highlights:

·          Ford Fusion sales jumped 18%
·          Ford Escape sales increased 16%
·          Ford F-150 sales rose 15% - best June on record
·          Ford F-150 Super Crew sales up 18% - best June on record

OAKVILLE, Ont., July 4, 2013 — Ford Motor Company of Canada, Limited, sales are up three per cent year to date, helping to maintain sales leadership. Ford of Canada was also the top-selling automaker for June.

Last month, trucks sales were up one per cent compared to the same month last year and up six per cent year to date. Truck sales gains were driven by the F-150, up 15 per cent, and F-150 Super Crew, up 18 per cent, its best June on record.

June sales were also bolstered by sales increases for the all-new, segment-leading Fusion and Escape, up 18 and 16 per cent respectively.

“We are humbled and very proud that Ford of Canada has maintained sales leadership in the first half of the year,” said Dianne Craig, president and CEO, Ford of Canada. “Customers are responding to our extensive lineup of hybrid and plug-in hybrid options, as well as continuing to make the F-Series Canada’s best-selling pickup.”

Ford Motor Company of Canada, Limited
June 2013 Vehicle Sales




% Change

Total Vehicles




January – June








Total Cars




January – June








Total Trucks




January – June










Detroit's Big 3 automakers reported strong sales gains in June

July 3, 2013

Ford reported a 13% driven by a 24% jump for the profitable F-150 pickups, Chrysler Group said sales were up 8% (its 39th consecutive monthly sales gain) and GM rose 6%.

Ford said that the sales pace was so strong that if it were extended over the entire year, adjusting seasonally, the industry would crack the critical 16-million sales barrier for the first time since 2007.

Meanwhile, Kelly Blue Book estimates that June car and truck buyers overall spent more for their new vehicles, too -- up 1% to an average out-the-door transaction price of $31,663 -- with Ford a big gainer.

"Consumer confidence continues to be a strong factor, along with pent-up demand and for now, low interest rates, bringing shoppers into the showroom to purchase a new vehicle," said Alec Gutierrez, senior market analyst for KBB. "Ford has been one the biggest beneficiaries, with transaction prices up nearly 3 percent, due to the strength in large truck sales, coupled with newly redesigned vehicles in the Fusion and Explorer."

Asian makers: Toyota reports strong gain, Hyundai up

Euro makers: Audi continues sales roll, VW slips

Here's how the Detroit 3 did:


Chrysler said seven of its vehicles set records in June, including the compact Dodge Dart that had had a slow start.. Othe highlights:

•Ram 1500 standard-duty pickups were standouts, with sales jumping 36%. The Ram 1500 got eight-speed automatic transmissions and other updates earlier this year. Heavy-duty models were up 5%, for a 24% gain overall for Ram brand.

Chrysler expects the momentum to continue this fall when the 2014 standard duty begins offering a diesel with eight-speed automatic, and the heavy-duties will have a bigger, 6.4-liter Hemi gasoline V-8.

•Durango, a full-size SUV based on the Jeep Grand Cherokee underpinnings, zipped 39% and was the company's biggest gainer. Durango had been having trouble getting sales traction.

•Jeep Grand Cherokee's 33% gain kept the brand above water -- the SUV has gotten a freshening with new styling and an 8-speed automatic. Jeep brand sales are suffering because the Liberty small SUV has been discontinued and the Cherokee that replaces it won't hit dealers until the third quarter.

•Chrysler brand sales were up just 1% despite an 18% gain by its Town & Country minivan.

•Fiat sales rose only 1%. The larger Fiat 500L has only begun to arrive at dealers and is expected to increase interest in the tiny Fiat 500 because the L is a bit bigger.


The 13% year-over-year gain to 228,174 overall added up to Ford's best June since 2006 and it was the best June for F-Series trucks since 2005 at 68,009. Cars sales rose 12% and utilities were up 8%.

Ford said its smallest cars – the Fiesta, Focus and C-MAX – were up 39% to 35,851.

The Escape SUV was up just 1% but its 28,694 deliveries were its best-ever month.

Ford's said in its release that the small cars and Escape, plus the Fusion mid-size sedan were helping it make sales inroads in western and southeastern markets where it has not been strong vs. foreign brands.

The new MKZ sedan that is leading the effort to revive the Lincoln brand sold 3,180 in June, for the models best month and closing first-ever quarter of more than 10,000 sales, beating it by 682. The new luxury car had gotten off to a rough sales start earlier this year due to a decision to hold up start of production to fix quality issues

In a call with reporters, Ford sales analyst Erich Merkle said Los Angeles has become Ford's biggest market for small cars, and San Francisco is now the fastest growing market.

The gain in smaller cars and crossovers was led by the smaller models, like Fiesta, Focus and C-MAX, which were up 39% over last year. Ford had its best small-vehicle sales performance in 13 years.

The Fusion sedan continues to be a hit. Dealers have less than a 40-day supply, which is less than optimal. But 16% of them still go to car rental fleets. "We're filling those orders based on demand," says Ken Czubay, Ford's U.S. vice president of marketing. But he says it is in line with Toyota's Camry.

When it comes to the F-Series, America's best selling model, Ford saw its 23rd consecutive monthly sales increase. Sales of the big pickups were up 24%.


General Motors said its June sales were 6% better than a year earlier.

The biggest U.S. car company said sales of its crossover SUVs were up 9% and cars rose 4%. Sales of the Chevrolet Silverado and GMC Sierra full-size pickups leapt due to a full redesign that's been on sale a few weeks.

GM said combined sales of all its mini, small and compact cars zoomed 59%.


•Buick sales slipped 4.1% despite a strong showing from the recently freshened Enclave big crossover SUV, which was up 13.7%.

•Cadillac zipped 14.9% on the strength of its newest cars, ATS compact and XTS big sedan. SRX crossover SUV was down 8.2% but remained the brand's best-seller.

•Chevrolet Cruze did huge business, a record for the car and up 73.2%. Volt plug-in hybrid was strong, too, up 53.3%. New-design Silverado pickup pushed sales up 28.9%

•GMC, the truck-only brand, was up only 4.5% despite a roaring 32.8% climb by its redesigned Sierra full-size pickup.

Chevy Cruze's 73% increase is impressive no matter which way you slice it. But the midsize Malibu, down 32%, is getting lost in the middle. GM probably wishes that it could hit the reset button and handle that car's launch much better than it did," says Michelle Krebs, analyst at Edmunds.com.


Windsor Star - July 3, 2013

U.S. buyers snapped up new cars and trucks in June at a pace not seen since before the recession.

Continuing demand for big pickups helped boost sales for Detroit's automakers. Ford said Tuesday that its sales rose 14 per cent, while General Motors' rose 6.5 per cent Chrysler Group's gained 8

per cent - the best June sales since 2007, the automaker said Tuesday.

The Chrysler, Jeep, Dodge, Ram and Fiat brands each posted year-over-year sales gains in June compared with the same month a year ago. The Ram truck brand's 23 per

cent increase was the largest sales gain of any Chrysler Group brand in June. Chrysler Group extended its streak of year-over-year sales gains to 39-consecutive months in June.

"Last month Chrysler Group set seven individual vehicle

line sales records and achieved our 39th-consecutive month of year-over-year sales growth. The fundamentals for continued industry gains in new vehicle sales remain intact," said Reid Bigland, head of U.S. Sales.

Sales of the Windsor-assembled Chrysler Town and Country minivan were up 18 per cent while demand for the Dodge Grand Caravan fell six per cent.

Sales of the flagship Jeep Grand Cherokee were up 33 per cent in June, the largest percentage sales gain of any Jeep brand vehicle in the month. It was the Grand Cherokee's best June sales in eight years.

All Jeep brand vehicles in production recorded year-overyear sales gains in June.

Japanese automakers reported solid gains as well. Nissan's sales jumped 13 per cent, while Toyota's and Honda's each rose 10 per cent. South Korea's Hyundai reported a record June, with sales up 2 per cent.

Only Volkswagen's sales dropped 3 per cent, the third straight monthly decline for the German car company as some products like the Jetta start to age.

Analysts say they don't see much that could slow the sales momentum of the first six months.


Joe Hinrichs: Keeping up
the momentum at Ford

The Globe and Mail
July 2, 2013

When the recession devastated the auto industry in 2008-2009, Ford Motor Co. was the only Detroit-based car company to avoid Chapter 11 bankruptcy Joe Hinrichs: Keeping up the momentum at Fordprotection. With the industry in full recovery mode and the North American market bouncing back and poised to return to pre-recession levels, Ford is reaping big profits, gaining market share and holding on to top spot in the Canadian sales rankings. Joe Hinrichs, president of The Americas, is charged with keeping up the momentum with a steady flow of new and redesigned vehicles, deciding when and if Ford needs to add new assembly plants in and managing growth in the emerging markets of South America.

There are forecasts that U.S. sales will hit a record 18 million vehicles before the end of the decade. Are you that optimistic?

There are scenarios with certain assumptions laid in that you can get to 18 million units in the U.S. It comes down to some key things: What's the GDP growth rate going to be and will it get back to the 3- 4-per-cent range instead of the 2-per-cent range? What are the millennials going to do when it comes to buying vehicles?

People were holding on to their vehicles longer through the recession. Do we get back to a more historical trend? Those kinds of things can get you to an 18 million unit industry in the U.S. We don't see that as kind of the base call today, but it certainly is a scenario that could unfold.

If U.S. sales rise to 18 million from about 15.5 million this year, does Ford have enough assembly capacity?

It's a hard question to answer because we have global capacity, we have regional capacity in North America and so depending on where we have available capacity and what those products are we can supplement capacity if we need to for a while or we can build new capacity. So the devil's in the details.

It's a fun subject to work on. It's a lot better than the other way.

We're going to be very careful not to repeat what happened in the past and that is have the same model being built at four or five different places. That's where you easily get into a situation where you have excess capacity that you don't need.

Where do negotiations stand with the federal and Ontario governments on Ford's proposal to redevelop the Oakville, Ont., plant to build vehicles there for global markets?

We are having good discussions with the government. They are not finalized yet. Once we get everything worked out with our business [case] and our partners in the government, then at the right time we'll have some news to share.

Are you getting close to a point where you need to get an answer?

For our planning purposes we have time lines we want to meet. We're still on those time lines.

How competitive is Canada as an auto producing nation with the dollar near par?

When you look at Canada certainly you have a good, well-trained work force. We have history. We have a good relationship with the governments both in Ontario and in Ottawa and we have an industry in North America that's continuing to grow.

So we need capacity. But when you look at Canada where it sits globally, it's one of the highest-cost manufacturing locations with the Canadian dollar where it is today.

That's a challenge that we all face for the future. Having said that, we're committed to having a Canadian manufacturing footprint. We have roughly 10 per cent of our manufacturing in Canada for vehicles, which is roughly the same as our sales mix in North America. That, on a relative basis will probably sustain itself over time.

What does Canada need to do to make itself more competitive?

I think we need to look at what's been going on around the world including in the United States ... look at what the costs are for the next generation of workers coming into the auto industry.

We need government support – that by the way, happens everywhere in the world.

We need to look for unique Canadian solutions, but at the same time move us forward to an overall more competitive manufacturing cost.

Ford recently announced the closing of a plant in Australia, also burdened by a high currency in a competitive market. How does Canada differ?

Australia is isolated with an industry of about 1 million units. Logistically it is not a good location.

The combination of the high Australian dollar and isolated location doesn't make it a good export base and not a big enough total [sales] volume industry to support manufacturing.

The Canadian situation is a little different than Australia because there is enough volume in the total North American industry to support high-volume plants, which makes up for some of those other issues.

Is Ford seeing any impact in the North American market from the fall in the value of the Japanese yen?

There can be arguments made about cause and effect, but Nissan lowered all their prices and we have seen significant increased incentives on the Prius lineup. So you look for product that's built in Japan, that's the ones we're seeing it on.

How does Ford react to that?

You have to be competitive in the marketplace, which means you have to work on your own cost structure.

At the same time, you make an argument that currencies should be freely traded and not manipulated or affected by government intervention. We continue to make that argument.

Why does Ford oppose the inclusion of Japan in the Trans Pacific Trade talks?

The reason for that is we don't believe that the Japanese auto industry has restructured to the level that the North American auto industry has. We took out all that capacity.

They have a lot of excess capacity they haven't taken out. Where does it want to go? It can't really go to China. It can't go to Europe right now because Europe's situation is difficult and the North American market is growing.

We don't think lowering duties further for Japan makes sense for the American or Canadian auto industry.



Title: Executive vice-president Ford Motor Co. and president, The Americas

Personal: Born in Columbus, Ohio; 47 years old. Married with three children.

Education: Bachelor's degree in electrical engineering, University of Dayton (Ohio); MBA, Harvard University.

Career Highlights
* Spent 10 years working for General Motors, including a job as plant manager.
* President of Ford Motor Co. of Canada Ltd. from January, 2005, to November, 2005.
* Vice-president of manufacturing, Ford North America, and later group vice-president of global manufacturing and labour affairs.
* Appointed group vice-president and president of Asia Pacific Africa for Ford in December, 2009, heading the company's operations in one of the world's fastest growing automotive markets.
* Became president, The Americas on Dec. 1, 2012.


U.S. closes probe into 467,000 Ford Taurus, Mercury Sable cars

David Shepardson
Detroit News Washington Bureau
July 1, 2013

Washington — The National Highway Traffic Safety Administration said Sunday it is closing an investigation into 467,000 older Ford Taurus cars after the Dearborn automaker agreed to a voluntary fix to prevent damage to an engine cable.

NHTSA said after its eight-month investigation it was not seeking a recall of 467,719 2000-2003 Ford Taurus and Mercury Sable cars with Duratec engines. The decision came after Ford on June 21 initiated a customer satisfaction program to address complaints of speed control cable damage. Ford told dealers that the cars are susceptible to damage or becoming partially disconnected during under hood vehicle maintenance -- like replacing a battery or changing the air filter -- and that a damaged cable could interfere with the throttle's full return to idle when the accelerator pedal is released.

Ford dealers will inspect the cables and replace any with any portion of either collar retention tab missing. Dealers will install a collar reinforcement clip in all vehicles and will reimburse owners through Dec. 31 if they have previously paid for similar repairs. The program will end on Aug. 31, 2014. There is no mileage limit for vehicles to take part. Ford will notify owners of the campaign in letters starting in July. The repairs should take about an hour.

NHTSA said it reviewed 100 complaints from owners of vehicles who had trouble braking and reports of five crashes. Some owners who experienced the condition were surprised that the engine speed did not drop as expected. In some cases, owners misjudged the degree of braking required to slow the vehicle. Others had trouble braking and responded by shifting to neutral or turning the engine off.

There were four crashes reported which were attributed to increased stopping distance caused by the increased engine power or reduced brake effectiveness. One minor crash occurred when the vehicle hit a roadside fence post after the driver responded to the stuck throttle by shifting the car to neutral, turning the engine off and coasting to the side of a roadway with no shoulder, resulting in $400 damage, NHTSA said. In another crash, the vehicle allegedly hit the back end of a truck at approximately 40 miles per hour causing about $2,000 damage, the agency said.

NHTSA said testing showed that the condition could result in a throttle stuck at approximately 26-29 percent open. The testing also showed that brake booster vacuum may become depleted, resulting in reduced brake effectiveness, if the brake is applied repeatedly when the throttle is stuck at this position.

Separately, NHTSA said Sunday it is also closing an investigation into 70,000 2011 Hyundai Sante Fe SUVs. NHTSA in October opened an investigation into a report that a fastener became loose in the steering shaft of a 2011 Santa Fe. Hyundai identified a total of four incidents of steering shaft universal joint failure in early production. Two of the failures occurred at low mileage early in 2011, shortly after the vehicle was sold, leading to Hyundai's initial investigation.

Hyundai attributed the failures to employee error at the vehicle assembly plant in failing to fully assemble the universal joint to the steering column shaft before tightening the universal pinch bolt. The company inspected 680 vehicles at the assembly plant as part of its initial investigation and found no additional examples of improper steering shaft assembly. Hyundai implemented changes at the assembly plant to ensure proper steering shaft assembly, including the use of a "go/no go" Gap Gauge to ensure it is fully assembled to the steering column shaft before being fastened. Hyundai believes that the improper assembly affected only a few vehicles and that joints that were not properly assembled should have already failed and the likelihood of additional failures is remote.









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