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."

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

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

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

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

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

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?

BOB ENGLISH
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

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

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

GREG KEENAN
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

TARA PERKINS
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

This big SUV is a poor Sport

TED LATURNUS
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.

Headline

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
Virginian-Pilot
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.

JEREMY CATO
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.

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:

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
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

GREG KEENAN
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

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

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

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!

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

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

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

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

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 GROUP

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.

FORD MOTOR

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

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%.

Highlights:

•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

GREG KEENAN
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 protection. 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.

____________________________

CURRICULUM VITAE

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.