Toyota's reputation
for quality long gone

Employees strayed from `Toyota Way'
during years of rapid growth

Jan 31, 2010

My friend Mary Lou in Michigan knows that Toyota's reputation for quality is a sham. On a recent visit, she swept her arm across the width of the dashboard of her year-old Camry, bought new. "Every piece of this trim has fallen off or warped," she said of America's best-selling car.

An analyst at J.D. Power and Associates, the sine qua non in rating vehicle quality, told The Canadian Press Wednesday Toyota's recall of 2.3 million vehicles in the U.S. and 270,000 in Canada "signifies that (Toyota is) not afraid of doing the right thing for the right reasons, that short-term sales and profits are less important than taking care of the consumer and making sure they're safe in Toyota vehicles.''

I'd argue that not one word of that is true.

To start with, Toyota took the extraordinary step this week of suspending production at three U.S. and its two Canadian assembly plants because it was forced to by U.S. law. "It's not a voluntary thing," Toyota spokesman Mike Michels told the Wall Street Journal Wednesday.

More important, Toyota's quality problems go back many years, before the latest recall and last year's massive 4.2-million vehicle recall.

As it embarked on a goal of becoming the world's biggest automaker, Toyota failed to insulate itself from the "big-company disease" that humbled General Motors Co. As Toyota quickly ramped up production of its vehicles, its employees strayed from the automaker's "Toyota Way" of exacting quality control and continuous improvement in manufacturing methods.

It almost had to turn out that way. By 2007 Toyota was adding an average of two new factories a year to its global network, including a second Canadian plant in Woodstock that opened in 2008. Toyota's annual volume growth of about 500,000 vehicles equalled the entire production of Ford Motor Co.'s Volvo brand. By that same year, some 200,000, or two-thirds, of Toyota's workforce was located outside Japan. Toyota could no longer rely on word of mouth to convey the firm's managerial and manufacturing methods.

From 2004 to 2007, Toyota recalled a staggering 9.3 million vehicles – a number exceeding its total annual output, and up from 2.5 million recalls in the three years previous to 2004. In 2005, Toyota's rate of recalls as a percentage of vehicles on the road hit 10.1 per cent, compared with 6.8 per cent from GM and 2.5 per cent at Chrysler Group.

In 2006, Tokyo censured Toyota over improper business practices for failing for eight years to disclose and act on reports of a design flaw implicated in loss-of-control incidents. Loss of control due to accelerator pedals caught under floor mats triggered last year's huge recall, and caused four deaths after a Lexus abruptly went off the road in California.

In the 2007 J.D. Power survey, the Toyota brand scored below that of Hyundai Motor Co., a firm better known for price than quality. And the Insurance Institute for Highway Safety withheld its "top-pick" rating from Toyota's Camry and RAV4 SUV after their substandard performance in whiplash tests.

Also in 2007, Toyota's U.S. division settled a class-action lawsuit brought by motorists claiming that oil-sludge buildup destroyed their engines despite compliance with Toyota's maintenance guidelines.

A long three years ago, then-CEO Katsuaki Watanabe acknowledged to reporters that Toyota's long run of shoddiness was jeopardizing the company. "The world-class quality that we've built is our lifeline."

Yet, despite opening two quality "institutes" in each of North America and Europe to inculcate the "Toyota Way," there has been no meaningful improvement in Toyota quality. Like GM, stuck with too many plants as its market share dropped in half, Toyota has been compelled to keep all its new plants running flat-out to generate the cash flow to finance their construction, even as customer complaints have mounted.

Unlike Honda, Toyota is not an engineering trailblazer. And no one would accuse Toyota of being a trendsetter in styling akin to, say, BMW. Quality is principally what Toyota offers the market.

Toyota realized its goal of eclipsing GM as the world's largest automaker last year. The goal was a dubious one, given the risks. In any case, by late last year, Toyota had been overtaken by Volkswagen.

The only thing saving Toyota is a decades-long reputation for quality that people who still buy its cars don't realize the firm has not lived up to for more than half a decade.

CAW CONTACT
Volume 40, No. 4 – January 29, 2010

Local 598 Xstrata Membership Vote in Favour of Strike Action

CAW Mine/Mill Local 598 members who work at Xstrata Nickel in Sudbury, Ontario have voted overwhelmingly in favour of strike action, if needed.

Local 598 members at the Sudbury mine voted 96 per cent in favour of strike action if necessary and 99 per cent in favour of opening the strike fund, if the current round of talks fails to produce a fair and equitable agreement by the January 31 deadline.

“We are unwilling to accept a contract that includes concessions to our current language and does not offer better job security,” said CAW Local 598 President Richard Paquin. “Given the enormous profits that Xstrata Nickel stands to make during the life of the next collective agreement, our jobs, wages and benefits are not up for grabs,” Paquin said in a news release.

Amendments to Ontario Workplace Violence Bill

Ontario's labour movement has won amendments to a bill that if properly enforced will begin to protect workers against workplace violence and harassment.

Government Bill 168, which amends the Occupational Health and Safety Act with respect to violence and harassment in the workplace, was approved December 15 last year. These amendments come into force June 15, 2010.

At committee hearings, unions including the CAW, individual workers and affected families made submissions in support of the bill and recommendations for its improvement.

The committee heard more than 40 submissions and made two amendments to Bill 168: an expanded definition of workplace violence to include threats of physical violence; and, giving authority to Ministry of Labour (MOL) inspectors to order employers to produce a written risk assessment.

Although labour advocates requested additional changes, the amendments put significant legal requirements on employers to develop and implement workplace violence prevention policies and programs.

“This victory belongs to CAW Women’s Advocates, local union leadership, along with members of many coalition groups, who formed after the workplace murders of Theresa Vince and Lori Dupont, who were killed in their workplaces in 1996 and 2005 respectively,” said Julie White, CAW director of women’s programs. “The families of Theresa and Lori worked hard to ensure the issue of workplace violence remained on the political agenda, pushing our elected leaders to make the changes.”

“It now becomes our challenge to ensure employers develop and enforce the new workplace violence and prevention policies and programs to create safe and healthy workplaces for the future,” said Sari Sairanen, CAW health, safety and environment director.

Settlement at Aradco, Aramco Plants in Windsor

Former workers at Aradco and Aramco, two auto parts suppliers in Windsor that closed last year, will share a further $225,000 under a settlement announced January 22.

CAW Local 195 President Gerry Farnham outlined terms of the settlement reached between CAW Local 195, company owners Catalina Inc., and Comerica Bank to 80 former employees.

Farnham said it was the best agreement possible under the circumstances. The workers could also receive potential proceeds from an upcoming court case after Catalina filed a complaint against Chrysler Corp. for termination of its parts supplier contract.

“Fighting back does make a difference,” said Farnham. “These workers started out with nothing on the day the plants closed and they launched a fightback that resulted in $625,000 coming to them. In addition, if they are successful in court they will receive further funds,” he said.

When the plants abruptly shut down last March, workers were owed about $2.4 million in severance, termination and vacation pay. Workers occupied the Aradco plant and left after receiving some funding from Chrysler. They also later blockaded both plants to stop equipment from being moved and to delay an auction of company equipment.

Trade Talks with Europe an Attack on Democracy

As the second round of Canada-European Union free trade talks wrapped up in Brussels, Belgium on January 22, Canadian civil society organizations issued a joint call demanding full transparency from the Harper government, and a halt to negotiations so countrywide public consultations can be held.

The scope of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) jeopardizes public services, sustainability, social policy and local democracy, say the organizations. The group includes the Council of Canadians, Canadian Auto Workers union, Sierra Club Canada, Canadian Union of Postal Workers, Canadian Union of Public Employees and National Union of Public and General Employees.

The proposed deal also threatens to extend the scope of power and privilege granted to private corporations, mirroring terms established in the North American Free Trade Agreement, said CAW President Ken Lewenza.

"We've seen firsthand how NAFTA has destroyed jobs, depressed working conditions and made governments nearly powerless to corporate interests. Canadians can't afford to go down that path again," said Lewenza.

One of the more contentious issues being negotiated is the removal of government powers to establish local content and other provisions when they purchase goods and services. Under this deal, private corporations would be given the power to legally challenge Buy-Canadian policies at the provincial and municipal levels.

Canada-EU trade negotiations are the latest in a series of trade deals being negotiated by the Harper government, including proposed deals with South Korea and Colombia.

The third round of talks is scheduled to take place in Ottawa this April.

For more information, please read:

Open For Business: Privatization, not higher standards, the main goal of Canada-EU free trade talks - Council of Canadians fact sheet (http://canadians.org/trade/documents/CA-EU-trade-talks.pdf)

Air Canada Unions Appoint Roy Romanow Board Representative

The Council of Unions representing organized Air Canada employees have chosen the Honourable Roy Romanow to be their representative on the airline’s Board of Directors.

Romanow is a former Premier of Saskatchewan and led the Royal Commission on the Future of Health Care in Canada. He is a member of the Privy Council and an Officer of the Order of Canada. Romanow is currently Senior Fellow in Public Policy at the University of Saskatchewan.

Romanow has long promoted labour representation on corporate boards and has served as a director for other private sector companies. He is currently a director on the board of Torstar Inc.

Romanow’s designation by the Air Canada unions is subject to the airline’s normal corporate governance procedures, including his appointment as a director at its next Annual Meeting of Shareholders.

Labour representation on the airline’s board was negotiated by the unions in June 2009, when Air Canada asked its employee groups for cost-neutral collective agreements and support for a revised pension payment schedule.

The Council of Unions is composed of the Air Canada Pilots Association (ACPA), the Canadian Airline Dispatchers Association (CALDA), the Canadian Auto Workers Union (CAW), the Canadian Union of Public Employees (CUPE) and the International Association of Machinists and Aerospace Workers (IAMAW).

CAW Calls for Full-Time Job Commitments at Casino Niagara

The Ontario Government’s January 22 announcement that it will extend the lease of Casino Niagara for 15 years is good news for workers and their families, CAW President Ken Lewenza says.

However, the Liberal government must take immediate steps to ensure Casino Niagara and the Fallsview Casino create more full-time employment within this hard hit community.

“It’s critical that a commitment is made to creating full-time jobs for casino workers, their families and the Niagara community, especially at a time when there is so much uncertainty in the economy,” said Lewenza. “The creation of low paying, part-time and contract employment simply means greater uncertainty for workers.” 

“The government has given the operator more stability with this lease agreement. In turn the CAW is asking for employment stability for workers as part of that agreement,” said Lewenza.

According to company records in January 2009 there were 3,439 workers at Casino Niagara and Fallsview Casinos. A total of 43 per cent were part-time or contract. By comparison, company records show that 84.5 per cent were full-time at the two locations in 2003.

The CAW is currently conducting an organizing campaign at both Niagara casinos.

The CAW is the largest gaming union in the country, representing 7,000 workers at Caesars Windsor Casino, Brantford Casino, Slots at Sudbury Downs, Great Blue Heron Casino, Edgewater Casino, the Woodbine Racetrack as well as other locations.

Study Shows Health Care Workers Suffer High Workplace Stress

An in-depth study of four Ottawa area hospitals has found that hospital workers are suffering from high levels of stress and overload at a time when they also face threats of funding freezes, layoffs and bed cutbacks.

The new study of “role overload” in Canada’s health care system was based on a survey of 1,500 health care workers at the four hospitals. They were overwhelmingly women and more than 75 per cent were married, and had children.

The study, which was funded by the Workplace Safety and Insurance Board, confirmed that health care workers are some of the most stressed and overwhelmed workers in the country. The report found that 60 per cent had high levels of “role overload” – defined as having too much to do in too short a time period, the Ottawa Citizen reports.

“In my opinion, health care workers are already overloaded,” said Linda Duxbury, study co-author and Carleton University business professor. “There is no slack in the system.” She also told the Citizen that “the way hospitals are funded and performance is measured doesn’t really reflect what’s happening in health care.”

CAW Health Care Director Katha Fortier said that the study results come as no surprise. "We know that women perform the vast majority of unpaid work, and we also know that as hospital employees are cut, the remaining workers continue to provide the same level of care, even if that means working through their breaks or taking on personal risks to meet the needs of their patients." 

CAW President Ken Lewenza noted that Canada’s hospitals face service cuts and staff reductions at a time when they are needed more than ever. “Government must protect the important principle of ensuring high quality care for everyone,” Lewenza said. “They must ensure that these hospitals are properly funded with no layoffs occurring. When our hospital workers are taken care of, they are then able to pass that care directly on to the vulnerable patients they care for.”

Education Update!

New! CAW One-Day Health and Safety Course.

This new one-day course is a great place for new worker health and safety committee members to start. It’s also a good refresher for those with years of experience.

A body mapping exercise helps participants identify the symptoms of work-related injury and the hazards in their workplaces. The class discusses the CAW’s statement of principles on health and safety, the principles of hazard control, and the worker’s rights to know, participate and refuse unsafe work.

Participants learn how to use health and safety legislation, the duty of employers, the rights of committees, regulations, guidelines, exposure limits and threshold limit values (TLVs), the CAW Accident/Incident Form, the right to refuse in the province, territory or jurisdiction, CAW model contract language, workplace mapping, job safety analysis, and workplace inspections.

For information on how to register or how to book this course in your area, check the CAW web page at www.caw.ca/education, click on Education or contact the CAW Education Department at educate@caw.ca.

Canadians Demand MPs Get Back to Work: Nation-Wide Rallies for Democracy – January 23, 2010
Photo collage – to see a selection of photos, go to: http://www.caw.ca/en/8302.htm
To see the complete set of photos, go to http://www.flickr.com/photos/cawmedia/

Wider brake fix is urged

An attorney representing the estate of a Flint woman killed while driving her 2005 Toyota Camry said the automaker should extend a brake-override system being offered for select 2007-10 models to older models that the company knew were susceptible to unintended acceleration.

"Electromagnetic interference with the electronic throttle-control system explains many of the incidents, and Toyota has known, or should have known, of this problem for a long time," said Edgar Heiskell, a Charleston, W.Va., attorney for the estate of Guadalupe Alberto. Alberto died in April 2008.

"The vehicle accelerated from an intended speed of less than 25 m.p.h. to approximately 80 m.p.h., despite Mrs. Guadalupe's having vigorously and desperately applied her brakes," the estate alleges in the lawsuit filed in Genesee County Circuit Court. "The car traveled at that high speed for approximately 1/4 of a mile, collided with a tree, went airborne and then collided with another tree."

She suffered fatal injuries, despite having her seat belt and shoulder restraint properly fastened.

"Other manufacturers, like BMW and Mercedes-Benz, knew it might happen and built in a fail-safe solution," Heiskell said. "Toyota did not add the fail-safe, so the driver was left exposed."

Toyota spokesman declined to respond to requests for comment on Heiskell's allegations.

As early as 2003, as many as 27 Toyota owners complained to the National Highway Traffic Safety Administration about their cars surging unexpectedly and, in some instances, accelerating even more after they stepped on their brakes.

In a deposition of Christopher Santucci, who worked in Toyota's Washington, D.C., office in March 2004, he testified that NHTSA informed him that it was starting an investigation of unintended acceleration complaints from Toyota owners.

Santucci had worked at NHTSA for several years prior to joining Toyota in October 2003.

After a series of meetings that included Santucci and several of his former NHTSA colleagues, NHTSA decided not to investigate incidents in which the unintended acceleration lasted longer than 1 second, Santucci said in the deposition.

Now Toyota is offering a brake-override system on 2007-10 model-year Camrys, Avalons, Lexus ES350, IS350 and IS250. The automaker also is making that system standard equipment on all new models starting this month.

But Heiskell and other attorneys who have filed lawsuits similar to the Alberto case say they won't be satisfied.

They argue that Toyota should recall all vehicles with that electronic throttle-control system, which was built into certain Toyota models dating to the 2002 model year.

So far, no vehicle older than the 2004 Prius is included in either of two recalls covering at least 5.4 million vehicles.

"Toyota can't tell you that the '07 Camry they are recalling is any different from the '06 or the '03 that has the same throttle control in it," Heiskell said. "By not recalling the older models, Toyota can avoid the cost of repairing more vehicles."

Toyota gas-pedal troubles
spread to Ford

Dan Strumpf

New York — The Associated Press Published on Thursday, Jan. 28, 2010

Ford Motor Co. has halted production of some full-sized commercial vehicles in China because they contain gas pedals built by the same company behind the accelerators in Toyota Motor Corp.'s recent recall.

Ford spokesman Said Deep said Thursday the diesel version of its Transit Classic built by a Chinese joint venture contains accelerators built by CTS Corp., based in Elkhart, Ind. The vehicles began production in December and only about 1,600 have been produced, he said.

The Transit Classic in question is not sold in Canada.

In a statement, Ford partner Jiangling Motors Co. said there have been no reported problems with the Transit Classic, but it is conducting a review of pedal assembly part to determine the next step. The diesel Transit Classic is Ford's only vehicle that contains gas pedal parts made by CTS, Mr. Deep said.

Accelerators made by CTS, which has a manufacturing facility in Mississauga, are at the centre of a massive recall and production halt by Toyota over fears that the gas pedals may get stuck and cause unintended acceleration. CTS makes gas pedal systems for various auto makers, though Toyota and Ford are the only ones to announce production stoppages.

“That's part of our routine process – when a company has a recall, you conduct a review and determine if you share any of the same vendors, design, parts,” Mr. eep said.

Jiangling has been making a version of the Ford Transit commercial van since the late 1990s and markets its own-brand sport utility vehicle, the Landwind, in China and Europe. The Transit is built in Nanchang in southeastern China.

Ford posts first annual
profit since 2005

Dee-Ann durbin and Tom Krisher

Dearborn, Mich. — The Associated Press Published on Thursday, Jan. 28, 2010

Ford Motor Co. made $2.7-billion in 2009, its first annual profit in four years.

The auto maker on Thursday also forecast a full-year profit in 2010. Earlier it had only promised to be “solidly profitable” in 2011.

Ford benefited from cost-cutting, a $696-million profit in its credit arm and popular cars and trucks like the Ford Fusion mid-size sedan and Ford Escape small sport utility vehicle. It gained market share in North and South America and Europe, despite the worst U.S. sales climate in 30 years.

“While we still face significant business environment challenges ahead, 2009 was a pivotal year for Ford,” Ford chief executive officer Alan Mulally said in a statement.

Ford's 2009 profit of 86 cents per share showed a significant improvement from the year before, when it lost a record $14.6-billion. Excluding one-time items of $711-million, Ford made 43 cents per share. Those items included severance payments and retiree health-care charges.

The profit surprised Wall Street, where analysts surveyed by Thomson Reuters expected an annual loss of 31 cents.

In the fourth quarter, Ford earned $868-million, or 25 cents per share, compared with a loss of $5.9-billion a year earlier. Ford earned money in three of the four quarters last year.

Ford said it will make profit-sharing payments to its U.S. hourly workers in March. They will be the first profit-sharing checks since 2004.

The Dearborn-based auto maker's debt load increased by $7.4-billion to $34.3-billion, largely because it took a charge of $7-billion to account for debt to a union-run retiree health care fund. That puts Ford at a disadvantage to GM and Chrysler, who were able to shed debt in bankruptcy court.

Toyota managed to win bragging rights as the world’s biggest car company. But that focus on rapid growth appears to have come at a cost to its reputation for quality, creating an opportunity for others to potentially take back market share they lost to Toyota.

Toyota said Thursday that it was extending the recall to Europe, and that "the models and exact number of potentially affected vehicles is under investigation. It added that "details of corrective action and implementation will be communicated directly to customers with vehicles potentially affected."

The company said it had already made the necessary changes to its production lines, so there would be no need to halt output in Europe.

Some 75,000 vehicles will also be recalled in China.

On Tuesday, after prodding by the Transportation Department, Toyota announced it was temporarily stopping production and sales of eight models that make up more than half of its annual sales in the United States, after two major recalls since November, while it tries to fix a problem with their accelerator pedals.

“There was always a question about how fast they could go,” James P. Womack, an author and expert on Toyota’s manufacturing methods, said of the automaker’s growth. “I’m sure they regret that they stomped on the gas so hard.”

Mr. Womack said Toyota was also paying for taking its eye off the message that has been central to its marketing. “When your whole deal was quality, every mistake is a big deal,” he said.

Transportation Department officials in the United States said Wednesday that they had advised the automaker to act quickly. “The reason Toyota decided to do the recall and to stop manufacturing is that we asked them to,” Raymond LaHood, the transportation secretary, said.

In an interview with WGN radio in Chicago, Mr. LaHood added, “We were the ones that really met with Toyota, our department, our safety folks, and told them, ‘You’ve got to do the recall.’ ”

Japanese media raised fears that Toyota’s problems might damage the reputation of other Japanese companies.

“The discrediting of Toyota could even destroy the world’s trust in Japanese manufacturing, which relies on its reputation for high quality,” warned the Tokyo Shimbun, a daily newspaper.

But fears about lasting damage to Toyota may be overblown, given the short attention span of consumers, said Jeffrey K. Liker, a professor of engineering at the University of Michigan and the author of the best-selling book “The Toyota Way.”

“This is an unfortunate series of events that aren’t a good reflection of the health of the company,” he said.

“But if they aren’t selling cars, nothing else matters.”

Toyota announced a similar halt to sales and production in Canada, where it has two assembly plants in Ontario. It is considering the same steps in Europe, although it has not yet come up with a plan.

Late Wednesday, Toyota added 1.1 million more vehicles to its November recall, which already was the largest in its history.

Halting production and sales of the eight models in North America represents the latest setback for Toyota’s president, Akio Toyoda, who has been buffeted by problems since taking the job seven months ago.

He has already apologized for the company’s losses, its bland cars and its overconfidence. Last fall, Mr. Toyoda said the automaker was “grasping for salvation.”

At the time, it seemed an overstatement. Despite its red ink, Toyota still has ample cash, and it gained market share in 2009 in the United States, where it ranks as the second-biggest player behind G.M.

On Monday, before Toyota announced the sales and production shutdowns, the company said it expected its global sales to grow by 6 percent in 2010, to about 8.27 million vehicles.

But as it has gained sales, Toyota has moved away from some of the business practices it adopted in its years of slow but steady growth.

One example is its decision to buy parts from companies around the world, rather than from a small group of Japanese suppliers that have been longtime partners. For example, the pedals in the vehicles affected by the production and sales stoppages come from a supplier’s Canadian plant.

The move to expand its supplier network was necessary to save money, given cost pressures on Toyota and other manufacturers, said Ulrike Schaede, professor of Japanese business at the University of California, San Diego. But the shift also makes it harder for Toyota to control quality. “At one level, it’s the right thing to do,” Professor Schaede said. “At another, what you pay is what you get.”

In Japan, “many of us weren’t surprised over the big recalls,” said Masahiro Fukuda, manager of research at Fourin, a global automotive research company based in Nagoya, Japan. “We were more surprised that it took Toyota so long.”

For Toyota, the timing of this problem is working somewhat in its favor. The production and sales halts are coming at one of the slowest times of the year, allowing the company to begin repairs before the car market picks up in the spring.

On Wednesday, Mr. LaHood said engineers at the Transportation Department were working closely with the company to find solutions.

Mr. Womack said an open question is whether consumers will be patient with the company, because they could choose from a variety of well-built cars from many other companies.

“They’re trying to regain their image of quality at a time when everyone has gotten so much better,” he said. “If everyone else is building almost-perfect vehicles, you have to make absolutely perfect products.” Mr. Womack said he was still rooting for Toyota to fix its problems.

“I’m saddened to see a company known for building good things make some unnecessary mistakes,” he said.

GM sells Saab to Spyker

Globe & Mail Jan 27, 2010 - Toby Sterling and Tom Krisher

Saab got a new life Tuesday as General Motors Co. agreed to sell the Swedish car brand to the small Dutch luxury car maker Spyker Cars NV.

Under the deal, GM will get $74-million (U.S.) in cash plus $326-million worth of preferred shares in Saab. GM will get “other considerations,” which it did not specify. The Swedish government is also ready to guarantee a loan of up to 4 billion kronor ($550-million) from the European Investment Bank, Industry Minister Maud Olofsson said.

The deal is a coup for Spyker and a lifeline for Saab, which has lost money for years under GM's ownership and was slated for liquidation. Saab has around 3,500 employees in Sweden.

But it's also a huge challenge for Spyker, which sold only 23 cars in the first half of 2009, its most recent reporting period, and posted a net loss of €8.7-million ($12.25-million). The 11-year-old company has yet to make a profit, but it says funding for its operations have been guaranteed through 2010.

Spyker chief executive officer Victor Muller said in a statement that the company is happy to have saved the brand and secured the jobs of thousands of workers.

“Saab is an iconic brand that we are honoured to shepherd,” he said in the statement, adding that support from many of the 1.5 million Saab drivers worldwide helped get the deal done.

Saab spokeswoman Gunilla Gustavs said “We are very happy” about the sale.

Under the deal, GM will continue to provide engines and transmissions for the new company for “an extended period of time,” and it will keep making the 9-4X crossover vehicle for Saab, said John Smith, GM's vice-president of planning and alliances. Crossovers have the interior room of an SUV but are built on a car instead of a truck frame.

GM hopes to close the deal by mid-February, Mr. Smith said.

Spyker will continue to provide vehicles for and support Saab's U.S. dealers, Mr. Smith said. The Dutch auto maker also will guarantee up to $10-million in Saab's obligations to GMAC, which is GM's financing arm.

Sweden's Ms. Olofsson said the government made the decision to back the loan on Tuesday after analyzing a review of Spyker's business plan and financial situation by the Swedish National Debt Office and consulting firm KPMG. She said the money must be used for projects to develop environmentally friendly cars in Sweden.

If the European Investment Bank loan is approved it will be paid out in instalments, not as a lump sum, she said.

But she said the biggest challenge remains for Saab: to develop cars that customers want and “deliver a solid profit.”

GM has been trying to shed Saab for more than a year as part of a massive restructuring process after it emerged from bankruptcy protection. The company also plans to sell Hummer and will phase out Saturn and Pontiac so it can focus on four brands: Chevrolet, Buick, GMC and Cadillac.

Saab Automobile sold around 90,000 cars in 2008, a 30 per cent decline from 2007. With another sharp sales decline expected, it filed for protection from creditors while it reorganized in February, 2009.

Saab's U.S. sales last year amounted to only 8,680, down 59 per cent from 2008 as consumers stayed away from the brand due to uncertainty over its future.

GM filed for bankruptcy itself in June, and previous attempts to sell Saab by a Dec. 31 deadline failed.

To win the bidding process, Spyker had to overcome reservations within GM that it didn't have the expertise to run a car company. Several GM executives were afraid of getting tangled up with the Dutch auto maker because GM will at least for a short time have to continue providing vehicles for Saab.

Spyker bested Luxembourg private equity group Genii Capital to win the bidding for Saab. Genii withdrew from the bidding Monday, saying “the timing of the bidding process for Saab is incompatible with implementing a solid business platform for the future.”

AUTO INDUSTRY REPORTER

GREG KEENAN

From Monday's Globe and Mail Published on Monday, Jan. 25

Two of the world's largest auto makers will close the books on 2009 this week - one as a shining star in a brutal year for the industry, and another that took advantage of the turmoil to vault back into North America.

Fiat SpA reports fourth-quarter and year-end financial results today after picking up 20 per cent of Chrysler LLC and management control of the No. 3 U.S. auto maker, which otherwise would have been liquidated.

The key challenge for Fiat and Chrysler chief executive officer Sergio Marchionne and Fiat management is to integrate the two companies. The plan is to restore profits at Chrysler next year, leading to a successful initial public offering, then to repay loans to U.S. and Canadian taxpayers and reduce or eliminate the ownership stake the United Auto Workers health-care trust has in Chrysler.

Not much of that will be reflected in the results issued today, but Mr. Marchionne has already hit the nail on the head.

"I hate to be this crass, but I need to run this business to make money," he said earlier this month in Detroit.

Ford Motor Co. , which will issue results on Thursday, is making money. It bested its crosstown rivals in 2009, not only by staying out of bankruptcy and not having to seek a bailout from taxpayers, but by reporting a profit in the third quarter.

J.P. Morgan auto analyst Himanshu Patel is forecasting fourth-quarter profit of 34 cents (U.S.) a share and a full-year loss of 12 cents when Ford issues its results on Thursday.

The recovery that began in the third quarter will continue this year and into 2011 and 2012, Mr. Patel said in a note to clients.

Ken Lewenza: `Don't buy
into tax rage'

The following is excerpted from a speech delivered by Ken Lewenza, president of the Canadian Auto Workers union, last month.

Toronto Star Jan 24, 2010

I want to raise the harmonized sales tax debate. I find it fascinating that in the province of Ontario, PC Leader Tim Hudak, a Mike Harris clone, stands up and argues about the harmonized sales tax, takes the Legislature captive, and says he's Mr. Tax Fighter. He is an anti-union, anti-social, anti-collective bargaining guy, and unpredictable. The fact of the matter is he's not doing this because he's going to eliminate the harmonized sales tax when he is in government, he's doing it for political opportunism. He's doing it because it will enhance his position in the polls.

We can't buy into this. Neither can my friends in the New Democratic Party. I said to the Ontario NDP Leader Andrea Horwath, "Andrea, the harmonized sales tax, as unpopular as it may be, cannot be an issue from the progressive side. It can't be an issue that makes Ontarians more cynical about taxes. We want to pay taxes. We want a civil society. We want health care. We want education. We want infrastructure. We do not want every Ontarian to think that taxes are bad."

That does not mean the CAW supports the harmonized sales tax in its entirety. Obviously, they've got to give tax credits to seniors, tax credits to lower paid people and should exclude certain things. I have already said to Dalton McGuinty... that he better not exclude the financial sector, which is being contemplated today, because they make a helluva lot of money and should pay taxes for a civil society.

We are arguing about elements of the harmonized sales tax, but brothers and sisters, don't buy into this tax rage because if you do, as progressives, we will be destroyed because you need taxes for a just society, as a society that cares for one another. This union has always taken the position of fair taxation....

We've got to continue to fight for good jobs, good wages, pay fair taxes and fight for a civil society through that tax base. I know there's a lot of controversy on this but the only ones who will have anything to gain will not be Ontarians. Do you know who is going to gain? The Conservative party. The NDP is never going to get elected on a revolt on taxes....

We have to concentrate our energies on jobs, on pensions, on precarious work, on the environment, and on good public services, because if we retreat from this, our country and our provinces will be much different.

Thousands protest the prorogue

Demonstrators gather across the country against PM's decision to delay Parliament

Toronto Star Jan 24, 2010

It isn't easy to turn "Parliament prorogued" into a chant for a crowd, but thousands of people across Canada turned out anyway on Saturday to protest Prime Minister Stephen Harper's shutdown of the federal legislature.

In Toronto, the estimated 3,000-strong turnout briefly forced the closing of Yonge St. The rally was one of 50 planned Saturday across the country by the grassroots group Canadians Against Proroguing Parliament, which sprang from a Facebook group that eventually numbered more than 200,000 members. They want Harper to change his Dec. 30 decision to suspend Parliament until March 3, when the Vancouver Olympics are over. MPs were supposed to be back in the Commons on Monday after their scheduled holiday break.

Critics have pummeled Harper for a move they say was designed to let him dodge the inquiry into how much the government knew about torture of prisoners in Afghanistan.

Liberal and New Democrat MPs will be on Parliament Hill Monday for a week of hearings, discussions and news conferences on unemployment, aiding Haiti, the pension crisis and Afghanistan, among other issues.

"I think it's just disgusting that Harper shut down Parliament. It was clearly a political move to avoid the inquiry into torture in Afghanistan," said librarian Syd Jones, who attended the rally at Yonge-Dundas Square with wife Renee.

"To use the Olympics as an excuse is a crock – and I'm equally disgusted with the Governor General for agreeing to prorogue the House for the second time in a year for no valid reason."

Toronto Centre Liberal MP Bob Rae, who, along with other politicians, attended the Toronto rally, said he came "because it's a chance for me to join others who agree that Mr. Harper made a terrible decision." The crowd included church groups, families, individuals, unions and members of the Liberal and NDP parties. "Harper didn't really give a good excuse for shutting down Parliament, so we thought we should get off the couch and do something," said Nick de Pencier, who attended in Toronto with his 6-year-old daughter.

In Ottawa, 3,000 people rallied outside Parliament.

NDP Leader Jack Layton, who has proposed legislated limits on the prime minister's power to prorogue Parliament, called on Harper to "unlock the doors of the people's house – it's not your house."

When he reminded the crowd of the NDP's call for anti-proroguing legislation, hundreds of people chanted: "Pass that bill."

Liberal Leader Michael Ignatieff promised to come up with proposed limits for the prime minister's power to prorogue Parliament. "You are a beautiful sight," Ignatieff told the crowd. "When Stephen Harper phoned the Governor General on New Year's Eve, he had no idea you'd be here. ... It is a very good sign of the health of our democracy that that understanding is in your heart, your bones, your conscience."

In downtown Toronto, York University student Jonathan Allan, one of about 150 local members of the Facebook group who planned the event, said: "We need reform so no prime minister ever again can just call up the Governor General and announce that we're shutting down Parliament for no reason."

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

Doug Berry and Alison White Attend the Orangeville Rally

UAW to demand Ford restore pay, benefits similar to white-collar staff

CAW CONTACT
Volume 40, No. 3 – January 22, 2010

Former PMP Workers Honoured at Graduation Ceremony

More than 90 former Progressive Moulded Products (PMP) workers were part of a graduation ceremony at the PMP Action Centre in Vaughan, Ontario on Tuesday, January 19 – the next step in a long process to move from unemployment into new jobs and careers. 

The ceremony was the first of its kind since the closure of the 11 PMP plants in Vaughan, which suddenly put 2,400 people out of work in July 2008. 

Approximately 36 people graduated from the provincially-funded Second Career program, while more than 50 graduated from academic upgrading programs. Fields of study range from dental assisting and social services to food preparation and building trades.

Certificates were also presented to workers who had completed an in-house bridging/academic upgrading program.  

“These workers have overcome some of the most challenging circumstances after losing their jobs,” said CAW President Ken Lewenza. “Along with recognizing their successful completion of important academic and career retraining programs, it’s their spirit of solidarity and resilience that we celebrate as well.”

Lewenza attended, along with Ontario Minister of Training, Colleges and Universities John Milloy.  

Support CAW Haiti Emergency Relief Efforts

CAW President Ken Lewenza has issued an urgent call to all CAW locals, staff and coordinators for donations to the CAW Social Justice Fund’s Haiti Earthquake Relief fund.

The CAW is aiming to raise $250,000 for disaster relief efforts, with the hope of triggering maximum contributory funds from the federal government.

Individual contributions can be made to the Haiti earthquake relief effort. (A tax receipt will be issued for contributions of $20.00 or more). Cheques should be made out to CAW Social Justice Fund - Haiti Earthquake Relief, and sent with a donation form to:

CAW Social Justice Fund
205 Placer Court, Toronto, Ontario M2H 3H9

Donation forms can be downloaded from the CAW website at: http://www.caw.ca/assets/images/HAITI_Earthquake_Relief.pdf

If you have any questions, please email the CAW International Department: cawint@caw.ca.

Community Rallies to Save Kidd Creek Metallurgical Site

A community rally held by the Save the Met Site Coalition in Timmins, Ontario brought together nearly 2,000 enthusiastic supporters determined to ensure Xstrata’s Kidd Metallurgical Site remains open.

Xstrata Copper Canada announced in December it plans to permanently shut down its copper and zinc metallurgical plants in May 2010. CAW Local 599 represents 615 workers at the facility. 670 Kidd employees plus an estimated 200 contractors will lose their jobs.

CAW Local 599 President Dennis Couvrette said it’s time for the entire community to speak out.

“We all have to agree that what Xstrata is doing is wrong,” Couvrette said. “They are at the point in their history where [they believe] Kidd Creek employees are expendable.”

CAW President Ken Lewenza told the January 17 rally the great community turnout demonstrates how important the issue is for everyone in Timmins and the surrounding area.

When Oshawa was dealing with the potential closure of GM, the Premier stepped in to help and the same help should be offered to the people of Northeastern Ontario, Lewenza was quoted in the Timmins Daily Press. “This means as much to this community as Chrysler does to Windsor,” Lewenza said. “This is not just about what’s good for us, but for the next generation.”

Ben Lefebvre, Chairperson at Xstrata Copper said that the company is making tons of money despite their claims to the contrary. “During the three year period ending December 31, 2008 Kidd made nearly $1 billion in net profit,” said Lefebvre. “Base metal prices are back up to historical highs. Xstrata’s announcement simply does not make sense.”

To sign the petition, please visit: www.caw599.ca. You can help even more by getting friends and neighbours to sign it too!

Support Debro Steel Workers in Brampton, Ontario

CAW local unions are being urged to provide financial support for CAW Local 252 members on strike at Debro Steel in Brampton, Ontario since November 22.

“There is no question that this remains a difficult dispute, as the employer has tabled numerous concessions,” said CAW President Ken Lewenza. 
The employer wants to phase out sick days, is attacking new hires rates, and is demanding overtime changes that would mean no overtime after 40 hours. Local 252 represents 36 workers at Debro Steel.

Cheques should be made payable to CAW Local 252 and sent to Abbot Harvey, President, CAW Local 252, 1343 Matheson Blvd., Unit 12, Mississauga, Ontario, L4W 1R1.

CAW Local 444 Hold Classes on Human Rights Training

Approximately 100 union officers of CAW Loal 444 took part in a week long human rights leadership program in early January. Another 100 officers will take the course in the months to come.

CAW Health Care Conference

The CAW Health Care Conference will be held May 7 to 9, 2010 at the Delta Halifax in Halifax, Nova Scotia.

The conference theme is Defending our Rights – Preparing for the Future. The conference will include guest speakers, plenary sessions and workshops.

Further details regarding workshop selections for pre-registration will be forwarded to CAW health care local union presidents and recording secretaries in the near future. 

Staff Appointment
As a result of Munir Khalid’s upcoming retirement, CAW President Ken Lewenza has appointed national representative Sukhvinder Johl, Toronto Area Director, working out of the CAW's Toronto office, effective Sunday, January 31, 2010.

Few take Ford's latest
buyout offer, union says

A buyout program Ford is offering to its 41,000 hourly workers is yielding few interested volunteers, UAW officials told the Free Press this week.

The enrollment period for the program, announced Dec. 17, is to expire Friday.

Ford has already cut its hourly workforce in North America by nearly half since 2005 through job cuts, plant closures and buyout programs.

Last spring, about 1,000 hourly workers, or just 2.4% of Ford's hourly workforce in the U.S., volunteered for a similar buyout offer.

"They've offered it so many times, the ones that wanted them already took them," said Rocky Comito, president of UAW Local 862, who said only handfuls of workers at two assembly plants in Kentucky that employ 5,800 have signed up for the buyout.

Ford is offering eligible production and skilled trades workers who accept early retirement or a buyout lump-sum payments from $20,000 to $50,000 and either a $25,000 vehicle voucher or a $20,000 payment.

But with Ford's financial prospects improving and the possibility of finding another good-paying job in today's economy grim, Ford's latest buyout offer is viewed by workers as too small -- especially when Ford is gaining market share and reporting surprise profits.

"It doesn't do much for people," said Jeff Terry, president of UAW Local 228, which represents more than 2,000 workers at Ford's axle plant in Sterling Heights.

If enough workers accept the offer, Nick Kottalis, president and chairman of UAW Local 600's Dearborn Truck unit, said Ford might be able to bring some part-time workers back to work. But so far, he said, only about five workers had volunteered at Dearborn Truck Plant.

"It is very hard for an assembler with 10 years in to take a buyout," Kottalis said.

Ford spokeswoman Marcey Evans said the majority of workers who volunteer for a buyout typically make their decision during the final days of the enrollment period.

For a list of Info, Rallies & Events click here

All-in auto prices a boost for buyers

Jan 20, 2010 - Toronto Star - Ellen Roseman

I recently mailed a package to Montreal by express service. Not until I checked the bill did I realize I'd paid an 11.5 per cent fuel surcharge.

Extra charges are everywhere. You pay system-access fees for telephone service and account opening or closing fees for financial services.

Airlines are notorious for advertising low prices that double up once the add-on fees are included.

"The preferable solution for consumers would be an outright ban on the practice," says the Public Interest Advocacy Centre in Ottawa.

In its report last September on extra charges in Canada's marketplace, PIAC proposes that companies use "all-in prices" in ads as the next best option.

Hurray, hurray.

In a victory for those who want bundled pricing, Ontario car dealers now have to move fees out of the fine print.

More meaningful disclosure is part of the new Motor Vehicle Dealers Act, 2002, which came into force Jan. 1. (I'll explain that delay in a moment.)

When you see ads for new and used vehicles, you can be confident the dealer's price includes major add-ons – such as freight and pre-delivery inspection charges, which can range up to $1,000.

Minor add-ons, such as window etching, nitrogen in tires and locking wheel nuts, will also be part of the dealer's price.

The only extra costs you can expect to pay are taxes, licence fees and lien registration – a fact that must be disclosed in dealers' ads.

"All-in pricing is a huge step forward for the industry to have taken," says Carl Compton, executive director and registrar of the Ontario Motor Vehicle Industry Council, which administers the act.

The industry? Isn't he talking about a provincial law here?

Well, let's back up to 1997, when the motor vehicle industry became the first regulated sector to move to self-management. (Real estate, travel and technical standards now have it, too.)

Compton's 12-member board is made up of nine dealers, two consumer representatives and one government representative. It works closely with the industry.

The consultations lasted so long because all stakeholders had to agree on changes.

"We wanted to make sure we got it right," he says, "and we weren't asking for anything impractical."

But something fell off the wagon on the winding road from 2002 to 2010.

All-in pricing is mandatory for car dealers, but not for car makers. It's a big gap in the rules.

You can blame it on the fragility of the domestic auto industry – or maybe the reluctance of national firms to adapt their ads to suit one province.

Whatever the reason, I hope some manufacturers adopt all-in pricing without being driven to do it.

Ontario's new motor vehicle rules affect many other areas of customer confusion. They have the potential to cut complaints dramatically.

You may think there's a cooling-off period for car sales, allowing you to put down a deposit tonight and change your mind tomorrow.

It's a widespread misperception. In fact, about a quarter of all calls to OMVIC are from consumers realizing they have to beg dealers to return their deposits and not deduct what's called "liquidated damages" to cover costs.

New contracts make it clear there's no cooling off period – with mandatory disclosure right next to where you sign. It's the last thing you see before you commit to a purchase.

Not all of Ontario's 8,300 registered motor vehicle dealers and 23,000 salespeople have their new contracts yet.

But after eight years of struggle, consumers have finally gained traction in their fight to stop burying big fees in tiny type.

Drivers should brace
for insurance crunch

No joint Saab bid: Spyker

Dutch car maker denies offer with investment firm as
thousands of Saab owners protest GM sale plan

Toronto Star Jan 18, 2010

AMSTERDAM–Dutch sports car maker Spyker denied Sunday it had plans to jointly bid for General Motors' Saab with Luxembourg investment firm Genii Capital.

German WirtschaftsWoche business weekly, in abstracts of a story to be published on Jan. 18, said the two companies, which have been trying individually to clinch a deal to buy the money-losing Swedish automaker, had now teamed up.

Spyker chief executive Victor Muller, in a reply to Reuters via text message, responded "No," when asked if Spyker was in contact with Genii about a joint bid for Saab or had changed its strategy.

Genii is backed by Formula 1 mogul Bernie Ecclestone.

Lars Carlstrom, who is coordinating the bid for Saab by Genii Capital and Ecclestone, told Reuters there had been some talks with Spyker's Muller last week but that he could not confirm nor deny anything related to a joint bid.

GM Europe spokesman Stephan Weinmann said GM was in talks about Saab but he declined to comment whether discussions were ongoing with one or several bidders.

GM said on Monday it would move ahead with closing Saab down. On Tuesday, it appointed two supervisors to oversee a wind-down, though it said it would continue to consider "several purchase proposals it has received for Saab."

The magazine's abstract said: "According to WirtschaftsWoche information, Spyker Cars and Genii Capital have been in contact in order to make a last-second joint offer." It did not give other details.

On Tuesday, Muller said GM's decision on Saab was a matter of "days not weeks."

Meanwhile, more than 2,000 Saab drivers gathered in their cars in the Swedish brand's hometown Sunday to show support for the iconic mark.

"It's hard to know exactly how many cars there were, but an estimate we've done puts the number at 2,500," Claes Robertsson, the head of Saab Turbo Club of Sweden, a group of Saab admirers, told AFP.

Robertsson said both Saab employees and brand enthusiasts had attended the rally, in which drivers from Germany, Denmark, Norway, the Netherlands and Britain also took part.

Swedish news agency TT said the demonstration started at the Saab museum in its southwestern Swedish hometown of Trollhaettan and ended at the Saab factory.

According to police, the four-kilometre stretch was entirely filled by Saab cars, TT reported.

In the Netherlands, more than 500 Dutch Saab lovers rallied.

Saab, which employs 3,400 people in Sweden, is one of four major brands being sold by GM as part of a massive restructuring that began in 2005 and accelerated last year when the largest U.S. automaker went bankrupt.

Analysts have warned some 8,000 jobs could be lost with Saab's closure.

Auto Hall of Fame
honours Ford's Mulally

Bryce G. Hoffman / The Detroit News
January 16. 2010

Detroit -- Ford Motor Co. CEO Alan Mulally was named "Industry Leader of 2009" by the Automotive Hall of Fame on Friday.

Speaking at the annual auto show meeting of the Detroit Economic Club, the hall's chairman, Stephen Polk, called Mulally "the overwhelming and obvious choice" because of his leadership of Ford's turnaround, which has come in the midst of the worst economic crisis since the Great Depression.

"Frankly, he's been great for the entire industry, and our community in particular, because he's reminded us all that we live in a community and in a country that still knows how to compete and how to win on a global stage," said Ford, who hired Mulally from Boeing Co. to take his place as CEO and president in 2006.

"I can't imagine a better partnership than I have with Alan."

Mulally accepted the award on behalf of the entire Ford leadership team, asking each of his vice presidents in the audience to stand, and praising their individual contributions to Ford's progress.

He also praised the United Auto Workers for its contribution toward making Ford more competitive in the United States.

"People didn't think we could compete," he said. "There's no reason why we can't compete with the best of the world."

While Ford is not expected to report a full-year profit for 2009, its financial results are expected to be a dramatic improvement over 2008, when the Dearborn automaker lost $14.6 billion.

It not only surprised Wall Street with unexpected profits in the second and third quarters, but managed to end a decline in U.S. market share that began in 1995.

Ford swept the North American International Auto Show this year, winning both the "Car of the Year" and "Truck of the Year" awards for its new Ford Focus and Transit Connect.

Mulally has promised to return the company to solid profitability by 2011.

"About the economy, we are cautiously optimistic," he said. "The neat thing about Ford is that we have the vehicles now that people really want, so we are going to be part of the recovery."

UAW to sell famed
Black Lake retreat

Louis Aguilar / The Detroit News
Jan 15, 2009

The United Auto Workers is hoping to sell its $33 million lakeside retreat in northern Michigan, long a symbol of the union's success but now a financial liability.

The UAW cited the recession and shrinking membership as reasons it is seeking a buyer for the Walter and May Reuther Family Education Center, located on 1,000 heavily forested acres near Onaway. The union bought the property in 1967.

The center, named for the union's iconic leader, was a jewel in which many UAW members took great pride. It is expected to go on the market yet this month.

The property includes the top-notch Black Lake Golf Club and the ashes of Reuther and his wife, who died along with four others when their small plane crashed en route to the property in 1970.

The center recently became a target of critics who grumbled that the UAW shouldn't keep such a luxury while hundreds of thousands of its members have lost their jobs or taken buyouts or early retirement as the domestic auto industry restructured.

The facility lost an estimated $23 million in the past five years and the UAW was forced to borrow to keep it afloat, according to filings with the U.S. Labor Department.

UAW President Ron Gettelfinger began to inform local UAW leaders of the potential sale of the facility last month, according to local union officials. One of them was Stan Marshall, a former UAW national vice president who now oversees retiree issues for Region 1A in Michigan.

"It's beauty -- I can't even begin to describe it," said Marshall.

"But when Ron told us that everything could be sold, well, I could see that. It's hard to justify when you have so much declining membership. It's costly. And it could be a complicated sale given that (Reuther's) ashes are there."

Center has 'legendary' role

Black Lake was Reuther's vision: a world-class educational facility for union members, who regarded it as a tribute to their legendary leader and a symbol of the UAW's rise and muscle.

In addition to golf and leisure, the center offers week-long conferences on political action, civil rights and leadership.

An estimated 10,000 visitors come to the complex annually.

"We regret that current financial conditions require us to explore the possible sale of the property," Gettelfinger said in an article in the current edition of Solidarity magazine, the UAW's official publication.

"The Black Lake facility has a unique and legendary role in the history of the UAW and the entire labor movement," he said. "Our responsibility now is to plan for the future, so we can bring our members together in the most cost-effective way possible."

The property should be on the market in about two weeks, said John Karver, a senior vice president at CB Richard Ellis, the real estate firm handling the listing.

Karver said an asking price has not yet been determined.

Sale prospects are uncertain in Michigan's depressed real estate market.

Tough times for the union

The center, renovated in the 1990s, has a gym with two full-size basketball courts; an Olympic-size indoor pool; exercise facilities; table tennis and pool tables; a sauna; beaches; hiking and biking trails; sports fields; a boat-launch ramp; and rooms and condominiums.

In 2000, a $6.7 million golf course was added -- the vision of the late UAW President Stephen Yokich. Golf Digest that year ranked it as North America's second-best "New Upscale Public Course." It now ranks 34th on Golf Digest's list of America's 100 Greatest Public Courses.

Like its members, the UAW is going through tough times.

In 2008, UAW membership totaled 431,000 and the union collected $161 million in dues. That compares to 654,000 members and $206.5 million in dues in 2004. At its peak in 1979, the UAW had 1.5 million members.

The union reported $1.2 billion in assets in 2008, the latest data available. That included $700 million in U.S. Treasury securities; $321 million in other investments, mainly securities; and $100 million in fixed assets, including the Black Lake facility.

Analysts say the union's long-term financial health could hinge on what happens to union-operated trust funds, known as Voluntary Employees' Beneficiary Associations, or VEBAs, that pay for retiree health care benefits. Detroit's Big Three automakers funded the VEBAs, but last year the UAW agreed to accept part of the payments from GM and Chrysler in company shares instead of cash because of the automakers' bankruptcies.

CAW CONTACT
Volume 40, No. 2 – January 15, 2010

Urgent Call for Haiti Relief Fund

CAW President Ken Lewenza has issued an urgent call to all CAW local unions, staff and co-ordinators to donate to the union’s Social Justice Fund Haiti Relief Fund, set up on January 13 to respond to the devastation wrought by the earthquake in Port-au-Prince, Haiti.

In a letter to local unions across the country, Lewenza said that the CAW has a long history of working with Haiti and the Haitian people through projects of the Social Justice Fund and the Quebec Federation of Labour.

“We want to express our profound condolences to those affected and their families,” wrote Lewenza. “We pledge to help those in Haiti who are in need.”

Specific projects and aid agencies the fund will support will be communicated shortly. Cheques can be sent to the national office care of the CAW SJF. The CAW plans to donate a total of $250,000.    

CAW-SJFHaiti Relief Fund
CAW National Office
205 Placer Court, Toronto, ON   M2H 3H9

Save the Met Site Coalition Formed

A Timmins, Ontario area coalition has been formed to fight for the 670 jobs at the Xstrata Kidd Metallurgical site, the many indirect jobs it supports and to stop Ontario’s natural resources from being shipped out of the province.

Mayors from many Northern Ontario communities, union and business leaders, as well as concerned citizens have formed a coalition called the ‘Save the Met Site Coalition.’ The slogan ‘Our Resources Remain Here’ was selected at a closed door meeting January 11.

Xstrata Copper Canada announced December 7 it planned to permanently shut down its copper and zinc metallurgical plants at the Kidd Site in Hoyle in May 2010. CAW Local 599 represents 615 workers at the facility.

CAW Local 599 President Dennis Couvrette said there was tremendous support expressed at the January 11 meeting. “Everyone recognizes what this means to Timmins, the surrounding communities and the region.”

“People from all walks of life are rallying to fight with us like I’ve never seen before,” Xstrata Chairperson Ben Lefebvre said. “I think we’re going to win this battle!”

The public is being urged to come out in support and to get involved in the fight back. A public meeting is planned for the McIntyre Arena ballroom in Timmins at 1 p.m. on Sunday, January 17.
The coalition wants to make sure the Ontario government is held accountable for how its resources are developed. MP Charlie Angus also said there is a petition circulating that requests that the signed agreement between the federal government and Xstrata be made public.

“This is going to be because of the will of a region saying enough is enough,” Angus, NDP MP for Timmins-James Bay, told the Timmins Daily Press.

For more information, please visit: www.caw599.ca

Training and Respect for Airport Security Workers

Amid the debate over privacy and changing airport security measures, the concerns of frontline workers have been absent, says CAW President Ken Lewenza. These changes are of particular relevance to workers employed in airport security, who face the brunt of passenger anger at long line-ups and what some might perceive as invasive practices.

Airline passengers face increased line-ups as changes to security measures are ironed out. Lewenza urged Canadians not to take their frustrations out on the security staff or other airport or airline workers, who have been caught up in changing work practices.

It is critical that frontline workers receive the appropriate training and airports and airlines ensure the necessary staffing levels,” said Lewenza. “Airlines in particular have cut staff so much that if any crisis should occur, such as what we saw over the holidays, the handful of existing staff is unable to cope with the overwhelming level of demand.”

The CAW represents approximately 1,500 airport security workers and up to 10,000 airport and airline workers across the country.

Public Inquiry Needed into Construction Worker Deaths

CAW President Ken Lewenza is calling on the Ontario government to reverse its decision not to hold a full public inquiry into the deaths of four Toronto construction workers on Christmas Eve. Lewenza spoke out after Ontario Minister of Labour Peter Fonseca said that no public inquiry would take place. Lewenza called this decision “shameful.”

“The government of Ontario must respond responsibly and hold a public inquiry into both the accident and the factors that allowed it to happen,” said Lewenza, reiterating earlier calls by labour leaders for a public inquiry.
           
“There should be no excuse for such an accident to happen, after years of improvements to health and safety standards and legislation. Even the strongest of legislation will not protect workers if they are unaware of their rights or unable to exercise them and I fear this was the case.”

Lewenza expressed grave concerns that the workers were uninformed on their right to refuse unsafe work, a fundamental right under the province’s health and safety legislation. 

In a letter to Premier Dalton McGuinty, Lewenza urged that a public inquiry must also reveal how common the disregard for basic safety rules actually is in the non-unionized construction industry, the same industry where many new Canadians find themselves working.

“There are a number of systemic issues which led to the circumstances of this tragic accident and the terrible disregard for human life,” said Lewenza, “and they must be thoroughly investigated in a transparent and publicly accountable manner.”

Canadian Workers Abandoned by Tory Government, CAW says

Hundreds of thousands of Canadian workers continue to suffer the lasting effects of a deep and damaging economic recession, yet they have been abandoned by the federal government, says CAW President Ken Lewenza in response to the latest dismal jobs report released by Statistics Canada. 

“It’s outrageous that with an 8.5 per cent unemployment rate and more than 300,000 Canadians out of work in just 12 months, the Harper government decides to take a prolonged holiday,” Lewenza said. “For the hundreds of thousands of unemployed Canadians, the next three months until Parliament resumes will be no holiday – this is a travesty to workers in Canada and an embarrassment to our nation’s democracy.”

The Labour Force Survey reports that Canada dumped another 17,000 jobs in the month of December (partially offset by a jump in workers joining the self-employed ranks, with 2,600 net jobs lost), bringing the running total of job losses since the start of the economic crisis to 323,000.

Not surprisingly, the manufacturing sector took the biggest hit among the major industrial sectors shedding nearly 10,000 jobs. 

“Communities across the country are being destroyed because of our government’s lack of any vision for the future of our economy,” Lewenza said. “These workers and their families are looking to Ottawa for leadership and it’s clear that this government simply doesn’t care. Instead, the government is distracted by petty political choices.” 

Transport Minister’s Turn to Fly it Right

After months of work on the Air Canada Fly it Right campaign, top CAW officials met with federal Minister of Transport John Baird in Ottawa to present him with more than 2000 petitions signed by CAW members at Air Canada and Air Canada retirees.

The January 5 meeting was attended by CAW President Ken Lewenza, Assistant to the President Peggy Nash, CAW Local 2002 President Leslie Dias, CAW National Representative Carlos Levore and a number of the 2002 executive.

“We made it clear that our membership want and deserve a flag carrier they can depend on to provide stable employment and long term job security,” said Dias, after the meeting.  “The Minister said that he wants to see Air Canada return to stability and better health. Our recommendations are clear and attainable steps which will make that a reality.”

The CAW spoke to Baird about the urgent need to re-regulate the airline industry and to get our national carrier, Air Canada, back on track. The brief presented to Baird outlined a number of key recommendations that would help manage the industry in a more sustainable fashion.

These include:
- Introducing regulatory limits to manage overall capacity growth and executive compensation;
- Public investment into Air Canada to stabilize the national carrier;
- National commitment to retirement security (across all industries);
- Creating a tripartite taskforce on the airline industry, including labour, government and business participation to develop long term solutions and viable industrial policies for the airlines;
- Addressing trade imbalance in air travel with better reciprocity in bilateral air negotiations.

CAW Members Ratify Pacific Coach Lines Agreement by 88% 

CAW members who work at Pacific Coach Lines have voted overwhelmingly in favour of their new collective agreement. Workers at the bus company voted 88% in favour of the new contract at a series of meetings held January 7 and 8.
The CAW and PCL reached the agreement New Year's Eve after a marathon 30-hour bargaining session at the BC Labour Relations Board. The CAW had served 72-hour strike notice for a deadline of January 2 and the company responded by serving lockout notice.
"The members wanted us to deal with key issues including wages, benefits, retirement contributions and job security and we're happy to report good progress on all of those fronts." CAW National Representative Gavin McGarrigle said.
CAW Local 114 represents a bargaining unit of 127 workers at Pacific Coach Lines including drivers, mechanics, service staff and ticket agents.
Pacific Coach Lines provides scheduled cross-water bus service from downtown Victoria to downtown Vancouver on board BC Ferries and also through to the Vancouver International Airport (YVR). Pacific Coach Lines also has an exclusive contract to transport passengers from the Vancouver Airport to Whistler in a service branded as Whistler Skylynx.
 CAW Local 114 Contributes to Long Standing Event in B.C.
Just as Local 114 was gearing up for a strike at Pacific Coach Lines, they were still helping the less fortunate in Victoria, B.C. The local made a donation to assist organizers of the 13th Annual New Year’s Day Poor People’s Levee Tour.

Every year since 1998 Art Farquharson (Chairperson Grayline West) has joined with other anti-poverty activists and taken Victoria’s poorest citizens and elders on the tour. The tour feeds these folks on a day when soup kitchens are closed and reminds the privileged that poverty doesn’t take a holiday. 

Levees are a tradition that date back to the 17th century in Canada. In Greater Victoria various Mayors and the Lieutenant Governor receive all citizens and offer refreshments to start the New Year. This year’s Levee Tour visited Victoria, Saanich and Sidney City Halls and Government House. “In keeping with my CAW Labour Music School training (1994) we sang zipper lyrics to the tune of ‘Let It Snow’”, said Farquharson.   

CAW Family Education Program

Some consider it the best kept secret in the CAW – the Family Education Program.

It’s like taking a family holiday with your union at the CAW’s beautiful Family Education Centre in Port Elgin, Ontario on the shores of Lake Huron. The CAW provides, free of charge, food and lodging to each participant (and family) during their stay at the Education Centre.

You will meet people from all across Canada and will get to discuss current economic and social issues from a worker’s viewpoint as well as learn more about your union. Guest speakers will raise topics that touch the lives of workers every day including our changing society, globalization, our health care system, human rights and equality issues, to name a few.

To top it all off at the end of the day you can enjoy one of the most beautiful sunsets in the world.

While you’re in the program qualified childcare staff care for and entertain your children.
There are three sessions this year:

- Saturday, July 10 to Saturday, July 17 – a new one-week program;
- Sunday, July 18 to Friday, July 30;
- Sunday, August 1 to Friday, August 13.

You are eligible to apply for the Family Education Program if you are a CAW member in good standing. (You do not require PEL in your contract).

For more information visit www.caw.ca/education for application forms and information packages. Applications should be returned by mail to Michelle Barrett, Education Department, CAW-Canada, 205 Placer Court, Toronto, Ontario, M2H 3H9 or by fax at 416-495-6554, before Friday, March 19, 2010.

Sault Area Hospital Agreement Ratified

CAW Local 1120 members who work at the Sault Ste. Marie, Ontario area hospital have voted overwhelmingly in favour of a new three-year collective agreement that provides wage and benefit gains.

CAW Local 1120 represents approximately 600 workers including service workers, RPNs, and office and clerical. The office and clerical bargaining unit voted 84 per cent and the service unit 78 per cent in favour.

There were a range of wage increases, but the majority receives wage increases of two per cent each year or more. Registered Practical Nurses (RPNs) receive a four per cent wage increase in each year. Skilled trades receive eight per cent over three years.

CAW national representative Andy Savela said “As the new hospital is a private/public partnership model, it was key the union protected the integrity of the bargaining unit, including those who will be administered under the private umbrella.”

“The new agreement protects and preserves all the terms and conditions for all those implicated by this.”

Benefit gains include improvements in vision care as well as gains for skilled trades including a $300 tool allowance.

The agreement also provides a process to deal with the issue of RPNs who have been going through a transformation to be utilized at their full scope of practice. “Not only did we obtain a process to help facilitate this we also got RPNs compensated for it and they will finally be at parity with their peers across the region,” said Local 1120 President Janice Pettalia. Petallia also noted there was a breakthrough as Personal Support Workers “were also recognized for the increased demands they are facing.”

Education Update! 

New! One-Day Collective Bargaining Course.

This new one-day course features a video "It's not a Game, Version 2" on bargaining at a small workplace and introduces the process to beginners. Experienced bargainers will also find it very interesting. Participants see a set of negotiations through the eyes of Monique, a new member of the committee. We also meet Beryl, the local union president, Terry, the union staff representative, and Drew, the member who has been through past negotiations. Participants see the steps from the first union caucus meeting to ratification of a new contract, the debates both in the union and management committees, and all the essential elements of the collective bargaining process. Participants see how they can draw on their own strengths to make a contribution, why contract language is so important, and what resources the CAW National union provides. Everyone gets a chance to practice speaking to issues.
For information on how to register or how to book this course in your area, check the CAW web page at www.caw.ca, click on Education or contact the CAW Education Department at educate@caw.ca.
Staff Appointment

As a result of Alex Keeney’s retirement, CAW President Ken Lewenza has appointed national representative Debbie Fields, CAW’s Windsor area office, effective immediately. Windsor Area Director, working out of the Windsor Office.

Ford Focus the pick of
the bunch at the NAIAS

The Ford Focus is the star of the North American International Auto Show, the most obvious choice in years.

Ford deserves a break because it survived and thrived without having to beg and borrow from the U.S. government, and against all the odds it has produced a gem with the new Focus.

It would have been enough to have simply brought this car through the design process, and plonked a worthy but mediocre car on dealer lots. But Ford has done this with a design of such panache and quality that it has restored the faith of doubters and shown that U.S. carmakers can still compete with the best.

North American models of the new Focus will initially have 2.0 liter, 4-cylinder engines with twin independent variable camshaft timing, direct injection, and a dual clutch power shift automatic transmission.

The new range will start production simultaneously in Europe and North America in late 2010 and go on sale early in 2011. Asia, Africa and South America production will follow.

The car looks a bit like a large Ford Fiesta, no bad thing when you consider how handsome that is. Looking over the car, there are very expensive-looking design touches in the headlights and rear light clusters. The interior on the show models makes you think BMW rather than Ford. Even GM Vice Chairman Bob Lutz approves.

"Pretty impressive. Nice car," Lutz said as he toured the Ford stand Wednesday.

All this class makes you wonder how Ford will compete on price in a tough competitive world. And this is supposedly the first global car for Ford, provoking the question, will the Focus play in Beijing, Bombay, Brighton, Buenos Aires and Baltimore?

Chrysler confirms Brampton investment

Plant upgrade planned as car maker mulls fate of Alfa Romeo franchise

Toronto Star Jan 13, 2010

DETROIT–Chrysler will probably build the next Alfa Romeo flagship sports car in Brampton if the company decides to proceed with such a project this year, says the company's top official.

Sergio Marchionne, chief executive officer for Chrysler and its Italian partner, Fiat SpA, told reporters Tuesday that he has instructed Alfa Romeo managers to redevelop its business case for the iconic car.

"The answer is if you build it, it's likely it will be there (Brampton), if we build it at all," Marchionne said during a news briefing at the North American International Auto Show here.

Marchionne, a former Torontonian who studied at the University of Toronto and University of Windsor, noted that although Alfa has a great brand and history, it remains "a drag" on resources at Fiat.

Fiat has been wrestling with the Alfa issue for some time but Marchionne noted it would make a decision about the project before the end of the year.

Last year, AutomotiveCompass, a U.S.-based research firm that tracks auto production schedules around the world, revealed that Fiat would move assembly of the Alfa Romeo 169 E-segment sedan to Brampton from an operation in Italy.

Furthermore, the firm noted that its sources in Alfa and the parts industry indicated production of the niche vehicle would start in 2012.

Insiders say the Alfa car would need to generate sales of at least 10,000 to 15,000 annually in North America to become viable. The Brampton plant could easily handle the extra production, since output of three cars has dropped in recent years.

The Brampton plant currently builds the Chrysler 300 sedan, Dodge Charger and Challenger sports cars.

Marchionne, who is trying to turn around Chrysler after Fiat became a partner last year, also confirmed that the company will be investing in the Brampton plant's aging paint operations.

"We're not talking about specific investments but I think the paint shop in Brampton will need some intervention," he said.

Marchionne would not provide details, but sources say the work could involve either a cheaper refurbishing or a new paint shop that would cost several hundred million dollars.

Marchionne acknowledged the first half of this year will be "a very difficult transition" as the company continues to fix operations and develop new models to lift sagging sales. Chrysler's sales plunged more than 25 per cent in Canada and the U.S. last year.

However, he said comparing financial, sales and production data for the first half of this year to the same 2009 period would not provide a true picture because Chrysler was producing vehicles at the "speed of light" then with huge discounts.

While Chrysler focuses on developing new products, he said the company will also be busy spending its advertising dollars on building brand equity in the marketplace.

Chrysler hopes to start building on that late this year with new versions of the 300, Charger, the Fiat 500 subcompact and an unidentified crossover vehicle in stores.

A union benefit trust currently holds a majority of Chrysler after a major restructuring last year but Marchionne said the company could pursue an initial public offering of shares next year.

After tough times,
Ford basks in praise

Bryce G. Hoffman / The Detroit News
Jan 13, 2010

Detroit --With North American car and truck of the year trophies sparkling on a stand crowded with journalists eager to catch a glimpse of the new Ford Focus, Ford Motor Co. executives may be forgiven a certain amount of swagger.

Many walking the floor at Cobo Center this week already are referring to the 2010 North American International Auto Show as "Ford's show."

But after more than a decade of decline, Ford's top executives acknowledge they still have a long way to go before they can declare victory.

"I'm really proud of what the team has pulled off," Executive Chairman Bill Ford Jr. told The Detroit News. "But the last thing we can do -- even for a minute -- is rest on our laurels."

He said the economic situation in the United States and abroad remains "challenging" for all automakers.

Ford Americas President Mark Fields called winning Car of the Year honors for the Ford Fusion Hybrid and Truck of the Year for the Ford TransitConnect "a tremendous sugar high" for everyone at Ford.

"It's important to enjoy the moment," he said, "but then get back to business."

Ford lost more than $14.6 billion last year and does not expect to return to solid full-year profitability until 2011. But the company avoided bankruptcy and rode out one of the worst crises to hit the auto industry without resorting to a government bailout -- and without cutting back on its product development program.

Ford stopped a decline in U.S. market share that began in 1995, and increased its share of the domestic market by more than two percentage points.

"They could get another percentage point of market share this year," said analyst Erich Merkle of Autoconomy.com in Grand Rapids. "There is a tremendous amount of momentum at Ford right now. But that doesn't mean there isn't a tremendous amount of heavy lifting still to do. It's a very competitive market, and they've got to be competitive in every segment."

Still, CEO Alan Mulally said Tuesday that Ford's turnaround is going better than he hoped.

"We just have to keep a laser focus on the plan."

2011 Ford Focus rocks segment

Small cars have something to match

By Staff, Canadian Auto Press - January 13, 2010

If there is a car that North American aftermarket tuning enthusiasts, entry-level consumers and Ford dealers have been longing for more than just about any other, it’s Ford’s Euro-spec Focus, and at long last it’s at the North American International Auto Show in Detroit in US-spec trim. Even better than hoped for, however, the new Focus offers everything its European counterpart does as well as specially designed details tailored to our unique market.

“Global customers increasingly want smaller cars with outstanding fuel economy, but without sacrificing any of the style, technology, connectivity and driving quality they demand from larger vehicles,” explained Derrick Kuzak, Ford's group vice president of Global Product Development. “Our next generation of C-cars – led by the exciting new Focus – will clearly show that Ford is ready to meet that challenge.”

Everything you know about the current Focus, hopefully excepting its excellent reputation for reliability and oh-so-cool Sync connectivity system, can be left in the proverbial dust now that the new 2011 Focus has been announced.

Just like the upcoming Fiesta will do damage to rivals in the subcompact segment, the new Focus should be mayhem for compact competitors when it gets unleashed on the public later this year. Not only is it attractive with stylish curves, an assertive front fascia, sporty overall stance, rakish rear end, and high-end detailing outside and in, but it rides on a revised version of the very competent Mazda3 platform architecture, so handling and ride quality should be superb.

“The all-new Focus is at the center of convergence for automotive trends,” commented J Mays, Ford group vice president of Design and chief creative officer.

“We've designed it with an acute understanding of global customers, yet it's tailored for each individual region. Focus combines the best from Europe, North America and Asia to deliver a level of emotional driving enjoyment never before experienced in a car this size.”

Focus buyers will once again face a sharp departure from their normal purchasing patterns, or possibly a welcome return to a much-loved body style that was forgotten with the current generation Focus, now only available in sedan and coupe configurations. The hatch is back, with a 5-door version at launch, joining the ever-popular 4-door sedan. A sporty 3-door version is expected soon after, and possibly even another coupe to satisfy Ford’s bevy of new 2-door compact customers.

The new Focus also gets a new engine sporting 2.0 litres of displacement, direct injection, Twin Independent Variable Camshaft Timing (Ti-VCT), and four cylinders, of course, resulting in 155hp and 145 lb-ft of torque. Ford says that its new 2.0-liter DI Ti-VCT engine is up to 20hp more powerful than the current 2.0 Duratec I-4, while 10% more fuel-efficient. This will be the only powerplant at launch, but it’s quite powerful for a base engine and a more potent four-cylinder is expected for the future.

Ford is pulling out all the stops as far as transmissions go, however, offering either a six-speed manual or PowerShift six-speed automatic gearbox, the former ideal for tuning applications and the latter a sophisticated dual-clutch sequential-style autobox, like Volkswagen’s fabulously efficient and brilliantly entertaining DSG. Ford says its PowerShift autobox can “reduce fuel consumption by up to 9 percent compared to a traditional four-speed automatic.”

New technologies in the upscale cabin should make the Focus more appealing to slightly better off North American buyers who would normally opt for a larger car as an unconscious status symbol, but are now considering something smaller and more environmentally friendly. Available features include an 8-inch infotainment screen with a “clear and intuitive colour display,” Sync connectivity with voice control Bluetooth, and “connection points for a wide variety of external devices and media players,” plus satellite navigation, a backup camera, proximity sensing remote entry with push-button start, a “semi-automatic parallel parking system that automatically steers the vehicle into a parking spot” and more. Together with attention paid to sound deadening for a higher quality overall feel, the Focus should deliver that large car experience so many North American buyers appreciate.

A stiffer, stronger body structure will enhance road manners too, as well as safety, the latter optimized with all the expected safety features.

Ford also confirmed a Focus Electric version for 2012, with a hybrid spanning the gap, sometime next year.

All Focus models, including the HEV and EV will be built in Michigan, so once again Ford gives us a good reason to buy North American and support our largest trading partner. The new Focus will arrive in Ford showrooms in Q1 of 2011.

Car and Truck of the Year
awards give Ford new cache

Scott Burgess / The Detroit News
Jan 12, 2010

One team, one Ford, two awards.

Ford Motor Co. took both the North American Car and Truck of the Year awards this morning as the North American International Auto Show kicked off.

The Ford Fusion hybrid beat out the Buick LaCrosse and Volkswagen Golf for Car of the Year, and the Ford Transit Connect won Truck of the Year, edging out the Chevrolet Equinox and Subaru Outback.

It's only the third time the same manufacturer has won both titles in the same year in the awards' 17-year history.

"Winning both awards is much bigger than winning just one," said Jack Nerad, an automotive analyst and editorial director at Kelley Blue Book. "It's prestigious, and it's something that consumers recognize."

Winning both sends a strong message to consumers about all of the company's vehicles, Nerad added.

The awards seemed to energize the Ford staff everywhere at Cobo Center. The company's display area buzzed all morning as executives smiled for cameras and mingled with the media.

"The awards recognize the hard work so many people have done," said Derrick Kuzak, Ford's vice president, global product development.

Mark Fields, Ford's president of the Americas, gushed when receiving the second award.

"This means really, really good things," he said.

Kuzak said he was especially proud of the Transit Connect, which arrived in the U.S. from Europe last summer. While in Europe, Kuzak had worked to redesign the truck, with sights on America.

The truck manages 22 miles per gallon in the city and 25 mpg on the highway. It can carry 1,600 pounds in its big cargo space.

Vote tallies

Among the voting of 49 North American automotive journalists, the Transit Connect received 213 points, the Equinox had 183 points and the Outback 94. The award is not connected to the auto show, though the announcement traditionally kicks off the show.

Jim Mateja of the Chicago Tribune said, "(It's) a U-Haul that fits in your garage. Holds people and so much of their stuff: bikes, snowmobiles, lawn mowers, skis, tents, boats, ladders, furniture, you name it. Defines multi-purpose and boasts a reasonable price even when you add side and rear windows and back seat."

The decision for the Fusion hybrid was much more decisive, with the hybrid collecting 241 points, the Golf receiving 146 and the LaCrosse earning 103.

The critically acclaimed Fusion hybrid, which gets 41 mpg on the highway, continues to receive high praise.

"We've worked so hard to make the Fusion hybrid a good car that people enjoy driving, not just a good hybrid," said Gil Portalatin, the Fusion hybrid's application manager, smiling from ear to ear shortly after hearing that the Fusion hybrid had won the award.

The Fusion hybrid has been recognized for just that, inspiring driving dynamics that cause people to forget it's a hybrid. The Fusion hybrid was the fourth hybrid to win the honor.

Ford's global future rides
on next generation Focus

Bryce G. Hoffman / The Detroit News
Jan 11, 2010

In the long history of Ford Motor Co., few cars have had more riding on them than the all-new Ford Focus the automaker will unveil today at the North American International Auto Show.

The sporty compact is the lever CEO Alan Mulally hopes will transform a company known for its gas-guzzling pickups and sport utility vehicles into one focused on fuel-efficient and fun-to-drive small cars. The 2012 Focus also is the centerpiece of Ford's new global product plan and the first real test of Mulally's "One Ford" strategy, aimed at combining the company's global resources as never before.

Ford will sell mostly the same cars and trucks worldwide, tweaked to meet regional tastes, instead of building different vehicles for each region. Many will be based on the Focus platform.

In one of the biggest gambles undertaken by an automaker, Ford plans to build 2 million cars and crossovers off the new architecture annually by 2012. If it succeeds in hitting that mark, the payoff will be enormous in economies of scale. But reaching that goal requires unprecedented cooperation and collaboration within a company notorious for being divided into regional fiefdoms.

"This Focus was designed from the start to leverage all of our global assets," Mulally told The Detroit News. "It exemplifies our transformation."

Ford put the world on wheels with its Model T, but the automaker's efforts to create a modern world car -- at times, one of its major goals -- have failed because of corporate in-fighting and turf wars.

The first Focus, launched in Europe in 1998, became a breakout success on that side of the Atlantic, but the car that arrived in U.S. showrooms two years later had been stripped of content and became an embarrassment.

"They didn't have global discipline then, and the cars devolved into separate vehicles," said analyst Jim Hall of 2953 Analytics LLP in Birmingham. "They've got it now. This is the biggest bet they've ever made, but it's going to pay off because, this time, they have the discipline to do it right."

What changed the equation was Bill Ford Jr.'s decision to step down as CEO in 2006 and turn the company over to Mulally, an aerospace engineer who was running Boeing Co.'s commercial aviation division.

"At Boeing, we didn't have a separate 737 for Europe, or Asia or the United States," Mulally said. "The first question I had for Bill was, 'Do you want to compete worldwide?' We absolutely agreed that we had these great assets worldwide and if we pulled them together and leveraged our size and operated as a global company, we could compete with the best in the world."

They decided that Ford would sell the same cars and trucks worldwide. Products like the iconic Mustang would be limited to certain markets, and vehicles would be tweaked to match local needs and regulations. The days of one Focus for America and another for Europe were over.

So were the days of regional conflict. Mulally tapped Derrick Kuzak as his global car czar and gave him control of production plans worldwide. Kuzak had been pushing for a global product development system that would standardize best practices and ensure that one person was responsible for each element of a project worldwide.

Kuzak also began reworking the automaker's cycle plan to eliminate duplicate vehicles. Ford unveiled its new car strategy in mid-2008 as gasoline prices topped $4 a gallon: It would retool truck factories in Mexico, Kentucky and Michigan to produce a new generation of small cars designed in Europe.

Most will be based on the underpinnings of the new Focus, which will replace three platforms built around the world. Along with the Focus, up to nine other cars and crossovers will be built off the same architecture.

"It will make us globally competitive like never before," Kuzak said.

Thinking globally

Delivering on that promise forced Ford to rethink every aspect of the Focus launch, starting with the vehicle's design. That task fell to Martin Smith, a British designer based in Cologne, Germany. While past efforts to create a world car were bland attempts aimed at appealing to the lowest common denominator, Smith says consumer tastes are converging worldwide -- thanks largely to the Internet.

"There's a kind of global cool," Smith said. "Customers are more unified than you might think in what they want in a vehicle."

Proof of that came when Ford showed the first Focus prototypes to consumer panels in Europe, the United States and Asia. The participants were universally impressed, although Smith acknowledged that global tastes are not yet fully uniform.

Consumers in different countries demanded different colors and interior materials. Chinese customers, for instance, favored a finer-grained plastic for the instrument panel, but that looked cheap to Americans. Ford settled on a material acceptable to everyone, but nixed a yellow leather interior popular in Shanghai.

"We do find that the Chinese market is very difficult to accommodate," Smith said. "Aligning North American and European tastes is a little easier."

Engineering the new Focus brought more challenges, particularly with varying safety rules and emissions requirements around the world. Designers in Europe placed the front windshield further forward, but Ford global small car chief Gunnar Herrman said his engineers had to move it back to meet U.S. crumple zone standards.

Tony Brown, Ford's global purchasing chief, said the give and take is worth it because of the economies of scale that come with a truly global plan. About 80 percent of the parts will be the same on every car worldwide, and 75 percent will come from the same suppliers.

"It's a massive coordination effort that we have to do globally, but this is where the real leverage is," Brown said. He declined to quantify the cost savings, but analysts say the potential is huge.

In a recent note to investors, analyst Brian Johnson of Barclays Capital said Ford's strategy "provides the company with improved scale that is competitive with other global" automakers.

Building locally

All of this creates new challenges for manufacturing. Plastic trim made in Europe must fit perfectly with sheet metal stamped in Michigan. To make sure it does, Ford relied on a virtual manufacturing system that allowed production managers in Europe, Asia and the United States to build the car in cyberspace before the first prototype was assembled.

"The idea is to really get the bugs out in the virtual build," said Jim Tetreault, a man uniquely qualified to lead the effort. The former head of manufacturing for Ford in Europe now holds that job in North America. Even he is daunted by simultaneous production launches in two countries.

"If you have a success, you have a success in all the regions," Tetreault said. "But if you make a mistake, you make a mistake in all the regions, too."

Focus production is to begin the same week later this year at factories in Germany and Michigan. Later, it will ramp up in plants in Russia and China.

Last month, Ford Americas President Mark Fields showed reporters around the former Michigan Truck Plant in Wayne, where Ford is investing some $550 million to transform the factory into a state-of-the-art small car facility.

"Just a year ago in this plant, we were producing Navigators and Expeditions," he said. "One year from now, we're going to be producing the new Ford Focus."

Ford slips pre-preview
ahead of media days

Jenny King , Jan 10, 2010

With 54,000 square feet of space to fill, Ford Motor Co. is promising visitors to the 2010 North American International Auto Show two dozen new interactive displays where they can expand their automotive knowledge, play games, sit in a Ford Taurus "theater" or experience the company's new Active Park Assist technology.

Hate to parallel park? Active Park will tuck you neatly into a space "with the touch of a button and without ever laying a hand on the steering wheel," Ford said. But will it feed the parking meter?

Vehicles powered by gas-electric hybrid systems will be driven in battery-only mode so visitors can actually experience the ride, not just examine a static car or truck.

The Ford display also includes two tall, orange, dinosaur-like robots, "Eco" and "Boost," which demonstrate how engines are assembled at the company's Cleveland engine plant. Ford says there will be presenters (human) at the robot stand who will explain the process.

In a pre-press preview session on Friday, Ford officials previewed nine new or significantly upgraded engines and six new transmissions it will introduce in various vehicles this calendar year in North America.

The company - once dependent on SUVs and pickups with big V-8 engines for profits - wants to become the most fuel-efficient automaker in North America.

New government regulations require an automaker's fleet to average 35.5 mpg by 2016 - prompting many companies to de-emphasize larger engines in favor of 4-cylinder engines, turbocharging, diesels, hybrids and all electric vehicles.

Barb Samardzich, Ford vice president, powertrain engineering, described it as "a once-in-a-career launch" for members of the powertrain engineering staff.

The Ford F-series Super Duty pickup will get an Ecoboost engine and a 6.7-liter diesel based on new architecture.

Mustang fans can look forward later this year to the first 5.0-liter V-8 available in the pony car since 1995. It will be available with a new six-speed manual transmission or six-speed automatic for the 2011 model year.

The Dearborn-based automaker received special permission to bring reporters onto the show flow three days in advance of the official media preview. Reporters were specially escorted in and out of the show area. They were asked to refrain from wandering and continually warned to step carefully over flapping plastic floor covering and around coils of extension cords. How long will it be before other automakers try the same diversionary tactics?

Ford adding
Twitter to Sync

Associated Press Jan 8, 2010

Las Vegas -- Ford Motor Co. is adding Twitter messages and Internet radio to its in-car entertainment and communication service, known as Sync.

Ford hopes to entice consumers who are adept at using mobile applications on their cell phones. But CEO Alan Mulally told an audience at the International Consumer Electronics Show that because Sync is voice-activated, it's safer for drivers than using their phones in the car.

Ford executives said Thursday that Sync will begin working with Internet radio services Pandora and Stitcher. It also will connect to OpenBeak, which can read your or your friends' Twitter posts out loud.

Executives said Ford is talking with Google Inc. about bringing its services to cars, as well. Ford Sync was developed by Microsoft in 2007.

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

Paul Green, a professor at the University of Michigan Transportation Research Institute who studies the effects of distractions for motorists, said auto makers are making a “reasonable effort” to minimize the problem. It's unclear how successful they are, though, because vehicles are becoming more and more complicated, adding to a driver's workload.

Green said that since Sync uses voice-activated commands, it should make it easier for drivers to keep their attention on the road.

“They're providing more things for drivers to do, but they're providing them in an easy way,” he said. “One hopes it's a net gain.”

Ford's Sync service, which was developed by Microsoft Corp. and rolled out in 2007, already lets drivers do such things as make phone calls and use GPS technology to get turn-by-turn directions and traffic information.

Now, Ford executives said Thursday, Sync will begin working with two Internet radio services, Pandora and Stitcher. It also will connect to OpenBeak, which can read your or your friends' Twitter posts out loud. Users will need to have the Sync versions of these applications on a phone with a Bluetooth wireless link.

Later this year, Ford plans to allow more software developers to modify their applications to work with Sync, too.

In an interview, Pandora founder Tim Westergren said the car is the “holy grail” of radio, and having his music application available through Sync shows how important Internet radio has become. Internet radio services offer a much wider variety of music than commercial services, generally without ads.

“This is a tipping point, I think,” he said.

Ford executives said that the company is talking with Google Inc. about bringing its services to cars as well, and that it plans to add Wi-Fi to some cars that have Sync.

Ford also said it will roll out a new LCD dashboard for cars later this year. Called MyFord Touch, it would work with Sync and let users do things such as personalize a car's audio and temperature settings. The company plans to have MyFord Touch on 80 per cent of its vehicles in the next five years.

CAW CONTACT
Volume 40, No. 1
January 8, 2010

 
World Leaders Fail to Make Real Progress in Climate Talks

CAW President Ken Lewenza says he is gravely concerned about the state of international climate negotiations following the uneventful end of the UN climate summit in Copenhagen and questions the commitment of world leaders, specifically Stephen Harper, to take seriously the threat that climate change poses.

“I’m not at all convinced that Stephen Harper fully understands the scale of the climate crisis and appreciates the opportunity this presents to meaningfully re-invest in our economy,” Lewenza said. 

“The Conservative government’s inaction on climate change is leading Canada down a very dangerous path, both environmentally and economically. Our government clearly has no vision for a sustainable economic future and Canadian workers stand to suffer most.”

Global climate negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) closed in Copenhagen on December 18 without coming to terms on a new legally binding international climate treaty.  

In place of a new global climate treaty, government negotiators at the annual UN climate summit came to terms on a political accord (the Copenhagen Accord), that outlines the international community’s desire to combat harmful global warming but does not outline any concrete steps as to how that goal will be achieved.

Over the course of the two week summit, Canada faced intense criticism from environmental advocates, Indigenous groups and trade union leaders for obstructing negotiations and allegedly weakening its own industrial emission reduction targets.

Canada was awarded the dubious Fossil of the Year award by the Climate Action Network for doing the most to obstruct progress on climate negotiations.

Structured more as a pledge for action on climate change, the Copenhagen Accord states countries should continue to work cooperatively in the long term to ensure, among other items, that global temperature increases do not exceed 2 degrees Celsius over pre-industrial levels. The three page document also includes new financing commitments that support climate change efforts in developing countries.

The Accord, unlike other global climate efforts, was agreed to by all major world economies including the United States (one of the major countries not to have ratified the Kyoto Protocol). UN Secretary-General Ban Ki-Moon has urged all countries under the UNFCCC to sign on to the voluntary Accord as quickly as possible.

Further climate negotiations are set to take place throughout 2010 with the next climate summit (COP16) to be held in Mexico City at the end of the year.

Higher Canadian Content Rules for TTC Bus Purchases

The Dec 16, 2009 Toronto Transit Commission decision requiring 50 per cent assembly labour in Canada for new public transit buses is an important step forward in creating good, green jobs for Canadians, the CAW says.

The new policy also requires a minimum of 40 per cent overall Canadian content in a standard diesel bus.

CAW President Ken Lewenza applauded TTC chair Adam Giambrone and the City of Toronto led by Mayor David Miller for standing up for stronger Canadian content rules, more direct assembly in Canada and for creating more green jobs.

“Other levels of government must adopt the same policies,” Lewenza said. It’s vital that our elected leaders make the same commitment to using public dollars to create Canadian jobs and to building a stronger economy for all,” Lewenza said.

Government has an important role to play in helping build the Canadian economy, especially at a time of economic hardship, said Jenny Ahn, CAW director of membership mobilization and political action.
“After thoroughly examining this issue, the TTC has taken a very important step in ensuring that when local government buys public transit buses with public dollars, those funds will be used to maintain jobs in Canada,” Ahn said.

Many governments around the world including those in Europe, Asia and the United States recognize the importance of domestic procurement policies. In the U.S. “Buy America” rules have been in place for more than three decades – these rules mean that public transit purchases must have 60 per cent domestic content and final assembly in the U.S.

The TTC’s decision will help create jobs in the Canadian manufacturing sector which has been hard hit in recent years and especially during the current recession. 

The CAW represents workers at Orion Bus Industries in Mississauga, Nova Bus in Quebec and New Flyer in Winnipeg.

Workers Receive Owed Monies Following Plant Occupation

Workers at M&I Air Systems received their pay cheques in the days following a plant occupation and demonstration by the workers and supporters, held on December 21.

The Mississauga, Ontario plant suddenly closed its doors on December 15, throwing 180 people out of work, 150 of which were members of CAW Local 252. The employer refused to pay outstanding monies owed to the workers following the closure, which prompted the workers to take immediate action.

“The action taken by these workers was absolutely necessary, as the employer refused to have any dialogue with the local union and/or the local plant committee,” said CAW Local 252 President Abbot Harvey. “This situation underscores one more time, the importance of legislative protection for workers and their families.”

The union is still working on securing vacation pay, as well as an additional week's pay.

"Without the show of solidarity and support, the workers here would have never seen the money that was owed to them," said Sukhvinder Johl, CAW national representative. "It's an important reminder that even when the situation looks bleak, our actions as a union do make a difference."

The workforce is primarily first generation Canadians with a range of seniority from a few years up to 20 years. The company has not filed for bankruptcy protection and there is still hope that it will re-open.

M&I Air Systems manufactures air handling and ventilation units.

CAW to Represent Gibraltar Mine Workers

The CAW has won a vote to represent the 315 workers at Gibraltar Mine just outside of Williams Lake, British Columbia. The vote was between the CAW and CLAC, with members voting by more than two thirds in favour of joining the CAW. CLAC is the Christian Labour Association of Canada.

The members will be represented by CAW Local 3018, which already has an office in Williams Lake.

“We believe the change in union representation will not only have a positive impact on members but also the surrounding area as the local union will once again be able to support local community groups,” said CAW National Representative Murray Gore, an organizer for the union who worked with the group at Gibraltar.  

Tentative Agreement Ratified at Jazz Air

CAW Local 2002 members at Jazz Air have voted 79 per cent in favour of a tentative agreement reached with the regional air carrier.

The three and a half year agreement covers customer service and aircraft services employees and comes after talks with a federally-appointed mediator. CAW Local 2002 represents 950 customer service and aircraft service workers at Jazz. In November, an earlier agreement was rejected by the membership, as was an initial agreement back in August. 

“We thank the membership for their patience throughout the challenging process of negotiating and ratifying this collective agreement,” said Shirley Anderson, Jazz Air service chairperson. “We heard clearly from our members that they wanted the week’s vacation back that we all had to give up during the CCAA process and no-one wanted to be forced into a rigid work hours structure. I think we were able to accomplish both of these goals.”
  
The agreement includes a cash/vacation bank which sets aside a percentage for each hour worked into a bank that can later be either taken as cash or vacation. It also includes a two per cent wage increase in each year of the agreement and changes to the part-time language which allow for minimum guaranteed hours, to be voted on base by base.

“While the process was long and at times frustrating, it did afford us the opportunity to communicate directly with our members during the ratification process and a special leadership meeting,” said Bob Orr, Assistant to the CAW National President.

“That allowed us to ensure we bargained the right agreement. The committee worked extremely hard and had to deal with the pressure of bargaining under enormous scrutiny and external factors present in the airline sector. I’m pleased we were able to reach a deal that was approved by our members without a work stoppage and the hardship that creates.”

In September, Jazz's technical service workers also ratified a three year agreement. CAW Local 2002 represents 900 workers in the technical services department. They voted 61 per cent in favour of the agreement. 

Need for Tougher Laws after Vancouver Bus Driver Attacked

CAW Local 111 is calling on the federal government to introduce tougher legislation to protect transit drivers, following a vicious Boxing Day attack on a Vancouver bus driver.

In the attack the driver of a passenger vehicle refused to move his car from the clearly marked bus stop and subsequently boarded the bus and punched the driver in the face.

“In 2009 we have had nearly 150 assaults on bus drivers in Metro Vancouver – that is totally unacceptable and we need action from the federal government to make these attacks subject to tougher sentencing, including jail time,” said CAW Local 111 President Don MacLeod.

MacLeod said the union continues to offer a $2,000 reward for information leading to a conviction in serious bus driver assaults. In this case police were able to arrest the attacker shortly after the incident, thanks to assistance from bus passengers and the driver.

“Public transit should be a safe way of travelling throughout Metro Vancouver and yet our drivers are being assaulted at a rate of one almost every other day. This poses a significant threat to both members’ and public safety,” MacLeod said, as some of the attacks have happened while the buses were in motion.

“Punishing the offenders more severely is not the only answer but it certainly sends a message that these attacks will send you to jail, so think twice before you hit a bus driver.”

The union continues to push for adoption of a private members bill introduced by Burnaby-New Westminster Member of Parliament Peter Julian to give bus drivers and transit operators the same protections under the Criminal Code afforded to police and ambulance personnel if they are assaulted while performing their duties.

Anniversary of Commitment to Support Auto Industry

CAW President Ken Lewenza is commending the federal and provincial government for taking dramatic action one year ago to support the domestic auto industry, which at the height of the financial crisis was on the verge of collapse.

In a joint press conference on December 20, 2008, the Ontario and federal government pledged, along with the U.S. government, to inject the necessary funds into both Chrysler and General Motors to keep the companies afloat and save tens of thousands of jobs. 

Lewenza said that although this year has been a difficult one for the auto industry, without government support, the industry would now be in ruins, including the immediate loss of thousands of jobs.

 “The loss of North American producers would have had a devastating ripple effect right across the economy, making it that much more difficult to pull out of the recession as tens of thousands of jobs would be eliminated in communities across the country.”
“Although supporting the auto industry came at a seemingly high expense, the cost of doing nothing would have been much greater. Workers in these value-added jobs make important contributions to our communities – in the form of taxes which go towards the strong public services upon which all Canadians rely and value.
The CAW represents approximately 8,000 Chrysler workers, 12,000 General Motors workers, including at CAMI in Ingersoll and 25,000 independent parts supplier workers.

Highest Paid CEOs Pocket Average of $7.3 Million in 2008

The 100 highest paid Canadian CEOs took home an average of $7.3 million in 2008, which is 174 times more than the average Canadian wage, a new report by the Canadian Centre for Policy Alternatives states.
           
This came at a time when the recession was hitting working Canadians hard, CCPA economist Hugh Mackenzie said.

He said average compensation for the top CEOs outpaced inflation by 70 per cent between 1998 and 2008. During the same period, those earning the average income lost six percent to inflation, he said.

Canadians will work full-time for a year to earn the national average of $42,305, Mackenzie said. The top 100 CEOs pocket that amount by 1:01 p.m. on Jan. 4 – the first working day of the year,” he said.

To read the full CCPA study, please visit www.policyalternatives.ca/publications/reports/soft-landing

Members Ratify Agreements at Leamington Hospital

CAW Local 2458 members at Leamington District Memorial Hospital in Ontario have overwhelmingly voted to ratify three-year collective agreements covering 50 workers in the Lab/x-ray tech unit and 70 workers in the service unit.

The service agreement was ratified by 83 per cent and the tech agreement by 93 per cent.

The service agreement includes a two per cent wage increase in each year with wages retroactive. There is also a special RPN adjustment of 0.15 cents per hour in each year of the agreement. There are shift and weekend premiums increases, an increase in bereavement leaves, as well as other monetary and working conditions gains.

The tech unit agreement includes a 2.5 per cent wage increase in the first and second years and a two per cent increase in the third. Also included are shift premium increases, an increase in bereavement leave and gains in other monetary and working condition issues.

“These two agreements mean these CAW members have made important progress in this round of bargaining,” said CAW national representative Jack Robinson.

Local 2458 President Bruce Dickie said many Ontario hospitals settled contracts prior to Christmas which include modest wage increases. But he said Windsor Regional Hospital CEO David Musyj continues to play scrooge with more than 700 Local 2458 health care members at that facility by demanding wage freezes. “After Musyj’s wages increased by 81 per cent over the past few years he can hardly claim to be the poster child for wage restraint,” Dickie said.

Skilled Trades Support

CAW/Mine Mill 598 President, Richard Paquin, and CAW Skilled Trades Northeastern Council President, Jake Noland, recently donated to USW Local 6500 president John Fera a cheque for $1000 on behalf of CAW national Skilled Trades Council and CAW Skilled Trades Northeastern Council to assist the workers who have been on strike since July 13, 2009. CAW Skilled Trades Council President Dave Cassidy said “this donation is intended to show our support for these workers who are facing an incredible struggle.”

Labour Activist Recognized

Robin Dudley, president of CAW Local 1917 and chairperson of Hitachi Truck in Guelph, Ontario was named Activist of the Year by the Grey-Bruce Labour Council.

Since being elected CAW Local 1917 president in 2008, Robin has started up a flying squad at the local, led the local union to a number of demonstrations on pensions and Employment Insurance as well as other workplace support measures across south-western Ontario. Robin is an outspoken advocate on issues of EI, Canadian procurement requirements and a number of other issues affecting working people across the country.
Robin is also the president of the CAW Truck, Bus and Specialty Vehicle Council. He lives in Hanover, Ontario.

Nova Scotia Must Support Yarmouth Ferry Service

The Nova Scotia government’s decision to no longer provide funds for the Yarmouth ferry service should be immediately reversed, CAW Atlantic area director Les Holloway says.

Nova Scotia Premier Darrell Dexter has indicated his government will no longer provide ongoing funding for the high speed Yarmouth ferry service that connects Nova Scotia to Maine. CAW Local 4315 represents 50 workers on the Yarmouth ferry service.

“The immediacy of re-establishing the funding cannot be overstated as we are already seeing the negative economic impact this decision to cut funding is having,” Holloway states in a December 23 letter to Dexter.

“The ferry services throughout our province are an integral and important part of our province’s transportation system and as such, they require and deserve this government’s support no less than other modes of transportation.” Holloway stressed that the province’s decision could also negatively effect federal funding for other Nova Scotia ferry services.
Holloway also urged Dexter to set up a discussion/consultation process with all parties on a long-term viable option to ensure ongoing ferry service in Yarmouth.

CAW Connected

Ever wish you could get up-to-the minute campaign information, leaflets and links to resources sent right to your inbox?  Well… have you heard of CAW Connected? 

CAW Connected is an exciting new communication system which allows activists right across the country to keep in touch with current campaigns and important issues in the union and find out how to get involved.  It’s the first of it’s kind of any union in the country!  

After you sign up, you’ll hear from us once or twice a month with the latest information on campaigns and how you can get involved.

The success of CAW Connected depends on you!  So sign up today! Visit: www.caw.ca/connected

Making Green Jobs Happen

On January 30 the Centre for Civic Governance at the Columbia Institute is organizing an afternoon forum at the Direct Energy Centre in Toronto entitled Making Green Jobs Happen. The forum is designed to look at practical strategies for green job creation in the province of Ontario, and includes workshops on financial municipal retrofit programs, green schools as well as green jobs strategies for Ontario communities.

For more information, and to register online for the Conference, visit: www.civicgovernance.ca/ontario. Conference registration is $75.

CAW Welcomes New Members

Ford upgrades in-car technology

Bryce G. Hoffman / The Detroit News
Jan 7, 2010

One of the most eagerly awaited unveilings at this year's International Consumer Electronics Show in Las Vegas is not from Sony or Dell, but from Ford Motor Co. -- a new automobile interface that the company says will change the way motorists interact with their cars and trucks.

Dubbed "MyFord Touch," the new system replaces most of the old-fashioned analog gauges and buttons on the dashboard with full-color, touch-sensitive computer screens. It also incorporates the latest version of Ford's Sync -- the onboard infotainment and voice-controlled communications system the automaker developed with Microsoft Corp.

"It's a fantastically smart design that allows us to be connected to an integrated world," CEO Alan Mulally told The Detroit News. "It's easy to operate. Your hands are on the wheel. Your eyes are on the road."

Derrick Kuzak, Ford's head of global product development, said it is all about providing customers with the same connectivity in their cars that they have come to expect everywhere else.

"We saw people becoming addicted to connectivity. We connected the dots to create Sync," he said. "(Now) we are continuing to connect the dots to deliver the cars of tomorrow today."

The MyFord Touch interface -- "MyMercury Touch" and "MyLincoln Touch" on Mercury and Lincoln vehicles -- retains the traditional dashboard layout and analog speedometer, but replaces the rest of the gauges and lights with three full-color LCD screens.

The new interface will be familiar to anyone who has used an iPod, PlayStation or just about any other contemporary electronic device: nested menus, five-way thumb controls and an animated, three-dimensional carousel browser that bears more than a passing resemblance to Apple Inc.'s Cover Flow.

Much of the information displayed on each of these monitors is customizable by the driver.

"MyFord really is about managing information," said Jason Johnson, one of the engineers who designed the interface. "The steering wheel has all the necessary functions available in a very compact area, right where your hand falls as you grab the wheel."

Many of the functions also can be controlled using voice commands, thanks to the latest generation of Ford's Sync system.

In addition to giving drivers voice control over their connected cell phones and music players, the new version of Sync that Ford is slated to unveil today will transform the automobile into a mobile Internet hub that brings together all of the technologies people have come to depend on in an increasingly wired world.

As The Detroit News first reported last month, the new version of Sync will include an open-source program interface that will allow the system to control virtually any application on a connected smart phone or music player. Today, Ford is expected to demonstrate the first of these, including a Sync-controlled version of the popular music streaming service Pandora.

In addition, the latest version of Sync can provide turn-by-turn navigation with real-time traffic reports, sports scores and news.

The new version also includes a more advanced phone book application that allows drivers to add photographs of each person in their contact list and browse by picture. The same system allows users to browse for music by scanning through a collection of album covers. The voice command system has been improved and the 911 Assist feature now can provide emergency dispatchers with more information.

Owners of Sync-equipped vehicles will be able to download the new version free of charge.

New hardware features include a second USB port and SD memory card slot, audio-visual input jacks and mobile Wi-Fi capability. Users can even connect a keyboard to Sync.

MyFord Touch will debut on the 2011 Ford Edge, which will hit dealer showrooms in late summer. It will be rolled to 80 percent of Ford, Lincoln and Mercury nameplates in North America within five years and also will be offered globally on select vehicles.

While many of the features Ford is offering with Sync and MyFord Touch have been introduced separately by other automakers, it is the first manufacturer to integrate them into a single package and make them a mass-market offering on all of its cars and trucks.

"It's led to a lot of the positive growth in their vehicle sales," said analyst Mark Boyadjis of iSuppli Corp., who added that it has helped Ford connect with an entirely new customer base. "Ford has made a name for itself at CES. Five or six years ago, there wasn't anything particularly advanced about Ford cars. It's a positive for their sales, it's a positive for their brand recognition."

But Boyadjis said Ford is facing increasing competition from other automakers as this sort of technology becomes more widely available.

Union vows fight if GM
changes Impala plans

Greg Keenan

Globe and Mail - Jan 7, 2010

The Canadian Auto Workers union vows to battle any plan by General Motors Co. to shift production of some Chevrolet Impala models from a plant in Oshawa, Ont., to a plant in Michigan.

"We own the Impala," said Chris Buckley, president of CAW Local 222, which represents 3,000 active workers and another 1,2000 on layoff at GM's two car plants in Oshawa, including one that now is the only GM factory turning out Impalas.

"If General Motors is going to make a decision to source it anywhere else, they have a fight on their hands," Mr. Buckley said yesterday. "The Impala is a Canadian-made vehicle; we own the rights to produce it in Canada and we're going to continue to produce it in Canada."

His comments came one day after the Automotive Parts Manufacturers' Association of Canada issued a notice to its members stating that GM plans to assemble the Impala in both Oshawa and a plant in Hamtramck, Mich., near Detroit, when the auto maker begins cranking out the redesigned version of the car in 2013.

Splitting production between the two plants, APMA said, could cut output in Oshawa to 400,000 units annually from a planned target of 500,000. GM's Oshawa complex and its Cami Automotive Inc. factory produced a total of 350,000 vehicles last year.

In response to the APMA notice, General Motors of Canada Ltd. issued a statement saying it will meet federal and Ontario government requirements that it maintain 16 per cent of its North American vehicle production in Canada.

"Inferences of a reduction in our Canadian production volume plans are simply inaccurate," the GM Canada statement said. The company said it recently announced that the Buick Regal will be added to the Chevrolet Camaro at its other Oshawa assembly plant in the first quarter of 2011 and that two more vehicles will be added later.

It did not identify the two vehicles, but did not dispute the APMA statement that identified the two cars as the Cadillac XTS and the Impala.

The auto maker also did not deny APMA's assertion that production of the Impala will be split.

Mr. Buckley said the CAW is trying to convince GM to keep the current Impala plant open after 2013 when production of the replacement vehicle begins at the newer, flexible plant.

The GM Canada restructuring plan submitted to the governments last February shows no new product at the Impala plant after 2013 "and there has been no change to that," company spokesman Tony LaRocca said yesterday.

If the CAW is unable to persuade GM to keep that plant open, it would mean the once-mighty GM Oshawa operation would be down to just a single plant, compared with three plants during the glory days before the 2008 recession.

The new Oshawa cars, and the Chevrolet Equinox and GMC Terrain made at GM's plant in Ingersoll, Ont., are likely to mean that GM will be able to comply with the governments' 16-per-cent production requirement in the 2014-2015 time frame, noted Bill Pochiluk, president of consulting firm AutomotiveCompass LLC.

But shifting some Impala production has the potential to be bad news for Ontario, Mr. Pochiluk said. "There is no way you can paint this as a win when you're giving up half of it to Hamtramck."

CAW president Ken Lewenza said that if production is split between two plants, the union will seek a commitment from GM that such a move will have no negative impact on Oshawa.

He added that he is seeking a top-level meeting with GM to discuss a number of issues, including production.

Ford steals show at Vegas
electronics summit

Daniel Howes

At a time when the most tired of tired Detroit mantras -- "they don't build what anyone wants to buy" -- is akin to holy writ, when magazine covers herald the "Extinction of the car giants," when books are titled "The End of Detroit," Ford Motor Co. is proving once again just how wrong conventional wisdom can be.

For the hottest thing at this week's Consumer Electronics Show is the Blue Oval's "MyFord Touch" and its latest version of Sync. The package combines the infotainment system with simplified computer touch screens that allow drivers to manage everything from climate control and iPod selections to hearing text messages and the latest headlines.

Cool? You have no idea. Easy? Easier than it's ever been. MyTouch will be standard equipment on selected models for the 2011 model year and will roll out in successive years -- which suggests just how aggressively Ford is pressing an advantage it staked with the first Sync systems it unveiled before the global auto market imploded.

Car buyers are paying attention. According to Ford, 70 percent of Ford, Lincoln and Mercury buyers opted for Sync; vehicles equipped with Sync sell twice as fast as those without it; 32 percent of Ford's customers said Sync was "critical" to their decision; and 77 percent of Ford customers said they would recommend Sync to others.

Numbers like those are the makings of a winner in just about any industry. For one of Detroit's three automakers, albeit the one with the strongest market presence right about now, that and rising market share are compelling evidence that reports of its death have been exaggerated.

What does it say about Ford that CEO Alan Mulally, for the second year running, is the keynote speaker today at the Las Vegas electronics show, the cathedral for cool tech that's about as far as you can get in mind from the stereotype of Old Clueless Detroit?

"To be invited to be the keynote with all these consumer electronics wizards," Mulally told The Detroit News this week, "is the all-time testimony that Ford is relevant."

That and more. What MyFord Touch promises to do -- essentially, replace a one-way relationship between man and machine that has existed since the days of the Model T -- may be less important than what it represents for Ford and, to some extent, Detroit's auto industry.

Barring some kind of software meltdown, Sync and MyFord Touch could be the killer app underscoring evidence that Ford's turnaround is real. Ford's black ink in every part of the world -- including the bellwether United States -- is being driven by well-executed cars and trucks offering innovative, easy-to-use technologies developed by an industrial icon.

A few years ago, you'd be hard-pressed to write that statement, much less have any credible evidence to back it up. But the numbers -- and the trends -- don't lie:

Profitability is returning to Ford, particularly in North America. Market share is inching higher. Sales in December surged 32.8 percent -- more than rival Toyota. Shares in Ford are trading near 52-week highs. Quality and perception of Ford products are improving, according to Consumer Reports, second only to Toyota. The cadence of new vehicles shows no sign of slowing this year.

Next week, at the North American International Auto Show, Ford is expected to show an all-new Focus compact and a thoroughly revised Lincoln MKX crossover, set to reach dealerships with its Ford Edge sibling by midyear. Also coming this year is the Fiesta subcompact, perhaps just in time for rising gas prices goosed by a recovering economy.

Bottom line: Leadership, vision and execution can reverse even the most dreadful declines, given time and money. Yeah, the hottest thing this week in the world of high tech isn't from Apple in Silicon Valley or Microsoft in Seattle.

It's from Dearborn, courtesy of an Old Economy company founded in 1903. How cool is that?

GM may restore 'hundreds' of dealerships, Whitacre says

Robert Snell And David Shepardson / The Detroit News
Jan 7, 2010

General Motors Co. Chairman and CEO Edward Whitacre Jr. said Wednesday he expects "hundreds" of dealers could be reinstated during dealer arbitration hearings.

Congress last month ordered GM to allow more than 1,300 dealers that it slated for closure by the end of 2010 to request independent reviews in challenging their closings. The legislation, which also applies to Chrysler Group LLC, was signed into law by President Barack Obama.

On Dec. 31, Chrysler Group LLC asked the U.S. Bankruptcy Court to throw out state laws that sought to make it easier for its 789 closed dealerships to reopen. The effort seeks to toss new laws in Illinois, Maine, North Carolina, and Oregon.

On Wednesday, Chrysler spokeswoman Shawn Morgan said the company still has not decided whether it will fight the federal legislation.

In a wide-ranging discussion with reporters Wednesday at the Renaissance Center, Whitacre said he predicts GM, which emerged from bankruptcy in July with about $50 billion in federal aid, will return to profitability this year and could start offering shares of the company's stock as early as late 2010.

Whitacre said many dealers -- potentially "in the hundreds" -- likely will be reinstated. But he said he doesn't think the process is a risk to GM's future.

Later, he backtracked slightly, saying it could be as few as 100. "Please don't take 'hundreds' to be a thousand -- it could be a hundred," Whitacre said. "I don't know the number, but it is a substantial number. I think it can be good and bad."

He said GM might benefit from some dealers being reinstated.

"The bad thing would be if they're a lousy dealer that has a lousy storefront and through some process they're put back in arbitrarily: That wouldn't be a good thing," Whitacre said.

He conceded GM probably "made some mistakes" in how it selected dealers for closure.

"It was a pretty arbitrary cutoff point, but you have to do it that way," Whitacre said. "It probably caught some good ones and probably missed a bad one or two."

The possibility of a few hundred dealers being reinstated is significant, an industry analyst said.

"That would signify GM wasn't terribly forthright in the criteria they used in determining which ones they closed to begin with," said auto analyst Aaron Bragman of IHS Global Insight. "If it could stand up in court, it wouldn't be an issue."

Whitacre is not confident GM will sell its Saab brand, and he still expects to wind down the unit by the end of the week despite trying hard to find a buyer. The brand's imminent death is simple to explain, he said.

"It's real easy. Just show up with the money and you can have it," Whitacre said.

"No one's come up with the money."

He also said newly hired Chief Financial Officer Christopher Liddell could be a candidate for CEO, but that would be up to the board. GM has been searching for a permanent CEO since Fritz Henderson resigned Dec. 1.

Last month Whitacre oversaw the exit of the company's longtime top lobbyist, Ken Cole, and replaced him with two lobbyists with ties to Whitacre's former employer, AT&T. Whitacre said he is looking to repair "strained" relationships in Washington.

He said some didn't approve of the company's $50 billion bailout.

"For the most part, we're done" with significant personnel changes, Whitacre said.

While declining to suggest his market share targets for GM sales, Whitacre reiterated his desire for GM to boost its market share.

"We have metrics established, and (we are) holding people accountable," he said. "We're after profitability first. ... We're in business to make a profit."

Ford stock upward of $11
per share, a high since 2005

Bryce G. Hoffman / The Detroit News
Jan 6, 2010

Ford Motor Co.'s stock increased past $11 a share today -- the first time it has traded that high since 2005.

Yesterday at midday, shares in the Dearborn automaker were up 7.88 percent at $11.07, following the release of strong December sales numbers. Ford's stock was also buoyed by Monday's announcement that the company had covered all of its current obligations to a union-run trust for hourly retiree health benefits and made an extra payment of $500 million towards its future obligations.

FORD BRAND #1 IN CANADA

Ford F-Series best-selling vehicle in Canada;
2009 sales up 7%; December sales up 26%

Jan 6, 2010

2009 Highlights:

December Highlights:

OAKVILLE, Ontario, January 5, 2010 – With more new product launches than any other automaker for 2009, Ford is the best-selling brand in Canada and the Ford F-Series reclaimed its title as the best-selling vehicle in the country.  F-Series has also been the top-selling pickup truck in Canada for a record 44 consecutive years. Ford Taurus, Fusion, Edge, Flex and Lincoln MKZ, MKX all registered sales increases over previous year's sales, reported Ford Motor Company of Canada, Limited today.

"Our products drove our sales success in 2009. Canadian consumers showed confidence in the Ford brand and recognized the quality and value in our lineup," said David Mondragon, president and CEO, Ford of Canada. "We grew our sales despite a down industry, powered by the freshest showroom in the country."

December also marked the fourteenth consecutive month of market share increases at Ford of Canada and a sales jump of 26 per cent marked the company's seventh straight month of retail sales gain.
With a sales increase of 46 per cent, the Lincoln lineup also saw strong performances with MKZ leading the pack. The Oakville-built Ford Flex, Ford Edge and Lincoln MKX also helped to increase sales at Ford of Canada.

"The industry continues to show signs of strength and we see a modest recovery coming in 2010. Ford of Canada is well positioned to experience growth by offering leading products that consumers want and value," said Mondragon. "In fact, we have 10 launches for 2010, from all-new products, to advanced powertrains and innovative technologies – our lineup this year will have something for everyone."

December Results
In December, Ford of Canada's overall sales increased 25.5 per cent with total car sales up 9.5 per cent and total truck sales increasing 30.1 per cent compared to last December.

Chrysler, Ford, GM report
double-digit drops for 2009

Associated Press / Detroit News staff and wire reports
Jan 6, 2010

Detroit -- Big automakers are glad to see the end of 2009, the worst year for U.S. sales in nearly 30 years.

General Motors reported sales of 2.08 million vehicles in 2009, off 30 percent from the previous year. Its December sales were down 6 percent from the previous month.

"The year-over-year comparison reflects a 38 percent reduction in fleet, reduced overall incentive spending and the orderly wind-down of the Pontiac and Saturn brands," said Susan Docherty, GM vice president, U.S. sales.

Chrysler had its worst sales year in 47 years in 2009.

The automaker sold just over 931,000 cars and trucks last year. Sales last dropped below 1 million in 1962.

The struggling automaker says its sales fell 36 percent from 2008 as the company received government aid and worked through bankruptcy protection.

But spokeswoman Kathy Graham says sales improved over November under Chrysler's plans to show steady progress each month.

Still, there were signs of progress. Ford ended the year with a bang, with December sales up 33 percent. The automaker says it gained U.S. market share for the year for the first time since 1995.

But Ford reported sales of 1.68 million vehicles in 2009, a 15.4 percent decrease from the previous year.

Japanese automaker Nissan reported an 18 percent rise in December sales from the same month a year earlier, thanks to higher sales of its Versa compact car. But for the year, sales dropped 19 percent. Subaru of America Inc. said 2009 sales rose 15 percent, and December sales climbed 33 percent, ending a year the company said was its best ever for sales and market share.

Toyota reported sales of 1.55 million vehicles in 2009, a 21 percent decrease from 2008. However, its December sales were up 34 percent over the previous month.

The auto industry underwent a radical transformation in 2009, one of the most turmoil-filled years in its more than 100-year history.

Chrysler and General Motors, which both filed for bankruptcy protection after nearly collapsing, are still suffering as they struggle to revive sales and pay back huge government loans. Ford has been a relative bright spot, but also needs sales to pick up this year.

Total U.S. auto sales, reported later Tuesday, are expected to drop to levels not seen for three decades. Joblessness climbed higher than 10 percent, and buyers stayed away from showrooms, worried that automakers like GM and Chrysler might not survive. The last time sales were so low was in 1982, when 10.5 million cars were sold during another deep recession.

Last summer, the government's "cash for clunkers" program eased the pain by reviving sales with $2.85 billion in government-backed rebates. Americans responded, buying nearly 700,000 vehicles. But for the most part, 2009 was a dismal year for new vehicles.

Meanwhile, China surpassed the United States as the largest auto market, with sales expected to top 12 million in 2009. Asian manufacturers like Hyundai surged by selling more affordable cars, though stalwart Toyota stumbled on factors like its biggest U.S. recall ever over accelerator problems.

Japan's auto sales were equally poor last year. Sales declined to the lowest level in 38 years, to 2.9 million vehicles. But Germany, another major auto producer, said that car exports were up in the quarter and year as the effects of the economic downturn eased.

FORD TRANSFERS ITS UAW RETIREE HEALTH CARE LIABILITIES TO VEBA TRUST AND PRE-PAYS VEBA DEBT

DEARBORN, Mich., Jan. 5, 2010 – Ford Motor Company announced today that on Dec. 31, 2009, it completed the transfer of its UAW retiree health care liabilities to the UAW Retiree Medical Benefits Trust (“VEBA Trust”).

Pursuant to a court-approved settlement agreement, the transfer of these liabilities was implemented by Ford transferring on Dec. 31 the following assets to the VEBA Trust: 

Also on Dec. 31, Ford made the following payments on the New Notes:

As a result of these actions, the New Notes will represent about $7 billion in incremental debt on Ford’s balance sheet.

“The transfer of these health care liabilities to the VEBA Trust is the culmination of several years of work and will significantly improve our competitiveness in the U.S.,” said Lewis Booth, Ford’s chief financial officer.  “We have removed a substantial health care liability from our balance sheet and have significantly reduced health care expenses.  We also have shown confidence in our liquidity and One Ford plan by pre-paying $500 million of debt owed to the VEBA Trust.”

Additional details about this transaction are included in Ford’s Current Report on Form 8-K filed today with the U.S. Securities and Exchange Commission.

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

Ford finishes VEBA transfer

Hourly workers put in union health trust; carmaker pays $500M

Bryce G. Hoffman / The Detroit News
Jan 5, 2010

Dearborn -- Ford Motor Co. announced Monday it had completed the transfer of all its U.S. hourly retiree health care liabilities to a union-run Voluntary Employees' Beneficiary Association, or VEBA, and made an extra payment of $500 million toward its future obligations to the trust.

Though Ford had the option of covering up to half of the health care fund payment with company stock, it paid the full amount in cash.

The company has now contributed approximately $6 billion in cash to the VEBA and issued some $7 billion in bonds to cover the remainder.

"The transfer of these health care liabilities to the VEBA trust is the culmination of several years of work and will significantly improve our competitiveness in the U.S.," said Lewis Booth, Ford's chief financial officer.

"We have removed a substantial health care liability from our balance sheet and have significantly reduced health care expenses. We also have shown confidence in our liquidity and 'One Ford' plan by prepaying $500 million of debt owed to the VEBA."

In addition to tapping its available cash, Ford funded the VEBA with previously announced debt offerings that added approximately $7 billion to its debt load, which totaled $27 billion at the end of the third quarter.

But as these payments were anticipated, analysts had already been adding that amount to the company's long-term debt calculations.

Analyst Shelly Lombard of Gimme Credit said the fact that Ford did not exercise its stock option and was able to make an extra payment is a "sign of the strength of their balance sheet."

"They know how important cash is," she said.

"It was the only thing that got them through this down cycle. So it says a lot about their financial health and their outlook for auto sales in the coming year."

Wall Street reacted favorably to the VEBA news Monday, sending Ford's stock up 2.8 percent to close at $10.28 a share.

The United Auto Workers agreed to assume responsibility for Ford's hourly retiree health care obligations as part of its 2007 labor agreement with the company.

The rising cost of providing health care to retired factory workers has long been a drag on the company's bottom line and the source of anxiety for investors.

The union negotiated similar deals with General Motors Co. and Chrysler Group LLC.

Here's the Buzz on unions today

The former head of the Canadian Auto Workers sees a systematic
assault on organized labour, blaming the 'axis of evil': deregulation, privatization and globalization.

Globe & Mail  Jan 2, 2010

As globalization has accelerated its pace and broadened its scope, workers the world over seem to find themselves in an increasingly precarious state.

There has been much chatter, over recent decades, about the general decline of unions and their diminishing influence in and relevance to the lives of Canadian workers. Fewer and fewer are dues-paying members.

In public discourse, to bash unions is de rigueur. They are everyone's favourite piñata, the source of myriad ills: enemies of productivity and progress; bureaucratic; anti-democratic; an intractable, greedy and anachronistic force.

During these last two years of the most profound economic crisis to confront the world since the 1930s, unions have come under increasing scrutiny. They are frequently upbraided by politicians and skewered in editorial pages, talk radio and on cable TV. They are accused of being mired in self-delusion, derided as pathologically obsessed with their sundry entitlements, portrayed as an inveterate threat to economic recovery.

In his intriguing new book, Laying it On the Line: Driving a Hard Bargain in Challenging Times, which is part memoir, part manifesto, part collective bargaining primer, part prescription for the crisis facing the auto sector, Basil Eldon "Buzz" Hargrove, the former national president of the Canadian Auto Workers (CAW) responds to the critics.

Hargrove's story begins in the New Brunswick "bush" in the 1940s. He is raised "in poverty and hopelessness" in a crowded house with no running water, electricity or central heating. The high-school dropout eventually leaves the Maritimes, ends up on a Chrysler assembly line in Windsor, and becomes active in the labour movement. The union becomes his finishing school, his salvation: "... I was elected shop steward. For the first time in my life I was responsible to someone beside myself, and almost overnight I changed from a hell-raising young guy spending his off-hours in beer halls and at the racetrack to a union advocate discussing left-wing politics and strategy."

There is a Horatio Alger aspect to this tale. Our protagonist, though, is clearly less an Ayn Rand "rugged individualist" and more a "man of the people" collectivist.

Hargrove is a passionate believer in the power of unions and thinks they are unfairly maligned by government and the "corporate controlled" media. He maintains that unions are a civilizing force that defend the rights of workers. They enable working people to gain "a voice and fair wages," but also engender pride, dignity and a sense of community in an atomized world.

In spite of a precipitous 10 per cent decline in union membership in Canada in the last 20 years, Hargrove argues that unionized workers remain more stable, better paid and far more productive than their non-unionized comrades. Unions, he insists, are good for women - they get paid more - and help produce a solid middle class, which is a bulwark of democracy.

He rails against what he considers a systematic assault on working people and organized labour, He blames the "axis of evil": deregulation, privatization and globalization.

He also lambastes former Ontario Conservative premier Mike Harris, federal Finance Minister Jim Flaherty and Prime Minister Stephen Harper for what he deems their fanatical fealty to free trade and market-based solutions. He holds their laissez-faire philosophy responsible for the evisceration of Canada's once robust manufacturing sector and the loss of hundreds of thousands of jobs.

Hargrove, though, is an equal opportunity critic. He peels strips off left-wing figures such as Jack Layton, Bob Rae and Sid Ryan - calling them arrogant and politically naive - along with corporate types such as Lee Iacocca, Robert Milton and Telus's Darren Entwistle - who are egotistical and boorish.

He dismisses the label "union boss" as pejorative, arguing energetically for the CAW's democratic bona fides. He presents his union as a paragon of transparency and accountability. On this matter, it seems Hargrove, the master salesman, is trying too hard to convince us.

Hargrove attributes the decline of Canada's auto industry to the unfortunate demise of the Auto Pact, our high dollar and the lack of import restrictions. He advocates "managed trade," not "free trade, and the implementation of a comprehensive national auto policy. He rejects the charge that unionized workers and their "excessive wages" are to blame for the Big Three's woes, countering that they amount to a measly seven per cent of the total cost of a vehicle. Rather, he takes the auto companies themselves to task for poor management practices.

Laying It on the Line is replete with surprising anecdotes, including a bizarre expletive-filled meeting Hargrove had with Stephen Harper; the PM did the swearing, Hargrove surmises, to "suggest he was one of the boys."

And who knew an unreconstructed socialist could harbour such affection for two of Canada's most unapologetic capitalists, Onex Corp's Gerry Schwartz and Magna International's Frank Stronach.

Hargrove's admiration for Stronach seems particularly odd given the auto-parts magnate's anti-union posture. And as if things couldn't get stranger, Hargrove reveals that in 1990, a cash-strapped Stronach sought million in loans from the CAW's strike fund for his then struggling firm: In the end he got the money elsewhere.

Hargrove says he supported using the strike-fund money to help the non-union company because the deal would have allowed the CAW to organize Magna workers.

Laying It on the Line reveals Buzz Hargrove to be a shrewd negotiator and a pragmatist of the first order, an unconventional man undaunted at the prospect of befriending should-be foes and alienating would-be allies.

Adrian Harewood is a writer and radio/television broadcaster in Ottawa

LAYING IT ON THE LINE Driving A Hard Bargain in Challenging TimesBy Buzz Hargrove
Harper Collins, 316 pages, $32.99

Windsor plant will build
new Mustang engine

Car will debut at Detroit auto show in January

Windsor Star Jan 1, 2010

Ford Motor Co., will unveil a redesigned 2011 Mustang GT that will be powered by an all-new 5.0-litre, V8 engine, which will be assembled at the Essex Engine plant in Windsor, the automaker announced Monday.

“The vehicle will go on sale in the spring,” with production of the new V8 beginning in early 2010, said Angie Kozleski, spokeswoman for the Dearborn, Mich., automaker.
The sporty vehicle and its new engine will make their debut at the North American International Auto Show in Detroit, which runs from Jan. 11 to 24.

“We’re excited that the 5.0 is back for 2011 in the Mustang GT. We’ve got a really loyal group of enthusiasts that are really passionate about Mustangs,” said Kozleski.
The V8 engine will deliver 412 horsepower, as well as up to 25 miles per gallon, or 9.4 litres per 100 kilometres, from a fuel economy standpoint, she added.

“This all-new 5.0-litre engine is the next chapter in the development of the world-class Mustang powertrain portfolio,” said Derrick Kuzak, Ford’s group vice-president, global product development. “It is a thoroughly modern engine for the times delivering the performance and fun-to-drive factor that enthusiasts want, while improving fuel economy.”

Ford announced in November that the vehicle would also house an all-new 3.7-litre, V6 engine with 305 horsepower. Monday’s announcement marks the return of the 5.0 litre Mustang engine, which was last seen in 1995 GT models.

The 2011 Mustang GT is expected to go head-to-head with two other Ontario assembled muscle cars — the hot-selling Chevy Camaro muscle car, which is assembled at General Motor’s facilities in Oshawa, and the Dodge Challenger SRT 8, which is produced at Chrysler’s plant in Brampton.

More important, the 5.0 litre, V8 engine could be used in other vehicles, including Ford’s F-150 pickup truck, said Eric Mayne, editor of news operations at wardsauto.com.

“You don’t develop a brand new engine for a vehicle that sells 100,000 units a year and this year, it’s going to come in less than that,” said Mayne.

“The obvious direction to point to is the F-150, which in Windsor’s case would be wonderful because it’s been the best-selling vehicle in North America for more than 20 years. In any engine plant, you want to be in a high-volume application. If the engine finds its way into the F-150, that’s a lot of job security for the people in Windsor.”

Kozleski would not comment on production plans at the plant, however, officials with the Canadian Auto Workers union have said the workforce would total about 200 when assembly of the new engine begins in the new year. With the help of federal and provincial funding, Ford reopened the Essex plant earlier this year with a view toward turning the facility into a flexible manufacturer of fuel-efficient engines and powertrain components.

Mickey Moulder, vice-president of the Canadian Transportation Museum in Essex, said the return of the 5.0 litre engine is welcome news for Mustang fans.
“In the 1980s, the 5.0 litre Mustang was the car,” said Moulder. “It was a fast, affordable and powerful sporty car for its time.”

But Ford stopped producing the engine in 1995 because of fuel economy shortcomings, he said.

The new Mustang is going to be “extremely competitive. I don’t know if it will lead the pack,” added Moulder. “The Mustang has been around a long time and the Camaro is the new kid on the block. But the new engine is going to help sales, there’s no question.”

Ford rushed development of the 5.0 litre engine, said Mayne. “It generally takes five years to design a new engine. They did this in two-and-a-half. It was a very high priority, which is not to say it’s a slapdash project either. It represents very advanced technology so to sink those kinds of resources into an engine that’s going to be in a niche vehicle, you have to know it has to be destined for somewhere else too.”

The new engine replaces the 4.6 litre, V8 produced in Romeo, Mich., with less power than the Camaro V8, said Mayne. Ford “definitely needed another engine to compete with Camaro,” he said. “I think they’re almost in a dead heat, but there’s as much passion for the Mustang nameplate as there is for the Camaro nameplate. With a new engine going into a madeover Mustang, you’ve got a whole new race starting.”

Canada bought stake
in GM to save jobs

Alisa Priddle / The Detroit News
Jan 1, 2010

When Canada bought a stake in General Motors Co., it did so for one reason: to preserve jobs on its side of the border.

And while the auto industry hasn't fully recovered and much uncertainty remains, Canada has benefited since its investment.

In December, GM announced it was buying out partner Suzuki Motor Corp. for full ownership of the CAMI Automotive Inc. plant in Ingersoll, Ontario, and adding a third shift and new body shop.

In Oshawa, GM has promised an additional shift in 2011 to add production of the new Buick Regal, in addition to previous promises to invest in other facilities in the nation.

Those moves bolster Prime Minister Stephen Harper's calls last year for approving bailout money, which came with the acquisition of an 11.7 percent stake for investing $9.5 billion in GM, and for the first time warranted a foreign government getting a seat on the board of directors of an iconic American company like GM.

Ontario Finance Minister Dwight Duncan told The Detroit News that if Canada had not been at the table to protect production within its borders, he had no doubt the work would be repatriated.

The Ontario government contributed about a third of the money and got 3.8 percent of the Canadian government's stake in the company.

In negotiations leading up to GM's June bankruptcy filing, the Detroit automaker threatened to pull its operations out of Canada. That would have meant the loss of more than 9,000 direct jobs, almost all of them in Ontario.

Duncan said the cost of GM's liquidation to the provincial economy "would have been so much greater than the cost of the loans and equity."

Instead, the loans bought an eight-year commitment from GM to continue to build vehicles in Canada and invest in plants, products, and research and development, he said.

The investment was never about power or governance, Canadian officials said, and Harper acknowledged that taxpayers may recoup little of the $9.5 billion in loans the national government gave to GM.

It was about preserving the auto industry in Canada, which is an integral part of the economy.

Canada's single seat on the 13-person board doesn't buy much clout as the agreement stipulates the appointee must vote Canada's shares with the majority of the independent directors. Canada's board member is Carol Stephenson, dean of the University of Western Ontario's Ivey business school and a member of a number of government and corporate boards in Canada.

The Canadian contribution was both protectionist and formulaic.

About 16 percent of GM's North American production has been in Ontario.

To maintain that proportion of manufacturing, Canadian politicians said early on that they would lend a figure amounting to 16 percent of what the U.S. Treasury provided.

The Canadian and Ontario governments also have a 2 percent share and one seat on the board of the new Chrysler Group LLC formed with Fiat SpA in return for more than $3 billion. Calgary businessman George Gosbee, founder of Tristone Capital Inc., sits on the Chrysler board.

The Canadian government had no choice but to invest in the companies, said analyst Dennis DesRosiers of DesRosiers Automotive Consultants near Toronto.

Decisions affecting GM Canada are made in the U.S. and most vehicles made in Canada have been traditionally viewed as domestic.

"Now we're being considered a hard border," DesRosiers said. "The U.S. is now seeing a Canada-built vehicle as foreign when it didn't a year ago."

Politicians in Canada say they don't want to stay in the car business.

The goal is to sell the GM shares within eight years, with some flexibility if market prices are horrendous.

Canadian politicians are optimistic the investments will pay off.

But DesRosiers disagrees, saying the government may have saved GM in Canada but it could cost the prime minister his job when angry taxpayers rebel.

"(Harper) wrote the shares off on the first day and had already built (the loss) into the deficit," he said.

"This has got disaster written all over it."

Canadian vehicle production to grow by 30%: Scotiabank

Dec 31, 2009

THE CANADIAN PRESS

Global auto sales will reach record highs by 2011, helping to boost Canadian vehicle assembly rates by as much as 30 per cent, according to a new report by Scotia Economics.

In its monthly Global Auto Report, released this week, Scotiabank said a combination of fiscal and monetary stimulus, a recovering global economy and improving access to credit will continue to lift vehicle sales next year.

This "will enable 2010 car sales to recapture half of the ground lost over the past two years, setting the stage for record volumes in 2011," the report says.

If accurate, the prediction marks a dramatic turnaround in the fortunes of the global auto industry, which was hit particularly hard by the recession as consumers deferred purchases of big-ticket items like new cars.

Increasing demand for new vehicles in developing countries like China, India and Brazil will lead the recovery for the foreseeable future, said senior Scotiabank economist and auto industry expert Carlos Gomes.

"The developing nations used to sell only about four million vehicles (a year) a decade ago and as of next year we're expecting that to be above 15 million," Gomes said in an interview. "So you can clearly see that that is where the growth has been, and because the vehicle penetration rates are still very low in these countries, that's where the growth will continue to come from going forward."

That's not to say the North American auto markets won't see a marked improvement in vehicles sales as well.

Gomes predicted "a double-digit advance in the key U.S. market," which in turn will help to boost Canadian production and employment levels. Some 62 per cent of parts and 80 per cent of finished vehicles manufactured in Canada are exported to the U.S.

Gomes says most of the advance will primarily be the result of deferred demand. "Both in Canada and in (the) United States, close to half the vehicles on the road are at least nine years old, so we do have a significant number of vehicles out there that do need to be replaced," he said.

"The point is, as the economy recovers and consumer confidence continues to improve, you'll actually see people starting to do that and not taking this approach of, 'Well, I'm not sure how things are going to be so I'll continue to hold onto my old clunker for another year or so."'

In Canada, Gomes predicted a 30 per cent increase in vehicle production in 2010, with a concurrent improvement in employment levels. This has already started to take hold, with General Motors Canada recalling laid-off workers at its plants in Ingersoll and Oshawa and Toyota Canada hiring 800 new employees at its plant in Woodstock.

Employment in Canadian assembly plants plunged to approximately 35,500 in 2009, its lowest level since 1963. In the parts sector, employment fell by almost 25 per cent in the last year alone, and overall employment in the industry is down 37 per cent from its high in 2000.

The Scotia report says 1.53 million vehicles will be purchased in Canada next year, compared with 1.45 million in 2009.

Purchases will be bolstered by rising incomes, pent-up demand and record new vehicle affordability. Strengthening used car prices, currently 19 per cent higher than a year earlier, will also encourage some people to replace aging vehicles, the report says.

Auto loan rates have also dropped significantly, to four per cent in the U.S., which is less than half what they were when the credit crisis took hold in late 2008.

Year in review: Auto Business

The Detroit News - Dec 30, 2009

GM nurses bruised image

General Motors Co. ends the most tumultuous year in its 101-year history as a new company born from bankruptcy with a clean balance sheet, thousands fewer employees, four fewer brands, its third CEO in nine months -- and a tarnished image.

After securing about $50 billion in federal aid and emerging in July from a 40-day stint in bankruptcy, the new GM is focused on boosting sales and market share -- right now. Demand for GM vehicles plunged 32 percent through November from a year ago, and the company's U.S. market share dropped to 19.8 percent, from 22.1 percent.

President Barack Obama fired CEO Rick Wagoner in March, former AT&T Inc. Chairman and CEO Ed Whitacre Jr. replaced Wagoner as chairman in June and, in December, added CEO to his title, at least temporarily, when the board ousted Wagoner's replacement in that role, Fritz Henderson.

The automaker parted ways with the Saturn, Pontiac, Saab and Hummer brands. It is betting its future on several promising new vehicles, including the Chevrolet Volt extended-range electric vehicle, going on sale late next year. They will hit the market with a singular mission: To convince consumers that the new GM, and its fresh crop of cars, is everything the old GM forgot how to be -- bold, innovative, groundbreaking.

Robert Snell

Chrysler's bumpy ride in '09 may ease in '10

Chrysler traveled a number of roads in 2009, all of them rocky.

The Auburn Hills automaker changed owners and top executives, was forced by the U.S. government into bankruptcy and saw vehicle development all but stopped. Top Chrysler executives who were shown the door or walked out on their own included Robert Nardelli, Tom LaSorda and Jim Press, as well as scores of other senior managers and thousands of hourly workers who took buyouts as the auto economy tanked and Chrysler's future remained murky.

At one point, LaSorda shopped the company to anyone who would listen, and a tie-up with General Motors Co. was seriously considered before an eventual post-bankruptcy deal was reached with Italian partner Fiat SpA.

Chrysler emerged from Chapter 11 with $4 billion in federal aid, a new CEO in Sergio Marchionne, and significantly reduced costs as it prepared a new five-year business plan it unveiled in November.

Chrysler now is owned 55 percent by a United Auto Workers health care trust fund, and 20 percent by Fiat, which can obtain another 15 percentage points by meeting conditions. The rest of the shares belong to the U.S. and Canadian governments, which provided $6 billion in loans to the new company on top of more than $7 billion Chrysler had received previously.

Chrysler insists that the road next year will be smoother.

Alisa Priddle

Ford drives around bankruptcy route in 2009

For Ford Motor Co., 2009 was all about bucking trends.

Ford was the only one of Detroit's Big Three automakers to avoid bankruptcy court, a fact not lost on the car-buying public. Demand for Ford, Lincoln and Mercury models fell with the rest of the industry, but not as much -- 19 percent for Ford through November, 24 percent for the industry -- and the Dearborn automaker increased its market share by 1 percentage point, to 15.9 percent. The launch of new vehicles like the all-new Ford Fusion Hybrid and redesigned Ford Taurus helped, too.

Ford promoted its relative strength compared to bankrupt rivals General Motors and Chrysler, and surprised Wall Street with unexpected profits in the second and third quarters. But the upbeat news hurt Ford's case with the United Auto Workers. When Ford sought the same concessions the UAW had granted GM and Chrysler, a tentative agreement between the union and Ford leaders was soundly rejected by the rank-and-file.

Bryce Hoffman

UAW givebacks garner stakes in GM, Chrysler

The United Auto Workers weathered tough times in 2009. Under pressure from the Obama administration, the union granted concessions to bankrupt GM and Chrysler. Among the givebacks was accepting company shares in place of cash to fund a UAW-run trust that will pay retiree health care costs starting in January. The union now owns 55 percent of Chrysler and 17 percent of GM, but neither stake will be worth much if the automakers don't rebound. The union also gave up its right to strike GM and Chrysler over wage and benefit increases before 2015, but the rank-and-file at Ford Motor Co. rejected a similar deal. Amid brutal job cuts as the U.S. auto industry retrenches, UAW membership has fallen to 431,000 from a 1979 peak of 1.5 million.

Next year, the union will elect a new president to replace Ron Gettelfinger, who will retire. Bob King, the UAW's lead Ford negotiator who previously headed the union's organizing efforts, has been tapped as Gettelfinger's likely successor. An official election is slated for June.

Louis Aguilar

Historic Toyota loss followed rise to No. 1

Toyota Motor Corp. opened a new chapter in the history of the auto industry when it passed General Motors in 2008 to become the world's biggest automaker.

But Toyota's rapid growth backfired in 2009 when demand for autos collapsed around the world. Toyota's sales plunged in the United States, traditionally its most lucrative market. For the first time in its history, the mighty Japanese automaker found itself saddled with idle factories in North America, while its exports from Japan slumped.

In the Japanese fiscal year ended March 31, Toyota reported its first annual loss since 1950. It expects to lose money again this year, although it returned to profit in the July-September quarter.

But Toyota now faces what could be a bigger threat -- one to its once unassailable reputation for quality. The automaker recalled 4 million vehicles in September to reduce the risk of unintended acceleration of Toyota and Lexus cars. It faces other complains from consumers reporting that their vehicles are stalling. Toyota's new president, Akio Toyoda, grandson of the founder, is pledging to restore the automaker with a back-to-basics approach and a renewed focus on the customer.

Christine Tierney

Suppliers in survival mode

As auto sales plunged through 2009 and Detroit's Big Three automakers slashed production, auto suppliers struggled to stay alive.

At least 50 parts makers filed for bankruptcy, including such big names as Visteon Corp., American Axle Manufacturing & Holdings Inc. and Lear Corp. Michigan is home to more than 2,000 suppliers -- the most of any state -- and 60 percent of all U.S. suppliers have operations in the state. Tens of thousands of jobs were lost as bankruptcies and a devastated auto market crippled the supply base.

Smaller operations were particularly hard hit as they lost access to capital from banks, but also from larger suppliers and automakers that had in the past floated them loans to help with operations. Suppliers requested $18.5 billion in aid from the Obama administration, but it refused, choosing to give automakers funds to help suppliers.

Analysts say even a slowly rebounding economy and uptick in auto sales won't keep the supply base from struggling again in 2010.

David Shepardson

Terminated dealers head to arbitration

Over the past year, Detroit's struggling automakers have been forced to close more plants, shed employees, eliminate brands and cast off dealers -- but the dealers are fighting back.

Traditionally, state franchise laws have protected dealers from arbitrary closure by automakers.

But General Motors Co. and Chrysler Group LLC took advantage of the bankruptcy process to shed some 2,000 dealers. Some were associated with brands slated for closure, such as Saturn and Pontiac, but others were weak performers who were dragging down the profitability of the retail networks.

Domestic brand dealers sell far fewer vehicles per outlet than dealers for import brands do.

U.S. government officials and lawmakers blasted GM and Chrysler for running inefficient and bloated operations. But when doomed dealers phoned their representatives, Congress took action to shield them in a move that has been criticized as the height of hypocrisy.

A new law allows the terminated GM and Chrysler dealerships to submit their case to an arbitrator. Meanwhile, some Asian carmakers are snapping up some of the cast-off dealers.

Christine Tierney

Michigan unemployment rate leads the nation for much of 2009

The year saw Michigan's already high unemployment rate soar, as the national recession sent auto sales plummeting and continued restructuring of the industry left more workers taking buyouts or getting pink slips.

The unemployment rate peaked at 15.3 percent in September, from 10.2 percent at the end of 2008. The jobless rate hovered around 15 percent for the last half of the year. While still the nation's worst, it gave some hopes that the free-fall for workers had begun to bottom out.

Economists also felt that the state economy may have hit bottom after the twin bankruptcies of General Motors and Chrysler. But the state's auto-dependent economy will be permanently damaged, with analysts saying they don't foresee a return to 2000 employment levels anytime during the next decade.

Brian J. O'Connor

Canada union has high hopes
for new Ford V-8 engine

* V-8 output to begin in early 2010 in Windsor, Ontario
* Engine to power the 2011 Mustang GT muscle car
* Union pushing Ford to use the engine in other vehicles

TORONTO, Dec 29 (Reuters) - The Canadian Auto Workers union said on Tuesday it is pushing Ford Motor Co to put its new 5.0-litre V-8 engine, which will be made in Windsor, Ontario, into more vehicles than just the Mustang GT.

Ford said on Monday that it would begin production of the V-8 engine for the 2011 Mustang GT at its Essex Engine plant in Windsor early in the new year.

The decision to build the new, more fuel efficient V-8 in the Windsor plant, which was shut in 2007, was made by Ford in October in contract talks with the CAW.

At the start, about 200 workers on one shift will make the V-8. But Ken Lewenza, president of the CAW, said more shifts could be added if Ford decides to put the engine into other vehicles.

"We've put a lot of effort into convincing Ford to maximize that engine in that plant, so this is the start, hopefully, of better things to come," he said.

There are about 1,000 Ford workers on layoff in Windsor. The city, which is across the river from Detroit, took a big hit from the downturn in the auto sector and has the highest unemployment rate of any major metropolitan area in Canada.

Lewenza said the V-8 engine could be used in Ford's F-150 pickup truck, which is the best-selling vehicle in North America.

Detroit Free Press 2010 Car and Truck of the Year

Dec 29, 2009

A pair of bold new strategies came together triumphantly for Ford Motor Co. in 2009, making the Fusion midsize sedan and Transit Connect compact van the Detroit Free Press 2010 Car and Truck of the Year.

The Fusion and Transit Connect embody a fundamental change in the way Ford approaches the vehicles it makes and the way it runs its business. The outstanding models leap to the head of the field.

The Fusion added dollops of style and technology to turn a good midsize sedan into an outstanding model line.

Read more about why the Ford Fusion is the Free Press Car of the Year.

The Transit Connect brought the fruits of Ford's global expertise to America, introducing a uniquely useful and fuel-efficient new class of vehicle.

Neither of these vehicles is the reason Ford avoided bankruptcy and government assistance in 2009. Ford was in such deep trouble when Alan Mulally took over in 2006 that he knew the company was headed for disaster. He wisely locked up $23.6 billion in credit, giving Ford enough money to eschew government help this year.

After securing cash to keep the doors open, Mulally accelerated product development and built a plan based on technical leadership, improved fuel economy and leveraging Ford's worldwide assets to bring better cars and trucks to American buyers.

The Fusion and Transit Connect provide plenty of reasons to be optimistic about Ford's future.

Learn more details and why the Transit Connect is the Free Press Truck of the Year

They show an automaker can elude disaster by using its resources intelligently and harnessing technology and design to make the best vehicles on the market. They are the first steps in a new-model rollout that includes the upcoming fuel-efficient Fiesta subcompact, the stylish and advanced Focus compact and a modern replacement for the Explorer SUV.

For years, Ford's corporate motto was "Ford has a better idea." In 2009, two great ideas paid off handsomely for the company

Mustang's 400 horses
make one powerful pony

Mustang's 5-liter V-8 vrooms into next decade with good gas mileage

Scott Burgess / The Detroit News
Dec 28, 2009

It sounds better than it looks, and the 2011 Ford Mustang GT 5.0 looks great.

Ford Motor Co. was to officially announce today the return of the 5-liter V-8, and the public will get its first look at the muscle car in January at the North American International Auto Show in Detroit.

The legendary engine has lived in the Mustang on and off for nearly 30 years but never with as much ferocious power or outstanding gas mileage. The new GT will be able to get up to 25 miles per gallon while cranking out more than 400 horses.

The current GT, powered by Ford's bullet proof 4.6-liter V-8, produces 315 horsepower and averages 23 mpg on the highway.

By the numbers the new naturally aspirated engine will deliver 412 horsepower, 390 pound-feet torque and a rumbling growl that can make the hair on the back of your neck stand up.

"I've been waiting 48 years for this," Jim Farley, Ford's vice president of marketing and a longtime Mustang enthusiast, said during a media preview of the Mustang GT. Farley drives a Grabber Blue Mustang GT. "When I joined Ford, as soon as I heard about this engine, I knew we had something special," he said.

The hallowed engine block -- a 5-liter engine has almost the same displacement as 302 cubic inches or a Boss 302 -- has a long Mustang history. When the 1983 Mustang GT 5.0 High Output arrived, it cranked out a then-thunderous 157 horsepower. A four-barrel carburetor on the 1986 GT wowed consumers with its 210 horsepower. The last GT to use the 5-liter V-8 was the 1995 Mustang.

Ford could use the new engine in other vehicles, such as the F-150 pickup, to provide more power than the current 4.6-liter V-8, though executives would not comment on that possibility.

Engineers and designers said they were challenged to top 400 horsepower on a 5-liter displacement engine. Additionally, they were given only a few years to create it, losing 12 months of development time.

"It's faster than we've ever done it," said Mike Harrison, V-8 engine programs manager, of the work his 10-person team did.

Engineers opened up the intake and created new headers for a "better breathing engine," Harrison said. They also gave the V-8 twin independent variable valve camshaft timing to enhance its performance.

Ford will showcase the new GT with the black and red 5.0 badge at the auto show in Detroit. But this car adds more than just power.

Ford will add a new six-speed automatic or manual transmission to the GT, replacing the five-speed gear box on the current model. With the improved gear ratios and with lots of low-end torque, drivers no longer will have to downshift to third to find power at 70 mph. (The new speedometer goes up to 160 mph, up from 140 mph.)

It will feature electric power-assisted steering, known as EPAS. This fuel-saving technology operates without a traditional steering pump, and Ford has worked to dial in a solid steering feel, engineers said.

There also were changes to the car's suspension and tuning. Ford promises a much quieter ride in the 2011 Mustang GT due to additional sound-deadening materials. Engineers added support to make the body 12 percent more rigid to improve its handling. The Mustang GT will keep its solid rear axle, perhaps the one sharply criticized attribute, but one many enthusiasts have come to embrace.

A special Bermbo brake package also will be available on the new GT with 14-inch disc brakes (taken from the GT 500), 19-inch wheels and summer performance tires.

Ford said it also will add features such as integrated blind spot mirrors, illuminated visors, and a universal garage door opener on the 2011 Mustang GT.

The 5.0 V-8 engine upgrade follows the introduction of a new powertrain to the 2011 Mustang V-6, which comes with a 3.7-liter engine that provides more than 300 horsepower and still allows the car to hit 30 mpg.

"This car is beautiful," Aaron Bragman, an automotive analyst at IHS Global Insight, said of the new 5.0. "Mustang enthusiasts will love it."

Then he looked at a black Mustang GT in front of him: "I'll take that one."

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

Additional Facts
The return of the 5.0 V-8

The Ford Mustang GT used the 5-litre V-8 from 1982 to 1995. Some models included an HO version, which stood for "high output." Here's a quick look at some of those engines.

1982: First 5.0 HO appeared in the GT. Total power: 157 horsepower
1983: 5.0 HO included four-barrel carburetor and produced 175 horsepower
1984: Fuel-injected 5.0 HO lowered power to 165 horsepower
1985: The most powerful four-barrel 5.0 produced 210 horsepower
1986: Only a fuel-injected 5.0 HO produced; total power: 200 horsepower
1987: The 5.0 HO produced 225 horsepower
1993: Ford revised horsepower rating to 205
1994: 5.0 offered 215 horsepower for the GT.
1996: Ford replaced the 5.0 V-8 with a smaller 4.6-litre V-8 for the GT, producing the same 215 horsepower.

Source: Mustang 5.0 magazine

Experts say auto sales will
accelerate in '10 -- slowly

Christine Tierney / The Detroit News
Dec 27, 2009

For the U.S. auto industry, the best thing about this year is that it's nearly over.

Most analysts expect that when the sales figures come in for December, the yearly total will be around 10.4 million cars and light trucks, the lowest in almost 40 years.

For most of the past decade, annual sales exceeded 16 million. But between 2007 and 2009, sales plunged a staggering 36.4 percent, tipping two of Detroit's automakers into bankruptcy and driving Japan's Toyota Motor Corp. deep into the red.

But as bad as this year has been, it's ending on a cheery note, with December sales expected to show a continuation in the gradual improvement in demand seen since the summer.

"The December selling rate is tracking at 11.2 million units -- up nearly 1 million units from a year ago -- which sets up 2010 for further recovery," said Gary Dilts, senior vice president for global automotive operations at J.D. Power and Associates.

The December rate compares with a selling rate of 10.9 million cars and light trucks in November, and 10.3 million in October.

J.D. Power estimates sales will increase next year to 11.5 million from an estimated 10.4 million this year.

Edmunds.com, an online automotive research company, also predicts auto sales will rise to 11.5 million in 2010 from 10.4 million this year, "the lowest since 1970." At that time, Edmunds said in a statement, there were 70 million fewer people in the United States.

Pricing firm TrueCar Inc. estimates sales next year will total 11.4 million cars and light trucks. But its estimate for the December seasonally adjusted annual rate, or SAAR, is a sluggish 10.3 million vehicles.

With the exception of investment firm Deutsche Bank, which sees auto sales jumping to 12.5 million next year, most analysts' estimates fall in the mid-11 million range.

In recent years, such a level would seem catastrophically low. But automakers are braced for a slow recovery. They have slashed their costs, particularly General Motors Co. and Chrysler Group LLC, and lowered their breakeven point -- the sales level at which they become profitable.

"While the industry hasn't yet received a clean bill of health, fixed costs have been trimmed at all levels, allowing for profitability -- even at a reduced selling rate," said Jeff Schuster, J.D. Power's executive director of global forecasting.

"The industry has an opportunity in 2010 to build on a series of small victories, such as improved pricing and appropriate inventory levels, to drive a stronger recovery," he said.

Toyota found to keep tight lid on potential safety problems

By Ken Bensinger and Ralph Vartabedian
December 26, 2009

It's a season for hope in new Detroit

Dec 26, 2009
Daniel Howes

In 1914, Henry Ford introduced the $5 day, a gateway to the middle class and a rising standard of living that changed the face of Detroit and its auto industry for the better part of a century.

In 1937, the United Auto Workers reached its first contracts with General Motors Corp. and Chrysler Corp. In the early days of 1942, Detroit began transforming itself into the Arsenal of Democracy, the engine that helped win World War II. In 1973, the first oil shocks exposed potentially fatal weaknesses of that powerhouse.

But 2009, drawing to a blessed close, will go down as the year that changed everything for Detroit, its home state and the bellwether industry that has defined for nearly a century its economic expectations and political life. Without direct intervention by the federal government, a bedrock industry of the U.S. economy would have collapsed into liquidation.

"I don't think in our wildest dreams anyone would have predicted a year like the last year," Bill Ford Jr., executive chairman of Ford Motor Co., said in a recent interview.

On one level, he's certainly right. The conditions that coalesced in the second half of 2008 -- skyrocketing oil prices, the global economic implosion, plunging consumer confidence, frozen credit markets -- to push GM and Chrysler into a White House-directed bankruptcy in mid-'09 were not easily foreseen by many.

Yet on a deeper level the unraveling of '09 was at least a decade in the making, a long, slow slide from the heady days of 1999 when Ford paid $6.4 billion for Volvo Cars of Sweden (but now is selling it to the Chinese for much less); when GM bought the remaining 50 percent of Saab Automobile (and now is closing it down) and when GM blew billions on a chunk of Fiat SpA.

That's when Ford was poised to earn record profits, in 2000; when Chrysler was still delivering fat checks to its new German owner; when the boom from selling pickups and gas-guzzling SUVs into a market fueled by cheap gas delivered earnings, big bonuses and a collective lethargy that made the fall of the last 12 months all the more painful.

As much as things came apart this year -- or felt each week as if they were -- the fissures began appearing long ago. In the automakers, their suppliers, their unions and their unsustainable business model. In the corrupt, self-absorbed politics of the city of Detroit, epitomized by the scandals that took down the former mayor, Kwame Kilpatrick, and a former City Council president, Monica Conyers.

This year exposed the rotting core of the city's public schools, still dangerously close to financial collapse. It revealed the backward-looking politics of Lansing, the clinging to the status quo, the hand-wringing over funding (or not) of local schools and government even while refusing to broach the entitlement time-bombs.

Yes, this year is when the water drained from the metaphorical bathtub that is Detroit and Michigan, uncovering an infrastructure of expectation and expense that cannot be supported by a smaller auto industry with fewer employees, by a smaller population earning less per capita, by legislators making promises they know they cannot keep.

Hopeless? No, especially not now, in this season of renewal. There is hope in a new, slimmer GM shorn of its also-ran brands, crushing debt loads and now run by a fresh leadership team that is not the sum total of the company's past 30 years.

There is hope in a fiscal vise that will force compromise and change on a Legislature predisposed to neither. There is hope for a Detroit Public Schools led by a financial realist empowered by a governor finally awakening to her responsibility to the city's kids.

There is hope in a mayor of Detroit, Dave Bing, who has the character to work for something larger than himself, the courage to tell the public what needs to change and the muscle to do it. There is hope a new City Council will be part of Detroit's solutions, not the source of more needless and silly problems.

There is hope because the change has already come.

Ford shares top $10
in wake of Volvo deal

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

Shares in Ford Motor Co. hit double-digits for the first time since 2005 Wednesday, closing at $10.08, after the Dearborn automaker said it had finalized most of the terms to sell its Swedish brand, Volvo, to China's Zhejiang Geely Holding Group Co.

Ford and Geely expect to sign an agreement in March and complete the sale by June 30. Ford had hoped to sell Volvo by last July. Still, the deal with Geely stands in sharp contrast to General Motors Co.'s failed bids to sell its Swedish brand, Saab, and further underscores the progress Ford has made toward restoring profitability.

Key to CEO Alan Mulally's turnaround plan was shedding Ford's foreign brands to help pay for a global restructuring and focus the company on fixing core brands Ford, Lincoln and Mercury. Ford already has sold its three British luxury marques -- Aston Martin, Jaguar and Land Rover -- as well as a controlling stake in Japan's Mazda Motor Corp.

In a statement early Wednesday, Ford confirmed that "all substantive commercial terms" of selling Volvo had been settled, but "some work still remains to be completed before signing -- including final documentation, financing and government approvals."

The announcement broke the silence that has surrounded talks between the companies since Ford identified Geely as its preferred bidder for Volvo in October. It was aimed at helping China's largest private automaker secure financing and win government approval for the acquisition, according to a source familiar with the negotiations. Geely also released a statement that sought to reassure Volvo employees and the Swedish government, which have both expressed concerns about the sale of one of Sweden's most respected brands to a Chinese manufacturer.

Ford and Geely hope to sign a final agreement in the first quarter of 2010. Though no terms were released, Ford said it expects to close the sale in the second quarter, pending regulatory approvals.

Analysts expect Ford to get about $2 billion for Volvo, far below the $6.45 billion the automaker paid for it in 1999.

"The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core One Ford strategy," the Dearborn automaker said.

Ford's stock closed Wednesday at $10.08 a share, trading above $10 for the first time since September 2005.

While the news about Volvo helped fuel the rise, Ford shares have been going up steadily since the automaker surprised Wall Street with a $1 billion third-quarter profit -- its second consecutive quarterly profit. Ford was the only U.S. automaker to eschew a federal bailout and avoid bankruptcy, and has steadily gained market share all year -- largely at the expense of GM and Chrysler Group LLC.

But concerns remain about Ford's debt. While GM and Chrysler were able to shed much of theirs in bankruptcy court, Ford is "highly leveraged," according to ratings agency Standard & Poor's.

"The company is showing early signs of progress," S&P said in a report Wednesday. "(But) fundamental business risks will remain unchanged well into at least 2010, most notably the company's exposure to weak vehicle demand globally."

The house that Jacques built

If the sale of Volvo marks the completion of Mulally's drive to consolidate Ford's global operations, it also marks the end of the international house of brands former CEO Jacques Nasser worked to assemble in his tenure.

Though the Volvo sale is months behind schedule, Ford has had a far easier time unloading brands than rival GM.

Efforts to sell Saab have failed, most recently last week when talks with Spyker Cars, a Dutch firm, collapsed. Spyker made a new offer to GM on the weekend and continues to pursue a deal.

Last month GM reversed its decision to sell a majority stake in its German unit, Adam Opel GmbH, to Canadian parts maker Magna International Inc. and Russian lender Sberbank. Efforts to find a new owner for its Saturn brand also failed, and a deal to sell Hummer to a Chinese heavy equipment manufacturer has progressed slowly.

Analyst Jim Hall of 2953 Analytics LLP in Birmingham said Volvo was a much more attractive offering than Saab.

"Saab has two passenger cars," Hall said. "Their SUV was a rebadged Chevy. They have no range, and that is why GM had a hard time selling them. Volvo has cars that cover a much broader range."

GM brand sales failed

GM also found it difficult to untangle Saab from its own product development organization. But Ford has been trying to distance itself from Volvo since at least 2008.

Wednesday's announcement came a year after Ford replaced Volvo CEO Fredrik Arp with Ford veteran Stephen Odell and gave him a free hand to do whatever was necessary to restore profits.

Since then, Volvo has shed some 6,000 jobs and negotiated a tougher contract with its unions. Volvo's losses narrowed to $135 million in the third quarter from $458 million a year before.

Ford will continue to work with Volvo after the sale, but will not retain a stake in the company.

Sync feature to connect Ford vehicles to Web

Bryce Hoffman / The Detroit News
Dec 23, 2009

Ford Motor Co.'s newest cars and trucks will have the ability to become mobile WiFi hotspots, another feature of the next-generation Sync system the automaker plans to unveil at the Consumer Electronics Show in Las Vegas next month.

The company said drivers will be able to insert a USB mobile broadband modem, also known as an air card, into the system's USB port to establish a secure wireless connection throughout the vehicle. Passengers with WiFi equipped mobile devices will then be able to access the Internet.

"While you're driving to grandma's house, your spouse can be finishing the holiday shopping and the kids can be chatting with friends and updating their Facebook profiles," said Ford Americas President Mark Fields. "And you're not paying for yet another mobile subscription or piece of hardware because Ford will let you use technology you already have."

As The Detroit News first reported last week, the new version of Sync -- the onboard infotainment and communications system it developed with Microsoft Corp. -- also will allow drivers to control many of the applications on their smartphone or music player with voice commands

Ford, Geely close in on Volvo sale

Bryce Hoffman / The Detroit News
Dec 23, 2009

Ford Motor Co. and Geely Automotive have reached agreement on most of the key issues relating to the sale of Ford's Swedish brand, Volvo, to the Chinese automaker. An announcement could come as early as Wednesday that a deal is imminent, according to a source familiar with the negotiations.

While talks between the two companies have been closely guarded, that person said the announcement is being made to reassure the Chinese government that negotiations are progressing toward a deal. Geely already has secured financing from two Chinese banks to purchase Volvo, and both sides are working toward finalizing the deal early next year.

Ford buyouts to extend to
Canadian auto workers,
company confirms

TORONTO - Automaker Ford (NYSE:F) has confirmed that a round of buyouts aimed at reducing its global workforce will be offered to about 20 per cent of its 6,200 workers in Canada.

The U.S.-based automaker says it is working resize its manufacturing capacity to better align it to market conditions.

Ford announced Monday it would offer buyout or retirement incentive packages to all of its 41,000 hourly workers in the United States.

Ford is the healthiest of Detroit's three automakers and the only one to avoid government aid and bankruptcy protection. Even so, it says it still has more workers than it needs to produce cars and trucks at current sales levels.

Specific financial details of the offer to the Canadian Auto Workers union members were not disclosed in a Ford of Canada email.

However, they company said the offer applies solely to hourly workers at its plant in Windsor, Ont., which currently employs 1,600 workers and has 1,000 on layoff.

"These incentives stem from the recently concluded negotiations with the CAW," the email said.

In the U.S., Ford's buyout package is available to workers with at least a year of service and it includes $50,000 cash and the choice of a $25,000 voucher to buy a vehicle or $20,000 more in cash.

Besides the Windsor workers, Ford also employs about 2,900 workers in Oakvile, Ont.; 1,400 in St. Thomas, Ont., and 300 at parts depots in Bramalea, Ont. and Edmonton

Ford ends tough year
with more buyout offers

But bad job market, carmaker's turnaround may keep workers in place

Bryce G. Hoffman / The Detroit News
Dec 22, 2009

Ford Motor Co. is once again offering company-wide buyouts to U.S. factory workers in a bid to further reduce its hourly work force.

But experts say Ford will be hard-pressed to convince many workers to head for the exits in these uncertain times -- particularly as its own turnaround gains traction.

Ford spokeswoman Marcey Evans said the company has not set a target for this round of downsizing.

"We still have a surplus of hourly employees in our manufacturing system. We're working with the UAW to manage that and do what's right for Ford and for our employees," she said, adding that the company is trying to match how many employees it needs to build vehicles with the reduced demand in the auto market due to the economic downturn.

Ford is offering two incentive plans to all 41,000 members of the United Auto Workers. These packages, worth up to $50,000, are similar to those Ford has offered in the past.

The Dearborn automaker, which was the only American car company not to accept a government bailout and the only one to avoid bankruptcy, still needs to keep cutting costs because of the weak auto market.

While General Motors Co. and Chrysler Group LLC have suffered in the marketplace in part because of bankruptcy filings, the automakers were able to shed much of their debt in Chapter 11 reorganization.

On Friday, Ford CEO Alan Mulally acknowledged that Ford's higher debt load is a "short-term competitive disadvantage."

"They still need to prune their costs," said restructuring expert Van Conway, president of Conway MacKenzie Inc. of Birmingham. "If the economy picks up and they need to hire somebody, the new guys will make considerably less."

That is because the UAW contract allows Ford to pay new hires significantly lower wages and provide fewer benefits than it does to current employees.

The automaker began sending details about the offers to workers at all U.S. factories last week.

The first option is a retirement incentive open to workers with 30 or more years at Ford, or those 55 and older with 10 or more years at the automaker. It offers $40,000 for skilled trades employees or $20,000 for other workers, plus the choice of a $25,000 voucher for a new Ford vehicle or an additional $20,000 in cash. Workers who sign up for this package are still entitled to regular retirement benefits.

The second is a buyout offer that is available to all workers with a year or more service. They will receive a lump sum payment of $50,000, as well as the choice of a $25,000 voucher or $20,000 cash. In addition, Ford will continue to provide basic medical coverage for six months.

Workers have until Jan. 22 to decide. Ford said workers who sign up will start leaving the company on Feb. 1, with most departing by March 1.

Ford already has cut its North American hourly work force from 90,000 at the end of 2006 to just over 50,000 at the end of September. That includes workers at parts plants that Ford took back from its former subsidiary, Visteon Corp., as part of a 2005 bailout of the now-bankrupt supplier.

Much of that downsizing has come as the result of series of buyout offers, but that was when the future was less certain and the economy was more stable.

"It's going to be a tougher sell this time," said Harley Shaiken, an expert on labor relations at the University of California, Berkeley, pointing to the surprise profits the Dearborn automaker reported for each of the last two quarters. "Ford's success may work against it."

While the incentives may be a good option for retirement-eligible workers, Shaiken said younger workers would face one of the worst job markets in history.

Angry workers occupy plant

Toronto Star Dec 22, 2009 - Tony Van Alphen

Angry employees at an idle air conditioning manufacturer in Mississauga occupied the company's plant for more than three hours Monday after they charged management "blindsided" them with an abrupt shutdown and no paycheques for extra work.

More than 100 workers mingled peacefully and retrieved belongings including tools at the M&I Air Systems plant in a pressure tactic to get some answers about their missing pay and the plant's future.

Bob Chernecki, a senior official for the Canadian Auto Workers, said management had not responded to union queries since last week, when the company halted operations and told employees to go home.

Chernecki said in an interview that the occupation led to a meeting where management indicated it would inform the union about its financial status, payment to workers and any possible chance of a reopening on Wednesday.

"These workers were blindsided by this corporation just before Christmas," he said.

"It's ridiculous. They received no warning and now face so much uncertainty."

M&I did not return calls for comment about the company's situation.

Chernecki said he expects the U.S.-based company to slip into receivership or fall under bankruptcy court protection during the next few days.

"It doesn't look good," he said.

M&I formed in 1981 and provides air-moving technology and systems for industrial and institutional buildings.

Chernecki said M&I did not provide regular biweekly paycheques on Dec.10, but managers promised they would submit them on the following Monday if employees worked during the same weekend to complete a major air-system project for a customer.

"They didn't get paid on the Monday and on the Tuesday the company called them in at 9 a.m. and told them there was no work and to go home," he added.

The union, which represents about 155 workers at the plant, is seeking wages including overtime for the employees during the past three weeks plus severance and holiday pay.

Furthermore, it wants the company to file employment insurance information with the federal government immediately.

The workers, including some staff with more than 20 years service, negotiated a new three-year contract during the fall that contained small wage increases for lower-paid staff and a $400 lump sum amount for higher-paid employees. The average wage is about $18 an hour.

The CAW and other unions have pushed for stronger legislation to protect workers who are victims of plant closures, including giving them higher standing than other creditors.

Ford execs say they'll live
with UAW contract

Experts say biggest disadvantage
is lack of strike protection

Bryce G. Hoffman / The Detroit News
Dec 19, 2009

Wayne -- Ford Motor Co.'s top executives said Friday that they were "disappointed" with the overwhelming rejection of proposed contract changes by United Auto Workers members last month.

Ford had hoped to match some of the concessions the UAW negotiated with rivals General Motors Co. and Chrysler Group LLC during their bankruptcy reorganizations earlier this year.

But they said Ford has closed the labor cost gap with its foreign competitors in the United States and does not expect to seek another reopening of the contract before it expires in 2011.

"I would have liked to see it happen, but I understand all the behind-the-scenes things that were in play," said Executive Chairman Bill Ford Jr. "The truth is, we've gotten a whole lot done together in the past three years. This is not the end of the world."

Ford also said he was happy with the decision by UAW leaders to anoint Vice President Bob King, head of the union's national Ford section, as the heir-apparent to UAW President Ron Gettelfinger.

"I've known Bob for a long time. He cares very deeply for the industry and for Ford," he said, adding that he does have a different approach than Gettelfinger. "Ron is very plain-spoken and gets to the point quickly. Bob is more cerebral."

Ford's comments were echoed by Ford Americas President Mark Fields.

"We respect Bob a lot," he said. "We're going to continue to work with Bob and the rest of the UAW team to make sure Ford remains competitive. We don't just talk to the UAW when we have an issue. We talk to the UAW every day, every week, about the challenges we face as a business and our strategy for overcoming those challenges."

The union's powerful administrative caucus endorsed King's candidacy last week. He still needs to be elected by rank-and-file members at the UAW's national convention next summer, but no candidate endorsed by that caucus has ever failed to win the presidency.

The agreement UAW members voted down last month would have frozen wages and benefits for new hires, changed some work rules and limited the union's right to strike over some issues.

Labor experts said the vote against the tentative agreement negotiated between the company and union leaders was doomed by Ford's success relative to the rest of Detroit's automobile industry. The company has surprised Wall Street with profits for each of the last two quarters, though it is still expected to lose money this year.

While analysts agree that Ford has little cost disadvantage with other automakers in the United States because of its failure to win approval for these contract changes, many worry that the lack of strike protection similar to that won by GM and Chrysler will put a target on Ford in the next round of national contract talks.

"The biggest threat to Ford from this is that the UAW is more likely to strike it because it can't strike GM or Chrysler," said Erich Merkle of Autoconomy.com.

In other news Friday, Ford CEO Alan Mulally said he feels "pretty good about the economy," adding that the company will "maintain a laser focus on our plan" in 2010.

As for 2009?

"What a year!" Mulally said.

Visteon seeks to end pensions

Change, affecting more than 21,000 workers and retirees, is key part of bankruptcy plan

David Shepardson / The Detroit News
Dec 19, 2009

Washington -- Visteon Corp. wants to terminate pension plans covering more than 21,000 of its employees and retirees -- a move that would cost pension recipients nearly $100 million.

The pension change was included in Visteon's reorganization proposal, filed late Thursday in U.S. Bankruptcy Court in Delaware.

The Van Buren Township-based company, forced into court protection in May amid declining auto sales, proposes to transfer to the Pension Benefit Guaranty Corp. three of its four U.S. pension plans.

About 2,000 Visteon workers in Michigan are covered by the proposal, including 1,500 at its Van Buren Township headquarters and about 500 at a joint venture in Benton Harbor and at a plant in Highland Park.

The number of Visteon retirees living in Michigan who would be affected by the proposal was not immediately known, but is believed to be in the thousands.

The pension plans Visteon wants to drop have a combined shortfall of $544 million.

The PBGC, the government's insurer of pension funds, does not yet support Visteon's plan, which must be approved by a bankruptcy judge.

Visteon is at least the sixth supplier this year to move to abandon its pension obligations, saddling the PBGC with the bills.

The PBGC said last month it would assume pension plans covering 4,780 workers and retirees of Hayes Lemmerz International Inc., the Northville-based wheel manufacturer. That will add nearly $100 million to the PBGC's growing deficit.

Also this year, the PBGC assumed responsibility for Troy-based Delphi Corp.'s pension plans, shifting to the PBGC $6.7 billion in costs for plans covering more than 70,000 people. It also assumed pension plans at suppliers Metaldyne Corp; Proliance International Inc., an auto parts maker based in New Haven, Conn.; and Portage-based Contech US LLC.

The PBGC said this month that its deficit had soared to $21.1 billion this year, up from $10.4 billion last year. But it improved over its midyear estimate of $33.5 billion.

The PBGC insures the pensions of about 1.5 million people in Michigan alone.

It is a government-owned corporation that guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans.

Vince Snowbarger, acting director of the PBGC, noted that "when pension plans terminate, many retirees lose hard-earned benefits because of limits set by federal law."

The PBGC estimates that workers and retirees in the three Visteon plans would lose almost $100 million in benefits, with early retirees most likely to see benefit reductions.

That's because federal law caps benefits by age.

A 50-year-old retiree can get no more than $18,900 annually in pension benefits, while older retirees can get more.

At this time, the PBGC doesn't support the move by the former Ford Motor Co. parts unit and hopes to convince Visteon to continue making pension payments.

"Continuation of the pension plans would preserve those benefits," Snowbarger said. "The PBGC hopes that Visteon can reach agreement with its creditors and lenders on a reorganization that allows the company to retain all its pension plans."

Last week, a bankruptcy judge in Delaware granted approval for Visteon to end health and life insurance benefits for 6,500 current and future retirees, which would save $31 million annually and $310 million in total.

But he ruled that 110 current workers can keep their benefits because of a union contract.

The judge must approve the reorganization plan, which faces objections from the PBGC and unsecured creditors, before the other pension changes can be made.

The supplier hopes to emerge from bankruptcy in early to mid-2010.

In October, the court rejected Visteon's plan to pay bonuses of up to $8.1 million for its 12 top officers, but authorized up to $3.3 million in long-term incentives for 83 other Visteon managers -- a group that doesn't include its top officers.

The company now proposes, under its reorganization plan, to award up to 10 percent of the new stock to the company's senior managers and up to $8.1 million in cash bonuses after emerging from bankruptcy.

Kirk Ludtke, an auto analyst with CRT Capital, noted the PBGC would get a $460 million general unsecured claim and 3.8 percent of Visteon's new stock.

The rest of the company's stock would be awarded to the company's bankruptcy lenders. The company's unsecured lenders have threatened to file suit to block the sale.

Visteon spokesman Jim Fisher said it's possible the supplier would retain a pension plan that covers 1,800 United Auto Workers hourly employees leased to a former company unit, Automotive Components Holding LLC.

Fisher said Visteon can't retain its other pensions because it was "an affordability question."

Visteon is to make $260 million in payments through 2015 to its underfunded pension plans.

Mullaly says Ford plans to
speed up debt repayment

By TOM KRISHER (AP) – Dec 18, 2009

WAYNE, Mich. — Ford Motor Co. CEO Alan Mulally says the automaker plans to speed up debt repayment as its financial condition continues to improve.

Mulally also told reporters at a briefing Friday on its new vehicles that Ford will keep its advantage over Chrysler and General Motors next year. Ford has gained sales and market share while its Detroit competitors were forced to take government aid and go through bankruptcy protection.

Ford has about $27 billion in debt. Mulally says the company repaid $10 billion this year and has sold $1.6 billion worth of stock.

He says the automaker will accelerate payments as it continues to move toward profitability in 2011.

Ford mortgaged all of its assets three years ago to borrow $23.5 billion. The loans allowed it to avoid bankruptcy and the government aid that GM and Chrysler needed to survive.

"Everybody knows how fast we are getting back to profitability and free cash flow," Mulally said. "Then we'll just accelerate the improvements to the balance sheet."

In November, Ford reported a third-quarter profit of nearly $1 billion and said it would be solidly profitable in two years.

Mulally said the borrowing and improved cash position have allowed Ford to revamp its product lineup so it will soon be the freshest in the industry. He made the statements in the Detroit suburb of Wayne, at a former truck factory being retooled to make the new European version of the Focus compact car.

New versions of the Focus are expected to be in showrooms early in 2011.

Ford's U.S. sales through November are down 19 percent from the same period last year, but that's a smaller drop than the overall market's 24 percent drop. The Dearborn, Mich., automaker has fared far better than GM, with sales down 32 percent, or Chrysler, which has seen a 38 percent decline, according to Autodata Corp.

Mulally said Ford would continue to see a competitive advantage over GM and Chrysler because of its solid products and because it avoided government aid and bankruptcy protection.

"They want to know that not only are they getting great products that will work for them, they want to know that the company is going to be there," he said.

Mulally also said the economy is starting to show signs of improvement throughout the world, slowly moving out of the recession. Yet Ford has still planned conservatively to have growth going forward, he said.

Ford Vehicle Residual Values Rise $1,300 on Average From 2009 to 2010 Model Year; Industry's
Largest Gain

DEARBORN, Mich., Dec. 18 /PRNewswire

Ford Motor Company (NYSE: F) vehicles, bolstered by improved quality, fuel economy and popular redesigned models, recorded the largest increase in residual values from the 2009 to the 2010 model year among full-line manufacturers.

The projected resale value of Ford, Lincoln and Mercury vehicles after 36 months in service increased by $1,310 per vehicle from 2009 to 2010 models, more than any other full-line automaker. This calculation is based on the straight average of all trim levels of each nameplate from ALG's January/February 2010 Residual Value Forecast with volume being weighted against R.L. Polk new vehicle registration data.

"We are very pleased that the quality and fuel economy our products are delivering is reflected in our residual values," said Ken Czubay, Ford vice president, Marketing, Sales and Service. "We know future trade-in value is a very important factor to customers when they are shopping for a new vehicle."

Ford already held a residual value advantage over its U.S.-based rivals. With the improvement in the 2010 model year, Ford narrowed the gap with leading Asian automakers, including Toyota.

Some Ford vehicles have now surpassed competing vehicles from Toyota in average residual values. The 2010 Ford Fusion midsize sedan, for example, is expected to be worth $687 more than the 2010 Toyota Camry after 36 months in service. And the residual value of the 2010 Ford Flex full-size crossover commands an $1,800 premium over the Toyota Highlander.

A steady stream of new products has helped boost Ford's residual values. For example, the redesigned 2010 Ford Taurus's projected average resale value after 36 months in service is $4,862 more than the 2009 Taurus. The Taurus was redesigned inside and out and features a host of new features and technologies.

"The ultimate measure of the health of an automotive brand is its residuals," said Waldek Raczkowski, Ford residual business analyst. "We have great new products with good quality, fuel economy and technology. We are pricing our vehicles properly and setting our volumes appropriately to meet market demand. This adds up to a significant increase in residual values."

The 2010 Ford F-150 earned the 2010 ALG Residual Value award in the Full-Size Pickup category, and the 2010 Ford Taurus and 2010 Ford F-Series Super Duty received Kelley Blue Book's kbb.com Best Resale Value awards for the full-size car and full-size pickup categories respectively.

In addition, Ford's improved products and brand image is translating into higher residual values. Compete Inc., a Massachusetts research firm that studies online car shopping, says Ford has surpassed Toyota in customer consideration for the first time since it began tracking such data in 2002. Compete data show Ford surpassed Toyota in customer consideration in September, October and November.

About Ford Motor Company

Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company.

Ford's December sales
'significantly better'

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

Dearborn -- Ford Motor Co.'s top salesman said sales in the first two weeks of December were "significantly better" than last month, giving him confidence in at least a modest 2010 turnaround.

"There is definitely some life in this industry again," Jim Farley, head of sales, marketing and service at Ford, told The Detroit News. "I was still a little worried about next year, but I'm starting to feel a lot better."

Ford to upgrade Sync system

Bryce G. Hoffman / The Detroit News
Dec 17, 2009

It could be the automobile industry's killer app.

In January, Ford Motor Co. will unveil the latest version of Sync at the Consumer Electronics Show in Las Vegas, including a new feature that will allow the system to work with virtually any application on a motorist's cell phone or music player, according to sources familiar with the company's plans.

That means drivers will be able to stream music from Internet radio service Pandora through their car's stereo or have Sync read incoming messages from their friends on Twitter. They will be able to manage these applications using Sync's voice controls or listen to information using its text-to-speech system. And they will be able to use the many location-specific applications that provide information about nearby businesses and attractions.

"Ford is once again the first to create a new technology," said analyst Mark Boyadjis of iSuppli Corp. "They are the first ones to integrate social media into the automobile."

Sync is the in-car communications and entertainment system that Ford developed with software giant Microsoft Corp. It was introduced in 2007, and Ford promised to add new features on a regular basis.

The Dearborn automaker would not discuss the latest upgrade, but is expected to provide details to journalists later today.

The new feature, known internally as "mobile apps," will be included in vehicles next year, but existing Sync customers will be able to download the upgrade and install it in their vehicle. Unlike the last upgrade that Ford released a year ago, this one likely will come with a price tag attached.

At the heart of the upgrade is a new application programming interface, or API, that Ford will make available to developers, allowing them to easily upgrade their programs to work with Sync.

Ford began offering Sync as an option in 2007, and the system has proven a game-changer for the company. Ford already has sold well over a million units, and 70 percent of customers who buy a Ford, Lincoln or Mercury model elect to purchase Sync. That has helped Ford increase the price it gets for its cars and trucks.

Sync also is attracting new customers. According to the automaker, 32 percent of customers say Sync was a key reason why they bought a Ford product.

"Fords used to be a pretty basic, plain-Jane car," Boyadjis said. "Even the Lincolns were little more than leather and some sound-deadening. Now, their cars are literally at the top of the space when it comes to technology. It has helped Ford gain market share from General Motors and Chrysler."

Microsoft making changes

The upgrade to Sync comes amid major changes this year at Redmond, Wash.-based Microsoft. After a decade as a separate business unit, Microsoft's automotive division was folded into its embedded computing division -- a move some observers saw as a sign the software giant was focusing its resources elsewhere.

Not so, says Greg Baribault, director of product planning and marketing for Microsoft's automotive group.

"We were replicating a lot of work that the general embedded computing team was doing," he said, adding that Microsoft often creates stand-alone business units to explore new opportunities and combines them with core parts of its organization once they are proven to be viable.

"As the two grew, it became more and more confusing for customers," he said. "It just didn't make sense to keep these things running independently any more."

Baribault said the automotive business remains important to Microsoft, and the company continues to invest in it, as well as its core home and office businesses.

"The car is a connection point between these two places, and it has really been an island without connectivity," he said. "For Microsoft, the car is a very strategic investment."

Boyadjis said Microsoft is putting a positive spin on its reorganization

"Most people took that as a sign of divestiture rather than investiture," he said. "But I don't think it really limited their ability to service the automotive market. I've seen continual advancement from them."

System is spreading

Ford was not the first automaker to use the Microsoft system. Italy's Fiat SpA introduced a system with the same basic features in Europe in 2006. Now that Fiat controls Chrysler Group LLC, it is working with Microsoft to bring its version to the United States, Baribault said.

It will likely debut on the Fiat 500, which is due to arrive in this country at the end of next year. Existing Chrysler models would not be able to incorporate the system until they are refreshed.

Microsoft also signed a deal with South Korea's Hyundai Kia Automotive Group after its exclusivity agreement with Ford expired at the beginning of 2008, though it has yet to bring a system to market.

"I can't give you a date, but we'll see something from Kia soon," Baribault said. Microsoft is also talking to other automakers and working to provide similar technology to suppliers.

"The recession put a lot of these things on hold," Boyadjis said, though he expects to see other automakers introduce their own systems next year. However, he doubts any of them will pose a serious threat to Ford.

"Ford has taken over a lot of this and created its own ecosystem. It will be more competitive, but I don't think it will overshadow the success that Sync has had," Boyadjis said. "Every year, they're announcing features that are not only groundbreaking, but easily upgradeable."

Baribault said many of Sync's hottest features, like mobile apps, are proprietary additions developed by the automaker.

"They're doing a lot of this without our direct engineering involvement," he said. "We're enabling them to create their own unique applications and provide them to their customers."

Ford Fusion Hybrid, Chevy Equinox among car, truck of the year finalists

Robert Snell / The Detroit News
Dec 17, 2009

Detroit -- Detroit automakers took four of the six finalist spots announced Wednesday for the 2010 North American Car and Truck of the Year awards.

General Motors Co. and Ford Motor Co. each had a car and a truck named as finalists for the coveted award.

Car of the year nominees are the Buick LaCrosse, Ford Fusion Hybrid and Volkswagen Golf.

Truck of the year nominees included the Chevrolet Equinox, Ford Transit Connect and Subaru Outback.

The winner will be named Jan. 11 at the North American International Auto Show at Cobo Center.

The finalists, revealed at an Automotive Press Association event, were chosen from among more than 50 vehicles that were all-new or underwent a substantial change from prior models. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. were shut out of the awards this year.

"It's a great way to take some product momentum into 2010," GM spokesman Terry Rhadigan said.

The awards, now in their 17th year, are given by a jury of 49 automotive journalists from Canada and the United States. They recognize the most outstanding vehicles of the year based on factors that include innovation, design, safety, handling, driver satisfaction and value.

"To me it's huge," said Rob Stevens, chief engineer for Ford's commercial vehicles. "We are greatly appreciative of everyone really understanding and seeing the Transit Connect for what it is: a work truck. We've got to be greener, improve fuel economy but still provide a truck that can do the job."

The 2009 Car of the Year was the Hyundai Genesis while the Ford F-150 snagged the truck honor. Domestics nabbed three of the six finalist spots in the 2009 vote.

Domestic vehicles have dominated prior awards. GM snagged four of six finalist spots for the 2008 North American Car and Truck of the Year award.

While the Dodge Ram was a finalist in the 2009 Truck of the Year competition, automaker Chrysler Group LLC was shut out of finalist ranks for 2010.

Detroit's automakers have won car of the year honors eight times compared to three wins for Japanese automakers. European brands have won four times and Korean once.

In the truck category, domestic brands have won 10 times while Japanese have taken top honors four times and Europeans twice.

Critical acclaim does not always translate into improved sales. The Saturn Aura, for example, won car of the year in 2006 but fell short of GM's sales expectations and now the brand is being eliminated.

But the honors could help GM change perceptions about the company since emerging from bankruptcy court July 10.

"When you lose your reputation, it's hard to get it back," GM Chairman and CEO Ed Whitacre told reporters Tuesday before the award finalists were announced.

Bill Ford praises Obama
for auto bailout

David Shepardson / Detroit News Washington Bureau
December 16, 2009

Washington -- Ford Motor Co. Executive Chairman Bill Ford Jr. said Monday President Barack Obama was right to rescue domestic competitors General Motors and Chrysler.

Ford told reporters in Washington that he met briefly with Obama in the Oval Office, and said he praised the $62 billion bailout of GM and Chrysler.

"I complimented him on the way he's handled the industry," Ford said, noting that his company supported the GM and Chrysler rescues because they provided stability to suppliers that all three companies use.

"Preventing the collapse of the supply base was something that they did swiftly and forcefully, and it worked."

The meeting with Obama lasted for about 10 or 15 minutes, a Ford spokesman said.

Ford was in the capital to meet with Commerce Secretary Gary Locke to discuss results of the National Summit convened by the Detroit Economic Club in Detroit in June.

The "to-do" list that came from the summit included developing comprehensive manufacturing and energy strategies, supporting research and development, upgrading infrastructure and improving science, math and engineering education.

"We're all looking to get to the same place: an American economy firing on all cylinders again and creating good jobs at good wages," Locke said.

"I don't care if an idea comes from the right or the left, from business or union leaders. If it can work and if it can grow sustainable jobs, this administration wants to know about it."

Obama and Ford also discussed the state of the auto industry. But Ford said it was a casual meeting.

The Dearborn-based automaker, which reported a $1 billion profit in the third quarter, was in better financial shape than its competitors in part because it mortgaged nearly all of its assets, including its trademark Blue Oval, to raise funds in the event of a severe downturn.

It didn't seek a bailout, but briefly sought an "emergency standby line of credit" from the Bush administration.

Ford has received other support, including a $5.9 billion loan to retool its factories to build more efficient vehicles. GM and Chrysler have also sought the loans, but haven't received them.

Bill Ford said the company is "thrilled with how we're doing. We're gaining market share across the globe," he said. "We're making money now, which is nice after a period of not doing so."

The company expects a modest uptick next year, Ford said, but declined to pinpoint the market share at which his company is aiming. The automaker won't chase market share at the cost of profitability, he said, because "we've all seen where that has led."

Ford, he said, has worked "to really balance inventory with share, with pricing and there's no right answer -- it's an art rather than a science."

Ford expects 12.5 million vehicles to be sold in the U.S. next year, and predicts a 58 percent North American production increase, up 201,000 vehicles over the same period in 2009.

"We're planning conservatively," he said. "We're not planning for a huge pickup next year. If we get one, we'll ride it."

Ford praised the United Auto Workers' Bob King, who is expected to succeed Ron Gettelfinger as the union's president.

King, who is vice president in charge of the UAW's national Ford section, "cares about Ford and he cares about the industry," Ford said. "He's a very good leader."

UAW workers defied union leaders this year and refused to give Ford the same concessions that GM and Chrysler received during bankruptcy.

The concessions include a ban on striking and a freeze on entry-level wages. UAW workers at GM and Chrysler have agreed to a no-strike provision until 2015.

Ford declined to say if he thinks the UAW will reconsider.

Ford, Mazda to remain
'long-term' partners

Automakers to team on new technology and joint systems

December 15, 2009

BRYCE G. HOFFMAN
The Detroit News

Dearborn --One year after Ford Motor Co. sold most of its controlling stake in Mazda Motor Corp., top executives from both companies have reaffirmed their commitment to a "long-term partnership" -- quashing speculation that the longest alliance in automotive history was breaking apart.

In meetings here over the past couple of weeks, Ford CEO Alan Mulally, Mazda CEO Takashi Yamanouchi and other senior managers have discussed how they can continue to collaborate within the framework of their new ownership structure. While their partnership will be less about shared vehicle platforms and more about joint development of automotive systems and technologies, executives from Ford and Mazda said it remains vital to their success.

"The strategic relationship continues. The business relationships continue. And they continue on the basis that they've always continued," Ford Chief Financial Officer Lewis Booth (pictured left) told The Detroit News. "Where it works to the benefit of both companies, we do things together, and where it doesn't, we don't."

These meetings come as Ford works to complete the sale of its last foreign brand, Volvo, as part of an effort to refocus the company on fixing the Blue Oval. At the same time, General Motors Co. is selling its Swedish brand, Saab, and rethinking other aspects of its global operations. But Ford executives say the relationship with Mazda remains vital to maintaining the company's global presence, keeping development costs in check and refining its product development and manufacturing processes.

That was echoed by Masaharu Yamaki, executive vice president for manufacturing at Mazda and a member of its managing board.
"Our strategic alliance will remain intact," he said. "Ford will remain an important partner for Mazda."

That partnership was evident last week at the Los Angeles Auto Show, where both companies featured new subcompacts that are key to their efforts to increase U.S. market share: the Ford Fiesta and the Mazda2. As with many of their new cars and crossovers, they share a common architecture -- in this case, one developed by Mazda.

When development began, neither company planned to sell its version in the United States. But that changed when Mulally took over and ordered a fundamental revision of Ford's product strategy.

"They told us it wasn't designed to be sold here, and they felt it wouldn't be able to meet the U.S. (safety) requirements," said Steve Kozak, chief engineer for safety systems at Ford. "We said, 'We'll be the judge of that.' And we sent our team to Hiroshima (Japan)."

Two months later, engineers from both companies had figured out how to modify the platform to not only meet U.S. safety requirements, but achieve top scores in government crash tests.

Ford saved Mazda

Collaboration between Ford and Mazda was not always so reciprocal. When Ford first began buying up shares in Mazda in 1979, it desperately needed a window into the Japanese automobile industry.

"Twenty or 30 years ago, the Japanese clearly had the lead," said Booth, formerly Mazda's president and chairman. "Now, it's a little more two-way than it was. There's more mutual sharing."

If Ford needed Mazda in the 1980s, Mazda desperately needed Ford by the end of the 1990s. It had strayed from its mission as a manufacturer of sporty cars with polarizing designs and nearly bankrupted itself in a failed bid to compete head-to-head with Toyota Motor Corp. and Honda Motor Co. in the Japanese market by offering a line of plain vanilla sedans designed for mass appeal.

In 1996, Ford bought a controlling stake in the company and installed its own executives, who helped Mazda return to its roots. It also set its sights on the U.S., not Japan, as its primary market.

That strategy worked. Before the automobile market collapsed a year ago, Mazda was setting sales records every month in the United States. Then came the surprise news in November 2008 that Ford was selling off its controlling stake in the company.

Booth said the move was motivated entirely by "Ford's financial position, rather than any change in strategy."

The Dearborn automaker was struggling to secure cash as the bottom fell out of the global auto market. Ford already had sold off its British luxury brands, and then-CFO Don Leclair wanted out of Mazda, too, according to a source, but other executives wanted to keep at least a partial stake.

"We're still dependent on each other," said Derrick Kuzak, Ford's head of global product development, noting that many of Ford's newest vehicles are still based on Mazda platforms. "You cannot change that overnight."

Ford reduced its stake in Mazda from 33.4 percent to just over 13 percent, netting approximately $540 million. It remains Mazda's largest shareholder.
That move raised some serious concerns in Japanese financial circles, coming as it did in the midst of the worst crisis to hit the global auto industry in decades. Several analysts questioned whether Mazda would be able to weather the storm without Ford. But Mazda has proven surprisingly resilient.

As with most other automakers, the past year has not been kind to Mazda.
Its U.S. sales are down 23 percent year-to-date, about the same as the industry as a whole, which is down 23.9 percent, but the company's share of the market remains flat at 2 percent.

In May, Mazda warned that it expected to lose more than $556 million this year.

Too small and too large

One Mazda insider said the company's problem is that it is too small and too large. Though it is a full-line manufacturer, it is too small to compete directly with the titans of the industry. It also lacks the financial resources to aggressively market all of its products. But Mazda also is too big to succeed as a niche player like rival Subaru.
Despite these challenges, Mazda's outlook has been improving. In October, the company said it was selling more vehicles than anticipated and was returning to profitability. It now expects to lose just over $289 million for the full fiscal year, which ends in March.

Mazda also issued more than $1 billion in new stock -- money it plans to use to fund research into green vehicle technology and safety improvements.

"We're making money, and we're cash-flow positive. We just went to the equity markets and raised a bunch of money," said Jim O'Sullivan (pictured right), president of Mazda North America. "That tells you people have a lot of faith in Mazda going forward."

Iwao Nakatani, director of research at Mitsubishi UFJ Research and Consulting Co. in Tokyo, said Mazda's resilience is typical of Japanese carmakers.

"Japanese companies are more patient and able to endure losses," he said. "It's bad for shareholders, but the competitiveness of Japanese industry has been fostered by this industrial structure. They have had to reduce costs and improve quality in order to survive."

While it seems to have found its financial footing, Mazda remains dependent on Ford for things like powertrains, which Ford say it will continue to provide.
"Beyond that, we're always open to considering new opportunities to work together," Kuzak said.

But Ford also remains dependent on its Japanese partner, and Kuzak has committed to regular meetings with Seita Kanai, his counterpart at Mazda, to ensure that information continues to flow between the two companies.

Ford still has a lot to learn from Mazda, particularly in the areas of manufacturing and product development, and both companies continue to share best practices.

Mazda provides Ford with a window into the Japanese auto business that Ford is keen to keep open. And the relationship also allows Ford to achieve even greater economies of scale. For example, by selling motors to Mazda, it is able to lower its own unit cost for those engines. And the two companies continue to operate four major joint ventures -- in China, Thailand, South Africa and Flat Rock -- that Booth said are critical to Ford's global ambitions.

Ford has given up its seat on Mazda's managing board, but Booth said that was motivated by legal considerations and not a reflection of any fundamental rift between the companies.

"Even when we were a bigger stakeholder, Mazda ran their own business," he said. "It's a remarkably enduring relationship. It's built on good business principles. It's also built on strong mutual respect between the two companies."

Ford to restore perks, raises

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

Ford Motor Co. will restore some benefits that its U.S. salaried employees lost last year and resume merit raises -- the latest sign that its recovery is gaining traction.

"Our plan is working," said Ford Americas President Mark Fields in a note to white-collar workers Thursday.

The note said Ford would resume matching employee 401(k) contributions effective Jan. 1. That program, through which Ford kicks in 60 cents for every dollar an employee contributes to a retirement account up to 5 percent of their base salary, had been suspended in January.

Ford also said it will begin offering tuition assistance to salaried workers again on March 1. And the automaker said it would resume merit pay increases April 1.

In 2008, Ford delayed merit pay increases until October and suspended them entirely this year after losing a record $14.6 billion.

"Those benefits were suspended due to difficult business conditions in the United States," said Ford spokeswoman Marcey Evans.

"We had committed to employees to reinstate them when business conditions allowed, and they have improved to the point that we can restore these benefits."

Last month, Ford surprised Wall Street with a $1 billion profit.

It was the second quarterly profit in a row for Ford, the only U.S. automaker that did not accept a government bailout and the only one to avoid bankruptcy in what has been one of the worst crises to hit the automobile industry ever.

The Dearborn automaker still expects to post a loss for the full year.

It has promised a return to profitability in 2011.

Evans said the company will not pay bonuses for 2009.

Engine revs up, driving
recovery – and hope

Globe & Mail Dec 14, 2009

A lineup had already formed on the frigid walk outside Woodstock's Community Employment Services office by the time the doors opened at 8:30 a.m. yesterday. Then the phone calls started, almost 200 by the end of the day.

The word was out: Toyota is hiring.

Toyota Motor Manufacturing Canada Inc. said Thursday it will add a second shift, or 800 jobs, at its Woodstock plant, about 144 kilometres southwest of Toronto. It's a small number compared to the scale of the layoffs in the industry – but for the part of the country hardest hit by the downturn in manufacturing, it's a sign that a recovery is under way.

“Everybody just wants to know, ‘How do I apply?'” said career counsellor Karen Oldroyd, who has been coaching applicants. “It gives them a little hope that things are headed in an upward direction. In the last 24 hours, just the buzz is amazing. It's exciting for people.”

Darrell Crane, who was laid off last summer by Ingersoll Fasteners after 24 years, went online within hours of hearing about the Toyota jobs, but had trouble navigating the company's online application. At a resumé workshop at the job centre, he was able to work with other participants to figure out how to apply.

The Toyota openings, he said, are a “hopeful sign.”

Job seekers such as Mr. Crane tell a story few would have believed a year ago: Canada's auto industry is coming back.

In Southern Ontario, the epicentre of Canada's manufacturing meltdown, the announcement that Toyota would double Woodstock's production of the RAV4 crossover utility vehicle by the end of March marked a turning point, a cautious resurrection.

The tentative comeback of the country's automotive industry is already starting to ripple through the manufacturing sector, as parts makers gear up to meet rising demand.

Canada's industrial heartland has been devastated by the auto slump and the broader manufacturing downturn. Vehicle production plunged 31 per cent in Canada from January to November, driving employment in both the assembly and parts industries down to lows not seen since the early 1960s, when the Canada-U.S. auto pact created a common market for vehicle output in North America.

Thousands of jobs have died, partly because of plant closings by U.S. parts makers that have gone through bankruptcy protection.

Now, increases in production by Toyota and by General Motors Co. at its Cami Automotive plant will generate several thousands jobs.

Toyota's original plan was to start with two shifts of production when the plant opened about a year ago, but it began on just a single shift because of the crisis. Now, as it ramps up, it's a bright spot in the manufacturing landscape.

Suppliers to Toyota are already planning for the boost in business. The number of jobs created at suppliers will likely be more than double the 800 the plant is adding, said Toyota Motor Manufacturing Canada president Ray Tanguay.

Seat manufacturer Toyota Boshoku Canada Inc., for example, located about a five-minute drive from the assembly plant, will hire more than 100 workers, adding to the 200 already employed. And about 50 kilometres away in Guelph, Ont., Denso Manufacturing Canada Inc. will hire 20 new employees to make more engine-cooling modules, which contain the radiator, fan and other cooling system parts for RAV4 models. Denso employs about 400 people now.

Woodstock – not to mention Ingersoll, Ont., a bit west along Ontario's automotive artery, Highway 401 – must give Americans much of the credit for the new-found optimism.

U.S. drivers have pumped up their purchases of crossover utility vehicles, which ride and handle better than their sport utility vehicle ancestors and consume less fuel because they're built on a car chassis instead of a truck frame. And in the way the auto maker slices and dices vehicle segments, not just any crossover utility vehicles, but in particular, those that are compact.

Americans bought more compact CUVs last month than pickup trucks. That category includes the RAV4 models that roll out of the Toyota plant in Woodstock and the Chevrolet Equinox and GMC Terrain assembled at Cami.

Compact crossover sales jumped 32 per cent in the United States last month in a market that was flat overall. That segment has grown to more than 1 million vehicles this year. So these are the vehicles that are helping the auto industry in Canada crawl out of the depths of the Great Recession.

Vehicle production in Canada – about 85 per cent goes into the U.S. market – will rise next year from the low levels of 2009, although it will be far from a spectacular jump, Bank of Nova Scotia economist Carlos Gomes said yesterday.

“It's better than creeping, it's certainly not roaring back, but somewhere in between,” Mr. Gomes said.

While Toyota's decision is a sign of the auto industry's comeback, it's also a signal that the worst days may be behind the manufacturing sector, which was hit first by a stronger dollar, which makes Canada's exports more expensive in other countries, and then by a recession that crippled global trade.

Still, economists question whether all 200,000 factory jobs lost in the downturn will ever return. Competitive challenges remain in the auto sector and the broader manufacturing industry, that predate the recession.

“It's confirmation that employment is improving again, but it doesn't necessarily mean that we have solved all of the competitive issues of our manufacturing sector, such as the strong Canadian dollar and the gradual erosion in market share to overseas manufacturers, said Avery Shenfeld, chief economist at CIBC World Markets.

Optional trim Mr. Shenfeld points to Statistics Canada figures showing about 2.3 million factory jobs in 2004, when the Canadian dollar had started to climb from an historical low. By the time the recession hit, that total was down to about 1.95 million. It's now around 1.74 million.

“We might get back half of what we lost in the recession, or maybe a bit more eventually, but we're unlikely to recover even all of those because part of that was still the trend decline we were facing before the recession even began,'' he said. He added that even as Asian auto companies such as Toyota boost their market share in North America they tend to use fewer domestic parts than the Detroit Three plants they're replacing. end trim

Still, sales by Canadian factories in September climbed for the third month in four as new orders reached a high for the year, although Mr. Shenfeld said there will still be more job losses despite the industry and economy having turned a corner.

Woodstock, where officials estimate the unemployment rate runs below the national average at about 8 per cent, is a prime example of what can happen to a region struck by a manufacturing slump. Still, entire plant closures that hit other towns like St. Thomas, Ont., haven't been seen there.

“Over 400 of our members were laid off in the last eight months,” said Ross Gerrie, president of the Canadian Auto Workers union Local 636. “Their unemployment is running out.”

According to Brad Hammond of Woodstock's economic development team, Woodstock has seen layoffs, work sharing, and some small businesses firing up to half of their employees. And unlike slumps of the past, which have generally cut loose younger workers with lower seniority, this time many who lost their jobs are in their 40s and 50s.

Back at the employment workshop, Mr. Crane's resumé skills are a little rusty. Until he was laid off last summer, he worked at Ingersoll Fasteners for 24 years. He'll need to make his application stand out. When the plant opened, Toyota had to wade through an estimated 45,000 resumés just like his, in a climate starved for manufacturing jobs.

The layoffs in the region have hurt businesses that depend on local consumers. The downtown core could certainly stand for some revitalization: while the town has worked hard to preserve its heritage architecture, some of those pretty store fronts are boarded up and vacant.

“The banks, locally, have red-lined our downtown core,” said Woodstock Mayor Michael Harding. “They won't reinvest.”

He believes that's about to change: a new budge hotel, an art gallery and a travel centre are all slated to open soon. Officials hope Toyota's decision will ripple through the rest of the community.

“We're two weeks away from Christmas, and the merchants are nervous,” said Kelly Morrison of the downtown Woodstock Business Improvement Area. “This announcement will help. People will want to spend again.”

Optional trim As a whole, Canada's manufacturing industry may never return to earlier levels, because companies are learning to do more with less.

Rob Hilborn, president of Darcor Ltd., a company in Toronto that makes high-performance casters and wheels used for anything from automotive tow lines to portable ultrasound machines to props and stages for Cirque de Soleil and Mirvish Productions, said the Toyota announcement is “probably a good indicator'' that things have stopped getting worse.

But he's unlikely to hire back anything close to the 20 per cent of the work force shed in the recession.

“We may add staff as sales increase, but I don't think our staffing levels will ever be to the level they were for the same level of sales,'' he said. “We're going to be shooting for higher revenue per employee than we have in the past.''

King emerges as next UAW chief

Bryce G. Hoffman / The Detroit News
Dec 12, 2009

Bob King will be tapped to succeed United Auto Workers President Ron Gettelfinger as the new head of the union, according to UAW sources. On Wednesday, the union's administrative caucus is expected to formally nominate King, who is vice president in charge of the UAW's national Ford section. That effectively guarantees he will be the next president of the UAW.

The union he will inherit is a shadow of the juggernaut that once dictated terms to Detroit's automakers.

At its peak in 1979, the UAW claimed 1.5 million members. Now, its membership has dropped to 431,000 from well over 500,000 a year ago. The UAW has lost so many members that it is cutting at least 120 staff positions in an effort to balance its budget, UAW sources said.

"We've got to downsize," a union source said. "It may not end there."

In a stunning role reversal, Gettelfinger told UAW employees Thursday that he would impose the terms of a concessionary contract that they voted down last month. That means reduced benefits for the union's own retirees and requires each UAW employee to take a two-week unpaid furlough or give up their 401(k) matching contribution next year.

"Ron Gettelfinger led the UAW during its toughest times and he's had to make some of the most difficult decisions in its history," said Harley Shaiken, a professor and labor expert at the University of California, Berkeley, who said the union boss has had to ask his members to accept painful concessions to keep American factories open. "I don't expect much different direction (from King)."

UAW spokesman Roger Kerson said the union had no comment.

Heir apparent

King, 63, has long been seen as Gettelfinger's heir apparent.

King joined the union in 1970 after hiring on at Ford's Detroit Parts Depot.

Before becoming head of the UAW-Ford section in 2006, he headed the union's national organizing efforts.

Between 2002 and 2006, he was credited with bringing in 66,000 new members, many of them the product of bitter campaigns waged in right-to-work states.

Prior to coming to Solidarity House, he served three terms as director of the UAW's powerful Region 1A, which represents workers in southeast Michigan.

Though the election itself will not take place until the UAW's national convention -- scheduled to be held in Detroit in June, according to UAW sources -- his nomination by the caucus, which is made up of senior union leaders, will all but ensure King's election.

"Since the 1940s when Walter Reuther formed the administrative caucus, the person selected by that committee has won the election," Shaiken said. "I'm not surprised that Bob King may be nominated. He is very well respected and well liked in the UAW."

Though there were several other candidates to replace Gettelfinger when he took control in 2002, none of them managed to secure the backing of enough union leaders to pose a serious challenge to his candidacy.

Bruised reputation

But King's reputation is still bruised by the recent defeat of an agreement he negotiated with Ford to match some of the concessions the UAW granted rivals General Motors Co. and Chrysler Group LLC during their bankruptcy reorganizations earlier this year.

On more than one occasion, union dissidents booed King when he tried to speak in favor of the deal at factories from Michigan to Missouri.

Gary Walkowicz, a member of the bargaining committee at UAW Local 600 in Dearborn and a leading union dissident, would not rule out a direct challenge to King from the convention floor.

"I don't agree with King's policies," he said. "But it really depends on who gets elected as delegates."

Terry Everman, chairman of UAW Local 599 in Flint, said many of his members are looking for "strong direction" and someone willing to help them find jobs in other industries. Just 460 workers remain at the GM plant in Flint he represents. Five years ago, there were 3,500.

"Most of us realize that, with the technological changes, it only takes a fraction of workers to do the kind of work and volume we once did," he said. "It would make sense that our leaders pursue other interests including energy, wind and solar."

Because of his age, King will likely be a one-term president, as it has long been UAW policy for officers to retire when they turn 65.

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

Bob King

• Age: 63
  
• Title: UAW vice president since 1998
  
• Background: Began working at Ford Motor Co. in 1970 after graduating from the University of Michigan and serving in the Army. The journeyman electrician earned a law degree from University of Detroit in 1973. First elected vice president at UAW Local 600, which represents Ford's Rouge complex, in 1981.
  Source: Detroit News research

Ontario tables pension
reform, phase one

James Daw - Toronto Star - Dec 10, 2009

Ontario is moving to eliminate the rights of laid-off workers to share pension fund surpluses, now that they have become quite rare.

But every worker whose age plus service totals 55 would qualify for enhanced pension rights after 2011, while only those affected by a significant layoff would continue to qualify for so-called grow-in rights until then.

Finance Minister Dwight Duncan tried to stay away from controversy in draft amendments tabled Wednesday, the first of two pieces of legislation to modernize the province's pension laws – fearing the sort of angry labour protests the former Conservative government faced when it tried to take away the rights of pension members and laid-off workers retroactively.

He left the more important proposals from last year's report of the Expert Commission on Pensions – like improving pension benefit guarantees, funding and reporting rules and the environment for creating new and innovative pension plans – until next spring.

"We want to get these (changes) out of the way before we deal with the more contentious ones," Duncan told reporters after introducing the Pension Benefits Amendment Act.

Among other changes proposed:

Workers joining defined benefit pension plans would immediately be entitled to take away more than just their own contributions plus interest, instead of having to wait two years to qualify to have pension rights "vested."

Pension sponsors would be able to amend their plans so older members could shift to part-time and continue to accrue more pension rights while drawing a pension, as permitted in Quebec and proposed in the last provincial budget.

Elimination of a time-consuming and potentially costly requirement to review historical pension plan documents if the employer gets a written agreement from members and pensioners to share surpluses at the time a plan is wound up.

Giving multi-employer pension plans, such as in the construction, resource, food and supermarket industries, the right to eliminate enhanced benefits for those laid-off after their age plus service totals 55 years.

Measures to give members and retirees more ready access to information about the funding status of their pension plan, notice of plan changes and the right to be included in an advisory role.

Giving regulators the power to approve arrangements for altering pension benefits or dealing with benefits when a company seeks protection from creditors or declares bankruptcy, as in the case of Nortel Networks Corp. and AbitibiBowater Inc.

New provisions to smooth the restructuring of companies and government agencies by allowing affected employees to transfer the value of their pension entitlements to a new pension plan.

Ian Markham, an actuary with Watson Wyatt Worldwide, said the proposed enhancements for all laid-off senior workers – not just those affected by a mass layoff or the closing of a sub-office or plan – can be extremely valuable.

Take the case of someone in a typical private-sector pension plan who is laid off at age 45 after at least 10 years of service. He or she might qualify for a 38 per cent larger transfer to a locked-in savings account by being treated as eligible for a 30 per cent pension reduction at age 55.

A 45-year-old with 20 years in a plan that pays an unreduced pension to someone with 30 years of service at 55 might qualify for twice or more money thanks to Ontario's generous pension grow-in rights for laid-off workers.

Markham predicted disputes over whether someone was laid off or fired, or not properly informed about the value of grow-in rights when given the option to quit or accept an enhanced severance package.

CAW CONTACT
Volume 39, No. 43 – December 11, 2009

 
CAW President Urges Doubling of CPP

Opening CAW Council in Toronto on December 4, CAW President Ken Lewenza urged the nearly 700 delegates from across the country to renew their fight for pension security. This means doubling the Canada Pension Plan, so that all citizens can live in dignity, regardless of whether they have an employer paid pension plan or RRSPs, said Lewenza.

"People are now talking about pensions and we're reading about pensions each day in the newspaper because workers are hitting the streets," said Lewenza.

"Our ability to preserve employer-sponsored pension plans in collective bargaining will depend on us bringing every Canadian along with us. If we don't do this, we won't succeed. This fight for fair pensions will be a defining moment for the labour movement."

Lewenza said that up to 75 per cent of private sector workers do not have pensions and only 30 per cent of Canadians have RRSPs, many of whom lost thousands of dollars with the global financial crisis and collapsing stock values last fall.

"If we can double the CPP, people then won't be scared to retire," said Lewenza. "Our government has it backwards, seeking regulatory changes to allow people to stay at work until 70 or 75."

Along with the doubling of CPP, Lewenza also said the union must continue to fight for a number of other legislative changes, particularly around severance, workplace closures and bankruptcies.

Lewenza highlighted the case of Nortel Networks. An Ontario court recently ruled the company has no financial responsibility for people who retired or who were on long term disability leave prior to the company going into bankruptcy protection in January 2009. Around the same time, media reports revealed that Nortel is still paying massive executive bonuses.

"It is unlawful in this country when executives can get rich on the backs of pensioners," Lewenza said to a huge round of applause.

Collective Bargaining

The Council meeting wraps up a tumultuous year in collective bargaining and politics. Lewenza outlined the last two sets of auto negotiations - with CAMI Automotive in Ingersoll, Ontario, which ended in September and Ford Motor Company, completed at the end of October. Lewenza commended both bargaining committees for their efforts in reaching the agreements that were ratified by members.

He said the auto industry gets a great deal of public attention, attention that should also go towards smaller workplaces where people are losing their jobs. "The auto parts sector in particular has been devastated over the last few years, as a result of constant restructuring and downward pressure by the auto companies to cut costs," said Lewenza.

Just as the auto industry has faced severe challenges over the last year, so too has the airline industry, particularly Air Canada which Lewenza called very vulnerable. "We can't protect the long term survival of Air Canada from constant negotiations," said Lewenza. Government has a role to play in supporting our national air carrier and linking communities across the country from east to west, he said.

Lewenza also congratulated technicians at Jazz Air for ratifying a new collective agreement. The customer service agents at Jazz Air have rejected two collective agreements and will vote on a new one next week.

The economic downturn has had a terrible impact on the retail, gaming, and hospitality sectors as well, where employers have attempted to exploit workers' fears to drive down working conditions, roll back wages and cut hours.

Lewenza highlighted the pending closure of the longtime Dominion store in Marystown, Newfoundland. He commended the CAW bargaining committee who were successful in negotiating an excellent closure agreement.

Lewenza urged CAW members to do their shopping in unionized stores. Lewenza also called on members to continue fighting for increases to the minimum wage to make gains for both organized and non-union workers.

Workers in the gaming sector are also suffering layoffs and seeing their hours cut as their employers grapple with fewer tourists. In the hospitality sector, a number of hotels in B.C. will be entering bargaining this coming year. 

The union also opened bargaining with VIA Rail in October. The current agreement expires December 31.

Domestic Politics

Lewenza recalled that only a year ago, there were high hopes the NDP-Liberal coalition, supported by the Bloc Quebecois, would take over government and bump out the Harper Conservative government. Not only did this not happen, said Lewenza, but Harper has strengthened the party's hold on power with the Liberal party currently sinking in the polls.

Lewenza urged CAW members at election time, to actively work to ensure the Harper Conservatives do not return to government. He said the Conservatives are a party that despise unions and despise public services.

The union organized the first of what will be a number of cross-country leadership meetings, in Halifax, Nova Scotia last week where recently elected NDP Nova Scotia Premier Darrell Dexter addressed the group. Lewenza had an important message for Dexter.

"You have to be different than the Liberals and Tory governments and stand up in defense of labour legislation and public services."

"We can't let Dexter off the hook," Lewenza told delegates.

Support for Public Services and Public Sector Workers

Lewenza urged the vigilant protection of public services as municipal, provincial and federal governments seek to pay down debts accumulated in the recession on the backs of workers.

Increasingly, health care workers are under attack as hospitals are made to meet stringent budgets, regardless of its impact on care.

Lewenza also encouraged delegates not to fall into the trap of "tax rage," fostered by the unlikely coalition of the Ontario NDP and the Ontario Progressive Conservative Party, surrounding the Harmonized Sales Tax (HST). "We want a strong civil society and that must be supported by taxes," said Lewenza.

Defending the National Gun Registry and Remembering the Montreal Massacre

Nearing the 20th Anniversary of the Montreal Massacre, Lewenza reflected that the event was a catalyst for action to end violence against women.

Women in the union in particular moved this agenda forward, creating equity programs and the Women's Advocate program, bargained into collective agreements across the country. Part of this activism also involved more stringent legislation on gun control.

"I ask members to recommit ourselves to maintaining gun control in this country, including urging all Liberal and NDP MPs to vote against Bill C-391, which would destroy the national gun registry."

Oppose Harper Free Trade Agenda, Delegates Urged

CAW Council delegates voted unanimously in support of a recommendation opposing new free trade agreements being proposed by the Harper government, including a deal with the European Union (Canada-EU Comprehensive Economic and Trade Agreement) that would restrict the ability of governments to adopt Canadian-content requirements in public purchases.

CAW Local 1075 President Paul Pugh said the issue at stake has to do with government skirting their responsibility for managing the economy. CAW Local 1075 represents workers in the Bombardier Thunder Bay plant, a facility that has received substantial new investments in part because of Canadian-content rules included in Toronto streetcars and subway cars.

"Municipalities and provinces must have power to create jobs for Canadians," Pugh said. "We can't allow the Harper government to take that away.”

Opposition to the Conservative government's free trade agenda also includes a proposed deal with South Korea as well as a hotly-contested deal with Colombia, a country that has a notorious track record on human rights abuses and is openly hostile to the rights and freedoms of trade unionists.

Council Delegates Call for Stronger Severance Protections

Council delegates supported a resolution calling for the establishment of provincial and federal funds to pay outstanding monies owed to workers in the case of an employer bankruptcy, including severance and termination pay.

With hundreds of thousands of Canadians having lost their jobs over the past years, there is a growing uneasiness among workers that government will not step in to enforce laws protecting workers right to severance pay, said Jerry Dias, Assistant to CAW President Ken Lewenza.

“Unless governments take a principled stand to protect the unpaid wages workers are entitled to under law, more and more Canadians will face the double shock of unemployment and no financial safety net,” Dias said.

CAW Local 195 President Gerry Farnham, who represents former Aradco and Aramco auto parts workers in Windsor, Ontario, stressed the important role the union has played in ensuring workers receive at least some of the outstanding monies they are owed in the face of employer insolvencies.

“At the end of the day, without unions fighting on behalf of these workers and demonstrating for their rights in the workplace, they most certainly would be left with nothing,” Farnham said. “Our fight is far from over.”

Aradco and Aramco workers in Windsor, are still owed $2.5 million in unpaid severance, termination and unpaid wages from employer Catalina Precision Products.    

CAW Commended for Activism on Canadian Content Rules

Toronto City Councillor Adam Giambrone stressed the importance of the CAW's activism and partnership with the Toronto Transit Commission in building a green and sustainable economy.

Giambrone, who is also chair of the TTC, told Council delegates that the union's leadership and membership played an important role in ensuring Toronto city council selected Bombardier as the manufacturer for the TTC's new light rail transit vehicles, which will be built in Canada at the company's Thunder Bay, Ontario plant.

The $1.2 billion streetcar contract means greater job security and hundreds of new jobs at the Thunder Bay plant. CAW Local 1075 represents workers at the Bombardier plant.

Giambrone outlined the importance of government establishing strong Canadian content requirements when they set out to purchase new mass transit vehicles. 

Compensation for Workplace Stress

Delegate after delegate outlined the adverse health effects of workplace stress including mental stress and physical affects that result in illness, injuries, accidents and undue hardship for the membership.

Workplace stress is generally an unseen hazard whether it’s acute (sudden onset) or chronic (long term gradual onset) that affects workers in all sectors.

They heard that workers across Canada don’t receive or are not entitled to fair compensation for workplace induced stress illnesses.

In response delegates voted to ensure the CAW makes it a priority to bargain with all employers to include workplace stress in contract language as a recognized work-related illness.

The resolution calls on the CAW to campaign to have governments at all levels accept workplace stress as a health hazard and illness. It also urges the expansion of workers’ compensation coverage to fully compensate for all forms of work-related stress.

Canadian Built Marine Atlantic Ferries Needed

The federal government must provide adequate funding to federal crown corporation Marine Atlantic so that a made in Canada replacement program for its aging fleet of ferries is immediately launched.

An emergency resolution was approved by Council delegates stressing that shipyards such as the Marystown Shipyard in Newfoundland and Labrador and the Halifax Shipyard in Nova Scotia build ferries for this vital service.

CAW Locals 4285 and 4286 represent approximately 700 workers at Marine Atlantic, which provides year round ferry service between Nova Scotia and Newfoundland and Labrador. Marine Atlantic is constitutionally mandated to provide passenger and commercial marine transportation between the two provinces.

Any attempt by Transport Canada and the federal government to lease or purchase vessels from outside Canada to replace the present fleet of ferries must be stopped.

CAW Atlantic Canada director Les Holloway urged delegates to go back to their locals and highlight the importance of building ships in Canada, which means jobs for Canadians and a stronger economy.

Wayne Butler, President of CAW/Marine Workers Federation Local 20, in Marystown, Newfoundland, said the shipbuilding industry is a crucial part of the local economy. He said the current fleet of Marine Atlantic ferries should have been replaced 10 years ago.

"There is a need for the federal government to build these ships in Canada," Butler said.

Mavis Grist, President of CAW Local 4285, stressed the importance of the CAW's campaign and the need build these vessels in Canada.

Climate Deal in Copenhagen a Must, CAW Says

CAW President Ken Lewenza called on the federal government to enter UN climate talks in Copenhagen on December 7 with a clear mandate to reach a new international climate deal, that includes aggressive emission reduction targets and language that protects workers negatively impacted by job loss.

“Canada must now show leadership, both at home and internationally, to ensure the international community can collectively make the successful transformation toward sustainability,” Lewenza said in a December 3 letter to federal Environment Minister Jim Prentice. 

The Canadian government has received a wave of international criticism in recent weeks, including from UN Secretary Ban-ki Moon, on its poor performance in dealing with climate change.

Lewenza said that the Canadian experience during the recent period of global economic and environmental transformation has so far been dismal, with over half a million jobs lost and growing insecurity, instability and precariousness in the labour market.

CAW Council delegates unanimously endorsed a recommendation to support ongoing efforts of labour unions, environmental and indigenous organizations and civil society groups calling on world leaders to negotiate a strong climate treaty in Copenhagen this year, including language that supports just transition programs for impacted workers.

“The global economic crisis has provided the federal government the opportunity to advance an agenda that both tackles our environmental crisis and rebuilds our economy on the basis of sustainability. But this opportunity clearly has not been seized, and to the detriment of all Canadians.” 

A copy of Ken Lewenza’s letter to Ken Prentice can be viewed on the CAW website at: http://www.caw.ca/en/8121.htm

 Ending Male Violence Against Women

White Ribbon Campaign Executive Director Todd Minerson finds hope in the everyday struggle to end violence against women. On the eve of the 20th anniversary of the Montreal Massacre, Minerson said that he’s optimistic about men, particularly young men, understanding the necessity of changing their own behaviour to take on violence, even challenging those “good guys” who would never resort to violence or abuse to speak up.

“Good guys need to make violence against women their problem,” said Minerson during his speech to CAW Council, encouraging all men to actively work to end violence against women by speaking to other men and boys about it and working in solidarity with women’s groups to promote gender equality. 
The White Ribbon Campaign is an international effort to encourage men to take the initiative to end violence against women.

In the lead up to Minerson’s address Julie White, CAW Director of Women’s Programs reflected back on the Montreal Massacre and the sentiments that accompanied what is now known as the worst killing spree in Canadian history.

“On December 6, 1989, our country would change forever,” said White. How we saw ourselves as a nation, would change as we began to confront the issue of male violence against women, she said.

During the emotionally-charged discussion, a number of delegates got up to the microphones. Among them was CAW Local 4003 member Denise Hampden, the founder of the Handkerchief Project.

The Handkerchief Project is an initiative which invited cloth submissions from across the country on the issue of violence against women, to commemorate the 20th anniversary of the Montreal Massacre. The handkerchiefs were displayed in the foyer at Council.

Closely linked to the discussion was that of the gun registry, which is currently under threat by a private members bill (Bill C-391), which would see it abolished.

CAW/FFAW President Earle McCurdy challenged the MPs who voted in favour of abolishing the registry.

“Have you ever seen such a display of insensitivity as those Members of Parliament who voted in favour of abolishing the gun registry, on the eve of the 20th anniversary of the Montreal Massacre?” asked McCurdy.

Peggy Nash, Assistant to CAW National President, was unequivocal on the position of maintaining the registry. “Every politician needs to be accountable, especially those who say they are our friends,” said Nash. “We need to make sure what we have achieved is not undermined.”

For more information about the White Ribbon Campaign, please visit: http://www.whiteribbon.ca/

For more information on the Handkerchief Project, please visit: http://thehandkerchiefproject.ca/

Reform and Strengthen Public Pensions

With Canadians facing a growing pension crisis, council delegates called for reform to the Canada Pension Plan and Quebec Pension Plan.

They outlined the importance of strengthening the CPP/QPP for current and future retirees and ensuring there is a strong legacy of public pensions for the next generation.

"Private plans have failed to provide benefit security, broad coverage and adequate retirement income, while savings schemes such as RRSPs have been a dismal failure, except for high income earners," a CAW leaflet states. Instead, public pensions have significantly reduced poverty among elderly Canadians. Still public pension reform remains crucial.

Delegates unanimously endorsed the Canadian Labour Congress campaign developed to confront the pension crisis. These initiatives include:

- doubling CPP and QPP benefits through a gradual increase in contributions over a seven year period;

- reducing the impact of a contribution increase on low-income workers through a proposal to double the Year's Basic Exemption;

- increasing the Guaranteed Income Supplement of Old Age Security by increasing the GIS by 15 per cent;

- introducing a Canada-Wide Pension Insurance Program;

- creating a national Pension Benefit Guarantee Fund, that provides protection for private sector-defined benefit plans in the event an employer becomes bankrupt and insolvent.

Ontario is the only jurisdiction in Canada with such a fund currently.

CAW Council Supports Striking Vale Inco Workers

CAW Council delegates voted unanimously to provide $20,000 in financial support to striking Vale Inco workers in Sudbury, Ontario.

John Fera, President of United Steelworkers Local 6500 representing the over 3000 striking miners, delivered an impassioned address to council delegates, highlighting the challenges his members face in trying to negotiate a new collective agreement.

Fera said the company has been relentless in its demand for workers to abandon their defined benefit pension plan, weaken seniority provisions and transfer rights and increase the use of contract workers, among other concessionary demands.

The Brazil-based mining giant Vale purchased Canadian mining company Inco in 2006, one of the largest foreign takeovers in Canadian history. Fera said the change in ownership has resulted in an increasingly hostile workplace environment, a shift he attributes to cutthroat and profit-driven globalization in the mining industry.

"The way this company has treated our community and our members has so far been despicable," Fera said.

Despite historic tensions between the Steelworkers and CAW/Mine, Mill and Smelter workers unions in Sudbury, Fera said the support his local has received from CAW leadership in the community is commendable.  Vale Inco workers have been on strike since July 2009.

Commit to Union Education

CAW Council delegates renewed a commitment to fully utilize the educational opportunities available to members through programs and workshops delivered at the CAW’s Port Elgin, Ontario Family Education Centre.

In recent years, with the steady decline of manufacturing jobs in Canada, the CAW has lost over 25,000 members – many in the auto sector – which has put added strain on various education funds offered by the union.

“As local union leadership we’re not supporting our union education programs as we should,” said CAW/MWF Local 20 President Wayne Butler. “Port Elgin is the heart of our union and is the base upon which our union must build for the future.”

Public Sector Jobs are Not For Sale

Delegates to CAW Council, many representing public sector workers across the country, urged support for good public service jobs in every region and community in the country.

“Mounting government deficits caused by a decline in good paying jobs have resulted in an increased demand for public services but with few funds to pay for them,” said CAW Local 2301 President Gary Warren. “As the threat of privatization looms we must remind our elected leaders that public services are not for sale.”

Delegates from British Columbia highlighted the challenging bargaining environment public sector workers face as the province posts major public financial deficits and gears up for the Olympic Games in February.

CAW Local 2200 President Joe Elworthy criticized the Campbell government in B.C. for suggesting there are few funds available to workers, while opening their pockets to fund major building and promotional projects for the Olympics. Local 2200, represents workers at the Coast Mountain Bus company in the Metro Vancouver Area. 

Bud Jimmerfield Award: Gord Piper CAW Local 114

CAW Local 114 Vice President Gord Piper is the winner of the annual Bud Jimmerfield Award for health, safety, environment and workers' compensation activism.

The award is made each year at the CAW Council meeting in December.

Gord Piper is a driver at FastFrate in Vancouver, British Columbia and has been actively involved with his local union for the last 29 years, taking on health and safety issues and workers' compensation issues.

CAW Health and Safety and Environment Director Sari Sairanen said Gord Piper is a selfless advocate on behalf of workers.

"There is not a local in British Columbia untouched by Gord's work on health and safety and workers compensation," Sairanen said.

Piper told CAW Council delegates it is a great honour to receive the award, thanking those who nominated him.

He said he worked briefly with Bud Jimmerfield in the early 1990s and was greatly impressed with Bud's dedication to the cause of workers health and safety.

Piper said it was a tremendous honour to work on behalf of CAW members who seek help, adding that these members always teach so much more than he could ever learn from any course.

At the CAW Council meeting in December of 1997 a moving address by CAW Local 89 President Bud Jimmerfield was given. Bud had only a couple of months to live. He had contracted cancer of the esophagus from exposure to metalworking fluids during 30 years of work at an automotive parts plant. He asked all to do their best to prevent future occupational diseases, death and injuries.

Ford seeks state help for
$500M hybrid projects

Bryce G. Hoffman / The Detroit News

Dec 9, 2009

Ford Motor Co. will invest up to $500 million and create more than a thousand new jobs in Michigan to support its electric vehicle programs if state lawmakers expand an existing incentive program and approve $85 million in tax credits, the company said Tuesday.

If those conditions are met, the Dearborn automaker would engineer and assemble battery packs for a new generation of hybrid vehicles in Michigan. Ford also would commit to manufacturing a new hybrid and plug-in hybrid here that would be based on the same platform as the new Ford Focus it plans to unveil in Detroit in January.

These moves would consolidate much of Ford's electric vehicle research, development, engineering and manufacturing in the state. Nancy Gioia, director of Ford's global electrification programs, said Michigan's commitment to battery technology and manufacturing makes it a great fit for Ford's plan, which she said would benefit the state.

"It promotes Michigan's competitiveness," she said. "It strengthens Michigan's advanced technology manufacturing base. It really is an engine for economic growth."

A spokeswoman for Gov. Jennifer Granholm said the governor supports Ford's request.

Last year, the state authorized tax credits for high-capacity lithium-ion battery pack assembly. Now, Ford is asking the state to expand those incentives to include lower-capacity batteries used in hybrid vehicles.

Specifically, Ford is asking for $85 million in tax credits from that program through 2014, and an additional $35 million beyond 2014 if the lithium-ion cells used in the battery packs are manufactured in Michigan.

The battery packs Ford uses in its hybrid cars and trucks are designed and produced by Delphi Corp. in Mexico. But Gioia said engineering and assembling these packs is a "critical core competency" that Ford needs to move in-house.

"It's a critical core competency to delivering the vehicle function, its DNA, its durability, its reliability and for getting every joule of energy out of the vehicle," she said, adding that automakers are struggling to keep up with the rapid advances in lithium-ion cell technology.

"By controlling the battery system development, we're making ourselves able to respond very quickly."

Derrick Kuzak, Ford's head of global product development, said this is key to Ford's competitiveness in the emerging electric vehicle market. For example, he said Ford has been able to modify the battery control system on its new 2010 Ford Fusion Hybrid to deliver best-in-class fuel economy and a higher electric-only speed.

"That ability comes not so much from cell technology itself, but the way that we're controlling the battery system," Kuzak said.

Ford, which was the first U.S. carmaker to bring a hybrid to market, offers four hybrids in the United States.

In January, it announced plans to introduce a battery powered version of its Transit Connect commercial van to fleet customers next year, to be followed by a battery powered version of the new Focus compact in 2011.

The company also promised to introduce a next-generation hybrid and plug-in hybrid in 2012.

On Tuesday, Ford said both of those vehicles will be built off the same platform as the new Focus, which will be produced at the company's Michigan Assembly Plant in Wayne. The hybrid and plug-in hybrid would likely be produced on the same assembly line.

Ford said it has not decided where in Michigan the batteries would be assembled. Gioia said the packs could be assembled at an existing facility or at a new factory. Gioia said Delphi may continue to supply some of the components used to produce its battery packs.

Ford's announcement came a day after General Motors Co. said it would invest $336 million to upgrade its Detroit-Hamtramck plant to produce the extended range electric Chevrolet Volt and the next-generation Malibu.

GM announced earlier this year that it would assemble its own battery packs in Brownstown Township.

University of Michigan economist George Fulton said these investments are "positive signs" that the state's efforts to become a hub for green vehicle development and manufacturing are "gaining traction."

"It's like a snowball rolling down the mountain," he said. "It's too early to say if it will really take hold, but this is encouraging."

Megan Brown, a Granholm spokeswoman, said Ford's plan would aid the state's efforts to develop a nascent battery industry.

"It's consistent with everything we've been trying to do over the past three years to attract this new industry sector," she said.

"Coming after the Chevy Volt announcement Monday, it's great news."

Gioia outlined Ford's plan for Michigan senators Tuesday and is scheduled to meet with state representatives today.

She said Ford has other sites in mind if Michigan lawmakers are unwilling to support the project with tax credits.

Some still oppose such incentives.

"The fact that we have to give tax credits tells us that our taxes on economic activity are too high," said Gary Wolfram, a professor of political economy at Hillsdale College.

"What we're doing is making it more difficult for us to lower the tax burden as a whole, which is really what we ought to be doing."

Ignatieff to call for
pension plan reform

Bill Curry - Globe & Mail

Dec 8, 2009

Liberal Leader Michael Ignatieff wants Canadians to be able to top up their individual retirement savings through the Canada Pension Plan, a move that would radically reshape the long-trusted national retirement fund.

Mr. Ignatieff is expected to call Tuesday for reforms that would allow individuals to invest cash in a “supplementary” version of the CPP.

According to sources, the idea will be pitched as a measure that will appeal to the millions of Canadians who do not have a company pension and are leery of registered retirement savings plans.

“This could be a very popular way to invest,” said a Liberal source familiar with the proposal.

The idea is sure to give the pension issue some added political profile in advance of this month's so-called pension summit in Whitehorse. The informal “summit” title has been slapped on the regular meeting between Finance Minister Jim Flaherty and his provincial and territorial counterparts, scheduled for Dec. 17-18, because they will receive the findings of an independent study they had requested on pension reform.

That report will be written by University of Calgary economist Jack Mintz.

Mr. Mintz will be preparing his report on the advice of finance ministers from British Columbia, Alberta, Manitoba, Ontario and Nova Scotia.

Mr. Ignatieff scheduled a news conference for Tuesday in which he will say two key holes remain in the Conservative government's approach to pension reform.

Sources say the Liberal Leader will highlight the fact that no new measures have been announced that would help the millions of Canadians whose employers do not provide a company pension.

On that point, he will urge the government to find a way for individuals to gain access to the CPP so they can voluntarily top up their own retirement savings.

Secondly, Mr. Ignatieff will call for new measures aimed at protecting the company pensions of workers when a business goes bankrupt. It is not clear whether this would also involve the Canada Pension Plan, or whether it would require a new federal agency to manage those pension funds.

Mr. Ignatieff will be joined at the news conference by Liberal MP Judy Sgro, who has studied the pension file, and party finance critic John McCallum.

In October, the government announced new measures to prevent companies from taking “contribution holidays” unless their pension funds are running a surplus of 5 per cent or more. The measures apply only to federally regulated pension programs, which cover about 7 per cent of Canadian plans.

Mr. Flaherty's office points out that the government could not go further without the support of the provinces – which regulate the other 93 per cent – and that is why the special study was commissioned.

“We recognize the importance of these pension issues and at the May meeting of federal-provincial-territorial finance ministers, all parties agreed to form a research working group to study pension issues,” said Chisholm Pothier, Mr. Flaherty's director of communications. “We look forward to receiving the report and will consider where to go from there once we have received it.”

Mr. Ignatieff's pension proposals will come a day after the Liberals hosted a day-long summit on Parliament Hill focused on trade policy. The party leader recently overhauled his Ottawa staff and is putting more focus on policy issues.

However, his political rivals will likely paint him as a latecomer to the pension debate. Pensions have long been a dominant issue for the New Democrats in the House of Commons, while Mr. Flaherty has unveiled several pension reforms of late.

With files from Jacquie McNish and Janet McFarland

Retiree
George Peel

FATHER OF NANCY HART


George Peel

It is with great sadness that we inform you of the passing of retiree George Peel on December 7, 2009

Our Deepest Condolences go out to his Family.

FUNERAL ARRANGEMENTS

BROADWAY TABERNACLE CHURCH
556 BROADWAY AVE.
ORANGEVILLE, ON.

VISITATIONS:
SATURDAY, DECEMBER 12TH. 2009
10 TO 11AM

FUNERAL SERVICE
11AM

In lieu of flowers,
donations
to the Sick Kids Foundation
would be greatly appreciated.

CAW President Urges
Doubling of CPP

Opening the CAW Council gathered in Toronto on December 4, CAW President Ken Lewenza urged the nearly 700 delegates from across the country to renew their fight for pension security.  This means doubling the Canada Pension Plan, so that all citizens can live in dignity, regardless of whether they have an employer paid pension plan or RRSPs, said Lewenza.

"People are now talking about pensions and we're reading about pensions each day in the newspaper because workers are hitting the streets," said Lewenza.

"Our ability to preserve employer-sponsored pension plans in collective bargaining will depend on us bringing every Canadian along with us.  If we don't do this, we won't succeed. This fight for fair pensions will be a defining moment for the labour movement."

Lewenza said that up to 75 per cent of private sector workers do not have pensions and only 30 per cent of Canadians have RRSPs, many of whom lost thousands of dollars with the global financial crisis and collapsing stock values last fall.

"If we can double the CPP, people then won't be scared to retire," said Lewenza. "Our government has it backwards, seeking regulatory changes to allow people to stay at work until 70 or 75."

Along with the doubling of CPP, Lewenza also said the union must continue to fight for a number of other legislative changes, particularly around severance, workplace closures and bankruptcies.

Lewenza highlighted the case of Nortel Networks, for whom just last week an Ontario court ruled the company has no financial responsibility for people who retired or who were on long term disability leave prior to the company going into bankruptcy protection in January 2009.  Around the same time, media reports revealed that Nortel is still paying massive executive bonuses.

"It is unlawful in this country when executives can get rich on the backs of pensioners," Lewenza said to a huge round of applause.

Collective Bargaining

The Council meeting wraps up a tumultuous year in collective bargaining and politics.  Lewenza outlined the last two sets of auto negotiations - with CAMI Automotive in Ingersoll, Ontario, which ended in September and Ford Motor Company, completed at the end of October. Lewenza commended both bargaining committees for their efforts in reaching the agreements that were ratified by members.

He said the auto industry gets a great deal of public attention, attention that should also go towards smaller workplaces where people are losing their jobs. "The auto parts sector in particular has been devastated over the last few years, as a result of constant restructuring and downward pressure by the auto companies to cut costs," said Lewenza.

Just as the auto industry has faced severe challenges over the last year, so too has the airline industry, particularly Air Canada which Lewenza called very vulnerable. "We can't protect the long term survival of Air Canada from constant negotiations," said Lewenza. Government has a role to play in supporting our national air carrier and linking communities across the country from east to west, he said.

Lewenza also congratulated technicians at Jazz Air for ratifying a new collective agreement. The customer service agents at Jazz Air have rejected two collective agreements and will vote on a new one next week.

The economic downturn has had a terrible impact on the retail, gaming, and hospitality sectors as well, where employers have attempted to exploit workers' fears to drive down working conditions, roll back wages and cut hours.

Lewenza highlighted the pending closure of the longtime Dominion store in Marystown, Newfoundland. He commended the CAW bargaining committee who were successful in negotiating an excellent closure agreement.

Lewenza urged CAW members to do their shopping in unionized stores.  Lewenza also called on members to continue fighting for increases to the minimum wage to make gains for both organized and non-union workers.

Workers in the gaming sector are also suffering layoffs and seeing their hours cut as their employers grapple with fewer tourists. In the hospitality sector, a number of hotels in B.C. will be entering bargaining this coming year. 

The union also opened bargaining with VIA Rail in October. The current agreement expires December 31.

Domestic Politics

Lewenza recalled that only a year ago at the CAW Council meeting in December, there were high hopes the NDP-Liberal coalition, supported by the Bloc Quebecois, would take over government and bump out the Harper Conservative government. Not only did this not happen, said Lewenza, but Harper has strengthened the party's hold on power with the Liberal party currently sinking in the polls.

Lewenza urged CAW members at election time, to actively work to ensure the Harper Conservatives do not return to government. He said the Conservatives are a party that despise unions and despise public services.

The union organized the first of what will be a number of cross-country leadership meetings, in Halifax, Nova Scotia last week where recently elected NDP Nova Scotia Premier Darrell Dexter addressed the group. Lewenza had an important message for Dexter.

"You have to be different than the Liberals and Tory governments and stand up in defense of labour legislation and public services."

"We can't let Dexter off the hook," Lewenza told delegates.

Support for Public Services and Public Sector Workers

Lewenza urged the vigilant protection of public services as municipal, provincial and federal governments seek to pay down debts accumulated in the recession on the backs of workers.

Increasingly health care workers are under attack as hospitals are made to meet stringent budgets, regardless of its impact on care.

Lewenza also encouraged delegates not to fall into the trap of "tax rage," fostered by the unlikely coalition of the Ontario NDP and the Ontario Progressive Conservative Party, surrounding the Harmonized Sales Tax (HST). "We want a strong civil society and that must be supported by taxes," said Lewenza.

Defending the National Gun Registry and Remembering the Montreal Massacre

Nearing the 20th Anniversary of the Montreal Massacre, Lewenza reflected that the event was a catalyst for action to end violence against women. Women in the union in particular moved this agenda forward, creating equity programs and the Women's Advocate program, bargained into collective agreements across the country.  Part of this activism also involved more stringent legislation on gun control.

"I ask members to recommit ourselves to maintaining gun control in this country, including urging all Liberal and NDP MPs to vote against Bill C-391, which would destroy the national gun registry."

ERIC JOHN  1923 - 2009

Passed away peacefully on December 5, 2009 at the age of 86 years.

CAW Local 584 Retirees wish to send their deepest condolences to the John Family. Eric was a friend to us all and will be sadly missed.

Eric dedicated his working life to making the world a better place in any way he could. He held many elected positions in the U.A.W. and C.A.W. from 1954 until the present position as Vice-chair of the C.A.W. National Retired Workers Executive Board.

He was active in Co-op housing developments and constant government lobbying for pensions. Eric was employed by the Ford Motor Company for 32 years of dedicated service starting as a Tool and Dye Maker. Eric will be sadly missed by all his many friends in Canada, the United States and Germany.

Cherished husband to the late Ingrid-2003 (nee Moll), with whom he celebrated 50 years of marriage. Loving father to Herb John and partner Yolanda Blackbird, Karin Veselinovic and husband Peter, and Monika John and special friend Rodney Kimbrough. Dear son of the late Christian and Elise (nee Bogel) John. Dearest grandfather to Jessica and partner Romeo, Stephanie, Jennifer and fiancé Gary, Theodore, Sarah, Jason, Vera, Nada, Sharon and partner Ted, Susan and partner Kasey. Great-grandfather to Matthew, Julian, Bobby, Daniel, Cheyenne, and Lucas. Dear brother of Ludwig John and wife Haroldine, Lillian Clausen and husband Peter, Gerhard John and wife Burga, Anneliese Neumeier and husband Willi, Manfred John and wife Waltraud. Many nieces and nephews also survive. Special friend to Eila.

If you so desire, memorial donations to Windsor & Essex Cancer Centre Foundation or Hospice Village would be appreciated by the family. Visiting Monday 7-9 p.m., Tuesday 2-5 and 7-9 p.m. Funeral Wednesday 10:00 a.m. at Families First Funeral Home & Tribute Centre (519-969-5841) 3260 Dougall Ave. with Pastor A. Schiemann officiating. Cremation to follow at Heavenly Rest Cemetery.

Mulally easily met Ford's
list of qualifications

Bryce G. Hoffman / The Detroit News
Dec 6, 2009

When Bill Ford Jr. decided in 2006 that fixing Ford Motor Co. was a bigger challenge than he could handle, he began making a list of the qualifications he wanted in his replacement.

It would have to be someone who had led a successful corporate restructuring, someone with global manufacturing experience and someone with enough technical expertise to be able to step in and learn the business quickly.

"It wasn't a long list," said a person familiar with the situation.

At the top was Carlos Ghosn, the CEO of Japan's Nissan Motor Co. and France's Renault SA, who then enjoyed near rock star status in the global auto industry.

Ghosn said no.

Though he lacked automobile experience, Mulally met all of Bill Ford's criteria.

The president of Boeing's commercial aviation division, he had made a name for himself by saving the jet manufacturer from financial collapse after the Sept. 11 terrorist attacks prompted every customer to cancel orders. He was an engineer who had become a student of Toyota Motor Corp.'s production system and applied it to aircraft manufacturing. As an executive, Mulally also already had dealt with the United Auto Workers.

Mulally had something else Bill Ford liked: a reputation for getting people to work together as a team. As head of the Boeing 777 program, he had famously let a documentary crew film the entire development process. Why? Because he knew that the presence of cameras would keep everyone on their best behavior.

But Mulally balked at Ford's initial overtures.

Though he had been passed up for promotion to the top job at Boeing, Mulally was relishing Boeing's victories over its arch-rival, Europe's Airbus SAS. Moreover, leaving Boeing would mean walking away from millions in stock options and other deferred compensation.

Ford's human resources director, Joe Laymon, camped out in Seattle until Mulally agreed to fly to Michigan to hear what Bill Ford had to say.

In the end, it was the prospect of saving not one, but two iconic American companies that lured Mulally to Dearborn.

That and $28 million.

Ford to issue up to
$1B in new stock

December 5, 2009
Bryce G. Hoffman / The Detroit News

Ford Motor Co. will issue up to $1 billion in new stock, according to documents filed by the company with the U.S. Securities and Exchange Commission after the markets closed on Friday.

In the filings, the Dearborn automaker said the proceeds will be used for "general corporate purposes."

Ford has been periodically issuing new shares to whittle away its debt, which remains a competitive disadvantage after its cross-town rivals, General Motors Co. and Chrysler Group LLC, eliminated much of their debt during their bankruptcy reorganizations earlier this year.

Ford shares closed unchanged Friday at $8.94 a share.

GM, Chrysler reconsidering dealership closings

Robert Snell and David Shepardson / The Detroit News

General Motors Co. and Chrysler Group LLC are offering to spare some of the more than 2,000 dealerships slated for closure in the automakers' drastic cost-cutting plans.

GM and Chrysler said Thursday they may reinstate some dealerships if Congress agrees to drop proposed legislation to reverse the planned closures.

Both automakers took advantage of the Chapter 11 bankruptcy process this year to cull their dealer networks and retain fewer but more profitable stores.

In GM's case, the dealer cutbacks also reflected its decision to close or sell the Hummer, Saturn, Pontiac and Saab brands.

But hundreds of dealers protested to their representatives in Congress -- the same people who in many cases had blasted the automakers for running bloated operations.

GM's proposal -- one of the first initiatives announced since Chairman and CEO Edward Whitacre Jr. took over the management on Tuesday -- is part of a broader plan to resolve complaints raised by dealers. Both GM and Chrysler have shrunk most operations, cutting jobs and reducing wages for executives and benefits for salaried employees, union workers and retirees.

Chrysler agreed to establish a binding appeals process for the 789 dealers it shuttered in June, giving them a chance to reopen.

The move is a reversal for Chrysler, which for months insisted it would not hear appeals.

By contrast, GM heard hundreds of appeals, reversed itself in about 70 cases and provided $600 million to help dealers wind down their operations.

GM is offering to provide Chevrolet, Buick, GMC and Cadillac dealers slated for closure face-to-face meetings to review specific reasons their franchise agreements were not being renewed, and binding arbitration if a dealer remains unsatisfied.

The arbitration process would focus on whether GM used business criteria in deciding which dealerships would close.

"GM values its dealer body and recognizes the contributions they are making to the future viability of the company, the critical role they play in satisfying customers and their importance to communities across the country," said Susan Docherty, GM's head of U.S. sales.

GM said it would start implementing its proposal in January if Congress dropped the legislation.

The National Automobile Dealers Association said it appreciated "the good faith and constructive dialogue" with GM and Chrysler, but said GM's plan does not include a "sufficiently meaningful process" that could lead to a "reasonable opportunity" for a dealer to be reinstated.

"We will also continue to work with Congress on the pending 'dealer rights' legislation in the event a non-legislative solution cannot be achieved on this important issue which affects thousands of people's jobs and lives and their communities," NADA said in a statement.

Congressional leaders said the proposals didn't go far enough."It is positive that GM and Chrysler are offering a chance for rejected dealers to meet and appeal their company's decision," said Katie Grant, a spokeswoman for House Majority Leader Steny Hoyer, D-Md. But "arbitration must allow for consideration of all information that dealers and the company want to present and not be limited to a narrow set of criteria that predetermines the outcome."

Chrysler said in a statement that if the independent three-person panel reviewing appeals found in the dealer's favor, the dealer would be allowed to reopen, either in their previous market area, or in an available area.

The Auburn Hills automaker also agreed to face-to-face meetings with dealers whose operations were closed.

In addition, Chrysler said it would repurchase eligible parts inventory at 68 cents on the dollar --the average transaction price for parts sold among dealers between June 9 and Sept. 10. It will send letters to the dealers by Dec. 10.

Chrysler also said that while it has not "closed the door to further discussion" with dealers, the process outlined Thursday "fully addresses concerns that Congress and the discontinued dealers have raised: it provides transparency, a right of appeal, and opportunities to join the new dealer network."

Ford to unveil comeback Fiesta

Scott Burgess / The Detroit News
Dec 2, 2009

Los Angeles -- The Fiesta has arrived -- again.

Ford Motor Co. officially moves back into the small-car business with the debut of the 2011 Ford Fiesta at the Los Angeles Auto Show today.

The subcompact sedan and four-door hatchback is Ford's smallest offering in the United States as the Blue Oval continues its plans to bring some of its best European models to America. Ford will debut an all-new Focus, based on the popular European model, at the North American International Auto Show in Detroit this January.

Originally designed for Europe and Asia, CEO Alan Mulally ordered designers and engineers to modify the Fiesta so it also could be sold in the United States. As such, it points the way to a new generation of global small cars that is expected to provide the foundation for Ford's product lineup worldwide.

"Ford is betting on small cars," said Mark Fields, vice president of the Americas. "Small-car sales have grown every year since 2004, and it's not just higher gas prices that are driving sales. It's consumer choice."

Indeed, an unstable economy, uncertain future, environmental concerns and consumers' desire to find value in future purchases is pushing them toward smaller cars, many experts say. According to New Jersey-based Autodata Corp., which tracks car and truck sales, auto sales have dropped 23.9 percent this year through November, while subcompact sales have dropped 13.2 percent.

"Even if gas prices don't hit $4 a gallon in a year, there's still a lot of uncertainty, and if the (automotive) market recovers, it's going to be a very slow recovery," said Stephanie Brinley, an industry analyst at AutoPacific in Southfield. "Having a competitive vehicle in this segment won't hurt Ford."

40 mpg estimated

The American version of the Fiesta will feature a 1.6-liter inline four-cylinder engine and Ford's new Powerstroke six-speed automatic transmission, the first subcompact in the United States to feature a six-speed transmission. It will be filled with lots of high-tech features and an interior worthy of many midsize sedans. It will include Ford's Sync infotainment system and voice-activated hands-free phone system, optional leather seats, ambient lighting and other high-tech features.

Ford estimates the Fiesta will get up to 40 miles per gallon on the highway, though official Environmental Protection Agency testing has not been completed. Ford has used a number of features and a high-tech transmission to eke out extra fuel economy. The Electric Power Assist Steering, known as EPAS, for example, removes the traditional power-steering pump and limits engine strain. Ford will offer a high-mileage SFE package that will be even more fuel-efficient.Derrick Kuzak, Ford's vice president for global development, said the new Fiesta will be fun to drive, too. "Ford will not dumb down this vehicle when it comes to the U.S.," he said.

It certainly has the pedigree. Mazda Motor Co. developed the platform for the Fiesta and Ford's European office gave it its performance characteristics, Kuzak said.

Sibling differences

The U.S. Fiesta shares about 60 percent of its parts with its European sibling.

"It's part of the global family of 600,000 strong and 1 million for the platform," Kuzak said. "That's the way you drive profitability for small cars."

Sheryl Connelly, Ford's manager of global trends, said changing consumer demands and concepts put the Fiesta in a strong position. Smaller cars have continued to get more popular because of the urbanization of the world. In 2008, more people began living in cities than in rural areas. Small cars are more popular in big cities.

"Twenty-two percent of all (subcompact) car sales are in five cities in the United States," Connelly said. Additionally, small-car buyers are no longer just buying them because it's all they can afford, Connelly said, noting more than 20 percent of small-car customers make more than $100,000 a year.

Many of the car's design features like the LED bar below the bumper and the sweeping roofline were added to give the Fiesta its modern, high-tech look, said Kevin George, Fiesta design manager. For the American Fiesta, Ford added a three-bar grille on the sedan and kept a European look with the hatchback with a body-colored grille.

The new Fiesta, however, shares nothing in common with Ford's first Fiesta. That car was introduced in Europe in 1976 and arrived in the United States in 1978. While successful in Europe, it was discontinued in the United States when the Ford Escort replaced it in 1981.

2011 Ford Fiesta

Type: Five-passenger, front-wheel drive subcompact
Price: Not available
Engine: 1.6-liter DOHC inline-four-cylinder
Power: 119 horsepower, 109 pound-feet torque
Transmission: Five-speed manual or six-speed automatic
Steering: Electric Power Assist Steering with power rack and pinion
Fuel economy (estimated)
Manual: 29 mpg city / 38 mpg highway
Automatic: 30 mpg city / 38 mpg highway
SFE package: 30 mpg city / 40 mpg highway

GM CEO Henderson forced out; Whitacre takes over -- for now

Christine Tierney and David Shepardson / The Detroit News
December 2, 2009

General Motors Co. marked an abrupt break with its past Tuesday when Chairman Edward Whitacre Jr. expanded his role to include chief executive after the resignation of Fritz Henderson.

Henderson, 51, had been president and CEO for less than nine months, but his lifelong career at GM appeared to be a handicap in the board's view.

"Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change," Whitacre said at a brief news conference at GM's Detroit headquarters. "While momentum has been building over the past several months, all involved agree that changes needed to be made

"To this end, I have taken over the role of chairman and CEO while an international search for a new president and CEO begins immediately."

GM did not say how long Whitacre expected to run the company, but officials said privately the search for a new CEO was likely to take three or four months.

Henderson's departure stunned GM executives. But sources familiar with the board's thinking said directors were frustrated by the slow pace of change at GM and Henderson's apparent inability to transform the corporate culture.

In recent months, public disagreements had broken out between Whitacre, an activist chairman who is a former chairman and CEO of AT&T Corp., and Henderson, who was appointed chief executive by the U.S. government's auto task force in March.

On Nov. 2, Henderson's standing began to look doubtful after the board reversed the management's decision to sell control of GM's Adam Opel GmbH carmaker in Germany. It was the biggest decision Henderson had put to the directors.

"In recent months, the board and Henderson appeared as if they were not on the same page," said Michelle Krebs, senior analyst at the automotive research site Edmunds.com. "Henderson wanted to sell Opel. The board overruled" him.

The subsequent collapse of GM's deals to sell its Saturn brand to Detroit tycoon Roger Penske and Saab to a Swedish firm "suggested to the board that Henderson couldn't get the job done," Krebs said.

GM notified the task force of Henderson's resignation after Tuesday's board meeting, GM spokesman Chris Preuss said at the news briefing. Whitacre declined to take questions.

He and the other directors were installed by the government, which became 60.8 percent owner of the new GM that emerged in July from the automaker's brief bankruptcy.

Despite its controlling stake, the government has remained distant from the corporate decision-making, with Obama administration officials saying they're relying on the hard-nosed business people they've appointed to oversee GM's management.

It was unclear what triggered Henderson's resignation. He was scheduled to be the keynote speaker at the Los Angeles Auto Show press preview today.

No replacement ready

GM's board didn't have a replacement lined up, analysts said, and it might have trouble finding one.

"The more fundamental management challenge facing GM now ... is its likely limited ability to attract high-quality outside executives," because of pay restrictions and other risks, said J.P. Morgan analyst Himanshu Patel.

As short-term CEO, Whitacre said he would work "on a daily basis" at GM's Renaissance Center headquarters.

Whitacre, who is the third CEO at GM this year, said he wanted to assure employees, dealers, suppliers, union workers and "most of all, our customers," that GM's daily business operations will continue normally.

He said he believed the automaker would remain a leader offering high-quality cars and trucks. "We now need to accelerate our progress toward that goal, which will also mean a return to profitability and repaying the American and Canadian taxpayers as soon as possible."

Unlike Rick Wagoner, who was widely viewed as having fallen short as chairman and CEO of GM, Henderson has strong advocates in the company and in the industry. He has broad international experience, having run GM's Asian and European operations, and he was also chief financial officer under Wagoner.

"He's the best automotive guy in the business, and GM will suffer because of this," said Warren Browne, a retired GM executive who formerly headed GM Russia.

But Henderson was thrust into the top job without strong backing. The task force seemed ambivalent toward him, and Wall Street wrote him off as a GM lifer.

"The choice of Henderson to replace Wagoner failed to impress the investment banks and private equity funds that held much of GM's debt," said a fund manager who spoke on condition of anonymity. "We wanted them to bring in an outsider. We don't want anyone running GM who helped put it where it is today."

GM Chief Financial Officer Ray Young's position also has been reported as being shaky. The announcement of Tuesday's news conference stirred speculation that his replacement was imminent.

"Ray Young remains the CFO, and we'll give more details on that," Preuss said.

Vice Chairman Bob Lutz remains in his job and will give the keynote speech in Los Angeles, Preuss said.

Auto show upheaval

Henderson's departure threw GM's auto show plans into disarray. The company canceled interviews and ordered executive committee members, including U.S. sales chief Susan Docherty, to stay in Detroit this week for meetings.

George Fowler, general manager of Superior Buick Pontiac GMC truck in Dearborn, said he had heard rumors that Henderson might be gone soon.

"Fritz was really respected in the dealer ranks," Fowler said. "He was one of the good old guys who grew up in the business."

But Fowler said he was open to new leadership. "Maybe fresh blood at the top will help."

Ford Motor Co. has thrived under the management of CEO Alan Mulally, an outsider who came from Boeing Co. in 2006.

But Chrysler LLC suffered after being acquired in 2007 by Cerberus Capital Management LLC, which installed former Home Depot CEO Bob Nardelli as chairman and CEO.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said the board's expectations for Henderson may have been too high.

"You can only change the culture so fast," said Cole, whose father Edward Cole was a president of GM. "When you have a board that doesn't know anything about the auto industry, they may expect things to happen faster than they can happen.

Detroit News Staff Writers Robert Snell, Alisa Priddle and Bryce G. Hoffman contributed.

Michigan auto supplier sheds pensions in bankruptcy

Dec 1, 2009
David Shepardson / Detroit News Washington Bureau

Washington -- The government's pension insurer said Monday it will assume responsibility for the underfunded pension plan of a bankrupt Northville auto supplier -- at least the fifth supplier to abandon its pension obligations this year.

The Pension Benefit Guaranty Corporation said it will seize the pension plans covering 4,780 workers and retirees of Hayes Lemmerz International Inc., the Michigan-based wheel manufacturer -- a move that will add nearly $100 million to the PBGC's growing deficit.

PBGC said it is moving now because Hayes Lemmerz failed to meet the minimum funding requirements, and the company cannot afford to fund the pension plan and to successfully exit bankruptcy.

The Hayes Lemmerz International Retirement Income Plan is 54 percent funded, with assets of $110.4 million to cover benefit liabilities of $204.8 million, according to PBGC estimates. The agency expects to be responsible for $93.7 million of the $94.4 million shortfall. The plan was frozen on Dec. 31, 2004.

The Detroit News reported this summer that PBGC was in talks with Hayes to seize its pension plans.

On May 11, Hayes filed for Chapter 11 protection. The company has said it intends to reorganize and emerge from bankruptcy this year to preserve its market share.

On Nov. 4, Hayes won court approval for a reorganization plan that will allow it to shed $480 million of its $720 million in debt.

The PBGC, a government-owned company, insures the basic pension benefits of about 44 million American workers and retirees in more than 29,000 private-sector defined benefit pension plans.

Earlier this year, PBGC assumed responsibility for Troy-based Delphi Corp's pension plans -- a move that saddled PBGC with $6.7 billion in costs for plans covering more than 70,000 people.

PBGC also assumed pension plans at suppliers Metaldyne Corp; Proliance International Inc., an auto parts maker based in New Haven, Conn.; and Portage-based Contech US LLC.

PBGC said earlier this month that its deficit had soared to $21.1 billion this year -- up from $10.4 billion last year. But it improved over its mid-year estimate of $33.5 billion.

Canadian vehicle production to grow by 30%: Scotiabank

Dec 31, 2009

THE CANADIAN PRESS

Global auto sales will reach record highs by 2011, helping to boost Canadian vehicle assembly rates by as much as 30 per cent, according to a new report by Scotia Economics.

In its monthly Global Auto Report, released this week, Scotiabank said a combination of fiscal and monetary stimulus, a recovering global economy and improving access to credit will continue to lift vehicle sales next year.

This "will enable 2010 car sales to recapture half of the ground lost over the past two years, setting the stage for record volumes in 2011," the report says.

If accurate, the prediction marks a dramatic turnaround in the fortunes of the global auto industry, which was hit particularly hard by the recession as consumers deferred purchases of big-ticket items like new cars.

Increasing demand for new vehicles in developing countries like China, India and Brazil will lead the recovery for the foreseeable future, said senior Scotiabank economist and auto industry expert Carlos Gomes.

"The developing nations used to sell only about four million vehicles (a year) a decade ago and as of next year we're expecting that to be above 15 million," Gomes said in an interview. "So you can clearly see that that is where the growth has been, and because the vehicle penetration rates are still very low in these countries, that's where the growth will continue to come from going forward."

That's not to say the North American auto markets won't see a marked improvement in vehicles sales as well.

Gomes predicted "a double-digit advance in the key U.S. market," which in turn will help to boost Canadian production and employment levels. Some 62 per cent of parts and 80 per cent of finished vehicles manufactured in Canada are exported to the U.S.

Gomes says most of the advance will primarily be the result of deferred demand. "Both in Canada and in (the) United States, close to half the vehicles on the road are at least nine years old, so we do have a significant number of vehicles out there that do need to be replaced," he said.

"The point is, as the economy recovers and consumer confidence continues to improve, you'll actually see people starting to do that and not taking this approach of, 'Well, I'm not sure how things are going to be so I'll continue to hold onto my old clunker for another year or so."'

In Canada, Gomes predicted a 30 per cent increase in vehicle production in 2010, with a concurrent improvement in employment levels. This has already started to take hold, with General Motors Canada recalling laid-off workers at its plants in Ingersoll and Oshawa and Toyota Canada hiring 800 new employees at its plant in Woodstock.

Employment in Canadian assembly plants plunged to approximately 35,500 in 2009, its lowest level since 1963. In the parts sector, employment fell by almost 25 per cent in the last year alone, and overall employment in the industry is down 37 per cent from its high in 2000.

The Scotia report says 1.53 million vehicles will be purchased in Canada next year, compared with 1.45 million in 2009.

Purchases will be bolstered by rising incomes, pent-up demand and record new vehicle affordability. Strengthening used car prices, currently 19 per cent higher than a year earlier, will also encourage some people to replace aging vehicles, the report says.

Auto loan rates have also dropped significantly, to four per cent in the U.S., which is less than half what they were when the credit crisis took hold in late 2008.

Year in review: Auto Business

The Detroit News - Dec 30, 2009

GM nurses bruised image

General Motors Co. ends the most tumultuous year in its 101-year history as a new company born from bankruptcy with a clean balance sheet, thousands fewer employees, four fewer brands, its third CEO in nine months -- and a tarnished image.

After securing about $50 billion in federal aid and emerging in July from a 40-day stint in bankruptcy, the new GM is focused on boosting sales and market share -- right now. Demand for GM vehicles plunged 32 percent through November from a year ago, and the company's U.S. market share dropped to 19.8 percent, from 22.1 percent.

President Barack Obama fired CEO Rick Wagoner in March, former AT&T Inc. Chairman and CEO Ed Whitacre Jr. replaced Wagoner as chairman in June and, in December, added CEO to his title, at least temporarily, when the board ousted Wagoner's replacement in that role, Fritz Henderson.

The automaker parted ways with the Saturn, Pontiac, Saab and Hummer brands. It is betting its future on several promising new vehicles, including the Chevrolet Volt extended-range electric vehicle, going on sale late next year. They will hit the market with a singular mission: To convince consumers that the new GM, and its fresh crop of cars, is everything the old GM forgot how to be -- bold, innovative, groundbreaking.

Robert Snell

Chrysler's bumpy ride in '09 may ease in '10

Chrysler traveled a number of roads in 2009, all of them rocky.

The Auburn Hills automaker changed owners and top executives, was forced by the U.S. government into bankruptcy and saw vehicle development all but stopped. Top Chrysler executives who were shown the door or walked out on their own included Robert Nardelli, Tom LaSorda and Jim Press, as well as scores of other senior managers and thousands of hourly workers who took buyouts as the auto economy tanked and Chrysler's future remained murky.

At one point, LaSorda shopped the company to anyone who would listen, and a tie-up with General Motors Co. was seriously considered before an eventual post-bankruptcy deal was reached with Italian partner Fiat SpA.

Chrysler emerged from Chapter 11 with $4 billion in federal aid, a new CEO in Sergio Marchionne, and significantly reduced costs as it prepared a new five-year business plan it unveiled in November.

Chrysler now is owned 55 percent by a United Auto Workers health care trust fund, and 20 percent by Fiat, which can obtain another 15 percentage points by meeting conditions. The rest of the shares belong to the U.S. and Canadian governments, which provided $6 billion in loans to the new company on top of more than $7 billion Chrysler had received previously.

Chrysler insists that the road next year will be smoother.

Alisa Priddle

Ford drives around bankruptcy route in 2009

For Ford Motor Co., 2009 was all about bucking trends.

Ford was the only one of Detroit's Big Three automakers to avoid bankruptcy court, a fact not lost on the car-buying public. Demand for Ford, Lincoln and Mercury models fell with the rest of the industry, but not as much -- 19 percent for Ford through November, 24 percent for the industry -- and the Dearborn automaker increased its market share by 1 percentage point, to 15.9 percent. The launch of new vehicles like the all-new Ford Fusion Hybrid and redesigned Ford Taurus helped, too.

Ford promoted its relative strength compared to bankrupt rivals General Motors and Chrysler, and surprised Wall Street with unexpected profits in the second and third quarters. But the upbeat news hurt Ford's case with the United Auto Workers. When Ford sought the same concessions the UAW had granted GM and Chrysler, a tentative agreement between the union and Ford leaders was soundly rejected by the rank-and-file.

Bryce Hoffman

UAW givebacks garner stakes in GM, Chrysler

The United Auto Workers weathered tough times in 2009. Under pressure from the Obama administration, the union granted concessions to bankrupt GM and Chrysler. Among the givebacks was accepting company shares in place of cash to fund a UAW-run trust that will pay retiree health care costs starting in January. The union now owns 55 percent of Chrysler and 17 percent of GM, but neither stake will be worth much if the automakers don't rebound. The union also gave up its right to strike GM and Chrysler over wage and benefit increases before 2015, but the rank-and-file at Ford Motor Co. rejected a similar deal. Amid brutal job cuts as the U.S. auto industry retrenches, UAW membership has fallen to 431,000 from a 1979 peak of 1.5 million.

Next year, the union will elect a new president to replace Ron Gettelfinger, who will retire. Bob King, the UAW's lead Ford negotiator who previously headed the union's organizing efforts, has been tapped as Gettelfinger's likely successor. An official election is slated for June.

Louis Aguilar

Historic Toyota loss followed rise to No. 1

Toyota Motor Corp. opened a new chapter in the history of the auto industry when it passed General Motors in 2008 to become the world's biggest automaker.

But Toyota's rapid growth backfired in 2009 when demand for autos collapsed around the world. Toyota's sales plunged in the United States, traditionally its most lucrative market. For the first time in its history, the mighty Japanese automaker found itself saddled with idle factories in North America, while its exports from Japan slumped.

In the Japanese fiscal year ended March 31, Toyota reported its first annual loss since 1950. It expects to lose money again this year, although it returned to profit in the July-September quarter.

But Toyota now faces what could be a bigger threat -- one to its once unassailable reputation for quality. The automaker recalled 4 million vehicles in September to reduce the risk of unintended acceleration of Toyota and Lexus cars. It faces other complains from consumers reporting that their vehicles are stalling. Toyota's new president, Akio Toyoda, grandson of the founder, is pledging to restore the automaker with a back-to-basics approach and a renewed focus on the customer.

Christine Tierney

Suppliers in survival mode

As auto sales plunged through 2009 and Detroit's Big Three automakers slashed production, auto suppliers struggled to stay alive.

At least 50 parts makers filed for bankruptcy, including such big names as Visteon Corp., American Axle Manufacturing & Holdings Inc. and Lear Corp. Michigan is home to more than 2,000 suppliers -- the most of any state -- and 60 percent of all U.S. suppliers have operations in the state. Tens of thousands of jobs were lost as bankruptcies and a devastated auto market crippled the supply base.

Smaller operations were particularly hard hit as they lost access to capital from banks, but also from larger suppliers and automakers that had in the past floated them loans to help with operations. Suppliers requested $18.5 billion in aid from the Obama administration, but it refused, choosing to give automakers funds to help suppliers.

Analysts say even a slowly rebounding economy and uptick in auto sales won't keep the supply base from struggling again in 2010.

David Shepardson

Terminated dealers head to arbitration

Over the past year, Detroit's struggling automakers have been forced to close more plants, shed employees, eliminate brands and cast off dealers -- but the dealers are fighting back.

Traditionally, state franchise laws have protected dealers from arbitrary closure by automakers.

But General Motors Co. and Chrysler Group LLC took advantage of the bankruptcy process to shed some 2,000 dealers. Some were associated with brands slated for closure, such as Saturn and Pontiac, but others were weak performers who were dragging down the profitability of the retail networks.

Domestic brand dealers sell far fewer vehicles per outlet than dealers for import brands do.

U.S. government officials and lawmakers blasted GM and Chrysler for running inefficient and bloated operations. But when doomed dealers phoned their representatives, Congress took action to shield them in a move that has been criticized as the height of hypocrisy.

A new law allows the terminated GM and Chrysler dealerships to submit their case to an arbitrator. Meanwhile, some Asian carmakers are snapping up some of the cast-off dealers.

Christine Tierney

Michigan unemployment rate leads the nation for much of 2009

The year saw Michigan's already high unemployment rate soar, as the national recession sent auto sales plummeting and continued restructuring of the industry left more workers taking buyouts or getting pink slips.

The unemployment rate peaked at 15.3 percent in September, from 10.2 percent at the end of 2008. The jobless rate hovered around 15 percent for the last half of the year. While still the nation's worst, it gave some hopes that the free-fall for workers had begun to bottom out.

Economists also felt that the state economy may have hit bottom after the twin bankruptcies of General Motors and Chrysler. But the state's auto-dependent economy will be permanently damaged, with analysts saying they don't foresee a return to 2000 employment levels anytime during the next decade.

Brian J. O'Connor

Canada union has high hopes
for new Ford V-8 engine

* V-8 output to begin in early 2010 in Windsor, Ontario
* Engine to power the 2011 Mustang GT muscle car
* Union pushing Ford to use the engine in other vehicles

TORONTO, Dec 29 (Reuters) - The Canadian Auto Workers union said on Tuesday it is pushing Ford Motor Co to put its new 5.0-litre V-8 engine, which will be made in Windsor, Ontario, into more vehicles than just the Mustang GT.

Ford said on Monday that it would begin production of the V-8 engine for the 2011 Mustang GT at its Essex Engine plant in Windsor early in the new year.

The decision to build the new, more fuel efficient V-8 in the Windsor plant, which was shut in 2007, was made by Ford in October in contract talks with the CAW.

At the start, about 200 workers on one shift will make the V-8. But Ken Lewenza, president of the CAW, said more shifts could be added if Ford decides to put the engine into other vehicles.

"We've put a lot of effort into convincing Ford to maximize that engine in that plant, so this is the start, hopefully, of better things to come," he said.

There are about 1,000 Ford workers on layoff in Windsor. The city, which is across the river from Detroit, took a big hit from the downturn in the auto sector and has the highest unemployment rate of any major metropolitan area in Canada.

Lewenza said the V-8 engine could be used in Ford's F-150 pickup truck, which is the best-selling vehicle in North America.

Detroit Free Press 2010 Car and Truck of the Year

Dec 29, 2009

A pair of bold new strategies came together triumphantly for Ford Motor Co. in 2009, making the Fusion midsize sedan and Transit Connect compact van the Detroit Free Press 2010 Car and Truck of the Year.

The Fusion and Transit Connect embody a fundamental change in the way Ford approaches the vehicles it makes and the way it runs its business. The outstanding models leap to the head of the field.

The Fusion added dollops of style and technology to turn a good midsize sedan into an outstanding model line.

Read more about why the Ford Fusion is the Free Press Car of the Year.

The Transit Connect brought the fruits of Ford's global expertise to America, introducing a uniquely useful and fuel-efficient new class of vehicle.

Neither of these vehicles is the reason Ford avoided bankruptcy and government assistance in 2009. Ford was in such deep trouble when Alan Mulally took over in 2006 that he knew the company was headed for disaster. He wisely locked up $23.6 billion in credit, giving Ford enough money to eschew government help this year.

After securing cash to keep the doors open, Mulally accelerated product development and built a plan based on technical leadership, improved fuel economy and leveraging Ford's worldwide assets to bring better cars and trucks to American buyers.

The Fusion and Transit Connect provide plenty of reasons to be optimistic about Ford's future.

Learn more details and why the Transit Connect is the Free Press Truck of the Year

They show an automaker can elude disaster by using its resources intelligently and harnessing technology and design to make the best vehicles on the market. They are the first steps in a new-model rollout that includes the upcoming fuel-efficient Fiesta subcompact, the stylish and advanced Focus compact and a modern replacement for the Explorer SUV.

For years, Ford's corporate motto was "Ford has a better idea." In 2009, two great ideas paid off handsomely for the company

Mustang's 400 horses
make one powerful pony

Mustang's 5-liter V-8 vrooms into next decade with good gas mileage

Scott Burgess / The Detroit News
Dec 28, 2009

It sounds better than it looks, and the 2011 Ford Mustang GT 5.0 looks great.

Ford Motor Co. was to officially announce today the return of the 5-liter V-8, and the public will get its first look at the muscle car in January at the North American International Auto Show in Detroit.

The legendary engine has lived in the Mustang on and off for nearly 30 years but never with as much ferocious power or outstanding gas mileage. The new GT will be able to get up to 25 miles per gallon while cranking out more than 400 horses.

The current GT, powered by Ford's bullet proof 4.6-liter V-8, produces 315 horsepower and averages 23 mpg on the highway.

By the numbers the new naturally aspirated engine will deliver 412 horsepower, 390 pound-feet torque and a rumbling growl that can make the hair on the back of your neck stand up.

"I've been waiting 48 years for this," Jim Farley, Ford's vice president of marketing and a longtime Mustang enthusiast, said during a media preview of the Mustang GT. Farley drives a Grabber Blue Mustang GT. "When I joined Ford, as soon as I heard about this engine, I knew we had something special," he said.

The hallowed engine block -- a 5-liter engine has almost the same displacement as 302 cubic inches or a Boss 302 -- has a long Mustang history. When the 1983 Mustang GT 5.0 High Output arrived, it cranked out a then-thunderous 157 horsepower. A four-barrel carburetor on the 1986 GT wowed consumers with its 210 horsepower. The last GT to use the 5-liter V-8 was the 1995 Mustang.

Ford could use the new engine in other vehicles, such as the F-150 pickup, to provide more power than the current 4.6-liter V-8, though executives would not comment on that possibility.

Engineers and designers said they were challenged to top 400 horsepower on a 5-liter displacement engine. Additionally, they were given only a few years to create it, losing 12 months of development time.

"It's faster than we've ever done it," said Mike Harrison, V-8 engine programs manager, of the work his 10-person team did.

Engineers opened up the intake and created new headers for a "better breathing engine," Harrison said. They also gave the V-8 twin independent variable valve camshaft timing to enhance its performance.

Ford will showcase the new GT with the black and red 5.0 badge at the auto show in Detroit. But this car adds more than just power.

Ford will add a new six-speed automatic or manual transmission to the GT, replacing the five-speed gear box on the current model. With the improved gear ratios and with lots of low-end torque, drivers no longer will have to downshift to third to find power at 70 mph. (The new speedometer goes up to 160 mph, up from 140 mph.)

It will feature electric power-assisted steering, known as EPAS. This fuel-saving technology operates without a traditional steering pump, and Ford has worked to dial in a solid steering feel, engineers said.

There also were changes to the car's suspension and tuning. Ford promises a much quieter ride in the 2011 Mustang GT due to additional sound-deadening materials. Engineers added support to make the body 12 percent more rigid to improve its handling. The Mustang GT will keep its solid rear axle, perhaps the one sharply criticized attribute, but one many enthusiasts have come to embrace.

A special Bermbo brake package also will be available on the new GT with 14-inch disc brakes (taken from the GT 500), 19-inch wheels and summer performance tires.

Ford said it also will add features such as integrated blind spot mirrors, illuminated visors, and a universal garage door opener on the 2011 Mustang GT.

The 5.0 V-8 engine upgrade follows the introduction of a new powertrain to the 2011 Mustang V-6, which comes with a 3.7-liter engine that provides more than 300 horsepower and still allows the car to hit 30 mpg.

"This car is beautiful," Aaron Bragman, an automotive analyst at IHS Global Insight, said of the new 5.0. "Mustang enthusiasts will love it."

Then he looked at a black Mustang GT in front of him: "I'll take that one."

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

Additional Facts
The return of the 5.0 V-8

The Ford Mustang GT used the 5-litre V-8 from 1982 to 1995. Some models included an HO version, which stood for "high output." Here's a quick look at some of those engines.

1982: First 5.0 HO appeared in the GT. Total power: 157 horsepower
1983: 5.0 HO included four-barrel carburetor and produced 175 horsepower
1984: Fuel-injected 5.0 HO lowered power to 165 horsepower
1985: The most powerful four-barrel 5.0 produced 210 horsepower
1986: Only a fuel-injected 5.0 HO produced; total power: 200 horsepower
1987: The 5.0 HO produced 225 horsepower
1993: Ford revised horsepower rating to 205
1994: 5.0 offered 215 horsepower for the GT.
1996: Ford replaced the 5.0 V-8 with a smaller 4.6-litre V-8 for the GT, producing the same 215 horsepower.

Source: Mustang 5.0 magazine

Experts say auto sales will
accelerate in '10 -- slowly

Christine Tierney / The Detroit News
Dec 27, 2009

For the U.S. auto industry, the best thing about this year is that it's nearly over.

Most analysts expect that when the sales figures come in for December, the yearly total will be around 10.4 million cars and light trucks, the lowest in almost 40 years.

For most of the past decade, annual sales exceeded 16 million. But between 2007 and 2009, sales plunged a staggering 36.4 percent, tipping two of Detroit's automakers into bankruptcy and driving Japan's Toyota Motor Corp. deep into the red.

But as bad as this year has been, it's ending on a cheery note, with December sales expected to show a continuation in the gradual improvement in demand seen since the summer.

"The December selling rate is tracking at 11.2 million units -- up nearly 1 million units from a year ago -- which sets up 2010 for further recovery," said Gary Dilts, senior vice president for global automotive operations at J.D. Power and Associates.

The December rate compares with a selling rate of 10.9 million cars and light trucks in November, and 10.3 million in October.

J.D. Power estimates sales will increase next year to 11.5 million from an estimated 10.4 million this year.

Edmunds.com, an online automotive research company, also predicts auto sales will rise to 11.5 million in 2010 from 10.4 million this year, "the lowest since 1970." At that time, Edmunds said in a statement, there were 70 million fewer people in the United States.

Pricing firm TrueCar Inc. estimates sales next year will total 11.4 million cars and light trucks. But its estimate for the December seasonally adjusted annual rate, or SAAR, is a sluggish 10.3 million vehicles.

With the exception of investment firm Deutsche Bank, which sees auto sales jumping to 12.5 million next year, most analysts' estimates fall in the mid-11 million range.

In recent years, such a level would seem catastrophically low. But automakers are braced for a slow recovery. They have slashed their costs, particularly General Motors Co. and Chrysler Group LLC, and lowered their breakeven point -- the sales level at which they become profitable.

"While the industry hasn't yet received a clean bill of health, fixed costs have been trimmed at all levels, allowing for profitability -- even at a reduced selling rate," said Jeff Schuster, J.D. Power's executive director of global forecasting.

"The industry has an opportunity in 2010 to build on a series of small victories, such as improved pricing and appropriate inventory levels, to drive a stronger recovery," he said.

Toyota found to keep tight lid on potential safety problems

By Ken Bensinger and Ralph Vartabedian
December 26, 2009

It's a season for hope in new Detroit

Dec 26, 2009
Daniel Howes

In 1914, Henry Ford introduced the $5 day, a gateway to the middle class and a rising standard of living that changed the face of Detroit and its auto industry for the better part of a century.

In 1937, the United Auto Workers reached its first contracts with General Motors Corp. and Chrysler Corp. In the early days of 1942, Detroit began transforming itself into the Arsenal of Democracy, the engine that helped win World War II. In 1973, the first oil shocks exposed potentially fatal weaknesses of that powerhouse.

But 2009, drawing to a blessed close, will go down as the year that changed everything for Detroit, its home state and the bellwether industry that has defined for nearly a century its economic expectations and political life. Without direct intervention by the federal government, a bedrock industry of the U.S. economy would have collapsed into liquidation.

"I don't think in our wildest dreams anyone would have predicted a year like the last year," Bill Ford Jr., executive chairman of Ford Motor Co., said in a recent interview.

On one level, he's certainly right. The conditions that coalesced in the second half of 2008 -- skyrocketing oil prices, the global economic implosion, plunging consumer confidence, frozen credit markets -- to push GM and Chrysler into a White House-directed bankruptcy in mid-'09 were not easily foreseen by many.

Yet on a deeper level the unraveling of '09 was at least a decade in the making, a long, slow slide from the heady days of 1999 when Ford paid $6.4 billion for Volvo Cars of Sweden (but now is selling it to the Chinese for much less); when GM bought the remaining 50 percent of Saab Automobile (and now is closing it down) and when GM blew billions on a chunk of Fiat SpA.

That's when Ford was poised to earn record profits, in 2000; when Chrysler was still delivering fat checks to its new German owner; when the boom from selling pickups and gas-guzzling SUVs into a market fueled by cheap gas delivered earnings, big bonuses and a collective lethargy that made the fall of the last 12 months all the more painful.

As much as things came apart this year -- or felt each week as if they were -- the fissures began appearing long ago. In the automakers, their suppliers, their unions and their unsustainable business model. In the corrupt, self-absorbed politics of the city of Detroit, epitomized by the scandals that took down the former mayor, Kwame Kilpatrick, and a former City Council president, Monica Conyers.

This year exposed the rotting core of the city's public schools, still dangerously close to financial collapse. It revealed the backward-looking politics of Lansing, the clinging to the status quo, the hand-wringing over funding (or not) of local schools and government even while refusing to broach the entitlement time-bombs.

Yes, this year is when the water drained from the metaphorical bathtub that is Detroit and Michigan, uncovering an infrastructure of expectation and expense that cannot be supported by a smaller auto industry with fewer employees, by a smaller population earning less per capita, by legislators making promises they know they cannot keep.

Hopeless? No, especially not now, in this season of renewal. There is hope in a new, slimmer GM shorn of its also-ran brands, crushing debt loads and now run by a fresh leadership team that is not the sum total of the company's past 30 years.

There is hope in a fiscal vise that will force compromise and change on a Legislature predisposed to neither. There is hope for a Detroit Public Schools led by a financial realist empowered by a governor finally awakening to her responsibility to the city's kids.

There is hope in a mayor of Detroit, Dave Bing, who has the character to work for something larger than himself, the courage to tell the public what needs to change and the muscle to do it. There is hope a new City Council will be part of Detroit's solutions, not the source of more needless and silly problems.

There is hope because the change has already come.

Ford shares top $10
in wake of Volvo deal

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

Shares in Ford Motor Co. hit double-digits for the first time since 2005 Wednesday, closing at $10.08, after the Dearborn automaker said it had finalized most of the terms to sell its Swedish brand, Volvo, to China's Zhejiang Geely Holding Group Co.

Ford and Geely expect to sign an agreement in March and complete the sale by June 30. Ford had hoped to sell Volvo by last July. Still, the deal with Geely stands in sharp contrast to General Motors Co.'s failed bids to sell its Swedish brand, Saab, and further underscores the progress Ford has made toward restoring profitability.

Key to CEO Alan Mulally's turnaround plan was shedding Ford's foreign brands to help pay for a global restructuring and focus the company on fixing core brands Ford, Lincoln and Mercury. Ford already has sold its three British luxury marques -- Aston Martin, Jaguar and Land Rover -- as well as a controlling stake in Japan's Mazda Motor Corp.

In a statement early Wednesday, Ford confirmed that "all substantive commercial terms" of selling Volvo had been settled, but "some work still remains to be completed before signing -- including final documentation, financing and government approvals."

The announcement broke the silence that has surrounded talks between the companies since Ford identified Geely as its preferred bidder for Volvo in October. It was aimed at helping China's largest private automaker secure financing and win government approval for the acquisition, according to a source familiar with the negotiations. Geely also released a statement that sought to reassure Volvo employees and the Swedish government, which have both expressed concerns about the sale of one of Sweden's most respected brands to a Chinese manufacturer.

Ford and Geely hope to sign a final agreement in the first quarter of 2010. Though no terms were released, Ford said it expects to close the sale in the second quarter, pending regulatory approvals.

Analysts expect Ford to get about $2 billion for Volvo, far below the $6.45 billion the automaker paid for it in 1999.

"The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core One Ford strategy," the Dearborn automaker said.

Ford's stock closed Wednesday at $10.08 a share, trading above $10 for the first time since September 2005.

While the news about Volvo helped fuel the rise, Ford shares have been going up steadily since the automaker surprised Wall Street with a $1 billion third-quarter profit -- its second consecutive quarterly profit. Ford was the only U.S. automaker to eschew a federal bailout and avoid bankruptcy, and has steadily gained market share all year -- largely at the expense of GM and Chrysler Group LLC.

But concerns remain about Ford's debt. While GM and Chrysler were able to shed much of theirs in bankruptcy court, Ford is "highly leveraged," according to ratings agency Standard & Poor's.

"The company is showing early signs of progress," S&P said in a report Wednesday. "(But) fundamental business risks will remain unchanged well into at least 2010, most notably the company's exposure to weak vehicle demand globally."

The house that Jacques built

If the sale of Volvo marks the completion of Mulally's drive to consolidate Ford's global operations, it also marks the end of the international house of brands former CEO Jacques Nasser worked to assemble in his tenure.

Though the Volvo sale is months behind schedule, Ford has had a far easier time unloading brands than rival GM.

Efforts to sell Saab have failed, most recently last week when talks with Spyker Cars, a Dutch firm, collapsed. Spyker made a new offer to GM on the weekend and continues to pursue a deal.

Last month GM reversed its decision to sell a majority stake in its German unit, Adam Opel GmbH, to Canadian parts maker Magna International Inc. and Russian lender Sberbank. Efforts to find a new owner for its Saturn brand also failed, and a deal to sell Hummer to a Chinese heavy equipment manufacturer has progressed slowly.

Analyst Jim Hall of 2953 Analytics LLP in Birmingham said Volvo was a much more attractive offering than Saab.

"Saab has two passenger cars," Hall said. "Their SUV was a rebadged Chevy. They have no range, and that is why GM had a hard time selling them. Volvo has cars that cover a much broader range."

GM brand sales failed

GM also found it difficult to untangle Saab from its own product development organization. But Ford has been trying to distance itself from Volvo since at least 2008.

Wednesday's announcement came a year after Ford replaced Volvo CEO Fredrik Arp with Ford veteran Stephen Odell and gave him a free hand to do whatever was necessary to restore profits.

Since then, Volvo has shed some 6,000 jobs and negotiated a tougher contract with its unions. Volvo's losses narrowed to $135 million in the third quarter from $458 million a year before.

Ford will continue to work with Volvo after the sale, but will not retain a stake in the company.

Sync feature to connect Ford vehicles to Web

Bryce Hoffman / The Detroit News
Dec 23, 2009

Ford Motor Co.'s newest cars and trucks will have the ability to become mobile WiFi hotspots, another feature of the next-generation Sync system the automaker plans to unveil at the Consumer Electronics Show in Las Vegas next month.

The company said drivers will be able to insert a USB mobile broadband modem, also known as an air card, into the system's USB port to establish a secure wireless connection throughout the vehicle. Passengers with WiFi equipped mobile devices will then be able to access the Internet.

"While you're driving to grandma's house, your spouse can be finishing the holiday shopping and the kids can be chatting with friends and updating their Facebook profiles," said Ford Americas President Mark Fields. "And you're not paying for yet another mobile subscription or piece of hardware because Ford will let you use technology you already have."

As The Detroit News first reported last week, the new version of Sync -- the onboard infotainment and communications system it developed with Microsoft Corp. -- also will allow drivers to control many of the applications on their smartphone or music player with voice commands

Ford, Geely close in on Volvo sale

Bryce Hoffman / The Detroit News
Dec 23, 2009

Ford Motor Co. and Geely Automotive have reached agreement on most of the key issues relating to the sale of Ford's Swedish brand, Volvo, to the Chinese automaker. An announcement could come as early as Wednesday that a deal is imminent, according to a source familiar with the negotiations.

While talks between the two companies have been closely guarded, that person said the announcement is being made to reassure the Chinese government that negotiations are progressing toward a deal. Geely already has secured financing from two Chinese banks to purchase Volvo, and both sides are working toward finalizing the deal early next year.

Ford buyouts to extend to
Canadian auto workers,
company confirms

TORONTO - Automaker Ford (NYSE:F) has confirmed that a round of buyouts aimed at reducing its global workforce will be offered to about 20 per cent of its 6,200 workers in Canada.

The U.S.-based automaker says it is working resize its manufacturing capacity to better align it to market conditions.

Ford announced Monday it would offer buyout or retirement incentive packages to all of its 41,000 hourly workers in the United States.

Ford is the healthiest of Detroit's three automakers and the only one to avoid government aid and bankruptcy protection. Even so, it says it still has more workers than it needs to produce cars and trucks at current sales levels.

Specific financial details of the offer to the Canadian Auto Workers union members were not disclosed in a Ford of Canada email.

However, they company said the offer applies solely to hourly workers at its plant in Windsor, Ont., which currently employs 1,600 workers and has 1,000 on layoff.

"These incentives stem from the recently concluded negotiations with the CAW," the email said.

In the U.S., Ford's buyout package is available to workers with at least a year of service and it includes $50,000 cash and the choice of a $25,000 voucher to buy a vehicle or $20,000 more in cash.

Besides the Windsor workers, Ford also employs about 2,900 workers in Oakvile, Ont.; 1,400 in St. Thomas, Ont., and 300 at parts depots in Bramalea, Ont. and Edmonton

Ford ends tough year
with more buyout offers

But bad job market, carmaker's turnaround may keep workers in place

Bryce G. Hoffman / The Detroit News
Dec 22, 2009

Ford Motor Co. is once again offering company-wide buyouts to U.S. factory workers in a bid to further reduce its hourly work force.

But experts say Ford will be hard-pressed to convince many workers to head for the exits in these uncertain times -- particularly as its own turnaround gains traction.

Ford spokeswoman Marcey Evans said the company has not set a target for this round of downsizing.

"We still have a surplus of hourly employees in our manufacturing system. We're working with the UAW to manage that and do what's right for Ford and for our employees," she said, adding that the company is trying to match how many employees it needs to build vehicles with the reduced demand in the auto market due to the economic downturn.

Ford is offering two incentive plans to all 41,000 members of the United Auto Workers. These packages, worth up to $50,000, are similar to those Ford has offered in the past.

The Dearborn automaker, which was the only American car company not to accept a government bailout and the only one to avoid bankruptcy, still needs to keep cutting costs because of the weak auto market.

While General Motors Co. and Chrysler Group LLC have suffered in the marketplace in part because of bankruptcy filings, the automakers were able to shed much of their debt in Chapter 11 reorganization.

On Friday, Ford CEO Alan Mulally acknowledged that Ford's higher debt load is a "short-term competitive disadvantage."

"They still need to prune their costs," said restructuring expert Van Conway, president of Conway MacKenzie Inc. of Birmingham. "If the economy picks up and they need to hire somebody, the new guys will make considerably less."

That is because the UAW contract allows Ford to pay new hires significantly lower wages and provide fewer benefits than it does to current employees.

The automaker began sending details about the offers to workers at all U.S. factories last week.

The first option is a retirement incentive open to workers with 30 or more years at Ford, or those 55 and older with 10 or more years at the automaker. It offers $40,000 for skilled trades employees or $20,000 for other workers, plus the choice of a $25,000 voucher for a new Ford vehicle or an additional $20,000 in cash. Workers who sign up for this package are still entitled to regular retirement benefits.

The second is a buyout offer that is available to all workers with a year or more service. They will receive a lump sum payment of $50,000, as well as the choice of a $25,000 voucher or $20,000 cash. In addition, Ford will continue to provide basic medical coverage for six months.

Workers have until Jan. 22 to decide. Ford said workers who sign up will start leaving the company on Feb. 1, with most departing by March 1.

Ford already has cut its North American hourly work force from 90,000 at the end of 2006 to just over 50,000 at the end of September. That includes workers at parts plants that Ford took back from its former subsidiary, Visteon Corp., as part of a 2005 bailout of the now-bankrupt supplier.

Much of that downsizing has come as the result of series of buyout offers, but that was when the future was less certain and the economy was more stable.

"It's going to be a tougher sell this time," said Harley Shaiken, an expert on labor relations at the University of California, Berkeley, pointing to the surprise profits the Dearborn automaker reported for each of the last two quarters. "Ford's success may work against it."

While the incentives may be a good option for retirement-eligible workers, Shaiken said younger workers would face one of the worst job markets in history.

Angry workers occupy plant

Toronto Star Dec 22, 2009 - Tony Van Alphen

Angry employees at an idle air conditioning manufacturer in Mississauga occupied the company's plant for more than three hours Monday after they charged management "blindsided" them with an abrupt shutdown and no paycheques for extra work.

More than 100 workers mingled peacefully and retrieved belongings including tools at the M&I Air Systems plant in a pressure tactic to get some answers about their missing pay and the plant's future.

Bob Chernecki, a senior official for the Canadian Auto Workers, said management had not responded to union queries since last week, when the company halted operations and told employees to go home.

Chernecki said in an interview that the occupation led to a meeting where management indicated it would inform the union about its financial status, payment to workers and any possible chance of a reopening on Wednesday.

"These workers were blindsided by this corporation just before Christmas," he said.

"It's ridiculous. They received no warning and now face so much uncertainty."

M&I did not return calls for comment about the company's situation.

Chernecki said he expects the U.S.-based company to slip into receivership or fall under bankruptcy court protection during the next few days.

"It doesn't look good," he said.

M&I formed in 1981 and provides air-moving technology and systems for industrial and institutional buildings.

Chernecki said M&I did not provide regular biweekly paycheques on Dec.10, but managers promised they would submit them on the following Monday if employees worked during the same weekend to complete a major air-system project for a customer.

"They didn't get paid on the Monday and on the Tuesday the company called them in at 9 a.m. and told them there was no work and to go home," he added.

The union, which represents about 155 workers at the plant, is seeking wages including overtime for the employees during the past three weeks plus severance and holiday pay.

Furthermore, it wants the company to file employment insurance information with the federal government immediately.

The workers, including some staff with more than 20 years service, negotiated a new three-year contract during the fall that contained small wage increases for lower-paid staff and a $400 lump sum amount for higher-paid employees. The average wage is about $18 an hour.

The CAW and other unions have pushed for stronger legislation to protect workers who are victims of plant closures, including giving them higher standing than other creditors.

Ford execs say they'll live
with UAW contract

Experts say biggest disadvantage
is lack of strike protection

Bryce G. Hoffman / The Detroit News
Dec 19, 2009

Wayne -- Ford Motor Co.'s top executives said Friday that they were "disappointed" with the overwhelming rejection of proposed contract changes by United Auto Workers members last month.

Ford had hoped to match some of the concessions the UAW negotiated with rivals General Motors Co. and Chrysler Group LLC during their bankruptcy reorganizations earlier this year.

But they said Ford has closed the labor cost gap with its foreign competitors in the United States and does not expect to seek another reopening of the contract before it expires in 2011.

"I would have liked to see it happen, but I understand all the behind-the-scenes things that were in play," said Executive Chairman Bill Ford Jr. "The truth is, we've gotten a whole lot done together in the past three years. This is not the end of the world."

Ford also said he was happy with the decision by UAW leaders to anoint Vice President Bob King, head of the union's national Ford section, as the heir-apparent to UAW President Ron Gettelfinger.

"I've known Bob for a long time. He cares very deeply for the industry and for Ford," he said, adding that he does have a different approach than Gettelfinger. "Ron is very plain-spoken and gets to the point quickly. Bob is more cerebral."

Ford's comments were echoed by Ford Americas President Mark Fields.

"We respect Bob a lot," he said. "We're going to continue to work with Bob and the rest of the UAW team to make sure Ford remains competitive. We don't just talk to the UAW when we have an issue. We talk to the UAW every day, every week, about the challenges we face as a business and our strategy for overcoming those challenges."

The union's powerful administrative caucus endorsed King's candidacy last week. He still needs to be elected by rank-and-file members at the UAW's national convention next summer, but no candidate endorsed by that caucus has ever failed to win the presidency.

The agreement UAW members voted down last month would have frozen wages and benefits for new hires, changed some work rules and limited the union's right to strike over some issues.

Labor experts said the vote against the tentative agreement negotiated between the company and union leaders was doomed by Ford's success relative to the rest of Detroit's automobile industry. The company has surprised Wall Street with profits for each of the last two quarters, though it is still expected to lose money this year.

While analysts agree that Ford has little cost disadvantage with other automakers in the United States because of its failure to win approval for these contract changes, many worry that the lack of strike protection similar to that won by GM and Chrysler will put a target on Ford in the next round of national contract talks.

"The biggest threat to Ford from this is that the UAW is more likely to strike it because it can't strike GM or Chrysler," said Erich Merkle of Autoconomy.com.

In other news Friday, Ford CEO Alan Mulally said he feels "pretty good about the economy," adding that the company will "maintain a laser focus on our plan" in 2010.

As for 2009?

"What a year!" Mulally said.

Visteon seeks to end pensions

Change, affecting more than 21,000 workers and retirees, is key part of bankruptcy plan

David Shepardson / The Detroit News
Dec 19, 2009

Washington -- Visteon Corp. wants to terminate pension plans covering more than 21,000 of its employees and retirees -- a move that would cost pension recipients nearly $100 million.

The pension change was included in Visteon's reorganization proposal, filed late Thursday in U.S. Bankruptcy Court in Delaware.

The Van Buren Township-based company, forced into court protection in May amid declining auto sales, proposes to transfer to the Pension Benefit Guaranty Corp. three of its four U.S. pension plans.

About 2,000 Visteon workers in Michigan are covered by the proposal, including 1,500 at its Van Buren Township headquarters and about 500 at a joint venture in Benton Harbor and at a plant in Highland Park.

The number of Visteon retirees living in Michigan who would be affected by the proposal was not immediately known, but is believed to be in the thousands.

The pension plans Visteon wants to drop have a combined shortfall of $544 million.

The PBGC, the government's insurer of pension funds, does not yet support Visteon's plan, which must be approved by a bankruptcy judge.

Visteon is at least the sixth supplier this year to move to abandon its pension obligations, saddling the PBGC with the bills.

The PBGC said last month it would assume pension plans covering 4,780 workers and retirees of Hayes Lemmerz International Inc., the Northville-based wheel manufacturer. That will add nearly $100 million to the PBGC's growing deficit.

Also this year, the PBGC assumed responsibility for Troy-based Delphi Corp.'s pension plans, shifting to the PBGC $6.7 billion in costs for plans covering more than 70,000 people. It also assumed pension plans at suppliers Metaldyne Corp; Proliance International Inc., an auto parts maker based in New Haven, Conn.; and Portage-based Contech US LLC.

The PBGC said this month that its deficit had soared to $21.1 billion this year, up from $10.4 billion last year. But it improved over its midyear estimate of $33.5 billion.

The PBGC insures the pensions of about 1.5 million people in Michigan alone.

It is a government-owned corporation that guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans.

Vince Snowbarger, acting director of the PBGC, noted that "when pension plans terminate, many retirees lose hard-earned benefits because of limits set by federal law."

The PBGC estimates that workers and retirees in the three Visteon plans would lose almost $100 million in benefits, with early retirees most likely to see benefit reductions.

That's because federal law caps benefits by age.

A 50-year-old retiree can get no more than $18,900 annually in pension benefits, while older retirees can get more.

At this time, the PBGC doesn't support the move by the former Ford Motor Co. parts unit and hopes to convince Visteon to continue making pension payments.

"Continuation of the pension plans would preserve those benefits," Snowbarger said. "The PBGC hopes that Visteon can reach agreement with its creditors and lenders on a reorganization that allows the company to retain all its pension plans."

Last week, a bankruptcy judge in Delaware granted approval for Visteon to end health and life insurance benefits for 6,500 current and future retirees, which would save $31 million annually and $310 million in total.

But he ruled that 110 current workers can keep their benefits because of a union contract.

The judge must approve the reorganization plan, which faces objections from the PBGC and unsecured creditors, before the other pension changes can be made.

The supplier hopes to emerge from bankruptcy in early to mid-2010.

In October, the court rejected Visteon's plan to pay bonuses of up to $8.1 million for its 12 top officers, but authorized up to $3.3 million in long-term incentives for 83 other Visteon managers -- a group that doesn't include its top officers.

The company now proposes, under its reorganization plan, to award up to 10 percent of the new stock to the company's senior managers and up to $8.1 million in cash bonuses after emerging from bankruptcy.

Kirk Ludtke, an auto analyst with CRT Capital, noted the PBGC would get a $460 million general unsecured claim and 3.8 percent of Visteon's new stock.

The rest of the company's stock would be awarded to the company's bankruptcy lenders. The company's unsecured lenders have threatened to file suit to block the sale.

Visteon spokesman Jim Fisher said it's possible the supplier would retain a pension plan that covers 1,800 United Auto Workers hourly employees leased to a former company unit, Automotive Components Holding LLC.

Fisher said Visteon can't retain its other pensions because it was "an affordability question."

Visteon is to make $260 million in payments through 2015 to its underfunded pension plans.

Mullaly says Ford plans to
speed up debt repayment

By TOM KRISHER (AP) – Dec 18, 2009

WAYNE, Mich. — Ford Motor Co. CEO Alan Mulally says the automaker plans to speed up debt repayment as its financial condition continues to improve.

Mulally also told reporters at a briefing Friday on its new vehicles that Ford will keep its advantage over Chrysler and General Motors next year. Ford has gained sales and market share while its Detroit competitors were forced to take government aid and go through bankruptcy protection.

Ford has about $27 billion in debt. Mulally says the company repaid $10 billion this year and has sold $1.6 billion worth of stock.

He says the automaker will accelerate payments as it continues to move toward profitability in 2011.

Ford mortgaged all of its assets three years ago to borrow $23.5 billion. The loans allowed it to avoid bankruptcy and the government aid that GM and Chrysler needed to survive.

"Everybody knows how fast we are getting back to profitability and free cash flow," Mulally said. "Then we'll just accelerate the improvements to the balance sheet."

In November, Ford reported a third-quarter profit of nearly $1 billion and said it would be solidly profitable in two years.

Mulally said the borrowing and improved cash position have allowed Ford to revamp its product lineup so it will soon be the freshest in the industry. He made the statements in the Detroit suburb of Wayne, at a former truck factory being retooled to make the new European version of the Focus compact car.

New versions of the Focus are expected to be in showrooms early in 2011.

Ford's U.S. sales through November are down 19 percent from the same period last year, but that's a smaller drop than the overall market's 24 percent drop. The Dearborn, Mich., automaker has fared far better than GM, with sales down 32 percent, or Chrysler, which has seen a 38 percent decline, according to Autodata Corp.

Mulally said Ford would continue to see a competitive advantage over GM and Chrysler because of its solid products and because it avoided government aid and bankruptcy protection.

"They want to know that not only are they getting great products that will work for them, they want to know that the company is going to be there," he said.

Mulally also said the economy is starting to show signs of improvement throughout the world, slowly moving out of the recession. Yet Ford has still planned conservatively to have growth going forward, he said.

Ford Vehicle Residual Values Rise $1,300 on Average From 2009 to 2010 Model Year; Industry's
Largest Gain

DEARBORN, Mich., Dec. 18 /PRNewswire

Ford Motor Company (NYSE: F) vehicles, bolstered by improved quality, fuel economy and popular redesigned models, recorded the largest increase in residual values from the 2009 to the 2010 model year among full-line manufacturers.

The projected resale value of Ford, Lincoln and Mercury vehicles after 36 months in service increased by $1,310 per vehicle from 2009 to 2010 models, more than any other full-line automaker. This calculation is based on the straight average of all trim levels of each nameplate from ALG's January/February 2010 Residual Value Forecast with volume being weighted against R.L. Polk new vehicle registration data.

"We are very pleased that the quality and fuel economy our products are delivering is reflected in our residual values," said Ken Czubay, Ford vice president, Marketing, Sales and Service. "We know future trade-in value is a very important factor to customers when they are shopping for a new vehicle."

Ford already held a residual value advantage over its U.S.-based rivals. With the improvement in the 2010 model year, Ford narrowed the gap with leading Asian automakers, including Toyota.

Some Ford vehicles have now surpassed competing vehicles from Toyota in average residual values. The 2010 Ford Fusion midsize sedan, for example, is expected to be worth $687 more than the 2010 Toyota Camry after 36 months in service. And the residual value of the 2010 Ford Flex full-size crossover commands an $1,800 premium over the Toyota Highlander.

A steady stream of new products has helped boost Ford's residual values. For example, the redesigned 2010 Ford Taurus's projected average resale value after 36 months in service is $4,862 more than the 2009 Taurus. The Taurus was redesigned inside and out and features a host of new features and technologies.

"The ultimate measure of the health of an automotive brand is its residuals," said Waldek Raczkowski, Ford residual business analyst. "We have great new products with good quality, fuel economy and technology. We are pricing our vehicles properly and setting our volumes appropriately to meet market demand. This adds up to a significant increase in residual values."

The 2010 Ford F-150 earned the 2010 ALG Residual Value award in the Full-Size Pickup category, and the 2010 Ford Taurus and 2010 Ford F-Series Super Duty received Kelley Blue Book's kbb.com Best Resale Value awards for the full-size car and full-size pickup categories respectively.

In addition, Ford's improved products and brand image is translating into higher residual values. Compete Inc., a Massachusetts research firm that studies online car shopping, says Ford has surpassed Toyota in customer consideration for the first time since it began tracking such data in 2002. Compete data show Ford surpassed Toyota in customer consideration in September, October and November.

About Ford Motor Company

Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company.

Ford's December sales
'significantly better'

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

Dearborn -- Ford Motor Co.'s top salesman said sales in the first two weeks of December were "significantly better" than last month, giving him confidence in at least a modest 2010 turnaround.

"There is definitely some life in this industry again," Jim Farley, head of sales, marketing and service at Ford, told The Detroit News. "I was still a little worried about next year, but I'm starting to feel a lot better."

Ford to upgrade Sync system

Bryce G. Hoffman / The Detroit News
Dec 17, 2009

It could be the automobile industry's killer app.

In January, Ford Motor Co. will unveil the latest version of Sync at the Consumer Electronics Show in Las Vegas, including a new feature that will allow the system to work with virtually any application on a motorist's cell phone or music player, according to sources familiar with the company's plans.

That means drivers will be able to stream music from Internet radio service Pandora through their car's stereo or have Sync read incoming messages from their friends on Twitter. They will be able to manage these applications using Sync's voice controls or listen to information using its text-to-speech system. And they will be able to use the many location-specific applications that provide information about nearby businesses and attractions.

"Ford is once again the first to create a new technology," said analyst Mark Boyadjis of iSuppli Corp. "They are the first ones to integrate social media into the automobile."

Sync is the in-car communications and entertainment system that Ford developed with software giant Microsoft Corp. It was introduced in 2007, and Ford promised to add new features on a regular basis.

The Dearborn automaker would not discuss the latest upgrade, but is expected to provide details to journalists later today.

The new feature, known internally as "mobile apps," will be included in vehicles next year, but existing Sync customers will be able to download the upgrade and install it in their vehicle. Unlike the last upgrade that Ford released a year ago, this one likely will come with a price tag attached.

At the heart of the upgrade is a new application programming interface, or API, that Ford will make available to developers, allowing them to easily upgrade their programs to work with Sync.

Ford began offering Sync as an option in 2007, and the system has proven a game-changer for the company. Ford already has sold well over a million units, and 70 percent of customers who buy a Ford, Lincoln or Mercury model elect to purchase Sync. That has helped Ford increase the price it gets for its cars and trucks.

Sync also is attracting new customers. According to the automaker, 32 percent of customers say Sync was a key reason why they bought a Ford product.

"Fords used to be a pretty basic, plain-Jane car," Boyadjis said. "Even the Lincolns were little more than leather and some sound-deadening. Now, their cars are literally at the top of the space when it comes to technology. It has helped Ford gain market share from General Motors and Chrysler."

Microsoft making changes

The upgrade to Sync comes amid major changes this year at Redmond, Wash.-based Microsoft. After a decade as a separate business unit, Microsoft's automotive division was folded into its embedded computing division -- a move some observers saw as a sign the software giant was focusing its resources elsewhere.

Not so, says Greg Baribault, director of product planning and marketing for Microsoft's automotive group.

"We were replicating a lot of work that the general embedded computing team was doing," he said, adding that Microsoft often creates stand-alone business units to explore new opportunities and combines them with core parts of its organization once they are proven to be viable.

"As the two grew, it became more and more confusing for customers," he said. "It just didn't make sense to keep these things running independently any more."

Baribault said the automotive business remains important to Microsoft, and the company continues to invest in it, as well as its core home and office businesses.

"The car is a connection point between these two places, and it has really been an island without connectivity," he said. "For Microsoft, the car is a very strategic investment."

Boyadjis said Microsoft is putting a positive spin on its reorganization

"Most people took that as a sign of divestiture rather than investiture," he said. "But I don't think it really limited their ability to service the automotive market. I've seen continual advancement from them."

System is spreading

Ford was not the first automaker to use the Microsoft system. Italy's Fiat SpA introduced a system with the same basic features in Europe in 2006. Now that Fiat controls Chrysler Group LLC, it is working with Microsoft to bring its version to the United States, Baribault said.

It will likely debut on the Fiat 500, which is due to arrive in this country at the end of next year. Existing Chrysler models would not be able to incorporate the system until they are refreshed.

Microsoft also signed a deal with South Korea's Hyundai Kia Automotive Group after its exclusivity agreement with Ford expired at the beginning of 2008, though it has yet to bring a system to market.

"I can't give you a date, but we'll see something from Kia soon," Baribault said. Microsoft is also talking to other automakers and working to provide similar technology to suppliers.

"The recession put a lot of these things on hold," Boyadjis said, though he expects to see other automakers introduce their own systems next year. However, he doubts any of them will pose a serious threat to Ford.

"Ford has taken over a lot of this and created its own ecosystem. It will be more competitive, but I don't think it will overshadow the success that Sync has had," Boyadjis said. "Every year, they're announcing features that are not only groundbreaking, but easily upgradeable."

Baribault said many of Sync's hottest features, like mobile apps, are proprietary additions developed by the automaker.

"They're doing a lot of this without our direct engineering involvement," he said. "We're enabling them to create their own unique applications and provide them to their customers."

Ford Fusion Hybrid, Chevy Equinox among car, truck of the year finalists

Robert Snell / The Detroit News
Dec 17, 2009

Detroit -- Detroit automakers took four of the six finalist spots announced Wednesday for the 2010 North American Car and Truck of the Year awards.

General Motors Co. and Ford Motor Co. each had a car and a truck named as finalists for the coveted award.

Car of the year nominees are the Buick LaCrosse, Ford Fusion Hybrid and Volkswagen Golf.

Truck of the year nominees included the Chevrolet Equinox, Ford Transit Connect and Subaru Outback.

The winner will be named Jan. 11 at the North American International Auto Show at Cobo Center.

The finalists, revealed at an Automotive Press Association event, were chosen from among more than 50 vehicles that were all-new or underwent a substantial change from prior models. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. were shut out of the awards this year.

"It's a great way to take some product momentum into 2010," GM spokesman Terry Rhadigan said.

The awards, now in their 17th year, are given by a jury of 49 automotive journalists from Canada and the United States. They recognize the most outstanding vehicles of the year based on factors that include innovation, design, safety, handling, driver satisfaction and value.

"To me it's huge," said Rob Stevens, chief engineer for Ford's commercial vehicles. "We are greatly appreciative of everyone really understanding and seeing the Transit Connect for what it is: a work truck. We've got to be greener, improve fuel economy but still provide a truck that can do the job."

The 2009 Car of the Year was the Hyundai Genesis while the Ford F-150 snagged the truck honor. Domestics nabbed three of the six finalist spots in the 2009 vote.

Domestic vehicles have dominated prior awards. GM snagged four of six finalist spots for the 2008 North American Car and Truck of the Year award.

While the Dodge Ram was a finalist in the 2009 Truck of the Year competition, automaker Chrysler Group LLC was shut out of finalist ranks for 2010.

Detroit's automakers have won car of the year honors eight times compared to three wins for Japanese automakers. European brands have won four times and Korean once.

In the truck category, domestic brands have won 10 times while Japanese have taken top honors four times and Europeans twice.

Critical acclaim does not always translate into improved sales. The Saturn Aura, for example, won car of the year in 2006 but fell short of GM's sales expectations and now the brand is being eliminated.

But the honors could help GM change perceptions about the company since emerging from bankruptcy court July 10.

"When you lose your reputation, it's hard to get it back," GM Chairman and CEO Ed Whitacre told reporters Tuesday before the award finalists were announced.

Bill Ford praises Obama
for auto bailout

David Shepardson / Detroit News Washington Bureau
December 16, 2009

Washington -- Ford Motor Co. Executive Chairman Bill Ford Jr. said Monday President Barack Obama was right to rescue domestic competitors General Motors and Chrysler.

Ford told reporters in Washington that he met briefly with Obama in the Oval Office, and said he praised the $62 billion bailout of GM and Chrysler.

"I complimented him on the way he's handled the industry," Ford said, noting that his company supported the GM and Chrysler rescues because they provided stability to suppliers that all three companies use.

"Preventing the collapse of the supply base was something that they did swiftly and forcefully, and it worked."

The meeting with Obama lasted for about 10 or 15 minutes, a Ford spokesman said.

Ford was in the capital to meet with Commerce Secretary Gary Locke to discuss results of the National Summit convened by the Detroit Economic Club in Detroit in June.

The "to-do" list that came from the summit included developing comprehensive manufacturing and energy strategies, supporting research and development, upgrading infrastructure and improving science, math and engineering education.

"We're all looking to get to the same place: an American economy firing on all cylinders again and creating good jobs at good wages," Locke said.

"I don't care if an idea comes from the right or the left, from business or union leaders. If it can work and if it can grow sustainable jobs, this administration wants to know about it."

Obama and Ford also discussed the state of the auto industry. But Ford said it was a casual meeting.

The Dearborn-based automaker, which reported a $1 billion profit in the third quarter, was in better financial shape than its competitors in part because it mortgaged nearly all of its assets, including its trademark Blue Oval, to raise funds in the event of a severe downturn.

It didn't seek a bailout, but briefly sought an "emergency standby line of credit" from the Bush administration.

Ford has received other support, including a $5.9 billion loan to retool its factories to build more efficient vehicles. GM and Chrysler have also sought the loans, but haven't received them.

Bill Ford said the company is "thrilled with how we're doing. We're gaining market share across the globe," he said. "We're making money now, which is nice after a period of not doing so."

The company expects a modest uptick next year, Ford said, but declined to pinpoint the market share at which his company is aiming. The automaker won't chase market share at the cost of profitability, he said, because "we've all seen where that has led."

Ford, he said, has worked "to really balance inventory with share, with pricing and there's no right answer -- it's an art rather than a science."

Ford expects 12.5 million vehicles to be sold in the U.S. next year, and predicts a 58 percent North American production increase, up 201,000 vehicles over the same period in 2009.

"We're planning conservatively," he said. "We're not planning for a huge pickup next year. If we get one, we'll ride it."

Ford praised the United Auto Workers' Bob King, who is expected to succeed Ron Gettelfinger as the union's president.

King, who is vice president in charge of the UAW's national Ford section, "cares about Ford and he cares about the industry," Ford said. "He's a very good leader."

UAW workers defied union leaders this year and refused to give Ford the same concessions that GM and Chrysler received during bankruptcy.

The concessions include a ban on striking and a freeze on entry-level wages. UAW workers at GM and Chrysler have agreed to a no-strike provision until 2015.

Ford declined to say if he thinks the UAW will reconsider.

Ford, Mazda to remain
'long-term' partners

Automakers to team on new technology and joint systems

December 15, 2009

BRYCE G. HOFFMAN
The Detroit News

Dearborn --One year after Ford Motor Co. sold most of its controlling stake in Mazda Motor Corp., top executives from both companies have reaffirmed their commitment to a "long-term partnership" -- quashing speculation that the longest alliance in automotive history was breaking apart.

In meetings here over the past couple of weeks, Ford CEO Alan Mulally, Mazda CEO Takashi Yamanouchi and other senior managers have discussed how they can continue to collaborate within the framework of their new ownership structure. While their partnership will be less about shared vehicle platforms and more about joint development of automotive systems and technologies, executives from Ford and Mazda said it remains vital to their success.

"The strategic relationship continues. The business relationships continue. And they continue on the basis that they've always continued," Ford Chief Financial Officer Lewis Booth (pictured left) told The Detroit News. "Where it works to the benefit of both companies, we do things together, and where it doesn't, we don't."

These meetings come as Ford works to complete the sale of its last foreign brand, Volvo, as part of an effort to refocus the company on fixing the Blue Oval. At the same time, General Motors Co. is selling its Swedish brand, Saab, and rethinking other aspects of its global operations. But Ford executives say the relationship with Mazda remains vital to maintaining the company's global presence, keeping development costs in check and refining its product development and manufacturing processes.

That was echoed by Masaharu Yamaki, executive vice president for manufacturing at Mazda and a member of its managing board.
"Our strategic alliance will remain intact," he said. "Ford will remain an important partner for Mazda."

That partnership was evident last week at the Los Angeles Auto Show, where both companies featured new subcompacts that are key to their efforts to increase U.S. market share: the Ford Fiesta and the Mazda2. As with many of their new cars and crossovers, they share a common architecture -- in this case, one developed by Mazda.

When development began, neither company planned to sell its version in the United States. But that changed when Mulally took over and ordered a fundamental revision of Ford's product strategy.

"They told us it wasn't designed to be sold here, and they felt it wouldn't be able to meet the U.S. (safety) requirements," said Steve Kozak, chief engineer for safety systems at Ford. "We said, 'We'll be the judge of that.' And we sent our team to Hiroshima (Japan)."

Two months later, engineers from both companies had figured out how to modify the platform to not only meet U.S. safety requirements, but achieve top scores in government crash tests.

Ford saved Mazda

Collaboration between Ford and Mazda was not always so reciprocal. When Ford first began buying up shares in Mazda in 1979, it desperately needed a window into the Japanese automobile industry.

"Twenty or 30 years ago, the Japanese clearly had the lead," said Booth, formerly Mazda's president and chairman. "Now, it's a little more two-way than it was. There's more mutual sharing."

If Ford needed Mazda in the 1980s, Mazda desperately needed Ford by the end of the 1990s. It had strayed from its mission as a manufacturer of sporty cars with polarizing designs and nearly bankrupted itself in a failed bid to compete head-to-head with Toyota Motor Corp. and Honda Motor Co. in the Japanese market by offering a line of plain vanilla sedans designed for mass appeal.

In 1996, Ford bought a controlling stake in the company and installed its own executives, who helped Mazda return to its roots. It also set its sights on the U.S., not Japan, as its primary market.

That strategy worked. Before the automobile market collapsed a year ago, Mazda was setting sales records every month in the United States. Then came the surprise news in November 2008 that Ford was selling off its controlling stake in the company.

Booth said the move was motivated entirely by "Ford's financial position, rather than any change in strategy."

The Dearborn automaker was struggling to secure cash as the bottom fell out of the global auto market. Ford already had sold off its British luxury brands, and then-CFO Don Leclair wanted out of Mazda, too, according to a source, but other executives wanted to keep at least a partial stake.

"We're still dependent on each other," said Derrick Kuzak, Ford's head of global product development, noting that many of Ford's newest vehicles are still based on Mazda platforms. "You cannot change that overnight."

Ford reduced its stake in Mazda from 33.4 percent to just over 13 percent, netting approximately $540 million. It remains Mazda's largest shareholder.
That move raised some serious concerns in Japanese financial circles, coming as it did in the midst of the worst crisis to hit the global auto industry in decades. Several analysts questioned whether Mazda would be able to weather the storm without Ford. But Mazda has proven surprisingly resilient.

As with most other automakers, the past year has not been kind to Mazda.
Its U.S. sales are down 23 percent year-to-date, about the same as the industry as a whole, which is down 23.9 percent, but the company's share of the market remains flat at 2 percent.

In May, Mazda warned that it expected to lose more than $556 million this year.

Too small and too large

One Mazda insider said the company's problem is that it is too small and too large. Though it is a full-line manufacturer, it is too small to compete directly with the titans of the industry. It also lacks the financial resources to aggressively market all of its products. But Mazda also is too big to succeed as a niche player like rival Subaru.
Despite these challenges, Mazda's outlook has been improving. In October, the company said it was selling more vehicles than anticipated and was returning to profitability. It now expects to lose just over $289 million for the full fiscal year, which ends in March.

Mazda also issued more than $1 billion in new stock -- money it plans to use to fund research into green vehicle technology and safety improvements.

"We're making money, and we're cash-flow positive. We just went to the equity markets and raised a bunch of money," said Jim O'Sullivan (pictured right), president of Mazda North America. "That tells you people have a lot of faith in Mazda going forward."

Iwao Nakatani, director of research at Mitsubishi UFJ Research and Consulting Co. in Tokyo, said Mazda's resilience is typical of Japanese carmakers.

"Japanese companies are more patient and able to endure losses," he said. "It's bad for shareholders, but the competitiveness of Japanese industry has been fostered by this industrial structure. They have had to reduce costs and improve quality in order to survive."

While it seems to have found its financial footing, Mazda remains dependent on Ford for things like powertrains, which Ford say it will continue to provide.
"Beyond that, we're always open to considering new opportunities to work together," Kuzak said.

But Ford also remains dependent on its Japanese partner, and Kuzak has committed to regular meetings with Seita Kanai, his counterpart at Mazda, to ensure that information continues to flow between the two companies.

Ford still has a lot to learn from Mazda, particularly in the areas of manufacturing and product development, and both companies continue to share best practices.

Mazda provides Ford with a window into the Japanese auto business that Ford is keen to keep open. And the relationship also allows Ford to achieve even greater economies of scale. For example, by selling motors to Mazda, it is able to lower its own unit cost for those engines. And the two companies continue to operate four major joint ventures -- in China, Thailand, South Africa and Flat Rock -- that Booth said are critical to Ford's global ambitions.

Ford has given up its seat on Mazda's managing board, but Booth said that was motivated by legal considerations and not a reflection of any fundamental rift between the companies.

"Even when we were a bigger stakeholder, Mazda ran their own business," he said. "It's a remarkably enduring relationship. It's built on good business principles. It's also built on strong mutual respect between the two companies."

Ford to restore perks, raises

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

Ford Motor Co. will restore some benefits that its U.S. salaried employees lost last year and resume merit raises -- the latest sign that its recovery is gaining traction.

"Our plan is working," said Ford Americas President Mark Fields in a note to white-collar workers Thursday.

The note said Ford would resume matching employee 401(k) contributions effective Jan. 1. That program, through which Ford kicks in 60 cents for every dollar an employee contributes to a retirement account up to 5 percent of their base salary, had been suspended in January.

Ford also said it will begin offering tuition assistance to salaried workers again on March 1. And the automaker said it would resume merit pay increases April 1.

In 2008, Ford delayed merit pay increases until October and suspended them entirely this year after losing a record $14.6 billion.

"Those benefits were suspended due to difficult business conditions in the United States," said Ford spokeswoman Marcey Evans.

"We had committed to employees to reinstate them when business conditions allowed, and they have improved to the point that we can restore these benefits."

Last month, Ford surprised Wall Street with a $1 billion profit.

It was the second quarterly profit in a row for Ford, the only U.S. automaker that did not accept a government bailout and the only one to avoid bankruptcy in what has been one of the worst crises to hit the automobile industry ever.

The Dearborn automaker still expects to post a loss for the full year.

It has promised a return to profitability in 2011.

Evans said the company will not pay bonuses for 2009.

Engine revs up, driving
recovery – and hope

Globe & Mail Dec 14, 2009

A lineup had already formed on the frigid walk outside Woodstock's Community Employment Services office by the time the doors opened at 8:30 a.m. yesterday. Then the phone calls started, almost 200 by the end of the day.

The word was out: Toyota is hiring.

Toyota Motor Manufacturing Canada Inc. said Thursday it will add a second shift, or 800 jobs, at its Woodstock plant, about 144 kilometres southwest of Toronto. It's a small number compared to the scale of the layoffs in the industry – but for the part of the country hardest hit by the downturn in manufacturing, it's a sign that a recovery is under way.

“Everybody just wants to know, ‘How do I apply?'” said career counsellor Karen Oldroyd, who has been coaching applicants. “It gives them a little hope that things are headed in an upward direction. In the last 24 hours, just the buzz is amazing. It's exciting for people.”

Darrell Crane, who was laid off last summer by Ingersoll Fasteners after 24 years, went online within hours of hearing about the Toyota jobs, but had trouble navigating the company's online application. At a resumé workshop at the job centre, he was able to work with other participants to figure out how to apply.

The Toyota openings, he said, are a “hopeful sign.”

Job seekers such as Mr. Crane tell a story few would have believed a year ago: Canada's auto industry is coming back.

In Southern Ontario, the epicentre of Canada's manufacturing meltdown, the announcement that Toyota would double Woodstock's production of the RAV4 crossover utility vehicle by the end of March marked a turning point, a cautious resurrection.

The tentative comeback of the country's automotive industry is already starting to ripple through the manufacturing sector, as parts makers gear up to meet rising demand.

Canada's industrial heartland has been devastated by the auto slump and the broader manufacturing downturn. Vehicle production plunged 31 per cent in Canada from January to November, driving employment in both the assembly and parts industries down to lows not seen since the early 1960s, when the Canada-U.S. auto pact created a common market for vehicle output in North America.

Thousands of jobs have died, partly because of plant closings by U.S. parts makers that have gone through bankruptcy protection.

Now, increases in production by Toyota and by General Motors Co. at its Cami Automotive plant will generate several thousands jobs.

Toyota's original plan was to start with two shifts of production when the plant opened about a year ago, but it began on just a single shift because of the crisis. Now, as it ramps up, it's a bright spot in the manufacturing landscape.

Suppliers to Toyota are already planning for the boost in business. The number of jobs created at suppliers will likely be more than double the 800 the plant is adding, said Toyota Motor Manufacturing Canada president Ray Tanguay.

Seat manufacturer Toyota Boshoku Canada Inc., for example, located about a five-minute drive from the assembly plant, will hire more than 100 workers, adding to the 200 already employed. And about 50 kilometres away in Guelph, Ont., Denso Manufacturing Canada Inc. will hire 20 new employees to make more engine-cooling modules, which contain the radiator, fan and other cooling system parts for RAV4 models. Denso employs about 400 people now.

Woodstock – not to mention Ingersoll, Ont., a bit west along Ontario's automotive artery, Highway 401 – must give Americans much of the credit for the new-found optimism.

U.S. drivers have pumped up their purchases of crossover utility vehicles, which ride and handle better than their sport utility vehicle ancestors and consume less fuel because they're built on a car chassis instead of a truck frame. And in the way the auto maker slices and dices vehicle segments, not just any crossover utility vehicles, but in particular, those that are compact.

Americans bought more compact CUVs last month than pickup trucks. That category includes the RAV4 models that roll out of the Toyota plant in Woodstock and the Chevrolet Equinox and GMC Terrain assembled at Cami.

Compact crossover sales jumped 32 per cent in the United States last month in a market that was flat overall. That segment has grown to more than 1 million vehicles this year. So these are the vehicles that are helping the auto industry in Canada crawl out of the depths of the Great Recession.

Vehicle production in Canada – about 85 per cent goes into the U.S. market – will rise next year from the low levels of 2009, although it will be far from a spectacular jump, Bank of Nova Scotia economist Carlos Gomes said yesterday.

“It's better than creeping, it's certainly not roaring back, but somewhere in between,” Mr. Gomes said.

While Toyota's decision is a sign of the auto industry's comeback, it's also a signal that the worst days may be behind the manufacturing sector, which was hit first by a stronger dollar, which makes Canada's exports more expensive in other countries, and then by a recession that crippled global trade.

Still, economists question whether all 200,000 factory jobs lost in the downturn will ever return. Competitive challenges remain in the auto sector and the broader manufacturing industry, that predate the recession.

“It's confirmation that employment is improving again, but it doesn't necessarily mean that we have solved all of the competitive issues of our manufacturing sector, such as the strong Canadian dollar and the gradual erosion in market share to overseas manufacturers, said Avery Shenfeld, chief economist at CIBC World Markets.

Optional trim Mr. Shenfeld points to Statistics Canada figures showing about 2.3 million factory jobs in 2004, when the Canadian dollar had started to climb from an historical low. By the time the recession hit, that total was down to about 1.95 million. It's now around 1.74 million.

“We might get back half of what we lost in the recession, or maybe a bit more eventually, but we're unlikely to recover even all of those because part of that was still the trend decline we were facing before the recession even began,'' he said. He added that even as Asian auto companies such as Toyota boost their market share in North America they tend to use fewer domestic parts than the Detroit Three plants they're replacing. end trim

Still, sales by Canadian factories in September climbed for the third month in four as new orders reached a high for the year, although Mr. Shenfeld said there will still be more job losses despite the industry and economy having turned a corner.

Woodstock, where officials estimate the unemployment rate runs below the national average at about 8 per cent, is a prime example of what can happen to a region struck by a manufacturing slump. Still, entire plant closures that hit other towns like St. Thomas, Ont., haven't been seen there.

“Over 400 of our members were laid off in the last eight months,” said Ross Gerrie, president of the Canadian Auto Workers union Local 636. “Their unemployment is running out.”

According to Brad Hammond of Woodstock's economic development team, Woodstock has seen layoffs, work sharing, and some small businesses firing up to half of their employees. And unlike slumps of the past, which have generally cut loose younger workers with lower seniority, this time many who lost their jobs are in their 40s and 50s.

Back at the employment workshop, Mr. Crane's resumé skills are a little rusty. Until he was laid off last summer, he worked at Ingersoll Fasteners for 24 years. He'll need to make his application stand out. When the plant opened, Toyota had to wade through an estimated 45,000 resumés just like his, in a climate starved for manufacturing jobs.

The layoffs in the region have hurt businesses that depend on local consumers. The downtown core could certainly stand for some revitalization: while the town has worked hard to preserve its heritage architecture, some of those pretty store fronts are boarded up and vacant.

“The banks, locally, have red-lined our downtown core,” said Woodstock Mayor Michael Harding. “They won't reinvest.”

He believes that's about to change: a new budge hotel, an art gallery and a travel centre are all slated to open soon. Officials hope Toyota's decision will ripple through the rest of the community.

“We're two weeks away from Christmas, and the merchants are nervous,” said Kelly Morrison of the downtown Woodstock Business Improvement Area. “This announcement will help. People will want to spend again.”

Optional trim As a whole, Canada's manufacturing industry may never return to earlier levels, because companies are learning to do more with less.

Rob Hilborn, president of Darcor Ltd., a company in Toronto that makes high-performance casters and wheels used for anything from automotive tow lines to portable ultrasound machines to props and stages for Cirque de Soleil and Mirvish Productions, said the Toyota announcement is “probably a good indicator'' that things have stopped getting worse.

But he's unlikely to hire back anything close to the 20 per cent of the work force shed in the recession.

“We may add staff as sales increase, but I don't think our staffing levels will ever be to the level they were for the same level of sales,'' he said. “We're going to be shooting for higher revenue per employee than we have in the past.''

King emerges as next UAW chief

Bryce G. Hoffman / The Detroit News
Dec 12, 2009

Bob King will be tapped to succeed United Auto Workers President Ron Gettelfinger as the new head of the union, according to UAW sources. On Wednesday, the union's administrative caucus is expected to formally nominate King, who is vice president in charge of the UAW's national Ford section. That effectively guarantees he will be the next president of the UAW.

The union he will inherit is a shadow of the juggernaut that once dictated terms to Detroit's automakers.

At its peak in 1979, the UAW claimed 1.5 million members. Now, its membership has dropped to 431,000 from well over 500,000 a year ago. The UAW has lost so many members that it is cutting at least 120 staff positions in an effort to balance its budget, UAW sources said.

"We've got to downsize," a union source said. "It may not end there."

In a stunning role reversal, Gettelfinger told UAW employees Thursday that he would impose the terms of a concessionary contract that they voted down last month. That means reduced benefits for the union's own retirees and requires each UAW employee to take a two-week unpaid furlough or give up their 401(k) matching contribution next year.

"Ron Gettelfinger led the UAW during its toughest times and he's had to make some of the most difficult decisions in its history," said Harley Shaiken, a professor and labor expert at the University of California, Berkeley, who said the union boss has had to ask his members to accept painful concessions to keep American factories open. "I don't expect much different direction (from King)."

UAW spokesman Roger Kerson said the union had no comment.

Heir apparent

King, 63, has long been seen as Gettelfinger's heir apparent.

King joined the union in 1970 after hiring on at Ford's Detroit Parts Depot.

Before becoming head of the UAW-Ford section in 2006, he headed the union's national organizing efforts.

Between 2002 and 2006, he was credited with bringing in 66,000 new members, many of them the product of bitter campaigns waged in right-to-work states.

Prior to coming to Solidarity House, he served three terms as director of the UAW's powerful Region 1A, which represents workers in southeast Michigan.

Though the election itself will not take place until the UAW's national convention -- scheduled to be held in Detroit in June, according to UAW sources -- his nomination by the caucus, which is made up of senior union leaders, will all but ensure King's election.

"Since the 1940s when Walter Reuther formed the administrative caucus, the person selected by that committee has won the election," Shaiken said. "I'm not surprised that Bob King may be nominated. He is very well respected and well liked in the UAW."

Though there were several other candidates to replace Gettelfinger when he took control in 2002, none of them managed to secure the backing of enough union leaders to pose a serious challenge to his candidacy.

Bruised reputation

But King's reputation is still bruised by the recent defeat of an agreement he negotiated with Ford to match some of the concessions the UAW granted rivals General Motors Co. and Chrysler Group LLC during their bankruptcy reorganizations earlier this year.

On more than one occasion, union dissidents booed King when he tried to speak in favor of the deal at factories from Michigan to Missouri.

Gary Walkowicz, a member of the bargaining committee at UAW Local 600 in Dearborn and a leading union dissident, would not rule out a direct challenge to King from the convention floor.

"I don't agree with King's policies," he said. "But it really depends on who gets elected as delegates."

Terry Everman, chairman of UAW Local 599 in Flint, said many of his members are looking for "strong direction" and someone willing to help them find jobs in other industries. Just 460 workers remain at the GM plant in Flint he represents. Five years ago, there were 3,500.

"Most of us realize that, with the technological changes, it only takes a fraction of workers to do the kind of work and volume we once did," he said. "It would make sense that our leaders pursue other interests including energy, wind and solar."

Because of his age, King will likely be a one-term president, as it has long been UAW policy for officers to retire when they turn 65.

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

Bob King

• Age: 63
  
• Title: UAW vice president since 1998
  
• Background: Began working at Ford Motor Co. in 1970 after graduating from the University of Michigan and serving in the Army. The journeyman electrician earned a law degree from University of Detroit in 1973. First elected vice president at UAW Local 600, which represents Ford's Rouge complex, in 1981.
  Source: Detroit News research

Ontario tables pension
reform, phase one

James Daw - Toronto Star - Dec 10, 2009

Ontario is moving to eliminate the rights of laid-off workers to share pension fund surpluses, now that they have become quite rare.

But every worker whose age plus service totals 55 would qualify for enhanced pension rights after 2011, while only those affected by a significant layoff would continue to qualify for so-called grow-in rights until then.

Finance Minister Dwight Duncan tried to stay away from controversy in draft amendments tabled Wednesday, the first of two pieces of legislation to modernize the province's pension laws – fearing the sort of angry labour protests the former Conservative government faced when it tried to take away the rights of pension members and laid-off workers retroactively.

He left the more important proposals from last year's report of the Expert Commission on Pensions – like improving pension benefit guarantees, funding and reporting rules and the environment for creating new and innovative pension plans – until next spring.

"We want to get these (changes) out of the way before we deal with the more contentious ones," Duncan told reporters after introducing the Pension Benefits Amendment Act.

Among other changes proposed:

Workers joining defined benefit pension plans would immediately be entitled to take away more than just their own contributions plus interest, instead of having to wait two years to qualify to have pension rights "vested."

Pension sponsors would be able to amend their plans so older members could shift to part-time and continue to accrue more pension rights while drawing a pension, as permitted in Quebec and proposed in the last provincial budget.

Elimination of a time-consuming and potentially costly requirement to review historical pension plan documents if the employer gets a written agreement from members and pensioners to share surpluses at the time a plan is wound up.

Giving multi-employer pension plans, such as in the construction, resource, food and supermarket industries, the right to eliminate enhanced benefits for those laid-off after their age plus service totals 55 years.

Measures to give members and retirees more ready access to information about the funding status of their pension plan, notice of plan changes and the right to be included in an advisory role.

Giving regulators the power to approve arrangements for altering pension benefits or dealing with benefits when a company seeks protection from creditors or declares bankruptcy, as in the case of Nortel Networks Corp. and AbitibiBowater Inc.

New provisions to smooth the restructuring of companies and government agencies by allowing affected employees to transfer the value of their pension entitlements to a new pension plan.

Ian Markham, an actuary with Watson Wyatt Worldwide, said the proposed enhancements for all laid-off senior workers – not just those affected by a mass layoff or the closing of a sub-office or plan – can be extremely valuable.

Take the case of someone in a typical private-sector pension plan who is laid off at age 45 after at least 10 years of service. He or she might qualify for a 38 per cent larger transfer to a locked-in savings account by being treated as eligible for a 30 per cent pension reduction at age 55.

A 45-year-old with 20 years in a plan that pays an unreduced pension to someone with 30 years of service at 55 might qualify for twice or more money thanks to Ontario's generous pension grow-in rights for laid-off workers.

Markham predicted disputes over whether someone was laid off or fired, or not properly informed about the value of grow-in rights when given the option to quit or accept an enhanced severance package.

CAW CONTACT
Volume 39, No. 43 – December 11, 2009

 
CAW President Urges Doubling of CPP

Opening CAW Council in Toronto on December 4, CAW President Ken Lewenza urged the nearly 700 delegates from across the country to renew their fight for pension security. This means doubling the Canada Pension Plan, so that all citizens can live in dignity, regardless of whether they have an employer paid pension plan or RRSPs, said Lewenza.

"People are now talking about pensions and we're reading about pensions each day in the newspaper because workers are hitting the streets," said Lewenza.

"Our ability to preserve employer-sponsored pension plans in collective bargaining will depend on us bringing every Canadian along with us. If we don't do this, we won't succeed. This fight for fair pensions will be a defining moment for the labour movement."

Lewenza said that up to 75 per cent of private sector workers do not have pensions and only 30 per cent of Canadians have RRSPs, many of whom lost thousands of dollars with the global financial crisis and collapsing stock values last fall.

"If we can double the CPP, people then won't be scared to retire," said Lewenza. "Our government has it backwards, seeking regulatory changes to allow people to stay at work until 70 or 75."

Along with the doubling of CPP, Lewenza also said the union must continue to fight for a number of other legislative changes, particularly around severance, workplace closures and bankruptcies.

Lewenza highlighted the case of Nortel Networks. An Ontario court recently ruled the company has no financial responsibility for people who retired or who were on long term disability leave prior to the company going into bankruptcy protection in January 2009. Around the same time, media reports revealed that Nortel is still paying massive executive bonuses.

"It is unlawful in this country when executives can get rich on the backs of pensioners," Lewenza said to a huge round of applause.

Collective Bargaining

The Council meeting wraps up a tumultuous year in collective bargaining and politics. Lewenza outlined the last two sets of auto negotiations - with CAMI Automotive in Ingersoll, Ontario, which ended in September and Ford Motor Company, completed at the end of October. Lewenza commended both bargaining committees for their efforts in reaching the agreements that were ratified by members.