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APRIL 1, 2015 to JULY 31, 2015
U.S. appeals court rejects Associated Press New York — Victims of apartheid in South Africa cannot sue IBM Corp. and Ford Motor Co. in New York because they cannot show that the companies' alleged offending behavior occurred in the United States, a federal appeals court said Monday. The 2nd U.S. Circuit Court of Appeals ruled against lawsuits brought 13 years ago against the Armonk, New York-based IBM and Dearborn, Michigan-based Ford. In its ruling, a three-judge panel cited a 2013 Supreme Court ruling severely limiting the legal reach of the 1789 Alien Tort Statute. The law was created in part to deal with piracy claims but in recent decades human rights lawyers have used it to pursue damages from individuals or companies alleged to have supported abuses around the world. In a decision written by Circuit Judge Jose A. Cabranes, the 2nd Circuit in Manhattan upheld a decision by Judge Shira A. Scheindlin last year that tossed out the lawsuits because the conduct at issue occurred abroad. Close to 80 companies initially were named in the lawsuits, but the vast majority of those claims were rejected. The lawsuits alleged that Ford provided specialized vehicles to the South African police and securities forces to help enforce apartheid — the country's former system of white minority rule — and shared information with government officials about anti-apartheid and union activists. They said IBM designed technologies that were essential for racial separation under apartheid. The 2nd Circuit said the claims against Ford fail because it was the automaker's South African subsidiary that was alleged to have assembled and sold specialized vehicles to the government. The subsidiary also was accused of providing information to the South African government about anti-apartheid activities. The appeals court said Ford could not be held directly responsible for its subsidiary's actions because well-settled principles of corporate law treat parent corporations and their subsidiaries as legally distinct entities. As for IBM, the 2nd Circuit said it cannot be held liable for the actions of its South African subsidiary, though the judges noted that the lawsuits allege that the parent company acted with knowledge that its acts might facilitate apartheid policies. Still, it found the allegations fell short of showing IBM acted purposefully. "Indeed, plaintiffs do not — and cannot — plausibly allege that by developing hardware and software to collect innocuous population data, IBM's purpose was to denationalize black South Africans and further the aims of a brutal regime," the court said. Lawyers in the case did not immediately respond to messages seeking comment. |
U.S. regulators impose record Reuters WASHINGTON (Reuters) - The U.S. auto safety watchdog, toughening its stance against manufacturer defects, on Sunday fined Fiat Chrysler Automobiles a record $105 million over lapses in safety recalls involving millions of vehicles, according to documents obtained by Reuters. Under a consent agreement with the National Highway Traffic Safety Administration, Fiat Chrysler agreed to give the owners of 1.5 million vehicles the option of selling their vehicles back to the manufacturer. Included were 1 million Jeep sport utility vehicles with fuel tanks that can leak and catch fire in rear-end collisions. According to the consent agreement, Fiat Chrysler also agreed to allow an independent monitor to audit its recall performance for three years. The agreement also requires Fiat Chrysler to spend at least $20 million to meet performance requirements and another $15 million if the monitor discovers additional violations. |
Ford Technology Develops
Wheels.ca Driving at night, particularly on unlit roads, can be a nerve-wracking experience. Ford Technology is developing new lighting technologies that will enable drivers to more easily identify potential hazards, including pedestrians, cyclists and animals. Ford's Camera-Based Advanced Front Lighting System can widen the beam at junctions and roundabouts to better illuminate hazards that are not in the direction of travel. New Spot Lighting technology helps draw the driver's attention to pedestrians, cyclists and even large animals in the vehicle's path or even just off the road. Camera-Based Advanced Front Lighting System builds upon Ford's Adaptive Front Lighting System and Traffic Sign Recognition, which are already available in Ford vehicles, to provide drivers with improved visibility at roundabouts, stop, and give way or yield signs. The system also uses GPS information to better illuminate bends and dips on a chosen route. Where GPS information is not available the technology uses a forward-facing video camera mounted in the rear-view mirror base to detect lane markings and predict the road's curvature, using the information to illuminate the area more effectively. In a further evolutionary step, in those instances, the camera stores the information in the navigation system. When next the driver uses the same road again, the headlights adapt to the course of the road automatically to better light the way. Camera-Based Advanced Front Lighting System was developed at Ford's European Research and Innovation Centre in Aachen, Germany, and Ford expects the technology to be available for customers in the near term. Spot Lighting – currently in the pre-development phase with Ford engineers in Aachen – uses an infra-red camera in the front grille to simultaneously locate and track up to eight people and bigger animals, including larger dogs, at a range of up to 120 metres. The system can spotlight two hazards for the driver with a spot and a stripe on the road surface, illuminated by two special LED lamps next to the fog lights. The highlighted objects are displayed on the screen inside the car, marked in a red or yellow frame, according to the proximity of the object and the level of danger presented. |
Ford critic Donald Trump
David Shepardson, Washington — Billionaire presidential candidate Donald Trump — who criticized Ford Motor Co. for plans to build a new plant in Mexico — is an investor in the company's credit arm, a campaign filing Wednesday shows. In financial disclosures with the Federal Election Commission made public Wednesday, Trump said he holds between $600,000 and $1.25 million in investments in Ford Motor Credit and earned between $17,500 and $55,000 in interest. He also listed a capital gain of between $100,000 and $1 million from the sale of Ford Motor Co. stock. Last month, Trump threatened Ford with likely illegal punitive taxes if it proceeds with a new $2.5 billion Mexican plant that he said will "take away thousands" of U.S. jobs. Trump vowed to impose 35 percent taxes on imported Ford vehicles and parts coming from the new Mexican plant. At the time, Trump said he would call Ford CEO Mark Fields — whom he identified only as "the head of Ford" — to explain the "bad news." "Let me give you the bad news: every car, every truck and every part manufactured in this plant that comes across the border, we're going to charge you a 35 percent tax — OK? — and that tax is going to be paid simultaneously with the transaction," Trump said. "They are going to take away thousands of jobs. In April, Ford said it would add 3,800 jobs in Mexico as part of a $2.5 billion investment — on top of the 11,300 Ford already employs in Mexico. The investment will include a new engine plant and new transmission plant allowing for exports of engines to the United States and elsewhere. Ford has had operations in Mexico for about 90 years. Asked about Trump's criticism last month, Ford spokeswoman Christin Baker pointed to the Dearborn automaker's U.S. investments. "We are proud that we have invested $6.2 billion in our U.S. plants since 2011 and hired nearly 25,000 U.S. employees. Overall, 80 percent of our North American investment annually is in the U.S., and 97 percent of our North American engineering is conducted in the U.S.," she said. Under the North American Free Trade Agreement and existing U.S. tax laws, it is not clear how Trump could take such an action unilaterally. Nearly all major automakers already have major plants in Mexico, including Detroit's Big Three automakers. Singling out one new auto plant for punitive taxes would almost certainly not be legal under American law. Companies are free to build plants where they want. Automakers are bypassing the U.S. for new plants in part because Mexico has dozens of free trade agreements around the world, low wages, free or nearly free land on which to build and fewer regulatory hurdles. BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors and Fiat Chrysler Automobiles NV are among the automakers that have built or announced new plants or plant expansions — part of more than $20 billion in investments made or planned for Mexico since 2010. In addition to the Ford stock listed in the FEC filing, Trump also holds an investment in Toyota Motor Corp. credit worth between $500,000 and $1 million. He also reported capital gains of between $100,000 and $1 million from both the sale of General Motors Co. stock and Volkswagen AG through a U.S.-traded equity. He is an investor in Yahoo, Apple, John Deere, Boeing, Chevron, Mastercard, UPS, Costco, Walt Disney and dozens of other firms. Trump to visit border Donald Trump, provocateur of the Republican presidential race, now plans to go the Mexican border, a flashpoint in the primary contest ever since he declared that immigrants from Mexico are rapists and drug dealers. He will travel to Laredo, Texas, on Thursday, where he will hold a news conference at the border, meet members of the union that represents Border Patrol agents and speak to law enforcement officers, his campaign said. |
Ford and UAW begin
Michael Martinez Detroit — Ford Motor Co. and the United Auto Workers kicked off contract negotiations Thursday at Cass Technical High School as the threat of production moving to Mexico loomed over the talks. "Mexico continues to be an issue for us," UAW President Dennis Williams said during the ceremonial handshake event. "I want everything to be built in the United States, including tennis shoes." Ford in April said it was investing $2.5 billion in Mexico for a new engine and transmission plant. And earlier this month it said it was moving production of the Focus and C-Max out of Michigan Assembly Plant in Wayne in 2018; Mexico is the likeliest option. "We have to look at our overall business ... and how we can best improve overall profitability for the company," said John Fleming, executive vice president of manufacturing and labor affairs for Ford. "We look at how to best optimze the overall footprint. Mexico is part of that footprint, China is part of the footprint, Thailand is part of the footprint. We're going to continue to look at what's best for the global business, but also what's best for the North America business." Ford would not comment on where it was looking to move the Focus and C-Max. It said the announcement earlier this month was part of the company's normal product cadence and not related to negotiations. Both sides expressed optimism that Michigan Assembly Plant would not close when the products move in 2018. "We're looking for what products are the right products to go in there," Fleming said. "At the moment, closing a plant is not something we've got on the agenda." As Detroit's automakers enter negotiations with the UAW, they likely will use the threat of moving production out of the U.S. as a bargaining chip as they look to keep labor costs down. The Center for Automotive Research says average hourly labor costs in the United States — including benefits — are $57 at Ford, $55 an hour at GM and $48 at FCA. Honda Motor Co.'s cost is $49 an hour, and Toyota Motor Corp.'s is $48. Williams said he recently met with U.S. Secretary of Labor Tom Perez and President Barack Obama "about Mexico and what a problem it is" and Williams "has a plan" to help improve worker conditions there. A central part of negotitians will be the UAW's push to bridge the gap between the pay of its tier-one and tier-two workers. Veteran tier-one workers earn more than $28 an hour, while more recently hired second-tier workers earn up to $19.28 an hour for the same jobs. The union agreed to a lower-paid entry-level job classification in 2007, just ahead of the economic downturn. Partly because of that, automakers have hired thousands of workers. "There's some really important work ahead of all of us....we're very well-prepared," said Bill Dirksen, Ford's vice president of labor affairs. The ceremony had a positive feel, as both side talked about the strides they've made since the economic downturn of 2008. It was the first time a handshake event was held outside of a Ford facility, and the first time Ford and UAW negotiators from individual plants were invited. "We've made tremendous gains since 2007," said Jimmy Settles, vice president of the UAW-Ford department. Ford promised to hire about 12,000 hourly workers in the last negotiations. It hired more than 15,000. "I'm absolutely convinced that we'll continue to build, working together, a stronger Ford Motor Co. going forward," said CEO Mark Fields. Autoworkers' current four-year contracts expire Sept. 14. |
Ford recalling 8,000 vehicles David Shepardson, Washington — Ford Motor Co. said Wednesday it is recalling 8,000 new cars and SUVs because the parking brakes may not fully engage. The recall covers some 2015-16 Ford Explorer, 2015 Taurus, Flex, Lincoln MKS and MKT vehicles. The Dearborn automaker said it is not aware of any accidents or injuries associated with this issue. The recall includes 7,165 vehicles in the United States, 799 in Canada and one in Mexico. Dealers will inspect the vehicle and, if necessary, replace the parking brake control assembly. |
Health spending won't meet needs GLORIA GALLOWAY The independent office responsible for assessing the country's finances says limits imposed by the federal Conservative government on increases to health transfers will eventually make it impossible for provinces and territories to handle the costs of an aging population. The fiscal sustainability report released on Tuesday by the Parliamentary Budget Officer (PBO) looks at whether spending policies of the various levels of government will be viable 75 years into the future, given current economic and demographic predictions. While the report says the Canada Pension Plan and the Quebec Pension Plan can absorb what is expected to be a significant increase in the number of retirees over the coming decades, it says the provinces and territories will not be able to afford health care. "Subnational governments cannot meet the challenges of population aging under current policy," the PBO said. The federal government has been increasing health transfers to the provinces and territories by 6 per cent a year since the signing of a health accord in 2004. But Ottawa announced in 2011 that, after 2016-17, future increases would be tied to the growth in the nominal gross domestic product, which is a measure of real GDP plus inflation. With an aging population requiring medical care, the PBO report says health-care costs will increase significantly as a share of the GDP and the lower levels of government will be forced to foot an increasing share of the bill. "Provinces are responsible for health-care delivery," Melissa Lantsman, a spokeswoman for Finance Minister Joe Oliver, said in an e-mail. "Nevertheless, our government is increasing health funding at a higher rate than provinces are spending it. Record sustainable funding will reach $40-billion annually by the end of the decade." That is about the point when the PBO says the provinces and territories will be in the best financial position, after which, increasing health-care expenditures will force a long, steep slide toward deficits and, by 2034, their budgets will be chronically in the red. Premiers who met this month in St. John's called on the federal government to provide more money for health. Newfoundland Premier Paul Davis said the provinces and territories want Ottawa to increase the Canada Health Transfer to cover at least 25 per cent of their health-care British Columbia Health Minister Terry Lake told The Globe and Mail on Tuesday that the current system, in which the federal money is allotted on a per-capita basis, ignores the fact that some provinces have much older populations than others. "When an older province has higher health-care costs because we have older residents, that should be reflected in the Canada Health Transfer as a population-needs based approach," Mr.Lake said. The PBO report said some other recent federal expenditures should have little negative effect on the bottom line in the years to come. The universal child-care benefit, which was increased in this year's budget and resulted in the delivery of $3-billion in cheques to Canadians this week, will have only a minor impact on fiscal room because the cash transfers are not indexed to inflation, the report said. And, while the increase in the amount Canadians can put in a tax-free savings account will reduce government revenues, the PBO says those declines will be offset by increases elsewhere.The report also says the federal government is on track to eliminate its own net debt over the next 35 years. But, for the provinces, health-care spending will be a problem. Melissa Newitt, the national co-ordinator of the Canadian Health Coalition, an advocacy group for public health care, said the PBO report is more evidence that a new national health accord is needed. That accord, she said, should provide stable funding, set national standards and include a national drug plan and a national seniors plan. Opposition parties have been complaining for four years about the limits the Conservative government imposed on the health-care transfer. Irene Mathyssen, the seniors critic for the New Democrats, said the PBO report confirms that Conservative cuts to health-care spending will put significant pressure on the provinces. If the NDP forms the next government, Ms. Mathyssen said, it will work with the provinces to write a new accord. Hedy Fry, the Liberal health-care critic, agreed with the B.C. Health Minister that demographics should be considered in the health transfers. A Liberal government, she said, would take a collaborative approach with provinces and territories to find ways to maximize efficiencies and keep spending in check. |
Ford unveils new luxury
Michael Wayland, Ford Motor Co. is looking to raise the bar when it comes to the growing, profitable luxury pickup market. The Dearborn automaker on Tuesday announced the return of the F-150 Limited — the most-recent top-end version of its popular full-size pickup. The truck, which the company touts as its "most advanced and luxurious truck ever," features additional chrome exterior features, upgraded leather interior and a host of special "Limited" badging and technology features. "The F-150 Limited sets a new bar for what discerning customers should expect in a high-end truck," said Raj Nair, Ford group vice president, Global Product Development. "We're adding segment-exclusive technology, and features that improve productivity, convenience and capability with distinctive style." The 2016 F-150 Limited is expected to arrive in dealerships this winter. Pricing was not announced, but likely will top $51,585 — the starting price of the top-end F-150 Platinum. Ford first introduced a F-150 Limited model for the 2013 model year. "F-150 Limited surpasses the well-appointed Lariat, the Western-themed King Ranch and contemporary Platinum edition models," Ford said in a release. Industry analysts say the market for high-end pickups in the U.S. hasn't topped-out, even though average transaction price for large pickups, including full-size and heavy-duty models, increased 37.4 percent in the last decade to $42,103 in 2014, according to auto research and pricing website Edmunds.com. Without adjusting for inflation, that's nearly $10,000 more than the industry average last year, $16,500 more than a mid-size car and the highest growth of any mainstream segment in the U.S. since 2004. "I don't think we've hit the ceiling on trucks," said Edmunds.com senior analyst Jessica Caldwell. "The demand keeps growing for more expensive vehicles. There is definitely a status symbol of having the top-of-the-line Silverado or F-150." Pickups, which a decade ago often were no-frills and typically had fewer safety features than SUVs or cars, are now increasingly being used for other purposes as well as for work trucks. These more expensive vehicles are among the highest profit products for Detroit's Big Three automakers. "It isn't something that's a basic mode of transportation anymore," said Caldwell, who expects pickup prices to continue to grow. "It's definitely more of a symbol or statement of how well your business is doing, in the case of small business owners." The F-150 Limited comes months after Fiat Chrysler Automobiles NV announced its redesigned luxury 2015 Ram 1500 Laramie Limited starting at about $51,000. General Motors Co. also has its high-end Chevrolet Silverado High Country and GMC Sierra Denali ,which both start at nearly $50,000. The Limited comes standard with adaptive cruise control, active park assist, 360-degree camera system and remote tailgate release. The pickup also features the automaker's new SYNC3 with AppLink infotainment system and 3.5-liter EcoBoost V6 engine, which produces 365 horsepower and 420 pound-feet of torque. |
Flat Rock plant to steer Lincoln Continental's return
Michael Martinez, Lincoln's new Continental flagship sedan will be built at Ford Motor Co.'s Flat Rock Assembly Plant — good news for auto workers who learned last week that Ford was pulling production of its slow-selling Focus and C-Max from the nearby Michigan Assembly Plant in Wayne. Wednesday's announcement came just days before Ford formally begins contract talks with the United Auto Workers, whose negotiators are seeking assurances that American carmakers will continue building cars, and employing workers, in the U.S. It has been widely speculated by the UAW and others that the Focus could be headed to Mexico. The Dearborn automaker said its top-of-the-line Continental, shown as a concept car at this year's New York Auto Show, will go on sale in 2016 and will be built at the plant alongside its Mustang sports car and Fusion mid-size sedan. Jimmy Settles, vice president of the Ford-UAW Department, said the Flat Rock announcement followed "extensive discussions" between the union and Ford. "It goes without saying that anytime Ford, or any domestic automaker, commits to American manufacturing, it provides a win for our members, the American middle class, and communities all across this country," Settles said. The Continental announcement could be a goodwill offering to the UAW ahead of negotiations aimed at securing a new four-year contract this fall, according to Art Schwartz, president of business management consulting firm Labor and Economics Associates. "Ford just hit them with some bad news," Schwartz said. "Maybe this is a way of saying 'Hey, we're still partners.' Ford and the UAW have had a fairly collaborative relationship." While the new Lincoln will be built and sold in the U.S., its primary target is China, where the full-size sedan market is expected to grow. The Continental will enter a vigorously competitive top-luxury market whose rivals include Cadillac's new flagship sedan, the CT6. Production will begin late this year at General Motors Co.'s Detroit-Hamtramck Assembly Plant. The Flat Rock plant employs more than 3,100. A Ford spokesperson said the company plans to continue producing the Mustang and Fusion in Flat Rock. Stephanie Brinley, senior analyst at IHS Automotive, said the Continental likely will be built on the same platform as the Fusion, Edge, MKX and other vehicles. "It's a very familiar platform for Ford, which should allow them to execute a really strong program," she said. "A near-flawless launch should be possible." IHS expects the Mustang will remain the top-volume product in Flat Rock, while it predicts Ford will produce between 25,000-30,000 Continentals annually. The concept Continental shown in New York is extremely close to the production version planned for 2016. Ford discontinued the Continental name in 2002, and while it hasn't confirmed the production vehicle will use the name, executives have said they're very pleased with the positive reaction it's gotten. The car shown in New York looked dramatically different from any vehicle in the Lincoln lineup and is designed to become the new face of the luxury brand. Gone is the split-wing "bow wave" front grille design that's been around since the 1930s, replaced by a sleeker, cleaner front that emphasizes the Lincoln logo. Ford said the car will be powered by a 3-liter V-6. "The Continental is dramatic," Brinley said. "It does move the design language forward quite a bit and it has the opportunity to make quite a statement." Kelley Blue Book Senior Analyst Karl Brauer said the new Continental represents a significant change for Lincoln, which has struggled to find its footing in a crowded luxury market. "It will help validate Lincoln as a world-class luxury brand, and the plant that produces it enjoys increased prestige and visibility as a result," Brauer said. The Continental will replace the Lincoln MKS, which is made at Ford's Chicago Assembly Plant. Settles said the move will not result in any loss of jobs at the Chicago plant. Lincoln is coming off a year in which sales rose 15.6 percent in the U.S., its best year since 2008. Lincoln sales through the first six months of 2015 are up 5.8 percent to 47,112, mostly due to its Navigator SUV and new MKC crossover. Last year, Ford said it would invest $2.5 billion in Lincoln by 2020, and the brand hopes to triple its volume to 300,000 vehicles by that time. Last November, the brand launched in China with a handful of dealers, and hopes to expand to 60 by the end of 2016. |
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TORONTO – The United Steelworkers and Crown Holdings have reached a tentative agreement aimed at ending a 22-month strike at a beer can manufacturing plant in Toronto. The tentative agreement was reached Wednesday night with the assistance of the Ontario Labour Relations Board. The proposed contract will be presented to striking workers and submitted to a ratification vote during the weekend of July 18-19. Details of the agreement will not be released prior to the ratification vote. “I commend the members of Steelworkers Local 9176 and their negotiating committee for the incredible solidarity and character they exhibited throughout this prolonged struggle,” said Marty Warren, United Steelworkers Ontario Director. “I thank the Toronto and York Region Labour Council, the Canadian Labour Congress and the many other unions, community groups and residents who provided tremendous financial and moral support to these working families over the last 22 months,” Warren said. ********************************************* After 22 long months, the strike against Crown Holdings is over. It took two long winters of constant picketing, political action, and hard work by the entire labour movement to defeat the company’s intention to bust the union. The members of USW Local 9176 vote this weekend on a new contract. Only one person crossed the picket line during the entire strike. The workers’ courage through this whole time was absolutely inspiring. Marty Warren, Director of USW District 6 thanked the Labour Council and the many unions that provided support for the strikers. Together we helped keep up the pressure on the government to bring closure to this long dispute.
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Harper government tries to Federal Finance Minister Joe Oliver says Ottawa won't provide administrative support for retirement scheme. Robert Benzie With an election looming, the federal Conservatives have fired a salvo at Ontario's Liberal government in a bid to derail Premier Kathleen Wynne's new provincial pension plan. In a letter leaked to the media before it was sent to Queen's Park, federal Finance Minister Joe Oliver said Ottawa won't provide administrative support for the retirement scheme because the Tories disagree with it. Ontario's proposed pension plan would "take money from workers and their families, kill jobs and damage the economy," Oliver, a Toronto MP, wrote with an eye toward the Oct. 19 election. "For these reasons, we will not assist the Ontario government in the implementation of the ORPP," he said, referring to the Ontario Retirement Pension Plan, Wynne's cornerstone election promise in the June 2014 campaign. "Administration of the ORPP will be the sole responsibility of the Ontario government, including the collection of contributions and any required information." Ontario Finance Minister Charles Sousa said it was "incredibly disappointing that the federal government is refusing to recognize the need for people to achieve a secure retirement future." "The ORPP is a central part of our government's platform that is supported by a majority mandate from Ontarians," Sousa said in a statement Thursday. "Our proposal to use existing infrastructure would have ensured cost-effective delivery of the ORPP, while minimizing compliance costs for employers," he said, noting the Tories' roadblock will cost the public money. "Like other arrangements between the federal and provincial governments, our expectation was to enter into a service agreement with the CRA or Service Canada — something that would have tremendous advantages for businesses, and employees," Sousa said. "As well, Ontario offered to compensate the federal government for any additional costs through a fee-for-service agreement," he said. "The federal government's refusal to work with Ontario puts politics ahead of practicality. It is especially disappointing given that co-operation would have resulted in lower costs to business." Sousa stressed the ORPP is "moving forward" regardless of Ottawa's brinkmanship. Wynne pitched the Ontario scheme because Prime Minister Stephen Harper refused to beef up the Canada Pension Plan, which pays out a maximum benefit of little more than $12,000 annually. |
Software firm suing Ford Michael Martinez, Southfield — An attorney for Texas-based software company Versata — which is suing Ford Motor Co. for more than a billion dollars for allegedly stealing trade secrets — said at a press event Thursday his client plans to take the case to trial and win. "We intend to prove that our software and our design was stolen, stolen through deceitful activities, and that now we're watching a coverup unfold," said Lanny Davis, attorney for the software company. The software in question can gather every possible configuration of an automobile — engine sizes, optional features, etc. — and determine which ones would be unfeasible (for example, a car with a sunroof couldn't including rear air conditioning ducts on the roof). Versata says it's invested about $300 million to develop the technology and that it saves Ford significant time and money. Ford began working on its own software in 2010, Versata says. Versata alleges that at a meeting in December 2014 in which it believed its contract with Ford would be extended, Ford told Versata it would terminate the contract since it had developed its own version of the software. Versata alleges between 10-15 Ford employees who worked on its new technology also knew of and worked with Versata. "We clearly have discovered numerous bad deeds that we believe warrant illumination," Mike Richards, president of Versata, told reporters Thursday. "I'm completely baffled by what we've observed." The automaker issued a statement saying: "Ford's patented software does not use or infringe any Versata intellectual property and Versata has provided no basis for their claims against us. We are confident that we will ultimately prevail in this case and we look forward to the opportunity to present our evidence at trial." Versata has worked with Ford on the technology for 15 years and currently works with FordDirect and Ford's information technology department, but Richards says this lawsuit is likely to sour its relationship and hurt its business with the automaker. Versata also works with other automakers. Versata in May filed a lawsuit against Ford in Texas and issued an injunction requesting Ford to immediately stop using the software in question. Ford is requesting a trial in Michigan. Verstata expects a decision on where the trial will be held within the next few months. |
Home care for Ontario ELIZABETH CHURCH Ontario's home-care system is changing how it delivers care to some clients, a move that will see an array of non-profit agencies take responsibility for services to tens of thousands of seniors who rely on regular support to remain in their homes. The change to how some personal support is delivered in Canada's largest province is the latest response from a cash-strapped public system that is being asked to deliver the kind of medical care in the community that was once reserved for the hospital ward. As the needs of home-care clients become more complex, those who rely on help with bathing or with medications and meals – the very people who once made up the bulk of those receiving home care – are being squeezed out by provincial agencies struggling to balance their budgets. Supporters of the switch say it will free up staff at the province's 14 Community Care Access Centres (CCACs) – the local government agencies that co-ordinate home care in Ontario – to focus their attention on higher needs clients, while making the most of non-profit community organizations such as the March of Dimes. The shift makes better use of medical expertise and limited financial resources, they say, similar to pharmacists giving flu shots rather than doctors. "This is just putting the client where the client should be," said Deborah Simon, the chief executive officer of the Ontario Community Support Association, which represents hundreds of non-profit agencies. "Our organization has lobbied for years that we can do this." Critics say the new policy introduces another layer of complexity to a provincial system that has long been criticized as overly bureaucratic and difficult to navigate. In practical terms, it means many seniors will face a choice between changing the person who comes into their homes each week, often to help with intimate tasks such as bathing, or paying out of pocket to keep their care provider. In a three-month investigation, The Globe and Mail talked to dozens of previous and current patients as well as front-line staff, community groups, unions, for-profit and non-profit home-care providers and industry organizations, and found that Ontario's home-care system is plagued by inconsistent standards of care, byzantine processes and a troubling lack of transparency. The Globe also found that, in an effort to save money, some CCACs have been handing off lower-needs clients to the non-profit sector in an ad hoc fashion for years, long before last summer's regulatory change. Trudie Davies was told in the fall of 2012 that her weekly services would be cut from two CCAC-funded baths to one at her apartment in Oakville, Ont. The arthritis-wracked widow, now 83, was offered a second weekly bath from a local non-profit organization called Links2Care. Reluctant to invite a new worker into her home, Ms. Davies, with the help of her son, Glen Davies, appealed the cut to a quasi-judicial panel called the Health Services Appeal and Review Board. The family agreed to drop the appeal in the spring of 2013 when the Mississauga Halton CCAC allowed Ms. Davies to keep her two CCAC-funded weekly appointments because, by that time, Links2Care had a waiting list and could not provide help to Ms. Davies. In the course of the abandoned appeal, Mr. Davies obtained an Oct. 1, 2012, internal memo from the CCAC's then-vice-president of client services that described how "financial pressures" were forcing the agency to direct lower-needs clients to non-profit agencies. Despite that policy being in place for two years, the memo's author noted that nearly 700 mild-needs clients who remained on the organization's roster still had to be "navigated" out of the CCAC system and into the non-profit sector. This spring, the CCAC cut Ms. Davies's weekly baths from two to one. Mr. Davies, certain another appeal would be futile, agreed to pay out of pocket for the second weekly visit of his mother's long-time caregiver. "What's so disturbing about all this is I don't know what vulnerable people do who don't have someone to advocate for them. The bureaucracy is impenetrable," Mr. Davies said. The local CCAC said that "for many patients, receiving care from a local community-based agency works well." Reducing Ms. Davies's services to one bath a week is "consistent with our CCAC's service guidelines," a spokeswoman said by e-mail, adding that Ms. Davies was given six weeks to adjust to the change and allowed to keep the caregiver with whom she had formed a close bond. Sherry Kerr heads up Participation House, a small non-profit agency in Brantford, Ont., that was asked last fall to take part in the recent changes enabled by last year's regulations. Her agency has hired and trained staff and is expecting to more than double its caseload with the arrival of as many as 120 new clients. The transition has not been as straightforward as first expected, and the agency has responded by building in extra time to each transfer so that elderly clients have a chance to adjust and say goodbye to care providers who have been in their homes for five or six years. "At first, as a team we thought we would do it quickly, but we didn't understand the number of people who have had the same caregiver for so long," Ms. Kerr said. So far, two clients have refused to make the change, she said. Under the existing system, a dollar marked for home care by Ontario's Ministry of Health and Long-Term Care must pass through one of 14 Local Health Integration Networks, or LHINs, which then send it to the corresponding CCAC for the region. That dollar is then passed on to the contracted care provider, which actually delivers the service. Until the change, local CCACs alone were responsible for assessing clients and case management, as well as contracting out care to third-party service providers. Now, the province's 14 LHINs can directly send money to community support service organizations, such as Participation House, to provide personal support in the home, freeing up the CCAC to focus on higher needs clients. Ontario's home-care system is already criticized as highly fragmented, and switching over the care for stable clients with low or moderate care needs has the potential to add even more groups to the mix. Who manages waiting lists, what to do with clients as their needs increase, and how best to keep track of those in the system are all issues that will need to be tackled. The provincial government, for its part, envisions a seamless system – whether care is managed by a local CCAC, as it has been in the past, or a community non-profit that will now receive provincial dollars to deliver home care. "There is no 'wrong door' to go through for clients to receive information or to access one or more home and community services," states a provincial policy document explaining the 2014 regulation change. Stacy Daub, CEO of Toronto Central CCAC, argues adding more entry points to the system increases complexity. "This idea of 'no wrong door' has made the system more difficult," she said in an interview. "Why do we need a million doors?" One early attempt to shift clients to community-care agencies that was later abandoned shows just what can go wrong. Last fall, the Champlain CCAC, which oversees home care in the Ottawa area, attempted to move individuals identified as stable and having mild to moderate needs over to seven local non-profit agencies as a way to address a funding shortfall. After that effort was stopped, a follow-up survey found that just 17 per cent of those identified to make the switch did so. Another 62 per cent turned to friends and family for help and 21 per cent purchased care. Chantale LeClerc, chief executive officer of the Champlain LHIN, stresses that all clients were given the option of moving, even if they did not. "I think it was successful to some degree in the sense that many people did decide to move to the community sector," she said. At Mills Community Support in Lanark County, west of Ottawa, Clem Pelot, the director of community supports and services, says he has no idea what happened to seven of the nine clients they were expecting to get. "We were gearing up to hire staff, do new scheduling, but they never came," he said. Only two made the switch from the CCAC's care, and his organization had to give back to the LHIN the funds it had received to care for the other seven. In the Hamilton area, the local LHIN has earmarked $4-million this year for seven non-profit agencies to provide personal support services. Those groups range from large national organizations such as March of Dimes to local non-profits such as Brantford's Participation House. Officials stress that there is no turning back. From now on, this is the way home care will be delivered, they say, so that CCAC case managers can focus on servicing higher needs patients who would otherwise occupy expensive hospital and long-term care beds. "We don't see it as another layer," said Rosalind Tarrant, director of access to care for the Hamilton, Niagara, Haldimand, Brant LHIN. "We are working together as one sector." |
Ford fixing Edge crossovers Michael Martinez, Ford Motor Co. on Tuesday said it's attempting to fix about 29,000 2015 Edge crossovers due to the possibility of water entering the cabin. The Dearborn automaker has not issued a formal recall, but has notified about 19,000 customers with vehicles built at its Oakville Assembly Plant in Canada prior to April 28. Dealers have been notified to inspect and fix an additional 10,000 vehicles still on lots before they sell them. Water could seep through a body seam in the cabin, and dealers can fix the issue by sealing the seam. Ford said the issue could take about a day to fix, but would take more time if the vehicle has gotten wet. The Edge went on sale in March. |
Good times, big expectations Daniel Howes, Profitability, smiles and handshakes guarantee nothing. As the United Auto Workers and the Detroit automakers this week formally open national contract talks, the rite aiming to manage prosperity with optimism also carries seeds of potential confrontation. You want evidence that pieces of Old Detroit still exist in the post-meltdown model? This is it. Instead of ensuring some measure of stability and good times, fat U.S. profits are challenging a status quo forged from restructuring, bailouts and labor-management cooperation imposed by the federal government. UAW President Dennis Williams is right: This won't be easy. First, less than two weeks before talks begin, Ford Motor Co. confirms it will end production of Focus compacts and C-Max hybrids at its Wayne Assembly plant in 2018. Unless and until a new product line is assigned to the union shop in Wayne, the most likely beneficiary will be Ford's operations in Mexico. In the UAW lexicon, "made in Mexico" remain fighting words. Eight years of retrenchment and reinvestment in Michigan (thanks, in part, to massive tax incentives extended in the waning days of the Granholm administration) look to be imperiled by a) the de facto end to the the state incentives and b) the press to more closely align profit margins with labor costs. Eight years after former CEO Alan Mulally agreed to build compact cars in Wayne in exchange for a competitive labor agreement, Ford clearly is moving to build smaller-margin products in lower-cost markets like Mexico and reserve higher-margin products for sites closer to home. The implication is clear: Company bargainers are prepared to use their Mexican operations as leverage to exert downward pressure on a labor-cost gap they know they cannot close in a single contract. But they want to show progress. Second, Fiat Chrysler Automobiles NV CEO Sergio Marchionne continues to press his case for a merger with General Motors Co., irrespective of GM's flat rejection of the idea. Any such transaction would have profound implications for Metro Detroit and the union, whose support would be necessary to consummating any deal. The merger pot-stirring adds a layer of complexity to the contract talks, presumably because Marchionne likely would tie investment commitments and substantial movement in second-tier wage rates to union support for a possible play for GM. Third, a GM led by CEO Mary Barra seems determined to wear the white hat in these negotiations. At Monday's "handshake" marking the official start to bargaining, she said GM would "truly listen" to the UAW. GM sweetened profit-sharing checks earlier this year; continues to announce reinvestments in U.S. plants; confirmed that the automaker has "no plans" to abandon its small-car project at its Lake Orion facility. How all of this good cheer will affect negotiations, if at all, remains to be seen. GM clearly is opening talks on a positive note, even as Marchionne is likely to work his longstanding relationship with Williams and Ford is likely to rely on its seasoned executive team and its deep ties to UAW-Ford Vice President Jimmy Settles. Fourth, UAW members don't just want base-wage increases; they expect them. Sweetening profit-sharing formulas or enriching signing and lump-sum bonuses are not likely to be sufficient to ensure ratification — not when the three companies have booked North American profits totaling $67.7 billion during the four years of the existing contract. That combined number will get even larger when the companies release their second-quarter financials in the coming weeks. As symbols, facts and the dynamics of national bargaining go, profits like that in the United States — the only market that matters when it comes to UAW compensation — cannot be overlooked. Fifth, health-care costs continue to grow at alarming speed, increasing the likelihood that company bargainers will push for union members to pay a higher percentage of their annual health care costs. Doesn't much matter that white-collar salaried employees at all three companies already do. Cadillac-style health care is a core expectation among the rank-and-file. A push to increase deductibles, or boost premium-sharing, in anything beyond token amounts would be fiercely resisted, especially at a time of fat profits and an expanding market. This is new territory for Detroit's automakers and their major union. Six years after the global financial meltdown pushed the industry to the brink of collapse, prosperity is back. Managing it is tough. |
Health care costs key Melissa Burden and Automaker spending on health care for hourly workers and their families likely will top $2 billion this year. In just the past four years, it's grown 45 percent for Ford Motor Co. and 77 percent for Fiat Chrysler Automobiles US. The United Auto Workers has been resistant to giving up the gold-plated health care coverage it has for more than 135,000 hourly workers. But with surging costs, Detroit automakers are looking for relief in contract negotiations that officially kick off Monday between General Motors Co. and the UAW. UAW hourly workers enjoy some of the best health care benefits in the country: There are virtually no premiums or deductibles and minimal co-pays for doctor visits and prescriptions. Two-tier workers have higher deductibles. That comes at a high cost. Ford says its health care cost for hourly employees is about $800 million this year — up from $550 million in 2011. FCA says it will pay $615 million this year, compared to $347 million it spent in 2011. GM reportedly spent $665 million on health care for hourly employees and families in 2011. The automaker would not say what its current spending is, but said its increases are "on par" with Ford and FCA. Health care is a "go to war issue" for the UAW as it seeks to maintain or expand benefits without adding more cost-sharing, said Kristin Dziczek, director of the Industry & Labor Group with the Center for Automotive Research. But the automakers see it differently, Dziczek said during a recent event in Detroit. "They need to cut the cost of their single most expensive benefit, and they think that people who have skin in the game make different decisions about their health care," she said. "They're going to push for some cost-share," she added. "And that's going to be a hard fight." Health care costs are not the only top issues the UAW and automakers will hash out over the next few months ahead of the current contract expiring Sept. 14. Others include pay raises for tier-one workers who haven't had one in a decade; bridging the pay gap between tier-one and tier-two workers; and securing product commitments for U.S. plants instead of Mexico. Labor experts say challenges to the UAW's health care coverage could be a strikeable issue. GM and FCA workers have the ability to strike for the first time since the 2007 talks; the UAW gave up that right for the 2011 talks as a condition of GM and Chrysler's government bailouts. "I doubt if it's untouchable; we're not the only ones putting demands on the table," Jimmy Settles, vice president of the UAW-Ford department, said about health care in a recent interview. "There's always ways to do things better." UAW President Dennis Williams last month told reporters he is considering creating a pool for active workers to help reduce overall health care costs, similar to the program it has for retirees. "The more people that pool together in this health care system, the more leverage you have against institutions such as hospitals, clinics and insurance companies, and that's the focus right now," Williams said. "The fact of the matter is health care is very important to corporations, as it is to our members. The healthier the employee, the more productive the employee is." Beginning in 2018, Detroit automakers will be on the hook for the so-called Cadillac tax, a 40 percent excise tax on company-sponsored health plans as part of the Affordable Care Act. Employers will be taxed on health coverage that costs more than $10,200 for individuals or $27,500 for a family. FCA said its average health care cost for a tier-one employee is $18,000 a year and is less for entry-level workers, though FCA expects new hires will cost just as much in the future. Currently, FCA hourly workers pay about 6 percent of costs; that compares to FCA salaried employees who pay about a third. Ford spends an average of $15,000 on each hourly employee per year for health care. Ford hourly workers pay between 5 percent and 10 percent of their total costs, the company said. The average person in the United States pays nearly 29 percent of their health care costs a year, or $4,823, according to a Kaiser Family Foundation survey. It found premiums for company-sponsored health coverage hit $16,834 last year. "We look forward to discussing many different options with our UAW partners that will allow us to have a fair and competitive labor agreement, and to provide jobs and investment here in the U.S.," Ford said in a statement. An FCA spokeswoman declined to comment on whether FCA hopes to have hourly workers pick up a bigger share of costs. A GM spokesman said in a statement, "Health care cost is one element of doing business that continues to grow for all employers. We're committed to working with our UAW partners to continue delivering benefits our employees value, while improving the long-term competitiveness of the company." The UAW VEBA (Voluntary Employee Beneficiary Association) is a health care trust used by Detroit's Big Three automakers to fund health care for about 750,000 UAW hourly worker retirees and dependents. The trust, created as part of UAW talks with carmakers in 2007, reduced the companies' labor cost by about $15 an hour, according to Labor and Economic Associates. Ultimately, Dziczek said she thinks the automakers and UAW will agree to put active employees into a pool like they've done with retirees in the VEBA — or possibly use the VEBA. "Your health care costs don't come from a little bit from everybody. There's a little bit from everybody, and there's a few people who are very costly to manage," Dziczek said. "And if you help those folks, make sure they take their medications, make sure they see their doctors, make sure their doctors are talking to each other, you end up with less hospitalizations and less chronic disease and problems that cost a lot of money. |
Top 7 issues in UAW negotiations Melissa Burden, Bargaining talks between automakers and the United Auto Workers officially begin in the coming days as they seek to negotiate a four-year contract for more than 135,000 hourly workers at General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles US. GM CEO Mary Barra, UAW President Dennis Williams and other company and union leaders will meet at 11 a.m. Monday at the UAW-GM Center for Human Resources in Detroit to officially kick off negotiations. Fiat Chrysler Automobiles and the UAW meet Tuesday, and Ford and the UAW will kick off bargaining July 23. The union's current contract expires Sept. 14. Top issues for the union and automakers are: ■Pay increases for veteran tier-one employees: Veteran hourly workers have not had a wage increase in as long as a decade and securing a base wage increase is among key goals for the union. Automakers, if they agree to it, may try to keep the raise low enough that hourly wages remain less than $30 an hour. ■Bridging the pay gap between tier-one and tier-two employees: The UAW wants to bridge the gap between tier-one workers, who earn more than $28 an hour, and more recently hired tier-two workers, who can earn up to $19.28 for doing the same work. FCA employs the most entry-level workers — estimated at more than 40 percent — while GM has less than 20 percent and Ford is at about 28 percent. ■Capping percentages of two-tier workers: Companies would like to keep and expand use of tier-two workers, agreed to in the 2007 contract, because it helps lower labor costs. They've hired thousands of new workers because of it. But many in the union want to end the two-tier system. It's possible caps would be set for percentages of entry-level workers at FCA and GM (unlike Ford, they don't have caps on the percentage of tier-two workers now). Or the companies and union could agree to do away with the two-tier over several years. ■Securing vehicle commitments for U.S. plants: Last week, the UAW said the Ford Focus will shift small car production from the Michigan Assembly factory in Wayne after 2018 to a plant outside the United States. Lower wages, an improved workforce and free trade agreements entice automakers to move or add work in Mexico. The union wants to secure new jobs in the U.S. and as many vehicle commitments to U.S. plants as possible. ■Profit sharing: The union wants to continue the benefit, which has poured thousands of dollars into workers' pockets as companies have turned profits. The automakers generally are on board with continuing the practice because they only pay it in good times. ■Controlling health care costs: Automakers have seen huge spikes in annual health care costs for hourly workers who enjoy some of the best benefits in the country. They are hoping workers will pick up more of the cost. Williams said he is considering a health care pool to help control costs. ■Reducing overall labor costs: Automakers, particularly Ford and GM, want to shave as much off their hourly labor costs (which are higher than FCA and Japanese automakers) as possible. The Center for Automotive Research says average hourly labor costs — including benefits — are $58 an hour at GM, $57 at Ford and $48 at FCA. Honda Motor Co. in the U.S. has a cost of $49 an hour, followed by Toyota Motor Corp. at $48. |
Fiat Chrysler CEO fires GREG KEENAN Ontario risks reducing its competitive position in the auto industry even further with policies such as a provincial pension plan and a cap-and-trade system for pollutants, Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles says. "These are all things that add cost to the running of an operation," Mr. Marchionne told reporters Friday after speaking at a conference in Toronto. He made his comments after sitting beside Ontario Premier Kathleen Wynne during the conference luncheon. "This is not what I would call the cheapest jurisdiction in which to produce," he added during a question-and-answer session after the luncheon. His comments come as Ms. Wynne's government and the federal government seek to land new automotive investment – and retain existing assembly plants – amid a flood of new spending by auto makers in Mexico. The governments recently appointed former Toyota Motor Manufacturing Canada Inc. chairman Ray Tanguay as a special adviser on the auto sector to come up with ideas to help Ontario attract new automotive investment. One of the actions Ontario could take, Mr. Marchionne said, is to create a mini Silicon Valley to develop ideas and startup companies that could develop new technologies. "Let the kids run," he said. "Give them the toys and let them play." Fiat Chrysler Automobiles NV operates two vehicle assembly plants in Canada, one of which was the recent recipient of about $2.6-billion in new investment to build a new generation of minivans, one of the products that has generated billions of dollars in profit for Chrysler's North American operations since the early 1980s. Mr. Marchionne noted that the Windsor plant can produce close to 400,000 vehicles annually and if there's $1,000 of costs built into those minivans that isn't found in other jurisdictions, then they're not competitive. "It's a very large number," he noted. "It will drastically change your ability to retain capital." The costs to FCA Canada of the cap and trade system and the potential addition of another pension plan aren't known yet, Mr. Marchionne said, but he pointed out that it makes little sense to add another pension system to the existing defined benefit plan that already exists for unionized workers represented by Unifor at the company's manufacturing plants in Ontario. Ms. Wynne was "incredibly responsive," Mr. Marchionne said. "I think we had confirmation that the argument is not falling on deaf ears." What has so far fallen on deaf ears is a plea the Italian-Canadian executive made in April for the auto industry to consolidate in part to help reduce the cost of new environmental technologies and provide a decent return on capital to investors. FCA has approached General Motors Co. and other unnamed auto makers and received several rejections of proposals – at least in public. A combination of FCA and GM makes the most sense, Mr. Marchionne said Friday, noting that he outlined his proposal in a three-page letter to GM CEO Mary Barra, who has said the GM board of directors considered the idea but declined. Those two companies combined would generate the highest level of savings of any of the combinations FCA officials examined, he said. The auto industry's destruction of capital is one reason why such technology giants as Apple Inc. and Google Inc. likely won't make their own vehicles, he said. "Don't overestimate Google's interest, he said. "These are very smart people."
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Ford's Wayne plant cuts vault Michael Martinez, Ford Motor Co.'s decision to end production of two slow-selling models at its Michigan Assembly plant in Wayne, confirmed Thursday, signals the critical role Mexico is likely to play in high-stakes wrangling with the United Auto Workers. The Dearborn automaker said it was reviewing "several possible options" for production of the slow-selling Focus compact and C-Max hybrids, which would end in Wayne in 2018. But in a bulletin handed out to UAW members at the plant, Local 900 Chairman Bill Johnson said production of the Focus would move "to a location outside of the United States," most likely Mexico. The move comes days before Ford, and its crosstown rivals, are set to begin national contract talks with the UAW. A key issue for Ford, as well as General Motors Co., will be closing their all-in labor cost gap, executives say, and one of the leverage points in bargaining and contract ratification is expected to be the real threat of moving some production to Mexico. Ford and GM both are investing heavily in their Mexican operations, partly to exert pressure on the UAW to hold the line on labor costs and partly to take advantage of lower wages and more favorable trade agreements. In April, Ford said it would invest $2.5 billion in Mexico for two engine and transmission plants, creating 3,800 jobs. "I think Ford has a trump card in their hand as they walk into negotiations," said Dave Sullivan, manager of product analysis with AutoPacific Inc. "It sends a message that now the UAW has to negotiate for jobs and (Ford) can close a plant and move it to another, lower-cost facility." Ford said in an emailed statement it is "actively pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with UAW leadership" as part of contract bargaining. The company declined to elaborate. Jimmy Settles, vice president of the UAW-Ford Department, said in a statement that the union is "extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule." The 5-million-square-foot plant employs about 4,700, according to Ford's website. In April, Ford said it would cut a shift at Michigan Assembly amid slumping sales for small cars, electrics and hybrids. The Dearborn automaker started to indefinitely lay off 673 hourly employees and 27 salaried employees on the "C Crew" at the plant June 22. Michigan Assembly got new life after the industry meltdown in 2008-09, a result of former CEO Alan Mulally's pledge to the UAW to bring new production to Wayne in exchange for a competitive labor agreement. Under terms of a $5.9 billion loan from the Energy Department, Michigan Assembly received a $550 million overhaul. Its 4,700-member workforce builds the Focus, Focus Electric, Focus ST, C-Max Hybrid and C-Max Energi. As part of that investment, Ford was awarded a $123 million state tax credit for the facility, in addition to $15.3 million from the city of Wayne, a $30 million brownfield tax credit and a $6.4 million state and local tax capture. In 2010, Ford was awarded a $10 million brownfield tax credit to redevelop the Wayne Stamping Plant, which is part of the facility. It worked, for a while. But comparatively low gas prices and booming demand for larger crossover vehicles are taking their toll. Sales of the Focus are down 3.2 percent so far this year; C-Max Hybrid sales are down 16.9 percent. "That's just the nature of the market right now," said Michelle Krebs, senior analyst with Autotrader.com. "The American car buyer doesn't really want cars, they want crossovers and sport utilities." A new model of the Focus is expected to come out in 2018, according to a recently published "Car Wars" report by Bank of America Merrill Lynch analyst John Murphy. He expects a new C-Max in 2019. The Focus is also built in China, Argentina, Germany, Russia, Thailand, Vietnam and Taiwan for overseas markets. The C-Max is also built in Germany. Until 2005, the Focus hatchback was made at Ford's assembly plant in Hermosillo, Mexico. In January, President Barack Obama came to the plant to tout the resurgent American automotive industry, even as the plant was closed that week because of lagging demand for its small gasoline-powered and hybrid cars. Ford made the decision to close the plant to reduce the supply of small cars before the White House approached the company about holding the event. Securing vehicles for specific plants will be among top goals for the UAW during upcoming talks, said Kristin Dziczek, director of the Industry & Labor Group for the Center for Automotive Research, during a CAR event last month in Detroit. She said Mexico is the biggest competitor now for UAW work. "The job security is now product-based," she said. "They're going to want to see product commitments and investment commitments, business case dependent as they always are. I think we'll be looking at some more product plans coming out in the negotiations this fall." In contrast to Ford's Wayne announcement, GM has spent the past few months announcing plans to invest $5.4 billion in U.S. plants over three years, creating 650 new jobs. GM, which builds the only subcompact in the U.S., the Chevrolet Sonic, recently announced about $400 million in investment at its Orion Assembly Plant in Orion Township for two new products: the Chevrolet Bolt all-electric car and another new GM vehicle. City officials from Wayne spoke with Ford on Thursday, said Peter J. McInerney, the city's Community Development director. He said the city did not have an immediate comment, given the issue will be negotiated. Ford's Wayne plant is the largest employer in the city of more than 19,000. Other big employers include Wayne-Westland Community Schools and Oakwood Hospital Wayne. A closure of the plant would hurt the city's tax revenue and employment base, among other issues. U.S. Rep. Debbie Dingell, D-Dearborn, said she was upset by Ford's decision to shift small-car production out of Michigan — and suggested it could be moving out of the country in part because of Congress' failure to address currency manipulation. She said until Congress acts on currency manipulation, "we're going to start seeing more jobs going to Mexico." Profit margins on compact vehicles is small, and she said Ford told her "they've got to make decisions based on where the profit is. We can't afford to have our small-car production and the jobs it creates going overseas." |
Is 'New Detroit' touted Daniel Howes, Ever since two of Detroit's three automakers emerged from bankruptcy six years ago, this town's eponymous auto industry has been trumpeting its model of new. It's newly profitable at home, thanks to tough restructuring requiring shared sacrifice. Its metal is newly designed and desirable. Its relationship with organized labor is newly pragmatic and cooperative, alleged evidence of enlightened management and union leadership. After decades of "going out of business," as former Ford Motor Co. CEO Alan Mulally often said, Detroit automakers and the United Auto Workers are running according to normal business principles, hewing to the basic laws of economics. Gone for good is the peculiar Detroit version skilled at destroying enormous amounts of capital, right? Starting next week, both sides get the opportunity to show just how new that New Detroit really is. For the first time since 2007, national contract talks will take place without the specter of imminent financial collapse or the bullying of a federal government protecting its taxpayer-funded bailout and driving its environmental agenda. The stakes could be higher, like they were in 2008 and 2009, but the symbolism could not be. Investors and bureaucrats, customers and employees, will be looking for evidence that the bad, old days really are dead and buried. Or whether they aren't, precursors to more pain in the next downturn. Proof will be in what both sides do in bargaining between now and mid-September, not increasingly heated rhetoric as the deadline nears, union members grow anxious and some take to social media in ways they could not during the '07 talks and before. If there's a wild card in this year's talks, its the power of Facebook and Twitter to turn rumor into fact. In seconds, as UAW leaders have repeatedly warned their own bargaining teams, old information and discarded proposals overheard at the dinner table or in a union local office can be spread by anyone with a smartphone, an iPad and the urge to emote. Expect that to fuel more than a few media frenzies over the next few months. A process shaped for decades by strategic leaks from both sides, a solid understanding of the industry and old-fashioned relationship building will be forced to contend with information flows it cannot easily control. There are other risks and potential flashpoints as both sides encounter something else entirely new: managing prosperity, not decades of decline, in their home market. A welcome change, that, but it will not be easy to meet the expectations of various constituencies, chiefly UAW members and Wall Street. Looming will be unresolved product allocation decisions for key plants, such as Ford's Michigan Assembly in Wayne and Chrysler's trademark Wrangler plant in Toledo; the threat of investment in Mexico as bargaining leverage over sites in the States; and global instability in places like Europe and China that could alter expectations for the booming U.S. market. Success carries its own cost. Even as Ford, General Motors Co. and FCA US LLC's Chrysler unit booked a combined $67.7 billion during the life of the four-year contract expiring in September — an enormous total, considering the troubled arc of the past 15 years — GM and Ford, in particular, still lag the all-in labor costs of FCA and their Japanese rivals. The tension: GM and Ford need to make progress on closing the cost gap, even as UAW bargainers will be pushing to "bridge the gap" between the hourly rate earned by so-called legacy employees and second-tier employees who get substantially less pay for doing the same jobs. Something will have to give, and the smart money is on the automakers recognizing that they cannot expect new, four-year deals to be ratified without base-wage increases — most likely different percentage increases — for both groups of workers. None of this will happen in a vacuum. Despite the positive change of the past six years, despite the profits and product plaudits, Detroit's two largest players enter the talks trailing most of the industry in all-in labor costs. FCA CEO Sergio Marchionne and his boss, FCA Chairman John Elkann, are openly lobbying for a partner to help them navigate a fraught future. The UAW, under President Dennis Williams and a mostly new crew of vice presidents, faces a delicate balance. They aim for a bigger chunk of profits for their members without a confrontation that would sully a carefully cultivated image as a "mature" labor union, as one insider said, and would complicate efforts to organize auto plants in the South. This is a test of a New Detroit. Here, the actions of management and labor should demonstrate an understanding that hyper-competition is a fact of life to be continually managed — and never ignored. |
Ford's China sales fall Michael Martinez, Ford Motor Co. on Wednesday said its sales in China fell 3percent last month compared to the same month last year as demand continues to cool there. The Dearborn automaker said it sold 83,506 vehicles in China last month, and has sold 543,488 vehicles there through the first half of the year, spurred by the sale of new models like the Kuga. Ford said its China sales are flat through the first half of the year. "Our sales for the first half of the year were steady in a weakening industry," John Lawler, chairman and CEO of Ford Motor China, said in a statement. "We expect to see a stronger second half as new products we've been launching continue to build momentum and as we launch additional products, including the new Ford Taurus, which has been uniquely designed to cater to the needs and demands of Chinese consumers. We are pleased that China's discerning car buyers continue to choose Ford and we are committed to bringing them Ford's high-quality, safe, smart and fuel-efficient global portfolio of vehicles." Changan Ford Automobiles, Ford's passenger joint car venture, sold 394,987 vehicles through the first six months of 2015. Its June sales were down 3 percent to 61,979 vehicles. Jiangling Motors Corporation, Ford's commercial vehicle partner, said sales through the first half of the year were up 3 percent to 133,654. Its June sales were down 5 percent to 19,016. Ford's sales in China were led by performance models. First-half sales of its Fiesta ST, Focus ST and Mustang increased 120 percent to 1,263 vehicles. SUV sales, including the EcoSport, Kuga, Edge and Explorer, reached 118,719 vehicles through the halfway mark of the year. Ford's second half new vehicle introductions include the new Taurus, Everest, Explorer, Focus and Focus ST. General Motors Co. said earlier this week its China sales fell 0.4 percent in June, but sales are up 4.4 percent through the first half of the year. Citi Research analyst Itay Michaeli said Wednesday in an investor note that U.S. auto stocks were underperforming because of concerns in China, including weak June sales numbers and the stock market sell-off happening there. Ford shares closed Wednesday down 3.23 percent to $14.37 a share. GM shares closed Wednesday down 5.08 percent to $31.19, nearly two dollars below its initial public offering prices of $33 a share. |
NDP viewed as clearest alternative
DANIEL LEBLANC The NDP is seen as the party that offers the best-defined alternative to the Conservative government before an election in which Canadians will be asked to choose between political stability and renewal, a Globe and Mail/Nanos Research poll has found. Fifty-two per cent of respondents said the NDP "represents the clearest change from the current Stephen Harper government." The Liberal Party was far behind at 19 per cent, with the Green Party at 10 per cent. Change – and who can best deliver it – will be an essential issue in the Oct. 19 election, with Prime Minister Stephen Harper countering that voters should opt for stability. Both the New Democrats and the Liberal Party are positioning themselves as agents of change after 10 years of Conservative rule, but the findings suggest the Liberals have failed to differentiate themselves clearly from the Harper government to this point. The poll also shows the NDP is nearly tied with the Liberal Party on economic issues. Asked to name the opposition party that they "trust most on matters related to the Canadian economy," 30 per cent of respondents named the Liberal Party, and 27 per cent opted for the NDP. (Thirty per cent said none of the opposition parties had earned their trust on economic issues.) Confirming that Canada is headed for a three-way contest, the poll found a tight race to be the party with the "most appealing" policy platform. The NDP came in first at 28 per cent, followed by the Conservatives at 27 per cent and the Liberals at 25 per cent. Pollster Nik Nanos said the NDP has staked out the clearest policy positions in opposition to the Conservative Party, while the Liberals have a more nuanced approach. "The NDP and Tom Mulcair have been able to fashion themselves as the party of clear change," Mr. Nanos said in an interview. "For Canadians who are not happy with the current government, it looks like they have a clear sense the New Democrats are the ones who will be the most different." Mr. Harper lumped the NDP and the Liberal Party together in a weekend speech at the Calgary Stampede, stating voters will face a stark choice. "We've come too far to take risks with reckless policies. That's why I'm confident that, this October, Canadians will choose security over risk," the Conservative Leader said. The NDP and the Liberal Party are clearly working the same terrain. Mr. Mulcair and Liberal Leader Justin Trudeau spent Canada Day in the Greater Toronto Area, then went to the Calgary Stampede, and spoke one after the other to the Assembly of First Nations in Montreal on Tuesday. The NDP has been working hard to reassure Canadians its economic policies would be largely in line with those of the current government. The biggest change proposed by the NDP is to increase corporate taxes, although party officials said the planned rate, to be revealed in coming months, would be "reasonable." Party officials said the NDP is looking for candidates with an economic background who could serve as ministers of finance or industry. The recent upswing in the polls could make that easier. The Liberals went through a tough period in the fall and winter as Mr. Trudeau stumbled on the combat mission in Iraq and struggled to find the right balance on the anti-terrorism legislation. In a bid to gather momentum, Mr. Trudeau has recently unveiled a proposal for an enhanced child benefit, plans for a more open government and a new environmental platform. The Liberals are also banking on a promise to increase personal income tax for Canadians making more than $200,000 a year and bring down the rate for middle-income earners. While both parties want to replace the Conservatives, their partisans have been at one another's throats. Last week, the Liberals suggested Mr. Mulcair's flirtation with the Conservatives in 2007 undermined the NDP's promises to clean up the environment. The NDP responded by parroting lines from the Liberals and Mr. Trudeau, taking to social media to call on Canadians to "replace the politics of fear and division with hope and optimism." The Nanos poll was a hybrid telephone and online survey of 1,000 Canadians, carried out from June 27 to 29, providing an accuracy rate of plus or minus 3.1 percentage points, 19 times out of 20. |
The Harper government is Gerald Caplan There is something unique about Stephen Harper's government, a uniqueness that stems from the Prime Minister himself. As articulated by his former adviser Tom Flanagan, Mr. Harper "can be suspicious, secretive and vindictive, prone to sudden eruptions of white-hot rage over meaningless trivia … he believes in playing politics right up to the edge of the rules." Mr. Flanagan compares him to Richard Nixon, not, I think, meant flatteringly. None follows these mean-spirited guidelines more enthusiastically than Immigration Minister Chris Alexander. Mr. Alexander tramples everything in his path without mercy. Just the other day in the House, referencing his government's unyielding opposition to Muslim women wearing the face-covering niqab during citizenship ceremonies, he declared that Canadians "don't want their co-citizens to be terrorists." Now there is in real life only a single case of a woman demanding to wear her niqab at this ceremony, so she must be the terrorist. Her name is Zunera Ishaq and for months the entire Canadian government has piled on this one woman, repeatedly maligning her for wanting to conform to her religious beliefs. The government of course knows perfectly well the charge is a bald-faced lie. Ms. Ishaq is a terrorist the way "Taliban Jack" Layton – Stephen Harper's cute smear – was a Taliban sympathizer. But the slurs never stop. Only last week, in full campaign mode, Stephen Harper charged that Liberal leader Justin Trudeau's priority is to become "best friends" with the government of Iran, "one of the state sponsors of terrorism in the world." This is of course yet another shameless lie. Nor are the government's enemies merely treacherous terr-symps. After maligning Ms. Ishaq, for example, Minister Alexander went after the entire Liberal Party of Canada. Responding to a Liberal MP, he said: "I would invite that member to apologize for decades of racism by his party under Mackenzie King," who died in 1950. Parts of the Liberal record certainly should embarrass party members. But while he's invoking history I'd invite Mr. Alexander to apologize for Conservative prime minister John A. Macdonald calling aboriginal peoples "savages" and using starvation as a weapon to steal their land. The Harper gang simply can't resist the low blow. No one knows why. A rational debate on factual grounds is just not in their armoury. They always need to add an extra gratuitous slander, even when it's completely stupid. Here's Deepak Obhrai, parliamentary secretary for Foreign Affairs, when opposition MPs advocated Canadian support for a UN peacekeeping mission to the Central African Republic. "Of course, we are very much concerned about the situation…. What is more important is that the Liberal Party, as well as the NDP, would like to put Canadian soldiers' lives in danger out in the region." This apparently irresistible compulsion to hit below the belt is really quite pathological. Public Safety Minister Steven Blaney cannot mention Omar Khadr's name without baselessly maligning him, wildly misrepresenting Mr. Khadr's record while virtually accusing him of being a terrorist threat even today. Peter MacKay brought these same Tricky Dicky Nixon traits with him to the new Conservative Party from the defunct Progressive Conservative Party. First, in order to win the PC leadership, MacKay gave an explicit written vow that he wouldn't merge the party with Stephen Harper's Canadian Alliance. Within months the merger was concluded and the Conservative Party was born. It was a good fit. Mr. MacKay evidently shares the Harper way of politics, as he showed again when Canadian diplomat Richard Colvin blew the whistle on Canada's practice of turning over Afghan prisoners to Afghan authorities to be tortured. Mr. MacKay repeatedly and viciously attacked Mr. Colvin's credibility and integrity. But as Defence Minister, Peter MacKay had to know that Colvin was 100-per-cent right. With comparable scruples, as Justice Minister, Peter MacKay joined with the Prime Minister in a shameful and fabricated assault on the integrity of the Chief Justice of the Supreme Court of Canada. In perhaps no area has the government played a more dangerous or dirty game than around Israel. As Stephen Harper put it last year, all criticism of Israeli policies is "the new anti-Semitism…. It targets the Jewish people by targeting Israel." According to cabinet minister Jason Kenney, critics of the Israeli government actually "advocate the destruction of Israel and the destruction of the Jewish people." Presumably that includes Prime Minister Benjamin Netanyahu's many Israeli and other Jewish critics. Can anything be more despicable than exploiting anti-Semitism for partisan purposes? No question. Don't underestimate Mr. Harper's team. They now have a new anti-Trudeau ad that actually reproduces Islamic State anthems and grisly Islamic State shots of their victims about to be slaughtered. It's a form of political pornography. Every time you think they've reached absolute rock bottom, they always find a road that runs lower yet. Hard to imagine what unplumbed depths they could sink to over four more years. |
Pony-car sales war: Mustang
Auto Blog The Ford Mustang has blown past the Chevy Camaro as America's best-selling pony car, and in June, it wasn't even close. The 'Stang outsold the Camaro 11,719 to 8,611 cars. The Camaro remained ahead of the Dodge Challenger, which sold 6,845 units. Even though the Camaro did post an 11.5-percent sales improvement in June, the competition is arguably stronger than at anytime since the 1970s muscle-car era. The Mustang's sales leapt a whopping 53.6 percent, while the Challenger saw a gain of 56 percent. Several factors are weighing down Camaro sales, including its lame duck status. Chevy is launching a new generation of the Camaro this year that's more than 200 pounds lighter, offers a new turbo four-cylinder engine option, and has a nicer interior than the outgoing model. Put simply: wait a few months and you can get a better car. It's also unlikely Chevy will jack up the price much, as it's historically kept the Camaro within reach of everyday enthusiasts.
While Chevy fans wait in anticipation for their new sports car, Ford and Dodge have downshifted. The new Mustang, which went on sale last year, is lighter, faster, and more sophisticated than its predecessor. It also offers a 2.3-liter EcoBoost four-cylinder, which Ford has credited for the Mustang's recent uptick and makes up 36 percent of the car's sales, Ford analyst Erich Merkle said. June's performance allowed the Mustang to widen its sales gap with the Camaro this year. Through the first five months, Ford sold 68,290 Mustangs, a 54.4-percent increased compared with 2014. Chevy sold 42,593 Camaros, an 8.7-percent decrease. The Challenger – long the No. 3 pony car in sales volume – has seen its sales surge 41 percent this year to 37,011 units. The rankings have allowed the Blue Oval some bragging rights this year, and Ford sales and marketing vice president Mark LaNeve called the Mustang's sales "smoking hot." They've sizzled in California, where retail 'Stang sales increased 157 percent in June, Merkle said. Even through the rankings have shuffled this year among the Mustang, Camaro, and Challenger, the across-the-board sales increases in June indicate general health for the market. "US sales in June reflect a more optimistic consumer, from increases in sporty car sales like the Ford Mustang and Chevrolet Camaro to the continued growth in SUV sales," IHS Automotive senior analyst Stephanie Brinley said in a statement.
So the Mustang is new, and the Camaro is old, which brings us to the curious case of the Challenger, which was freshened with a new interior, more technology, an eight-speed transmission, and styling tweaks for the 2015 model year. It's also been supported by a vigorous advertising campaign – we haven't heard this much from the Dodge Brothers since the age of Gatsby – and the bright halo of the 707-hp Hellcat Challenger. There's also a zero-day supply for the Challenger Scat Pack model. "The new 2015 model-year Challenger launch continues to gain traction, helping the Challenger continue to set sales records," spokesperson Kristin Starnes said. While Ford and Dodge have capitalized on the Chevy's time of transition, the gen six Camaro is mere months away. Despite its strengthened competition, Chevy doesn't plan to remain No. 2. As General Motors product chief Mark Reuss put it: "If you're not here to win, why play the game?" |
Sales of trucks, luxury cars Alexandra Posadzki DesRosiers Automotive Consultants says sales of new vehicles edged 1.2 per cent higher last month compared with a year ago, making it the best June on record. Canadians bought 177,857 new cars and light trucks last month — up from 175,678 in June 2014. The record sales were driven primarily by demand for light trucks, which accelerated by 11.5 per cent to 109,400, up from 98,126 in June of last year. Meanwhile, sales of passenger cars slipped 11.7 per cent to 68,457 from the 77,552 cars Canadians bought a year ago. Fiat Chrysler claimed top spot with 27,217 vehicles sold, while Ford came in second place at 26,776 vehicles. General Motors trailed in third, selling 24,226 new vehicles in June. DesRosiers said luxury brands experienced the highest year-over-year growth, led by Land Rover at 28.2 per cent, Acura at 27.6 per cent, Porshe at 25.9 per cent and Lexus at 25.8 per cent. "The ongoing gains being enjoyed by luxury manufacturers in the Canadian market turned into a veritable feast in June," the company said in a news release. In a report earlier this week, Scotiabank analyst Carlos Gomes said lower gasoline prices have fuelled sales of luxury SUVs this year. Gomes says luxury vehicles now make up more than 10 per cent of new vehicle sales in Canada. In British Columbia, which he dubs "Canada's luxury leader," sales of high-end vehicles comprise 15 per cent of the overall market. "Purchases are being driven by rising household wealth — the key driver of the luxury auto market — which is being buoyed by strong equity market performances across much of the globe and ongoing house price appreciation," said Gomes. Although baby boomers have been the key drivers of the luxury auto market, Gomes says upscale automakers are increasingly striving to attract younger buyers by offering smaller-sized, more affordable high-end vehicles. "This development will be key going forward, as growth in the 30-49 year old Canadian population will begin to exceed the 50-69 year old cohort by 2017," Gomes said. |
Ford recalls 433,000 cars, David Shepardson, Washington — Ford Motor Co. said Thursday it is recalling 433,000 new cars and SUVs for a software glitch that could allow the vehicles to continue to run after turning the vehicle off. The Dearborn automaker said the recall covers the 2015 Focus, C-MAX and Escape for a body control module issue. Ford says it is possible for the engine to continue to run after turning the ignition key to the "off" position and removing the key, or after pressing the Engine Start/Stop button. That could allow the vehicle to be stolen or roll away. Ford is not aware of any accidents or injuries associated with this issue. The recall includes 374,781 vehicles in the United States, 52,180 in Canada and 5,135 in Mexico. Dealers will update the body control module software at no cost to the customer. |
Union finance bill passes, two OTTAWA — The Canadian Press Three bills passed by the House of Commons had their fates decided by the Senate on the eve of Canada Day — one was pushed through by the Conservative majority, while the other two died without a word being spoken. A third didn't even get a mention, failing to come as far in the legislative process as it did two years ago. The Senate's final vote before its summer break was a 35-22 result that passed Bill C-377 two years after senators originally gutted the legislation — an act of defiance by 16 Conservatives against their own government. On Tuesday, only three Conservative senators voted against the legislation — John Wallace, Nancy Ruth and Diane Bellemare — while a fourth, Doug Black, abstained. The bill requires unions to publicly disclose all transactions over $5,000, reveal the details of officers or executives who make over $100,000, and provide that information to the Canada Revenue Agency, which would publicly post the information to its website. Conservatives argued the bill will shed light on union finances. A group that lobbied for the Senate to pass the bill applauded the final vote. "Transparency and accountability are fundamental to democracy," Terrance Oakey, president of Merit Canada, said in a statement. "If labour organizations want to enjoy the dual benefits of mandatory dues collection and beneficial tax treatment, they must earn it by operating in a transparent manner." The federal privacy commissioner raised concerns about the scope of the bill, seven provinces denounced it as unconstitutional and numerous other labour associations have called for its defeat. That led Senate Liberals to argue the bill's passage would trigger a court challenge that the government would likely lose. Opposition leader James Cowan told the chamber during the last few hours of debate on the bill that its passage "provide ammunition to those who argue for (the Senate's) abolition." Former Conservative senator Hugh Segal, who led the uprising against the bill two years ago, had previously told The Canadian Press that the passage of C-377 could hurt the Conservatives in dozens of ridings where labour unions could influence the outcome of the fall vote. "Why somebody would decide that kind of suicidal, ideologically narrow excess is in the national or the party's interests or the prime minister's interests is completely beyond me," Segal said in an interview last week. In a statement Tuesday, minutes after the final vote on C-377, Liberal Leader Justin Trudeau vowed to repeal the law should his party form the next government. Before the C-377 vote, the Senate allowed three other high-profile private member's bills to die Tuesday without giving two a word of debate and letting a third become buried at committee. Government Senate leader Claude Carignan delayed debate in his name on a transgender rights bill introduced by NDP MP Randall Garrison that was passed with bipartisan support in the House of Commons, effectively killing the legislation. That move spared senators from having to vote on a bill that supporters said had been effectively gutted and stripped of any power during Senate committee hearings. Senators were also denied the chance to debate committee amendments to a bill aimed at stripping convicted parliamentarians of their pensions, which also died an unceremonious death. A third bill passed by the House of Commons with bipartisan support — one that would allow single-game sports betting — was left to wallow in a Senate committee and was never referred back to the Senate for further debate. All other bills the Senate didn't pass Tuesday will die on the order paper. |
Ford's Mustang pulls
Michael Martinez, Ford Motor Co.'s Mustang is flexing its power in the race for best-selling muscle car. Sales of the Dearborn automaker's pony car are up 55 percent in the United States through the first five months of the year, and it's outselling its biggest rival — the Chevrolet Camaro — for the first time since 2009. Through May, Ford sold 56,571 Mustangs; Chevy sold 33,982 Camaros, according to Autodata Corp. The Dodge Challenger is in third place, with 30,166 sold. The Mustang's sizzling start to the year can be attributed to its 50th-anniversary redesign and a new 2.3-liter EcoBoost four-cylinder that are attracting younger buyers, especially in Southern California. If the Mustang's blistering sales pace continues — Ford expects around a 40 percent sales gain for June when results are tallied Wednesday — it will finish the year as the best-selling muscle car for the first time in six years. But analysts say its crown could be challenged when the redesigned sixth-generation Camaro goes on sale late this year. "The newness certainly helps vehicles in this segment," Matt DeLorenzo, managing editor at Kelley Blue Book, said in an interview. The deciding factor in the pony car segment — both this year and in the future — may not be the purists who crave V-8 engines and buckets of horsepower in cars that only leave the garage on weekends. More important are millennials — buyers through their early 30s — who prefer four-cylinders and improved fuel economy in a sleek, everyday driver. Nationwide, 35 percent of Mustang buyers are millennials, Ford said. Last year, that number was 30 percent. In Southern California, young buyers snap up 40 percent of Mustangs sold. Ford says the Mustang is selling particularly well in the important Southern California market. Sales there are up 117 percent, Ford said. Erich Merkle, Ford's sales analyst, said, "It's done everything we've tried to do: maintain our traditional buyer, but be able to grow into a new buyer as well." DeLorenzo said that's because younger buyers crave good fuel economy wrapped in stylish design. The Mustang's four-cylinder, the 2.3-liter EcoBoost is responsible for nearly all of its sales growth. It delivers 310 horsepower while getting 32 miles per gallon on the highway; the 2014 model's 3.7-liter V-6 produced 305 horsepower and got 31 mpg highway. Chevy may be watching that trend, too. The 2016 Camaro, introduced in May on Belle Isle, will hit dealer lots next year with a standard 2-liter, turbocharged four-cylinder that delivers 275 horsepower and more than 30 mpg highway. "I think that's critical," DeLorenzo said. "You're getting the horsepower of a V-6 but still posting some pretty decent fuel economy numbers. I think it was a smart move on Ford and GM to put a four-cylinder back in the mix." Ford could feel some pressure from the convertible Camaro, too. Chevy hopes its drop-top will trump the Mustang by offering the segment's first fully-automatic stowed roof. Convertibles make up just under 20 percent of Camaro sales and 15 percent of Mustang buys. Muscle car sales Ford Motor Co.'s Mustang outsold the Chevy Camaro and Dodge Challenger through the first five months of 2015, and stands to finish the year as America's best-selling muscle car for the first time since 2009. All Big Three automakers still offer plenty of horsepower as options for those who crave it. Despite the rise of four-cylinders, Ford says V-8s still represent 40 percent of Mustang buys. The new Camaro has an optional 6.2-liter V-8 that is certified at 455 horsepower, making it the most powerful Camaro SS ever. Ford's Shelby GT350 Mustang, due out this fall, will come with a 5.2-liter flat-plane crankshaft V-8 that will get 526 horsepower. It will be Ford's highest-revving V-8, topping out at 8,250 rpm. That could help the Blue Oval hold on to the crown in 2016, DeLorenzo said, because Chevy has yet to announce performance versions of the 2016 Camaro. Dodge's 2015 Challenger Hellcat comes with a 6.2-liter Hemi supercharged engine rated at more than 700 horsepower. That could help the Challenger land the No. 2 spot by the end of the year, due to an expected dip in Camaro sales as customers await the new version. "When you don't have a huge styling change, if you can do something like the Hellcat to draw attention ... that certainly is going to help Challenger get on people's shopping lists," DeLorenzo said. Although the Mustang is in firm control in 2015, the race for No. 1 could be a toss-up next year. "I think it's going to be really tight," DeLorenzo said. "Obviously, the Mustang is working. It will be interesting to watch the strategy with the Camaro. It's like the pickup truck wars in a microcosm between Ford and Chevy, but this might be a little more fun." |
U.S. opens probe into David Shepardson, Washington — The National Highway Traffic Safety Administration said Friday it is opening an investigation into 250,000 Ford F-150 pickups for braking problems linked to two crashes. The investigation covers the 2011-12 F-150 with a 3.5 liter gasoline turbo direct-injection engine and comes as 32 complaints alleging electric vacuum assist pump failures resulting in loss of brake power assist and increased brake pedal effort. NHTSA said "none of the complaints reported any warning indicators to alert the driver of brake power assist loss or the potential of increased stopping distance. Two reports alleged crashes due to increased brake pedal effort required to stop or slow the vehicle." The agency said the complaints suggest "an apparent increasing trend, with approximately 60 percent of complaints received within the past nine months." Many owners told NHTSA they thought the issue was dangerous and expensive to fix. and some reported back orders at dealers for parts — with one waiting for six weeks. "This situation is very dangerous," one owner told NHTSA, saying the 2013 model was updated. The owner of a 2011 F-150 wrote Ford last year after buying a 2012 F-150 and said he almost crashed. "I am an Iraq war vet who could have (been) killed along with my 3-year-old son because of this defect," he said. Another owner said he could no longer park in his garage because he "may hit house, or garage or kids when backing out." Ford replaced the pump to supply power brakes with a belt-driven vacuum pump from the 2013 F-150, owners said. Ford said it was cooperating with the NHTSA investigations. |
Tory senators take unusual BILL CURRY Conservative senators took the highly unusual step of overruling their own Speaker Friday in an effort to force a controversial union disclosure bill into law before Parliament shuts down. Conservative Senator Leo Housakos – who was appointed Speaker last month – ruled Friday morning that the latest tactics of the government side aimed at blocking an opposition filibuster were against the rules of the Senate. But government leader Claude Carignan challenged the ruling and won. The challenge succeeded in a 32-to-17 vote. Five Conservative Senators abstained. "In our rules, the final arbitrator of the rules is the Senate," Mr. Carignan told reporters in defending his move. The senator said the step was necessary because the opposition was using "archaic procedural tactics" to prevent a vote. The bill is now expected to come to a final vote early next week. Mr. Carignan predicted Friday that the bill will be approved and become law. Bill C-377 is a private member's bill from Conservative MP Russ Hiebert that would force unions to publicly disclose a wide range of financial information including salaries and expenses. Supporters say it addresses concerns from union members who say they face intimidation if they ask for too much information from their leadership. Unions strongly oppose the law and argue that only union members should be able to view such information. Critics of the bill warn it will place unions at an unfair disadvantage during collective bargaining because management will have new insight into the financial situation of unions. The bill was previously blocked by the Senate two years ago and had not received much attention since. However in recent weeks, the Conservatives in the Senate have indicated that passing the bill is a priority. Opposition and some Conservative senators had been trying to talk out the clock, hoping to block the bill from passing before Parliament rises. Any bills that are not passed by that point will die because of the October federal election. Conservative Senator Don Plett chided the Liberal Senators, accusing them of wanting to block the bill so that Liberal Leader Justin Trudeau can promote himself as the "protector of big union bosses." Several unions have indicated they will run advertising against the Conservative Party in the runup to the federal election campaign. The fact that the bill is now poised to become law came as an unpleasant shock to unions that have been following the debate closely. Christopher Smillie, a senior adviser with Canada's Building Trades Unions, said the organization plans to fight the bill in court should it become law. "We are extremely disappointed the Conservative government fundamentally changed the rules of the Senate to try and pass an offensive and unconstitutional bill," said Mr. Smillie in an e-mail. The larger issue behind Friday's dust up is the future of a long standing practice in the Senate that the government is only allowed to shut down debate on government bills, not private members bills like C-377. "A proposal of this type could in the long term distort the basic structure of Senate business," the Speaker said in his ruling, which warned against establishing a "far-reaching precedent." Liberal Senator James Cowan, the leader of the opposition in the Senate, said it is highly unusual – if not unprecedented – the government side in the Senate to overrule a Speaker from the same party. Mr. Cowan claimed that Prime Minister Stephen Harper is pushing the bill behind the scenes. "The last act of this Parliament was Mr. Harper, the Prime Minister of Canada, directing his Senators to break the rules of the Senate," he said. "That's the message: That Mr. Harper makes the rules and if he doesn't like the rules that are there, he changes them." |
GM pension plan deficits GREG KEENAN The deficits posted by General Motors of Canada Ltd. pension plans dwindled slightly last year, but the auto maker still faces a shortfall of $3.6-billion that must be eliminated by 2020 under Ontario government pension rules. The solvency deficiency in GM Canada's hourly and salaried pension plans dropped by 4 per cent to $3.558-billion from $3.705-billion, according to the most recent valuation of the pensions as of Sept. 1, 2014. It's also much healthier than the 45-per-cent deficiency in 2009, when federal and Ontario taxpayers contributed $10.8-billion to the bailout of General Motors Co. – $4.5-billion of which went to help reduce the pension deficit. The plans were boosted in 2014 by a 16 per cent return on assets. But they were hurt by a reduction in the discount rate, which is the interest rate companies use to measure the long-term return on assets set aside to cover the obligations in the funds. The discount rate for the GM Canada defined benefit plans fell to 4.25 per cent from 5 per cent a year earlier, meaning a higher value of assets is required to backstop the liabilities. The state of the pension plan for unionized employees represented by Unifor is already a key issue in discussions between the company and the union, a year before they begin officially bargaining on a new contract. The company is intent on eliminating the defined benefit portion of the pensions offered to newly hired employees, sources have said. The plan for newly hired unionized employees is a hybrid plan that combines defined benefits with defined contributions by the company. Union sources have said that local leaders in Oshawa, Ont., and St. Catharines, Ont., are prepared to make that concession to GM Canada in return for commitments of new product – especially in Oshawa. There are no new vehicle programs allocated to Oshawa to replace vehicles that are being shifted elsewhere or going out of production. More than 29,000 unionized retirees and beneficiaries receive a pension from the plan, but that number will grow when 1,000 jobs are eliminated later this year – when one of those production shifts occurs as the Chevrolet Camaro gets transferred to Lansing, Mich. Union officials are hoping that the combination of the low Canadian dollar and the ability to hire new employees with less costly pensions and lower wages than existing employees for 10 years will convince GM to allocate new products to Oshawa and an engine and transmission plant in St. Catharines. GM Canada faces a payment of $638.2-million in the current pension year but it can apply $287-million that remains in its prior year credit balance, effectively a bank account from which it can draw to reduce annual cash payments. But if it uses the rest of the credit balance this year, the remaining payments to eliminate the solvency deficiency by 2020 will be cash outlays. Ford Motor Co. of Canada Ltd. faces payments of about $640-million to eliminate the solvency deficiency in its unionized pension fund by 2019. If Ford's plans had been wound up as of Dec. 31, 2013, the assets would have covered 75 per cent of the liabilities. "Like many companies, Ford of Canada chose to participate in the Ontario government's solvency funding relief provisions, which were put in place by the government in recognition of the significant impact the economic crisis had on Ontario pension plans," spokeswoman Michelle Lee-Gracey said. Ford Canada is on track with a plan to reduce the solvency deficiency and will finance any new deficits that arise as required by Ontario pension regulations, Ms. Lee-Gracey said. |
Ford launches car-sharing Michael Martinez, Ford Motor Co. on Tuesday said it will launch a pilot car-share program in six U.S. cities and London, and has created a third prototype electric bicycle as it continues to experiment with different modes of transportation. The Dearborn automaker said its offering its new Peer-2-Peer Car Sharing service to 14,000 customers in six U.S. cities, and 12,000 customers in London. Under the program, customers who finance their vehicles through Ford Motor Credit will be able to rent their vehicle to pre-screened drivers for short-term use. The vehicle owners can set the price for the car rental. Separately, Ford announced MoDe: Flex, its third electric bicycle that runs on a battery and folds and stores inside any Ford vehicle, where it can be charged while stowed. Ford is not currently making the bike available to the public. The programs are part of 25 mobility experiments Ford launched six months ago. Last month, Ford announced a separate car-share program, called GoDrive, would be launched in London. "As most vehicles are parked and out of use much of the time, this can help us gauge our customers' desires to pick up extra cash and keep their vehicles in use," said David McClelland, Ford Credit vice president of marketing, in a written statement. U.S. customers will partake in the new car-share pilot through ride-share company Getaround, while London customers will use easyCar Club. The program is being offered through November to Ford Credit customers in Chicago, Washington, D.C., Portland, Oregon, and California locations including Berkeley, Oakland and San Francisco. The ride-sharing industry is showing strong growth and more traditional auto companies are clamoring to get aboard. Avis spent $491 million two years ago to buy Zipcar, tapping into strong demand for short-term car rentals in urban areas. Enterprise runs CarShare and Daimler AG runs Car2Go in multiple European and U.S. cities. The number of users has doubled over six years, according to the Transportation Sustainability Research Center at the University of California. While it is tiny compared with the traditional car rental industry, annual revenue has reached about $400 million, researchers found. Ford's latest bicycle follows MoDe:Me and MoDe: Pro that launched in March. The MoDe: Flex will come with a smartwatch app that increases electric pedal assist based on heart rate, and provides safety notifications for hazards like potholes. The Associated Press contributed. |
Ford recalls 203,000 vehicles David Shepardson, Washington — Ford Motor Co. said Wednesday it is recalling 203,000 new Transit Connect and Escape vehicles because warning chimes and messages may not appear on instrument clusters. The recall covers the 2014-15 models because when "starting the vehicle, the instrument cluster, warning chimes, messages and warning lights may not work, which is a compliance issue with FMVSS 101 and other applicable FMVSS requirements. If these displays don't work as intended, it could increase the risk of a crash." The recall covers 182,520 in the United States and federalized territories, 18,226 in Canada and 2,699 in Mexico. There are no reports of injuries or crashes related to the issue. The latest generation of the Ford Escape has had many glitches. The 2014 Escape has been recalled eight times and is the subject of 34 service bulletins, according to the National Highway Traffic Safety Administration. The 2014 Escape has been recalled for fuel pump and twice for air bag issues. The company called it back last year because the fuel delivery module may crack, engine wiring may cause stalling, the panoramic roof glass may not be properly attached, the door handles may open during driving and it may have sub-standard weld joints used to attach the seat back recliner mechanism to the seat frame. The 2013 Escape has been recalled 12 times, NHTSA says. Separately, Ford is issuing a small recall covering just 49 2015 model Transit vehicles in the United States for a seat belt labeling issue. These vehicles have a special-order front passenger seat belt that works properly, but was mislabeled by the supplier and does not contain information required by law. |
Ford moves closer to Michael Martinez, Ford Motor Co. is inching closer to autonomous vehicles. The Dearborn automaker on Tuesday said it's moved from the "test" phase to the "advanced engineering" phase of its driverless car program — the last stage before producing and selling vehicles. Ford has appointed a director of autonomous vehicle development — Randy Visintainer — and created a global team to work on the advanced program. "During the next five years, we will move to migrate driver-assist technologies across our product lineup to help make our roads safer and continue to increase automated driving capability," Raj Nair, Ford group vice president, global product development, said in a statement. Ford's new Research and Innovation Center in Palo Alto, California, is working on driverless car technology. Earlier this year, Ford donated a Fusion Hybrid to Stanford University's engineering program to test driverless car algorithms. CEO Mark Fields has said he expects some automaker to invent a fully autonomous vehicle within five years. But don't expect that automaker to be Ford. "To be clear, our priority at Ford is not in making marketing claims or being in a race for the first autonomous car on the road," Fields said in January. "Our priority is in making the first Ford autonomous vehicle accessible to the masses and truly enhancing our customers' lives." Ford made other technology news Tuesday, including: ■Its pre-collision assist with pedestrian detection technology, already available on the Ford Mondeo in Europe, will be available in the United States next year on a Ford-brand vehicle. This continues Ford's plan to roll out the feature on most Ford products globally by 2019. ■It is partnering with Carbon3D to print parts like bumpers and grommets. ■The automaker has developed a smartwatch app to check the driving range and battery charge for their plug-in hybrid or electric vehicle quickly. ■Ford will introduce new camera technology that can help see around corners by displaying a 180-degree view of the area in front of or behind a vehicle. Ford introduced split-view on the 2015 Ford Edge and 2016 Explorer. ■The next Super Duty truck will offer up to seven cameras for lane-keeping and to see more angles around a truck and trailer than ever before. |
High Court won't hear Ford David Shepardson, Washington — The U.S. Supreme Court without comment Monday refused to hear Ford Motor Co.'s appeal of a $445 million tax case, saying it is not entitled to a refund of tax overpayments dating back three decades. In 2012, a federal appeals court upheld a district court ruling in Detroit that denied the automaker the interest for taxes it owed from 1983-89, 1992 and 1994. In 1991, 1992 and 1994, Ford made payments to the Internal Revenue Service totaling $875 million after the government said it had underpaid its taxes. In 1994, Ford asked IRS to treat these as advance payments — rather than a cash bond — because then Ford could be entitled to interest if a court or the IRS found later it had overpayed its taxes. The IRS did later determine Ford had overpaid its taxes and agreed to pay Ford interest, but only from the date it had asked that the funds be treated as advanced payments. The IRS says taxpayers can either treat taxes as a bond or advanced tax payments — so if the taxpayer did underpay taxes, it doesn't owe interest on the back taxes. Ford sued in 2008 and U.S. District Judge Patrick Duggan in Detroit found in 2010 that while Ford's argument "may have some merit," it said the IRS argument was reasonable. The issue is that federal tax law doesn't define the date of overpayment. In December 2013, the High Court kept the case alive when it sent the long-running tax dispute back to an appeals court for further hearings on whether the automaker was entitled to $445 million in interest on taxes it overpaid. Ford said in a statement, "We are disappointed that the Supreme Court declined to hear our appeal which presented an important issue regarding when taxpayers are entitled to recover interest on taxes overpaid to the government." |
Ford GT, GT350R to be
Michael Martinez, With a price tag near $400,000 and only 250 produced each year, chances are you won't get a chance to drive Ford Motor Co.'s new GT supercar — unless it's in the new "Forza Motorsport 6" video game. Ford announced the GT would grace the video game's cover back in January. Monday at the E3 video game conference in California, the automaker announced the supercar would be joined by the Mustang Shelby GT350R and about 40 other Fords. . "Regardless of what you're interested in driving, you can drive it," said Henry Ford III, manager, Global Ford Performance Marketing. The racing game, which this year is celebrating its 10 year anniversary, will feature 450 cars and 26 racing locations across the globe, and will be released in the U.S. on Sept. 15. "The car and gaming industry have really changed," said Dan Greenawalt, creative director of Forza Motorsport. "Gamers have become a much bigger part of the car industry." Greenwalt said Ford reached out to them about including the GT in the game, and let them visit the secret lair where the supercar was developed before most even knew about it. "We learned about the car before many executives learned about it," Greenwalt said. "We didn't know what we were going to see. At worst, we thought it would be a new Mustang, at best, it would be a once-in-a-generation car." Greenwalt said the gaming team took most of Ford's data to create the video game version of the GT, and paid special attention to everything from the tires to the unique EcoBoost engine sound. "We found the GT was very agile, focused," he said. "I felt like our teams worked very well." |
Steelmaker fights back after Thomas Biesheuvel When Ford Motor Co. confirmed last year it would build its most popular pickup truck using aluminum, the automaker's steel supplier was caught flat-footed. Now ArcelorMittal, the top worldwide supplier of steel for autos, has built a two-pronged response to try to head off defections by other customers including General Motors Co., Fiat Chrysler Automobiles NV and Japan's biggest carmakers. First, the Luxembourg-based company developed lighter steel that's as strong as earlier products. Second, it embedded almost three dozen engineers with car companies around the world so there are fewer surprises on vehicle redesigns, according to Brian Aranha, head of ArcelorMittal's automotive business. "We see the threat," said Aranha, whose unit is ArcelorMittal's most profitable, in an interview at the company's London offices. Losing the deal with Ford "was on a large-enough scale that it made us pay a lot of attention and adjust our approach." Aluminum weighs less than steel, reducing fuel consumption of cars amid stricter emissions limits for automakers. At the same time it has historically been tougher to weld than steel, and typically costs about 30 percent more. It was breakthroughs in welding technology that helped overcome some of those concerns, leading to Ford's decision to build its F-150 truck with an aluminum body. 'We were surprised' The move to aluminum was based on weight-reduction targets, said Matthew J. Zaluzec, head of materials and manufacturing research at Ford. "The engineering and research staff looked at many lightweight options including aluminum, advanced high-strength steel, as well as other materials options," he said. The threat for ArcelorMittal, the world's biggest steelmaker, is other carmakers will follow suit. Its automotive customers include General Motors, Daimler AG, Toyota Motor Corp. and Honda Motor Co., according to data compiled by Bloomberg. "Ford began this program a long time ago and maintained a very high level of confidentiality around it," Aranha said. "We were surprised." The first step in meeting the new challenge was to take advantage of advanced engineering techniques to create lighter steel, including new hot-stamping processes and laser-welded blanks, according to ArcelorMittal. While the new products cost more, customers would use less, according to Aranha. That cuts the weight by about 20 percent for roughly the same cost. The new products are already available for pickup trucks. Lighter vehicles ArcelorMittal also embedded 35 engineers with carmakers and suppliers to help it gain insights into vehicles coming up for redesign. "You've seen Mittal investing significantly more than their peers," said Seth Rosenfeld, an analyst at Jefferies International Ltd. in London. "They have the size and financial flexibility to do that and they haven't held back in that regard." Carmakers aren't automatically looking to move away from steel, according to Aranha. They switch because they don't think they have a way of making their vehicles lighter with steel, he said. It's the job of his unit to make sure customers are aware that steel is now available that works just as well. The auto industry uses about 150 million metric tons of steel annually compared with 4.5 million tons of aluminum. Too late "If you wait until it's too late in the process, the designers will make an easy swap," Aranha said. "If they involve us early, we'll give them a solution that's cost neutral." Many in the aluminum industry, meanwhile, are convinced the future is on their side. Norsk Hydro ASA, an aluminum maker whose customers include Audi AG, Bayerische Motoren Werke AG and Daimler, is spending 130 million euros ($147 million) to expand capacity fourfold to an annual 200,000 tons from next year at its Grevenbroich plant in Germany to meet demand from carmakers. "The trend is clearly a shift toward aluminum," said Svein Richard Brandtzaeg, Norsk Hydro's chief executive officer. "We are in close cooperation with many carmakers who are looking into increasing the use of aluminum in their cars." |
UAW leaders intent on bridging Union seeks health care pool to lower costs David Barkholz DETROIT -- UAW President Dennis Williams, using his final press conference before the start of contract negotiations with the Detroit 3, today vowed to address the pay disparity between entry-level workers and longtime auto workers meaningfully in this year's round of bargaining. Williams also said the union is working on a plan to lower the costs of health care for active workers and retired UAW members by pooling their buying power with insurers and caregivers. He declined to give details. Closing the wage gap for entry-level, or Tier 2, workers, though, is a priority for the union in this round of bargaining, Williams said. Entry-level workers at General Motors, Ford Motor Co. and Fiat Chrysler start at about $16 an hour vs. $28 an hour for senior or legacy workers. "Our members after the last two bargaining periods made a lot of sacrifices," Williams said of a concessionary contract in 2009 and one in 2011 that was heavy on profit-sharing but contained no wage increase for longtime workers. "We feel like it's our time." "We have made it clear that we intend on bridging the gap and [will] address the entry-level employees as well as our legacy employees," Williams added. "Our legacy employees haven't had a raise for eight years." The UAW's four-year contracts covering wages and benefits with the Detroit 3 expire Sept. 14. Handshakes in July The union negotiators expect to hold symbolic handshake ceremonies with their Detroit 3 negotiating counterparts beginning the week of July 13 to launch collective bargaining officially. Williams noted when he signed off from the hourlong press conference that he would have more to say about negotiations after the contracts are settled and ratified. Tier 2 is a sticky problem for UAW leaders and the Detroit 3. The 140,000 UAW auto workers at the Detroit 3 want it eliminated. The idea that workers doing the same jobs earn different wages is anathema to union solidarity. The Detroit 3 say the ability to hire lower-paid Tier 2 workers has helped to create jobs and kept their labor costs from ballooning too much higher than those at nonunion U.S. auto plants operated by Asian and European carmakers. FCA issues FCA US' outsized reliance on Tier 2, however, makes addressing the issue more challenging, Williams concedes. Industry watchers say simply raising wages for Tier 2 workers at the Detroit 3 would disproportionately hurt FCA because its 38,000-employee hourly work force is 43 percent Tier 2. In contrast, Ford's work force is 28 percent Tier 2, and GM's is 19 percent. FCA also is the weakest financially, with CEO Sergio Marchionne seeking a merger partner to improve the company's competitiveness. Williams said the union has looked at the approach Unifor, formerly the Canadian Auto Workers, has taken toward entry-level workers. Canada model As part of Unifor contracts negotiated with the Detroit 3 in 2012, a new hire can "grow into" full wages over 10 years of designated raises. That's different from the Tier 2 system in the United States, where hires can never achieve the top wage of senior workers. Williams wouldn't say whether he liked the Unifor model or other approaches the UAW has studied. But he did say that he couldn't envision it taking 10 years for an entry-level worker to achieve full wages. Unifor President Jerry Dias said in an interview today that he has spoken occasionally with Williams and no one should doubt the UAW leader is serious about addressing Tier 2. "It was clear from our discussions that he recognizes that there have to be significant inroads made in bargaining for second-tier workers," Dias said. Williams said he and the UAW negotiating teams are going into bargaining expecting to achieve contracts without a strike. But he said a dues increase last year has rebuilt the union's strike fund, and the UAW would be ready to strike if it has to. Untapped buying power On health care, Williams said there's untapped buying power that can be harnessed by pooling health care consumers in the three independent Voluntary Employee Beneficiary Associations set up in 2005 and 2007 for UAW retirees along with active hourly and salaried employees at the Detroit 3. He estimated that the VEBAs provide health care benefits for 607,000 retirees and their spouses. Meantime, there are 140,000 active hourly employees at the Detroit 3 and another 150,000 to 160,000 salaried employees. He said active employees couldn't legally be put in the same health insurance plans as the VEBA recipients. However, the union is exploring ways to use its huge buying power to negotiate better rates with insurers, hospital and doctors, though he declined to provide details. Today, hourly UAW members at the Detroit 3 have among the richest health care benefits in industrial America. They pay for only about 6 percent of their overall health care costs vs. 11 percent for VEBA recipients. Williams defended those benefits today, saying that those consumers should have national health care and be paying nothing out of their pockets. He also criticized the so-called "Cadillac Tax" in the Affordable Care Act that threatens a 40 percent surcharge for those holding rich benefit plans like the UAW when the tax is implemented in 2018. Williams said it was unfair for the federal government "to penalize people with good health care." |
Senators running out clock BILL CURRY A group of Conservative and Liberal senators are trying to talk out the clock on a Tory union disclosure bill, hoping to prevent it from becoming law before the sun sets on the 41st Parliament. Bill C-377 was previously blocked by the Senate in 2013 when several Conservatives sided with the opposition to amend the bill, but the House of Commons sent it back to the Senate in its original state. "Three-seven-seven is just an outrageous bill," said Liberal Senator Larry Campbell. Conservative Senator Diane Bellemare and Liberal Senator James Cowan both put forward amendments to the bill this week, which will delay the final vote. Should the Senate rise before the final vote, the legislation will be dead because of the October federal election. The final outcome could depend on whether the Senate chooses to rise on Friday or whether it comes back next week to wrap up unfinished business. Senators are well aware that they are debating the bill at a time of unprecedented scrutiny. Senators who are in favour of the bill hope the Auditor General's concerns about the expenses of Senators will tilt the scales in favour of supporting the bill, because it deals with transparency and expenses. At the same time, Senators opposed to the bill see this as an opportunity to show the public that they have a legitimate role to play in providing sober second thought. Then there is the fact that unions are preparing to launch ad campaigns that will feature their most partisan attacks ever on the Conservatives ahead of the fall election, which they hope will unseat a government that they see as an enemy of organized labour. For instance, the Professional Institute of the Public Service of Canada, which has historically been less confrontational than the larger Public Service Alliance of Canada, recently launched an ad campaign that says "the Conservative government" does not understand integrity and says public servants will be voting accordingly on October 19. However Bill C-377 would apply to all unions, not just those in the federal public sector. That has led to objections from several provinces, who argue labour regulations fall under their responsibility. Another union that is quietly lobbying against the bill is the National Hockey League Players Association. The NHLPA is concerned that the bill would force players to disclose details on their lucrative merchandising deals in areas like video games and hockey cards. Conservative Senator Jean-Guy Dagenais, a former Montreal police officer who worked with a policing union, is the government's main advocate for the bill in the Senate. "I have no hesitation in saying that Bill C-377 contains nothing that is anti-union, nothing unconstitutional, and more importantly, nothing against unionized workers," he told the Senate this week. "It simply establishes the formula that union leaders will be required to use every year to make a disclosure that will enable those who pay union dues to ensure that the union is spending their money wisely." Debate is expected to continue on Thursday. |
Trump vows to press Ford David Shepardson, Republican presidential candidate and billionaire Donald Trump threatened Ford Motor Co. with punitive taxes if the Dearborn automaker proceeds with a new $2.5 billion Mexican plant that will "take away thousands" of U.S. jobs. Trump, who announced his plans to run at an appearance in New York on Tuesday, vowed to impose 35 percent taxes on imported Ford vehicles and parts coming from the new Mexican plant. Trump said he would call Ford CEO Mark Fields — whom he identified only as "the head of Ford" — to explain the "bad news." "Let me give you the bad news: every car, every truck and every part manufactured in this plant that comes across the border, we're going to charge you a 35 percent tax — OK? — and that tax is going to be paid simultaneously with the transaction," Trump said. "They are going to take away thousands of jobs." In April, Ford said it would add 3,800 jobs in Mexico as part of a $2.5 billion investment — on top of the 11,300 Ford already employs in Mexico. The investment will include a new engine plant and new transmission plant allowing for exports of engines to the United States and elsewhere. Trump has been pitching the proposal to tax Ford in a series of speeches in Iowa, North Carolina and around the country since May. Trump said Ford would try to get donors and lobbyists to pressure him not to act. But Trump said he would not listen. He said the automaker would decide against the plant: "They'll say, 'Mr. President we've decided to move the plant back to the United States — we're not going to build it in Mexico.' That's it. They have no choice." He said Ford was a good company and that he knew the head of Ford personally. Asked about Trump's criticism, Ford spokeswoman Christin Baker pointed to the Dearborn automaker's U.S. investments. "We are proud that we have invested $6.2 billion in our U.S. plants since 2011 and hired nearly 25,000 U.S. employees. Overall, 80 percent of our North American investment annually is in the U.S., and 97 percent of our North American engineering is conducted in the U.S.," she said. Under the North American Free Trade Agreement and existing U.S. tax laws, it is not clear how Trump could take such an action unilaterally. Nearly all major automakers already have major plants in Mexico, including Detroit's Big Three automakers. Singling out one new auto plant for punitive taxes would almost certainly not be legal under American law. Companies are free to build plants where they want. Automakers are bypassing the U.S. for new plants in part because Mexico has dozens of free trade agreements around the world, low wages, free or nearly free land on which to build and fewer regulatory hurdles. The investments also put pressure on the United Auto Workers upcoming contract talks with Detroit's Big Three automakers since U.S. automakers will emphasize competitive pressures in talks. BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors, and Fiat Chrysler Automobiles NV are among the automakers that have built or announced new plants or plant expansions — part of more than $20 billion in investments made or planned for Mexico since 2010. IHS Automotive predicts Mexican production will rise from 3.2 million last year to 5.1 million vehicles in 2020. Nearly all of the vehicles built in Mexico are exported to the United States. Trump made auto issues a big part of his announcement speech in New York. He asked when was "the last time you saw a Chevrolet in Tokyo? It doesn't exist, folks," Trump said, even as Japanese automakers sell millions of cars and trucks in the United States. "They are laughing at us at our stupidity." General Motors spokesman Ataf Farah said GM does in fact sell four Chevrolet models in Japan — the Chevrolet Sonic, Captiva, Camaro and Corvette. But GM sales are extremely limited in Japan with just 1,204 vehicles last year. |
Ford seeks pole position Michael Martinez, In the wake of abrupt retirements of top labor negotiators at its crosstown rivals, Ford Motor Co. is touting its cohesiveness and expressing desire to be the first automaker to start contract negotiations with the United Auto Workers when talks formally begin next month. "We have pretty stable leadership on both the UAW and Ford side, and we feel ready," said Bill Dirksen, Ford's vice president of labor affairs. "I think most companies most years prefer to be the lead, and we don't see it any differently. We'll stick to our plan and ultimately the UAW will gravitate to one company for the first agreement." The lead role would allow Ford, General Motors Co. or Fiat Chrysler Automobiles NV the ability to shape the next four-year contract to best suit their competitive circumstances — and potentially disadvantage competitors. "There is usually an advantage to going first," said Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research in Ann Arbor. FCA said Tuesday that its North American labor relations chief, Alphons Iacobelli, 55, elected to retire, effective immediately; GM confirmed to The Detroit News the same day that its top bargainer, Rex Blackwell, 60, quietly retired June 1. Ford may have the advantage in leading the talks because of stability in the upper reaches of management — from Executive Chairman Bill Ford and CEO Mark Fields, to Dirksen and Ford of the Americas chief Joe Hinrichs. And it has established relationships with Jimmy Settles, the most experienced UAW vice president. "The way you think about the strategy, (the lead company) could be the place that has the most well-developed relationships," Dziczek said. "Bill and Jimmy go back years and years. If you have a good relationship, you have a chance to get a good agreement." Although there have been cases of concurrent bargaining, the UAW often picks one automaker to lead negotiations, and the talks with the other two would be framed by what was decided with the first. The companies bargained concurrently in 2011, but GM settled its contract with the UAW first that year. The UAW on Monday had no comment on whether it plans to pick a lead company with which to negotiate. Settles, the UAW's Ford rep, said he's bidding to negotiate first after the two sides shake hands July 23 at Cass Tech High School. Settles said GM and FCA will hold handshake events June 13 and 14; GM would not confirm its date. "Everybody wants to be first," Settles said. "I like leading; I don't like following." The handshakes are a formality, Dziczek said, and have no impact on who leads negotiations. That likely won't be determined until around Labor Day. Ford, whose senior thesis at Princeton University was on labor negotiations, said he's less concerned with going first. "Sometimes it really pays to be (first), other times it doesn't," he said. "I'm not really losing a lot of sleep over it." Dziczek noted that in 2009 the Dearborn-based automaker was the first to the bargaining table and ratified a contract, only to see GM and Chrysler get more favorable deals. This time, the UAW will be pushing to "bridge the gap" between the pay of first-tier and second-tier workers, which favors more tenured employees. The automakers will try to keep labor costs down to remain competitive with foreign rivals. Health care costs and profit sharing will be among other key issues. "We have to negotiate smart," Settles said. "We can't negotiate to put the company out of business, nor do we want to go through the experiences where we have plants closing." One factor that could make Ford the favorite to lead talks, Dziczek said, is the automaker's cap on two-tier workers. Caps at both GM and FCA were suspended in 2009 as part of the automakers' bankruptcy reorganizations. Under the current contract with the UAW, Ford is allowed to hire 20 percent of its workforce at a lower, second-tier wage, excluding some workers at certain plants whose jobs were created by moving work in-house from other companies. It surpassed that cap earlier this year, and has had to move hundreds of workers to a higher level of pay. The UAW is likely to try to retain the cap with Ford, and return it at GM and FCA. "Going with Ford with a cap already in place would be less of a battle," Dziczek said. Bill Ford wouldn't comment on what the Dearborn automaker's focus would be, but said he hopes the talks go smoothly. "We have a great relationship with the UAW," he said. "When you get to the negotiations there should be no surprises because if you've done your job correctly, building relationships, sharing information, then when you get to the actual bargaining table, both sides know where the other side stands." |
Profit Sharing to Stoke
GM, Melissa Burden Profit sharing and bonuses will take center stage in the upcoming UAW contract talks, especially at Fiat Chrysler Automobiles, where hourly workers pocketed less than half of what their counterparts at Ford and GM received in the current contract. Over the four years of the current contract, which expires in September, most FCA workers received about $16,500 in bonuses and profit sharing before taxes. Over the same four years, Ford hourly employees received up to $43,200 in bonuses and profit sharing before taxes, and GM workers received $39,250 pre-tax. Experts say negotiations with FCA could be contentious because of the profit sharing disparity; FCA's second-tier workforce, whose employees rely more heavily on those payments; and work schedules that some FCA workers don't like. More than 40 percent of FCA workers are on the lower-paid tier. "It'll make Chrysler more volatile negotiations," said Art Schwartz, president of Labor and Economic Associates. Labor experts believe automakers will favor keeping some form of profit sharing and bonuses in new four-year deals, instead of agreeing to raises for workers who have not gotten an hourly pay boost in a decade.
Workers at Fiat Chrysler get $1 for every $1 million in profits, based on 85 percent of FCA US's worldwide operating profit. That percentage represents FCA US's North American pre-tax profits. Ford and GM employees are paid an average of $1 for every $1 million in pre-tax North American profits. Automakers, who went through challenging and costly times in recent years, likely don't want to add more fixed costs, like hourly raises, onto their books. If they do agree to pay raises, expect them to get something in return — such as requiring workers to contribute to their health care coverage. Schwartz said while workers did not receive a raise during the 2011 contract, profit sharing and bonuses for Ford and GM were were higher than if they'd received a 3 percent pay increase each year. ■GM's bonuses and profit sharing in the current contract included a $5,000 ratification bonus, four quality bonuses of $250 each ($1,000), three lump sum $1,000 performance bonuses ($3,000) and profit sharing of $30,250 ($7,000 in 2012, $6,750 in 2013, $7,500 in 2014 and $7,000 plus a $2,000 special performance payout in 2015). "GM is committed to a compensation system that enables employees to win when the company wins," GM spokeswoman Katie McBride said in a statement. "Variable pay such as profit-sharing is one way to do that." ■Ford paid its hourly workers a $6,000 ratification bonus, $6,000 in inflation protection, a $1,000 performance bonus and $30,200 in profit sharing over four years — the largest in the company's history over a single contract period, Ford said. "We believe variable compensation such as profit sharing has been hugely successful in delivering value to our employees and allowing them to share in the success of the company," the automaker said in a statement. "Moving forward, we will continue to recognize our employees' contributions to our successful growth." ■FCA paid a ratification bonus of $1,750 within 30 days of ratification, another ratification bonus of $1,750 in December 2012, four $500 performance bonuses ($2,000), four $500 quality bonuses ($2,000) and profit sharing of $9,000 ($1,500 in 2012, $2,250 in 2013, $2,500 in 2014, $2,750 in 2015). Some workers may have received higher quality and performance bonuses if they worked at a plant with World Class Manufacturing status. Dziczek said FCA's low numbers aren't unique, when looked at from a historical perspective: "There's been lopsidedness in profit-sharing disparity between the companies before. If you go back, there were many years where FCA was higher than GM or Ford." From 1993 through 1999, Chrysler employees received more in profit sharing than their crosstown counterparts — at times about $7,000 more per year than GM workers and $6,000 or more than Ford employees. 'On the right path' UAW vice president Norwood Jewell, who oversees the union's Chrysler division, said while North American profits for Fiat Chrysler aren't as high as GM's and Ford's, the company is moving in the right direction and "there are little tweaks" that the union could negotiate to help even the playing field for the workers. "Theoretically, hopefully, we're going on the right path to get to where the people at Chrysler would enjoy the same types of profit sharing checks that the people at Ford and GM do," he said during a recent interview in Detroit. "It just wasn't going to happen with the click of a finger. It's something that's going to take some time." Jewell would not elaborate on what those actions could be. When asked if different levels of profit sharing between the workers or larger fixed-level bonuses could be used, possibly in lieu of raises, he said the union has "not even begun to have discussions with the company on that." Schwartz said the formulas, which pay workers based on how profitable the companies are in North America, aren't that different, but FCA made less money and profit sharing payments were smaller. "It's variable compensation," he said. "It's not guaranteed. You can do better in good times, but you can do worse in bad times." Dziczek said most workers realize that profit sharing can vary year to year, and most use the extra money to pay off credit cards and student loans instead of buying big-ticket items. "If anyone expands their lifestyle to account for profit sharing, they're going to have some bad years," Dziczek said. "That's not a way to build a household budget." 'A good supplement' Bruce Baumhower, president of UAW Local 12 in Toledo, said FCA workers he represents want more than just the ever-fluctuating profit sharing checks. "Profit sharing has been a good supplement to our members' income, but we haven't had raises in more than 10 years now," he said. "I don't think profit sharing alone should be the way they're compensated." GM hourly workers such as Ramon Hernandez and Wade Peele, at GM's Lansing Grand River Assembly Plant, say profit sharing helps them not only financially, but also with building a team environment. "We are part of what this car's end result is … so I'm a firm believer that the harder we work, the better we'll all get," said Peele, 44, of DeWitt. "And I think everyone should celebrate equally in the sharing of that. Success is only going to come with quality builds and quality launches of vehicles and being on time." "Everybody understands that … they've got to do their part to make good, quality cars," added Hernandez, 41, of Okemos, a longtime GM worker. Peele said he wants to see profit sharing continue in the coming contract with the UAW. "It ties the people out on the floor to have some ownership of the vehicle and more face value of the vehicle. ...," Peele said. "It's in everyone's best benefit to have the highest quality jobs out here. Because quality is going to sell the vehicles." |
"It's been part of the contracts since 1982, and it would take something big to get rid of it," Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research in Ann Arbor, said of profit sharing. "But workers at FCA would like to see an adjustment to their formula, which differs from the other two companies both in structure and in payouts."
Ford agrees to invest $3.1B in Michigan, cap tax breaks Chad Livengood and Lansing — Ford Motor Co. pledged Monday to invest $3.1 billion in Michigan facilities to keep its lucrative tax breaks capped at $2.3 billion under a deal Gov. Rick Snyder's administration hopes to replicate with the state's other two automakers. A state board approved an amendment Monday to Ford's Michigan Economic Growth Authority tax credits, marking the first major agreement the Snyder administration has reached to help stop the state's $9.38 billion long-term liability from escalating in cost to taxpayers. "I think it's a good model or template to look at," Snyder said in a telephone interview with The Detroit News. "There's other discussions going on." After being hit with a surprise surge in refunds last fall, Snyder has sought budgetary certainty from the remaining companies eligible for tax credits through 2031. The firms include General Motors Co. and the former Chrysler Group LLC, whose tax credits were last valued at $2.1 billion and $1.3 billion, respectively, but expected to rise. The deal comes months before Ford intensifies talks with the United Auto Workers over a new national contract in which the union will likely prod the automaker to commit more production and vehicle lines in U.S. plants. Ford is expected to push union bargainers for restraining growth in labor costs. Under the deal, Ford agrees to spend an additional $3.1 billion on Michigan facilities through 2025 — double the automaker's initial capital investment commitment — to remain eligible for its MEGA tax credits. The refundable tax credits cover the retention of 40,200 jobs — more than 91 percent of Ford's in-state workforce. "It's not insignificant that they've committed to doubling their capital investment from what was originally estimated over the next 10 years," said Steve Arwood, CEO of the Michigan Economic Development Corp. "I think, for both Ford and the state ... this is a major win." The investment would mostly be focused on manufacturing equipment and retooling plants in Michigan, said Charlie Pryde, Ford's regional director of state and local government relations. "Currently we don't have any plans on those investments," Pryde told reporters. "In order to earn the maximum amount (of tax credits), we have to invest. So there's no guarantees we will invest an additional $3.1 billion." The ballooning value of Michigan's business tax credits has put the state's general fund under strain this year after the profitable Detroit Three automakers and other companies began cashing in credits at higher-than-expected rates. MEDC officials were forced to revised the value of the credits from $6.5 billion to $9.38 billion over the next 16 years. Ford's 2009 and 2010 tax credits have more than doubled in value from an initial value $1.14 billion to $2.3 billion, which the automaker is eligible to claim through the end of 2025, according to an MEDC memo to Michigan Strategic Fund board members. The agreement with Ford stipulates the company will agree to an unspecified annual limit on the value of tax credits it can claim — a demand the Snyder administration made to bring more certainty to yearly budgeting for tax credits in the state's nearly $10 billion general fund. Pryde said the company wanted assurances on the annual refunds, given the political volatility surrounding the MEGA tax credits. "We were concerned in terms of the timing of the payment of credits," Pryde said. The agreement allows Ford to count improvements at any Michigan facility with workers covered by the tax credits as part of its additional $3.1 billion capital investment requirement. Ford could "re-earn" tax credits for which it didn't qualify in the previous year if it meets job retention and capital investment requirements. "In a globally competitive environment, the modified MEGA agreement provides an additional reason for Ford to continue considering further investment in Michigan," said Joe Hinrichs, Ford's president of the Americas, in a statement. The Michigan Strategic Fund board, which governs the tax credit program, approved Ford's amendment Monday at the urging of MEDC staff. "This amendment does not increase the State's liability under the MEGA," MEDC attorney Christin Armstrong wrote in a memo. "In fact, the amendment would serve to limit the state's costs and provide more certainty with its long-term obligations to Ford under the amended MEGA tax credit." Rising tax liability The News first reported in February on how the Detroit Three automakers laid claim to tax credits initially valued at $4.5 billion and tied to the retention of 86,000 jobs in Michigan. Since revising the estimated total tax credit liability, the MEDC has refused to divulge the value of credits owed to individual companies. But in response to a Freedom of Information Act request from The News, the state agency said more than $9 billion in credits are owed to an industry loosely defined as "transportation." Tax credits under the Michigan Business Tax are calculated by multiplying the state's 4.25 percent income tax rate by the total cost of wages and health care benefits of jobs retained by Ford, GM and FCA US LLC. Because of rising payrolls, Ford's tax credits could have increased in value without the cap, Pryde said. Michigan began handling out large multimillion-dollar tax credits to businesses that created jobs under former Republican Gov. John Engler's administration. In 2009, at the height of the financial crisis when GM and Chrysler were going through bankruptcy, Democratic Gov. Jennifer Granholm's administration began striking more tax credit deals with companies that kept jobs in Michigan to stem the loss of the state's automotive manufacturing base. In June 2009, GM struck the first deal for a "global" tax credit worth more than $1 billion. It has since been amended four times by the Granholm and Snyder administrations to a value of $2.1 billion, with the most recent addition of $96.3 million last July, according to state records. On Oct. 26, 2010, the Granholm administration announced tax credit commitments for Ford valued at $909 million and $1.3 billion for Chrysler. Arwood said the deal with Ford "sets the framework" for negotiating changes to other tax credit deals with a half-dozen other large companies. He would not confirm whether there are ongoing negotiations with GM or FCA. Tax credit backlash The Snyder administration's agreement with Ford to cap the long-term value of its tax credits comes as the MEDC is under fire from lawmakers for its handling of the program and after the House voted to ban any future amendments to the tax credit deals that added to the value. The automakers have been fighting the legislation, which would end the Michigan Business Tax after 2031. Whether the Senate will approve the legislation and send it to Snyder's desk remains uncertain, though. "There's a long way to go in the legislative process," Snyder said Monday. |
May auto sales hit fastest Melissa Burden and Detroit's Big Three automakers reported better-than-expected sales in May, as the industry's sales pace hit its highest point for any month in nearly a decade, with buyers flocking to dealerships for trucks and SUVs. Auto industry sales hit nearly 1.64 million last month, up 1.6 percent from a year ago, despite one fewer selling day compared to May 2014. The annual sales pace hit 17.79 million in May, up from 16.73 million a year earlier and was the highest figure since July 2005, according to Autodata Corp. With lower gas prices, easy credit and low interest rates, light truck sales in May continued to outpace car sales. Light truck sales represented 53.2 percent of the industry last month, versus 46.8 percent for cars. Consumers took advantage of Memorial Day sales and the weekend following, pushing sales above analysts' expectations, said Jeff Schuster, senior vice president of forecasting for LMC Automotive. Analysts had expected an overall sales dip. "There are new products out there, and there are deals out there," he said in an interview. "There are some great lease deals out there and that's also helping to push buyers into dealers." General Motors Co. and Fiat Chrysler Automobiles reported 3 percent and 4 percent sales gains, respectively, while Ford Motor Co. sales fell 1.3 percent. GM and FCA were aided by strong sales of trucks and SUVs, while Ford's sales were off because truck sales were down because of tight supplies of F-150s. ; GM posted its best May since 2007, with three of four brands increasing sales. Chevy crossovers had best-ever May sales and the Chevrolet Colorado pickup had its best month since launching last year. The automaker's total car sales fell 13 percent year-over-year. Ford's sport utility sales (up 0.5 percent) were strong, while car sales (down 0.9 percent) struggled but were helped by Mustang's . Truck sales fell 5.1 percent last month as the F-150 ramps up production. Last week, UAW officials reported a frame shortage has led to a slight dip in production at both the Kansas City and Dearborn truck plants. Ford said Tuesday it will shorten its summer shutdowns at some plants to help produce an additional 40,000 F-150s and other utilities. "America's love affair with the automobile appears over, but Americans are head over heels for utilities," said Michelle Krebs, senior analyst with Autotrader.com. Ford said its F-150 inventory in May was half of what it was the same time a year ago. Ford said incentive spending was down about $900 as it chose not to participate in Memorial Day sales because of tight inventory. Average transaction prices reached $43,300, a $3,300 increase over a year ago. Ford has a 63-day supply of trucks, and they're sitting on dealer lots for an average of 26 days. "We feel good about our numbers given those constraints," Mark LaNeve, Ford vice president, U.S. marketing, sales and service, said in call with analysts and reporters. "We've got tight supply, we've got high demand." LaNeve said he told dealers "May was a low point and it gets better every month from there." FCA continued its sales gain streak for the 62nd straight month, reporting its best May sales month since 2005 and sold more than 200,000 vehicles for the first time in a month since March 2007. Sales were driven by Jeep and Ram, which each posted sales increases. Automakers who rely more heavily on cars for sales saw declines such as Hyundai Motor America, which saw sales fall 10.3 percent. Toyota Motor Co. and Nissan Motor Co. each posted small declines, while Volkswagen's sales rose 8 percent, American Honda Motor Co. Inc. saw sales rise 1.3 percent and Kia Motors America posted record monthly sales of 62,433 vehicles in May. "May proved to be a bit difficult for us as it appears more customers were out looking for big trucks and SUVs than cars," Bob Pradzinski, vice-president of national sales for Hyundai Motor America, said in a statement. Kelley Blue Book expects total yearly sales will reach 16.9 million vehicles, the most since 2005 when sales reached just shy of 17 million. LMC Automotive is targeting 17 million sales for the year. "This is a telling start to the summer selling season," Schuster said. "A May showing this kind of strength, really coming off a strong May last year, I think is a strong sign of where the industry is headed through the summer." |
My Final Retirees Benefit As a reminder: July 1st will begin the third quarter of the healthcare contribution to be applied to all medical claims. Michelle Harvey |
Ford Mustang is officially
Detroit News After years of champing at the bit, Ford Motor's Mustang is opening a huge lead in the race for the pony car market. In the first five months of the year, drivers keen on an American sports car bought 56,571 Mustangs, a 55 percent increase from a year earlier. At the same time, Mustang's closest competitor, Chevrolet's Camaro, went into a skid; only 33,982 of the vehicles drove off the lot through May, a 13 percent decline. It's an astonishing gap in what has been a tightly contested market for 50 years. The past five years, Camaro has been on top. "I always think of it in political terms," said Chevrolet spokesman Monte Doran. "There's 40 percent of the market that would never think of leaving Camaro and 40 percent that will always buy a Mustang. But that 20 percent in the middle is the swing vote." The pony-car platform has long been simple and straightforward: lots of horsepower, loud paint, and cool design for relatively few dollars. A bare-bones Mustang posts 300 in horsepower and can be had for less than $24,000. It's one equation that Detroit still engineers as well as or better than anyone else, along with pickup truck profits. But if the market were, indeed, an election, Ford is now winning in a landslide. Part of its success comes down to timing. The Mustang sitting in dealerships now is a drastic redesign ordered up by the executive team to celebrate the model's 50th anniversary. The slightly younger Camaro doesn't hit 50 until next year (or 2017, depending on when one marks its start date). "Some of this can be explained just by people waiting for next year's Camaro," said Bloomberg Intelligence analyst Kevin Tynan. "But a lot of it is also the new Mustang just being really good." Drive a "triple yellow" version of the 2015 Mustang through the streets of Manhattan and you get two looks: approving nods and get-over-yourself eye-rolls. What's important: Everyone looks. Even in single yellow, the machine would demand attention. Most notably, the Mustang seems longer and leaner than prior iterations less hot rod, more Jaguar, less Lebron James 2012, more Lebron 2015, all sinewy and carb-free. "When you do such a dramatic redesign, either it's going to resonate really well or it's not," said Ford Marketing Manager Melanie Baker. "Honestly, we're ecstatic with the sales numbers." The Mustang can still be had with a manual transmission and a big-block V-8 full of barbaric yawp. But Ford is also offering the car with a turbo four-cylinder. To Mustang purists this is like selling four beers in a six-pack, but the purists will keep buying. Plus, it's a new, green world out there, full of high- performance hybrids and sake cocktails. "We actually call it Ecoboost, because people have a negative association with four-cylinder,'" Baker explained. Roughly one-third of Mustang buyers are opting for the small engine. Meanwhile, California has become the Mustang's No. 1 market. In the cockpit, Ford finally fixed a number of little irritants. The cup holders, for example, no longer crowd the gear selector. And it added something called line lock, which clamps the brakes to let a driver smoke the back tires at a stoplight. It's a feature straight from the "you know what would be cool?" file, and it comes standard. Despite little cheap engineering tricks like that, or perhaps because of them, the Mustang is pulling a greater share of buyers away from more refined and expensive luxury brands, according to Baker. (Note to BMW: make a burnout button.) Chevrolet, meanwhile, is biding its time. Last month, it unveiled an all-new Camaro that will be about 200 pounds lighter than its predecessors and also can be had with the model's first turbo-charged engine, a four-cylinder unit. GM's Doran said the vehicle's designers managed to make the car look both contemporary and classic, which is never as easy as it sounds. "You could strip all the badges off that car and put it on the moon, and it would still look like a Camaro," he said. The most muscle-bound Camaro model will also make 455 horsepower, 20 more than Ford's meatiest pony. The more anticipation builds, however, the more the current Camaro will lose its sheen. At current trajectories, the Dodge Challenger, last year a distant No. 3 in the pony car race, will overtake Chevy's entry-level sports car in the next few months. Through May, Challenger sales in the U.S. increased by 38 percent to 30,166. General Motors CEO Mary Barra said the new Camaro is designed to keep the pony-car crown, not compete for second place. "I think we will, and that is our goal," she told Bloomberg.The car will start showing up in dealerships around the end of the year; for General Motors, it can't come soon enough. In the meantime, Camaro fans will be able to find screaming deals on the 2015 models. |
Obituary for Mr Robert
March 26, 1950 - November 14, 2014 June 8, 2015 We have just become aware of Bob Edy's passing today by one of our retirees. He passed away on November 14, 2014. Bob worked at Ford Bramalea for 19 years before transferring to Edmonton. Our sincerest condolences go out to his family. It is with great sadness and much love that we announce the passing of our beloved Dad, Son, Brother, Nephew, and Uncle, Bob Edy. Bob passed away peacefully on November 14, 2014, at the age of 64 years, with his Daughter and Son-In-Law by his side. Bob, a true Oilers fan and classy dresser, loved collecting frogs, cooking, playing golf, car racing, listening to country music, woodworking, and camping in his Airstream trailer. Bob loved to have a good laugh, especially when it came to the art of choosing a funny card, a competition, which he and his daughter made a tradition. Bob will be sadly missed by his daughter and son-in-law, Cara and Iain Linsey, his mother Betty Hancock, his wife of 31 years Ann Edy, brothers and sisters Nancy Kuchurean (Murray) (Daniel deceased), Ted Edy (Debbie), Sue Edy (Keith), Dave Hancock (Kim), aunts and uncles, nieces and nephews, and great nieces, nephews as well as close friends. Bob is predeceased by his sister, Sandie Edy, and loving stepfather, Fred Hancock. Cremation has taken place. Cara would like to extend her sincere gratitude to all the kind staff at the ALS Society of Alberta and the University of Alberta ALS Clinic. |
Ford running short of F-150 frames Ford Autoblog Like most any automaker, Ford is eager to build as many F-150 pickups as it can sell. And considering that the truck has long stood as the top selling vehicle in the United States, that means building (and selling) a lot of them. Further, Ford reports that its factories are finally fully up to speed and ready to build as many F-150s as dealers can sell. Unfortunately another factor is reportedly preventing the new aluminum-bodied pickup from reaching its potential. According to Automotive News and as we've heard before, the Blue Oval automaker has had trouble getting its hands on as many frames as it needs. Though Ford would not confirm the shortage itself, AN cites union sources in reporting that the Metalsa plant in Kentucky, which produces the new F-150's frame for Ford, has been unable to meet the demand for more such frames. "Whenever you have launches, you have issues that you have to deal with in the supply base," is all Ford CFO Bob Shanks would admit. "We're always working closely with suppliers if there's an issue to sort it out. If that were the case, that's what we'd be doing." The reported supply shortage could be why plans for overtime production are reportedly being canceled at both the plants in Kansas City and Dearborn where the F-150s are assembled, despite reaching or nearing full capacity. The shortage could also help explain why, according to AN, sales of the F-Series in the United States fell nearly 10 percent last month, while the rest of the pickup market rose 17 percent. |
Toyota to explore use of Michael Martinez, While other automakers turn to Apple CarPlay and Android Auto to integrate smartphones into the car, Ford Motor Co. and Toyota Motor Corp. on Wednesday announced a partnership to use a Ford-developed app system. The Japanese automaker said it will explore the adoption of SmartDeviceLink — an open-source version of Ford's AppLink software system — so drivers can easily access smartphone apps using their car's infotainment system. The software could appear on future Toyota and Lexus vehicles. SDL was developed by Ford and Livio, a Ford subsidiary. "We continue to investigate new technologies that both enhance and safeguard the driving experience of Toyota and Lexus owners," Shigeki Terashi, Toyota's senior managing officer, said in a statement. "The in-car app market is quickly evolving. Developing robust, flexible, safe and user-friendly connected services is a priority for us, and one that we believe is shared by Ford, Livio and other contributors to SDL technology." The SDL technology allows drivers to play music, look up directions and check weather by using display screens, buttons and voice recognition on their car or truck's infotainment system. "Dashboard interface design and smartphone connectivity are key elements for product differentiation within the industry," Don Butler, executive director, Ford connected vehicle and services, said in a statement. "At Ford, we view all aspects of time behind the wheel as core to the experience we provide customers. We're pleased other members of the industry feel the same way, and look forward to working together to drive even more support for the SDL developer community." Ford's AppLink technology is available on more than 5 million Ford vehicles in North America, South America, Europe and the Asia Pacific region. The automaker said vehicles in Taiwan, New Zealand and Thailand are set to get the technology this year. In 2013, Ford announced it would become the first American automaker to hand over its AppLink software to an open-source project that other automakers could access. This isn't the first time Toyota and Ford have teamed up. In 2011, the automakers agreed to collaborate on the development of next generation standards for in-car telematics. |
US auto sales crush expectations Myles Udland Economists expected sales would come in at a pace of 17.3 million. Throughout the day, we saw major automakers including General Motors, Fiat Chrysler, Ford, Toyota, Honda, and Nissan all report sales that beat expectations. Honda reported an unexpected sales increase in May, with sales rising 1.3% against expectations for a 4.4% decline. Toyota reported its US auto sales fell 0.3%, less than the 1.8% decline that was expected. General Motors reported sales that beat expectations in May, with sales rising 3% against expectations for a 0.1% increase. Fiat Chrysler kicked off the reporting, with sales rising 4% in May, topping expectations for a 2.6% increase. Ford later followed up with a 1.3% sales decline in May, which is less than the 3.1% declined that was expected. Nissan also saw sales beat expectations, with sales fall 0.8% against expectations for a 2.4% decline. Here's the updated scoreboard: Economists expect that auto sales rebounded in May to a seasonally adjusted annualized rate of 17.2 million vehicles after April's results disappointed. In April, sales totaled a pace of 16.5 million. In a note to clients ahead of the report, economists at Bank of America Merrill Lynch wrote: "With winter doldrums well in the rearview mirror, and with consumers enjoying several months of relatively low gasoline prices, we see an improvement in vehicle demand. 17.2mn is slightly above the highs of this year (registered in March), and if gasoline prices remain subdued and consumer confidence continues to improve, we see further upside to vehicle sales ahead." |
Shelby GT350 Mustang engine Michael Martinez, When Ford Motor Co.'s new Shelby GT350 and GT350R Mustangs hit showrooms this fall, they will feature the automaker's most powerful naturally aspirated engine ever made.
The engine is virtually all new, and weighs less than previous versions. It includes a redesigned engine block, oil pan, 87-millimeter throttle body, intake and exhaust manifolds and air cleaner. "The high-revving, naturally aspirated 5.2-liter flat-plane V8 delivers on every target we set — high horsepower, broad torque curve, aggressive throttle response and light weight," Jamal Hameedi, Ford Performance chief engineer, said in a statement. Ford engineers got more power out of the engine by maximizing airflow. The engine has a unique firing order that alternates ignition events between the V-8's two cylinder blocks, improving airflow and allowing it more power. It also features larger exhaust values and a higher lift — 14 millimeters — to get the exhaust gas out of the engine quicker. "We wanted this to be the ultimate engine for a track-going Mustang," Hameedi said. The engine has been optimized for track racing. It features a wide torque curve, producing 90 percent of peak torque from about 3,450 rpm through 7,000 rpm. "We didn't just want high power at high speed, we wanted a broad torque curve designed for the track," said project manager Eric Ladner. When the GT350 and GT350R go on sale later this year, there will be a very limited number of 2015 model-year cars: 100 GT350s and 37 GT350Rs. |
The 5.2-liter flat-plane crankshaft V-8 will get 526 horsepower and 429 pound-feet of torque. It will be Ford's highest-revving V-8 engine, topping out at 8,250 rpm, and gets 102 horsepower per liter. All this comes without Ford's Ecoboost technology.
Ford's Sync 3 to debut
on Michael Martinez, Ford Motor Co.'s next-generation Sync 3 infotainment system will debut this summer as an option on the 2016 model-year Escape compact SUV and Fiesta compact car. The Dearborn automaker said Tuesday it chose the Escape because it is one of Ford's highest-volume vehicles, and the Fiesta because it is its most affordable car. Ford wouldn't provide specific dates the vehicles would hit showrooms, but said the Escape will be available first. Ford says Sync 3 will be on all Ford vehicles in North America by the end of next year. "Sync always has been about providing a safer way for our customers to connect their smartphones in order to keep their eyes on the road and hands on the wheel," said Mark LaNeve, Ford Motor Co. vice president, U.S. marketing, sales and service. The price of Sync 3 will vary, Ford said, but the price on the Escape will not change from what MyFord Touch cost on the 2015 model. The Sync 3 option on the Escape SE trim level is part of a $1,395 package that includes Sync 3, a Sony nine-speaker audio system and a number of other features. Sync 3 is standard on the Titanium trim level. The newest version of Ford's infotainment system features completely revamped hardware and software. The MyFord Touch name is gone, and so is partner Microsoft, ditched in favor of software from Panasonic and QNX. The interface is different, with a simpler, horizontal tab list at the bottom of the screen for features like music, navigation, phone and climate. Sync previously utilized a four-corners layout for those features. Sync 3 features a new interface that includes one-box search menus, automatic wireless software updates and an updated app network called Sync AppLink. AppLink allows customers to connect their smartphone to their vehicle and control compatible apps — including Spotify, Pandora, Glympse, NPR One and iHeart Auto — using voice commands or buttons on the vehicle display screen. AppLink automatically discovers smartphone apps. Music and news apps are automatically displayed along with other media sources — just like AM/FM or SiriusXM. The updated voice-recognition system minimizes the number of steps needed to carry out a command. Voice searches can also accept partial names — you can search "Detroit Airport" instead of its official name, "Detroit Metropolitan Airport." The new Sync will have a steering-wheel button that iPhone users can push to activate the Siri search function. It will also feature an improved 911-assist feature that can tell emergency personnel what type of accident a vehicle was involved in and whether or not the driver was wearing a seat belt. Ford's Sync system, which launched in 2007, is now in more than 12 million vehicles on the road globally, Ford said. While Ford was a leader in such technology, early versions of the Sync system were plagued by quality issues. Ford said it drew on 22,000 customer comments and suggestions to develop Sync 3. Since its initial problems, Ford has made strides in third-party quality studies. According to the most recent J.D. Power & Associates' Initial Quality Study, Ford jumped above the industry average, thanks to improvements in its technology. |
Ford to cut summer shutdown Michael Martinez, Ford Motor Co. on Tuesday said it will cut its summer shutdown from two weeks to one week at six assembly plants across the country that make the F-150, Edge, Escape and Explorer to keep up with high demand for those vehicles. The extra week of production at Ford's Dearborn Truck, Chicago, Kansas City, Kentucky Truck, Louisville and Oakville plants will be used to make an additional 40,000 trucks and utilities, the automaker said. The plants — along with 10 supporting stamping and powertrain plants — will shut down the week of June 29. Ford's other manufacturing facilities in North America are scheduled to be idled from June 29 to July 10 for building maintenance and machine retooling. "To meet surging customer demand for our top-selling trucks and utilities, we are continuing to run our North American facilities during the traditional two-week summer shutdown in order to add close to 40,000 units," Bruce Hettle, Ford vice president, North America manufacturing, said in a statement. "Six of our assembly plants will build for an additional week in order to ensure we're getting more of our vehicles into dealerships." Ford's trucks and utilities were popular in April. F-150 was turning in just 20 days on dealer lots, while Edge spent just 10 days on dealer lots, Ford said. The automaker sold 222,498 vehicles in April, including an April record 62,730 SUVs. Ford utility sales rose 14.5 percent that month. Automakers will release May sales numbers Tuesday. Last week, UAW officials posted online that a shortage in F-150 frames has led to canceled overtime shifts for the past few months. This is the third straight year Ford has kept plants running during summer shutdown to meet demand, Ford said. The increased production was included in the financial guidance Ford confirmed in its first-quarter earnings report on April 28. Shortened summer shutdowns In addition to Ford's six assembly plants, the following stamping and powertrain plants will also have reduced summer shutdowns: ■Dearborn Consolidated ■Livonia Transmission ■Sterling Axle ■Woodhaven Stamping ■Rawsonville Transmission ■Sharonville Transmission ■Buffalo Stamping ■Chicago Stamping ■Kansas City Stamping ■Kentucky Stamping |
UAW: Overtime canceled Michael Martinez, A shortage of frames has caused a cancellation of some overtime shifts at Ford Motor Co. plants producing the new aluminum-bodied F-150 pickup. UAW officials say a lack of truck frames — made by Metalsa, a supplier in Kentucky — has forced Ford to cut weekend overtime shifts at its Dearborn Truck Plant and Kansas City Assembly Plant. "Demand for our F-150 is sky high," Todd Hillyard, plant bargaining chair for UAW Local 249 in Kansas City, wrote on the local's Facebook page. "Frames continue to hold both truck plants back from running overtime days on the weekend. (Kansas City Assembly Plant) just canceled the first 'super Saturday' for May 30 and (Dearborn Truck Plant) has canceled several 'super days' already." The shortage has affected shifts for at least a few months. The plants "have had a few shifts canceled due to a frame supplier not being able to keep up," Hillyard wrote in a post on UAW Local 429's Facebook page April 1. "The demand for the new F-150 is very strong and it looks to be a busy year once the supply base is able to keep up with the two truck plants." Nick Kottalis, a UAW chairman at the Dearborn Truck Plant, said Friday that Ford told plant workers the situation has been remedied. "We should be getting back to full-scale overtime over the next 30 days," he said. Ford did not directly comment on the frame shortage or slowed production. "We are producing the all-new F-150 at full production at Dearborn Truck Plant and will be at full production this quarter at our Kansas City Assembly Plant," Ford said in a statement. "As with all our vehicle launches, we are working closely with our suppliers to meet customer demand for the truck." On May 1, Ford said the popular pickup was sitting on dealer lots for an average of 20 days. Average transaction prices in April reached a record $42,600, an increase of $3,200 from a year ago, and Ford said 60 percent of truck retail sales in April were of more expensive premium models like the King Ranch, Lariat and Platinum. F-series sales fell 0.9 percent last month compared to the same time a year ago, and are up 1.4 percent through the first four months of the year. "Ford F-150 sales haven't been what some expected, in large part due to production capacity issues and getting more production lines online for the new model," said Akshay Anand, analyst at Kelley Blue Book. "Considering production is an issue already, this latest frame shortage development has the potential to hurt the F150's sales growth even more. Not only that, but as the F-Series is a huge profit maker for Ford, this is definitely something to keep in mind going forward if this issue lasts a while." |
Union slams Conservative By laurabeaulne The union representing workers at a General Motors plant in Oshawa is upset over one of Stephen Harper's latest ads and its depiction of an assembly line for a car that will soon be assembled in the United States. "This ad shows just how out of touch this government has become," said Jerry Dias, the president of Unifor National. The ad, titled Proven Leadership, was released Monday in an attempt to portray Prime Minister Stephen Harper as a strong leader, capable of making tough decisions. The ad is also an obvious knock against Liberal leader Justin Trudeau, without naming the Papineau MP in the video, who the Conservatives say is not up for the job of being prime minister. But Unifor members aren't happy with the government or with the GM's plans to ship production of the Camaro muscle car elsewhere. "Sitting back while good jobs leave the country is not proven leadership," said Dias. The shot of the Chevy Camaro is, at the very least, an awkward blunder on the part of the Conservatives. It's been known for a couple of years that Chevrolet would be moving its production of the Camaro to the United States but at the end of April the company announced the last car would roll off the assembly line in November of this year, with 1,000 job losses at the Oshawa plant a result. Production will then shift to Lansing, Michigan. "This government has overseen an incredible loss of jobs in the manufacturing sector, and has absolutely failed to create a meaningful strategy to rebuild and maintain the sector." He added that the Conservative government under Harper sold its shares in GM, giving up influence in what would happen to the company in the future "at this crucial time." But Conservative spokesperson Cory Hann defended the party's advertisement. He said earlier this week that the ad speaks for itself, and shows what Canadians already know — "that being prime minister is not an entry-level job and requires proven leadership to make hard decisions." GM also did some damage control after the ad was released and reached out to media, including the CBC, noting that the company is still doing a lot of work in Canada and that, for example, the Camaro's engine will be produced on Canadian soil. The Conservative Party's ad is just one out of many that came out this week. The Conservatives, as well as the NDP and Liberal Party, are in pre-election campaign mode, and beginning to release attack ads or basic promotional advertisements, starting to frame how the election campaign battles might be fought in the lead up to the expected October election. Watch the full ad: |
Albert Hunt Passes Away I was sadly informed today that one of our retirees, AL Hunt passed away last October 26, 2014. I am very disappointed to say that Ford Motor company was aware of this and never notified the Union. My sincerest condolences go out to his wife Margaret and the Hunt family. We really regret that we had to miss the opportunity to pay our respects. I sent a letter to Ford Management expressing our disappointment with them once again. (See below)
Date of Birth: Peacefully at Headwaters Health Care Centre on Sunday, October 26th, 2014 at the age of 86; beloved husband of Margaret Hunt; dear father of Deborah Love (Mark) and Donna Hunt (Bill Hoffele); cherished granddad of David, Cheryl, John, Sarah and Emma; dear great-granddad of Nathan, Jax, Sierra and Vienna; Albert will be greatly missed by other relatives and many friends. A tree will be planted in memory of Albert in the Dods & McNair Memorial Forest at the Island Lake Conservation Area, Orangeville. A dedication service will be held on Sunday, September 13, 2015 at 2:30 p.m. Condolences may be offered to the family at www.dodsandmcnair.com
Ford Of Canada May 28, 2015 I am again very disappointed with the Ford Motor Company and their (H.R.) Benefits department regarding retiree death notifications. We have just learned by accident that Al Hunt, one of our Retirees passed away over 7 months ago (October 26,2014) and no one from the Union was ever notified. This is a disgrace and keeps happening much too often. This lack of respect for our currently deceased retired members has to stop. There is no excuse for this and you need to fix this NOW! We have repeatedly asked for this issue to be resolved but it keeps reoccurring all too often. Our Union Benefit rep has informed me that CHQ has never notified her of any retiree passing in recent years but she has been the one that informs them. They have told her that it is difficult to notify the Union as they have so many other plants. I have also been told that the Bramalea Office is having the same problem. There is definitely something wrong here. Our Retirees are real people with families and at Local 584 we always think of them as family. It's time Ford Motor Company treated them that way and not just a number. We need a commitment that Ford Motor Company will make a sincere effort to notify the Union as soon as possible after every notification of a retirees death. Chris Wilski |
Ford recalls 423K vehicles David Shepardson, Ford Motor Co. said Wednesday it is recalling 423,000 Fords, Lincolns and Mercurys because the electric power-steering assist can fail while driving, make them more difficult to steer. Four minor crashes are linked to the problem, Ford said, but no one has been injured. The following vehicles are being called back: 2011-13 Ford Taurus and Flex, and Lincoln MKS and MKT; certain 2011-12 Ford Fusion and Lincoln MKZ vehicles; and some 2011 Mercury Milans. The National Highway Traffic Safety Administration in October opened an investigation into 938,000 models of the Ford Fusion, Lincoln MKZ and 2010-11 Mercury Milan after reviewing 508 complaints of steering issues in the vehicles and reports of four crashes. "In some cases, the condition was corrected by turning the vehicle off and restarting. However, many reports indicate the condition returned again after restart," NHTSA said. Ford said the vehicles can have a problem in the electrical connection in the steering gear that might result in the loss of electric power steering assist while driving. "If this happens, the steering system defaults to manual steering mode, making the vehicle more difficult to steer, especially at lower speeds. This could result in the increased risk of a crash," Ford said. The recall includes 393,622 vehicles in the United States, 25,195 in Canada and 3,997 in Mexico. Dealers will perform one of two service fixes, depending upon whether certain diagnostic trouble codes are present. They will either update software for the power steering control module or replace the steering gear. Separately, Ford is recalling 19,500 new 2015 Ford Mustangs with a 2.3-liter engine in North America because high underbody temperatures can cause fuel leaks and parking brake problems. Ford says extended exposure to higher underbody temperatures could degrade the fuel tank and fuel vapor lines, which could lead to a gasoline leak and fire. Extended exposure to heat also can degrade parking brake cable seals and cause the parking brake to malfunction. Ford is not aware of any accidents, injuries or fire. Dealers will replace the fuel tank shield with a new shield with better insulating capability, install thermal patches on the fuel tank and parking brake cable, and install thermal wraps on fuel vapor lines. |
Tories propose voluntary Bill Curry and Steven Chase The federal Conservative government is proposing a voluntary expansion of the Canada Pension Plan, adding a pre-election twist to the politically charged debate over how best to boost Canadian savings. Finance Minister Joe Oliver made the announcement Tuesday in the House of Commons, promising that consultations will take place over the summer on the details. The general premise is that Canadians who choose to pay higher CPP premiums would receive higher guaranteed payments in retirement. The announcement marks a significant shift for the Conservatives, who have long resisted changes to the CPP on the grounds that higher premiums would represent job-killing payroll taxes. It also amounts to a key campaign promise because this measure will not be in place before an expected Oct. 19 federal election. "Our Conservative government believes all Canadians should have options when saving for their future. That is why we intend to consult on giving Canadians the voluntary option to contribute more to the Canada Pension Plan to supplement their retirement savings," Mr. Oliver said. Though the announcement represents a significant policy shift, the Finance Minister did not take questions from the media and few details were provided. This expansion of the CPP on a voluntary, instead of compulsory, basis is an attempt by the Conservatives to offer voters another way to save for retirement without obliging them to do so. The Tories have been at loggerheads with the opposition parties – and most provinces – over the issue for years. Labour groups and the seniors advocacy group CARP have long argued that voluntary savings vehicles do not work and that a mandatory CPP expansion is needed to ensure that all Canadians are saving enough for retirement. The Conservatives have sided with business groups, such as the Canadian Federation of Independent Business, that argue that increasing mandatory contributions to the CPP by employees and employers would be damaging to the economy. The CFIB said Tuesday that it was "delighted" by Mr. Oliver's proposal, provided that it would also be a voluntary decision as to whether or not employers make larger contributions for employees. Susan Eng, the vice-president of CARP, also responded positively, although she stressed that mandatory increases are still likely to be needed. Mr. Oliver said the voluntary plan would build on other government initiatives, including tax-free savings accounts and pooled registered pension plans. He suggested that the Tories give Canadians more choice than the Liberals and the NDP. However, Liberal finance critic Scott Brison noted it was his party that advocated both a mandatory and a voluntary expansion of the CPP in the 2011 election campaign. NDP finance critic Nathan Cullen called the move a "deathbed conversion" by the Conservatives. "You can tell when the government's serious about something: They ram it through an omnibus bill. When they're not serious about it, they launch a series of consultations over the summer on the eve of an election as if somehow they were going to be converted at the very last minute," he said. "This is about polls. It's about the Conservatives realizing they're in trouble." At one point during the past several years of debate over CPP reform, the Conservatives spoke out against the idea they now propose. In 2010, Jim Flaherty, then the finance minister, took the view that further voluntary savings vehicles were not enough. The government later changed course. While Mr. Flaherty briefly advocated for expanded mandatory CPP contributions, Prime Minister Stephen Harper has long opposed the idea in his public comments. The Ontario government has been among the most vocal advocates urging the federal government to support an expanded CPP. When Ottawa decided against the idea, Ontario proposed its own supplemental pension plan, which would begin in 2017 and would apply only to workers who do not have a company pension plan. Ontario has suggested that if Ottawa changes its position and decides to support an expanded CPP, it would not go ahead with its own pension plan. Ontario's associate finance minister, Mitzie Hunter, described the federal proposal as "disappointing." "Two things are clear – people are not saving enough for retirement, and we don't have a federal partner willing to tackle this problem," she said in a statement. |
4 things we can learn from our best public pension plans: Mayers 1.2 million Ontario workers have a reason to smile as their pension funds had a great year. Here's how to copy that winning strategy. Adam Mayers Personal Canada's public pensions come under a lot of fire for being too fat, too generous and too reliant on the public purse for their benefits. You can argue about the pros and cons of how plans representing teachers, nurses, firefighters, police and civic employees are set up, but you can't argue with the success of the people hired to manage their money. Five big Ontario plans representing about 1.2 million workers and retirees averaged a 12.7 per return in their latest year. This excludes the Canada Pension Plan which said last week it earned 18 per cent — its best showing since it began stock market investing in 1999. These returns compare to an average return by Toronto stocks last year of 7 per cent. The best five-year Guaranteed Investments Certificate (GICs) I could find this week is yielding 2.3 per cent. That means its value is declining when you take inflation into account. Beside that, the numbers are even more impressive. As individuals, we can't hope to match the sort of performance. We don't have the scale, the expertise or the long-term time horizon. But we can learn a lot from the way the pros do it. Here's how some big funds have been doing: •The CPP Investment Board which invests our premiums and manages the money. At $265 billion, the CPP is one of the world's largest pension funds. The CPP can cover its obligations for the next 75 years, which is as far out as actuarial predictions go. It sees short-term prospects in the U.S. and longer term, more investment in emerging economies. •OMERS, Ontario's largest pension plan, manages the assets of 450,000 municipal employees. It earned a 10 per cent return in 2014. OMERS sees more money going into infrastructure investments in Canada and the U.S. and Australia. That's such things as roads, telecom and internet backbones, power generation and water purification plants. •Ontario Teachers Pension Plan (OTPP) invests on behalf of 311,000 teachers. It earned 12 per cent and has averaged a 10.2 per cent annual return in each of the past 25 years. Teachers sees a global strategy as vital to its long-term success. It opened a Hong Kong investment office in 2012 and also has one in London, England. •Healthcare of Ontario Pension Plan, (HOOPP) covers 295,000 nurses, hospital support staff and related workers. It returned a record 18 per cent in its latest year. HOOPP has averaged a 10.3 per cent return in each of its last 10 year. It likes the bricks and mortar of new office buildings in Canada, the U.S. and Europe. •OPTrust represents 86,000 Ontario provincial employees and returned 12 per cent. A key part of its success is investments in real estate and infrastructure in Europe. •The Colleges of Applied Arts and Technology (CAAT) Pension Plan represents 40,000 people in the Ontario college system. It earned 11.5 per cent. Just 20 per cent of its stock market investments are in Canada. The rest are in Europe, the U.S. and emerging markets. Here's what we can learn from their success: Have a strategy: Many investors get distracted by current events, changing direction with the latest investing theme. The CPPIB sticks to a strategy that sees its assets stick to 65 per cent stocks and 35 per cent bonds. The stocks are a global basket. The bonds are top quality government and company issues and things that behave like bonds because they spin off cash. These include office buildings and shopping centres, toll roads pipelines and, electricity towers. Reduce your risk: "Diversification is one of the most important components of our strategy," says the CAAT annual report. That means spreading stock and bond investments over a variety of sectors — manufacturing, financial services, energy, consumer goods. So, when oil prices fall, other sectors pick up the slack. It also means looking beyond Canada. Watch fees: The big pension plans rely on in-house staff to buy and sell stocks. It means they're not paying fees to brokers and investment dealers and can get a better deal on the fees they must pay. It's hard for us to do, but we can trade less frequently and avoid funds with high costs. Just 2 per cent in fees makes a huge difference in the long run. Here's an example: A $10,000 investment earning 5 per cent a year, over 10 years, will be worth $16,289. The same amount earning 3 per cent, over 10 years, would be worth $13,439. The difference is $2,850. Also read: How a 2% fee adds $350,000 over time Be patient: When pension plans think the next 'quarter' it means the next quarter of a century. They have no life span. We can't be that patient, but the next best option is to avoid the ups and downs by buying high quality investments and sticking with them. Be prudent, but ignore the chatter. If you had bailed out of stocks in 2009 the value of your holding would have been as much as halved from a year earlier. If you'd been patient, you'd have recovered handsomely. |
NHTSA probes '14 Ford David Shepardson, The National Highway Traffic Safety Administration said Sunday it is investigating 20,000 2014 Ford Edge SUVs for aluminum wheel rim failures. In November, NHTSA received a complaint of a sudden failure of a 22-inch alloy wheel rim 2014 Ford Edge with 8,500 miles on it from an incident in Dickerson, Maryland. There were no injuries in the incident. The "right-front corner of the vehicle suddenly dropped while driving, causing the vehicle to drive off the road and into a field. The right-front wheel rim was found to have broken into two pieces. The owner said that there was no prior warning or wheel related problems with the vehicle," NHTSA said. The driver said he didn't hit any pothole or object before the wheel "totally sheared off from the exterior." Ford didn't immediately respond to a request for comment, but has a policy of cooperating with NHTSA investigations. |
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Tom Krisher Detroit — Eleven automakers are expected next week to reveal which models are being added to a massive recall of air bags made by Takata Corp. On Tuesday, the U.S. National Highway Traffic Safety Administration announced a deal with Takata to declare millions of its air bag inflators defective and expand the recall from 17 million to 33.8 million. The air bag inflators can explode with too much force, spewing metal fragments into the passenger compartment. Automakers including Toyota Motor Corp. and Honda Motor Co. are scrambling to figure out which models are now covered. Many questions about the problem remain unanswered as an investigation continues, but here's what you need to know about the largest automotive recall in U.S. history: THE DANGER In a crash, the air bag propellant can burn too fast, blowing apart a metal inflator canister. Six people have died and at least 105 have been injured due to the problem. THE SOLUTION Takata's agreement with U.S. regulators added millions of cars and trucks to existing recalls by 11 manufacturers — BMW, Fiat Chrysler, Ford, General Motors, Daimler Trucks, Honda, Mitsubishi, Mazda, Nissan, Subaru and Toyota. Takata will need 33.8 million inflators for the repairs — so far it has made 3.8 million. At Takata's estimated rate of production, it will take 2 ½ years to crank out enough inflators to fix all the affected vehicles. DOES THE EXPANSION COVER MY CAR? The automakers don't yet have the answer. They are busy taking data from Takata and matching it to production records to see which models have the faulty inflators. Once they determine that, the companies will file papers with NHTSA detailing the models, probably next week. It's likely that the expansion will involve additional car and truck models beyond those that already have been recalled. HOW TO CHECK ON YOUR CAR If your car has the faulty air bags, eventually you'll get a recall notice in the mail from the manufacturer. But many won't get notices until parts are available. In the meantime, you can enter your vehicle identification number into the NHTSA website, https://vinrcl.safercar.gov/vin/ on see if you're part of the recall. The number is stamped on the driver's side dashboard near the base of the windshield, or it can be found on state registration cards. It's wise to keep checking if you suspect your car is involved because the automakers are still determining which models to include. SHOULD CAR OWNERS WORRY? Takata says inflator ruptures are rare. In paperwork filed with NHTSA, the company says its air bags have inflated in crashes 1.2 million times in the U.S. Of those, 84 inflators have exploded. That's only 0.007 percent of the total. But even such a remote possibility can unnerve some drivers. So if you have a recalled model, or if you're awaiting word on your car, check with your dealer often to see if parts have arrived so you get on a priority list. Some manufacturers such as Honda, Toyota, BMW and General Motors offer loaner cars for at least some recalled models. Other automakers could provide them if you persist. It's worth trying. WHAT IS THE GOVERNMENT DOING? NHTSA pushed Takata to expand the recall, and the agency has filed paperwork to take control of the recall. It has the power to manage production, distribution and installation of replacement parts, including lining up other manufacturers to make more inflators. Inflators would go to high-humidity areas along the Gulf Coast first because the risk is highest there. Older cars would get priority as well, because the longer an inflator is exposed to high humidity, the greater the likelihood of failure. SOME REPLACEMENT INFLATORS MAY BE BAD Some drivers who already had inflators replaced may have to do so again because automakers have replaced some inflators with new ones that now are defective. But NHTSA says people should still get their cars fixed because a new inflator — even if it's defective — is better than an old one. I HAVE A NEWER CAR WITH A TAKATA AIR BAG This is another tricky spot. NHTSA says there haven't been any problems with inflators in cars newer than the 2011 model year, so those aren't being recalled. The rest of the recalled cars date to the early 2000s. But models keep being added to the recall, and investigators are looking at the safety of all Takata inflators. To be safe, ask your dealer if your car's air bags are made by Takata and check periodically to see if it's part of any recall expansions. ------------------------------------------------- Canadians seek $3.25 billion Windsor Star The ongoing Canadian legal battle to recoup money from shamed Japanese auto parts maker Takata Corp. expanded to five class-action lawsuits this week, according to the Windsor law firm leading the charge in court. Combined, the plaintiffs — represented by Sutts, Strosberg LLP — are seeking $3.25 billion for the inconvenience of having to deal with the massive recall of faulty airbags, which is now linked to nearly 34 million vehicles sold in the U.S alone. John McIntosh is one of three Windsor plaintiffs named in the Canadian lawsuits, which his lawyer Harvey Strosberg estimates to include at least 1.6 million Canadian vehicles. "We want to compensate … the owners of the cars for the time that they spend getting their car into the dealer and waiting for … the airbags to get replaced," Strosberg said during a news conference Thursday. "I think people (who) sell cars will not get the same amount if they have a car that had airbags that worked." The latest U.S. figures for defective airbags linked to Takata nearly doubled this week making it the largest recall in U.S. history, according to an announcement on Tuesday by the U.S. Department of Transportation and the National Highway Traffic Safety Administration. Both organizations fought with Takata for a year about the exact size of the recall and a more precise cause of the defect. To date, the air bags have led to six deaths and more than 100 injuries worldwide. The problem stems from airbag inflators. Chemicals used to inflate the faulty airbags explode with too much force, sending shrapnel at drivers and passengers in the vehicle. Though the official number of affected cars in Canada is unknown because of a lack of mandatory recall regulations, U.S. numbers illustrate the extent of the problem. Of the 10 automakers listed on the U.S. traffic safety administration website, Honda Motor Co. has the highest number of recalls at more than five million, followed by Toyota Motor Corp. at 877,000. None of the five plaintiffs named in the Canadian lawsuits were injured by airbags, but there has been substantial inconvenience, said McIntosh, who drives a 2003 Toyota Corolla. Since learning about the recall, he limits how often he drives and he refuses to travel on any highways. "I don't like to drive it, especially on the highway," he said. "I have no desire to be in a situation where it might deploy, so I refuse to drive it on the highway. There's a significant impact on how I can use it." Though Takata is named in all five lawsuits, individual claims were filed because each suit includes a different automaker: Honda, Toyota, BMW, Nissan and Chrysler. Each lawsuit seeks $650 million in compensation. Also named on the statements of claims are Windsor residents Rick Des-Rosiers and Stephen Kominar. Gary Coles of Tecumseh is named in the fourth lawsuit and Donal D'Haene of London and Keith Sanford of Windsor are identified in the fifth claim.
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Bills pile up for Ontario
Toronto Star The Ontario Federation of Labour is so cash-strapped that is has been assigned a financial administrator to oversee its affairs, the Star has learned. With millions of dollars in dues lost because of complaints about the way the umbrella labour group is being run, the OFL is barely able to keep its head above water as the bills pile up. According to an email obtained by the Star, the organization has $1 million in outstanding payments, a budget shortfall of $200,000 for the first six months of this fiscal year, and a $250,000 credit line that's maxed out most weeks. "In fact the credit line is what we have been using to pay the OFL payroll and bill payments for over a year," the OFL's secretary-treasurer Nancy Hutchison said in the email to union leaders dated March 26. The three unions no longer paying dues are: Ontario Public Service Employees Union (OPSEU) — $680,000 annually; Ontario Nurses Association (ONA) $136,000; Service Employees International Union (SEIU) — $80,000. The OFL said the accumulated shortfall is about $4.5 million. OPSEU president Warren (Smokey) Thomas pointed his finger at OFL president Sid Ryan, and said his union is unhappy with how the OFL is being run. "Mr. Ryan has two choices. Mend his ways or resign," Thomas said in an email statement to the Star. He added later by phone: "I believe it (the OFL) is living on borrowed time already." Ryan, who is running for re-election in November, said the release of the internal OFL documents "is obviously mischief-making" by people trying to derail his re-election bid. "There is . . . a handful of people with a political agenda, who keep leaking to the media to create the illusion that the OFL is going to go out of existence," he said. The OFL, which represents 48 unions, is an influential body that speaks for all labour groups in the province and has held sway with governments of all stripes. In the unlikely event that it ceased to exist, the union movement would be seriously hobbled. Ryan, who makes about $120,000 a year, said he is confident he can right the financial ship, despite having to cope with 20 years of legacy costs, including an unfunded pension plan and, according to Hutchison, "a massive unfunded liability of $406,277.77 in our banked vacation." He said the OFL has had a credit line for 20 years to cover the almost daily shortfall. "There is almost $600,000 in arrears on any given day at the OFL . . . so the arrangement we made with the bank about 20 years ago was that we would basically have a rolling line of credit, so when we have bills that come in and have to be paid right away we use the line of credit," Ryan explained. The OFL's projected revenue for 2014-15 is $4.1 million. On average, Ryan said about 900 cheques come into the federation from various affiliates every month and that every time one arrives it goes right on the line of credit. Officials with the SEIU and ONA both declined to comment. But Thomas said OPSEU members have twice voted on whether the union should rejoin the OFL again and "both times, the members overwhelmingly endorsed our position to remain outside of the OFL until the appropriate structural changes are made." "We have established principles, policies and standards that govern our conduct. A commitment to accountability, transparency, equity, respect and a welcoming environment, where all thoughts and opinions can be expressed without reprisal are non-negotiable. Accordingly, Mr. Ryan's leadership at the OFL has been a colossal failure," Thomas said in his email. Meanwhile, the Canadian Labour Congress, the parent union organization, has stepped in and appointed a financial administrator to oversee the operation of the OFL. The team is Chris Buckley from Unifor and CLC's Jasen Murphy. "It concerns all of us and I have said to the officers directly that we've got to deal with the challenges that they are faced with . . . and hopefully make their obligations of paying their bills on time and their payroll on time," CLC president Hassan Yussuff told the Star. Yussuff said he can't say whether Ryan is to blame for OFL's problems or the unions that are on a dues strike. "At the end of the day officers of the federation have to have a good relationship and be able to work with each other in a collegial fashion," he said. Unifor president Jerry Dias said there is no need to panic, and believes the OFL financial state of affairs can be brought into line in three to four months. "It would have been helpful for us to react sooner but we are reacting now," Dias said. As for Ryan's tempestuous leadership, Dias said Ryan, the former president of CUPE-Ontario, is a powerful personality who speaks his mind. "You are not going to have a successful leader of any federation . . . by being charm school graduate. Some might point the finger at Sid but I don't think that's fair," Dias said. 48 – Number of unions represented by the Ontario Federation of Labour. $4.5 million — Accumulated shortfall because unions are no longer paying bills to OFL. $1 million — Outstanding payments owed by the OFL, according to an email obtained by the Star. $120,000 — OFL president Sid Ryan's approximate salary. |
CPP Fund generates highest one Barbara Shecter The CPP Fund generated the highest one-year return in its most recent fiscal year since it was created in 1999 — and racked up the largest chunk of annual investment income. The investment portfolio of Canada's biggest pension fund generated a net investment return of 18.3 per cent, according to results for fiscal 2015 released Thursday. Assets climbed by $45.5 billion to $264.6 billion. The growth included $40.6 billion in net investment income after all costs of the Canada Pension Plan Investment Board. The balance came from CPP contributions. "Many factors helped lift the year's results but the impact of decisions made over several years — and patience — is evident," said Mark Wiseman, chief executive of the CPP Investment Board. He said he views longer–term returns as even more important than the single's year's "exceptional" results. The 10-year investment rate of return for the fund is eight per cent, while the real return — which takes inflation into account — is 6.2 per cent. Canada's Chief Actuary says the fund must generate an average annual rate of return of four per cent to be sustained at current contribution rates and meet its obligations over the next 75 years. In the past year, the fund benefitted from strong public equity markets, as well as diversification across currencies as the relative value of the Canadian dollar fell. "We accept occasional swings in the portfolio, currency being one example," Wiseman said, explaining the decision not to hedge in order to smooth results year to year. On the investment front, there were fewer deals than a year earlier, which reflects continued competition that is pushing up prices, he said. But that hasn't altered the strategy of global diversification that led to some recent investment gains. "I certainly hope and expect that we will find one or more Alibabas in these transactions we completed in the past year," Wiseman said, referring to CPPIB's early investment in the Chinese e-commerce behemoth that was taken public last year. The CPP Investment Board's active investment style, which is measured by how much the investment portfolio exceeds a benchmark return after costs, added $2.8 billion to returns in fiscal 2015. "It's really, really hard to beat the reference portfolio in a bull market," Wiseman said. "Where [it] will really pay off is when the market turns." While year-to-year results are expected fluctuate, he said the long-term horizon of the fund, as well as its size and scale, should result in a "high tolerance for potential future negative shocks." Wiseman said the fund's characteristics should also allow for a gradual increase in risk appetite over the next few years in both the reference portfolio benchmark of public equity and bond investments, and in its total portfolio, which includes private investments such as infrastructure and real estate. "On the margin, we're going to prudently increase our risk appetite over a period of time," he said. Ed Cass, chief investment strategist at the CPP Investment Board, said this will be achieved, in part, by tweaks in the permissible weight level of certain geographies and assets classes. The CPP Investment Board invests funds not needed by the Canada Pension Plan to pay current benefits. Investment income, which made up around half the CPP fund's cumulative assets for the first time in fiscal 2014, now accounts for more than 57 per cent. |
The truth about GM's Cost- May 21, 2015 The hourly cost of production in Oshawa is competitive with the UAW plants in the U.S., yet our local MP is erroneously blaming unionized workers' wages at the GM Oshawa plants for the loss of jobs. Here are the facts. Our existing members' rate is $34.48 Cdn/hr. The Canadian dollar at $0.85 US makes that $29.30 US/hr. The Canadian health care cost advantage is $5 per/hr, bringing the cost down to $24.30 US/hr. There is a 5% to 10% productivity advantage at GM Oshawa which puts our existing wages in the $22 US/hr range. The UAW existing wage is over $28 US/hr. New members start at $20.49 Cdn/hr. The Canadian dollar at $0.85 US makes that $17.41 US/hr. The Canadian Health Care Cost advantage is $5 per/hr, bringing the cost to $12.41 US/hr. The 5% to 10% productivity advantage at GM Oshawa puts our new member wages below $11 US/hr. The UAW new worker wage is $14 US/hr. All-in cost of Unifor Local 222 members (including wages and benefits) are about $10 US/hr lower for existing members and about $15 US/hr lower for new members than in the American plants, at current exchange rates. The UAW is entering bargaining which is strongly expected to increase the hourly cost in the U.S. Meanwhile, the demographic of the workers in Oshawa allows for 2/3 of our workforce to be retirement eligible by the end of 2015, thereby lowering our production costs even further. During the 2008 auto bailout package from the Canadian Government, our Union agreed to reduce our overall cost by thousands of dollars by changing job rules, reducing time off, reducing benefits, etc. It is a distortion to compare Canadian wages to those in China and Mexico. All-in cost (including wages and benefits) in Mexico are under $6 US/hr and the average industrial wage in China is $4 US/hr. Can anyone reading this article live on that?! The Federal government was the largest single shareholder of GM stock and awarded a member on the GM Board of Directors, yet they made no effort to use the GM shares, bought with your tax dollars, to allocate product in Oshawa. Why? The Oshawa MP's boss, Stephen Harper, ordered the sale of the GM stock at a loss of over 3 billion taxpayer dollars to balance his budget, while he handed over $2 billion a year to the richest 15% of Canadians. Why? The Business Development Bank of Canada recently loaned over $500 million to Volkswagen, who builds in the Southern U.S. and Mexico, but does not build in Canada? Why? We are losing 1,000 good jobs at GM Oshawa, which will result in 5,000 to 7,000 jobs gone from our community. This is a time for Unions and governments to cooperate. We are a transparent Union and are happy to inform the public and politicians of the facts. Unifor Local 222 has made responsible decisions to protect jobs and we will continue to pursue new products and job opportunities for our community and our country. By Ron Svajlenko, Unifor Local 222 President |
FCA stock closes ahead of Michael Martinez Shares of Fiat Chrysler Automobiles NV closed up 13 cents to $15.60 a share on Tuesday, a dime higher than Ford Motor Co. — the second time this week that shares of the Auburn Hills automaker have topped its Dearborn rival. Ford stock was down 8 cents Tuesday, dropping 2.6 percent during the past year, while FCA's stock has gained nearly 75 percent since its Oct. 13 debut on the New York Stock Exchange. This week marks the first time since the listing that FCA's stock has surpassed Ford's. Analysts say the stock price jump doesn't mean much, since Ford's market capitalization remains far ahead of FCA's. Ford's relatively low stock price raised at least one question at Ford's annual shareholders meeting last week in Delaware, but analysts remain optimistic about Ford's fortunes through the rest of the year. "They've had some medium-term pain because of some launch costs for some products," said David Whiston, a senior equity analyst with Morningstar Inc. "But I think going forward, including this year, Ford has a lot of potential for some nice upside." That potential hinges on Ford's most profitable vehicle, the new F-150 pickup. The automaker will reach full production at its two F-150 plants by the end of this quarter. Whiston said that, coupled with new models of the Edge and Lincoln MKX will help boost profit margins and stock price. "I think things will start to change during the end of the summer," said Barclays analyst Brian Johnson. During Ford's shareholders meeting, Roger Heymann, a shareholder from Rockville, Maryland, voiced concern over the company's stock price. Executive Chairman Bill Ford responded by saying he checks the stock price daily, if not hourly. "We're on track for a very good year," Ford said. "I believe the stock price will take care of itself." Efraim Levy, equity analyst at S&P Capital IQ, said in a recent note to investors that FCA's stock should perform well, as profit and margins expand in 2015. |
Crafted in secrecy, Ford GT
Michael Martinez, Ford Motor Co.'s 2017 GT supercar is anything but ordinary — and the same goes for the space where it was made. Engineers and designers spent 14 months crafting Ford's halo car inside a secret room in the corner of the automaker's Dearborn Product Development Center. There are nearly no decorations inside the gray space, except for a "Teamwork" motivational poster near one of the clay model machines. Few knew of the room's location, tucked at the end of a long basement corridor and flanked by barrels of used oil and storage shelves for extra pieces of foam, steel and other materials. Those who did were sworn to secrecy about the project until its reveal at the 2015 North American International Auto Show. "We realized when we started the program we needed a small dedicated space with a small team somewhere out of the norm," Moray Callum, Ford's design chief, told reporters in a Monday tour of the facility. The secret makeshift studio houses Ford's oldest mill, but quickly became the birthplace of its most advanced vehicle in terms of lightweight materials and performance capabilities. "It's a very different entity than the first GT40 and the last GT we did," said Jamal Hameedi, chief engineer of Ford Performance. Ford's 2005 aluminum GT had anti-lock brake systems, but the 2017 supercar will feature the full spectrum of driver-assist technologies. "These systems are not just there for convenience," Hameedi said. "There's a very performance-driven purpose for all of these electronics systems." The supercar includes more than 50 sensors that generate 100 gigabytes of data per hour and feed 28 microprocessors which control everything from tire pressure to door latches. The GT includes more than 10 million lines of code, about 8 million more than an F-22 fighter jet, Ford said. "There is a lot of software and it is all mission critical," Hameedi said. New software systems also help regulate the 3.5-liter V-6 EcoBoost engine. It's the same engine that debuted on Ford's Taurus SHO and is on the 2015 F-150 pickup, but the GT engine includes custom pistons, rods, turbos and cams that will help it get more than 600 horsepower. The GT also features a more simplified drive-mode control. The development team looked to the complicated drive modes on the 2013 Ford Raptor — it took three buttons to get to various modes — and cut that down to a single switch that can move through "normal," "sport," "track," and "wet" modes, which each offer different engine power, brake controls and other features. The GT is the first production car that Ford will equip with active aerodynamics; a moveable wing at the rear of the car that will automatically move depending on how you're driving. The car's interior features fixed seats bolted into a carbon fiber tub, although the steering wheel and pedals can move about eight inches to accommodate larger or smaller drivers. The interior space was so small that designers had to put the air vents on the doors instead of the dash. The center console has just enough room to fit the smaller iPhone 6. "We had to be as lean and as efficient as possible," said Amko Leenarts, Ford's global interior design director. The GT will be available in late 2016, and Ford will limit production to 250 a year. Ford says it will be priced competitively with the Lamborghini Aventador, which starts at around $400,000. |
Ford shareholders Michael Martinez, FShareholders of Ford Motor Co. on Thursday again rejected a proposal to end the two-tier class system that allows the Ford family to control the company while owning a relatively small proportion of shares, but it got a record number of votes — 36.3 percent — up from 34.4 percent last year, and 33.4 percent the year before. The Ford family holds a special class of stock worth about 40 percent of the voting shares, getting 16 votes per share. That gives the family effective control of the company. Separately, shareholders approved 15 nominees for the automaker’s board of directors, along with compensation plans for its executives. They also voted down a proposal to hold special meetings between the annual shareholders meeting. The 60th annual meeting — which took place in Wilmington, Delaware, and lasted just under an hour — was the first for new President and CEO Mark Fields. Bill Ford Jr., Ford’s executive chairman, praised Fields for the smooth transition from Alan Mulally last year. “The team didn’t miss a beat,” Ford said. Among the shareholder comments of praise and adulation for Fields and the company, Roger Heymann, a shareholder from Rockville, Maryland, voiced concern over the company’s stock price. Ford responded by saying he checks the stock price daily, if not hourly. “We’re on track for a very good year,” he said. “I believe the stock price will take care of itself.” |
Appeals court: GM By Greg Gardner, A federal appeals court upheld a lower court ruling that General Motors does not have to make a $450 million contribution to the UAW trust responsible for healthcare covering union members who retired from GM's former parts unit. A three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati found that the automaker assumed the healthcare obligations of Delphi Corp., GM's one-time parts division that was spun off into a separate company in 1999. But the UAW and GM later agreed in the company's 2009 bankruptcy to free GM from that responsibility. "We're pleased with the outcome of this case," said GM spokesman Peter Ternes. The UAW did not provide a comment as to whether it will appeal the case to the U.S. Supreme Court. The disputed payment had been part of a 2007 contract between the old GM, Delphi, which also was in Chapter 11 bankruptcy at the time, and the UAW. It was not, however, included in a different contract over medical benefits signed in 2009 by the GM when it came out of bankruptcy. "In the reorganization, neither the UAW nor GM explicitly took a position on the claim for the $450 million contribution," stated the opinion from Appellate Judges Danny Boggs, Jeffrey Sutton and Jane Branstetter Stranch. In 2006, GM and the UAW agreed to establish a trust to pay for some medical costs of UAW retirees. GM's contributions to that coverage was weakening its fragile financial condition. The UAW wanted to reduce the risk that some retirees would have to bear a large percentage of those costs in the future. In 2007 Delphi, which was already in Chapter 11 bankruptcy, agreed with GM and the union that, among other provisions, GM would make a one-time contribution of $450 million to the retiree healthcare trust. That agreement was revised in 2008, but it provided that GM would make the $450 million payment. Then GM filed bankruptcy in June 2009 which led to the injection of $49.5 billion of taxpayer funding, eliminated most of the company's debt and provided for the sale of its best assets to a new company called General Motors Co. The unwanted assets remained in bankruptcy courts as Motors Liquidation Co. That sale agreement, which U.S. Bankruptcy Judge Robert Gerber approved on July 5, 2009, did not say anything about the $450 million retiree healthcare payment. Three months later Delphi, still in bankruptcy, sold most of its remaining assets, leading the UAW to seek the $450 million payment from New GM. New GM refused to make the payment. The UAW sued in April 2010, and the U.S. District Court for the Eastern District of Michigan ruled for GM in December 2013. A separate legal fight by thousands of Delphi salaried retirees against the Pension Benefit Guaranty Corp. continues. About 22,000 Delphi salaried retirees have had their pension benefits cut, in some cases by 30% or more after the PBGC, which insures corporate pension plans of U.S. companies, declared the Delphi salaried plan to be underfunded. Unlike the UAW-Delphi pensions, that were fully funded as part of the 2009 bankruptcy restructuring of GM, Delphi's white-collar pension was given no government aid. The salaried retirees contend the PBGC miscalculated the plan's assets and liabilities when it took control and that the benefit cuts were not necessary. |
Ford recalls 2015 F-150 for steering concern Alisa Priddle, Ford is recalling about 12,300 2015 F-150 pickups in North America to check for a problem that could affect steering. The issue is with the upper I-shaft that might have been riveted improperly, potentially causing it to separate, which could make it hard to steer and increase the risk of a crash. The automaker is not aware of any accidents or injuries because of the problem. Affected vehicles were built at the Dearborn Truck and Kansas City assembly plants. The recall is for 1 8,963 trucks in the United States, 3,348 in Canada and 17 in Mexico. Only 5,600 have been shipped to customers; the rest have not been sold. Dealers will inspect the upper I-shaft assembly and replace it if necessary at no cost to the customer. |
Election shows Alberta DAVID EBNER, The stunning electoral landslide that propelled the New Democrats to power in Alberta this week was the product of two decades of demographic change and a shift in political attitudes that have seen Albertans draw much closer in outlook to the rest of Canada. Alberta has been the fastest growing province for much of that period, often expanding at two or three times the national average. It is also Canada's youngest province, with a median age about four years younger than the rest of the country, the highest birth rate and the smallest proportion of seniors. As it has prospered economically, it has attracted young, highly educated Canadians from every other province at an unparalleled rate. University graduates living in Alberta are roughly twice as likely to have matriculated in another province, proof of its drawing power. And like the rest of the country, it has grown increasingly urban. All of those factors – youth, education, urbanization – would be expected to create a more politically progressive society, given established patterns elsewhere in Canada. On Tuesday, Rachel Notley's NDP captured at least 53 of the province's 87 seats, sweeping metropolitan Edmonton, half of Calgary and most Alberta's urban ridings. Faron Ellis, who teaches politics at Lethbridge College, has been studying the changing political attitudes in Alberta with public survey data that focuses on issues such as same-sex marriage, abortion and assisted suicide. He said there's no longer much difference between Alberta and the rest of Canada. "I often kill a lot of headlines for reporters when I say 'We're not that different,'" Prof. Ellis said. "What our data does is shatter the stereotype of Alberta being the Bible belt, for lack of a better term. "Not only is Alberta not that stereotypically social conservative province but it is increasingly like the rest of the country." Susan McDaniel, a demographer at the University of Lethbridge, described Tuesday's election result as "a convergence of the demographic and the political." "I'm quite convinced that, because this is a landslide, all kinds of people voted NDP who hadn't voted NDP before in every demographic, all across the province," Prof. McDaniel said. "Here in Alberta I don't think this is the shock that it is for people in other parts of the country. The big cities have two progressive mayors and that's where most of the people live." And while the province's changing demographics played a role in the election, so did a feeling that it was time for a change. In Wei's Western Wear in downtown Red Deer, the store's proprietor, Chung Mah, is relaxed about the end of the Tory dynasty. Mr. Mah's father founded this business six decades ago, after he had moved here from China. Red Deer, a city of close to 100,000 halfway between Edmonton and Calgary, had elected only Progressive Conservatives going back to 1971, but this time returned New Democrats to the legislature. Mr. Mah is a long-time PC voter and voted PC on Tuesday. But he's feeling fine about an NDP government. "Albertans finally got pissed off enough," says Mr. Mah, 54. There are racks of cowboy boots on one wall and cowboy hats at the entrance. Oil has ticked back to about $60 a barrel. Business is pretty good. There are prophecies of impending ruin under the NDP from some quarters – oil industry types – on Facebook and the radio, but Mr. Mah isn't buying it. "No. The NDP are still Albertans. They might do things we don't all agree with. I don't think they can do a lot wrong. They have the best interests of all Albertans." A couple blocks away is a shoe-and-clothing store owned by Lorna Watkinson-Zimmer and her husband, Dennis. "We're pumped here," said Ms. Watkinson-Zimmer. Customers have danced little jigs of celebration on entering. "To go completely orange is just amazing." Ms. Watkinson-Zimmer, 67, was recruited to run for the perennially last-place NDP in Red Deer South in 2012. There was no party infrastructure. She worked to build a base and cracked 10 per cent of the vote. This time the NDP, under union leader and Safeway cashier Barb Miller, won. Ms. Watkinson-Zimmer is elated. And she's convinced premier-designate Notley will be able at the reins. "She's not going to pound like a wild horse," says Ms. Watkinson-Zimmer. "She's going to be methodical." Tony Coulson, a vice-president at Environics Research, says there are three distinct population groupings in Alberta. Edmonton, where the NDP first gained momentum and swept every seat in the metropolitan area, has a progressive, diverse population that cares about inequality and believes the government can have a positive impact in people's lives, he said. Calgary is a cosmopolitan, global city that values its immigrant population and international business connections. And then there is rural Alberta and its smaller cities, which more closely resemble some of the Alberta stereotypes, where people tend be more conservative, religious, and wary of government, according to the survey data. "It used to be that when we looked at Alberta relative to other provinces there was a distance in values and outlook but that has really narrowed over time," Mr. Coulson said. The shift became apparent for him around 2006, he said, when Calgary and Edmonton jumped way up in the census measures of ethnic diversity. Nearly a quarter of Edmontonians belong to a visible minority; and the proportion is slightly higher in Calgary. This week in Calgary, which was considered the key to an NDP victory, Chima Nkemdirim was eating lunch near City Hall. Mr. Nkemdirim was born in Calgary in 1971, the year the first PC premier Peter Lougheed was elected, beginning 44 years of unbroken one-party rule. Mr. Nkemdirim's mother, a nurse from Ghana, and his father, a climatologist from Nigeria, met in Toronto in the late 1960s. The family came to Calgary, says Mr. Nkemdirim, "for the idea of some place new, to create something." Mr. Nkemdirim, a lawyer, is Mayor Naheed Nenshi's chief of staff. Mr. Nkemdirim is as deeply entwined in the new Alberta as anyone in the province. "This election changes everything," Mr. Nkemdirim says. "I didn't believe it. Nobody believed it. I knew, intellectually, this is what should happen – but I didn't believe it." He had been on the phone, the day before, with an oil executive, who was frantic. The executive wanted Ms. Notley's phone number, to dissuade her from a royalty review. Mr. Nkemdirim had not yet met Ms. Notley. He didn't have her number. "It's not going to be who you know. It's a fundamental change. It's going to be refreshing for Alberta." Alexandra Mann, a lawyer, is one of many who came to Alberta from elsewhere. She grew up in downtown Toronto and went to Dalhousie University in Halifax before returning home to study law at Osgoode Hall. Then, suddenly, in 2011, she was a Calgarian, moving west with her husband. At first, there was an apprehension about the city, that it was a home of rednecks. "My fears," she says, "were not well founded." Back east, she typically voted NDP. She did so again on Tuesday in Alberta. "The PC government didn't align with my values," Ms. Mann, 32, said. "I'm still in disbelief it happened. There's hope. Democracy needs change. After 44 years, we just have to let somebody else try." On Edmonton's main downtown drag, Cristiane Tassinari pulls a shot of espresso on an Italian-made machine at the end of the lunch-hour rush. After moving to Alberta's capital city from Brazil, she recently opened a café on Jasper Avenue with her Alberta-born husband. She's part of a wave of 60,000 who have moved to Edmonton in the past two years. "Being in power for 44 years is really a long time. I feel that people were eager for a change," Ms. Tassinari said. She said she's pleased with the change in government. Throughout the campaign she served a number of NDP staffers who worked in the party's nearby headquarters. As a newcomer to Alberta, she didn't feel any special attachment to the long-ruling PCs or the province's political traditions. "When I moved here I liked how things were working; the system in Alberta is certainly better than what I was used to," she said. "But I never have had any loyalty to the PCs. I just don't think they have the right perspective on things." Ms. Tassinari supported Brazil's current leftist President before moving to Canada. But Ms. Tassinari says she's a realist on what left-wing parties can achieve after many promises were made to fix that country's health and education systems and little was delivered. As the NDP prepares to form government, its strategists vow that their party will reflect "Prairie pragmatism" and won't overpromise. While Ms. Tassinari might have brought some of her early political leanings with her, Prof. Ellis said he believes newcomers are more likely to adapt to Alberta than the other way around. "People tend to be assimilated into the Alberta political culture rather than change it," Prof. Ellis said. Born in Edmonton, John Brennan has watched as the province's political culture has changed around him. The strategic adviser to Edmonton's Mayor Don Iveson, Mr. Brennan says Alberta's two largest cities are leading the way. "This city once was a small Prairie town, but it's been growing in spurts my entire life. It's incredibly multicultural now," Mr. Brennan said. "That growth has really changed the demographics here. That's now reflected in the mayors of those cities and the new premier and government they've elected." Alberta's newly elected political class has long rejected the province's label as a conservative fortress. Mr. Brennan begins to name the cities with mayors who identify as progressive: Calgary, Edmonton, Red Deer, Fort McMurray, Grande Prairie. "While there were a lot of reasons for what you saw on Tuesday, the demographics have been changing for a long time. It didn't just flip overnight," he said. |
2016 F-150 pickup Michael Martinez, Ford Motor Co. said its 2016 model year F-150 — which hits dealer lots this winter — will offer a compressed natural gas option on its 5-liter V8 engine that runs on fuel cheaper than both unleaded gas and diesel. The Dearborn automaker said the F-150 will become the only half-ton pickup with the gaseous-fuel prep package option, which allows customers to run on clean, low-cost compressed natural gas or propane. The option will cost customers thousands of dollars: $315 for Ford to prep the engine, and between $7,500-$9,500 to have a Ford qualified vehicle modifier supply and upfit the engine with the necessary fuel tanks, fuel lines and fuel injectors. "For us, it's another way of providing improved productivity and efficiency to our broad customer base," Doug Scott, Ford's F-150 marketing manager, said in a statement. Compressed natural gas is mainly composed of methane. It is stored and distributed in hard containers at a pressure of approximately 3,600 psi. Ford had previously offered the CNG option on its 2014 F-150's 3.7-liter V6 engine, but believes it can sell more on the V8 to customers who want lower fuel costs. As of April 30, compressed natural gas was selling for an average of $2.11 per gallon of gasoline equivalent. The national average for unleaded regular fuel is $2.58 per gallon. Scott said the CNG option will be relatively low volume, and most of the orders will likely come from commercial or fleet customers in states like Texas and Oklahoma, where CNG-capable fueling stations are most plentiful. There are six CNG-equipped fueling stations in Metro Detroit, according to cngnow.com, which maps stations across the country. Ford said F-150 trucks running on CNG or propane will be able to tow the same amount as if they were running on gasoline. Payload capability will be the same as well — minus the weight of the installed CNG or propane system, which Scott says will be minimal. Ford sells a gaseous-fuel prep option on seven other vehicles: the F-250 and F-350 Super Duty pickups; the F-450 and F-550 Super Duty chassis cabs; the F-650 and F-750 chassis cabs; the F-53 and F-59 stripped chassis; the Transit Connect van and wagon; the Transit van, wagon, cutaway and chassis cabs; and the E-Series cutaway and stripped chassis. Ford sold a record 16,821 commercial vehicles with CNG/propane gaseous engine-prep packages in 2014. The automaker has sold more than 57,000 CNG/propane-prepped vehicles since 2009. "The growth in interest for CNG/propane-prepped vehicles shows a shift in fleet customers' mindsets," Dick Cupka, Ford commercial vehicle sustainability leader, said in a statement. "They are becoming more forward-thinking about alternative fuels, taking into account their total cost of ownership and looking for ways to reduce their vehicle emissions." Ford currently has four vehicle modifiers that offer CNG or propane bi-fuel and dedicated kits for the F-150: Two in Michigan (Sterling Heights and Adrian), one in Dallas and one in North Carolina. Ford will start taking orders for the 2016 F-150 this summer, and the pickup will hit showrooms this winter. |
2015 Ford Mustang
Who'd have thought that a lifelong worshipper at the temple of do-it-yourself shifting would ever say such a thing? But here it is: I wish this Mustang had been an automatic. No, I haven't gone soft. I'm still a sucker for sports-car handling, for V-8 brawn, for a manual shifter that hard-wires you into the driving experience. This Mustang GT Convertible has all that. And yet … while the idea of, say, a Mazda MX-5 with automatic transmission would be blasphemy, it's different with this Mustang. And that altered identity works best – just like in all those airport rental convertibles – with automatic transmission. At least we had made-to-measure weather. My mid-April booking triggered Southern Ontario's first warm spell of the year, and the 'Stang's top made it easy to enjoy. It takes just 11 seconds to drop the top and that includes first manually releasing the catch on the windshield. Ford has also reduced the height of the folded top a whopping 17 centimetre, to the benefit of both rearward visibility and aesthetic purity. Unlike some modern convertibles, the Mustang doesn't let you operate the top on the move (at least, not above 5 km/h). And although the side windows go down automatically as part of the process, it's up to you to power them back up (three switches) if you want them raised while driving. Keeping the windows up reduces air turbulence in the cockpit to a modest breeze, even at highway velocity. Leave the top up and you hear the whoosh of air over the fabric ceiling, but there's none of the bluster or flutter you might expect. The V-8 whooffle that we found a little subdued on the coupe is much better enjoyed when there's no metal between your ears and the tailpipes. And in Mustang's case the soft-top weight penalty is barely five per cent, so you don't lose too much of the coupe's straight-line speed. Figure on a plenty-quick 0-100-km/h time around five seconds if you make full and skilled use of the chunky, metallic six-on-a-stick shifter. Said shifter was perfectly at home in the Performance Pack GT we tested last fall: not exactly an effortless no-brainer to handle when you're just pottering around, but the harder you worked it, the better it felt. However, the softer-sprung, looser-bodied convertible with its surprisingly compliant ride would be better matched with the optional six-speed automatic (especially since, according to Car and Driver magazine's tests, there's absolutely no "slushbox" performance penalty). A degree of body quiver is endemic to convertibles, all the more so those with a structural "hole" big enough to accommodate an extra pair of seats and, while the Mustang's not bad, there's enough underlying softness to say, "let's all take a deep breath and relax." And much as we love the sturm und drang of the V-8, the convertible's laid-back persona would be well served by the base V-6 engine. As a convertible, the Mustang's only direct rival is the Chevrolet Camaro. I haven't driven a drop-top Camaro recently enough to compare, but does it matter? Given the epic half-century rivalry between the two, I don't see a lot of cross-shopping here. Both deliver a style of al fresco automobility that is unique in their price range, and if you liked the Mustang Convertible before, you'll like it even better now. You'll like this car if ... You could use a traditional all-American muscle convertible with room for up to three passengers and two golf bags. TECH SPECS RATINGS •Interior: The range of at-the-wheel adjustment is less than optimal, and the cockpit design favours form over function, yet without appearing especially rich in fit finish. But it can accommodate four mid-size adults. •Technology: Mechanically, it's the most sophisticated Mustang, yet still preserves that traditional pony-car persona. Adaptive speed control is a pricey $1,600 option on the test car, likewise the $2,000 for a package that includes an audio upgrade, memory seats and blind-spot monitoring. On-board IT includes most features and capabilities you'd expect, interfaced through the little-loved SYNC with MyFord Touch. •Performance: One of the smaller V-8s among its peers, the 5.0 is more a revver than a torque-monster so you need to row the gears to extract the best from it. Handling is on the fun side of competent, but lacks the taut balance and precision of the coupe. It's no coincidence that the hard-core Performance Pack chassis set-up is not even available on the squishier-bodied convertible. •Cargo: The trunk is 19 per cent •roomier than on the old car and Ford claims its 323-litre volume (12 per cent more than Camaro convertible) can accommodate two large golf bags, even with the available premium audio subwoofer. Unlike in some European convertibles, cargo volume is unaffected by whether the top is up or down. The Verdict 7.5 A modern rendition of a uniquely American motoring tradition.
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Canada loses 19,700 jobs in April, unemployment rate stays at 6.8% May 8, 2015 Meanwhile, in the U.S., employers added 223,000 jobs in April. The unemployment rate fell to 5.4 per cent from 5.5 per cent the previous month. * Since Harper took office in 1999 there were 5 countries that Canada had free trade agreements with, today that number is 43 countries. They keep saying this is good for Canada by providing investment and more jobs. He is killing all our manufacturing and decimating our Auto industry. Remember that when its time to vote |
UAW hopes VW will David Shepardson, Washington — The United Auto Workers said Thursday it wants Volkswagen AG to recognize the union as the bargaining agent for employees at the German automaker's Chattanooga, Tennessee, plant without seeking a new vote by employees. Gary Casteel, secretary-treasurer of the UAW, who heads the International Union's Transnational Department, said the union has submitted a framework to VW for creating a German-style works council and said he hoped the automaker would take that step. He said the union has tried to be patient, but said he thinks it is time to act. Last month, the UAW filed a statement with the Labor Department that said it had the support of 55 percent of workers at the union, or 816 workers. "We're not looking for another election, but we do want to be the exclusive bargaining agent. The quicker the better," Casteel said in a conference call. But he declined to name a timeline in which he hopes VW recognizes the UAW." The new push comes after VW's chairman resigned and a longtime union official, Berthold Huber, was named acting chairman. In early 2014, VW and the UAW "outlined a framework through which the union and the company could together establish a path for management and employees to cooperate on matters inside the plant. A more detailed version of this concept, in the form of a proposed 'Vision Statement,' has been submitted to the company for its consideration," Casteel said. VW didn't directly answer if it will require a new vote by employees before recognizing the UAW as employee's bargaining agent. It said Thursday its policy of engagement with worker representatives "has been a very effective way to start dialogue with each of the groups and we intend to continue." In December, VW said it was awarding the UAW access rights after an audit showed it has the support of nearly half of plant workers — but wasn't recognized as the bargaining agent. The decision meant the UAW's Local 42 could meet bi-weekly with Volkswagen Human Resources and monthly with the Volkswagen Chattanooga Executive Committee to talk about issues. It enables the union to reserve and utilize on-site locations for meetings on non-work time with staff or employees. In February, VW said an anti-UAW organization called the American Council of Employees has enough support to represent some workers at the plant. The automaker said an external auditor verified that ACE met requirements to represent both hourly and salary employees under its Community Organization Engagement Policy that states a group must achieve support from at least 15 percent of the workers it looks to represent. The labor group is an alternative to the UAW, which was designated to have access to hourly employees last year after failing to garner enough votes to be the sole representative for plant workers. In mid-November, the German automaker said it would not immediately recognize the UAW until an external audit established its membership level — and it opened the door to working with other groups representing employees. VW's policy requires a union to get at least 45 percent of eligible employees in a specific group to join. The UAW suffered a big setback in February 2014, when workers voted 712-626 to reject creation of a German-style works council. The vote came after heavy pressure from Republican lawmakers. In July, the UAW opted to form a local to represent workers in Chattanooga, rather than hold another election. VW has more than 100 plants worldwide, and only the Chattanooga plant is non-union. In July, VW said it would commit $900 million and create 2,000 jobs to build mid-size SUVs in Tennessee. |
An NDP victory changes everything Canadians think about Alberta GARY MASON Instead, voters anxious for change helped the New Democratic Party make political history on Tuesday and produce a shocking Miracle on the Prairies of a different sort. Over the course of the 28-day campaign, the perennial centre-left rump group was transformed into Alberta's next provincial government. It is a victory that will reverberate across the country and may have implications for this fall's federal election. Few provincial elections can transfix a country. This one did in part because of the dramatic fashion in which age-old assumptions about Alberta were proven to be grossly outdated. Political scientists and party strategists will be picking over the entrails of this vote for some time. Among other things, they will be trying to determine the precise point at which the political landscape in Alberta began to shift, imperilling the seemingly invincible 44-year-old Progressive Conservative Party dynasty. The reality is that the ground began to move long before this election was called. Alberta is a province that has been radically altered in the past five to 10 years, in large measure because of the hundreds of thousands of people who have poured into the place from across the country and around the world. It has become increasingly urbanized, with its two largest centres, Calgary and Edmonton, led by young, progressive-minded mayors whose personal ideologies transcend strict party doctrine. They could be as comfortable with parts of the New Democratic Party election platform as they could with the Progressive Conservatives. As it turns out, so could many of their constituents. Few anticipated an NDP majority government in Alberta, but it can be explained in a couple of ways. When people are angry at a government – really, really angry – their fury can be conveyed in a manner not expressed before. There is no doubt that in this election, the New Democrats were the beneficiaries of ballot box support from conservative-minded folks who saw them as the best bet for getting rid of a party they felt had begun to take them for granted. Even a year ago, many of these people likely could never have imagined themselves voting NDP, but that is what building frustration and a sense of hopelessness can do. It certainly helped that the New Democrats were led by someone who captured the public's imagination. At some point during the campaign, almost a cult of personality developed around Rachel Notley. People became increasingly attracted to her character, the easy, accessible way in which she expressed her views. In the process, she differentiated herself from the other party leaders, all men, who lacked the charm and natural salesmanship abilities that she possessed. Ms. Notley was the NDP campaign, and unquestionably elevated herself above her party's brand. The unprecedented New Democrat surge in Alberta was certainly abetted by a Conservative regime that looked out of touch and, frankly, acted like a dysfunctional family that needed counselling. And if it required any additional proof, the campaign demonstrated the price a politician can pay for imprecise language. The smallest of phrases can have the largest of impacts and consequences. Before the election was even called, Progressive Conservative Leader Jim Prentice said in an interview that when it came to the fiscal mess in which the province found itself, Albertans needed to "look in the mirror." Those four simple words infuriated a public that felt Mr. Prentice was blaming them for a problem created by a succession of PC governments. In the end, it was the Tory Leader who looked in the mirror and decided to resign from provincial politics. After an election, emotions in a province can be raw. People who voted for the losing side can often be disillusioned for months or longer. In Alberta, this has not been much of an issue for decades, as the Tories were returned with massive majority after massive majority. Few times has their hold on power been threatened – a come-from-behind win by the PCs under Ralph Klein in 1993 produced the first Miracle on the Prairies – especially by forces that did not identify as conservatives. This election changed that. And the reverberations of this campaign will be felt in Alberta, and across the country, for years to come. |
NDP wins majority government ALLAN MAKI Albertans have chosen a new political path with the stunning election of a New Democratic government, ending a Progressive Conservative dynasty in power for more than four decades. The NDP, leading in the polls from start to finish, becomes only the third party to govern the province since 1935. Heading a new majority government, Leader Rachel Notley, who won her seat in Edmonton-Strathcona, now has a mandate to take the province in a new direction but will also inherit tough economic challenges. "I think we might have made a little bit of history tonight," Ms. Notley said in her victory speech. "I believe that change has finally come to Alberta." PC Leader and former premier Jim Prentice immediately announced his resignation. By late evening Alberta time (early morning ET), the NDP had won or were leading in 53 seats -- nine more than needed for a majority in the 87-seat legislature. The Wildrose Party was poised to become the Official Opposition with about 21 seats while the Progressive Conservatives were crushed -- winning or leading in only 11 seats. The NDP had about 40 per cent of the popular vote. The PCs were second with about 28 per cent while Wildrose garnered about 25 per cent. In the midst of low oil prices and plunging tax revenues, Mr. Prentice called the election a year early after unveiling a budget that included a massive deficit and dozens of new fees. Just before the campaign, he stumbled when he told Albertans to "look in the mirror," seeming to blame them for the province's financial woes. Mr. Prentice called the election on April 7, hoping an early vote would play in his favour. But the PCs fell all the way to third place behind Wildrose, now the Official Opposition party. Brian Jean, the leader of the Wildrose Party, won his seat in the Fort McMurray-Conklin riding. Mr. Prentice arrived late at the PCs Calgary headquarters and thanked his supporters before resigning as party leader and giving up his Calgary-Foothills seat, which he had just won. In his speech to party faithful, Mr. Prentice said he accepted responsibility for Tuesday night's outcome. "Alberta needed to make choices and they have now done so. I am satisfied the voters are always right in a democracy." Mr. Prentice campaigned primarily on his budget, which centred on two new tax brackets for Albertans, no increase in corporate taxes and the cutting of 2,016 jobs in the public service. Ms. Notley countered with a promise to raise the corporate tax rate to 12 per cent from 10 per cent, increase taxes on the highest-income Albertans and review the royalties that oil companies pay to the province. Mr. Prentice had also planned to reduce the 21-per-cent tax credit for charitable donations down to 12.75 per cent. Charitable tax credits for donations made to a political party went untouched. Mr. Prentice then decided to leave the tax credit unchanged after a swift backlash. Some long-time PC supporters were so angry at the perception that the leader had lost touch with Albertans that they switched loyalties and put NDP signs on their front lawns. The PCs, which came to power in 1971, were hoping to keep a stranglehold on leadership with a 13th consecutive majority government. The Wildrose Party, decimated when many of its MLAs crossed the floor to the PCs last year, is now back as the Official Opposition. "We've seen a complete change in Alberta," Wildrose Leader Brian Jean said later. "And Wildrose proved them wrong. We have prospered mightily. We have done amazing things." He promised to mount "fierce opposition" to the new NDP government. "Starting tomorrow, we're going to show Rachel Notley a little bit of that opposition." Advance polling, in which 235,410 people voted over four days, was a record, according to Elections Alberta. Prior to Tuesday's election, those who stuck with the Tories did their best to rally a late comeback. PCL Construction sent letters to its staff saying they were free to vote as they pleased but that they needed to know a few things. Company president and chief executive officer Paul Douglas wrote that while the PCs had not "lived up to our expectations and have experienced tremendous instability within their party," they remained the best option. "[The NDP] policies," wrote Mr. Douglas, "discourage investment, reduce the activity of business, slow down the economy, reduce jobs and profits and ultimately reduce the amount of money they were looking for in the first place to increase the size of government and provide enhanced government services." The Tories staged a comeback in 2012, when Alison Redford trailing badly in the polls rebounded to win over Wildrose and its then-leader Daniel Smith. In 2015, the party never recovered as the NDP emerged as a political force in a province with a desire for new leadership. |
Canada creates auto sector jobs
by PressProgress Here's a question for you: Why is Canada spending half a billion dollars helping German car makers create jobs in Mexico and the United States at the same time as thousands of manufacturing jobs are being eliminated right here at home? On Thursday, 1,000 auto workers at General Motors learned they were the latest ones to lose their jobs when the automobile giant announced massive layoffs at its Oshawa assembly line. This represents a reduction of one-third of GM's Oshawa workforce. GM said it plans to move production of the Chevrolet Camaro across the border from Oshawa to Lansing, Michigan. Unifor, the union representing GM workers at the Oshawa plant, speculated that the Harper government's recent decision to sell off its shares in GM in a bid to balance the budget may have influenced the automaker's decision to scale back operations at the Oshawa plant and layoff workers. Canada lost taxpayers $3.5 billion when Finance Minister Joe Oliver chose to sell the government's shares in GM before they earned back their full value. Last month, Unifor released a report that found Oshawa's GM plant supports an additional 33,000 jobs in the local economy and generates $1 billion in tax revenue for the government. And if that's an injury, here's the insult: The devastating news for Oshawa comes just a week after Export Development Canada announced a $526 million loan to Volkswagen to help them "grow their operations in North America" -- by building factories and creating jobs in Mexico (where jobs in the auto sector pay even less than the Canadian and American minimum wage), as well as in right-to-work states in the American south with loose labour laws and low wages. EDC claims the move could "generate opportunities for small and medium-sized Canadian companies to win business with the global automotive giant," but that's completely up to Volkswagon. But there is actually no guarantee Canadians will see one cent of new business generated by the Canadian crown corporation's half a billion dollar loan. As Unifor economist Jim Stanford pointed out Thursday in a Globe and Mail op-ed: "Even if a Canadian supplier wins a Volkswagen contract, it's unlikely the work would occur in Canada. Canadian parts suppliers have opened dozens of factories in Mexico and the Deep South – often required to locate near assembly plants. But EDC doesn't mind: Helping Canadian-owned firms open plants in Mexico is part of its strategy. Mexico's auto industry, powered by cheap labour, a growing supply base and lucrative subsidies, is scooping up virtually all new greenfield auto investment in North America. Eight new assembly plants have been built or announced there since 2009. The "giant sucking sound" predicted by Ross Perot in the debate over NAFTA has become a reality. That's bad enough. But watching a Canadian government agency assist that southward migration is incredible." On Thursday, GM also announced it would invest $5.4 billion (US) in its American factories, creating around 650 new jobs. Six months earlier, GM announced plans to invest $5 billion to expand its Mexican factories, which was projected to create 5,600 jobs. |
Ontario seeking auto GREG KEENAN The Ontario government plans to appoint an auto adviser to provide critical intelligence about the sector instead of a "super salesman" as it tries to convince global auto makers to invest in the province. "We want global intelligence to determine, for instance, what are the next five or 10 [product] mandates that are going to take place globally over the next five or 10 years," Ontario Economic Development Minister Brad Duguid said. "How do we, as Ontario, position ourselves to land one or two of those mandates?" The concept of an auto investment board headed by an industry executive with deep knowledge of the sector was suggested last year by the Canadian Automotive Partnership Council, an advisory group composed of industry executives, Ontario, Quebec and federal government officials and representatives from the Unifor union. The recommendation came in a report that examined, in part, why Mexico and southern U.S. states were winning tens of billions of dollars in new investments while Ontario was bypassed. The government is fine-tuning the details of the auto adviser job, but it's likely to be less about selling Ontario, Mr. Duguid said in an interview at the General Motors of Canada Ltd. engineering centre in Oshawa, Ont. "What we've lacked in the past has been sector knowledge that you probably can't get from the government that you need to get from the sector itself," he said. In addition to determining which auto makers would be thinking about opening new plants in North America, the new auto adviser will assess threats to current investment in the province and determine how to position Ontario to take advantage of the transformation to higher-technology and greener vehicles. Mr. Duguid said it's his job to play a crucial role in selling Ontario when new opportunities are identified. Some opportunities have arisen since the concept of the automotive investment board was first suggested last year. AB Volvo and Jaguar Land Rover Ltd. are planning to build assembly plants in North America, but those investments appear to be headed to the United States or Mexico, without Ontario even appearing on those companies' radar screens when they first began looking. To get the attention of companies that are looking, federal and Ontario representatives need to get in the door earlier, said Ray Tanguay, who recently retired as chairman of Toyota Motor Manufacturing Canada Inc. and the executive who played a key role in landing the last new auto plant in the country, the Toyota factory in Woodstock, Ont. "For them to react after somebody has already made a decision to invest, you're too late, forget it," Mr. Tanguay said in a pre-retirement interview. Some industry insiders have suggested that the auto adviser job is tailor-made for him. He said in the interview, however, that he was not interested. "I could be a spokesperson for that group, but I'm not going to be the one that's going to take that as a full-time job," he said. "You have to develop the strategy now and identify how that would work and then decide on the need for a business leader on top of it. Don't start with, 'We want an auto czar or an auto champion or an auto ambassador' without a strategy." He said through a spokesman last week that he has not changed his view. |
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By JIM STANFORD EDC is a federally owned agency, offering loans and other supports to Canadian exporters. Why on Earth would it help Volkswagen expand in Mexico and Tennessee? It's not as if Volkswagen needs our help. With revenues last year of 200-billion, and profits of 12.7-billion, it can easily raise all the commercial capital it needs. And officials with EDC emphasize its support for Volkswagen is not contingent on buying anything from Canada. That would violate the rules of "free trade." The only requirement is that Volkswagen network with Canadian suppliers to discuss business opportunities in Mexico and Tennessee. For $530-million, that had better be one heck of a "meet and greet." Even if a Canadian supplier wins a Volkswagen contract, it's unlikely the work would occur in Canada. Canadian parts suppliers have opened dozens of factories in Mexico and the Deep South – often required to locate near assembly plants. But EDC doesn't mind: Helping Canadian-owned firms open plants in Mexico is part of its strategy. Mexico's auto industry, powered by cheap labour, a growing supply base and lucrative subsidies, is scooping up virtually all new greenfield auto investment in North America. Eight new assembly plants have been built or announced there since 2009. The "giant sucking sound" predicted by Ross Perot in the debate over NAFTA has become a reality. That's bad enough. But watching a Canadian government agency assist that southward migration is incredible. There's an ugly side to Mexico's industrial boom. Contrary to promises of prosperity and democracy, its workers remain desperate. Real manufacturing wages have not grown; labour costs are now cheaper there than in China. Trade unionism and other political activity is suppressed, often violently – evidenced horrifically by last year's murder of 43 student protesters, in which the local mayor and police have been implicated. The normal institutional forces that, in a free society, would allow Mexicans to win a fairer share of the wealth they produce have been short-circuited. Mexico produced 3.4 million vehicles last year, worth $100billion. Canada exported $484million in parts to Mexico last year – and our exports are shrinking (down 30 per cent since 2001). Each dollar of Mexican output now has less than one half-cent of Canadian content. Our auto deficit with Mexico exceeded $10-billion last year; our total deficit with Mexico was $23-billion. EDC claims its loans will help us capture a few more crumbs from the auto industry's southward migration. Its convoluted logic highlights the contradictions of Canada's approach to autos under NAFTA's lopsided rules. We aren't allowed to "subsidize" purchases of Canadian products. So why must we bribe companies just to look at our products – something that should be automatic under true competition? Volkswagen sold $4-billion worth of vehicles in Canada last year. Shouldn't we demand some Canadian purchases from the company, in return for all that business, instead of begging for it? Meanwhile, back home in Germany, Volkswagen is 20-per-cent state-owned, and benefits from various public technology, training and capital supports. German wages are significantly higher than Canada's, yet Volkswagen hasn't closed a German factory in decades. Ottawa could try the same thing. Instead, it sold off its General Motors shares this month (for the short-term gain of balancing its budget). It has a fund to entice auto investment to Canada, but can't seem to spend it (auto makers don't like its unwieldy rules, and they're infatuated with Mexico anyway). We could use other government levers (including EDC) to attract auto makers here. Instead, Ottawa signs more trade agreements with places (such as Korea) that have no more interest in Canadian cars than Mexico does. The fatalism of EDC's strategy is stunning. But the incoherence of Canada's overall auto strategy is even worse. |
Ford expands door handle David Shepardson, Washington — Under government pressure, Ford Motor Co. said Friday it will expand a recall by another 156,000 vehicles for faulty door latches linked to two minor injuries and one accident — the latest in a series of call backs for door latch issues. Since 2014, Ford has now issued five recalls covering more than 1.55 million vehicles for door latch issues in the last year. The new recall covers the 2011 Fiesta vehicles and Ford said it was at the request of government regulators. The expanded recall came after Ford initially told the National Highway Traffic Safety Administration last week it planned a regional recall to address the problem. After a discussion Thursday between National Highway Traffic Safety Administration chief Mark Rosekind and Ford officials, the Dearborn automaker agreed to an expanded recall of 390,000 vehicles. On Tuesday, Rosekind said the agency was still reviewing whether the Dearborn automaker's recall of 390,000 vehicles covered all the vehicles that could be faulty. He is meeting this week with Ford CEO Mark Fields in southeast Michigan, among other top executives at Detroit's Big Three automakers. "I want to have direct communication. If there are issues, I want to be able to call them or they can call me — that just doing this through headlines for example or reading a press release is not the way for us to talk about a recall issue or a defect," Rosekind said in a Detroit News interview. Last week's recall covers 389,585 2012-14 Ford Fiesta and 2013-14 Ford Fusion and Lincoln MKZ cars. Ford says the door latch in these vehicles may experience a broken pawl spring tab, which typically results in a condition where the door will not latch. If a user latches the door, there is potential the door may unlatch while driving. Ford is aware of two allegations of soreness resulting from an unlatched door bouncing back when the customer attempted to close it. Dealers will replace all four door latches. In March, Ford recalled 213,000 2011-13 Ford Explorer SUVs and Ford Police Interceptor Utility vehicles in North America because the spring that controls the interior door handles may prevent the door from latching completely. Ford said it was a different issue than the new recall. In January, Ford recalled 204,945 2010-13 Ford Taurus, Lincoln MKS and Police Interceptor vehicles for the same issue. Last month, NHTSA upgraded an investigation into hundred of complaints of doors failing to latch or flying open into nearly 486,000 2011-13 Ford Fiesta cars. NHTSA launched a preliminary investigation. NHTSA said it has received 207 reports related to the alleged problem, with 65 claiming doors opened inadvertently while the vehicle was in motion. The automaker said it has 451 reports related to the problem. One involved an incident in which a door opened while driving at low speed and struck another vehicle. Ford said it has 1,079 warranty claims related to door latch failures. Also this week, Ford recalled another 590,000 vehicles in four separate campaigns — most for steering issues in 20 cold weather states. The Dearborn automaker is calling back 518,000 2013-15 Ford Fusion and Lincoln MKZ vehicles and 2015 Ford Edge vehicles in North America for steering gear motor attachment bolts that may break due to rust cracking. If the steering gear motor bolts break, the steering system may default to manual steering mode, making the vehicle more difficult to steer, especially at lower speeds. This would not result in a loss of steering, but could result in an increased risk of a crash. |
Oshawa GM plant to cut 1,000 jobs By Paola Loriggio General Motors says it will cut about 1,000 positions from its Oshawa, Ont., manufacturing operations this year as the company plans to spend billions of dollars to boost its U.S. operations. By December, GM Canada's main assembly operation is expected to have 2,600 hourly employees – down from 3,600. GM Canada says it's working with the Unifor union, formerly known as the Canadian Auto Workers, to offer retirement incentives to eligible workers. The downsizing is being timed to the end of production of the Chevrolet Camaro sports car, now officially scheduled for Nov. 20. The company says it remains committed to Canada, and will continue to produce five other vehicles in Oshawa. Unifor has been bracing for a significant downturn since GM announced in late 2012 that it would end production of the Camaro. "We knew the announcement was coming but it still doesn't make it any better," said Jerry Dias, national president of Unifor, He also raised questions about the federal government's recent sale of GM shares to Goldman Sachs for $3.3 billion. "The selling of the shares, both by the province and the feds, certainly took away bargaining power," Dias said. "Shareholders have rights, shareholders have power, and they just gave it away, which to me was completely foolish. Before they sold any of their shares, they should have solidified General Motors' footprint in Canada. But they were all about balancing the budget." A decision on another product for Oshawa won't be made until after the next labour contract with Unifor, GM says. That contract will be negotiated next year. In addition to the Oshawa manufacturing operation, GM Canada owns the CAMI assembly plant in Ingersoll, Ont., which recently received an $800-million investment commitment from the company. In Oshawa, where General Motors has its Canadian headquarters and a research operation as well as the vehicle assembly operations, the company will continue to operate two plants. The so-called flex plant will drop to two shifts from three after Camaro production ends, while the other plant will continue to have one shift. Brad Duguid, Ontario's minister of economic development, said he's "disappointed" by GM's decision to cease production of the Camaro. "As always, my immediate concerns are with the impacted employees and their families," he said in a statement. "It remains my top priority to work closely with GM, Unifor, and the federal government to secure a future mandate for GM's Oshawa facility beyond 2016." General Motors announced Thursday that it plans to spend $6.5 billion to improve its U.S. factories during the next three years, creating about 650 new jobs. In December, the company said it planned to invest $6 billion to modernize and expand its four factories in Mexico.
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Ford to make small number
Michael Martinez Fans of the Shelby brand are among the most passionate in the automotive industry," Henry Ford III, Ford Performance marketing manager, said in a statement. "To honor the passion of our fans for Shelby GT350's 50th anniversary, a limited run of GT350 models will be built in 2015; these cars will be highly coveted by both Mustang and Shelby enthusiasts alike." Late last year, Ford unveiled a 2016 model GT350 that is powered by a flat-plane crankshaft 5.2-liter V8 that will produce more than 500 horsepower. It's Ford's most powerful naturally aspirated production engine ever, officials said. Last January at the Detroit auto show, Ford unveiled the track-ready but street-legal GT350R with the same engine. The GT350R drops a number of amenities, like air conditioning, in the pursuit of reducing weight, but Ford has an electronics package for those seeking more comfort that includes dual-zone air conditioning, 8-inch touch screen with navigation, seven-speaker audio system, turn-signal mirrors and more. The cars are among 12 new Ford Performance vehicles coming by 2020. Pricing hasn't been announced. |
Ford to release Michael Martinez, Ford Motor Co. on Tuesday is expected to report higher earnings than this time a year ago as the automaker starts to reap some rewards from the plant downtime and added costs associated with last year's numerous vehicle rollouts. Some analyst are expecting Ford to post first-quarter earnings per share of 26 cents, up from 25 cents per share during the same period a year ago. Analysts predict quarterly revenue could hit $33.92 billion, slightly higher than the $33.90 billion from the same time last year. "We believe the new model launches around the world, particularly with the ramp-up of the F-150, are beginning to take effect and will provide a much-needed jump-start to the stock's performance this year," David Kudla, CEO and chief investment strategist of Mainstay Capital Management, LLC, said in an investor note. While the bulk of Ford's profits will come from North America, Europe and South America are two areas of concern. President and CEO Mark Fields has said Russia will continue to be a drag on Ford's earnings for the foreseeable future, and Ford has predicted losing more than $250 million in Europe this year, despite previously expectingto turn a profit there this year. Last year, Ford earned $3.2 billion in 2014, down from $7.2 billion the year before, and pre-tax profits fell $2.3 billion to $6.3 billion. "2015 is going to be a breakthrough year for Ford," Fields told reporters and analysts in January. Ford has predicted better outlooks this year for nearly every region it operates in, although it has worsened its forecast for Europe. Ford predicts a pre-tax profit of $8.5 billion-$9.5 billion in 2015. "With automotive industry sales on track to sell a solid 17 million vehicles, the company should be poised for steady growth in 2015 and beyond," Kudla said. "This should likewise reflect in the stock price this year." ***************************************************
-Mark
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Ford Motor Company's 2015 1Q Pre-Tax Profit Totals $1.4 Billion
GM CEO Mary Barra Melissa Burden, General Motors Co.'s new CEO Mary Barra made $16.16 million in total compensation last year, a figure exceeding her target but short of amounts she and other executives could have earned if business performance objectives had been fully achieved. Barra, who became the auto industry's first female CEO on Jan. 15, 2014, taking over for a retiring Dan Akerson, had a target to earn $14.4 million in 2014. She made more than the target because she received $1.76 million in restricted stock awards that were for 2013 performance, the Detroit automaker announced Friday as part of the release of its proxy filing to federal regulators. Her target pay package as CEO includes $1.6 million cash base salary, $2.8 million short-term cash compensation and $10 million long-term compensation that is paid in stock. Her actual base salary came in a bit short of that, at $1.57 million, due to when she started the CEO job in the year and because short-term cash compensation was $2.07 million. She earned a total of $11.76 million in stock awards. Last year was the first full year GM had from pay restrictions for executives it was tied to for several years under government ownership. In 2014, GM transitioned to a pay system for executives that incentives them for their and company performance. It was also a year in which the automaker was rocked by an ignition switch recall crisis. Barra, 53, and other executives fell short of what they could have earned as part of the company's short-term incentive plan, an annual cash award. Executives are compensated based on the company's business performance and they also can receive an adjustment for individual performance. For example, Barra's target was to earn 175 percent of her base salary, or $2.8 million. Business performance goals were equally weighted at 25 percent each for adjusted earnings before interest and taxes, adjusted automotive free cash flow, global market share and global quality. The actual cash payout ranges is 0 to 200 percent of each executive's target and is based on company performance: it was 74 percent for all executives last year. The biggest miss was on global quality last year, particularly in warranty and policy expense tied to recalls of so many older vehicles, where executives got 16 percent of the target overall. The company board had targets for adjusted earnings of $9 billion but it came in at $6.5 billion, meaning executives earned 17 percent of the 25 percent target, for example. Global market share was targeted for 11.7 percent and GM was 11.4 percent last year, meaning executives got 18 percent of that 25 percent target. GM earned $2.8 billion overall last year. No executives received an individual performance change for short-term compensation. GM said Chairman Tim Solso was not commenting. "Ms. Barra neither sought nor did the compensation committee recommend an adjustment to the STIP (Short-Term Incentive Plan) awards for GM's named executive officers," according to the proxy. No named GM executives received cash bonuses either last year, a year rocked by millions of recalled vehicles, including older cars with defective ignition switches now tied to at least 87 deaths. Barra's pay also included $2.5 million in restricted stock awards and $7.5 million in performance stock awards that only vest if certain milestones are achieved. She also had a change in pension value worth $349,926 and other compensation totaling $412,532. That included items such as employer contributions to savings plans, life insurance, $189,936 for using chartered planes for personal travel (GM says its security policy doesn't allow her to fly commercially), security and the company vehicle program. Barra earned $5.23 million in 2013 when she served as executive vice president of global product development, purchasing and supply chain for the company. That compares to Ford Motor Co. President and CEO Mark Fields, who took over as CEO on July 1, earned $18.6 million in 2014. That was up from total compensation of $10.2 million in 2013 as Ford's chief operating officer. Last year, Sergio Marchionne, Fiat Chrysler Automobiles CEO, earned 31.3 million euros ($38 million based on Dec. 31 exchange rate), according to an annual filing with the U.S. Securities and Exchange Commission. The majority of his compensation last year stemmed from a 24.7 million ($30 million) cash reward from non-executive directors. The GM board compensation committee did award retention awards — paid in the form of restricted stock — to three executives last year to help ensure "consistency of management during the leadership transition period." Mark Reuss, GM's head of global product development, purchasing and supply chain, received 57,160 units, valued at about $2 million when they were granted last year; Michael Millikin, former general counsel, received 58,191, worth about $2 million and Karl-Thomas Neumann, executive vice president of GM Europe, received 27,587, worth about $1 million. Millikin's award vested at the end of 2014, while Reuss' and Neumann's will vest on the third anniversary of the day they were granted. Reuss made a total of $9.48 million last year, while GM's Chief Financial Officer Chuck Stevens earned $4.89 million, GM President Dan Ammann made $8.49 million, Millikin earned $5.77 million and Neumann made $5.27 million. Akerson, who remained a senior adviser to the company until July, earned a total of $2.1 million from GM last year. That included $850,000 in salary, $1.1 million in short-term cash incentives and $148,453 in other compensation. Akerson earned $9.1 million in 2013. GM also said its annual shareholder's meeting is scheduled for 9:30 a.m. June 9 at GM's headquarters in the Renaissance Center in Detroit. Shareholders will vote on electing directors to the board; selecting its public accounting firm; advisory vote on executive compensation; and two stockholder proposals. |
Ford recalls 390,000 cars David Shepardson, Washington — Ford Motor Co. said late Friday it will recall 390,000 cars for faulty door latches linked to two minor injuries and one accident — the latest in a series of call backs for door latch issues. Since 2014, Ford has now issued at least four recalls covering more than 1.4 million vehicles for door latch issues in the last year. The recall came after Ford initially told the National Highway Traffic Safety Administration earlier it planned a regional recall to address the problem. After a discussion Thursday between senior NHTSA and Ford officials, the Dearborn automaker agreed to an expanded recall, an agency official told The Detroit News Friday. "In response to a thorough NHTSA investigation that demonstrated a clear risk to safety, Ford is taking important action to protect its customers. We are pleased that Ford is taking this proactive step for safety," NHTSA Administrator Mark Rosekind said in a statement. Ford spokeswoman Kelli Felker declined to comment on the company's initial recall plan, but said the automaker had continued to cooperate with NHTSA. This is the latest example of NHTSA's tougher stance with automakers in recent months. Ford's latest recall covers 389,585 2012-14 Ford Fiesta and 2013-14 Ford Fusion and Lincoln MKZ cars. Ford says the door latch in these vehicles may experience a broken pawl spring tab, which typically results in a condition where the door will not latch. If a user latches the door, there is potential the door may unlatch while driving, increasing the risk of injury. Ford is aware of two allegations of soreness resulting from an unlatched door bouncing back when the customer attempted to close it, and one accident allegation when an unlatched door swung open and struck an adjacent vehicle as the driver was pulling into a parking space. The recall includes nearly 337,000 vehicles in the United States, 30,000 in Canada and 22,000 in Mexico. Dealers will replace all four door latches. In March, Ford recalled 213,000 2011-2013 Ford Explorer SUVs and Ford Police Interceptor Utility vehicles in North America because the spring that controls the interior door handles may prevent the door from latching completely. Ford said it was a different issue than the new recall. In January, Ford recalled 204,945 2010-13 Ford Taurus, Lincoln MKS and Police Interceptor vehicles for the same issue. In May 2014, Ford recalled 692,744 2013-2014 Escapes for a different door handle issue.. Last month, NHTSA upgraded an investigation into hundred of complaints of doors failing to latch or flying open into nearly 486,000 2011-2013 Ford Fiesta cars — as well as the 2013 Fusion and Lincoln MKZ. NHTSA launched a preliminary investigation last year into 2011-13 Fiestas. NHTSA said it has received 207 reports related to the alleged problem, with 65 claiming doors opened inadvertently while the vehicle was in motion. Two injuries were reported, both caused by a rebounding door striking a person after they attempted to close it. Ford told NHTSA that the 2013 Ford Fusion and Lincoln MKZ use the same door latch as the Fiestas NHTAS has received 11 reports on these vehicles, with four allegations of inadvertent opening. NHTSA added those models to its investigation. The automaker said it has 451 reports related to the problem. One involved an incident in which a door opened while driving at low speed and struck another vehicle. Ford said it has 1,079 warranty claims related to door latch failures. Ford told NHTSA "it does not believe that a latched door experiencing this condition will inadvertently unlatch and that there are many overt warnings associated with a door that does not latch." NHTSA noted that the rate of occurrence for this failure is comparable to other door latch failure investigations and questions the effectiveness of warning signals, given the number of complaints alleging that doors |
Province unveils The finance minister tabled his $131.9-billion Robert Benzie Finance Minister Charles Sousa used Thursday's provincial budget to tout the fact Wynne's Liberals – re-elected last June with a majority – are "building Ontario up" to tackle the need for transit, highways, bridges, waterworks, and hospitals. The road to a balanced budget will be lined with transit stops, but there could be some bumps along the way. Finance Minister Charles Sousa's budget Thursday spelled out a massive 10-year, $130-billion infrastructure push fuelled by supermarket beer sales, a sell-off of Hydro One, and flatlined spending. Saddled with a budget shortfall he hopes to eliminate in 2017-18 — in time for the October 2018 provincial election — Sousa said average annual increases on health and education must be limited to 1.9 per cent and 2 per cent respectively over the next few years. Overall spending on other services — except justice and children and youth services — will be cut by 5.5 per cent, though no public service jobs will be eliminated. Some of the reductions will come from time-limited expenditures such as this summer's Pan Am Games, which are already funded. Sousa said Premier Kathleen Wynne's Liberals — re-elected last June with a majority — are "building Ontario up" by finally addressing the need for transit, highways, bridges, waterworks, and hospitals. $130 billion budgeted for infrastructure over 10 years Budget projected to be balanced by 2018 Beer to be sold in 450 supermarkets New 3 cents-a-litre beer tax starts in fall 60-percent sell-off of Hydro One Insurance discount on motorists who use snow tires What the 2015 budget means for you Here are the highlights of the 2015 budget "This will be one of the largest infrastructure investments in Canada since the Last Spike was driven, completing the Canadian Pacific Railway," Sousa told the legislature as he tabled a $131.9-billion spending plan with an $8.5-billion deficit. "Right now, gridlock is choking our growth potential. This is not a 'Toronto traffic' problem — everyone from Bowmanville to Brampton to Burlington knows how hard it is to get across the Greater Toronto and Hamilton Area in rush hour," said the Mississauga South MPP. "Gridlock costs our economy up to $11 billion per year in the GTHA alone. Government after government has delayed investing in infrastructure. We can't afford any more delays," he said of a decade-long effort that should create 110,000 jobs. Sousa said former TD Bank CEO Ed Clark's panel on privatization and monetizing government assets, which last Thursday recommended grocery beer sales and selling 60 per cent of Hydro One, was key to bankrolling the historic expansion. That includes previously announced improved GO and TTC services, a new Hurontario LRT linking Mississauga and Brampton, extending Hwy. 407 from Brock Road in Pickering to Oshawa's Harmony Road, which will open later this year, and one-third of the funding for Toronto Mayor John Tory (open John Tory's policard)'s SmartTrack surface rail system. Budget shortfall Sousa said "managing compensation costs" for the 1.2 million employees on the public payroll along with reviewing and modernizing government programs are crucial to balancing the books. |
Why Mexico is eating The Globe and Mail Richard Tsou's first warning his job was moving to Mexico came in an e-mail from Asia. Tsou was employed as an industrial engineer in Mississauga. The tip came from a friend working for a supplier that shipped parts to Tsou's employer, Grohe Canada, a manufacturer of luxury kitchen and bathroom faucets. "The supplier was told to redirect their shipments from Canada to Mexico," Tsou recalls. At first the idea of a move to Mexico just seemed to be a bizarre rumour. But then, early last summer, after more than 20 years in Mississauga, Grohe, which is based in Düsseldorf, Germany, confirmed it was Mexico-bound. Grohe's 200 Canadian employees were given notice. In due course, the firm's sole Canadian plant was disassembled, machine by machine, loaded into trucks, and shipped to an industrial zone on the outskirts of Monterrey, Mexico's third-largest city. As Tsou pondered his future, he got a short-term reprieve: In the fall, Grohe, which employs 10,000 people worldwide, asked him and a handful of other former Canadian employees to help start up the new plant in Mexico. So, in late February, he caught a plane and headed south. "And that's why I'm here today," said Tsou in March while reaching for a beer in the bar at the Camino Real, a luxury hotel in Monterrey. For Tsou, Grohe's Canadian exit has been an eye-opener. With a population of four million, Monterrey, he quickly discovered, is a city of stark, often unsettling dualities. Ranked among the world's most dangerous cities after a toll of 1,459 homicides in 2012, it's also one of the world's fastest-growing industrial hubs—the centrepoint for a stampede of international investment that has seen hundreds of factories spring up alongside the highway to Texas, which is two hours' drive northward. A gleaming new business district has blossomed, separated from Monterrey's impoverished, crime-ridden core by a spiny mountain ridge. "I said I'd come, but only if Grohe would guarantee my security," says Tsou. "So they sent a car and driver to ferry me to work." The Grohe plant was once occupied by American Standard, another faucet maker. That is no accident, since American Standard (former operator of five now-shuttered Canadian factories), like Grohe, was purchased in 2013 by Lixil, a Japanese group bent on becoming the world's top player in sanitary fittings. Tsou's mission is to familiarize a team of freshly recruited Mexican technicians with the machines he oversaw in Mississauga. Predictably, there have been quality-control glitches. But while he misses the long-established workplace culture of the Mississauga plant, Tsou acknowledges that Grohe's Mexican recruits will soon master their jobs. "There's nothing we do in Canada that can't be done far more cheaply here." For Tsou, who grew up in Hong Kong, this trajectory of diminishing work calibre, plant closures and offshore relocations serves as a personal parable for the dismantling of the Central Canadian industrial heartland, where more than 600,000 manufacturing jobs have been lost over the last dozen years. Like more than a few industrial analysts, Tsou believes Canada's manufacturing sector risks becoming a relic: Battered by a decade of high-dollar federal monetary policies and sidelined by Ottawa's preoccupation with oil and gas, the manufacturing sector, says Tsou, has suffered from Canada's dismal record of under-investment in research and development for new products, jobs and industries. "I've seen it before," Tsou laments. "When I left Hong Kong in the 1960s, it was a global manufacturing hub. Now it's all gone. And at this point, I'm really not sure there's a future for manufacturing in Canada either." As economic development secretary for the state of Nuevo León, From Villarreal's perspective, the automotive boom is part of a much broader rising tide pushing the state's economy up the development ladder. Some 80% of Mexican exports to the United States pass through Nuevo León, which is routinely ranked among Mexico's most economically competitive states. Its schools produce 11,000 technicians and 7,500 engineers every year. Wages in the state are the highest in the country. But even so, at $150 a week on average, they hardly deter investment. "We used to be thought of as a sweatshop zone with a history of heavy industry," says Villarreal, whose office in a postmodern skyscraper overlooks a theme park in which a long-ago decommissioned steel plant has been turned into a tourist attraction. "But now we're quickly becoming a knowledge-based economy." To prove it, she's got yet another figure: "Foreign companies and governments have now built 97 research and development centres here." Neuvo León's development model, Villarreal explains, centres on a set of sectoral "clusters" including autos, building products, domestic appliances, life sciences and nanotechnology. "We follow the triple-helix model of industrial development, where industry, academia and government all pull together," she adds, "just like in Canada." Her familiarity with Canada, perhaps now dated, stems from placements in Saskatchewan and Manitoba during her student years. In her current job, she's travelled repeatedly to Canada, seeking to drum up investment. To help persuade Magna to invest in Nuevo León, she visited the company's offices in Graz, Austria. But regarding her success rate, Villarreal is circumspect, citing data that just 1% of foreign investment in the state has come from Canada. (The Grohe move, made at the behest of its Japanese parent, would not fall under that tally.) "I used to travel to Canada frequently, but not lately," she explains. "Many of the companies I met with were not thinking globally. They were comfortable with their markets and didn't want to bet on Mexico for growth. They're more conservative than, say, the Koreans." Duncan Wood, who monitors Canada-Mexico relations from Mexico City as director of the Washington, D.C.-based Woodrow Wilson International Center's Mexico Institute, agrees that, with the exception of a handful of companies including Bombardier, Magna, Scotiabank, Linamar, New Gold and Celestica, Canadians have been slow to appreciate Mexico's heavy investments in skilled labour, its focus on attracting research and development, its proximity to massive North and South American markets, and its huge advantage as one of the world's lowest-wage jurisdictions. "It's all coming together here," says Wood, who holds a PhD from Queen's University in Kingston. "The next thing that's going to happen is that Mexico will overtake Canada as the United States' largest trading partner. And that will be a blow to the Canadian psyche." For evidence the traditional power balance has shifted southward, Wood points to Mexico City-based Grupo Bimbo's outlay of $1.8 billion (U.S.) last year to buy both Maple Leaf's Canada Bread unit and Saputo's bakery unit—the maker of the Jos. Louis, one of Canada's most iconic food products. He also cites Ford Motor Co.'s decision last year to build an engine plant in Mexico rather than in Windsor, despite numerous Canadian entreaties and offers of incentives. As the terrain shifts, says Wood, Ottawa's imposition of a visa requirement on Mexicans in 2009—a move that has been sharply opposed by Mexican officials while justified by their Canadian counterparts as a necessity for immigration control—is viewed with growing skepticism by business leaders in both countries. "There's a sense among business elites both here and in Canada that Ottawa has been slow to deepen relations," he says. "People increasingly worry that rather than promoting complementary economic growth along the lines pioneered by Bombardier, which operates interdependent plants in Canada, the U.S. and Mexico, Ottawa simply sees Mexico as a competitive threat." A comprehensive study released by the Canadian Council of Chief Executives (CCCE) echoes these worries, describing a pattern of "federal policy ambivalence" and "business apathy" toward Mexican economic threats and opportunities. The study highlights Canada's failure to capitalize on the 1994 North American Free Trade Agreement (NAFTA). Mexico harnessed NAFTA to restructure and grow its economy by using low wages, training programs and market proximity to lure investments that are now creating growing numbers of increasingly high-tech, high-skilled jobs in sectors such as aerospace. Meanwhile, Canada held back, the CCCE study asserts. "A Canadian firm's decision to move an assembly job to Mexico is not a net loss for Canada if Mexican assembly activity supports high-value engineering jobs in Canada and creates higher returns for Canadian investors," the study argues. But more firms need to appreciate this fact, the study concludes. The problem is not just that Canada is fumbling the huge Mexican trade opportunities offered within NAFTA. Time has also revealed the weakness of the commitments Canada's partners made under the agreement—especially to provisions aimed at ensuring labour rights and environmental protections would not become competitive handicaps for Canadian manufacturers. NAFTA has failed to "establish strong institutions for managing and strengthening the economic integration of the three countries," and most of the NAFTA working groups "have fallen into disuse," Dawson's CCCE study laments. "Meetings among leaders and ministers to take stock of the relationship and plan future co-operation are rare." If Vancouver seems like an unlikely base for the president and general secretary of Mexico's largest industrial union, Napoleón Gómez would be the first to agree. But Vancouver has been home for Gómez, who heads Mexico's 250,000-strong National Union of Mining, Metallurgical, Steel and Allied Workers (Los Mineros), since 2006, when he was forced to flee to Canada in the face of death threats. A series of federal investigations that year led the Mexican government to freeze the union's bank accounts and press charges against Gómez for embezzlement. But shortly after being re-elected for another six-year term as leader last year, Gómez saw his name cleared by Mexico's Supreme Court. Apart from the death threats, he's reluctant to return home without a guarantee that he will not be arrested. And that has not been forthcoming. Nor has the Mexican government reopened Los Mineros's accounts. "There is no presumption of innocence under Mexican law," Gómez explains. "I could be imprisoned more or less at whim without a government commitment otherwise." The impasse that keeps him in Vancouver, Gómez argues, stems from Los Mineros's successes in delivering wage gains averaging more than 10% annually for its members. In a country where democratic unions have long been repressed and controlled by national and state governments, Gómez says, Los Mineros's massive bargaining power—and its muscular efforts to promote Canadian-style labour rights throughout Mexico—has generated hostility in business and government circles alike. "We've been successful in representing our members in a way no other Mexican union has," he says. "But in Mexico, we have a state-enforced environment of low wages and labour repression. NAFTA has done nothing to change that. If it had, I'd be in Mexico City right now." Laura Macdonald, an expert in Mexico-Canada relations at Carleton University in Ottawa, agrees that NAFTA has failed to improve protections for Mexican labour. It's bad enough, she argues, that Canada failed to ensure that NAFTA's labour provisions were implemented, which would have helped Canadian workers compete. As well, over the past decade, Ottawa has quietly defunded programs designed to help Canadian unions bolster labour conditions in Mexico and other countries, while also channelling development money toward support for Canadian mining corporations in those countries. "It would have been in our best interests to promote labour rights in Mexico," Macdonald says, noting that Mexico's repressive labour regime amounts to a highly lucrative government-backed subsidy for employers there. "It would have helped prevent the race to the bottom we're now seeing, where wages are even lower than in China, and labour leaders who take militant positions risk being murdered." Data published by the Vancouver-based Fraser Institute, no friend of unions, reinforces Gómez and Macdonald's characterization of the Mexican labour climate. In its 2014 Economic Freedom of the World report, the institute ranks Mexico 115th among nations for the integrity of labour-market regulation (Canada and the U.S. are both in the top 10). According to the report, the security of collective bargaining has significantly deteriorated since NAFTA was signed. Higinio Barrios testifies to the barriers unions face as head of the Monterrey chapter of the Authentic Labour Front, a national organization dedicated to promoting independent, democratic unions. Company-controlled unions pass muster in Nueva León, he says, but "it's extremely rare for the state government to register an independent union. In fact, there is only one such union registered here." The head of that union, which represents sales representatives, declined to be interviewed on the record for fear of being fired. Six members of that union who spoke to local reporters in February were immediately fired, Barrios said. On a recent morning in the Monterrey suburb of Pesquería, Mario Sanchez, As the queue inched toward a labour contractor conducting interviews, Sanchez said he hoped to sign on as a carpenter at $250 a week, plus overtime. It was Benito Juárez Day, a national holiday dedicated to celebrating the reforming politician who forged a democratic republic ruled by law (including labour laws that nominally guarantee workers' holidays); otherwise, Sanchez knew, there would be even more competitors ahead of him in the queue. On the road leading from the site back toward Monterrey, the scale of the competition Sanchez faced became apparent. Holiday or not, hundreds of migrant labourers, many of them carrying their tools with them, were on the march, seeking temporary employment in a vast arc of industrial parks, interspersed with police and military bases, that stretches from Pesquería northward towards Ciénega de Flores, the suburb where Richard Tsou is connecting Grohe Canada's Mississauga machinery with its new Mexican masters. The names on the factory billboards along the road to Ciénega de Flores include many global brands: Lenovo (computers), Villacero (steel), Smurfit Kappa (packaging), Freightliner (trucks), Masonite (doors), Hussmann (refrigeration), Walmart Logistics. Almost every plant has a "Se Solicita Personal" (we're hiring) sign out front. At the American Standard plant where Grohe is now setting up shop, the parking lot was full. Banks and governments were closed for the holiday, but at Grohe, scores of workers could be seen in the cafeteria adjacent to the parking lot. At Grohe's security gate, a squad of guards was on duty. They reinforced the decision by Dr. Ulrike Heuser-Greipl, senior vice-president, public and investor relations, at Grohe's head office in Germany, to neither provide a reporter with a tour of the plant, nor with an interview, nor even with the factory's address. Grohe's security team refused to allow pictures to be taken outside the factory's gate. In an e-mail explaining that press inquiries could not be fielded during the plant's "transition," Heuser-Greipl said the plant in Mississauga was closed "because of its limited productivity compared with our other production facilities. It was not in a position to attain the level of efficacy of its sister facilities within the Grohe Group, meaning that it unfortunately didn't meet our growth strategy requirements." R&D CUTS WORSEN CANADA'S BRAIN DRAIN After NAFTA was negotiated in 1992, Mexico's then-president, Carlos Salinas, said it would allow Mexico to "create more and better-paid jobs." He was right. Mexican manufacturing has rapidly evolved from its low-paid textile and fabrication roots into higher-value arenas. Mexico, says Jayson Myers of Canadian Manufacturers and Exporters, is a popular destination for Canadian manufacturing jobs of all types. As jobs drain southward, salvation lies in innovation—"the ultimate source of the long-term competitiveness of businesses and the quality of life of Canadians," in the words of a federal panel in 2011. It warned that nations like Mexico "are using education, research and development, and the commitment of their governments to innovate and rapidly ascend the value chain. The challenge for highly developed countries like Canada, accustomed to generations atop the global economic league tables, is clear." Data show Canada is failing to meet this challenge. "Canada's business innovation activity is by any aggregate measure lacklustre," a 2012 OECD report said, pointing out that Canadian R&D as a percentage of GDP badly trails that of many industrialized countries. "While Canada is at the forefront of a number of industries, notably those that are natural resource-based, it appears to be rather far from the R&D-intensive high-tech manufacturing frontier." Between 2006 and 2011—the depths of the recession—investment in manufacturing R&D by Canadian companies dropped 26% to $5.3 billion (in constant U.S. dollars). In Mexico, it fell just 15% to $1.4 billion. American investment climbed 8% to $179 billion; Korean, almost 54% to $37 billion. In some key innovation sectors, even Mexico outpaces Canada. In pharmaceuticals, Canadian R&D spending plummeted from $871 million in 2006 to $370 million in 2011. Mexico's spending tripled to $421 million between 2006 and 2011. On a recent morning in the Monterrey suburb of Pesquería, Mario Sanchez, As the queue inched toward a labour contractor conducting interviews, Sanchez said he hoped to sign on as a carpenter at $250 a week, plus overtime. It was Benito Juárez Day, a national holiday dedicated to celebrating the reforming politician who forged a democratic republic ruled by law (including labour laws that nominally guarantee workers' holidays); otherwise, Sanchez knew, there would be even more competitors ahead of him in the queue. On the road leading from the site back toward Monterrey, the scale of the competition Sanchez faced became apparent. Holiday or not, hundreds of migrant labourers, many of them carrying their tools with them, were on the march, seeking temporary employment in a vast arc of industrial parks, interspersed with police and military bases, that stretches from Pesquería northward towards Ciénega de Flores, the suburb where Richard Tsou is connecting Grohe Canada's Mississauga machinery with its new Mexican masters. The names on the factory billboards along the road to Ciénega de Flores include many global brands: Lenovo (computers), Villacero (steel), Smurfit Kappa (packaging), Freightliner (trucks), Masonite (doors), Hussmann (refrigeration), Walmart Logistics. Almost every plant has a "Se Solicita Personal" (we're hiring) sign out front. At the American Standard plant where Grohe is now setting up shop, the parking lot was full. Banks and governments were closed for the holiday, but at Grohe, scores of workers could be seen in the cafeteria adjacent to the parking lot. At Grohe's security gate, a squad of guards was on duty. They reinforced the decision by Dr. Ulrike Heuser-Greipl, senior vice-president, public and investor relations, at Grohe's head office in Germany, to neither provide a reporter with a tour of the plant, nor with an interview, nor even with the factory's address. Grohe's security team refused to allow pictures to be taken outside the factory's gate. In an e-mail explaining that press inquiries could not be fielded during the plant's "transition," Heuser-Greipl said the plant in Mississauga was closed "because of its limited productivity compared with our other production facilities. It was not in a position to attain the level of efficacy of its sister facilities within the Grohe Group, meaning that it unfortunately didn't meet our growth strategy requirements." R&D CUTS WORSEN CANADA'S BRAIN DRAIN After NAFTA was negotiated in 1992, Mexico's then-president, Carlos Salinas, said it would allow Mexico to "create more and better-paid jobs." He was right. Mexican manufacturing has rapidly evolved from its low-paid textile and fabrication roots into higher-value arenas. Mexico, says Jayson Myers of Canadian Manufacturers and Exporters, is a popular destination for Canadian manufacturing jobs of all types. As jobs drain southward, salvation lies in innovation—"the ultimate source of the long-term competitiveness of businesses and the quality of life of Canadians," in the words of a federal panel in 2011. It warned that nations like Mexico "are using education, research and development, and the commitment of their governments to innovate and rapidly ascend the value chain. The challenge for highly developed countries like Canada, accustomed to generations atop the global economic league tables, is clear." Data show Canada is failing to meet this challenge. "Canada's business innovation activity is by any aggregate measure lacklustre," a 2012 OECD report said, pointing out that Canadian R&D as a percentage of GDP badly trails that of many industrialized countries. "While Canada is at the forefront of a number of industries, notably those that are natural resource-based, it appears to be rather far from the R&D-intensive high-tech manufacturing frontier." Between 2006 and 2011—the depths of the recession—investment in manufacturing R&D by Canadian companies dropped 26% to $5.3 billion (in constant U.S. dollars). In Mexico, it fell just 15% to $1.4 billion. American investment climbed 8% to $179 billion; Korean, almost 54% to $37 billion. In some key innovation sectors, even Mexico outpaces Canada. In pharmaceuticals, Canadian R&D spending plummeted from $871 million in 2006 to $370 million in 2011. Mexico's spending tripled to $421 million between 2006 and 2011. |
UAW, automakers look Michael Wayland, "Bridging the gap" is the United Auto Workers' resounding philosophy for collective bargaining issues with the Detroit automakers and other organizations for the next four years. It's a precise wording that could be one of the first signs that contract negotiations between the union and companies will be more beneficial for all parties than they historically have. "There is a realism to it," said senior attorney Clifford Hammond of Detroit labor and employment law firm Nemeth Law P.C. "I think there's a lot to say about the words. They chose them for a reason." For union leaders and members, it's a strategy that is meant to benefit all: high-seniority workers who have lacked a pay raise for a decade; newer workers who are paid less and have fewer benefits; and temporary and contingent workers who aren't directly employed by companies. "What I've said all along is bridging the gap is not just about wages at the Big Three or wages with UAW members, it's about society as a whole," UAW President Dennis Williams said Wednesday following a panel with labor leaders at Wayne State University's campus in Detroit. Williams, during the panel, said the American labor movement is at a crossroads, and it's time for everyone to come to the bargaining table and move the country in a new direction. "We've got to find a way to bring students together, working men and women together, white-collar, blue-collar together, and say, 'There's something wrong with America,' " he said. "I think there's a great opportunity here." Williams' comments echoed those from the the union's Special Bargaining Convention last month in Detroit, where Williams and union leaders used "bridging the gap" throughout the convention. Some delegates last month called for stronger, more precise wording such as "eliminating" the gap — specifically between auto workers currently working under a tiered system that can pay entry-level employees $10 less than veteran, or legacy, employees — but the push fell short. The terminology is actually nothing new to General Motors Co., Ford Motor Co. and Chrysler, now Fiat Chrysler Automobiles NV. Since before the economic downturn of 2008-09 that led GM and then-Chrysler into government-backed bankruptcies, Detroit automakers were using the term "close" or "closing" the gap to refer to their labor costs compared to foreign automakers with operations in the U.S. Detroit automakers are still seeking to bridge that gap. Hammond said it's not unusual for bargaining groups to use words that are consistent with what's been said at previous rounds of negotiations. "Bridging the gap," he said, could be beneficial language for the automakers as well as Williams, who must appease rank-and-file workers and help keep labor costs for domestic automakers competitive with their non-union, foreign counterparts. "It's a way to try and get everybody at the table started in the right direction," Hammond said. "It's a pragmatic approach. It tries to hit every single angle." The auto industry is on a roll and the UAW made sacrifices during the economic downturn that they will be hoping to be awarded for, but the automakers have to remain competitive and be ready for a recession or dip in sales. One or two bad years of sales during a short-sighted contract that doesn't allow for flexibility could send the automakers back to Washington, D.C., with their hands out. The major "bridging" is expected to be around the two-tier wage system for the Detroit automakers and union workers. Analysts have speculated that it will be difficult to eliminate the two-tier structure in one round of bargaining. But bridging could be manageable. "It's certainly more realistic than trying to eliminate it," said Arthur Schwartz, a professor of labor relations at Wayne State University and a former general director of labor relations for GM, during a recent interview. "Trying to eliminate it is going to cost them a lot of jobs, and they know that. Trying to close it, I think the automakers can live with that, depending on how much." Current contracts between the Detroit automakers and UAW expire in September. |
Seniors the runaway winners ROB CARRICK In a budget that will take the federal government into the next election, seniors are the clear winners. They get more elbow room to manage withdrawals from their registered retirement income funds and a new tax credit to make their homes more accessible. They are also major beneficiaries of the new $10,000 annual contribution limit for tax-free savings accounts and some financial help for people who look after gravely ill relatives. What the government wants and needs are votes. To get them, it has targeted seniors and families with young children. Seniors have been served in the budget, and families were covered through the already announced family tax cut and improvements to the universal child-care benefit and Child Care Expenses Deduction. Ignored, aside from those student-loan measures, is the young adult cohort know as Generation Y, or millennials. If any group is not benefiting from the thrumming economy the government describes in its budget documents, it is these young adults. They are struggling to break into a work force that too often will not commit to young workers beyond temporary contracts or unpaid internships, and they are increasingly being shut out of the housing market in some cities. Rising postsecondary tuition costs are also a problem, but here the government did offer something. Starting in 2016-17, the budget would reduce the expected contribution from parents when considering a student's eligibility for the Canada Student Loans program. Another measure would eliminate income that students earn while in school from assessments on eligibility for loans. TFSAs are actually quite handy for young people as a catch-all savings/investing vehicle for home down payments, travel, retirement and more. But a higher TFSA contribution limit will not mean much to Gen Y without better prospects for employment and financial self-sufficiency. It is seniors who really benefit from a high TFSA limit and the government itself says so. It estimates that, based on current savings patterns, people ages 65 and older will receive about 60 per cent of the benefits in 2019 from boosting the TFSA limit to $10,000. Incidentally, that higher TFSA limit takes effect for the 2015 tax year and increases to the limit will no longer be indexed to inflation. The new RRIF withdrawal rules are designed to help today's increasingly long-lived seniors conserve their retirement savings at a time when painfully low interest rates have hurt returns from safe investments such as bonds and guaranteed investment certificates. Starting in the 2015 tax year, the minimum withdrawal begins at 5.28 per cent in the year in which a senior is 71 on Jan. 1, down from 7.38 per cent. The required minimum will rise to 18.79 per cent at age 94 and remain capped at 20 per cent at age 95 and beyond. Previously, the 20-per-cent level was reached at 94. The government estimates that the lower withdrawal rate will cumulatively preserve close to 50 per cent more capital by age 90. Note to seniors who end up withdrawing RRIF amounts in 2015 according to the old schedule: The government will allow you to recontribute the difference between what you withdrew and the new minimum by the end of February, 2016. The new home-accessibility tax credit applies starting next year to both seniors and people with disabilities. Up to $1,500 in tax relief would be available for renovations such as wheelchair ramps, walk-in bathtubs, wheel-in showers and grab bars. Seniors will be prime beneficiaries of two other budget measures, the first being an extension of compassionate-care benefits offered through employment insurance to six months from six weeks. This enhanced benefit would apply starting next year to people who must be away from work to care for family members who are gravely ill with a significant risk of death. The other measure aims to simplify requirements for people with foreign investments in non-registered accounts to disclose their holdings in detail to the Canada Revenue Agency. A less onerous reporting process is being developed for people with less than $250,000 in foreign property. One of the more universal features of the budget is a project to add clearer consumer-protection language to the Bank Act. For example, there will be requirements for expanded use of information boxes on the documentation of financial products to disclose basic information, and increased availability of a cooling-off period to allow people to back out of a financial purchase without penalties. |
Ford Europe unveils its
Neil Winton, You can't say Ford Europe hasn't been warned, but it is bravely, or rashly, going ahead with its plan to beat the Germans at their own game. The Ford Vignale Mondeo is an attempt to provide Europeans with premium cars with all the quality of manufacture, high-tech content and personal service in the market for which has been dominated by BMW, VW's Audi and Mercedes, with a little bit of penetration from Land Rover, Jaguar and Lexus. The reward of course is the fat profit margins which have swelled German coffers. Does the Vignale have what it takes? It's too early to say because it has yet to hit the road, but Ford Europe unveiled a production version of the Vignale Friday. Ford's first boast concerns the Vignale's high level of luxury items, technology and service. The exterior, (you'll recognize that the Mondeo is a thinly disguised Ford Fusion), has been jazzed up with much chrome and messages proclaiming it's a Vignale, including unique wheels. Exclusive, personalized paint jobs are offered. Inside, there are upmarket leather seats. Computer power is impressive with safety gizmos like Pre-Collision Assist with Pedestrian Detection. Other aids to safety and convenience include computerized parking, traffic sign recognition, and automatic braking to avoid collisions at up to 25 mph. Engine choices include a 207 hp Bi-turbo 2.0 liter diesel, a 237 hp gasoline motor, and a 184 hp gasoline-electric hybrid. All-wheel drive is an option too. Ford underlines the personal service you'll get if you buy a Vignale. "Vignale relationship managers (will) deliver services including collection and delivery for servicing and valeting; Vignale OneCall offers 24-hour customer support," Ford said. Prices start at the equivalent of $31,200, after taxes in Britain, when the Vignale goes on sale next month at new flagship FordStores. "Ford Vignale is the highest expression of the Ford brand in Europe, bringing together award-winning design with a unique ownership experience," said Jim Farley, Ford Europe executive vice president . Later this year there will be a Ford Vignale S MAX minivan. Ford underlines the quietness of the Mondeo Vignale, and some aids to comfort . "(there are) contour seats with active motion massage function. Designed to reduce muscle fatigue, particularly during longer journeys, the seats use a system of 11 inflatable cushions to deliver an unobtrusive massaging effect for thighs and lower back," Ford said. But will it sell? The history of the European automotive industry is littered with failed examples of mass carmakers trying to muscle in on German upmarket territory. Sales disasters like the Renault Vel Satis and Renault Avantime remind shareholders that companies enter this expensive territory at their peril. Saab of Sweden went bankrupt trying. Its compatriot, Volvo, is still doing its best. Even Volkswagen of Germany has fallen foul of this over confident route. Its attempt to match Mercedes with its ill-fated upmarket Phaeton has lost $2.7 billion so far, according to Bernstein Research. And yet the mass carmakers refuse to be daunted. Renault is making another attempt to break in with Initiale Paris versions of its cars and SUVs. Peugeot has its DS brand. Nissan's Infiniti is making a half-hearted effort in Europe too. So far, Honda has resisted trying to sell Acura cars here. Some analysts wondered why Ford didn't use the Lincoln luxury brand name if it was moving upmarket in Europe. At least that would have some ring of authenticity. Vignale is meaningless, but sounds vaguely Italian and hopefully, classy. But Ford clearly wouldn't be wasting the millions it must have invested in the project if it didn't expect success. Unfortunately, although Ford, Renault, Peugeot and Infiniti might make upmarket cars that are just as good, if not better than the Germans, it will take a huge, expensive and long-term effort to dislodge the power of the German badge and its inbuilt heritage.
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Ford unveils new Taurus
Michael Martinez Ford Motor Co. on Saturday unveiled a new Taurus sedan that for the first time will be sold in China. The Dearborn automaker took the wraps off the new car — along with a refreshed Focus and Explorer SUV— at a special event in advance of the Shanghai Auto Show. The Taurus is powered by a twin-turbo 2.7-liter EcoBoost V6 engine and will be manufactured at the recently opened Changan Ford Hangzhou Plant. No pricing or release date information was given. "The new Ford Taurus is another example of the best Ford has to offer globally, designed and developed with the Chinese market in mind," Marin Burela, president, Changan Ford Automobile Co., said in a statement. "More than just a premium business sedan, it's an elegant statement of what is possible under the One Ford plan." The new flagship sedan is designed differently than the North American Taurus and features a shield-like, trapezoidal five-bar grille and sleek LED headlamps. Designers added a number of details on the exterior, including upswept highlight trim on the doors and 19-inch alloy wheels. "The Ford Taurus we're introducing today shows the amazing strength and flexibility of our One Ford plan," John Lawler, chairman and CEO, Ford China, said in a statement. "It combines the best of our global product development and large-car expertise with a clear understanding of what Chinese customers in this segment want." Recent Taurus sales have struggled as North American consumers turn to sporty SUVs and trucks, but large cars are still popular in China, where many can afford personal drivers. Ford last month unveiled a new Lincoln Continental concept at the New York Auto Show that features an elaborate, spacious back seat designed for customers in China. The Taurus also emphasizes the back seat. In a first for a Ford vehicle in China, the Taurus has power-reclining rear seats with optional adjustable lumbar support and a massage function. A rear-seat control panel allows the passengers to control air conditioning, seat functions and car media. The panel can be hidden to accommodate three rear-seat passengers. Ford also revealed a refreshed Focus that will go on sale in China later this year. It features a wider exterior and simpler interior with a streamlined instrument panel. A new Explorer SUV also features a refreshed exterior, more driver assist technologies and new 2.3-liter four-cylinder and 3.5-liter V6 EcoBoost engines. |
Core inflation rate surges
on AVID PARKINSON The chances of another Bank of Canada interest-rate cut took a step backward following two key economic reports Friday, as higher-than-expected inflation and a sharp rebound in retail sales suggested the Canadian economy may be weathering the oil shock better than thought. Statistics Canada reported the annual inflation rate was 1.2 per cent in March, up from 1.0 per cent in February and the highest level since December, as the impact of the weaker loonie and a rebound at the gas pumps pushed consumer prices higher. The Bank of Canada's closely watched core inflation rate, which excludes some of the most volatile components of the Consumer Price Index (CPI) to provide a better picture of the underlying inflation trend, surged to 2.4 per cent – its highest level in more than six years. Meanwhile, Statscan also reported that seasonally adjusted retail sales surged 1.7 per cent month over month in February. Statscan said that on a year-over-year basis, food prices (up 3.8 per cent) have been the main upside driver. Gasoline prices have been the biggest downward drag on year-to-year inflation, down 19.2 per cent; but they have rebounded 16 per cent in the past two months, reducing the oil-related drag on the annual inflation rate. Economists had expected both total and core CPI inflation to hold steady at 1.0 per cent and 2.1 per cent, respectively, but were surprised by unexpectedly strong price gains in March. Both total and core CPI jumped 0.4 per cent in March on a seasonally adjusted basis over February, their biggest month-to-month advance in more than two years. Transportation costs led the advance, reflecting a 6.3-per-cent rise in gasoline prices. But the increase was broadly based, with six of the eight major component sectors in CPI higher on the month. The core CPI measure is now at its highest level since the end of 2008, and has spent the past eight consecutive months above the Bank of Canada's 2-per-cent target that guides its interest rate policy. "There were rampant signs of currency pass-through scattered across this [Statscan CPI] release," said Douglas Porter, chief economist at Bank of Montreal, in a research report. "The recent rebound in the Canadian dollar – it's up 4 per cent from its March average level – will take some steam out of import prices, which clearly have been the big driver of core." Still, the strong core rate suggests inflationary pressures are more broadly based than just a food-and-energy phenomenon. Dawn Desjardins, assistant chief economist at Royal Bank of Canada, noted nearly half the components of CPI are showing year-over-year gains above 2 per cent, "indicating that price pressures are spreading beyond items that are exchange-rate sensitive." "Core price resilience suggests the Canadian economy had less slack prior to its deceleration in the first quarter than the central bankers believed," Mr. Exarhos added. If the inflation data suggest the Bank of Canada may not need further easing to spur inflation to sustainably achieve its 2-per-cent target, the retail numbers suggest the economy may have been stronger in February than many observers, including the central bank, had feared. Given that February was a particularly harsh month for winter weather, the broad advance in retail sales was an encouraging sign for consumer appetite at a time when other segments of the economy showed signs of suffocating under the snow pack. "Today's data are likely to save February's monthly GDP outlook," Mr. Exarhos said.
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Ford announces $2.5 Michael Martinez, Ford Motor Co. on Friday made official a $2.5 billion investment in Mexico for two new plants and an expansion of a diesel engine line that will create about 3,800 jobs. Ford will spend $1.1 billion to build an engine facility within its Chihuahua Engine Plant, where it will produce a new gasoline-powered engine, creating 1,300 jobs. Ford will export the engines to the U.S., Canada, South America and the Asia Pacific region. In addition, Ford will spend $1.2 billion to build a transmission plant within the premises of a facility used by transmission supplier and partner Getrag, which is based in the city of Irapuato in the state of Guanajuato. The project will create 2,000 jobs. The new transmission plant — Ford's first transmission facility in Mexico — will produce two all-new automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as other North American markets. The automaker will spend $200 million and create 500 more jobs to expand its current I-4 and diesel engines production in Chihuahua. "Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build," Joe Hinrichs, Ford's president of the Americas, said in a statement. "These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world." Ford made the announcement Friday during a ceremony with Mexican President Enrique Peña Nieto. Ford is the latest automaker to turn to Mexico. Toyota Motor Corp. said Wednesday it will build a $1 billion plant in Mexico. And in December, GM said it is investing $5 billion in Mexico over six years, dating from 2013 through 2018, and will add 5,600 new jobs in Mexico. GM Mexico employs about 15,000 people. Automakers are bypassing the U.S. for new plants in part because Mexico has dozens of free trade agreements around the world, low wages, free or nearly free land on which to build and fewer regulatory hurdles. The investments also put pressure on the United Auto Workers coming contract talks with Detroit's Big Three automakers, since U.S. automakers will emphasize competitive pressures in talks. "The announcement by Ford to invest 2.5 billion in Mexico is disappointing but not any more disappointing than GM's decision to invest $5 billion in Mexico or similar investments like FCA Chrysler, Nissan, Mazda, Honda, and now both Toyota and Kia, which have announced investments in Mexico," UAW President Dennis Williams said in a statement. "The fact is that these companies are taking advantage of slavelike wages and corruption permissible through bad trade agreements. All Americans should be angered that these products are sold in the United States, where American manufacturing workers could have had good paying jobs that respect basic human dignity." Ford builds 4.4-liter and 6.7-liter diesel engines at its 727,000-square-foot Chihuahua Engine Plant. Its Mexico operations also include Cuautitlan and Hermosillo Stamping and Assembly plants, and a joint-venture with Getrag to build six-speed transmissions. Ford product chief Raj Nair said in November that the automaker could add a diesel engine option on the F-150 pickup. Ford has 11,300 employees in Mexico. The Ford Fiesta, Fusion and Lincoln MKZ as well as the hybrid versions of both are manufactured in Mexico. |
UAW's Williams Daniel Howes, The start of United Auto Workers' national contract talks is months away, but the take on President Dennis Williams is that he's a guy who will work with the Detroit automakers.
"People are watching these negotiations," one industry executive close to the process said. "If we do the same old stuff, that won't help build the union." Put another way: Williams is no Bob King. Where the former president spent time and member dues in vain attempts to unite workers around the globe, Williams demonstrates a sharper focus on the needs of his members and squaring those with the competitive realities facing the automakers. Where King tended to see multinational corporations as repositories of cash to be fleeced for the union's short-term benefit, Williams recognizes that competitive employers are in the long-term interest of the union and its desperate need for growth — in the Detroit companies and, potentially, the foreign-owned operating in the United States. Where King pledged cooperation even as he threatened to brand non-union automakers "human rights violators" if they didn't readily accede to the UAW's organizing efforts, Williams so far is less publicly bombastic and less contradictory in the messages he sends. Where King would spend weeks traveling to meet with South Korean unionists or an international labor conference in Geneva, one of the most expensive cities on the planet, Williams is focused on the United States and is more likely to be attending a board meeting of Illinois-based Navistar Inc., where he has been a director since 2006. Another ranking executive describes Williams as "a businessman" who entertains creative solutions and "gets it." He'd better, because the stakes are high for the union and the automakers. This year's negotiations will be the first in eight years unencumbered by the threat of imminent financial collapse or government oversight; the first in decades where the United States, not foreign markets, is the primary profit-driver; the first in who knows how long that all sides will be working to manage prosperity, not decline. Make no mistake: The emerging consensus in advance of talks beginning this summer is that they will not be easy. Nor is a union whose mantra is "bridge the gap" between pay rates for second-tier and legacy employees likely to drive an easy bargain. It can't, politically speaking, despite needing to balance contradictory imperatives. Those include squaring the expectation for base-wage increases among tier-one employees with the need (at General Motors Co. and Ford Motor Co., especially) to achieve all-in labor costs parity with foreign-owned automakers. They include balancing expectations for Cadillac health care with the fact that the richness of the UAW plan will be subject to a "Cadillac tax" set to be levied on the automakers by current terms of the Affordable Care Act. And they include reckoning the drive for more dues-paying members at potentially lower tiers with a push to compensate existing members even more, through base-pay increases, richer bonuses or both. The first path improves chances for continued reinvestment in the States; the second does not, executives say. How Williams, the union's bargaining committee and their counterparts at the auto companies balance all these variables, and more, will shape Detroit's evolving image with investors, industry analysts, dealers, employees and customers. Bankruptcy and bailouts are receding quickly (too quickly?) in the collective rear-view mirror here, but they remain hot touchstones to critics of using taxpayer money to rescue private companies. How and what the talks produce will be markers of how Detroit is changing — or not. Whenever companies make money, and show an ability to do it consistently, there's no shortage of interest groups devising ways to spend it. On union pay, bonuses and benefits; on stock buybacks and dividends for investors; on new vehicle programs, even acquisitions. Understandable human nature, that, if an exercise in looking backwards. That's not much help when the union and the companies need a business plan to move forward together, competitively. |
Not because the union president is likely to be a pushover, ranking industry executives say. But because the UAW CEO understands competition better than his predecessor and he's likely to approach bargaining the way they do: as a business proposition whose results will be judged by key constituencies.
Automakers ramp up David Shepardson, Toyota Motor Corp. said Wednesday it will build a $1 billion plant in Mexico — the latest move by the auto industry to ramp up production south of the border. The move comes two days before Ford Motor Co. is expected to announce $2.5 billion in investments in Mexico, as automakers opt not to build new plants in the United States — largely because of Mexico's free trade agreements, much lower wages and fewer hurdles to acquiring land and building new plants. Many automakers are turning to Mexico to build new or expand plant operations. Mexico is the fourth largest exporter of vehicles globally and eighth largest producer, according to the Mexican Automotive Industry Association. Mexican auto production set another record in 2014, up 10 percent, and has more than doubled over the last decade, and exported more than 80 percent of the vehicles. Nearly all of the Mexican exports go to U.S. and Canadian customers.
Toyota said it will invest $1 billion to build its newest North American plant in the state of Guanajuato in Central Mexico to produce the Corolla, which will employ 2,000 and be able to produce 200,000 vehicles a year. This will be Toyota's largest investment in Mexico and its 15th plant in North America. Once Corolla production begins in Mexico in 2019, Toyota will halt Corolla production at its Cambridge, Ontario North Plant to switch to mid-sized, higher-value vehicles. Toyota plans to make significant investments in its assembly plants in Cambridge and Woodstock, Ontario. "This strategic re-thinking of how and where we build our products will create new opportunities for our company, our business partners and our team members across the region," said Jim Lentz, CEO of Toyota North America. "Our next-generation production facility in Mexico will be a model for the future of global manufacturing and set a new standard for innovation and excellence." Automakers are passing up building new plants in the United States — and low wages in Mexico may become an issue in labor talks between the United Auto Workers and Detroit's Big Three automakers this summer. In the 2011 contract talks, the UAW won agreements from Detroit's Big Three to return some jobs to the United States from Mexico. Ford is expected to announce an investment for a new transmission plant, and an expansion of Ford's plant in the northern Chihuahua state, where it will build two new diesel engines. Ford currently builds 4.4-liter and 6.7-liter diesel engines at its 727,000-square-foot Chihuahua Engine Plant. Its Mexico operations also include Cuautitlan and Hermosillo Stamping and Assembly plants, and a joint-venture with Getrag to build six-speed transmissions. The number of diesel engines the Dearborn automaker offers constantly changes by region as it shifts what vehicle models do and do not offer them. Ford product chief Raj Nair said last November the automaker could add a diesel engine option on the F-150 pickup if the opportunity makes sense. In December, General Motors Co. said it is investing $5 billion in Mexico over six years, dating from 2013 through 2018, and will add 5,600 new jobs in the region. The Detroit based automaker said the investment includes $1.4 billion announced or implemented in 2013 and 2014 — $3.6 billion will come over the next four years. "These investments will fund plant improvements to modernize and expand our manufacturing facilities at our four major complexes in Mexico," GM spokesman Bill Grotz said. GM, in a news release, said the investments will help "GM produce new vehicles for the local and foreign market, which will help establish GM as Mexico's No. 1 vehicle exporter." The four production complexes in Mexico include Toluca, Ramos Arizpe, Silao and San Luis Potosi. Those complexes include 14 manufacturing plants comprising assembly, engine, transmission, stamping and foundry work. GM Mexico currently employs about 15,000 people. GM employees annually build an average of 890,000 engines in Mexico, nearly 1.2 million transmissions and 647,000 vehicles, of which about 80 percent are exported. It also has an engineering center in Toluca, where engineers work on vehicle interiors and electrical and thermal systems. |
Ford to announce $2.5 billion investment in Mexico Michael Martinez, Ford Motor Co. on Friday will announce a $2.5 billion investment in Mexico, a source confirmed to The Detroit News. Reuters, citing industry sources, first reported the investment, which it said would include money for a transmission plant, and an expansion of Ford's plant in the northern Chihuahua state, where it will build two new diesel engines. Ford on Tuesday released a statement saying it "cannot comment on future product or manufacturing plans." Ford currently builds 4.4-liter and 6.7-liter diesel engines at its 727,000-square-foot Chihuahua Engine Plant. Its Mexico operations also include Cuautitlan and Hermosillo Stamping and Assembly plants, and a joint-venture with Getrag to build six-speed transmissions. The number of diesel engines the Dearborn automaker offers constantly changes by region as it shifts what vehicle models do and do not offer them. Ford product chief Raj Nair said last November the automaker could add a diesel engine option on the F-150 pickup if the opportunity makes sense. Ford would be the latest in a number of automakers who are turning to Mexico to build new plants or expand operations. Mexico is the fourth largest exporter of vehicles globally and eighth largest producer, according to the Mexican Automotive Industry Association. Last December, General Motors Co. said it will invest $5 billion in Mexico over six years, dating from 2013 through 2018, and will add 5,600 new jobs in the region. The Detroit automaker said the investment includes $1.4 billion announced or implemented in the past two years and $3.6 billion will come over the next four years. "Mexico has put so many of these free trade agreements in place in a very shrewd move and it's worked," said Karl Brauer, senior analyst with Kelley Blue Book. "It's drawing in automakers and all sorts of industries because of the low cost of doing business there and selling the products across the globe." |
Ford's Europe sales rise Michael Martinez, Ford Motor Co.'s sales in Europe rose 12.5 percent during the first three months of 2015 as the automaker gained market share and became the No. 1 commercial vehicle brand thanks to a wave of new products. Ford sold 335,089 vehicles in Europe during the first quarter of 2015 and experienced a 14.4 percent sales bump in March. Its market share rose 0.2 percentage points in the first quarter to 8.2 percent, and Ford recently surpassed Volkswagen as the best-selling commercial vehicle brand. In 2012, Ford ranked No. 7. "This is really about momentum for us," Peter Fleet, vice president of sales for Ford of Europe, said on a Tuesday conference call with reporters. "The new products we're bringing to market aren't just adding additional sales numbers, it highlights favorability in the brand." Ford's success in Europe was helped, in part, by General Motors Co.'s decision to mostly pull out of the troubled Russian market. Fleet said Ford has seen an uptick in interest from GM customers and dealers. "We certainly see upside to our operations in Russian from the GM announcement," he said. "We've had some significant expressions of interest from GM dealers in Russia who would like to be represented by Ford, and some customers from GM coming to us. Not thousands of customers desperately trying to sell their cars but seeking some assurance the Ford dealer is able to service their GM car." Fleet said that, despite the challenges in Russia, Ford was "picking up some momentum" there thanks to new products and government loan packages that are designed to boost sales. Across Europe, Fleet said Ford's gains have been driven by its new products. Half of the automaker's sales volume comes from new or refreshed vehicles. Sales of the all-new Mondeo were up 34 percent year-over-year and customer orders were up 75 percent. Ford's SUV sales were paced by the Kuga, up 30.7 percent for the best first quarter since 2008, when the first-generation Kuga was launched. Sales of the EcoSport compact SUV also continued to gain momentum in first quarter sales with nearly 9,700 sold. "Whatever way you cut it, it's very clear there's some strong industry growth in Europe," Fleet said. Ford has more new products coming. It will launch the new C-MAX and Grand C-MAX, the all-new S-MAX and Galaxy models, and the new Ford Vignale Mondeo in the coming weeks. This summer, Ford will begin selling the all-new Mustang fastback and convertible in Europe for the first time. Fleet said 2,000 Mustangs have already been sold even though the pony car hasn't yet made it to showrooms. Near the end of the year, Ford will begin producing the Ford Edge SUV and Focus RS performance hatch. "The momentum we've enjoyed in the first quarter ... we are expecting to continue to drive that momentum forward for the rest of the year," he said. Fleet wouldn't comment on whether better sales will translate into profitability in Europe. Ford has forecast it will lose more than $250 million there this year. It will release first quarter earnings at the end of April. |
Unifor Local 584 President/UPC Sandy Knight - Declined Vice President Chairperson Tony Gilmour-Reserved Financial Secretary Sandy Brook-Accepted Recording Secretary Michelle Hilts - Accepted Guide Arlene Rudolph - Reserved Trustee (3) Alison White - Reserved Committeeperson – Shift 2 Michelle Harwood – Accepted Committeeperson – Shift 3 Naz – Acclaimed Alternate Committeeperson – Shift 2 Alison White – Reserved Alternate Committeeperson – Shift 3 Rob Broughton – Accepted Health and Safety Rep Thayne Smith - Accepted Alternate Health and Safety Rep Greg Barnard – Accepted Benefit Rep Michelle Harvey - Accepted Alternate Benefit Rep Sandy Knight - Accepted Education Chair Social Services Sharon Crossley – Acclaimed Recreation Chair UWD (United Workers of Deversity) Lisa Girgenti – Declined Women's Committee Chairperson Tracey Lauzon - Accepted Pride Chairperson By-Laws Committee (2) Richard Green -Reserved Women’s Advocate Pat Riley – Reserved EFAP (Employee & Family Assistance)Rep Glen Swatman – Accepted Unifor Council Delegate (1) Gary Rumboldt-Accepted Unifor Convention Delegate (1) Gary Rumboldt – Accepted Labour Council (3) Chris Brookbanks – Acclaimed |
GM seeking contract Grace Macaluso A senior Unifor official said Thursday he expects to meet with General Motors within the next month to begin discussions that could lead to new product for the carmaker's Oshawa plant. "We're not interested in changing everything in our collective agreement," said Ron Svajlenko, president of Local 222, which represents about 3,500 hourly workers at the Oshawa complex. "We're interested in hearing their feedback on what their expectations are of us and what help we will need from governments and the municipality." GM has raised a "host of issues," including moving new hires to a defined contribution pension plan, said Svajlenko. Currently, new hires at GM's Oshawa and St. Catharine's plants receive a hybrid plan that is half defined and half contribution — a concession that was part of 2012 Detroit Three contract talks. At the time, the automakers were pressing the union to move all new hires from a defined benefits plan to a defined contribution plan, the union said. "There hasn't been a lot of discussion on this," said Svajlenko, although he did not think it would be a tough sell for his members since the defined contribution plan is a provision for new hires in the collective agreement representing GM workers at its CAMI plant in Ingersoll. The contract covering CAMI workers was negotiated separately in 2013 — a year after Detroit Three bargaining. "They have done this at CAMI," he said. "At the same time, it's not new across the board." However, some union officials are balking at making such a concession, which would have to be part of pattern bargaining negotiations that aren't expected to begin until the summer of 2016. "Absolutely it would be a tough sell," said Chris Taylor, president of Unifor Local 200, which represents Ford workers at two Windsor engine plants. "You're setting a precedent where you have one group of people who won't have what another group of people has," said Taylor. "These companies are making very, very good profits, mostly in North America. To turn around and say we can't compete by keeping defined benefits plans when we've come up with a hybrid plans seems unrealistic." Unifor has been pressing GM for new investment in Oshawa, which is slated to lose production of the Chevy Camaro muscle car to Lansing, Mich., later this year. That move will affect about 1,000 hourly workers. As well, the consolidated line, which assembles the Impala sedan and Chevy Equinox, will shut down some time next year. GM Canada president Stephen Carlisle has said he would be willing to begin contract talks early in a bid to end uncertainty over the fate of the Oshawa operation. The current four-year contract is set to expire in September 2016. Svajlenko said meaningful talks can't begin until GM commits to a long-term future for the Oshawa plant. "We need to get engaged with GM," he said. "We're looking for product." GM has already announced three down weeks for the Oshawa plant. "Our cars aren't selling well," said Svajlenko. "We look forward to putting security in front of our members." Taylor reiterated calls for an enhanced Canada Pension Plan, which would ease company pension costs and provide security to retiring workers. "Most people coming into our plants are new hires who have time to put in 30 or 40 years and would benefit from an enhanced CPP." |
New Ford technology will ANDREW CLARK Do you have trouble understanding double digits? When driving, do you find it hard to pay attention to little things, like what speed you're going? Well, fret no longer. Ford's got you covered. Introducing the "Intelligent Speed Limiter," a built-in device that can detect road signs and cameras and slow your car down when needed. Think of it as a brain for people who don't have one. The Intelligent Speed Limiter will be available in Britain this summer as part of Ford's new S-Max, a vehicle that Roelant de Waard, Ford of Europe vice-president, marketing, sales and service, says "defies the notion that a versatile seven-seat family car cannot also be stylish, rewarding to drive and technologically advanced. Intelligent Speed Limiter is one of those technologies that people will wonder how they did without – not just because they avoid speeding fines but because driving becomes that much less stressful." Let's put aside the fact that anyone who uses the words "family," "car" and "stylish" in the same sentence should be automatically dismissed. Let's put aside the fact that Intelligent Speed Limiter sounds like something Kurt Vonnegut might have cut from Breakfast of Champions and then Thomas Pynchon borrowed and put in Gravity's Rainbow. Let's look at the Intelligent Speed Limiter and what it means to the future of driving. On the micro-scale, it's just another small step toward the robots taking over. It simply combines two existing Ford technologies: the Adjustable Speed Limiter, which lets drivers manually set a maximum speed, and the Traffic Sign Recognition, which provides drivers with the latest traffic information, such as speed limits and passing restrictions. Easy. The Intelligent Speed Limiter uses a windshield-mounted camera to monitor road signs. When the Intelligent Speed Limiter recognizes that the driver has exceeded the speed limit by more than 10 km/h, the system slows the vehicle, not by applying the brakes but by adjusting the amount of fuel delivered. A driver can override the system by "firmly" accelerating. So far, so good. Speed is a factor in a majority of accidents and any technology that can control it should be beneficial. And yet … Will Intelligent Speed Limiter reduce or increase velocitization? That's the phenomenon that causes drivers who travel at a high rate of speed for extended periods of time to no longer feel as if they are travelling fast when they enter into a zone with a slower posted speed limit. By automatically alerting drivers, this sort of technology could snuff out velocitization or it could make us complacent and make it far worse. There is something unsettling about a technology that will allow drivers to pay even less attention than they already are. As for making driving "less stressful" – you're operating a ton of potentially lethal rolling steel; shouldn't that be a little stressful? In the grand lexicon of things that are important when driving, the speed you're travelling at it is near the top of the list. Is it too much to ask that a driver pay attention? Anyone who can't be bothered to check what speed they're going should not be driving. If you're that lazy, an intelligent "speed-limiting" move would be to put your keys down and let someone else do the driving. |
Canada loses $800M Melissa Burden, The Canadian federal government sold its nearly 73.4 million shares of General Motors Co. stock on Monday for about $2.61 billion, putting its losses likely around $800 million Canadian for its financial bailout support of the Detroit automaker. Canada GEN Investment Corp., which held Canada's equity interest in GM, sold its stake at $35.61 a share, according to a regulatory filing. The sale could net the Canadian federal government about $3.3 billion in Canadian dollars based on Thursday's U.S. exchange rate. Canada GEN Investment Corp. said Monday it would sell its 4.6 percent stake in GM in a block sale this week to investment bank Goldman Sachs & Co. But it said it would convert the U.S. dollars into Canadian currency "gradually over a period of time." The move ends nearly six years of government ownership into the Detroit automaker. Canada and Ontario helped bail out GM during its bankruptcy, giving $10.8 billion in Canadian dollars at the time, with the federal government providing $7.2 billion Canadian. The Canadian and Ontario governments at one point collectively held about 175 million shares of GM common stock. They also held preferred stock shares. A Minister of Finance spokeswoman Thursday said the Canadian government has recovered $6.4 billion in Canadian dollars of its support to GM. The U.S. government lost $11.2 billion on its $49.5 billion GM bailout. The U.S. sold its last shares in the company in December 2013, while Ontario sold its final stake in GM, 36.7 million shares, in February for $1.1 billion. Ontario provided $3.6 billion in Canadian dollars to GM during the recession. The province received 58.4 million shares of GM stock as part of its support to GM. Ontario made $1.35 billion Canadian dollars on its sales of GM shares, which exceeded Ontario's target of a $900 million gain, a spokeswoman confirmed. But the difference indicates a $2.25 billion loss. "Ontario is already realizing a significant return on investment from its support for GM through hundreds of thousands of direct and indirect jobs retained, the accompanying economic activity and revenues that would otherwise have been lost," Kelsey Ingram, spokeswoman for Ontario Finance Minister Charles Sousa, said in a statement. "The recession in Ontario would have been deeper and longer had we not acted." On Monday, Finance Minister Joe Oliver said that Canada's investment in GM was meant to be temporary and that its share sale returns GM to private sector ownership. Unifor, the Canadian union that represents 21,000 autoworkers including hourly workers at GM, was disappointed in the sale. "It is remarkably short-sighted of the federal government to sell off its shares in GM at a time when there has been widespread agreement that securing GM's future in Canada is critical," Unifor National President Jerry Dias said in a statement. GM is considering the fate of its Oshawa, Ontario, assembly plant and has said it won't decide until next year on any new vehicle commitments or investments for the plant. Production of the Chevrolet Camaro is moving from Oshawa to GM's Lansing Grand River Assembly Plant later this year; some analysts say the Oshawa plant is at risk of closure. "The federal government is selling off its shares for short-term political gain, as it prepares its last budget before the next federal election. We need leaders with more vision, strategy and savvy than this," Dias said. "This was an unwise and unhelpful move by the federal government. That said, we remain confident that GM can have a strong future in Canada because just as GM is good for Canada, Canada is good for GM. But at some point very soon, the federal and provincial governments are going to have to take decisive action to secure the future of GM." A GM spokeswoman has said the company will meet or exceed all mandates Canada required for receiving bailout funds, including launching five new vehicles in Canada and keeping at least 16 percent of North American production in Canada through 2016. GM's largest shareholder is the UAW Retiree Medical Benefits Trust, a voluntary employees' beneficiary association. As of late February, it owned about 140.1 million shares, or 8.7 percent, of GM's outstanding stock. |
GTAA DEMONSTRATION
The Greater Toronto Airport Authority (GTAA) has a history of contract flipping of good paying jobs to low paying jobs. Contract flipping has resurfaced during Air Canada negotiations and talks have broken off as we do not have a resolve to the loss of our jobs. These members help passengers who have wheelchair/special assistance requests. The Greater Toronto Airport Authority (GTAA) has become an important front in the struggle for good jobs in Canada. Last month, the GTAA changed providers leading to layoffs of more than 260 workers who service passengers with special needs. Unifor is accusing the GTAA of "contract flipping," the legal but unethical practice of switching service providers every few years to suppress wages and benefits. When a new contract begins, employees must re-apply for their job and face uncertainty or unemployment. More recently, the GTAA de-railed bargaining between Unifor and Air Canada by demanding that Unifor held two large demonstrations and several information pickets to raise awareness about the GTAA's attack on good jobs. "The campaign against the GTAA is symbolic of our |
GM pushing Unifor Globe & Mail General Motors Co. is pressing the union at two of its Ontario factories to give up a long-cherished element of compensation packages – the defined benefit portion of the pension plan the company provides for newly hired employees. The auto maker is making the push as it discusses with Unifor – the union that represents hourly paid workers – potential investments in new vehicles and products at assembly plants in Oshawa, Ont., and an engine and transmission making facility in St. Catharines, Ont. The pressure from GM is "huge," said one Unifor official, who noted that the Unifor local at GM's Cami assembly plant in Ingersoll, Ont., negotiated a full defined contribution plan for new employees. The pension for new unionized employees hired at GM's other Canadian operations is a half defined contribution and half defined benefit. "When I say huge, I would say they have no interest in doing anything ... if we don't follow suit with what Cami did," said the union official, who spoke on condition that he not be identified. Defined benefit pension plans have been a pillar of the union movement in Canada for decades, although that pillar is being eroded as corporations scrap them entirely or switch to defined contribution plans for new employees, which eliminates the plans over time. "This is a huge fundamental issue for us as an organization," Unifor president Jerry Dias said. If the union gives up the idea of defined benefit plans at GM, they will be ended for newly hired employees at Ford Motor Co. of Canada Ltd. plants and those operated by FCA Canada (formerly Chrysler) because of what is called pattern bargaining, in which the contract with one of the Detroit Three serves as the template for contracts with the other two companies. Defined benefit pension plans would also come under pressure at all employers that have them, Mr. Dias added. "It would have a broad economy-wide impact, not just on auto," said Charlotte Yates, dean of social studies at McMaster University in Hamilton, Ont., and a long-time observer of the Canadian labour scene. "It would be a really hard pill for the national [union] to swallow, because other employers will go after them for it." Official negotiations on a new contract between Unifor and the Canadian units of the Detroit Three companies begin in about 15 months and GM has said no decisions on new products for Oshawa will be made until those talks are complete. Mr. Dias said a defined contribution plan only for new employees is an issue that has been raised by GM. "If you take a look at the profitability of the industry today, there is no reason for them to make that type of a request," he said. Stephen Carlisle, president of General Motors of Canada Ltd., said in an interview in February that the pension plan is one of the items being discussed as GM assesses its competitive position in Oshawa and whether to allocate new vehicles to the assembly plants. "We're more inclined to a DC plan than we are a DB plan," Mr. Carlisle said. He made those comments while announcing that GM and its suppliers will invest $560-million at Cami to produce the next generation of the Chevrolet Equinox crossover. That was a reminder to union officials in Oshawa and St. Catharines that their plants could win new investment if the pension plan for new hires changes, instead of facing the possibility of closing. Mr. Dias has been lobbied by people inside the union to replicate the move made by the local in Cami, which has never been included in national GM contracts. "It's pretty hard for us not to do what Cami did," said one union official. "In my opinion it's a good thing to do." Another union official said if Unifor agrees to change the pension plan, it could win new investment, which then means the plants keep operating to generate revenue to fund the defined benefit plans of older employees. Those plans are underfunded, so they would pay just 67 per cent of full benefits if they were wound up. |
NHTSA reviews 740,000 David Shepardson, Washington — The National Highway Traffic Safety Administration is reviewing Ford Motor Co.'s 2014 recall of 740,000 SUVs to determine if the Dearborn automaker's software upgrade fix is adequate. In May 2014, Ford recalled 740,878 2008-11 Ford Escape and Mercury Mariner SUVs to address reports of sudden loss of power-steering assist. Ford said the problem was the result of "a poor signal-to-noise ratio in the torque sensor" within the electric power steering system. When the system detects the problem, it shifts to the fail-safe/manual steering mode. Ford said that would require higher steering effort at lower vehicle speeds, which may result in an increased risk of a crash. In February, NHTSA received a petition to determine if Ford met its obligations under the 2014 recall from the owner of a vehicle that experienced a torque-sensor failure after receiving the fix. The petition alleges that the Ford software update does not adequately remedy the safety defect and that the software update itself may in fact cause further issues with the power steering, causing it to fail, and ultimately requiring replacement of the sensor or entire steering column. NHTSA said it will review the petition and decide whether to launch a formal investigation. Ford said it is cooperating. The automaker said it has repaired 443,198 of the recalled vehicles through Dec. 31, with 24,400 owners being unreachable. Ford's remedy instructs dealers to check the power-steering control module for diagnostic trouble codes, to determine the proper repair procedure. If no trouble codes are present, dealers will update the software. Last week, NHTSA said it is reviewing a separate petition into 517,945 2003-05 Ford Crown Victoria and Mercury Grand Marquis cars for lighting problems. The North Carolina Consumers Council has asked for a defect investigation for headlight and exterior lighting failure on 2003-05 Ford Crown Victoria and Mercury Grand Marquis vehicles. The petition says a defect in the lighting control module that powers the headlights can result in the loss of vehicle headlights and all exterior lighting while driving. NHTSA investigated the issue in 2008 without demanding a recall. The petitioner notes that Ford recently extended the vehicle warranty for this part to 15 years or 250,000 miles. The petition also says that service replacement parts were not readily available for warranty repairs at the time of the petition submission. |
Canada to sell 4.6% stake in Melissa Burden The Canadian federal government said Monday it will sell its 73.4 million shares of General Motors Co. stock to Goldman, Sachs & Co., ending nearly six years of government ownership into the Detroit automaker. Canada GEN Investment Corporation, a subsidiary of Canada Development Investment Corp., said the sale — which accounts for about 4.6 percent of GM's outstanding shares — will happen in a block trade by Friday. The corporation said more details about the sale would be available in the "next several days" after Canada GEN reports the trade with U.S. and Canadian securities regulators. Proceeds will be in U.S. dollars and converted to "Canadian currency gradually over a period of time," Canada GEN said in a news release. The shares would be worth about $2.7 billion based on GM's close of $36.66 a share Monday. GM declined to comment. "Like any shareholder, the decision by the Canadian government to sell rests solely with them," GM spokesman Tom Henderson said in an email. In 2008 and 2009, the United States gave GM a $49.5 billion bailout, while the Canadian and Ontario governments contributed about $10 billion, including $4.8 billion from Ontario for GM and Chrysler. The U.S. exited its final stake in the Detroit automaker in December 2013. In 2014, the federal and Canadian governments owned 7 percent of GM's common stock. In February, the Ontario government said it had sold all of its final 36.7 million shares that it received as part of Canada's $10 billion bailout of GM. The Ontario Finance Ministry said the shares sold for $1.1 billion and money would go into a trust to help public infrastructure in Ontario. In a January regulatory filing, Canada GEN Investment Corporation said that an arrangement between the Canadian government and Ontario, in which Canada had committed to provide Ontario with one-third of proceeds from the sale of any stock held by Canada GEN and a third of dividends received by Canada GEN, had been terminated. The head of the Canadian Unifor union previously has spoken out against Canada and Ontario selling their stakes in the company, especially given uncertainty about GM's Oshawa, Ontario assembly plant, which analysts say is at high risk to close. "If Canada wants to have a robust auto manufacturing industry, our governments must play a role," Jerry Dias, president of Unifor (the union created by the Canadian Auto Workers' merger with the Communications, Energy and Paperworkers Union) said in a February statement. "We strongly urge the federal government to hold onto its shares." GM has said it will wait until next year before deciding any new vehicle commitments or investments at Oshawa. The plant is slated to lose a high-volume vehicle, the Chevrolet Camaro, later this year. In exchange for the bailout money, GM promised to launch five new vehicles in Canada, including a Canadian-made hybrid, and to keep at least 16 percent of North American production there through 2016. A GM spokeswoman said all those mandates will be met or exceeded. |
U.S. reviews 517K older David Shepardson, The National Highway Traffic Safety Administration said Friday it will review a petition for a formal investigation into 517,945 2003-05 Ford Crown Victoria and Mercury Grand Marquis cars for lighting problems. The North Carolina Consumers Council has asked for a defect investigation for headlight and exterior lighting failure on 2003-05 Ford Crown Victoria and Mercury Grand Marquis vehicles. The petition says a defect in the lighting control module that powers the headlights can result in the loss of vehicle headlights and all exterior lighting while driving. NHTSA investigated the issue in 2008 without demanding a recall. The petitioner notes that Ford recently extended the vehicle warranty for this part to 15 years or 250,000 miles. The petition also says that service replacement parts were not readily available for warranty repairs at the time of the petition submission. Ford didn't immediately comment. |
Ford gives raises to more Michael Martinez, Ford Motor Co. exceeded expectations in the first quarter by giving nearly $10-an-hour raises to more than 700 hourly United Auto Workers members in Kansas City, Chicago and Louisville as part of its 2011 contract with the UAW. The Dearborn automaker originally planned to transition 300-500 workers from two-tier to one-tier pay during the first three months of 2015. The UAW-Ford Department announced the latest number Thursday on Twitter. Ford had to give the workers raises because, under the 2011 UAW contract, it is only allowed to hire 20 percent of its workforce at the two-tier wage level. It recently surpassed that cap after adding more than 5,000 hourly jobs across its U.S. manufacturing facilities last year. "Ford is committed to career progression for our hourly workers," the automaker said in a statement. "As part of the UAW-Ford collective bargaining agreement, our commitment was to transition employees to the 'new traditional' status once we exceeded our entry-level allowance, which we are doing. This agreement has contributed to Ford's competitiveness and has enabled us to create 15,000 new jobs and invest more than $6.2 billion in our U.S. plants." Ford has invested more than $8 billion in its U.S. plants, according to a report by the UAW. In its 2011 contract, Ford had promised to create 12,000 hourly jobs and invest $6.2 billion in the U.S. by 2015. The announcement that the first Ford workers would transition marked the first time that any of the union's members have moved up to a higher pay scale since it agreed to two-tier wages in 2007; General Motors Co. and FCA US LLC don't have cap limits. The two-tier system will be a major topic of discussion at negotiations between the UAW and automakers this fall. Last month at a special bargaining convention, many UAW members called for the elimination of the tier system, and UAW President Dennis Williams said he would seek raises for all UAW members. |
FCA's March sales rise Michael Martinez Sales of new cars and trucks slowed last month thanks to fewer March selling days and prolonged cold weather, but strong demand for pickups and SUVs bodes well for sales in the second quarter of 2015 and beyond, analysts say. Automakers sold 1.5 million vehicles last month, a 0.6 percent increase from a year ago, according to Autodata. Detroit's automakers posted mixed sales results. Fiat Chrysler Automobiles reported a 1.7 percent sales gain — its 60th consecutive month of year-over-year gains — while sales at Ford Motor Co. and General Motors Co. both fell. Analysts had expected soft sales numbers in relation to March 2014, when a wave of shoppers picked up new vehicles after an extraordinarily snowy winter. "Months like this are no reason to panic, rather a good sign of a healthy industry," said Michelle Krebs, a senior analyst at Autotrader. As has been the case in recent months, most automakers struggled to sell cars. GM's car sales dropped 20.8 percent and Ford's car sales fell 11.6 percent. FCA's car sales rose 11.5 percent, thanks mostly to strong gains for the Chrysler brand; Fiat brand sales fell 5.1 percent. But it was a different story for trucks and SUVs. March represented Ford's best commercial van sales month since 1994, and five of the six Ford vehicles that posted sales gains were either trucks, SUVs or crossovers. Total sales of GM trucks, including pickups, vans and SUVs, were up 14 percent, the Detroit automaker said. And FCA sales were buoyed by Jeep SUVs like the Cherokee and Patriot compact SUV. The brand posted its best sales month ever, up 23 percent. "Trucks and SUVs remained a bright spot for the industry with solid gains for most automakers overall," said Alec Gutierrez, senior analyst for Kelley Blue Book, said in a statement. Demand for Ford's new F-150 aluminum-bodied pickup continues to be strong, the automaker said. About 29 percent of its truck sales last month were made up of the new 2015 model, although total F-Series sales fell 4.6 percent compared to the same month a year ago. On a conference call with reporters and analysts, Mark LaNeve, Ford's vice president of U.S. marketing, sales and service, said he's not concerned about the sales drops this month. "March of a year ago was a five-weekend month, plus coming out of really tough weather over extended period of time," he said. "So I think last year's March might have been a little more buoyant than maybe normal in terms of year-over-year comparisons." Among other automakers, Hyundai sales rose 12 percent — its best ever sales month — and Toyota sales rose 4.9 percent, driven by an 11.5 spike in light truck sales. Toyota's growth was also due to big discounts in the showroom as the Japanese fiscal year ended. "Toyota's sales growth was among the best in the industry last month, but it came at the cost of lower transaction prices and a big bump in incentive spending compared to March 2014," said Karl Brauer, senior analyst at Kelley Blue Book. "This is common for Japanese automakers because the fiscal year ends in March and there's always a push to end it with strong sales." The spring months should see an uptick in vehicle sales, analysts say. Dave Winslow, vice president of digital strategy at Dealertrack Technologies, a company that tracks data from auto dealers, said the site saw a 20 percent bump in the number of visitors looking for cars. "Consumers are still shopping for vehicles," he said. "Based on the strong traffic growth we saw in March, we see a strong rebound." |
World's auto makers to invest $24-billion – but not in Canada GREG KEENAN - Auto Industry Reporter The world's auto makers announced investments of $24.1-billion to increase production capacity last year and for the fourth year in the past five, none of the money has been earmarked for Canada. The value of new-capacity investments announced by auto makers rose 37 per cent last year from 2013 levels, according to an annual study done by Office of Automotive & Vehicle Research at the University of Windsor's Odette School of Business and the Automotive Parts Manufacturers Association of Canada. Canada has been earmarked for just $180-million of the investments auto makers have announced for new capacity since 2011, says the study, scheduled to be released Wednesday. "The majority of new-vehicle assembly capacity in North America will be going to the southern U.S. and Mexico and will be added by the Japanese, South Korean and European assemblers," a news release on the study said. "Future assembly growth from the Detroit Three will be coming outside of North America." Ford Motor Co., General Motors Co. and Honda Motor Co. Ltd., have announced investments in Canada, but those are in existing assembly plants, not in new factories or increased production capacity. Money for new factories is flooding into such growth markets as China and Brazil, as well as Mexico and the United States. China scooped up $12.7-billion or more than half of the investment auto makers announced last year. Investments in China have topped $48-billion during the past four years. Investments announced in new U.S. plants totalled $4.2-billion last year. Over a four-year period, the United States trails Mexico, which will be the recipient of $9.3-billion in new spending. Several new auto plants are under construction in Mexico as Audi AG, BMW AG and Hyundai Motor Co. use that country as a source of supply for both the North and South American markets. Mexico's winning streak appears to have been halted at least temporarily this week with the announcement by Volvo Car Group that it will build a U.S. plant to supply North America, spending about $500-million (U.S.). |
Big makeover yields
Michael Martinez, New York — Ford Motor Co.'s Lincoln unit is unveiling its most drastic vehicle design change in more than half a century ahead of the New York Auto Show: a Continental flagship sedan that designer David Woodhouse calls "the new face of Lincoln." Lincoln Motor Co. has struggled for years to compete with high-end luxury automakers like BMW, Mercedes-Benz and Audi, but its sales remain less than a third of the sales of the market leaders. It has reported recent sales gains with new vehicles like the MKZ sedan, MKC crossover and refreshed Navigator SUV. The Continental, its new flagship, is meant to accelerate that growth and serve as a template for future product design. The reveal — officially a concept but extremely close to the production version planned for 2016 — comes just before General Motors Co. on Tuesday in New York will unveil its own flagship luxury sedan: the Cadillac CT6. While the U.S. market for full-size sedans has been flat or down, it is expected to grow dramatically in China and other markets. "We want to be different, but in a relevant and vibrant way," Ford CEO Mark Fields told reporters at an event at an electronics store in midtown Manhattan on Sunday to show the concept car to reporters ahead of the official unveiling Wednesday. The flagship sedan will drive "brand favorability and that view of the brand. ... The customer wants to make a statement about themselves." The Continental looks dramatically different from any vehicle in the current lineup. Gone is the split-wing "bow wave" front grille design that's been around since the 1930s, replaced by a sleeker, cleaner front that emphasizes the Lincoln logo. The big car features a large rear end and a spacious interior, meant to cater to the Chinese market, a region Lincoln hopes will help triple its global sales to 300,000 vehicles by 2020. It even has an airplane-style tablet table for the right rear seat that reclines. Few other details were given, but Ford said the Continental will be powered by a 3-liter V-6 engine. Fields declined to say if it will build a convertible, hybrid or electric version of the vehicle. Boost for the brand Fields said revitalizing Lincoln is crucial — in part because luxury vehicles account for one-third of total auto industry profitability. He said the concept Continental "strongly hints" at what the production version going on sale next year will look like. Asked what changes will take place before Ford green-lights the concept vehicle — which has been in the works for about a year — Fields said: "We're done." Lincoln grew about twice as fast in the United States last year over the industry. Fields said Lincoln's retail sales are up 12 percent in the first two months for its fastest start since 2008, but its sales are still less than half its all-time record set in 1990. One analyst expects the Continental to give sales a lift. "This will be very powerful; it's exactly what Lincoln needs," said Karl Brauer, senior analyst at Kelley Blue Book's KBB.com. "The car will reinvigorate interest in the brand by people who have largely ignored it or forgotten about it." The name hearkens back to the Continental that Henry Ford's son, Edsel, first had built around 1940. The name was discontinued in 2002. Brand officials said it was important to revive the name to lure new customers who may be familiar with the vehicle's past. Lincoln executives said the new car would compete directly against luxury cars like the Lexus GS, BMW 5 Series and Cadillac XTS. No performance or pricing details were revealed, but the Continental features a number of new technologies, including a 30-way rear seat that conforms to passengers' sizes and shapes. The passenger-side rear seat can fully recline by moving the front passenger seat forward with the touch of a button. Lincoln applied for about 50 patents on the seats alone, executives said. The concept doesn't have traditional mechanical door handles. Instead, an "E-Latch" door handle is tucked discreetly in the vehicle's belt line, and opens with the touch of a button positioned on the underside of the door handle wings. The interior uses Venetian leather seat and door panels, Alcantara seat inserts and armrests, satin headliner and shearling wool carpet. It uses rose gold trim around the instrument cluster and bright chrome trim on the instrument panel. Moving in right direction Lincoln is coming off a year in which sales rose 15.6 percent in the United States, its best year since 2008. Most of that growth came from new vehicles like the MKC and the refreshed Navigator. This year, Lincoln's retail sales are up 12 percent through February, its best start since 2008. Last year, Ford said it would invest $2.5 billion in Lincoln by 2020, and the brand hopes to triple its volume to 300,000 vehicles by that time.
To help hawk its new products, Lincoln signed a two-year contract with actor Matthew McConaughey to serve as a spokesman. His quirky commercials have generated much buzz for the brand and have been parodied by numerous late night shows. Lincoln recently introduced a Black Label experience — an exclusive driver membership program that includes custom interiors and perks — and announced a decade-long partnership with Revel Audio Systems, which is Harman's premium loudspeaker brand, to put its sound system in all of its new cars, starting with the next generation MKX midsize utility. "I think they're doing a lot of what they need to do to really separate themselves from looking like a Ford and offering more exclusive features," said Dave Sullivan, manager of product analysis with AutoPacific Inc. "You really need to give people a reason to pay a premium for these vehicles." Wooing China buyers Lincoln's biggest moves may have come overseas. In November, the brand launched in China with a handful of dealers, and hopes to expand to 60 by the end of 2016. Already, three of Lincoln's top 10 dealers globally come from China, and that market sells only two vehicles: the MKZ and MKC. The foreign showrooms look vastly different than those in the U.S., with elaborate tea rooms and other experiences geared specifically toward the Chinese customer. Even with the new large sedan, analysts have said the Lincoln brand is still years away from seriously competing with other luxury automakers. Lincoln's 94,000 sales last year were far fewer than Cadillac's 170,000, and both of those were dwarfed by Audi's 182,000 and BMW's 340,000. Brauer said it still needs to fill product holes — there's a need for a rear-wheel-drive, small sporty car, he said — and Sullivan thinks there's room for a three-row crossover. "It's not going to happen with just one or two vehicles. I think people need to be patient; we're talking at least 10, 15 years of continued new product and sustained growth." |
Fields in particular has shown support for the brand. One of his first acts after becoming president and CEO in July was appointing a separate president for Lincoln, Kumar Galhotra. And he has said that most days he drives an MKC home from Ford's Dearborn headquarters.Congratulations to our
CHRIS BLAIR Retired April 1, 2015 43.2 Years of service |
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