Ford sale of Volvo expected
to be done next week

Automaker sheds latest European marque
with purchase next week by China's Geely

Detroit News staff and wire reports
July 30, 2010

Ford Motor Co. plans to complete the sale of Volvo Cars to Zhejiang Geely Holding Co. next week, marking the biggest acquisition of a global brand by a Chinese company, people familiar with the plans said Wednesday.

Ford is selling Volvo to Geely for $1.8 billion, less than a third of what it paid for the Swedish carmaker in 1999, as part of the Dearborn automaker's strategy to focus on its blue-oval brand.

Ford and Geely have been aiming to close the deal next week.

Li Shufu, founder and chairman of Zhejiang Geely, will be the chairman of a new board for Volvo Car Corp. after the deal is completed, Geely said this month. A former Volvo chief executive, Hans-Olov Olsson, will be vice chairman.

But it has given no indication whether negotiations to hire Stefan Jacoby, most recently head of Volkswagen's U.S. operations, to be Volvo's next chief executive are nearing completion.

Volvo's current CEO Stephen Odell will leave the company to become chairman and CEO of Ford of Europe.

The Volvo sale concludes Ford Chief Executive Officer Alan Mulally's strategy to shed the European luxury marques purchased by his predecessors.

Since Mulally's arrival from Boeing Co. in 2006, Ford has sold Aston Martin, Land Rover and Jaguar, which it acquired in 1989 as the first of a stable of premium brands that failed to generate the profits the automaker expected.

Of Ford's European brands, Volvo provided the most benefits to Ford, and the acquisition was considered among the most successful in an industry littered with unhappy deals.

"The Volvo-Ford marriage was one of the strongest because their car buyers had similar characteristics," said Rebecca Lindland, an analyst at IHS Automotive in Lexington, Mass.

Geely declined to comment on the timing of the completion.

Ford will continue to supply Volvo with engines, transmissions and other components. It also agreed to offer engineering and technology support, and access to tooling for common components for an unspecified period.

Ford to cut nearly
400 jobs in Windsor

Ford workers in Windsor finally told how many will be laid off and when

Emily Mathieu
Business Reporter
Toronto Star July 29, 2010

After months of waiting, workers at the Ford Motor Co. engine-making facility in Windsor have been told that almost 400 union members will be laid off.

On Wednesday, members were told that total layoffs would be 388 people, 250 production workers and 138 trades people.

A Ford spokesperson confirmed that layoff notices will be handed out in early August and members will have 12 weeks of work, with the final day expected on Nov 1.

Marc Renaud, vice president CAW local 200 Windsor, said even though they knew layoffs were imminent, the number is “devastating.”

“We are going to continue to push forward and have discussions with the company for additional work for Windsor,” said Renaud, adding that Ford was holding town hall meetings with workers to discuss options.

Union members were told by Ford in January that layoffs would be taking place in the fall.

The company is reducing the number of shifts at the engine plant. A new shift is being added at a second Windsor facility, but the change will result in a net loss of jobs.

At time they were told about 180 production workers and about 75 trades people would be laid off some time in September or October, said Renaud.

Workers who have received layoff notices have been given the option to bump junior members or use their seniority to take the jobs of recent hires, said Renaud.

Options being discussed with the company include voluntary severance or retirement-incentive packages to the union “to hopefully open the door for the younger folks to stay,” he said.

CAW local 200 Windsor has 1,737 members working at four plants, said Renaud.

CAW CONTACT
Volume 40, No. 27
July 28, 2010

Government Must Extend Temporary EI Measures

The federal government must act immediately to extend budget measures and pilot projects providing vitally important Employment Insurance supports to laid off workers, the CAW is urging Prime Minister Stephen Harper.

“All the key Employment Insurance stimulus measures and projects are starting to fall off the table, beginning September 11,” CAW President Ken Lewenza and Fish, Food and Allied Workers President Earle McCurdy told Harper in a July 13 letter.

“This will come as a terrible shock to most Canadians. Many of those currently on regular EI would have already exhausted their benefits if not for those measures,” Lewenza and McCurdy state.

In its latest employment outlook, the Organization for Economic Cooperation and Development noted that the number of long-term unemployed almost doubled as a percentage of Canada’s labour force in the last two years and recommended that EI temporary extensions “should be maintained until the pool of long-term unemployed begins to drop significantly.”

Talk of early exit strategies for government stimulus at the G20 meetings and elsewhere is deeply disturbing, Lewenza and McCurdy state.

“Indeed, the recovery is still vulnerable. There’s a danger of a double dip recession and both unemployment and underemployment will be with us for some time. Our members know this only too well; some are in their second layoff in as many years.”

A battle is also heating up in the US over UI extensions. There the federal government has already extended benefits for up to 99 weeks, adding 73 weeks of extra benefits on top of the 26 weeks provided by most states. Canada’s EI extensions are modest in comparison.
CAW and FFAW called for eight temporary EI measures to be extended or made permanent, including:

• an extra five weeks benefits for all claimants and an extension of up to 20 weeks for long service workers;

• two pilot projects that base benefit calculations on 14 best weeks of earnings and allow earnings of up to 40% of benefits while on EI;

• EI training benefits for claimants in approved re-training programs.

To read the complete copy of the letter to Harper go to: http://www.caw.ca/en/9128.htm

CAW Reaches Deal With St. Marys Cement

The CAW has reached a tentative agreement with St. Marys Cement after a five month long strike at the Bowmanville facility over pensions and a number of other concessions.

The tentative agreement is subject to ratification by the 87 CAW Local 222 members and voting will take place on Thursday, July 29. Details of the agreement will be released following ratification.

St. Marys Cement is a wholly-owned subsidiary of Brazilian company Votorantim Cimentos.

CAW Members Approve VIA Deal

CAW members at VIA Rail have voted 88 per cent in favour of a new collective agreement, in a series of ratification meetings held across the country over the past weeks.

“This agreement is a major victory for VIA workers, especially in light of the many concessions initially demanded by the company,” said CAW President Ken Lewenza. He congratulated the CAW master bargaining committee for their efforts during the difficult round of negotiations.

“Now we must turn our attention to pushing the federal government to properly support this important service which links our country from east to west,” said Lewenza. “For many years, governments of the day have undervalued and underfunded VIA Rail, putting an ever-increasing strain on operations.”

The three year agreement includes wage increases in each year; improvements to the benefit plan, including short-term and long-term disability, maternity leave; a new apprenticeship program for maintenance and for the first time, establishes health care spending accounts for retirees.

“I’m pleased that we were able to arrive at this agreement which enjoyed such high support from VIA workers,” said CAW National Council 4000 Secretary-Treasurer Heather Grant, representing both the customer service and on-board service workers.

“Improvements to the collective agreement were important to our members, but equally important was finalizing the apprenticeship program for skilled trades which will be put into place in locations across the country,” said CAW Local 100 President John Burns, whose local union represents maintenance workers.

The CAW is VIA Rail's largest union, representing 2,200 workers. The union reached the agreement with VIA on June 26.

Dragon Boats for the Cure

More than 100 CAW Local 444 members came out to participate in and support the recent Dragon Boats for The Cure races, held on July 10 and 11, 2010 at Tecumseh, Ontario's Waterfront Park. The Dragon Boats for The Cure festival raises money for breast cancer research. Women breast cancer survivors and supporters from all over North America came to participate. CAW Local 444 raised $23,000. Photo: Gord Gray, CAW Local 444.

Bargaining Opens at B.C. Lower Mainland Ports

The Vancouver Container Truckers Association-CAW Local 2006 officially opened bargaining July 22 with a group of separate companies engaged in moving containers to and from the various lower mainland ports.

VCTA-CAW Local 2006 represents the largest group of container truck drivers at lower mainland ports in British Columbia. The membership is seeking a benchmark agreement for container truck drivers which will promote port stability and put an end to constant under-cutting of owner-operator rates.

“We can’t have stability at the ports with an increasing number of unscrupulous container truck companies competing in a race to the bottom,” said VCTA-CAW Local 2006 President Paul Johal.

Port Metro Vancouver (PMV) terminals saw a massive withdrawal of service by 1200 owner-operators in 2005 to protest working conditions and a race to the bottom on rates. The dispute disrupted port operations and cost the provincial and national economies hundreds of millions of dollars.

As a result, the federal government amended the Port Authorities Operations Regulations to set up a licensing system with benchmark and minimum rates for applicable owner-operators. The B.C. Ministry of Transportation and Infrastructure also set up a program to investigate and make recommendations to PMV to enforce the correct rates. PMV can sanction, suspend, or cancel the licenses of offenders.

“It seems the Ports aren’t that interested in rate enforcement as they won’t name companies with suspended or cancelled licenses,” said CAW National Representative Gavin McGarrigle. 

“The Ports need to be ordered to do a better and more transparent job of rate enforcement. The Port regulations need to be changed to provide for true stability instead of the fake appearance of stability that we are left with today,” said McGarrigle.

Further bargaining is scheduled for August 4 and 5.

Attack on Public Sector Workers’ Collective Bargaining Unfair

The CAW criticized the Ontario government’s attempt to attack the collective bargaining rights of public sector workers and the important services these workers provide across the province following a consultation with Ontario Finance Minister Dwight Duncan and other public sector unions on July 20.  

“To suggest that the provincial deficit should be borne by public sector workers is tremendously short-sighted and unfair,” said CAW President Ken Lewenza. “Ontario can only get out of a deficit position by growing the economy, not by making it even more precarious. This will in no way protect services as the province is claiming.”

Lewenza said that the union recognizes the difficulty the province is facing due to the loss of jobs and the impact of the financial crisis but insists that the cost cannot be borne almost wholly by workers.

Under its austerity program, intended to cut into what is projected to be a $21 billion deficit, the provincial government is zeroing in on workers in the education, civil service and health care sectors, a move Lewenza said is unwarranted and will further stall what is already a fragile economic recovery.

The union is also condemning the government’s approach to hospital funding, cut back this year with many facilities facing severe funding shortfalls and even closures in some communities.

Lewenza said the Public Sector Compensation Restraint to Protect Public Services Act, is having far-reaching implications even into the for-profit long term care sector, which employs thousands of CAW members. “For-profit providers such as Extendicare and Revera are now demanding wage restraints and threatening lay-offs despite the fact that the province recently announced $157 million in new funding for the long term care homes sector.”

“This is already a sector characterized by low wages, long working hours and staffing shortages. Too many people working in this sector, predominantly women, have to string together two part time jobs in order to provide for themselves and their families. Our message to the province and to these private sector employers is that we will not tolerate this wage freeze.”

The consultation was the first of a number of others to follow. Lewenza said the union plans to continue meeting with the government to arrive at a solution which precludes placing the burden directly on public sector workers and the important public services these workers provide.

Winnipeg Casino Workers to Vote on CAW Representation

One thousand workers at the Club Regent and McPhillips Street Station casinos in Winnipeg participated in a union displacement vote that could see them represented by the CAW – Canada’s largest gaming workers union. The vote took place over three days, from July 22 to 24.

Some workers at the two casinos have expressed frustration with their current union over inadequate representation and perceived lack of transparency in decision-making, which sparked their campaign to be represented by the CAW.

"Many of the workers we have spoken to fully understand the benefits of being a union member, they just want the type of open, democratic and progressive representation that other workers enjoy with the CAW," said John Aman, the union’s national organizing director.

In response to the workers’ desire to be represented by the CAW, the incumbent union launched a public campaign intending to discredit the CAW and discourage workers from voting for the CAW.

“It’s unfortunate that this union has chosen to spend an extraordinary amount of time, money and energy to publicly attack our union, especially when there are so many outstanding workplace issues affecting their members’ lives,” Aman said.

Vote results are expected to be announced by the Manitoba Labour Board in the coming weeks.
   
CAW is Canada’s largest union in the gaming sector, representing over 7,000 workers at Caesars Windsor Casino, Brantford Casino, Slots at Sudbury Downs, Great Blue Heron Casino, Edgewater Casino and the Woodbine Racetrack as well as other locations.

$46 Million Poultry Plant Good News for N.S. Members

Plans for a $46 million chicken and turkey processing plant in Nova Scotia is a positive step towards getting CAW members back to work in the Annapolis Valley.

CAW Local 2216 members who worked at ACA Co-operative poultry processing facility in Nova Scotia were left reeling by a decision to downsize the plant resulting in 185 layoffs.

Plans were announced July 13 to build a new plant in the Kentville Industrial Park. The facility will be jointly owned by Maple Lodge Farms and a group of local farmers, processing chickens and turkeys raised in Nova Scotia and Prince Edward Island.

CAW Local 2216 President Dean Tupper said the announcement of the new state-of-the- art facility is a positive step toward getting many CAW members back to work.

“After some tough times and enormous uncertainty for our members this plant promises to bring a more stable work environment, while also creating more jobs in the local community,” said Tupper. “Our members have made tremendous sacrifices to keep this industry alive in Nova Scotia,” Tupper said.

The ACA Co-operative facility’s future has been in jeopardy for some time as new poultry processing technology has come to market. In the latest round of contract negotiations with ACA, CAW Local 2216 members ratified a new cost-saving agreement that was needed to secure investment in the new plant.

“I want to thank the membership for their strong support of the bargaining committee during this very tough round of negotiations,” said CAW national representative Chad Johnston.

“The decisions they had to make while they were in the process of losing their jobs weren’t easy for them or their families. It was our sincere hope that those tough decisions would help them secure a better future and this announcement is a step in the right direction,” he said.

Looking Back to Move Forward: CAW Women’s Art Project

The CAW Women’s Program has undertaken an innovative community arts project entitled Looking Back to Move Forward that will celebrate CAW women and their history.

The project aims to compile a patchwork of CAW women’s stories of struggle, activism and personal experiences over the past 25 years into a creative art collage that will be on display at CAW Council in Toronto this December.

The union has received funding from the Ontario Arts Council and the Toronto Arts Council for this initiative and has partnered with experienced community artist Florencia Berinstein, who will coordinate and animate the project.

The project requires the help of all CAW sisters. Women from all sectors of the union and all geographic regions are encouraged to participate.

Please visit http://www.caw.ca/en/9002.htm to download the project questionnaire. All questionnaires must be filled out and be returned through any of the following options:

Mail:        Florencia Berinstein, Project Artist,
                 602 Delaware Avenue,
                 Toronto, Ontario M6H 2V2
Email:      fberinstein@gmail.com
Fax:         416-599-8661

If you have questions about this arts project, please contact Julie White, CAW Director of Women’s Programs, at: julie.white@caw.ca

CAW 25th Anniversary Song Contest

The CAW is turning 25 this year and what better way to celebrate our two and a half decades than by a song?

Talented CAW members from across the country have submitted their original work.

Now it's up to you to decide what song will be chosen to commemorate the union's first 25 years.

The three finalists are:
“The Line” by Adrian Burnett (CAW Local 3000)

"It's only getting better" by Art Farquharson (CAW Local 114)
"Stand up for what you believe" by Glen MacNeil (CAW Local 2027) 

Songs can be heard online by visiting: http://www.caw.ca/en/9169.htm

To cast your vote, please visit the CAW homepage: www.caw.ca/en 

Voting closes on August 4. The winning song will be performed at the CAW Joint Council in Montreal, Quebec - August 27-29.

CAW Welcomes New Members

►        Manitouwadge General Hospital, Manitouwadge, Ontario – 8 new members in CAW Local 229.

►        Hampton Court Retirement Lodge, Southampton, Ontario – 18 new members in CAW Local 2458;

►        OLG Mohawk Slots (Security) Campbellville, Ontario – 40 new members in CAW Local 252;

►        Cascade Carriers LP, Multiple locations in Alberta – 54 new members in CAW Local 4050;

►        Orchard Court, Shannex Incorporated, Kentville, Nova Scotia – 60 new members in CAW Local 2216;

Ford to sell $1.08 billion
of loan bonds
They could be sold starting this week

BY SARAH MULHOLLAND
BLOOMBERG NEWS
July 28, 2010

Ford plans to sell $1.08 billion of bonds tied to auto loans after the U.S. Securities and Exchange Commission created a six-month window for companies to offer asset-backed debt without including ratings in marketing documents.

The bonds may be sold as soon as this week, according to a person familiar with the offering who declined to be identified because terms aren't public. The automaker last sold similar debt in April, according to data compiled by Bloomberg News.

Ford is the first issuer to sell asset-backed bonds since President Barack Obama signed an overhaul of regulation on Wednesday. The Wall Street legislation makes ratings companies vulnerable to lawsuits when underwriters include their assessments in documents used to sell debt.

Moody's Investors Service, Standard & Poor's and Fitch Ratings, in an effort to avoid the legal liability, told borrowers not to include debt ratings in marketing materials, leading some issuers to postpone public bond sales last week.

The law subjects ratings companies to so-called expert liability, meaning they would face the same legal risks as accountants and other parties that participate in bond sales.

The SEC said Friday in a statement that companies could omit ratings from regulatory documents for six months to give market participants a transition period to comply with new laws.

Ford's sale is the first public asset-backed securities issue to be offered since Toyota's finance arm sold $1.75 billion in bonds on July 14, Bloomberg data show.

The U.S. automaker postponed the sale last week because of the new law, Dow Jones Newswires reported last week.

"Ford Motor Credit Company worked with the SEC to find an approach that temporarily resolved this industry issue," Margaret Mellott, a Ford spokeswoman, said in an e-mailed statement.

The financial overhaul was spurred by the 2008 financial crisis that triggered the collapse of Lehman Brothers Holdings.

Obama vowed the law will bring an end to taxpayer bailouts of financial firms and said adjustments to the regulations may have to be made along the way

INPLANT REPORT
July 27, 2010

Kim Clout, CAW Local 584, Plant Chairperson

Hopefully everyone is having a safe and enjoyable summer spending quality time with family and friends. Your Inplant has continued to be very busy during the summer period. We're dealing with several issues related to the announced restructuring and the natural insecurity that the membership feels as a result of these changes. The company's position that we will lose the equivalent of 15 jobs has not changed. It is still impossible to determine the exact impact until we get into the fall. Your union's number one priority is, and has always been to protect your job. We are now beginning to emerge from a period of enormous turmoil.

Last week the company approached the union with a plan to begin the CAW union awareness training. As reported earlier, we pushed this training back to the fall in an attempt to deal with any excess manpower issues. The restructuring should be completed by September. Your Inplant viewed the CAW training discussions as an opportunity to once again state our position that no one should hit the street. In exchange for agreement on moving forward with the training, we demanded that the company put in writing its plans with regard to manpower levels as we move forward. We are very pleased that after several discussions, we received a document from the company today that we feel should go a long way in alleviating some of the memberships concerns over job security, at least in the near future. The following is a portion of the document your Inplant felt was important to communicate to the membership as quickly as possible:

"As this training activity may generate perceived concern in the minds of some employees that a surplus manpower problem is possible later in the year, under our current forecast, we foresee NO difficulties in managing our manpower levels throughout the remainder of the year. Plans are in place to deploy any surplus personnel to support our contractual and legislative training requirements as well as sales and marketing program initiatives. Accordingly, our business volumes, training needs and other operational activities would indicate NO potential for layoffs in the foreseeable future."

Simply put, we pushed the company for a written commitment that none of our members would be laid off this year at the minimum. On top of that, we were also successful in getting the company to once again commit that we would work constructively together with the common goal of avoiding any future layoffs that may result from the restructuring.
This is an important first step in the negotiation process we have now entered. Your Inplant will continue to demand job security for this membership. As I stated earlier, it is and always will be our #1 priority. We will fight like hell to protect your right to provide for your family.

Hopefully this will eliminate any short term insecurity and allow the membership to truly enjoy the summer with piece of mind for the next while. We will communicate any new information as fast as we can.

In Solidarity,
Kim Clout
Plant Chair
On Behalf of the Inplant Committee

2011 Ford Explorer:
Icon drives into new era

Scott Burgess / The Detroit News
July 27, 2010

There are three living icons at Ford Motor Co.: The Mustang, the F-150 and the Explorer.

Perhaps that's why the debut of the 2011 Ford Explorer spanned nine cities, countless tweets and a nearly endless video run on Facebook.

In the past, a vehicle this big, this important, would have been saved for a media blast at the Detroit auto show. But Ford doesn't want to wait. The new Explorer will hit dealerships this winter.

"I've never seen anything like this before," said Victor Lams, an employee at the company's world headquarters in Dearborn.

Nope. There hasn't been anything like this in recent Ford history.

The Explorer debuted to applauding workers and onlookers holding up cell phone cameras to capture the event for family and friends. In the past, it would have been revealed amid flashing cameras and a string of executive interviews for the media.

But this is a new era at Ford.

Ford pitchman Mike Rowe talked with CEO Alan Mulally in New York City. Ford's President of the Americas Mark Fields introduced the Explorer in Los Angeles. And vice president and global product guru Derrick Kuzak asked every employee in Dearborn to get to know the Explorer to help sell it.

The debut lived up to the Explorer's iconic billing.

Ford is on a roll. Ford knows it, the media knows it, and, more importantly, consumers know it. Last week, the automaker announced its fifth consecutive profitable quarter. It's producing great small calls, smart big cars and excellent trucks.

But the new Explorer does more to show the changes inside Ford than any single vehicle wearing a Blue Oval.

No vehicle more accurately defines Ford than the Explorer. In the '90s, the Explorer was unstoppable. During its second decade, it became a symbol of excess and waste, and now, as it enters its third decade, it intends to redefine SUVs.

We've doubted Ford before, should we really do it again?

I've long believed the growing trend toward crossovers -- truck-like vehicles built on car-like platforms that provide car-like rides, better gas mileage and lots of space -- was a product of fashionable practicality. Deep down, consumers want an SUV, and they would buy them if they got 35 mpg. There is nothing more American than a truck.

The new Explorer, which will have a starting price of $28,995, demonstrates how a company can change the trajectory of a falling star. Unlike the Ford Taurus -- where Ford employed the Kirstie Alley plan -- which saw the midsize disappear for a few weeks and then reappear as large sedan, Ford avoided making mistakes with the Explorer.

So is this SUV different than the previous Explorers? Is Ford trying to toughen up a crossover or put lipstick on a truck? Both, and neither.

Customers have always liked the utility of the Explorer, Kuzak said, but they didn't like its body-on-frame ride or its V-8 gas mileage. So Ford addressed those specific issues. A unibody construction will ensure a smoother ride.

More importantly, Ford predicts a 20 percent increase in fuel economy with the new 3.5-liter V-6 and a 30 percent jump in fuel economy with the all-new turbocharged, direct injection 2-liter four-cylinder engine.

A vehicle once known for its ability to crush small buildings in a single rev will now feature a four-cylinder for the first time -- and Ford plans to charge customers a premium for the smaller engine. The amount of the upcharge was not released Monday.

"People have stayed away from Explorers because of its poor gas mileage," said Brian Godfrey, general manager at Pat Milliken Ford in Redford. "This vehicle is definitely going to bring new customers to dealerships."

Yes, it will. And while the debate will continue about whether the new Explorer is truly an SUV with off-roading abilities, few will ask the more important question: Will it even need off-road capabilities? According to Ford, of the millions of Explorers on the road, only 18 percent of owners take them off road, ever.

It would seem silly to cater to a group of noisy enthusiasts when the other 82 percent don't care; they want the smoother ride and better mileage.

With the all-new Explorer, Ford has embraced its heritage but with an eye toward the future.

The Explorer does more than redefine future SUVs, it redefines Ford Motor Co.

Major SUV Fuel Economy Gains, Technology, Style Highlight Reinvention of Ford Explorer
Ford Explorer – the vehicle that defined a segment – has been completely reinvented, raising customers’ expectations of sport utility vehicle (SUV) fuel efficiency, safety, technology, capability and quality. “The all-new Explorer will deliver today’s SUV buyers the attributes they really want and value, and a few they might not even have dreamed of,” said Mark Fields, Ford president of The Americas. “We’re proud to introduce the new Explorer to customers and fans around the world today and pleased to begin a whole new era that blends strong SUV fuel economy and performance.”

The all-new Explorer launches today to its Facebook friends in a unique social media initiative, followed by reveal events throughout the U.S. and Canada.

Shattering SUV Fuel Economy and Performance Expectations
“The new Explorer simply does everything well,” said Derrick Kuzak, group vice president, Global Product Development. “It raises the bar for ride and handling on the road and transforms the off-road experience. It’s the hands-down winner for towing capability and ease. All this capability – and three rows of seating – with amazing fuel economy will make Explorer the absolute right choice for families with a sense of adventure.”

The 2011 Explorer with V-6 power is expected to deliver more than 20 percent better fuel economy than the 2010 model, shattering conventional expectations for SUV fuel efficiency. When equipped with the available 2.0-liter EcoBoost™ I-4 engine, Explorer fuel economy is expected to improve by more than 30 percent and exceed the 2010 Honda Pilot and 2010 Toyota Highlander V-6.

Chief Nameplate Engineer Jim Holland said the team targeted two key objectives when developing the 2011 Ford Explorer. “It had to look modern and contemporary – inside and out – yet be instantly recognizable as an Explorer,” said Holland. “Next, the new Explorer needed to deliver the fuel economy today’s customers want, combined with the performance, capability and empowerment they expect from an SUV.”

Driven by the commitment to give customers unsurpassed fuel efficiency with each new vehicle, Ford attacked every detail to transform Explorer with significantly improved fuel economy:

Weight reduction is a key element in improving Explorer fuel efficiency. While adding significant content to the vehicle, engineers were able to reduce total vehicle weight by almost 100 pounds through the use of lighter materials such as an aluminum hood. Explorer weight loss is even more impressive, as the latest versions of Honda Pilot and Toyota 4Runner have added pounds versus previous models.

Explorer’s available advanced 2.0-liter EcoBoost I-4 delivers the power of a normally aspirated V-6 without compromising four-cylinder fuel economy. Aimed at the SUV buyer whose top priority is fuel economy, this turbocharged and intercooled I-4 engine delivers a projected 237 horsepower at 5,500 rpm and 250 lb.-ft. of torque from 1,700 through 4,000 rpm. The EcoBoost employs direct injection of gasoline, Ti-VCT, direct-acting mechanical bucket (DAMB) valve lifters and four valves per cylinder.

Explorer’s standard powertrain combines front-wheel drive with a 3.5-liter Ti-VCT V-6 engine, delivering an estimated 290 horsepower and 255 lb.-ft. of torque. Ti-VCT allows individually optimized camshaft timing of valve opening and closing events to improve mechanical efficiency while delivering increased power and reducing part-throttle emissions. Mated to a six-speed automatic transmission, this powerful, flexible and efficient V-6 is projected to deliver more than 20 percent better fuel economy versus the previous Explorer V-6 model.

Explorer’s variable-displacement air-conditioning compressor provides a fuel economy benefit with less drag and smoother transition for improved driveability.

Each Explorer engine is paired with a unique six-speed automatic transmission, combining lowered initial gears for improved off-the-line acceleration and higher gearing for improved efficiency at lower engine rpm when cruising.

Explorer V-6 models are available with an intelligent 4WD system that adds terrain management. Situation-selectable, this powertrain advancement takes the guesswork out of 4WD range choice.

A driver need only turn the console-mounted knob to the proper setting among snow, sand, mud and normal modes. This system also includes a hill descent mode.

Simpler and more convenient for SUV veterans, the system will be a confidence-builder for drivers new to the segment.

Contemporary Design with Segment-Leading Craftsmanship and Quietness
In addition to its clean, modern design inside and out, Explorer aims to please SUV shoppers with a thoughtful, flexible interior package that abounds with clever storage capacity. The new SUV features more head and shoulder room, three rows of flexible seating, and room for everything families want to take along on their adventures.

The Explorer design – inside and out – is executed with world-class craftsmanship. Tight margin gaps are just one indication of the immense attention to detail applied to craftsmanship across the spectrum, from design to engineering to manufacturing.

The Chicago facility where Explorer will be produced raised the bar on initial quality measures with the recent Taurus launch, which is good news for customers.

“Crafting a high-quality vehicle is like preparing a gourmet meal,” said Peter Bejin, craftsmanship supervisor. “You start with high-quality ingredients, execute your recipe with flawless preparation and finally, present it with flair and panache.”

Quietness – another profound advancement in the all-new 2011 Ford Explorer – also will signal quality to customers.

The team enhanced noise, vibration and harshness (NVH) control for the all-new Explorer using an advanced technology called NoiseVision. A ball with hundreds of tiny cameras and microphones, NoiseVision allows engineers to pinpoint and address potential noise issues earlier in the development process.
Explorer is expected to be superior to in-segment competitors and rival premium SUVs in quietness and NVH control.

Explorer Safety – Strength, Technology and Innovation
The all-new Explorer targets top safety ratings with a stiff unibody structure and a class-leading suite of active and passive safety features and technologies, plus another Ford safety innovation – the world’s first second-row inflatable rear belts.

Rear seat passengers – often children or mature passengers – can be more vulnerable to head, chest and neck injuries. Ford’s unique inflatable rear belts spread impact forces across more than five times the area than conventional seat belts, reducing pressure on the chest while helping to control head and neck motion. Belt comfort should also help increase usage rates. Studies show inflatable belts to be more comfortable for passengers due to padding.
From the boron front bumper beam through the hydroformed front frame rails and high-strength steel side-impact tubes, Explorer’s rigid body structure is designed to provide robust protection for occupants. In the instance of a crash, these elements come together to protect Explorer driver and passengers inside a safety cage of strength.

Standard Explorer safety features include:

Available Explorer safety features include:

Stretching the Breadth of Capability
The 2011 Ford Explorer redefines customer expectations for driving dynamics and comfort – on any road, anytime, anywhere – while stretching the breadth of SUV capability. Transforming Explorer’s driving quality was central to creating an SUV for 21st century customers.

“Our objectives for Explorer dynamics were threefold,” said Carl Widmann, vehicle engineering manager. “The first element was to greatly increase on-road comfort, capability and driving dynamics. The second was to maintain the ‘any road, anytime, anywhere’ capability of the previous model. Finally, we aimed to apply technology to the task of safely towing, as V-6 Explorer models are rated up to 5,000 pounds. We think customers will be pleased with the next-generation Explorer on all three counts.”

The theme of the all-new Explorer dynamics development was balance. The team sought to provide an engaging driver experience in harmony with the extended breadth of 4WD capability to build driver confidence.

The shift to a unibody construction platform enabled a reduction in road noise and significantly decreased Explorer body roll in dynamic cornering situations. Independent front suspension is of the short- and long-arm configuration with a 32-millimeter front stabilizer bar. Independent rear suspension is the SR1 configuration, so-named for its one-to-one shock absorber ratio, which enables precise ride control.

Explorer’s EPAS system allows for variable rates of assistance based on speed, turn-in and direction. In addition to optimized steering feel, tight on-centering and appropriate resistance, EPAS provides a fuel economy benefit in comparison to traditional hydraulic power assist systems. EPAS also enables a competitive turning radius for optimum maneuverability in parking situations, combined with increased assistance at low speeds for parking ease.

EPAS allows for the addition of Curve Control, a new feature that senses when a driver enters a turn too quickly and applies brake pressure to stabilize the vehicle.

In addition, EPAS enables the optional active park assist technology. When activated, the system scans for a suitable spot, calculates the trajectory, and steers the vehicle. The driver continues to control brake and throttle inputs, but the system steers the vehicle throughout the parking maneuver.

Off-Roading Standout On a Variety of Surfaces
The key to Explorer 4WD capability is Ford’s new terrain management system.
Replacing the traditional SUV transfer case configuration, the new system takes the guesswork out of maximizing 4WD and the capabilities it enables. Rather than employment of four-high, four-low and auto settings, Explorer terrain management is selectable by situation. The four settings – available by shift-on-the-fly – include normal, mud, sand and snow.

Each setting provides unique engine behavior, throttle tip-in, transmission shift scheduling and calibrations for traction and stability control systems. Terrain management also includes Hill Descent Control™, which provides engine braking to increase driver confidence and control when descending a steep incline.

Explorer models with V-6 power are rated to tow a maximum of 5,000 pounds. To aid with hookup –especially when alone – a reverse camera with zoom-in functionality is available, allowing a driver to back up to the trailer on-center. The Explorer towing package includes trailer sway control – a stability package shared with the Ford F-150 pickup – to help minimize trailer sway. Trailer brake controller wiring is also included, as is a tow/haul mode. Engaging tow/haul mode increases engine braking to help slow the vehicle and trailer when descending steep grades.

Loaded with Features, Convenience and Connectivity
The all-new Explorer is available in three trim series levels – base, XLT and Limited. Each offering presents a robust array of standard features, with a class-leading selection of additional convenience and connectivity options so a buyer can tailor a new Explorer to his or her individual needs and desires.
Standard convenience features include:

Explorer XLT includes standard content and adds:

Explorer Limited includes all base and XLT content, plus:

“We spent our time listening to customers and addressing their needs to launch an SUV that reinvigorates the Explorer nameplate and delivers on Ford’s promise of high-quality, fuel-efficient and technologically advanced vehicles with industry-leading safety,” said Holland. “The all-new Explorer will change market perceptions about SUV style, fuel efficiency, technology and user-friendliness.”
The 2011 Explorer will be assembled at Ford’s Chicago manufacturing facility. Production begins late this year, and Explorer will be available in dealerships this winter.

Click here to view the photo gallery for the 2011 Ford Exlporer.

Click here to view the video for the 2011 Ford Explorer Reveal.

Ford reaping solid profits
after turnaround

By DEE-ANN DURBIN and TOM KRISHER
AP Auto Writers
July 25, 2010

DEARBORN, Mich. (AP) -- Four years ago, Ford mortgaged everything down to the blue oval logo to save itself. Now, even as Americans remain skittish about the economy, it's reaping big rewards and stealing business from stumbling rivals.

Ford said Friday that it made $2.6 billion from April through June, its fifth straight quarterly profit. The company, which reported record losses in 2008, now predicts it will end 2011 with more cash than debt.

With its two longtime Detroit rivals still finding their way after spending time in bankruptcy last year, Ford, which never took government bailout money, extended its success story.

President and CEO Alan Mulally said the company is ahead of where he thought it would be in its turnaround. It now sells the most popular pickup truck in the U.S., the F-Series, and the most popular crossover SUV, the Escape.

"Our performance this year gives us great confidence going forward," he said.

In the past year, Ford has gained a bigger share of the American market, the equivalent of about 154,000 cars and trucks. Rivals Toyota, General Motors and Chrysler have all lost ground.

Toyota stumbled this year because of safety-related recalls. GM and Chrysler's precarious financial positions had some people shying away from their cars.

Mulally, a tough manager masked by a boyish face and gee-whiz demeanor, joined Ford in October 2006, a year into a turnaround plan that called for closing plants, cutting jobs and dropping some of its models.

He removed obstacles, put new managers in place and forced feuding parts of the company to work together. He had cards printed out for every employee exhorting people to work together and accelerate development of new products - and carries one in his own pocket. In weekly management meetings, he holds people accountable but also greets success with applause.

Michael Robinet, an analyst for the consulting firm IHS Automotive, credits Mulally with motivating the work force. But he said the biggest reason for Ford's success is a complete overhaul of its factory and sales strategies.

When the company was losing billions last decade, it kept cranking out cars and trucks even if they weren't selling, because high labor costs made it too expensive to shut down production.

But late in 2008, the United Auto Workers union gave up a provision known as the jobs bank, in which automakers had to pay laid-off workers even if their plants were closed.

Now, workers have to take jobs at other factories or risk losing wages and benefits. With 12 fewer factories and a North American work force that is half the 140,000 people it was five years ago, Ford can limit production when demand is slow.

"It's not about the moving metal any more. It's about moving the metal profitably," Robinet said.

Ford's leaner development system allows more of its cars and trucks to share parts. The new Fiesta subcompact, for example, will be sold around the world with only minor variations. And Ford plans to bring at least six vehicles from Europe to North America in the next few years, including a new Focus and the C-Max minivan.

High quality rankings from outside groups like Consumer Reports have also helped Ford command higher prices. The average selling price of a Ford last quarter was about $2,000 higher than a year earlier, according to Edmunds.com.

Ford Chief Financial Officer Lewis Booth said the commitment to new and better products like the Ford Fusion sedan is the biggest factor in Ford's turnaround, allowing Ford to bring in more money while keeping costs competitive.

"If you've got great products, you can go to market in a sort of confident fashion," Booth said. "If you haven't, it's much tougher."

Ford's second-quarter revenue rose 14 percent to $31.3 billion. Its profit was 61 cents per share, 8 cents less than a year ago, when a big debt payment reduced Ford's interest payments.

Ford said it expects to make money for the next two years. Its stock rose 63 cents to $12.73. Ford shares fell as low as $1.26 in 2008. It's still a bargain, trading at about about seven times earnings. Toyota's ratio is more than 46.

Booth said Ford's first-half results surprised him and were better than the company expected at the start of the year. But he said Ford still must reduce debt and raise sales, particularly in fast-growing China and India, where it lags competitors.

Ford is also cautious about weaker demand for cars and trucks at home. It cut its forecast for total U.S. sales to between 11.5 million and 12 million on Friday. Earlier, it had predicted sales of up to 12.5 million.

Ford also held its third-quarter production forecast steady at 1.27 million cars and trucks worldwide, instead of raising production as it did in the second quarter.

Many analysts predict U.S. sales will continue to improve in 2011 and later. When they do, Ford is poised to rake in even more profit, Robinet said.

"Ford is setting the table for strong, stable performance going forward," he said.

Ford's profit the biggest in 12 years

Mulally expects to pay down debt and for 2011 to be even better

Christine Tierney / The Detroit News
July 24, 2010

Ford Motor Co. earned $2.6 billion on higher car and truck sales in the second quarter, its biggest quarterly profit in 12 years, and repaid some of the debt that it took on to ride out the industry downturn.

"We're ahead of where we thought we'd be after this excellent first half, and we expect even better results in 2011," Ford President and Chief Executive Alan Mulally said.

"It appears to us we're going to be able to improve the balance sheet and reduce the debt," he told analysts and reporters Friday.

Compared with its crosstown rivals, Ford made it through the downturn intact, after borrowing $23 billion in late 2006.

But its heavy debt load left Ford at a disadvantage relative to General Motors Co. and Chrysler Group LLC, which shed their debts in bankruptcy.

Now, after five consecutive profitable quarters, Ford repaid $7 billion of debt, trimming interest expenses by more than $470 million.

Chief Financial Officer Lewis Booth said the company expects to go from having net debt to a positive cash position sometime next year. "That's a strong statement about how the business is going," he said.

Ford's better-than-expected results triggered a rally in its shares, which closed up 5.29 percent at $12.73.

The company's $2.6 billion quarterly profit, on revenue of $31.3 billion, compares with a $2.26 billion profit a year earlier and was the highest quarterly total since the first quarter of 1998.

Its pre-tax operating profit totaled $2.9 billion, or 68 cents per share, Ford's best quarterly operating performance since the first quarter of 2004. The operating results exceeded analysts' expectations, averaging 41 cents per share, and reflected gains in the company's automotive and financial services businesses.

Ford's pre-tax profits in North America of $1.9 billion also were well above most estimates. Its overseas operations were profitable, too.

During the second quarter, Ford sold 1.4 million vehicles, up from 1.2 million a year ago.

The automaker is benefiting from the savings generated by a restructuring under Mulally, as well as higher vehicle prices reflecting the growing strength of its brands while many of its rivals are struggling.

Looking back, Booth described the move by Chairman Bill Ford Jr., Mulally and former CFO Don Leclair to mortgage most of Ford's assets and take out the loans as "a brilliant bit of work. I don't think anyone anticipated how bad the recession would be," he told The Detroit News.

Ex-GM worker, husband
accused of stealing secrets

Detroit News staff and wire reports / Associated Press
July 23, 2010

Detroit -- A former General Motors engineer and her husband were charged today in federal court with conspiring to sell stolen trade secrets about hybrid vehicles to Chinese automaker Chery Automobile.

Shanshan "Shannon" Du, 49, and her husband, Yu Qin, 51, both of Troy, stood mute before U.S. Magistrate Judge Mark A. Randon on conspiracy and other charges. They had been under investigation for years and were charged in 2006 with destroying documents, but the case was dropped while a broader probe continued.

The indictment says Du, who was hired at GM in 2000 and worked in the company's Advance Technology Vehicle Group, copied thousands of pages of GM trade secrets onto a portable computer hard drive five days after accepting a buyout offer in 2005. The indictment alleges the theft of secrets dates back to 2003.

GM estimates the value of the stolen documents at $40 million, according to the U.S. Attorney's Office.

"We cooperated with the authorities in developing the case, and will continued to cooperate as appropriate," GM spokesman Tom Wilkinson said. He declined to elaborate.

By the summer of 2003, Qin, who had been an engineer with Troy-based electrical systems and equipment maker Controlled Power Company, was telling people he had a deal to provide hybrid technology to Chery Automobile, the indictment says. The couple had established their own company, Millennium Technology International, in 2000.

Assistant U.S. Attorney Kathleen Corkren said GM was notified of the alleged theft by Controlled Power, which had discovered the portable hard drive containing GM documents. GM called the FBI. The indictment contains details of e-mail exchanges offering GM data and plans.

Corkren said the indictment indicates none of the trade secrets actually reached Chery.

The indictment also tells about how the couple tried to discard shredded documents that had been requested by a federal grand jury investigating the matter.

"Theft of trade secrets is a threat to national security," Andrew Arena, head of the FBI in Detroit, said in a statement. The couple was arrested this morning. Randon set unsecured bond for each at $10,000 and ordered them to not leave the three-county area. The couple asked permission to travel to Illinois next month to help their son who is beginning college there.

"It's a surprise to us," said Frank Eaman, Qin's attorney. "This investigation has been going on so long I figured if they had a basis they would have charged them a long time ago."

Ford to offer hybrid sedan at
same price as gas model

Dee-Ann Durbin

DEARBORN, Mich. — The Associated Press
Thursday, Jul. 22, 2010

For the first time, an American auto maker plans to sell a hybrid car for the same, lower price as its gas-powered counterpart, removing at least one obstacle for drivers who want a greener ride.

At a little more than $35,000 (All prices in U.S. dollars), the 2011 Lincoln MKZ sedan won't be cheap, but the decision by Ford to match the prices of the two styles could lead competitors to follow suit with future models.

The hybrid MKZ, debuting this fall and running on both gas and electric power, will be a bargain after factoring in savings at the pump. It gets more than double the mileage of the traditional version in city driving.

While auto makers won't reveal what they spend to install a hybrid system in a car, the final product usually costs several thousand dollars more than a gas-powered version of the same car.

The Lexus HS 250h, the MKZ's closest competitor, costs about $2,500 more than the Lexus IS, a similar, small, gas-powered sedan. Ford charges $8,840 more for the hybrid version of its Ford Escape SUV.

The MKZ can still make money even if Lincoln doesn't charge more for the hybrid, said Erich Merkle, president of the consulting company Autoconomy.com. Luxury cars are sold at a significant premium, he said, ensuring a profit for Ford.

Lincoln can also borrow the hybrid system from the Ford Fusion, its corporate twin, and save on development costs.

“Conventional wisdom is that the hybrid should be priced higher, but there's not really anything to say that a hybrid has to command a higher price,” Merkle said.

Besides, Ford had to keep the price down, said Jessica Caldwell, an analyst for Edmunds.com. If it had sold for more than $40,000, it would have faced tougher competition from luxury cars like the Mercedes E-Class or the Audi A6, she said.

“It's going to take moves like this one to break into the luxury market,” she said.

Other auto makers may not try to match Lincoln's move if it is limited to the MKZ, but they will have to take notice if Lincoln uses the same strategy with future hybrid models, said Aaron Bragman, an analyst with IHS Automotive.

John Felice, Lincoln's marketing manager, said pricing strategy is an opportunity to get buyers interested in the Lincoln brand. Even after a complete revamp of its cars in the past few years, Lincoln still lags behind other luxury brands. Lincoln sales were up 7.5 per cent in the first six months of this year, compared with 17 percent industrywide.

Lincoln is also trying to make up for the sales it is losing by phasing out its Mercury brand, which includes two hybrids.

The MKZ is one of most popular Lincoln models, but its sales have fallen 5 percent so far this year.

The MKZ will get 41 mpg in the city and 36 on the highway. That beats the Lexus HS 250h, which gets 35 mpg in the city and 34 on the highway. The gasoline version of the Lincoln MKZ gets 18 mpg in the city and 27 on the highway.

The new hybrid system isn't the Lincoln MKZ's only nod to the environment. Its wood trim comes from well-managed forests, while the leather seats use a chromium-free tanning process that makes them easier to recycle, Ford said.

Lincoln MKZ buyers are not eligible for federal tax credits for alternative-fuel vehicles. Federal law limits the credits to the first 60,000 buyers of a company's hybrids, and Ford hit that number on March 31.

Ford is the first U.S. auto maker to offer a hybrid and conventional version of a car at the same price. Industry analysts say they are unaware of a foreign automaker doing it, either.

Even if Ford were to lose money on the MKZ hybrid, it would probably be willing to make the trade in exchange for marketing value for the Lincoln brand, said Bruze Belzowski, assistant research scientist at the University of Michigan Transportation Research Institute.

“Lincoln might say, ‘We're going to take a hit on this,“' Belzowski said. “They may say something like ‘We're willing to take a hit on this because the marketing value is going to outweigh the cost.“'

Bailout likely also saved Ford, top Senate Democrat says

David Shepardson / Detroit News Washington Bureau
July 22, 2010

Washington -- The Senate's top Democrat argued Ford Motor Co. probably would have collapsed if the government hadn't bailed out its top two competitors.

Sen. Harry Reid, D-Nev., chided Republicans for opposing Democratic efforts on a number of fronts and defended the Obama administration's auto bailout.

"Isn't it a good thing today in America that we have an automobile manufacturing sector? If it had been up to them, General Motors would be gone. If it were up to them, Ford Motor Company would probably be gone. Chrysler definitely would be gone," Reid said on the Senate floor today. "We decided that they need help, just like New York City needed help 25 years ago."

GM and Chrysler received a $62 billion government bailout -- with the Bush administration rescuing the companies with $17.4 billion near the end of its White House tenure. The Obama administration provided about $45 billion to restructure the two companies in bankruptcy.

But Ford executives have never said the company would have collapsed if the government hadn't bailed out its cross-town rivals.

In December, Ford executive chairman Bill Ford Jr. met with President Barack Obama and praised him for rescuing GM and Chrysler.

"The way he stepped in with GM and Chrysler and preventing the collapse of the supply base was something they did swiftly and forcefully and it worked," Ford said.

White House Press Secretary Robert Gibbs on Monday defended the auto bailout -- and also suggested a failure to rescue the other companies could have brought down Ford.

"It's important to look at the decision to put into bankruptcy and restructure both Chrysler and GM, because I think it is safe to say without that decision that the president and the auto team made, it is likely that neither of those two auto companies would exist today," Gibbs said. "And I think if you listen to the CEO of Ford, it's not likely that that auto company would exist today either."

Republicans have been increasingly critical of the auto bailout. Democrats have also criticized the Obama auto task force's decision to urge more auto dealer closings in the wake of an audit by the special inspector general's overseeing $700 billion Wall Street and auto bailout fund.

2011 Ford Explorer expected
to increase sales


Crossover platform, greater fuel efficiency give new vehicle boost

Alisa Priddle / The Detroit News
July 21, 2010

Dearborn -- Ford Motor Co. expects a boost in Explorer sales with the new 2011 edition, which will be unveiled Monday, but remains tight-lipped on its volume projections.

"We expect to sell more than we do today or we wouldn't have changed the product," Jim Farley, global marketing chief, said at a Ford event Tuesday.

Analyst Aaron Bragman of IHS Automotive in Troy said selling 60,000 a year should be easy and 100,000 should be possible. "I think it will be a popular vehicle," he said.

Including the Sport Trac model, 52,000 Explorers were sold in 2009.

The new Explorer, which has gone from being a body-on-frame sport-utility vehicle to a car-based crossover, is equipped with more features and options, Farley said.

A lighter vehicle with an improved V-6 and new 2-liter EcoBoost four-cylinder also will improve fuel economy 30 percent from the outgoing model.

Farley said the new Explorer's efficiency opens up the competitive field so the seven-passenger crossover can expand beyond Jeeps and other trucky competitors to include car-based offerings.

"I think we'll get more cross-shopping now," Farley said.

Ford is tapping social media to spread the message an SUV can be fuel-efficient and offer a smooth ride.

A Facebook campaign with teaser pictures of the vehicles has been running for months and a multicity launch is planned Monday for the vehicle that goes on sale this winter.

"We're starting six months early with the risk of still needing to sell down the old ones but we think it is worth the risk," Farley said, adding the marketing effort needs to incorporate social and mainstream media.

Social media is a great tool for a prelaunch, Farley said.

Ford used social media to create a buzz about the new Ford Fiesta subcompact a year before its launch. The cars are arriving in showrooms now.

Like the Ford Taurus with which it shares underpinnings, the Explorer has the latest in infotainment technology.

MyFord Touch has Sync as the operating system for technology that includes touch screens and steering-wheel controls.

Ford: New Explorer ups
fuel efficiency by 30%

Alisa Priddle / The Detroit News
July 20, 2010

Ford Motor Co. today confirmed the all-new 2011 Ford Explorer will be 30 percent more fuel-efficient than the outgoing model.

Ford has been building up the crossover's debut with Facebook teaser pictures of parts of the vehicle and a steady diet of snippets about features and attributes. The new Explorer goes on sale later this year, but the production model has not been shown on the auto circuit.

The improved fuel economy will be achieved because the vehicle is lighter, more aerodynamic and car-based (from the Taurus family), and it has an optional 2-liter four-cylinder Ecoboost engine, which means it is turbocharged and has direct-injection. The crossover also has a six-speed automatic transmission.

The current Explorer, with a 4-liter V-6 engine, is rated as getting 14 mpg in the city and 20 mpg in highway driving. A 30 percent improvement would mean the new Explorer should get 18/26 mpg. Official figures will be released once the EPA completes its testing.

"The all-new Explorer will give a huge universe of existing and prospective customers the capability they expect and the luxury and convenience they want, all combined with the fuel economy they need," said Mark Fields, Ford president of The Americas, in a statement.

In an effort to get as many miles per gallon as possible, the Explorer will offer electric power-assisted steering, battery management, fast engine warm-up and aggressive deceleration fuel shutoff, and a more efficient air conditioning compressor.

Safety technology includes curve technology that will debut on the Explorer. It is an upgraded electronic stability control system to better hug the road if a driver takes a curve too quickly and will be added to 90 percent of Ford's light trucks and crossovers by 2015.

The public got its first look at the replacement for the body-on-frame Explorer with the Explorer America concept at the 2008 North American International Auto Show.

Ford F-350 a beast on the road

Scott Burgess / The Detroit News
July 18, 2010

I'm sorry: Did I just run over your car?

That can happen when you drive the 2011 Ford F-350, which makes every other vehicle on the road look like a tin can ready for crushing.

It is the most refined beast on the road today. Capable of arriving in a variety of configurations, the Ford Super Duty remains one of the best big rig trucks.

The Lariat edition I recently tested for a week grew on me the more I drove it -- enjoying it without actually putting this truck to work. The interior was beautiful, the ride surprisingly smooth, and it offered a bird's eye view of the road. In fact, it requires a parachute just to get out of it.

It may not fit in a lot of garages; my test vehicle measured 246 inches long (and it had the "short" 6-by-8-foot bed on it), but when you're behind the wheel, you don't really care. You just drive.

Now really, this truck is more than any journalist -- and most people -- may want to own, unless, of course, you need to haul 15,000 pounds on a regular basis and you simply enjoy intimidating other cars off the road. Then, this is the perfect vehicle.

Of course, I could have tested the even-more-powerful diesel version of the F-350, which cranks out incredible amounts of torque (735 pound-feet) that will pull most houses.

But the gas version is nearly as nice. The 6.2-liter V-8 will create 405 pound-feet of torque and 385 horsepower, more than enough to carry a winter's supply of firewood. Plus, it runs on gas.

But it's not simply a big gas engine, it's a high-tech wonder. It uses two spark plugs per cylinder to ensure cleaner and more efficient combustion. There are also dual knock sensors, dual equal variable cam timing, better engine breathing and a heavy duty six-speed automatic transmission that can handle just about everything.

Now, within the truck world, there are always a few diesel deniers -- those who weigh the diesel premium (nearly $9,000 more) against the more efficient diesel engine. (I am not one of them; instead, I believe there should be a diesel version of every vehicle on the road today.)

But for the sake of sounding fair, the argument goes that a person buying diesel will never save enough money using a diesel to pay for the premium. This is why every heavy-duty truck maker offers a big V-8 gas engine. Strictly speaking, this argument is true. Diesels are not the economical engine -- especially now that diesel fuel costs more than gas at filling stations.

However, and this is a big one, the diesel engine is nearly twice as powerful as the gas engine. And diesels are famous for incredible durability, which is something every pickup owner demands.

In the end, the engine choice is up to the driver. For someone who uses their big rig for toy hauling, boat pulling or the occasional firewood run, a gas engine might be the best choice. For others, the diesel -- for me, the gas engine was just fine.

City driving

In order to really see this vehicle's capabilities, I took it to Ann Arbor for a little city driving.

I thought the 156-inch wheel base might make driving in traffic difficult. It was far from that. Cars tended to move right out of my way as I came up behind them. Parking was a bit of a bear just finding a space big enough -- none of the city-owned parking spaces seemed big enough. I could squeeze into the space, but the back end would stick out a few feet and I wouldn't be able to open the doors.

So I had to park in those side streets that allegedly required a permit of some sort. From the driver's seat of the F-350, permits seem silly.

The interior will make anyone feel as if they're exempt from permits. The cabin is simply spectacular. The giant seats and the crew cab, which actually has more space back there than up front, are comfortable and well made. There is nearly everything a person needs during a long drive.

Then there are all of the features inside. From the voice-operated infotainment system Sync to the massive amounts of storage and the small crisp display screen between the tachometer and speedometer, Ford creates a polished interior that will impress luxury car buyers. It's complete, well built and reflects the toughness of the exterior.

A pleasure to drive

During a late night drive coming back from Ann Arbor, the truck glided down the road. Its big wheels churned along and cars moved out the way quickly as I approached them. (When the new Super Duty was created, the head lights were lowered slightly so they wouldn't glare in the eyes of car drivers.)

It's big and brawny and classy and fun. The Super Duty, in any size or configuration, may be a work truck but it's also a pleasure to drive.

While it's not something I really need, it's certainly something I like. And those people who need a big truck, the F-350 is a great place to start.

2011 Ford F-350 Crew Cab

Price: $29,715
Engine: 6.2-liter V-6 (gasoline)
Horsepower: 385
Torque : 405 pound-feet
Transmission: Six-speed automatic
EPA gas mileage : Not evaluated
Towing capacity : Up to 15,000 pounds
Max Payload : 4,050
Dimensions (provided with 6.75-foot bed):
Wheelbase: 156.2 inches
Length: 246.8 inches
Width: 79.9 inches
Height: 80.8 inches
Seats: Five people
Interior dimensions (Crew Cab)
Front / rear
Headroom: 40.7 inches / 40.8 inches
Legroom: 41.1 inches / 42.1 inches
Hip room: 67.6 inches / 67.6 inches
Shoulder room: 68 inches / 68 inches
Fuel tank : 35 gallons
Suspension:
Front: Independent twin I-beam (narrow front track) with coil springs, shock absorbers, stabilizer bar (
Rear: (4x2) Live axle with leaf springs, staggered shock absorbers and stabilizer bar;
Steering: Power assist
Note: There are a multiple of configurations for the Ford Super Duty trucks.

CAW CONTACT
Volume 40, No. 26
July 16, 2010

 
Bargaining Impasse: St. Marys Cement Strike Appeal

Despite two-and-a-half days of further negotiations and after 18 weeks on strike, St. Mary’s Cement continues to refuse to bargain a fair and equitable agreement with CAW Local 222 members who work at its Bowmanville, Ontario facility.

“We remain at a clear impasse with this arrogant corporation,” said CAW President Ken Lewenza. “St. Marys Cement is foreign-owned by a Brazilian Corporation that is making completely unacceptable demands on these workers, including an attack on their defined benefit pension plan, which has been in effect for 66 years,” he said.

“This is a critical fight for all workers who deserve to receive secure retirement income,” Lewenza said.

CAW Local 222 President Chris Buckley said the CAW will continue to press the company for a fair agreement in order to end this dispute.

Buckley blamed all levels of government for allowing foreign-owned companies to buy up Canada’s natural resources and facilities and gut our hard-earned collective agreements.

"What is even more disgusting is the fact the current government allows this company to hire scab labour to perform our jobs during this dispute. We are encouraging consumers not to buy St. Marys products during this dispute,” he said.

Paul Sowden, CAW Local 222 unit chairperson thanked all local unions across the country for their generous financial support for these workers and their families during this struggle.

"It remains our objective to bargain a fair and equitable agreement on behalf of our members and end this dispute which has gone on far too long,” Sowden said.

Lewenza, in a July 12 letter, is again calling on all CAW local unions to provide as much financial and picket line support as possible to these workers.

Cheques should be made payable to CAW Local 222 and sent to: Chris Buckley, President, CAW Local 222, 1425 Phillip Murray Avenue, Oshawa, ON, L1J 8L4.

CAW Joins Call for Public Inquiry into G20 Police Actions

The CAW has joined with dozens of progressive organizations in condemning the curtailment of civil liberties during the G20 Summit and calling for an independent public inquiry into police actions in an open letter to Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty.

The detention of over 1000 citizens, many of whom were innocent bystanders, has been the subject of intense public criticism levied at the federal and provincial governments in recent weeks in the wake of G20 meetings held in Toronto on June 26-27. Of primary concern is the arbitrary nature in which these arrests took place, the extension of power granted to police in and around the security perimeter, along with the excessive force used by police and unsanitary and unsafe conditions for those detained.

The actions of police and a small group of protestors, unconnected with the People’s First rally, and the excessively strong-armed police actions marred what was a very large and peaceful demonstration in Toronto that involved tens of thousands of labour union, student and social justice activists, including hundreds of CAW members from all across Ontario. 

Demonstrators, representing a wide cross-section of Canadian civil society organizations and various progressive causes, called on G20 leaders to ensure the issues of decent work, environmental sustainability and action against global poverty were at the top of their meeting agenda, including the need to promote more extensive economic recovery efforts and prevent future economic crises by adopting a global tax on financial transactions.

A large contingent of women activists lead the peaceful march, demanding that Stephen Harper reverse his decision to exclude abortion among the various maternal health-promotion measures that G20 nations will support in developing countries around the world.

CAW President Ken Lewenza, who participated in the demonstration, called the rally a tremendous success. “I’m always inspired by the resolve of our activists who are willing to stand up against injustice and raise their voices to demand a better, more equal and humane world – especially in the face of an intimidating police presence.”

Most national and international media attention of the day focused on events that transpired after the peaceful demonstration had wound its way back to Queen’s Park, when a small group of protestors and self-identified anarchists were shown participating in acts of vandalism.

A full copy of the open letter can be found on the Canadian Federation of Students website: http://www.cfs-fcee.ca/html/english/campaigns/g20inquiry.php

Tentative Agreement at VIA Rail

CAW leadership at VIA Rail have voted unanimously in support of recommending a new three-year collective agreement to CAW membership.

Fifty elected workplace union leadership reviewed the tentative agreement in Montreal and the agreement is now being voted on by the membership in a series of meetings.

After a difficult set of contract talks the CAW and VIA Rail reached a tentative agreement on June 26. The tentative agreement came one day before the strike deadline. Details of the collective agreement will be released after ratification.

The CAW is VIA Rail’s largest union, representing 2,200 workers in customer service, on-board service and maintenance.

Mass Demonstration at Siemens Canada Head Office

CAW Local 504 members who work at Siemens Canada’s gas turbine facility in Hamilton, Ontario held a mass demonstration outside the company’s headquarters to protest plans to close the plant and move work to North Carolina.

They urged the highly profitable company to reverse the decision or find alternate work for the long-time Hamilton facility. Failing those options they demanded the company sit down with the CAW to finalize an equitable settlement.

The company has announced plans to close the gas turbine plant in July 2011.

“We’re getting increasingly frustrated at this company’s callous attitude towards its workforce, so this could be the first of many similar events if things don’t change,” said CAW Local 504 President Randy Smith. “We continue to receive strong support from our brothers and sisters at IG Metall in Germany, the metalworkers’ union which represents Siemens workers there, who believe there remains a strong future for the Hamilton facility as well as gas turbine facilities in Germany.”

“After more than 100 years of commitment from this workforce in Hamilton it’s a disgrace the way the company is treating these highly skilled workers,” said CAW National Representative Tom Rooke. “They should treat these workers with the dignity they deserve - this is a corporation that’s making billions in profits each year worldwide.”   

“It’s time for this corporation to come back to the table and negotiate a fair and equitable agreement for these workers,” said Rooke.

CAW President Ken Lewenza said Siemens is a world-wide producer that has benefitted from government support and procurement contracts, including here in Canada. “Siemens should not forget that it owes its success to its productive workforce, including our members at the Hamilton facility,” Lewenza said.

Failing the possibility of finding alternate work to keep the plant running, Lewenza said the union is demanding a fair settlement agreement, that to date Siemens has been unwilling to consider.

CAW Local 504 represents approximately 350 hourly and salaried members at Siemens in Hamilton.

Newfoundland and Labrador Crab Harvesters Stand United

After resisting demands for lower crab prices from seafood producers, Newfoundland and Labrador crab harvesters remained united, fighting to get a price of $1.35 per pound, ensuring the provincial crab fishery got underway this season. 

“Clearly $1.35 is not a feasible price for crab going into the future, but we needed to get this fishery started and harvesters are to be commended for standing united on this issue and allowing that to happen this year,” said CAW/FFAW President Earle McCurdy.

After a back and forth struggle between the Association of Seafood Producers (ASP) and CAW/FFAW negotiators the crab fishery is now moving ahead bringing tremendous relief to rural Newfoundland and Labrador communities dependent on the fishery.

McCurdy urged more provincial government involvement including improved marketing and a better overall sales structure in the industry.

In future, better and more organized ways of doing business are needed when it comes to assessing market situations and marketing products to ensure everyone gets the best possible return from the fishery, McCurdy said. He stressed the union is committed to finding solutions before the start of the next season.

“Harvesters and plantworkers, as well as those working in associated industries suffered a great deal of stress and uncertainty this year and we need to avoid that in the future,” McCurdy said. The CAW/FFAW represents thousands of harvesters and plant workers across the province.

Ontario Premier’s Letter on Navistar

The following is an excerpt from a July 5 letter to CAW President Ken Lewenza from Ontario Premier Dalton McGuinty regarding the future of the Navistar truck facility in Chatham, Ontario:

“My colleagues and I are concerned for all workers and their families who will be affected by Navistar’s strategy to move production components out of Chatham to Mexico. We understand that the employees at Navistar are talented, experienced and highly skilled with a record of high quality production, and we regret that the company had to make this decision – one which will not only affect the livelihood of the workers, but of the whole community of Chatham.”

To read the full letter – visit: www.caw.ca/en/7606.htm

Toronto Pride Parade

(Photo) CAW members join in the festivities at the 2010 Toronto Pride parade on July 4. Members snaked through the downtown core holding banners and handing out stickers that readL Proud to be Political," "Our Pride Includes Free Speech," and "Workers of the World...Caress!" among others. This year marked the 30th anniversary of the Toronto Pride parade, nown for its fun-filled celebratory atmosphere and infused with strong progressive politics that support the rights of lesbian, gay, bisexual and trans communities. Organizers estimated this year's parade was attended by 1.3 million people.
Agreement at BC Transit in Victoria

CAW Local 333 members who work at B.C. Transit in Victoria, British Columbia have ratified a new two-year agreement.
The new contract covers 680 transit operators and skilled trades workers and expires March 31, 2012. It resists concession demands and provides benefit gains, while eliminating a tier in the wage schedule, now ensuring that after two years everyone is at the top rate.

This round of bargaining occurred in a particularly tough environment with the provincial Liberal government mandating a zero cost agreement over two years.

“It is very disappointing that the right to free collective bargaining was denied by this legislation,” CAW BC Area Director Susan Spratt said. “Some of our members made gains at the expense of others. I’m very proud of our members who sacrificed to give newer members of our union a wage increase to get them to a living wage in Victoria.”

“We truly hope that in the next agreement transit workers can be recognized for the service they provide to the public in Victoria and we can move forward,” Spratt said.

Opening of Bargaining at Lower Mainland Ports in B.C. with CAW-Container Truckers

The Vancouver Container Truckers Association-CAW Local 2006 will officially open bargaining July 22 with a group of separate companies engaged in moving containers to and from the various lower mainland ports.

VCTA-CAW Local 2006 represents the largest group of container truck drivers at lower mainland ports in British Columbia. The membership is seeking an agreement that provides stability and puts an end to undercutting owner-operator rates.

“We can’t have stability at the ports with an increasing number of unscrupulous container truck companies competing in a race to the bottom,” said VCTA-CAW Local 2006 President Paul Johal.

Port Metro Vancouver (PMV) terminals saw a massive withdrawal of service by 1200 owner operators in 2005 to protest working conditions and a race to the bottom on rates. The dispute disrupted port operations and cost the provincial and national economies hundreds of millions of dollars.

As a result, the federal government amended the Port Authorities Operations Regulations to set up a licensing system with benchmark and minimum rates for applicable owner operators. The BC Ministry of Transportation and Infrastructure also set up a program to investigate and make recommendations to PMV to enforce the correct rates. PMV can sanction, suspend, or cancel the licenses of offenders.

“It seems the Ports aren’t that interested in rate enforcement as they won’t name companies with suspended or cancelled licenses” said CAW National Representative Gavin McGarrigle. 

BC Labour Minister Murray Coell expressed concerns about the lack of timely action on the Ministry of Transportation recommendations in a letter sent to PMV June 3: “Since December 2007, approximately $645,765has been collected on behalf of 351 owner-operators”. Minister Coell added “If actions are not taken on offenders swiftly, I believe the effectiveness of the program will be seriously undermined.”

“The Ports need to be ordered to do a better and more transparent job of rate enforcement. The Port regulations need to be changed to provide for true stability instead of the fake appearance of stability that we are left with today,” said McGarrigle.
“If the federal government doesn’t make these changes soon, the bargaining environment will be difficult and the current rate system at the Ports could fall apart leading to massive instability - this is an outcome that nobody wants to see, especially our members,” McGarrigle added.

Further bargaining is scheduled for August 4 and 5. 

New Contract for Coca-Cola Workers in Brampton

CAW members at the Coca-Cola bottling plant in Brampton, Ontario ratified a new three-year agreement by a margin of 69 per cent on June 27.

The new agreement includes pension improvements, new workplace training commitments, and enhanced job security language among other gains.

“This was a very challenging round of negotiations that pushed our bargaining committee right to the eleventh hour,” said CAW Local 973 President Tony Di Bartolomeo. “It was the resolve of our committee and our membership that enabled us to make the gains we did. We will continue to build on this contract moving forward.”

Bargaining committee Chairperson Ryan Parson said the union fought back company demands to drag down wages and work standards, which would have eroded the Brampton workers’ contract – widely considered to be the Cadillac agreement for Coke workers in Canada.

“The aggressive approach taken by this company to demand concessions is further proof that as a union we must remain vigilant in how our in-plant leadership administer and defend this important contract, for the benefit of all workers at Coke,” Parson said.

CAW Local 973 represents over 500 production, delivery and skilled trades workers at the Brampton bottling facility.

Ford shuffles European executives

Alisa Priddle / The Detroit News
July 16, 2010

Ford Motor Co. today announced a shuffling of its executive ranks to better pursue growth as a united global company and without the Volvo brand.

Effective Aug. 1, Ford is expanding the role of Jim Farley to global leader for marketing, sales and service. Farley had overseen these responsibilities for Canada, Mexico and South America. Adding the rest of the world to his duties marks the first time that Ford has aligned all markets under a single leader, the automaker says.

The "One Ford" plan has been a driving force under CEO Alan Mulally.

"These moves allow us to strengthen our global team as we accelerate our One Ford plan and continue to profitably grow serving our customers around the world," Mulally said in a statement.

Ford has achieved efficiency by developing products that can be sold anywhere in the world, so it makes sense to get further efficiency by aligning marketing the same way, said James Bell, executive market analyst for Kelley Blue Book in Irvine, Calif.

"Ford has plans for so much integration that it makes sense to have one person in charge of marketing and having a consistent theme," Bell said.

Other executive appointments are in anticipation of the closing of Ford's sale of Volvo to Zhejiang Geely Holding Group Ltd. this quarter.

Executive Vice President John Fleming, 58, will take over global manufacturing and labor affairs operations. Replacing him as CEO of Ford of Europe is Stephen Odell who had been CEO of Volvo Cars and who has led Ford of Europe in the past.

Volvo Chief Financial Officer Stuart Rowley assumes the same position at Ford of Europe.

Ford's agreement to sell Volvo still needs approval from Chinese government regulators.

In other moves, Eduardo Serrano, head of Ford of Mexico, is appointed executive director of Latin America.

Serrano and Ford Canada President David Mondragon will now report to Mark Fields who oversees the Americas.

Li Shufu, the founder and chairman of Zhejiang Geely Holding Group Co., will be the chairman of a new board for Volvo Car Corp. once the sale is finalized.

A former Volvo Chief Executive, Hans-Olov Olsson, will be the vice chairman of Volvo Cars, the Chinese company said today.

Perk-packed 2011 Ford Edge offers luxury in growing crossover market

Latest model has new powertrain, better mileage and link to Sync

Scott Burgess / The Detroit News
July 15, 2010

Dearborn -- With the second-generation Edge, Ford Motor Co. is further positioning itself to tap the growing popularity of crossovers with American consumers.

The 2011 Edge, which arrives in dealerships next month, features a new powertrain, better overall mileage and an all-new interior, Ford officials said.

The Edge Sport model will feature a 3.7-liter V-6 (the same engine found in the 2011 Mustang) that produces 305 horsepower and 280 pound-feet of torque. It also will have standard 22-inch wheels.

The new Edge will help Ford draw new customers to the brand not only because of the expanding crossover segment but also because of the vehicle's growing success, said Amy Marentic, Ford's large cars and crossover marketing manager.

By the end of 2010, midsize crossovers are expected to represent more than 11 percent of the total market, Ford predicts.

"Crossovers are still growing, and we expect them to continue to grow," Marentic said.

Edge sales have jumped 35.8 percent this year through June, with Ford selling more than 56,000 units, according to Autodata Corp.

Forty-nine percent of Edge buyers are new to Ford and 70 percent remain loyal to the brand with their next purchase, Marentic said.

The Edge fits well in the market place, especially for consumers who are considering moving down from more luxurious vehicles but do not want to give up luxury amenities, said Aaron Bragman, an automotive analyst for IHS Global Insight.

"Ford is right, crossover utility vehicles are going to continue to grow in sales," Bragman said. "They are becoming the family vehicle of choice. They're replacing SUVs."

The Edge will debut features that will eventually make their way into other Ford vehicles. They include the Ford MyTouch system, which connects the driver quickly to the Sync mobile information and entertainment system. The exterior has been designed to look more refined and sportier, said Elaine Bannon, the vehicle's chief engineer.

The new base model Edge SE, powered by Ford's 3.5-liter V-6, will cost $27,995, including shipping. That price is $200 less than the outgoing model.

The 2011 Edge SE also adds 2 miles per gallon on the highway and 1 mpg in city driving, bringing its EPA mileage numbers to 19 mpg city and 27 mpg highway.

The Edge Sport will have a starting price of $36,995 US and offer 18 mpg in the city and 25 mpg on the highway, Bannon said.

Auto-sector jobs lost
despite sales growth

The Canadian Press
July 14, 2010

TORONTO — The number of people employed by the Canadian auto industry has declined this year despite a recovery in sales, according to data compiled by DesRosiers Automotive Consultants.

As of April, 123,829 Canadians worked in the auto industry. This is down more than seven per cent from 133,375 in the same period of 2009 and a whopping 26 per cent decline from nearly 168,000 in 2008, before the global recession hit and the Canadian and U.S. governments lent billions of dollars to General Motors and Chrysler to protect auto jobs.

"The most important political variable in the automotive equation and the critical reason that our collective governments dumped over $100 billion into the Detroit Three ... was to arrest declines in jobs," industry analyst Dennis DesRosiers wrote in a commentary.

"Close to 10,000 jobs have been lost compared to the identical period a year ago and remember, a year ago the industry was in deep trouble, so to be down from the depressed levels of a year ago indicates that the automotive and parts sector in Canada ... is in seriously bad shape."

This is the fifth year in a row that employment in the Canadian auto industry has declined. Industry employment hit its peak in 2001 with almost 200,000 jobs and has since dropped by nearly 40 per cent.

DesRosiers said each of the industry's subsectors -- including assembly; parts; tool, die and mould; and body and trailer -- employs fewer people this year than it did last year.

"Politicians should be very worried. We are seeing the (winnowing) away of our vehicle and parts manufacturing sector and I quite frankly don't see much ability for any politician to stop this," DesRosiers said.

Canada's auto sector is largely based in southern Ontario.

Part of the reason jobs continue to disappear despite a recovery in sales is that previously announced shutdowns of Canadian assembly plants are still taking effect.

GM Canada recently closed its transmission factory in Windsor, Ont., putting 1,100 people out of work. This followed on the heels of the closure of its truck plant in Oshawa, Ont., last year, which eliminated 2,600 jobs. And Ford Canada will close its St. Thomas, Ont., plant next year, leaving another 1,500 auto workers without a job.

It is estimated that for every one job in the assembly sector, another six to seven are created in related industries.

Ford Edge Sport gets
Mustang engine

Dee-Ann Durbin / Associated Press
July 14, 2010

Detroit -- The Ford Edge Sport is getting sportier with a new engine swiped from the Ford Mustang.

Ford Motor Co. said Wednesday that the 2011 Ford Edge Sport -- the high-performance version of the Edge, which is one of the country's top-selling mid-size crossovers -- will have the same engine as the Mustang sports car. It's the first time the Mustang's 3.7-liter engine has gone into an Edge.

The 305-horsepower V-6 engine will give the Edge Sport 40 more horsepower than the current model -- and 41 more horsepower than the V-6 on the Chevrolet Equinox, a close competitor that outsold the Edge in the first half of this year.

But Ford stressed that the 2011 Edge Sport will have the same fuel economy as the current version, which gets 20 miles per gallon on the front-wheel-drive version. That's because the engine is more efficient and Ford has made other fuel-saving changes, including improving the vehicle's aerodynamics and lowering the idle speed.

The Edge Sport has other sports-car touches, including paddle shifters on either side of the steering wheel for shifting gears. The transmission reverts to automatic mode when the paddles aren't in use. The Edge Sport also has new 22-inch forged aluminum wheels, a painted black grille and sport-tuned suspension for a firmer ride.

The Edge Sport also has the industry's first iTunes tagging system, an option that lets customers tap a button if they hear a song they like on the radio. The system captures the song for later purchase on iTunes.

Elaine Bannon, the chief engineer of the Ford Edge Sport, said the bigger wheels and more powerful engine are the kinds of upgrades performance-oriented customers might make on their own. She said her team wanted to make the Edge Sport the Mustang of the staid, family hauling crossover segment. Crossovers are SUVs built on a lower car platform.

Bannon said the Edge Sport, which has been on the market for two years, doesn't make up a big percentage of Edge sales but generates excitement about the vehicle.

"It's the soul of the lineup and gives a glow factor across the lineup," she said.

The Edge Sport goes on sale at the end of the summer. It will start at $36,220, or about $9,000 more than the base model Edge.

Ford also announced Wednesday that the 2011 Edge SEL and Limited versions, which have a 285-horsepower V-6 engine, will have the best fuel economy among their V-6 competitors. They are rated at 19 miles per gallon in the city and 27 on the highway.

Ford's Flat Rock plant on single shift; 550 workers to be relocated

Alisa Priddle / The Detroit News
July 13, 2010

Back from vacation shutdown, Ford Motor Co.'s Flat Rock plant is now operating on a single shift and excess employees are being relocated to other plants.

Ford announced in February that the AutoAlliance International plant, jointly owned by Mazda Motor Corp., would consolidate all Ford Mustang and Mazda6 production on a single shift starting this week.

At that time, the automaker's early estimate was that as many as 900 workers would have to be reassigned, and there were jobs for all of them.

It turned out the single shift, which is running 35 percent faster, needed more workers than anticipated, said Ford spokeswoman Marcey Evans. As a result, about 550 had to be moved to other plants.

"None went to indefinite layoff," Evans said, but some are on temporary layoff as they wait to be phased into other plants in the process of expanding their work force.

Michigan Assembly in Wayne needs extra workers later this year to make the Ford Focus, and the Chicago assembly plant is adding a second shift of 1,200 in the third quarter to make the new Ford Explorer.

Flat Rock now has about 1,750 workers.

The plant assembled about 102,000 cars in 2009 and the forecast is to increase output this year, helped by the new 2011 Mustang with a more fuel-efficient engine.

The plant had a lot of downtime last year as Mustang sales fell 27 percent and Mazda6 sales were off 34 percent. Both the Mustang and Mazda6 are up less than 1 percent for the first half of the year, but in June they were up 18 percent and 84 percent respectively.

UAW president, the Rev. Jackson
to launch jobs and
peace campaign today

Louis Aguilar / The Detroit News
July 12, 2010

United Auto Workers President Bob King and civic rights leader the Rev. Jesse Jackson Sr. intend to launch a new campaign that will call for more American jobs, beef up federal enforcement of the workplace and industry, and end the wars in Afghanistan and Iraq.

The Jobs, Justice and Peace Campaign will be announced at the UAW's Solidarity House in Detroit this afternoon, according to a press statement released Friday by the Rainbow PUSH Coalition, the Chicago-based group led by Jackson.

The campaign begins with an Aug. 28 march in Detroit. The date commemorates the June 1963 "Freedom Walk" in Detroit led by Martin Luther King Jr.

King first delivered portions of his "I Have a Dream" speech in Detroit prior to leading the largest civil rights demonstration in history -- the March on Washington on Aug. 28, 1963.

The planned UAW-Rainbow PUSH Coalition march continues a more activist tone that King has set for the union since succeeding Ron Gettelfinger as president at the union's mid-June convention.

King has urged a boycott of Toyota dealers as part of an effort to organize a Tesla electric car factory at the old GM-Toyota assembly plant in Fremont, Calif.

In his convention acceptance speech, he said he wanted to be known as "an idealist ... a dreamer ... a visionary."

Afterward, King took to the streets of Detroit with Teamsters President James P. Hoffa and NAACP President and CEO Benjamin Jealous after his union convention speech.

"If we don't win social justice for everyone, we don't win!" King told a crowd that filled a city block.

Why Americans get a better deal

Kate Robertson
Investopedia.com
July 12, 2010

Every time a Canadian looks at the price of a book or a magazine, he or she is faced with a harsh reality. There it is, the price of the book if sold in the United States; below, the more expensive price if it's sold in Canada. This used to be because the Canadian dollar was weaker, but as the two currencies reached parity back in 2007, consumers discovered the price gap for commodities was still fairly high.

According to Douglas Porter, a Canadian economist at the Bank of Montreal, prices were, on average, a whopping 24 per cent higher for the same products sold in Canada than in the United States.

Though the Canadian dollar has taken a few hits since then, it has recovered. Because of pressure from consumer groups over the last few years, price gaps have narrowed even further. Still, Mr. Porter says prices are still about 7-per-cent higher in Canada. Sound unfair? Here's why.

More Companies, More Competition

Quite simply, the lay of the land in the United States is vastly different from Canada's. There are about 310 million Americans compared to 34 million Canadians, which means there are more companies and retail outlets serving more people in the United States. And when there is more competition, prices drop. (When the Canadian dollar reaches parity with the U.S. dollar, how does that affect you? Find out in Why Things Are Getting A Little Loonie.)

"More competition generally means lower prices, downward pressure on whatever pricing structure is used and, for all models, better product quality, more consumer choice and innovation - all of which benefit not only individual Canadians, but the economy as a whole," Melanie L. Aitken, Canada's commissioner of competition, recently told the Economic Club of Canada.

Distribution and Scale

With a small population spread out over a vast geographic area, Canadian distributors are responsible for transporting a smaller numbers of goods to harder to reach areas, which can be expensive. For example, the majority of books found in Canadian retail outlets are stored centrally, in the Greater Toronto Area, and then shipped out to stores from there.

According to a report commissioned by the Department of Canadian Heritage, "Book distribution in Canada is heavily influenced by an important structural aspect of the domestic marketplace: Canada is a relatively small market, with a modest population spread over a large geographic area. Economies of scale are particularly difficult to achieve in such a market."

Regulations, Labour Costs and Employee Benefits

The U.S. has fewer unions, lower labour costs and fewer benefits for employees that manufacture goods, which could influence the prices of those goods. Last year, the Canadian Auto Workers confirmed that employees at Ford of Canada's plants made, on average, $16 (U.S.) per hour more than Ford workers in the United States. The union and the company negotiated a new contract that included an amendment that workers would have to give up certain benefits, like a $1,700 annual special bonus, in November of last year. (Learn the pros and cons of these organizations and how they fit into today's economy in Unions: Do They Help Or Hurt Workers?)

"It is a credit to the relationship we have with the CAW that we were able to reach a responsible agreement in such turbulent economic times," said Stacey Allerton Firth, vice-president of human resources at Ford of Canada. "Both the union and the company realized that we had to work collaboratively to meet the competitive challenges facing the industry."

The Bottom Line

Historically, American retail outlets and tourism have benefited from a stronger Canadian dollar and price gaps that send shoppers north of the border south to buy. And in turn, many predict that fewer Americans make the trip north, where their dollar has less spending power. According to Statistics Canada, there have been 50-per-cent fewer cross-border shopping trips by Americans in Canada since 2003. There have been 2.2 million more same-day car trips by Canadians to the United States. (Find out how to capitalize on exchange rates in order to save money while shopping in North America in Cross-Border Shopping Tips.)

Cross-Border Shopping Tips (Click Here)

Recalls announced
at Ford, Chrysler

July 10, 2010
David Shepardson / Detroit News Washington Bureau

Washington -- Ford Motor Co. is recalling 33,728 Transit Connect vans and halting sales until it fixes the vehicles.

The Dearborn automaker told the National Highway Traffic Safety Administration that it is recalling 2010 Transit Connect vehicles to replace a part above the B-pillar trim on both the left and right side of the vehicle to address potential noncompliance with federal law.

A government test showed a vehicle didn't meet one federal safety standard. The recall covers all Ford Transit vehicles built between Dec. 5, 2008, through May 31 at its Kocaeli plant in Turkey.

Ford said it is not aware of any reports of accidents or injuries related to this issue.

On April 23, Ford was informed by NHTSA of the test result recorded for a 2010 model year Ford Transit Connect. Ford investigated the test results, including assessing of test setup conditions and additional system testing and analysis, to confirm the test results.

Ford spokesman Wes Sherwood said the company was repairing vehicles to make them ready for sale. "The parts are available at our regional storage facilities so dealers can order them now. We alerted dealers about this earlier in the week," he said.

Chrysler recalling 22,000
Separately, Chrysler Group LLC said today it is recalling 22,000 vehicles over possible brake problems.

The recall includes some 2010 Dodge Nitro, Dodge Ram 1500 pickup tricks, along with Jeep Liberty and Wrangler vehicles.

The recall includes 7,800 Ram pickups and 8,800 Jeep Wranglers.

Chrysler said the vehicles have been built with potentially defective brake tubes. The condition could lead to loss of brake fluid and reduced braking performance, which could increase the chance of a crash.

Chrysler said the recall also covers another 6,000 vehicles in Canada, Mexico and other foreign markets.

"The condition was discovered internally through improved quality control processes. Chrysler Group LLC will conduct a voluntary safety recall on all potentially affected vehicles to inspect and replace the affected components. The improvement will be completed at no cost to the customer," Chrysler spokesman Nick Cappa said.

Chrysler dealers will replace the brake tubes as part of a recall that will begin next month.

Nickel workers approve
contract with Vale

Brenda Bouw Mining Reporter

Vancouver — Globe and Mail Update
Friday, Jul. 09, 2010

Unionized workers at the former Inco nickel mines in Ontario will be back on the job within weeks after approving a new labour contract and ending one of the longest strikes in Canadian history.

After a year-long strike, union members voted about 75 per cent in favour of a five-year contract, which includes modest wage increases, a new two-tier pension plan, a tighter bonus based on the price of nickel, and some layoffs. About 84 per cent of the union’s eligible striking workers cast ballots on Wednesday and Thursday.

“I’m pleased with the deal,” said Wayne Fraser, director of the district that includes the striking United Steelworkers locals 6200 and 6500. “There are still 25 per cent of the membership that are not happy, but we’ll live to fight another day.”

Workers will return to work over the next six weeks, which was part of the contract agreement.

The deal also includes changes that will sees Brazilian owner Vale SA squeeze costs and boost productivity at the operations it obtained when it bought Inco in 2006 for $19.4-billion, one of a series of foreign takeovers of Canadian mining companies at the time.

Approval of the contract came just days before the one-year anniversary of the strike, which began July 13, 2009.

About 3,100 workers at mines in Sudbury and Port Colborne walked off the job after the members of the United Steel Workers union failed to agree to its first-ever contract with Vale.

Much of the disagreement revolved around a bonus tied to the price of nickel, as well as a move towards a defined contribution pension plan.

The contract approved Thursday includes minor changes from a proposal overwhelmingly rejected by union members in March.

The new deal is expected to serve as a blueprint for 120 workers on strike at Vale’s operations in Voisey’s Bay, Nfld. who have been on strike since Aug. 1, 2009.

Vale’s Canadian operations produce about 10 per cent of the world’s nickel supply.

Toyota knew Lexus flaw 2 years ago

Yuri Kageyama / Associated Press
July 9, 2010

Tokyo -- Toyota knew two years ago about the engine problem behind its latest Lexus recall, even changing the spring part to correct it, but did not think a recall was warranted until recently, a company official said Tuesday.

Toyota Motor Corp. started Monday a global recall over engine defects in its Lexus luxury models sold around the world, as well as the Crown sold in Japan, moving to repair some 270,000 vehicles to replace valve springs -- crucial engine components that are flawed and could cause vehicles to stall.

In August 2008, Toyota changed that spring part, making it thicker, to prevent the problem, spokesman Hideaki Homma told the Associated Press. That is why the latest recall does not affect vehicles produced after August 2008.

Toyota, the world's top automaker, previously thought the problem was caused by a foreign substance entering during manufacturing of the valve springs, and beefed up checks so that wouldn't happen. It had thought the issue was an isolated problem that didn't require a recall.

"We changed the part in August because then the problem won't happen at all, even if tiny particles enter during manufacturing," Homma said. "We are talking about microscopic particles here."

But the complaints started climbing, and Toyota decided recently they weren't isolated problems after all, but a design defect, and decided to issue the recall, Homma said.

Toyota has promised to recall problem cars more quickly to salvage a once pristine reputation now in tatters after recalls ballooned to more than 8.5 million vehicles around the world since October.

Toyota executives have repeatedly vowed to put customers first. But it has been criticized as lagging in its response to quality lapses, and was slapped with a record $16.4 million fine in the United States for responding too slowly when the recall crisis erupted.

Auto analyst Koji Endo at Advanced Research Japan Co. said automakers routinely improve parts and technology when a product is remodeled, and the facts don't necessarily point to a cover-up.

But he said that recall after recall at Toyota are devastating for its image, underlining how it had not properly paid attention to quality during its booming expansion years.

"They are paying for that now," he said. "Demand had been surging and so it was difficult to balance that with maintaining quality."

Endo said the popularity of the Lexus was likely to drop in the United States, providing a chance for growth to luxury rivals BMW and Mercedes-Benz amid a gradually recovering market.

Affected in the latest recall were Lexus models GS350, GS450h, GS460, IS350, LS460, LS600h, LS600hL and Crown models, including about 138,000 vehicles in the United States, nearly 92,000 in Japan, 15,000 in Europe, 10,000 in the Middle East, 6,000 in China, 4,000 in Canada, and 8,000 elsewhere.

Toyota has received about 200 complaints, but no accidents due to the defects have been reported.

The latest woes come on top of a recall last week for 17,000 Lexus hybrids after testing showed fuel can spill during a rear-end crash.

Ford to allow users to
limit Sync distractions

David Shepardson / Detroit News Washington Bureau
July 8, 2010

Washington -- Ford Motor Co. will offer consumers the ability to block features of its Sync communications system as the debate grows over distracted driving.

The Dearborn automaker said in a statement late Wednesday that the new feature, dubbed a "Do Not Disturb" button, will lock out capabilities "that are not relevant to the task of driving while the vehicle is in motion."

Ford will offer the new system first on the 2011 Ford Edge and Lincoln MKX through its new My Ford Touch, its second-generation of Sync. The measure blocks incoming phone calls or text messages from a Bluetooth-enabled mobile phone and diverts calls into voicemail and saving text messages on the device for viewing later.

The move goes beyond voluntarily guidelines agreed to by automakers.

Ford will not allow a driver to manually enter a destination on a navigation system unlike some other automakers, said Alan Hall, a Ford spokesman.

Ford says the advantage of the system -- unlike turning the phone off -- is drivers can still make voice-activated outgoing phone calls, and the SYNC 911 assist feature can make a call to 911 in case of an emergency.

Ford is also locking out and limiting content of its new My Ford Touch system that it's introducing this summer. The system will have a web browser -- but drivers won't be allowed to use it while driving.

The move bars drivers from using screens such as point-of-interest reviews and ratings, sports scores, movie listings, and ski conditions while in motion.

Ford is also barring any action that requires typing on a keypad and limiting lists of navigation and phone choices that the user can view to fewer entries -- like phone contacts or recent phone calls.

Congress is mulling new proposals to combat distracted driving.

The Ford announcement came as Transportation Secretary Ray LaHood criticized a nascent lobbying effort saying he was "stunned to read that anyone would organize an effort to undercut road safety."

The lobbying firm Seward Square circulated a leaked proposal in recent days to convince automakers, electronics firms and others to oppose additional distracted driving proposals. The firm has since withdrawn the proposal.

In February, LaHood worried about the growing number of distractions in cars.

"Some of these car manufacturers are putting all these gadgets and bells and whistles that are going to distract people -- and we're trying to get gadgets and bells and whistles out of their hands and out of their ears," LaHood said.

LaHood has said he's focused on getting cell phones out of the hands of drivers.

It comes as more states are banning texting behind the wheel.

"Text messaging has become the default communications method for consumers of all ages," said John Schneider, chief engineer, Ford multimedia and infotainment engineering. Ford's "latest connectivity improvements will reduce the temptation to pick up the phone and take your eyes off the road, providing a safer solution for the use of mobile devices in the car."

Ford supports banning hand-held texting.

Ford stock drops 12 cents;
analyst cuts target

July 7, 2010
BY BRENT SNAVELY
FREE PRESS BUSINESS WRITER

Ford's stock price dropped 12 cents Tuesday after a Goldman Sachs analyst cut his price target on Ford shares by $2 because of growing concerns that industry sales during the second half of the year won't meet expectations.

Goldman Sachs analyst Patrick Archambault cut his price target on Ford to $14 from $16. He also reduced his 2010 forecast for U.S. auto sales to 11.7 million from 12 million.

Ford's stock closed at $10.16 per share on Tuesday, down 1.2% from Friday.

Still, Archambault said in his report that he continues to recommend Ford as a buy because the company's turnaround plan is ahead of schedule.

Ford's stock price remains stalled even though it surprised Wall Street last week by paying off more than $4 billion of its debt.

Since then, Ford's stock has risen 28 cents from $9.88 per share.

Ford's surprise debt payment failed to boost its stock price because it was followed by news Thursday that the industry's seasonally adjusted annual rate declined in June to 11.1 million from 11.6 million in May, feeding concerns that the U.S. economic recovery might be stalled.

The SAAR indicates what sales would total for the year if demand remained constant over 12 months, adjusting for seasonal factors.

Most analysts and industry executives had hoped that promising sales trends in May would carry over into June and lead to a mild sales recovery for the year.

Barclays Capital analyst Brian Johnson said that the weak current sales pace is likely to drag down stock prices across the automotive sector for the next few weeks.

Obama to name Ford CEO
Mulally to export council

David Shepardson / Detroit News Washington Bureau
July 7, 2010

Washington -- President Barack Obama plans to name Ford Motor Co. president and CEO Alan Mulally to a presidential council on exports.

Obama is also expected to hold a meeting on exports today.

In March, Obama named Boeing Co. president and CEO W. James McNerney Jr. as chair of the President's Export Council -- a group first created in 1973 by executive order. He also named Xerox Corp. CEO Ursula Burns as vice chair.

The president's council has 28 private-sector members, along with congressional and executive branch members. Sen. Debbie Stabenow, D-Lansing, is among the members of the council.

She was named in March.

"We need to be exporting our products, not our jobs," Stabenow said. "Without addressing the needs of our manufacturers in our trade policies, we will continue to lose millions of jobs to countries like China, which misaligns its currency and blocks our exports."

Mulally isn't expected to attend today's announcement because Ford's board of directors has a regularly scheduled meeting.

But Mulally had lunch at the White House last week with Obama and four other business leaders.

Ford spokesman Mike Moran declined to comment.

Obama wants to double U.S. exports within five years. He also wants to resolve issues with the stalled South Korea free trade agreement by November.

Ford and some other automakers want the administration to do more to open South Korea's market to U.S. exports.

Chrysler assembly operations lagging: CAW president

Brampton Guardian July 5, 2010

Canadian car plants should look to Europe for a lesson on how to be “world-class”, Canadian Auto Workers (CAW) union president Ken Lewenza says.
Lewenza and other CAW officials representing employees at Chrysler’s Brampton and Windsor plants returned this week from a visit to Fiat factories in Italy, Poland and Germany.

Fiat has a minority stake in Chrysler and is partnering with the automaker as it strives to rebound from economic troubles.

Lewenza said production is more advanced at the European Fiat plants than at Chrysler’s plants in Windsor and Brampton.

“The auto industry has always had peaks and valleys, but if you could run a plant as efficient as Fiat runs their particular plants, then I believe Chrysler has a great future,” Lewenza told CBC News.

“It really means empowering each member, each employee of Chrysler corporation to find ways to eliminate waste, because if you can eliminate waste, you have more money to invest in future products, you have more money to invest in the facility itself.” Lewenza said North American assembly operations clearly have something to shoot for.

“The plants are cleaner, there’s much more investment in technology, there’s much more investment in human dignity in the workplace, from washrooms to workstations to just the kind of quality of work,” said Lewenza, noting that with time, Fiat’s sleeker “world-class manufacturing” could be implemented at Chrysler factories in North America.

More picking Ford pickups

Not taking federal aid helps automaker

July 4, 2010
BY BRENT SNAVELY
FREE PRESS BUSINESS WRITER

After owning three Ram pickups, Jason Reed of Texas -- the nation's largest pickup market -- decided to switch brands in April: He bought a Ford F-150.

"I've never been a Ford guy -- ever," said Reed, 42.

He wasn't just won over by the features on the Ford truck, though. Another factor also helped seal the deal: the taxpayer-backed bankruptcies of Chrysler and General Motors.

"I just don't like the idea of our federal government doing that," Reed said.

Interviews with some truck drivers, dealers and auto experts reveal that Reed is not alone. Pickup drivers are shifting to Ford trucks, in part because Ford didn't take emergency taxpayer assistance.

More than 90% of all new big pickup sales still go to Detroit Three brands, and the segment is well known for its patriotism and brand loyalty. But Ford has gained 5.2 percentage points of market share in the highly profitable full-size truck segment this year, while Chrysler lost 4.2 points and GM pickups lost 1.7 points, according to Autodata.

Mike Levine, senior editor at PickupTrucks.com, said some truck owners in his online forums remain irked by the U.S. investment in GM and Chrysler.

"That is reflected in the sales -- right or wrong," he said.

Added Art Spinella, president of CNW Marketing Research in Oregon: "The buy-American attitude of a large proportion of pickup buyers keeps them in Detroit's corner, but until GM and Chrysler are totally out from under government involvement, Ford will be the preferred brand."

Pickups give Detroit 3 a needed pick-me-up

The Detroit Three continue to sell more than 90% of the full-size pickups in America, despite major investments by both Toyota and Nissan to make inroads in the highly profitable segment over the past decade.

That strong customer loyalty continues to benefit Detroit's bottom line, even as automakers try to shift more attention to fuel-efficient cars.

The profit margin on a full-size pickup can exceed $10,000, depending on the model and level of optional equipment, said John Wolkonowicz, a senior analyst with IHS Automotive.

Through June, Ford captured 39.8% of the full-size truck segment, a gain of 5.2 percentage points, according to Autodata Corp.

General Motors' Chevy Silverado and GMC Sierra captured 36.8% (a decline of 1.7 percentage points), and Chrysler's Ram held 14.1% of the large pickup segment (a decline of 4.2 percentage points).

Doug Scott, Ford's truck marketing manager, said Ford is gaining market share in the pickup segment because customers are embracing the company's redesigned Super Duty pickup, introduced in April, which gets 20% better fuel economy.

He also noted Ford's F-150 pickups were redesigned in 2008 with the needs of core truck buyers, such as contractors and hunters, in mind.

Scott also acknowledged that Ford's ability to survive without emergency federal loans also has helped.

"Anecdotally ... I've heard it whether it is from customers and dealers," Scott said. "It is probably the customer that is most patriotic."

Last year, the U.S. government provided $50 billion to GM and $8.2 billion to Chrysler as the companies restructured in bankruptcy.

But until both companies go through an initial public offering, and shed all government ownership, Art Spinella, an auto analyst with CNW Research in Oregon, said Ford will have an edge.

"Large pickup buyers tend to be politically conservative," Spinella said. "That said, they are strong proponents of 'Buy American' and are rock hard in their belief that government should stay out of dictates to business."

Time is right for new models

Lisa Whalen, GM's director of corporate planning, said GM has held its own in the truck wars despite the company's turmoil and expects to gain ground as the economy recovers and as it introduces its redesigned heavy duty Silverado and Sierra this summer.

"There is a halo effect when you launch a new product," Whalen said. "As the economy starts to recover, this is a good time for us to introduce a new product."

In June, Silverado sales increased 25.1% and Sierra sales increased 26.9% after the company became more aggressive with incentives to match competitors'. Overall, full-size pickups gained 25.9% in June.

GM Vice President Steve Carlisle said that the increased incentives helped give GM trucks a boost in June.

Meanwhile, Chrysler, which introduced a redesigned heavy-duty Ram pickup last year, had hoped its sales would increase by more than 10% in 2010. So far this year, Ram sales have declined 10.2%.

Chrysler declined to comment for this report.

Built Ford proud

Paul Shamo, owner of Taylor Ford, said a lot of customers -- especially small-business owners -- are coming into his dealership already looking to switch from other brands to Ford.

For George Gill, president of Boomer Construction Materials in Detroit, Ford's ability to survive without taxpayer dollars was an added reason to stick with the company.

"We are very comfortable that Ford didn't take the bailout money," said Gill, who bought a silver Ford F-150 Lariat from Bob Maxey Ford in Detroit last week. "We are very proud of Ford."

GM sells more in China than U.S.

First time any overseas market has outsold GM’s domestic market in the carmaker’s 102-year-old history

July 3, 2010 - Toronto Star

General Motors Co.’s first-half sales in China surpassed those in the U.S. for the first time as the world’s fastest-growing major economy propelled global auto demand.

Sales in China by GM and its joint ventures totaled 1.21 million vehicles in the six months ended June 30, topping U.S. deliveries of 1.08 million, based on figures reported separately by the Detroit-based company. This would be the first time any overseas market has “consistently outsold” GM’s domestic market in the carmaker’s 102-year-old history, said Michael Albano, a Shanghai-based spokesman.

Surging demand among China’s 1.37 billion people is speeding automakers’ recovery after a recession cut global auto sales last year and forced GM’s predecessor, General Motors Corp., into bankruptcy. GM is counting on expansion overseas to bolster profit as it prepares for an initial public offering as early as the fourth quarter.

“China is one of GM’s bright spots globally,” said John Zeng, a Shanghai-based automotive analyst at IHS Global Insight. “GM has done a better job in the Chinese market than other American automakers. The huge potential in this market will continue to fuel GM’s growth here.”

Government stimulus measures helped China’s industrywide vehicle sales jump 46 per cent last year to 13.6 million, surpassing the U.S. for the first time to become the world’s largest national automobile market. U.S. auto sales fell 21 per cent to 10.4 million, the fewest since 1982, as unemployment rose amid the worst recession in six decades.

GM makes vehicles including Buick Excelle and Regal cars as well as Chevrolet Lova compacts with its Chinese joint-venture partner SAIC Motor Co. It also makes Sunshine minivans at SAIC- GM-Wuling Automotive Co.

The SAIC-GM-Wuling venture’s deliveries, which are included in GM’s monthly sales reports, are excluded from tallies by some industry analysts because GM owns 34 percent of the venture, while SAIC Motor has a 50.1 per cent stake.

GM and its partners aim to boost vehicle sales in China to 3 million a year by 2015 from 1.83 million in 2009, Kevin Wale, president of the carmaker’s China business, has said. The company estimates it will top 2 million sales in the country this year.

GM’s June deliveries in China rose 23 per cent from a year earlier to 176,486 units, the carmaker said today. The company plans to introduce 25 new or updated models in the country by the end of 2011, including its Chevrolet Volt plug-in car, it said in April.

GM’s four ventures with SAIC Motor Corp. were among companies approved for a Chinese government energy-efficiency subsidy, the Ministry of Industry and Information Technology said on its website today.

Full-year auto sales in China may rise 17 per cent this year to 16 million, according to the State Information Center, even as growth may slow in the second half.

The rate of expansion in auto demand slowed in April and May as prices for gasoline, consumer goods and real estate rose. The government raised the consumption tax on small vehicles to 7.5 per cent in January after cutting it in half to 5 per cent last year.

In the U.S., GM and Ford Motor Co. reported June sales that fell short of analyst estimates as consumers concerned about unemployment and the economy avoided large purchases. A 9.7 percent jobless rate and continued lower home prices have reduced consumers’ confidence and are keeping them out of showrooms, dealers and analysts said.

GM’s sales in its home market last month rose to 195,380, an 11 per cent increase from a year earlier, which trailed the 16 per cent average growth estimate of six analysts surveyed by Bloomberg.

Industrywide U.S. deliveries in June reached an annualized rate of 11.1 million vehicles, according to Woodcliff Lake, New Jersey-based Autodata Corp. The figure trailed the average estimate for an 11.2 million-vehicle pace and is a drop from 11.6 million in May.

GM’s predecessor entered bankruptcy on June 1, 2009, and the new company emerged in July 2009. The carmaker reported first-quarter net income of $865 million this year, helped by higher production and smaller discounts. Chief Financial Officer Chris Liddell on May 17 called the profit a “good, useful step” toward an IPO.

The automaker’s equity is worth $70 billion, according to a May 20 report by Eric Selle, a JPMorgan Chase & Co. debt analyst who projects a return of 47 cents on the dollar for holders of bonds issued by General Motors Corp. that will be converted to stock and warrants in new GM. At yesterday’s bond prices, GM’s equity is worth about $47 billion.

GM posted operating profit of $1.2 billion in the first three months as revenue rose 40 per cent from a year earlier to $31.5 billion.

Ford pays $3.8 billion in cash
to retiree health fund

Automotive News -- July 1, 2010

DETROIT (Bloomberg) -- Ford Motor Co. will pay about $3.8 billion in cash to a union health-care fund, a sign the automaker is confident that CEO Alan Mulally's focus on the namesake brand will produce profits.

Ford was required to pay $859 million to the UAW Retiree Medical Benefits Trust by June 30 to fund benefits for former hourly workers. Ford paid cash even though it had the option to pay as much as $610 million in stock under an agreement reached with the union last year. It also prepaid $2.9 billion toward its health-care obligations, it said today.

Ford defied the expectations of analysts who had said the automaker would pay a portion of its obligation in stock because the second-largest U.S. automaker's shares have been trading down since closing at a 52-week high of $14.46 on April 26. The chief of Ford's Americas unit also warned analysts the U.S. auto market had “flat-lined” since last year's third quarter as consumers avoided making big purchases.

“There was speculation that they would pay with equity; that would have been a bit alarming,” said Colin Langan, an analyst with UBS Securities. “With all of the risk out there, it's a good sign that they feel they can pay with cash.”

Ford shares, after spending much of the day trading up about 5 percent, closed at $10.06, up 19 cents or 1.9 percent on the New York Stock Exchange -- reversing a five trading-day decline.

Ford said it will pay $3.8 billion in cash to the UAW trust, dropping its balance owed to the fund to $3.6 billion. The automaker said it is also paying $255 million in deferred dividends to another trust held by other investors.

Debt reduction

Added with other debt payments made in the second quarter, Ford said it has reduced debt by $7 billion in the quarter, reducing annual interest payments by $470 million. At the end of the first quarter, Ford had $34 billion in debt. This should reduce Ford's debt to as low as $27 billion.

“Our One Ford plan to profitably grow our business is working, and we are increasingly confident about our future,” Mulally said in a statement. “We expect to continue to improve our balance sheet as we deliver on our plan.”

Ford used cash for its first payment of $610 million in December and pre-paid an additional $500 million after its shares had a fourfold annual gain last year. The company said at the time that it paid in cash because the stock's volume- weighted average share price in the period before the payment, which determines the price of the stock it issues to the trust, was $9.13, less than the $10 the stock closed at on Dec. 31.

The stock closed yesterday at $9.88, 13 percent below the average of about $11.35 in the 30 trading days ending June 28. The company has 3.34 billion shares outstanding.

Cash surprise

Kristin Dziczek, director of the labor industry group at the Center for Automotive Research in Ann Arbor, Mich., said she had expected Ford to make payments to the union's trust in stock, which would have preserved cash while producing minimal dilution for shareholders.

“It was a big surprise,” she said. “This is a move to try to get on equal footing with other auto companies. Ford still has a dirty balance sheet.”

Ford has $22.3 billion in automotive gross cash after paying $3 billion on its revolving credit line in April, said Mark Fields, the company's president of the Americas. Ford also has $31.3 billion in automotive debt, higher than rivals such as General Motors Co., the largest U.S. automaker, he said.

Of the $4 billion, $1.3 billion will come from Ford Credit, reducing the drain on automotive cash. In the first quarter, Ford earned $2.1 billion in cash flow from operations.

2006 Borrowing

Ford borrowed $23 billion in late 2006, giving it a cash cushion that helped it withstand losses and avoid the bankruptcies that befell its U.S. rivals last year. The company was able to develop new models as the U.S. auto market fell to its lowest level in 27 years in 2009. Ford has said the debt load now puts it at a disadvantage against GM and Chrysler, which had their obligations cut in bankruptcy.

The UAW, GM, Ford and the predecessor of Chrysler Group LLC agreed in 2007 to create retiree health-care trusts to remove those liabilities from their labor costs. Prior to the payments Ford has made, the company owed $13.2 billion to the union-run health-care trust, also known as a Voluntary Employee Beneficiary Association, or VEBA. Ford has annual payments scheduled through June 2022, according to company filings.

Ford's U.S. sales have risen 30.3 percent this year, almost twice as much the overall gain in industry sales.

Mulally expanded the namesake brand and improved quality, helping the company earn $2.7 billion last year after three years of losses. Mulally has said the automaker will be “solidly profitable” this year.

PRESS RELEASE: Ford Takes Action to Further Strengthen Balance Sheet by Reducing Debt by $4 Billion

-- Ford to pay $3.8 billion in cash to the UAW Retiree Medical Benefits Trust by making scheduled debt payments due on Notes A and B held by the trust and paying the entire remaining balance of Note A ahead of schedule

-- Company to pay $255 million of previously deferred quarterly distributions on 6.50% Cumulative Trust Preferred Securities of Ford Motor Company Capital Trust II; quarterly distribution payments will resume starting with the payment due on July 15, 2010

-- Ford obtains more flexibility over a three-year period to pre-pay all or a portion of the remaining $3.6 billion outstanding principal amount of Note B

-- These actions, combined with an April payment of $3 billion on its 2013 revolving credit facility, reduced Ford's debt by more than $7 billion during the second quarter; the total debt reduction will save Ford more than $470 million in annual interest expense

Ford Motor Company (NYSE: F) today is reducing its debt by more than $4 billion - primarily by retiring debt owed to the UAW Retiree Medical Benefits Trust ahead of schedule. The company said it is taking the action to further strengthen its balance sheet as it gains momentum on its One Ford plan and remains on track to deliver solid profits and positive Automotive operating-related cash flow this year.

Ford is making scheduled payments in cash totaling about $860 million on Notes A and B held by the UAW Retiree Medical Benefits Trust - including about $250 million due under Note A, and $610 million due under Note B. Ford had the option to pay Note B with cash or Ford stock but agreed to pay with cash. In addition, Ford and its subsidiary, Ford Motor Credit Company, are paying a combined $2.9 billion to retire the remaining obligation on Note A at an agreed upon discount of 2 percent.

Separately, Ford is making a $255 million cash payment to bring current previously deferred quarterly distributions on the 6.50% Cumulative Trust Preferred Securities of Ford Motor Company Capital Trust II.

With today's actions and an April payment of $3 billion on its 2013 revolving credit facility, Ford will have reduced its debt by more than $7 billion in the second quarter. The second quarter debt reduction will save Ford more than $470 million in annual interest expense.

"Our One Ford plan to profitably grow our business is working, and we are increasingly confident about the future," said Ford President and CEO Alan Mulally. "We expect to continue to improve our balance sheet as we deliver on our plan. Importantly, our business results make it possible to take these actions while still accelerating the investments we are making in our business to serve our customers with the very best cars and trucks.

"We are pleased to make these payments ahead of schedule for the benefit of Ford and our UAW-Ford retirees who count on the Trust for their health care benefits," Mulally said.

The second quarter debt reductions are in addition to a series of actions Ford has taken since early 2009 to improve its balance sheet. These include completing transactions in spring 2009 that reduced Ford's Automotive debt obligations by $10.1 billion, and raising more than $5.7 billion since the second quarter of 2009 through several equity and equity-linked offerings.

The VEBA Trust Note Obligations

Pursuant to a March 2008 settlement agreement, the UAW Retiree Medical Benefits Trust was created to assume responsibility for providing retiree health care benefits to eligible Ford-UAW employees and their dependants, the cost of which would be funded with assets contributed by Ford.

The settlement was amended in March 2009 to create Notes A and B, which smoothed Ford's payment obligations and gave Ford the option to use Ford stock to make payments under Note B. On Dec. 31, 2009, Ford completed the transfer of assets, including Notes A and B, to the UAW Retiree Medical Benefits Trust, and the trust assumed the retiree health care liabilities.

June 2010 Agreement

The payments made today result from an agreement last week between Ford and the UAW Retiree Medical Benefits Trust that includes:

-- Ford making the scheduled payments on Notes A and B in cash totaling about $860 million.

-- Ford and Ford Credit purchasing for cash the remaining $2.96 billion outstanding principal amount of Note A at a price of 98 percent, or $2.9 billion, of which $1.6 billion is being paid by Ford and $1.3 billion is being paid by Ford Credit. Ford Credit intends to deliver to Ford the portion of Note A that it is purchasing from the UAW Retiree Medical Benefits Trust to satisfy existing intercompany tax liabilities it owes to Ford.

-- Subject to regulatory approval, the UAW Retiree Medical Benefits Trust is providing Ford a three-year right beginning in July 2010 whereby Ford has the flexibility to pre-pay for cash, periodically during each year, all or a portion of the remaining $3.6 billion outstanding principal amount of Note B at a 5 percent discount for purchases made prior to 2012 and at a 4 percent discount for purchases made after 2011. Previously, Ford could pre-pay Note B once a year at par.

"We are very pleased with this transaction, which continues the process of diversifying the Trust's assets at very attractive values and assists the thousands of Ford retired employees, their families and survivors and others who look to the Trust to fund their retiree health benefits," said Samuel W. Halpern, president of Independent Fiduciary Services, Inc., the independent fiduciary and investment manager for the UAW Retiree Medical Benefits Trust.

Repayment and Reinstatement of Distributions on Trust Preferred Securities

Ford also announced today that it is paying in cash to the trustee all accrued distributions previously deferred totaling $255 million on the Trust Preferred Securities, and that it intends to resume making quarterly distribution payments starting with the payment due on July 15, 2010.

The accrued distributions will be paid by the trustee on July 15, 2010, to the holders of record of the Trust Preferred Securities on June 30, 2010. Distributions on the Trust Preferred Securities had been deferred in accordance with their terms since April 15, 2009.

Ford said its liquidity and ability to generate positive cash flow are sufficient to warrant reinstatement of the distributions on the Trust Preferred Securities.

Labour groups were well represented but the variety of special interest groups was staggering. Everyone from environmental activist to Free Tibet were making themselves known in the steady rain that continued, ironically enough, until after the march was completed. Undaunted by the weather our hearty band of CAW members marched down University to Queen then west on Queen to Spadina. Turning north on Spadina we were greeted by an applauding brother Ken Lewenza. Turning right on College we found ourselves back at the legislature.

The heavy police presence was evident at all the intersections guarding the perimeter fence. Sadly, as a result of the ever present anarchist groups found at all large international functions of this nature, it was proven to the populace in general and the world media in particular that the “fortress Toronto” security effort was justified if not over the top in scale. The vast majority of the anarchist activity began after the main body of the approximately 5 to 8 thousand law-abiding demonstrators had essentially finished the route and were safely back at Queens Park.

No rational person could condone the actions of these misdirected youths who, as a consequence of their violent actions, undermine the credibility of those of us who have legitimate reasons to “vent our spleens” by using our democratic right to demonstrate in a relatively peaceful manner. This is not to say that, should the police react in a
provocative way against a non-belligerent group of demonstrators and human nature being what it is, a defensive reaction should not be unexpected. Having said that, these anarchist, by their violent actions, garner ninety percent of the media attention while the boisterous yet peaceful activists, such as ourselves, are relegated to page two.

Still, the satisfaction of knowing that Local 584 of the CAW continues its long history of involvement in labour and social issues, be it on the picket line or at demonstrations of this type, is immensely gratifying and something of which we can all be proud of as active and retired members of our local.

Thanks go to brother Dave Champagne for his efforts at organizing our portion of this event.

In Solidarity,
Brother Doug Berry (retiree’s committee)

Please note: The opinions expressed are those of the author
(Click on Photos for bigger picture)

G20 Toronto Star editorial:
Brutal spectacle failed a city and its people

The G20 security strategy has been spectacularly successful at cocooning the world’s leading politicians and staggeringly ineffective at protecting the property and peace of mind of Torontonians. And the one, inevitably, led to the other.

By bringing in thousands of heavily armed strangers and throwing up barricades everywhere to regular traffic, frightening off good and decent citizens, Canadian authorities created a ghost town in the heart of our city.

Perfect for the political leaders. Protesters were kept blocks away from where the deliberations were going on.

And most protesters conducted themselves faultlessly as the global good and great met behind rings of gulag-like fencing and battalions of police beating Plexiglas shields with batons in a primitive show of might.

It was, however, less than perfect for the city, its businesses and its inhabitants. The only force that can prevent vandalism and mayhem in a city is the presence of its population. Surely that was the lesson every urban planner learned from looking south to the hollowed-out urban war zones of the United States in the 1960s, 1970s and 1980s.

No police force, no matter how large, how well armed, how empowered to limit the civil rights of citizens, can stop vandalism in the empty shell of a city. Canadian authorities have proved that two days and nights running.

The strategy that ensured G20 leaders would never have to see a Canadian who wasn’t a politician, a police officer or a waiter lacked even a glimmer of common sense when it came to the security of Toronto and Torontonians.

They took our city to hold a meeting and bullied us out of the core, damaging the commerce of thousands of merchants and inconveniencing the entire population. Then, they failed to protect our property. Along Yonge St., as self-described anarchists were smashing stores unopposed, terrified merchants and their staffs sought shelter behind counters and in basements. If these establishments had been set alight, all of the thousands of fearsomely equipped police would have been able to do little more to save our citizens than they did to save their burning cruisers.

For the last few days, the city has looked like a vast reality TV set, where heavily garbed gladiators in black, burdened under bullet-proof vests, guns, walkie-talkies, shields and batons, try to chase down a wild, quick-footed band of anti-gladiators in black sweat suits and bandanas. And it cost us $1.2-billion to stage and choreograph this grossly unequal contest.

Canadian authorities knew that this overweening show of paramilitary hubris would draw the violent dregs of nihilism from around the world. Previous summits offered stark and certain warnings. Given that, the attempt to provide security for the city and its inhabitants has been a sad and disturbing failure.

What is the critical lesson?

Don’t even try to hold international political conferences with this kind of explosive ideological charge in the heart of a major urban centre. You sacrifice either the safety of the politicians or the safety of the city.

The idea that this was an effective way to show off Toronto to foreign guests is bewilderingly stupid.

Canadian authorities created a city no citizen could recognize and no visitor could admire. Then, they allowed a pack of brutes to trash it.

Ford shares fall as concerns rise

Automaker may use stock to pay UAW retiree benefit trust

Keith Naughton / Bloomberg News
June 30, 2020

Ford Motor Co., whose shares more than quadrupled last year, erased its 2010 gains amid concerns about sluggish auto sales and the possibility the company will issue shares to help make an $859 million health care fund payment.

Ford fell 55 cents Tuesday, or 5.3 percent, to $9.88 in New York Stock Exchange composite trading. The shares earlier fell to $9.75, the lowest intraday price since December, and are down 1.2 percent this year.

Ford's fall Tuesday was larger than the 2.7 percent decline in the Dow Jones Industrial Average and the 3.1 percent decline in the Standard & Poor's 500 Index.

Ford Americas President Mark Fields said last week that the U.S. auto market has flat-lined since the third quarter of last year.

Ford may use stock to pay as much as $610 million by today to the United Auto Workers Retiree Medical Benefits Trust to cover health care for former hourly employees.

Analysts said investors may see a payment in stock as a potential sign of weakness in the shares.

Ford, the only major U.S. automaker to avoid bankruptcy, reversed three years of losses by posting $2.7 billion in net income last year.

U.S. sales are up 30 percent this year at the Dearborn automaker, on gains from new models such as the Fusion hybrid and the redesigned Taurus sedan.

Ford Chief Executive Officer Alan Mulally has said the automaker will be solidly profitable this year.

Ford's VEBA payment
could show weakness

BY KEITH NAUGHTON
BLOOMBERG NEWS
June 29, 2010

Ford may make part of its required $859-million payment to a union health care fund this week in stock, a sign of potential weakness in the shares as the U.S. auto sales recovery stalls, analysts said.

Ford must pay the UAW Retiree Medical Benefits Trust by Wednesday to fund benefits for former hourly workers.

Ford has the option to pay as much as $610 million in stock under an agreement reached with the union last year, and the second-largest U.S. automaker may choose shares in order to conserve cash, said Brian Johnson, a Barclays Capital analyst.

If Ford issues stock to pay the fund, investors may see it as a sign the company considers its shares overvalued in a sales environment that the head of its Americas unit described as "flat-lined."

"Investors look at this as an indication of whether management sees their stock as cheap or expensive," said Chicago-based Johnson, who has a neutral rating on Ford common shares. "If it's cheap, they use cash. If it's expensive, they'll use stock."

John Stoll, a Ford spokesman, declined to comment on how the automaker will pay the trust.

"We'll meet our obligation," Stoll said in an interview. "We're not in a position to talk about an amount or how exactly we'll pay for it."

Ford used cash for its first payment of $610 million in December and prepaid an additional $500 million with its shares in the midst of a fourfold annual gain.

The company said at the time that it paid in cash because the stock's volume-weighted average share price in the period before the payment, which determines the price of the stock it issues to the trust, was $9.13, less than the $10 the stock closed at on Dec. 31.

The stock closed June 25 at $10.75, a 6.2% discount to the average of about $11.46 in the previous 30 trading days. The company has 3.34 billion shares outstanding.

The shares fell 32 cents, or 3%, to $10.43 Monday.

South Korea trade
pact back by Ford

New agreement could lower barriers that limit imports of American autos and beef

David Shepardson / Detroit News Washington Bureau
June 29, 2010

Washington -- Ford Motor Co. on Monday praised the White House's decision to work toward improving U.S. automakers' access to the South Korean market.

"Ford Motor Co. looks forward to working with the administration and Congress on an agreement that provides meaningful market access for our manufacturers, that shows rapid growth of American-made automobiles sold in Korea, and that is enforceable," Ford said in a statement.

In April 2007, the Bush administration signed a free trade agreement with South Korea, but it stalled in the United States, primarily over concerns about U.S. beef and auto exports.

President Barack Obama, at the G-20 summit in Canada this weekend, said his administration will launch new talks with South Korea aimed at resolving those differences before he visits in November; he wants to submit an agreement to Congress soon thereafter.

The Dearborn automaker said it is "pleased that the Obama administration has committed to negotiate improved auto provisions to ensure that the U.S.-Korea trade agreement will actually help open one of the most closed markets in the world to automotive imports."

Ford said the South Korean government "has a long history of actively intervening in the market to exclude imports.

"A well-negotiated U.S.-Korea Free Trade agreement," it said, "represents the last, best chance to open the Korean market to imported automobiles."

Most U.S. automakers have opposed the agreement negotiated under the Bush administration because it did little to open the closed auto market. General Motors Co. has stayed neutral, because of its South Korean unit GM Daewoo, which is the fourth-largest automaker there.

U.S. Rep. Sander Levin, D-Royal Oak, chairman of the House Ways and Means Committee, said in a statement the administration needs to address the obstacles that American automakers face in gaining access to the South Korean market.

The problem with the 2007 deal, Levin said, "is that it does not effectively address the regulatory and tax barriers that have led to one-way trade and hurt our industrial sector, as well as kept out our beef. Until recently, South Korea was unwilling to discuss changes to address these vital issues in the industrial sector."

Levin said the White House's deadline can be met "only if the outstanding issues are fully addressed with enforceable commitments."

The House and Senate must consider trade agreements, without amendments.

In a Detroit News interview earlier this year, U.S. Trade Representative Ron Kirk, who will initiate the new discussions with South Korea, said he is fully aware of the "disparity." Korean automakers sell 700,000 vehicles annually here, but U.S. automakers export fewer than 7,000 vehicles annually to Korea.

The White House says the new deal likely will be sent to Congress early next year, but there's a chance it could be completed during a lame duck session of Congress after the November elections.

Obama says a new pact will strengthen ties between the two countries, and may boost the export of American goods by as much as $11 billion a year.

Ford to debut curve control
system in new Explorer

June 28, 2010
DEE-ANN DURBIN / AP Auto Writer

Dearborn -- Ford Motor Co. is upgrading the electronic stability control system on its 2011 Ford Explorer to help the SUV perform better if a driver takes a curve too quickly.

The curve control system uses the same sensors as Ford's stability control system, which monitors the steering wheel angle, wheel speed, tilt of the vehicle and other inputs 100 times per second. Stability control cuts the engine's power and applies the brakes to individual wheels if it senses a driver going off-course. Curve control adds another layer of monitoring and can cut power even more quickly if it senses the SUV isn't turning as fast as the driver wants it to. Curve control will be able to drop the Explorer's speed by as much as 10 miles per hour in a second.

The system will be standard on the Explorer, which comes out late this year. Ford plans to add it to 90 percent of its North American crossovers, sport utility vehicles, trucks and vans by 2015.

Curve control will complement, but not override, a driver's own braking action, said Tony Rendi, Ford's manager for brake controls. When a driver hits the brakes, curve control can add more pressure to the individual brakes that are most needed. The system also can react more quickly than a driver can.

Ford says there are more than 50,000 crashes on curves each year in the U.S. alone.

"Something like this, we've all done it, and you can appreciate why you would need it," Rendi said.

The system will be the first of its kind on the market, according to Ali Jammoul, Ford's chief engineer of global chassis engineering. Ford, based in Dearborn, Mich., began developing curve control internally about 18 months ago and has a patent pending on it.

Most cars in the U.S. now have stability control, which the federal government will require on all vehicles by the 2012 model year. Ford's electronic stability control system was first introduced on Volvo cars in 2003.

David Champion, senior director of auto testing for Consumer Reports, said he hasn't tested Ford's system but has been briefed on it and believes it will be more effective than standard stability control.

Stability control has its limitations, Champion said. It's designed to prevent oversteer, which is when the back end loses traction, slides out and may cause the car to spin. But it's less effective at controlling understeer, which is when the wheels continue to go straight even though the driver wants them to turn.

"It slows the vehicle down but can't keep the car on the course," Champion said.

In a recent demonstration at Ford's test track, a 2011 Explorer without curve control made it around a curve of cones at 50 miles per hour but swung out toward the end and stopped in an area outside the cones. When curve control was engaged, the SUV slowed down rapidly in the middle of the curve and stayed within the cones for the length of the test.

The 2011 Explorer will be a platform for several new safety technologies, including the industry's first rear inflatable seat belts, a terrain management system for various on- and off-road conditions and a collision warning system.

CAW CONTACT
Volume 40, No. 25
June 25, 2010

CAW Members Demonstrate at Lanark Place for Fair Contract

CAW members at Lanark Place/Lanark Heights long term care facility along with residents, friends, family members and other supporters from local unions throughout the Kitchener region in Ontario held a lively three-hour information picket outside the facility on June 22.

Demonstrators urged the company to negotiate a fair contract with its 200 employees who are members of CAW Local 302. Negotiations between the CAW and Lanark have stalled, with the company refusing to drop demands for wage freezes and other concessions.

"This employer is trying to hide behind Bill 16, the Public Sector Compensation Restraint Act, and refuses to bargain a fair wage for its front line health care workers," said Bill Gibson, CAW Kitchener-area Director.

"Lanark is taking the unacceptable position of applying the legislated wage freezes even though they do not apply to the private sector. Meanwhile, the workers in this home are among the lowest paid health care workers in the region."

Similar demonstrations have already taken place across the province in response to a breakdown in negotiations between the CAW and Extendicare, another long term care provider operating facilities across Ontario.

New Contract Means More Jobs in Thunder Bay, Ontario

A $770 million light rail car order placed by the Metrolinx transportation agency means Bombardier will hire more than 200 additional workers for its Thunder Bay, Ontario plant.

The contract signed by Bombardier and Metrolinx, the transportation agency for the Greater Toronto Area, calls for 182 light rail vehicles, with the chance of a further 118, for use over the next 10 years in the GTA and Hamilton areas.

CAW Local 1075 represents workers at the Thunder Bay plant. When this most recent contract is added to existing streetcar and subway contracts for Toronto as well as construction of bi-level cars for other transportation services, the local plant should be operating near capacity of 1,500 workers.

CAW President Ken Lewenza said the announcement highlights the importance of Canadian content policies.

“This contract means investment in the Thunder Bay facility, which ensures greater job security and opportunity in the future for this community and the surrounding area, which have been so hard hit by job losses in other economic sectors,” Lewenza said.

At a June 14 ceremony in Thunder Bay, Bombardier’s North American president Raymond Bachant said the company plans to exceed the 25 per cent Canadian content requirement put in place by the province.

CAW Local 1075 President Paul Pugh said the new equipment and workforce means the plant is likely to land more contracts.

“Economies of scale kick in,” said Pugh. “Once you have these assembly lines in place and the products being produced, it’s not hard to pick up other orders. That’s what’s happened with the Bi-Level line, which now is the largest selling commuter vehicle in North America.”

Overwhelming Strike Vote at Auto Parts Maker Wescast

CAW Local 4207 members who work at Wescast Machining in Wingham, Ontario have overwhelmingly rejected a forced final offer from the company.

The workers voted 78 per cent against the company offer in a Ministry of Labour supervised vote. The membership also voted 94 per cent in favour of a strike, if needed. CAW Local 4207 represents 88 members at the Wingham facility, which manufactures exhaust manifolds. The contract expires June 30.

Local 4207 President Mark Goetz said parts workers like those at the Wingham plant face increasing pressure from all sides in an industry that is undergoing a major restructuring.

“Our members work hard to make quality products and deserve fair and equitable compensation for the dedication they show the employer,” Goetz said.

Plant chairperson Deb Van Beek said the membership have shown tremendous support for their bargaining committee.

“The membership have sent a clear message that their bargaining committee has a strong mandate to negotiate the best agreement possible,” said Van Beek.

FFAW Recognizes Those who Helped Injured Harvester

The FFAW/CAW is crediting the selfless and fast-thinking actions of offshore oil industry workers and management, emergency responders, Search and Rescue and fish harvesters for recently helping an injured fish harvester get emergency treatment under perilous circumstances at sea.

“On behalf of the union and fish harvesters across the province, I wish to extend my sincerest thanks and appreciation to all those who went to great lengths to provide assistance to a seriously injured harvester last Tuesday (June 8) afternoon on the Grand Banks,” said CAW/FFAW President Earle McCurdy.

On June 1, a crewmember onboard the Canadian Navigator II, based out of Port de Grave, was seriously hurt after his leg became entangled in crab fishing gear. The skipper, Matthew Petten, radioed for help to the nearby White Rose oil field.

The Maersk Chignecto supply ship, which is currently being contracted by Husky, launched a fast rescue craft (FRC) to pick up the injured crewmember. Bleeding and in significant pain, the man was taken back to the supply ship where he was stabilized.

He was then transferred to the hospital onboard the Husky-operated Transocean GSF Grand Bank oil rig where he was prepared for helicopter transfer by the rig’s medic. A Search and Rescue Hercules aircraft was on the scene at 3:30 p.m. to check on conditions and shortly thereafter the injured man was winched up from the deck of the oil rig by a Search and Rescue Cormorant helicopter. He was immediately airlifted back to hospital in St. John’s where he underwent surgery shortly after landing. He is currently recovering.

“All these actions … — all took place in very rough weather and heavy seas,” McCurdy said.  “The people who put themselves at risk to ensure the safety and well-being of the man who was hurt showed courage and certainly compassion for an injured colleague at sea.”

New Leadership at UAW

Members of the U.S.-based United Auto Workers union elected a new leadership team at the union’s Constitutional Convention on June 16.

Former UAW Vice President and head of the union’s National Ford Department Bob King was elected to the post of International President, succeeding outgoing president Ron Gettlefinger. Dennis Williams, former director of UAW Region 4, was acclaimed as the union’s Secretary-Treasurer, succeeding Elizabeth Bunn. Both Gettlefinger and Bunn announced their retirement from UAW prior to the Convention.

“On behalf of the CAW, I want to congratulate Bob, Dennis and the new UAW leadership on their elections,” said CAW President Ken Lewenza. “We look forward to working in solidarity with the UAW to build a stronger and more effective labour movement in North America, and around the world.”

Union: Ford to stop making Escape in Missouri next year

David A. Lieb / Associated Press
June 24, 2010

Jefferson City, Mo. -- Ford Motor Co. plans to stop making the Escape in Missouri by the end of next year and shift production of its next-generation sport utility vehicle to Kentucky, a union president said Tuesday.

Ford has indicated its suburban Kansas City plant could receive a new product, if Missouri were to enact new tax incentives for the company, said Jeff Wright, president of the United Auto Workers Local 249.

A special legislative session is to begin Thursday to consider a bill offering up to $15 million annually for manufacturers who retain jobs by making factory improvements for new products. To offset the cost of the incentives, lawmakers also are to consider a measure requiring new state employees to contribute toward their pension funds.

Ford spokesman John Stoll said Tuesday that the company supports Missouri's proposed incentives. But he declined to comment about Ford's plans for the Escape or its Claycomo assembly plant near Kansas City.

Ford has said it will begin building a vehicle at the Louisville plant based on its compact-car underpinnings, which could support small SUVs.

The Claycomo plant, which employs about 3,700 people, currently makes the Escape, its twin Mercury Mariner and the F-150 pickup truck. Ford is phasing out the Mercury brand, including the Mariner, by the end of this year.

Wright said the last Ford Escape will roll off the Claycomo assemble plant around November or December 2011 and that production of a new version of the sport utility vehicle then would shift to Louisville.

"The Escape's already gone, they've already announced that, and I think if they haven't already started to retool Louisville, Ky., it's close," Wright said. "What we're looking for is a new product."

Wright made his comments during a conference call Tuesday announcing that dozens of businesses, economic development groups and union workers had formed a coalition supporting the Missouri incentive legislation. Participants in the Missouri Manufacturing Works coalition said losing jobs at the Claycomo factory would send negative ripples through the local and state economies.

"If we don't pass this, we're not competing at all," said Ray McCarty, president of the Associated Industries of Missouri. "We don't have anything in our tool box right now to help attract those new product lines."

Senior driver fatalities down
Study also finds more drivers over 70 are keeping their licenses

David Shepardson / Detroit News Washington Bureau
June 23, 2010

Washington -- The nation's senior citizens are getting into fewer serious car accidents and more are holding onto their licenses.

In a study released today, the Insurance Institute for Highway Safety said fatal crashes per licensed driver over age 70 fell 37 percent from 1997 to 2008.

The most dramatic decline was among drivers over 80: The number of fatal crashes declined by nearly half in that age group.

"Older people are doing a good job of addressing their own driving abilities," said Anne McCartt, senior vice president for research at IIHS, an industry-funded group that works to reduce car crashes.

One factor in the reduction is that older people typically drive fewer miles than younger drivers. Studies have found a much higher fatality rate per mile traveled for older drivers.

The reduction in deadly crashes involving older drivers outpaced declines among younger drivers. Fatal accidents in the younger group decreased 23 percent over the same period.

If senior citizen crashes had kept pace with those of younger drivers, another 10,000 senior drivers would have been involved in fatal accidents over the 11-year period, McCartt said.

During the past decade, in the wake of high-profile incidents, the nation's graying population sparked fears of more senior citizens dying or causing fatal accidents.

In 2003, for example, an 86-year-old man lost control of his car, killing 10 and injuring more than 70 as he crashed into a Santa Monica, Calif., farmers market.

The IIHS study also found that the number of drivers over age 70 who are holding onto their driver's licenses is increasing.

In 2008, 28 million people over 70 held a license -- or 78 percent of the population, up from 73 percent in 1997.

AARP, the senior citizen advocacy group, said the findings will help "refute stubborn stereotypes about older drivers with new data."

An AARP senior vice president, Elinor Ginzler, said "the new IIHS report reinforces what safety experts already know: Age, by itself, doesn't cause car crashes. Most older drivers are safe drivers and exercise personal responsibility; the report found that many older drivers were limiting their own driving at night and on high-speed roads."

The rate of accidents without injuries reported to police among drivers over 80 fell 20 percent since 1997, but it was flat among drivers 35-54.

Even though elderly drivers are getting into fewer serious crashes, they are still far more likely to die in a crash than younger drivers. A driver older than 70 is three times as likely as one 35-54 to sustain a fatal injury in a crash, but that's down from 3.5 times in 1997.

IIHS said several factors may account for the change, including safer cars, closer monitoring of older drivers in some states and improvements in health and physical conditioning among older drivers.

At least 26 states set special provisions for seniors, such as requiring vision tests, shortening renewal periods or banning renewal by mail.

New Hampshire and Illinois require a new road test after 75.

Michigan has no special licensing requirements for senior citizen drivers.

Studies have also shown that states can make it easier for seniors and others. "Michigan lefts" -- or indirect left turns after an intersection on major roads, such as Telegraph or Woodward -- dramatically decrease accidents among elderly drivers.

Abuse of painkillers, other
meds now causes as many
ER visits as illegal drugs

Mike Stobbe

ASSOCIATED PRESS
June 21, 2010

ATLANTA—For the first time, abuse of painkillers and other medication is sending as many people to the emergency room in the United States as the use of illegal drugs.

In 2008, ERs saw an estimated one million visits from people abusing prescription or over-the-counter medicines — mostly painkillers and sedatives. That was about the same number of visits from those overdosing on heroin, cocaine and other illegal drugs, according to a government report released Thursday.

Only five years earlier, illegal drug visits outnumbered those from legal medications by a two-to-one margin.

In other words, the number of ER visits from medication abuse doubled, said Peter Delany of the Substance Abuse and Mental Health Services Administration.

“It’s a pretty startling jump,” Delany said. He led a team that worked with the Centers for Disease Control and Prevention on the report.

Painkillers and sedatives clearly drove the trend. ER visits for the painkillers oxycodone and hydrocodone more than doubled from 2004 to 2008. And cases from one kind of tranquilizer nearly doubled.

The estimates are based on emergency room data from more than 200 U.S. hospitals. Many of the cases may be overdoses, but some may come from mixing drugs or combining them with alcohol, Delany said.

Health officials are not sure why painkiller abuse rose so dramatically. But the number of prescriptions has been increasing, so some of those who ended up in ERs may have gotten their medicine legally.

The authors did not estimate how many of the ER patients died. A CDC report last year found that the rate of drug-related deaths roughly doubled from the late 1990s to 2006, and most of the increase was attributed to prescription opiates such as the painkillers methadone, Oxycontin and Vicodin.

“The abuse of prescription drugs is our nation’s fastest-growing drug problem,” Gil Kerlikowske, director of the Office of National Drug Control Policy, said in a statement.

The use of painkillers has grown in recent years as doctors tried to correct the traditional undertreatment of pain, and pharmaceutical companies ramped up marketing of new pain medications.

But many doctors and patients don’t fully recognize the medications’ dangers, said Susan Foster, a vice-president at Columbia University’s National Center on Addiction and Substance Abuse.

“People believe they’re safer because they’re prescribed by doctors and approved by the FDA,” she said.

The report is being published this week in a CDC publication, Morbidity and Mortality Weekly Report.

Auto dealers criticize UAW's
planned Toyota protest

David Shepardson / Detroit News Washington Bureau
June 20, 2010

Washington -- Auto dealers who sell foreign brands are criticizing a plan by the United Auto Workers union to protest at Toyota Motor Corp. dealerships.

On Thursday, newly-elected UAW President Bob King said the union was redoubling its efforts to organize Toyota workers and will protest at the Japanese automaker's dealerships.

"Attacking small businesses won't help Mr. King build back UAW membership," Cody Lusk, president of the American International Automobile Dealers Association, said Friday.

"If he wants to pressure the 28,000 workers at Toyota's U.S. manufacturing plants to unionize, he should consider some other method than hindering business at a randomly chosen Toyota dealership."

The union argues that Toyota, which has recalled more than 9 million vehicles worldwide over sudden acceleration concerns, has put making money ahead of the safety of its customers.

In Detroit on Thursday, King vowed to "pound on Toyota until they recognize the First Amendment rights of those workers to come into the UAW."

The dealers group represents 10,000 dealers of 29 international automotive brands, and employ more than 500,000. In 2010, the dealers have sold 2.5 million vehicles, more than half of which were built in the United States.

"A picket line will only hurt the dealership, its employees, and the community it serves," Lusk said.

"An assault on America's auto retail industry will only serve to highlight the disconnect between the UAW and reality."

A UAW spokeswoman didn't return a message seeking comment.

Detroit 3 surpass foreign rivals in quality survey

Bryce G. Hoffman / The Detroit News
June 19, 2010

Detroit -- It has taken 24 years, but Detroit's Big Three beat their foreign rivals for the first time ever in J.D. Power and Associates' influential annual study of initial vehicle quality.

Even if just barely.

Domestic brands averaged 108 problems per 100 vehicles, compared to an average 109 problems for foreign brands, according to the results of this year's  survey, released Thursday.

"After 24 years, a win is a win," said David Sargent, vice president of global vehicle research for the Westlake Village, Calif.-based rating firm. "The margin is small ... but when you've trailed for 23 years, 108 to 109, that's a significant difference."

For decades, American automakers have struggled to shed an image that their cars and trucks are inferior to import models. Other recent studies have shown the domestic companies narrowing the gap in perceived and actual quality.

Toyota Motor Corp.'s quality problems pulled down the average for foreign manufacturers. But Sargent said the domestic automakers would have won even if Toyota's quality had remained flat, thanks largely to big gains by Ford Motor Co., whose namesake Blue Oval brand edged out Honda to become the highest-ranked non-luxury marque. Chrysler Group LLC also improved, though its vehicles remain below average.

How brands fare in J.D. Power's initial quality survey, which asks consumers how well their vehicles performed during the first three months of ownership, historically has been a good indicator of how well the models will sell.

Ford has been improving

Reviewing the results with members of the Automotive Press Association at the Detroit Athletic Club, Sargent noted that Ford has improved steadily for the better part of a decade, but is only just now getting to the point where consumers recognize its gains.

"Virtually every vehicle they produce is massively better than it was two or three years ago," he said. "What they've done over the past few years is pretty impressive."

Ford came in fifth overall of the 33 brands, with 93 problems per 100 vehicles, making it the highest-rated mass market marque. Last year, Ford came in eighth.

The Dearborn automaker's Lincoln brand came in eighth with 106, the highest ranking of any American luxury brand.

"Steady and meticulous attention to new model launches, along with consistency in how we do them across the brand and the globe, are having a very positive effect on the initial quality of our all-new or redesigned products," said Bennie Fowler, Ford's group vice president in charge of global quality.

"While we are pleased with where we are today, our job is not done. Our plan is to keep improving quality each and every year."

A dozen Ford models ranked in the top three in their respective segments this year -- more than any other automaker -- and Ford products earned top honors in three, tying Toyota's Lexus brand.

Toyota expecting the hit

While Lexus remained above average, the Toyota brand's rating plummeted from sixth place in 2009 to 21st, with its average number of problems increasing by 16 per 100 new vehicles. That put Toyota below the industry average for the first time.

Sargent said it was not surprising, given the automaker had recalled millions of cars and trucks in late 2009 and early 2010 to fix pedals and make other adjustments after concerns were raised about unintended acceleration.

"The recalls did have a substantial effect on Toyota's performance," he said. "Some of it is real. Some of it is Toyota customers just paying a lot more attention to their vehicles than they ever have done in the past."

Toyota was expecting the hit.

"We're disappointed, but probably not surprised," said Jim Lentz, president of Toyota Motor Sales in Torrance, Calif., who pointed out that the survey was conducted between February and May of this year as Toyota leaders were being grilled in Washington.

"It was at the heart of the recalls."

Toyota vehicles not included in the recalls actually showed improvements in quality consistent with the company's past performance, and Sargent predicted its scores would rebound within a couple of years.

"What may take longer to recover is their reputation," he said.

Dodge worst-ranked in U.S.

Chrysler, which has consistently ranked among the worst manufacturers, managed to buck that trend this year -- at least with its Ram pickups. After Ford and Lincoln, Ram was the highest-ranked domestic brand, coming in just below the industry average with 110 problems per 100 new vehicles.

Dodge was the worst-ranked domestic brand, but Sargent said Chrysler as a whole showed clear improvement.

"In the next year, 75 percent of our vehicles will be all-new or significantly improved," said Doug Betts, the senior vice president in charge of quality for Chrysler. "We are taking advantage of this opportunity to address the design-related issues that customers have identified while continuing to reduce defects."

Sargent said Chrysler's results were helped by the fact that it only launched one new vehicle last year: the Ram heavy duty. In contrast, nearly a third of General Motors Co.'s volume came from new vehicles, which he said contributed to the automaker's "disappointing year."

"They had an unusually high mix of all-new vehicles," he said. "None of them performed particularly well."

Cadillac plummeted from third in last year's survey to 13th this year, tying Chevrolet, which slipped from ninth. Both brands averaged 111 problems per 100 vehicles. Still, 10 GM models scored in the top three of their respective segments, and Chevrolet was the leader in two.

"Without question, we do have some work to do," said GM spokeswoman Katy McBride. "Our tracking studies show that we have made improvement since then in our launch vehicles, so we are paying attention to those things."

The 2010 study is based on responses from more than 82,000 purchasers and lessees of new, 2010 model-year vehicles.

For the first time in years, the overall industry average slipped slightly. It increased from 108 problems to 109 this year. Sargent predicted overall quality would continue to improve next year.

Porsche was the highest-rated brand, with 83 problems per 100 vehicles; Land Rover was the worst, with 170.

UAW's King calls
for Toyota protests

Newly elected president seeks to renew
attempts to unionize foreign auto plants

Louis Aguilar / The Detroit News
June 19, 2010

Detroit -- United Auto Workers President Bob King came out swinging on his first day in office, taking aim at Toyota Motor Corp.

King criticized Toyota for closing a Fremont, Calif., plant the Japanese automaker had once operated jointly with General Motors, saying it was shuttered only because it was represented by the UAW, and he called for protest marches against Toyota and its dealerships.

King made the attack during a speech after he was sworn in as the union's 10th president. He argued that a renewed UAW attempt to unionize U.S. workers of foreign automakers is a key to winning back concessions made to Detroit's automakers to help them survive.

"There is no question in my mind that if we get Toyota and Honda and Kia and Hyundai and Nissan workers the right to join the UAW without a terrorism campaign by the boss, that they would come into the UAW," said King, former head of the UAW's Ford Motor Co. unit. "And that would then give us the power to win back the concessions and sacrifices we made and win more than that."

King wouldn't put a timeline on when the UAW would successfully organize a foreign automaker's U.S. work force. The UAW has twice failed to organize Nissan Motor Co.'s factory in Smyrna, Tenn. King led the last organizing effort in 2001, when Nissan workers rejected the union by a wide margin.

The former New United Motors Manufacturing Inc., or NUMMI, plant in California is the "first battleground" in the organizing effort, King told 1,200 delegates on the final day of the union's convention.

GM and Toyota ended their partnership after GM went through bankruptcy last year. Toyota spokesman Mike Goss said NUMMI was closed because Toyota could not afford to run the plant after GM withdrew. About 4,500 UAW workers lost jobs.

Toyota then sold the NUMMI plant to Tesla Motors and invested $50 million in the luxury electric carmaker to work on building electric cars together in Fremont. Tesla plans to hire up to 1,000 workers, but hasn't said whether they will be unionized.

"Our No. 1 fight with Toyota is to give those workers a choice," King said Thursday. "We're going to pound on Toyota until they recognize the First Amendment right of those workers to come into the UAW."

King also chastised Toyota President Akio Toyoda for taking work to Mississippi. The automaker announced Thursday that it would restart building its facility in Blue Springs, Miss., with a goal of making Corolla compact cars there by late 2011. Toyota had stopped construction when vehicle demand sank during the recession.

"Well, Mr. Toyoda, if you ... truly care about safety and quality in America, then you are going to build (at Fremont) and not in Mississippi," King said.

King said the UAW could have success organizing foreign-owned plants because a friendly Democratic White House and National Labor Relations Board will enforce labor laws that don't allow companies to intimidate workers trying to organize.

But one longtime auto analyst described King's organizing effort as "preposterous."

"The UAW's saber-rattling one year after bankruptcy is not healthy," said Maryann Keller, who runs her own consulting firm in Stamford, Conn.

Raising labor costs by organizing nonunion plants won't help Detroit's automakers or consumers, Keller said.

"The only thing the UAW has done in the past 30 years is lose members," Keller said.

After his acceptance speech, King and Teamsters President James Hoffa further promoted the activism theme by leading a march of UAW leaders and delegates down Jefferson Avenue in Detroit to protest Wall Street's role in the national recession.

"If we don't win social justice for everyone, we don't win!" King told a block-long crowd.

CAW CONTACT
Volume 40, No. 24
June 18, 2010

CAW Applauds Agreement on CPP

CAW President Ken Lewenza is voicing his strong approval of the June 14 agreement by most of the provinces and the federal government to improve Canada Pension Plan benefits.   

“This is an historic agreement that will hopefully mean greater dignity in retirement for millions of Canadians,” said Lewenza. He congratulated the provincial and federal finance ministers, particularly Ontario Finance Minister Dwight Duncan and Federal Finance Minister Jim Flaherty, for recognizing the necessity of changing CPP legislation. While it was a shame that the Province of Alberta continues to oppose changes to the CPP, Lewenza said he was pleased to see all other provinces coming to consensus.

Lewenza credits a co-ordinated effort to press elected officials for change, combined with a number of high profile bankruptcy cases, including Nortel, which created greater public awareness about the difficulties retirees often face. “Collectively, we owe a debt of gratitude to the hundreds of thousands of women and men who attended rallies, contacted their elected officials, called in to radio shows and filled the letter boxes, voicing their concerns around retirement security. Without these efforts, we would not have anything to celebrate today.”

Lewenza reaffirmed that the details of the agreement will be extremely important. “Canadians must continue to be vigilant that tangible changes will be made to CPP legislation that will enhance the quality of life for people when they retire,” said Lewenza. 

Lewenza also warned against alarmists in the business community who have indicated that improvements to CPP benefits will kill jobs. “This is just an attempt to derail critical changes that would bring about greater equality and dignity for Canadians when they retire. Equality in our country has been under attack for years, and this line of argument is exactly that.”

CAW Members Vote in Favour of Strike at VIA Rail, If Needed

CAW members who work at VIA Rail have voted more than 94 per cent in favour of strike action, if needed.

CAW members in Local 100 and National Council 4000 voted in a recent series of meetings across the country to support the VIA Master Bargaining Committee as they move towards a strike deadline of June 27–at 11:59 p.m.

Further negotiations are scheduled for Monday, June 21 in Montreal and will continue until the deadline of Sunday, June 27th at midnight.  

“The bargaining committee remains determined to reach a settlement without a dispute but the corporation’s concession demands must be stopped,” said CAW President Ken Lewenza.

“Our bargaining committee, supported by the strong membership strike vote, are fighting to protect hard fought gains from past negotiations and are determined to enhance the working lives of the membership through this round of collective bargaining,” Lewenza said.

The CAW represents more than 2,000 workers at VIA in on-train and clerical services, including ticket vendors and maintenance. 

CAW Local 504 Members Reject Siemens Closure Plan

CAW Local 504 members who work at the Siemens turbine manufacturing facility in Hamilton, Ontario are expressing outrage over the company’s latest response to a proposed closure agreement.

More than 400 workers took part in a membership meeting Sunday, June 13 to discuss the company’s refusal to negotiate a fair and equitable closure agreement. On June 14 workers burned the company’s latest response in a barrel outside the plant during a protest at noon hour.

CAW Local 504 President Randy Smith said despite repeated requests the CEO of Siemens Canada is refusing to meet with CAW National President Ken Lewenza to find a solution to the problem.

“This is totally unacceptable,” Smith said. “We are going to fight back to ensure our members get a fair and equitable closure agreement.”

Bob Chernecki, assistant to the CAW President, said Siemens is a highly profitable international corporation. He said CAW members at the Hamilton plant are highly skilled with many years of service.

“These workers have made an enormous contribution to this company, which is refusing to recognize the importance and value of the work of the Hamilton workforce,” Chernecki said.

“We’re determined to secure a solid closure agreement on behalf of these workers,” Chernecki said.  

Doug Brown, Siemens hourly unit chair, said the workforce is older with the majority of members over 50 years of age who will face an “impossible task of finding comparable jobs this late in their work careers. This is why we need an enhanced closure agreement that reflects the dedication, hard work and high skills of these members.”

“The bargaining committee has been frustrated at every turn by the company but we remain determined to negotiate a good closure agreement,” said Brown.

CAW Ratifies First Agreement With Brinks

CAW members at Brinks have ratified a first contract by 81 per cent in 13 locations across Ontario.

The 950 workers recently voted in favour of the contract during ratification meetings over three days. 

The new contract includes improvements to wages and benefits, with the extension of health care benefits to retirees for the first time.

“These negotiations focused on protecting historic gains, such as the pension plan and building for the future, including greater job security and representation in the workplace,” said CAW President Ken Lewenza. “We wanted to ensure that the work our members do at Brinks is fairly compensated and that they share in the success of the company.”  

The deal also included a commitment by Brinks to create new full-time jobs and improved the scheduling of both full-time and part-time hours.

The deal was reached on June 11, 2010. The Brinks workers joined the CAW in October 2009.

June 21 – National Aboriginal Peoples Day

In 1996, the Governor General of Canada proclaimed June 21 National Aboriginal Peoples Day. The CAW recognizes June 21 as a day for all workers to show solidarity with Aboriginal communities, educating themselves on Aboriginal culture, celebrating its diversity and joining with Aboriginal peoples in calling for access to jobs, housing, healthcare, childcare and education.

The CAW National Human Rights department is encouraging all members to commemorate June 21 in local unions and workplaces across the country.

Is your local union or workplace planning to commemorate June 21? If so, send information and pictures of your event to the CAWHuman Rights department: humanrights@caw.ca  

To read the CAW National Executive Board statement on National Aboriginal People’s Day, visit: http://www.caw.ca/en/7901.htm

To download the poster, visit: http://www.caw.ca/en/services-departments-human-rights-aboriginal-peoples-day-june-21-pdf.htm

King routs challenger to
win UAW presidency

Louis Aguilar / The Detroit News
June 17, 2010

Detroit -- United Auto Workers Vice President Bob King was elected president of the union early this afternoon after a roll-call vote was stopped when he had gained more than enough votes.

King, the union's 63-year-old lead negotiator with Ford Motor Co., received 2,115 votes to 74 votes for Gary Walkowicz, a 61-year-old Local 600 bargaining committee member at Ford's Dearborn Truck Plant who was the first challenger to an endorsed UAW presidential candidate in 18 years.

The challenger did not win all the votes of the four delegates from his Dearborn Truck delegation. He won three.

"Democracy in action!" UAW President Ron Gettelfinger yelled to a cheering crowd. Gettelfinger and the union's executive board endorsed King's candidacy.

King's nomination was loudly cheered by many of the delegates in the morning. He can only run for one term because of the union's mandatory 65-and-out retirement policy.

Dissident Walkowicz was roundly booed by many delegates on the convention floor as he spoke briefly at the podium in the morning. Some delegates even yelled "withdraw" at Walkowicz.

Walkowicz admitted beforehand that he had little chance of getting elected by the convention's delegates, but his supporters wanted to use his nomination to speak out against the UAW's recent deep concessions in workers' wages and benefits to Detroit's automakers.

"Our union faces a huge crisis, a real emergency, brought on by past policies," read a statement that Walkowicz's supporters handed out. "We need to do a radical 180-degree turn, away from policies of concessions!"

Walkowicz's candidacy met the same fate as that of former UAW executive board member Jerry Tucker, who in 1992 unsuccessfully tried to derail then-UAW President Owen Bieber's re-election bid.

The rest of King's nominated executive board candidates and regional director candidates were elected without a challenge on the convention floor, which was festooned with blue-and-gold balloons that said "Bob's Team."

General Holiefield was elected to a second term as vice president. He has been head of the Chrysler negotiating unit and is a former executive administrative assistant to UAW President Ron Gettelfinger.

Joseph Ashton, director of Region 9 that covers New York, New Jersey and parts of Pennsylvania, was elected as a new vice president. His region includes GM and Delphi workers.

James "Jimmy" Settles, the director of UAW Region 1A, was re-elected as a vice president. He rose through the ranks from Dearborn's Local 600, the same local where King began.

Cynthia "Cindy" Estrada, director of the National Organizing Department that recruits workers from a variety of industries, was chosen for a vice presidency.

Dennis Williams, director of UAW Region 4, which covers nine north-central states including Illinois and Wisconsin, also was elected.

All the vice presidential candidates raised their hands in unison with King after their election.

King is scheduled to announce the responsibilities he will assign to each vice president Thursday, including which bargaining units he or she may oversee. King will give an acceptance speech Thursday to the convention as well as hold a press conference.

UAW delegates gave a lengthy farewell to some departing members of the executive board, including Gettelfinger, secretary-treasurer Elizabeth Bunn and GM unit Vice President Cal Rapson, who are retiring.

Gettelfinger was given a rousing and long standing ovation this morning as he received a plaque for more than 44 years of service, including eight years as president.

Senator promises UAW to keep pension plans intact

Detroit News Staff
June 16, 2010

Detroit -- U.S. Sen. Tom Harkin promised delegates of the United Auto Workers convention today that he would help stop the erosion of pension plans.

The Detroit automakers have kept their pension plans intact, while the auto supplier Delphi Automotive LLC terminated its hourly and salaried pension plans when it emerged from bankruptcy in 2009. The Delphi Salaried Retirees Association has questioned whether the ending of the white-collar plan was justified, pointing to an actuarial study indicating that plan was 81.7 percent funded and better financed than other plans that weren't terminated.

Harkin, the chairman of the Senate Health, Education, Labor and Pensions Committee, told a story about being stopped once by a United Airlines employee who said his pension had been stripped, but top executives cut deals to pad their retirement compensation. He said such abuses need to be corrected.

Harkin, a Democrat from Iowa, also said a National Labor Relations Board with more Democratic appointees will more vigorously enforce workers' rights.

The Iowa senator opposes enacting any more free trade agreements like those proposed with South Korea and other nations.

"No more free trade without fair trade," he said.

Ottawa, provinces agree to
keep working on CPP

CTV News June 15, 2010

Ottawa and the provinces have agreed to continue working on a plan that would see a modest increase in Canadian Pension Plan benefits.

Finance Minister Jim Flaherty said after the end of meetings in Prince Edward Island Monday the majority of provinces are in favour of the plan.

He said a "couple" of provinces are against the proposed reforms but he did not identify them.

"We were not unanimous, but certainly the substantive majority view is that we should proceed," Flaherty told reporters at a resort where the meeting took place. "Now there's a lot of work to be done. You know, what does modest mean? How do we go about doing this?"

The ministers are expected to report back to Flaherty this fall, after examining details of the plan. Flaherty said each province will decide whether to adopt it.

Alberta has argued that it is not the time to raise the CPP benefit because of the current economic climate. Ontario has supported pension reform, proposing that financial institutions play a larger role in retirement savings.

The support of seven out of 10 provinces is needed in order to increase benefits.

Various economists have said the average person today will be less well off in retirement than those who are already retired.

And so Flaherty is proposing a modest increase to CPP payroll premiums that would be phased in over time.

TD Bank deputy chief economist Craig Alexander said that based on today's average CPP retirement benefit of $502, a ten per cent increase in premiums would result in a $550 benefit, while a 20 per cent bump would lead to a $600 benefit.

Alexander said the payments would be indexed to inflation, so down the road payments, and benefits, would be higher, which means some workers will feel pinched.

"But at the end of the day, the reason the government is doing this is to encourage people to save more and what we can see from the statistics is that Canadians aren't saving enough," Alexander told CTV News.

Labour groups have been urging the finance ministers to agree to increase CPP benefits, and the meeting drew about 125 demonstrators to the beach resort where the ministers gathered.

Shelly Ward, president of the P.E.I. union of public sector employees, said many Islanders work in seasonal jobs, and a lot of people can't retire comfortably.

Canadian Labour Congress president Ken Georgetti has travelled to the Island to lobby to increase premiums enough to double benefits.

"Because of the efficiency of CPP, we'd only have to increase the contribution by 60 per cent to get a doubling effect on your benefits," he told CTV Atlantic. "For someone earning $30,000 a year, which is $15 an hour, it would amount to six cents an hour as the premium increase, which is a cafe latte a week."

Flaherty has argued such an increase would hurt the economy.

He said his approach to CPP is to "do no harm."

The Canadian Federation of Independent Business, a major lobby group, opposes increasing CPP premiums.

Alexander predicted it could be November or December before Canadians get a better idea about exactly what the government is proposing and how its negotiations with the provinces are proceeding.

UAW retiree handcuffed for passing out leaflets at Cobo Center

BY LOUIS AGUILAR / The Detroit News
June 14, 2010

Detroit -- A United Auto Workers retiree was briefly handcuffed outside Cobo Center yesterday for trying to hand out pamphlets critical of union leadership.

Al Benchich, a General Motors retiree and ex-president of Local 909 in Warren, was released with a warning by a Detroit Police officer. Benchich is part of an estimated 50 protestors staging a rally outside the Washington Boulevard entrance of Cobo, the site of the UAW Constitutional Convention.

"I'm a delegate, I have a right to be here," said Benchich as he was handcuffed, a situation that lasted less than 15 minutes. He was let go with a warning by a Detroit Police officer, who told him he could not distribute the flyers directly outside the entrance of Cobo, but, rather join the other rally members across the street from the entrance.

Hundreds of UAW delegates from across the nation arrive in Detroit for the UAW convention, which ends Thursday. The delegates will elect new national, regional and local UAW leaders. That includes a new national president. Current UAW Vice President Bob King is the only official presidential candidate but he may be challenged by long-shot contender Gary Walkowicz.

Very few delegates participated in the Sunday protest and several delegates said they continued to have faith in UAW leaders.

The convention will also determine the mood of a union that's accepted deep concessions in wages and benefits over the past few years. Many local leaders say some UAW delegates will use the convention to voice they want some of those concessions eased.

UAW membership fell 18 percent last year to a post-World War II low of 355,191. Membership has tumbled by nearly half since 2001, when the union had 701,818 members. Membership peaked in 1979 at 1.53 million members.

Passion, pragmatism
drive UAW's King

Louis Aguilar / The Detroit News
June 12, 2010

In the mid-1980s when Bob King was president of United Auto Workers Local 600, representing workers at Ford Motor Co.'s Rouge complex in Dearborn, he took the then-unheard-of step of recruiting health care workers to help broaden the union's reach.

King also convinced a group of union officials to travel to El Salvador in the early 1990s to monitor elections when the Central American nation was embroiled in a civil war.

Several colleagues say King, an electrician and lawyer by training who is now vice president of the UAW's Ford bargaining unit, still participates in annual protests of the School of Americas, a U.S. military camp in Georgia that trains soldiers from Latin American nations. The demonstrators believe the soldiers are schooled to serve oppressive dictatorships.

"He's always been a guy who thought of the union as a way to help bring justice to everyone," says Bernie Rickie, who heads UAW Local 600 today and has known King since 1970. "He's always thought global."

King, 63, will bring his passion and pragmatism to the UAW's constitutional convention next week at Cobo Center, where he will be the front-runner to succeed Ron Gettelfinger as union president.

Gary Walkowicz, a Local 600 bargaining committeeman, plans to challenge King's candidacy but admits he is a long shot to win. King is endorsed by the union's executive board.

The consensus among labor analysts, corporate executives and other observers is that King's experience and temperament make him the right man for the job.

"He is one of the most gifted leaders in American labor right now," said Harley Shaiken, a University of California Berkeley professor and labor analyst who has known King for about three decades.

"He has the talent and the energy to make many people understand the UAW's cause is not just about autoworkers, but about saving U.S. manufacturing and keeping the U.S. competitive in the global economy."

King has the best reputation of any UAW leader among politicians, corporate management and auto analysts, says David Cole, chairman of the Center for Automotive Research in Ann Arbor.

Ford executives have praised King for his grasp of the big picture and his realistic approach to tough issues. In turn, King has made it clear to union members that a successful Ford is the best guarantor of their jobs and benefits.

A matter of trust

That same political acumen prompted King, who declined to be interviewed for this article, to become more confrontational in recent months as Ford's fortunes improved.

Last fall, he was booed during a speech at Ford's Dearborn Truck Plant when he tried to convince workers to accept more concessions; the plan was soundly defeated.

But with Ford now reporting quarterly profits again, King has increased demands that the automaker restore some benefits workers gave up to help make Ford more competitive.

"We want to make sure in that turnaround our members are treated fairly," King said last month.

Yet, some of the rank-and-file still don't trust him.

"He's part of the leadership that has led us down this bottomless pit of concessions, concessions and concessions," said Wendy Thompson, a longtime UAW activist who is helping stage a rally Sunday outside Cobo Center to criticize the givebacks. "He cares more about what the company wants than what the workers need."

If Gettelfinger's tenure was defined by granting concessions to save Detroit's automakers and keep the UAW alive, King's task may be to broaden the base of the 75-year-old union beyond the auto industry, according to analysts. The UAW has 355,191 members, down more than 1.1 million since 1979.

Still, King has recruited 66,000 members to the UAW amid the overall decline, many from non-automotive fields like casino gaming and state government.

He also has negotiated partnership agreements with many auto suppliers, which helped the UAW organize more than 36,000 workers.

"Bob King understands the UAW needs to diversify in who they represent and he has shown much success with that kind of coalition building," said Ross Eisenbrey, vice president of the Economic Policy Institute, a pro-labor think tank in Washington, D.C.

"The UAW active membership is probably more non-auto than auto. The expected rehiring in the auto industry may change that, but King understands that the UAW can become a much broader union."

Not 'the typical person'

King's ascension through the union ranks has been an intellectual journey of sorts.

The son of a former industrial relations director at Ford, King briefly studied religion and philosophy at College of the Holy Cross in Worcester, Mass. He then transferred to the University of Michigan, graduating in 1968 with a political science degree. He worked summers at General Motors and Chrysler plants. After U-M, he did a two-year stint in the Army.

King joined Ford in 1970 and eventually became an electrical apprentice while attending the University of Detroit Law School. Classmates recall him as disciplined, bright and affable.

"He was no ordinary electrician," recalls Tom Watkins, who was 18 and working the Ford Mustang line at the Dearborn Rouge facility when he met King in the late 1970s.

"He would always talk to line workers to just ask how they are doing," Watkins said. "He actually listened. The way he talked -- political and social justice theories and how it applied to everyone -- it was clear he wasn't the typical person you met working in an auto plant."

More than a decade later, then-state mental health director Watkins faced King and other UAW negotiators in contract talks with state mental health workers.

"Of all the union negotiators I had to deal with, he was the most effective," Watkins said. "He was tough because he was informed and he knew how much his members could realistically gain or give up."

That's why some have much hope for King.

"So many people take as basic fact that the UAW helped ruin Detroit," said the Economic Policy Institute's Eisenbrey.

"He has the talent to change the perception of the UAW."

Flaherty pushes provinces
for pension reform

Winnipeg Free Press
Heather Scoffield
June 12, 2010

OTTAWA -- The consensus around the cabinet committee table, one cold winter day earlier this year, was to let the pension-reform file die an early death.

The provinces had backed off. Ottawa was armed with research concluding retirement income was adequate for most people. Any change to the system was laced with complicated pros and cons that would be tough to sell.

Letting the issue fade away, perhaps with the help of a few regulatory changes and tax incentives here and there, would be easy enough.

But the consensus lacked a key player: Prime Minister Stephen Harper. He wanted to see significant action on pensions, and he wanted it right away, sources say.

The prime minister's wishes have been granted.

After months of appearing neutral or even dismissive of pension reform, Finance Minister Jim Flaherty suddenly informed his provincial colleagues this week he thinks major changes are necessary, and he wants their support.

Financial institutions should be given the regulatory freedom to provide more pension options at low cost, especially to self-employed people and small businesses. And the Canada Pension Plan should be gradually and moderately expanded, he said.

Still to come are any details about how much the CPP benefit could increase and how much premiums might rise. But many pension experts welcome the fact Ottawa has agreed in principle to such changes.

"This is actually a tremendous breakthrough," said Susan Eng, vice-president of advocacy for the huge seniors' lobby group CARP, and a tireless advocate for pension reform.

With Ontario and some other provinces onside, there is widespread optimism that when federal and provincial finance ministers meet in Prince Edward Island this Sunday and Monday, they will agree to push the plan forward.

"I think it's one the provinces can buy into," said economist Jack Mintz, who heads the University of Calgary's School of Policy Studies.

Ottawa couldn't move immediately on Harper's orders last winter, since it had already committed to public consultations. But the consultations this spring served to validate Harper's instinct on the issue.

Ordinary citizens and analysts alike repeated that the future for many retirees looked uncomfortable. Financial services companies have been competing against each other to offer new alternatives. Unions, retired people and municipalities have been forming alliances pushing the federal and provincial governments to step up.

"He (Flaherty) felt the heartbeat of Canada on this one," said Ken Georgetti, president of the Canadian Labour Congress, who sent staff laden with data to many of the hearings.

"There are a lot of votes out there on this issue. It's grey power."

But the debate is far from over.

Two-thirds of the country needs to agree, if changes are to be made to the CPP. With Ontario already onside, and some other provinces likely following suit, that critical mass can probably be found.

-- The Canadian Press

Ford engineers try to help
drag racer win, safely

Motorsports tap passenger car inflatable belts

Bryce G. Hoffman / The Detroit News
June 12, 2010

Dearborn -- Few people alive know just how dangerous drag racing can be like John Force, who in 2007 survived one of the fastest crashes in history.

He attributes his survival to improvements made to his vehicle by safety engineers from Ford Motor Co.

This week, the legendary driver was in Dearborn to talk to Ford engineers about using the company's inflatable seatbelt system, which will debut this year in the all-new Ford Explorer, in his "funny cars" -- dragsters with forward-mounted engines and bodies vaguely resembling a stock model but are, well, funny-looking.

The genesis of this collaboration was the 2007 death of one of Force's drivers, Eric Medlen.

"It was a wake-up call," Force told The Detroit News. "We were all about going fast and winning races. If we crashed a car, we just rolled out another one. We thought we had everything we needed to keep us safe."

Most racers were concerned that adding safety equipment would add weight to their vehicles. Ford engineers contacted him and said they could help make his cars safer without slowing them down. They helped Force improve the design of his chassis to make it wider and add padding around the driver's head.

"I crashed four months later. I did break my arms and my legs, but no head damage. That's what killed Eric, and it was the identical situation," Force said. "It was the Ford engineers that kept me together."

Force and Ford formalized their collaboration under the auspices of the National Hot Rod Association as the Eric Medlen Project. It aims to use advances in Ford's passenger vehicles to make race cars safer.

"There's an opportunity with NHRA and the Force team to update some of the technology that's out there today and improve the safety of these vehicles," said Todd Clark, safety research supervisor at Ford, adding that inflatable seatbelt is a good example. "We're looking at how we can restrain the driver in a better way."

Despite their success in saving lives, air bags have not been used on race cars. Force said this partly out of concern that they would obscure a driver's vision at a critical moment. Ford's seatbelt airbag is the first one he thinks could work in both applications.

For decades, safety innovations pioneered for motorsports have migrated back to passenger cars. Now, Force and Ford are reversing that equation.

Force said Ford is able to spend a lot more money on safety research than he or the NHRA could.

Ford engineers have installed the restraints control module used in the 2009 F-series pickup on Force's funny cars to collect the data necessary to understand how to deploy the system in a racing environment. Clark said what Ford learns from this data could help it improve the safety of passenger vehicles, too.

But Jim Hall of 2953 Analytics LLP said the relevance to consumer applications is limited.

"There is a clear benefit to using these technologies in motorsports," he said. "The benefit to consumers is less clear. The crashes that occur in racing are so much more severe than those that happen on the road."

Force has more reason than ever to become a safety advocate: Daughter Ashley Force-Hood and son-in-law Robert Hight are both racing for his team.

Gettelfinger led UAW into new
era that redefined union

Daniel Howes
June 11, 2010

Ron Gettelfinger won't soon forget Election Day 2008 because that's when he learned the most important company to the United Auto Workers' survival was broke.

"Steve Girsky was the guy that told me," the UAW president said in an interview this week at Solidarity House, just days before his scheduled retirement after eight years atop the union. "Set right here in this lobby ... and he said: 'I told my wife, remember this day, this is the day we learned General Motors was in bankruptcy.' " Or headed there, to be exact.

But it was Gettelfinger's job to lead the union through its toughest times since the bellwether strikes of the 1930s, this 21st-century confluence of accumulated bad habits, unprecedented economic events and political change that will make the Kentucky native the most consequential UAW president since Walter Reuther.

"We made calls to banks, we did different things," Gettelfinger said. "But, yes, November the fourth of 2008, right here in this lobby, because at the time I was leaning very heavily on Girsky" -- the former Wall Street analyst turned corporate adviser whom the UAW appointed to the General Motors Co. board on his way to becoming vice chairman.

To hear Gettelfinger tell it, modestly, he leaned on lots of people over his two terms as president: Girsky, who corroborates the Election Day exchange; UAW staffers, local presidents and bargaining committee members; company CEOs and chairmen, starting with Ford Motor Co.'s Bill Ford Jr., with each needing a partner to navigate the most dangerous times in generations.

"He never saw it as one side winning and the other side losing," Bill Ford said, calling Gettelfinger "exceptionally bright" and "very principled." He added: "There have been a lot of fundamental shifts ... in the last several years and the labor agreement is one of those fundamental shifts."

Gettelfinger parries the praise: "It's not me, it's all of us. We did the absolute best that we possibly could, and I do believe that the economy is slowly rebounding. The industry is on very solid footing."

More so, certainly. Yet the automakers employ tens of thousands fewer. Market shares, save for Ford, are smaller. The membership of the UAW -- 355,000 at the end of last year -- is at its lowest point since the end of World War II. The federal government controls GM and Chrysler Group LLC in exchange for billions in taxpayer dollars to keep the companies and the union afloat.

Bailouts shape legacy

The bailouts, likely to define the Detroit industry for years to come, rescued more than two automakers from collapse. Twin bankruptcies and the workouts that followed averted mortal wounds to Gettelfinger's UAW, a legacy of his that will endure even as it drives heated debate.

To critics, the ever-escalating demands of successive UAW contracts, the targeted strikes that interrupted the supplies of cars and parts to customers and the inability of the union to adapt to competitive threats from foreign rivals in the United States helped push Detroit to the brink of extinction.

Union members received a slight wage premium over counterparts at Toyota in Kentucky or Honda in Ohio. Their benefits were better, their pensions richer and all of it contributed to the financial stranglehold on Detroit's automakers. And when seismic economic events threatened it all, a union-friendly president armed with taxpayer money came to the rescue.

The critics are right -- to a point.

The union's record under Gettelfinger isn't one of recalcitrance and confrontation (notwithstanding prominent strikes against GM in Lansing and American Axle & Manufacturing Holdings Inc. in Detroit). It's one of aggressive, and increasingly desperate, concessions to help Detroit's automakers confront brutal reality.

"We were at the table in '05," Gettelfinger said. "We went back in '06. We were in negotiations in '07. We went back in and made changes in '08. And we went in twice in '09 to each one of them. So that's a lot of movement on the part of the union."

He's right, too. Labor costs for Detroit's automakers are dramatically lower today. New hires will be paid roughly half what the veterans now get. Defined-benefit pensions will be replaced with defined-contribution 401(k) plans. Active members pay more for their health care, and so do the legions of retirees.

Said John Casesa, a longtime Wall Street analyst and managing partner of Casesa & Co.: "Ron correctly sensed that Detroit would reach an inflection point during his term as president -- that the money would run out -- and so he was prepared enough to save the UAW when the crisis came."

Saving jobs drives contract

But the UAW, like the automakers, is being eviscerated to do it. By arguably the most crucial measure any union can muster -- dues-paying members -- the downward arc of the UAW's decline accelerated during Gettelfinger's tenure.

In 2001, the UAW reported 701,818 members in filings with the Labor Department. At the end of last year, which claimed 76,000 members, the union said its membership stood at 355,151 -- a decline of 49.4 percent in eight years. Membership peaked in 1979 at 1.5 million.

The union president doesn't flinch with his response: "The best contract in the world doesn't mean anything if you don't have a job."

Gettelfinger skeptics inside the UAW "can be critical of this decision or that decision, but we're still here," said Mike Green, president of UAW Local 652 in Lansing. "The fact is we're still here because of Ron Gettelfinger. We live to fight another day. The outcome could have been much worse."

Unquestionably. In late 2008 and into '09, sentiment ran decidedly against Detroit's automakers, the UAW and pouring more money -- any money -- into the industry's capital-destroying maw. But for the intervention of Team Obama, a domino-like collapse into liquidation appeared likely.

Now? There's hope and a path back. As he prepares to pass the gavel to Vice President Bob King -- 45 years and six months to the day he hired into Ford and joined the union in 1964 -- Gettelfinger sounds optimistic.

Sergio Marchionne is "the salvation for Chrysler" and will make "that company a success." GM's Ed Whitacre is "very respectful" and "GM is coming on strong." Bill Ford is a singular leader who showed the courage to step down and woo CEO Alan Mulally from Boeing, "a stroke of genius."

Gettelfinger, says the Chrysler and Fiat SpA CEO Marchionne, "wants to fix the situation, permanently." He's not the only one.

CAW CONTACT
Volume 40, No. 22
June 11, 2010

CAW Launches Groundbreaking Study Tracking Laid Off Workers

The CAW has unveiled a study tracking laid off workers in three different cities across southern Ontario that highlights how incredibly difficult it remains to find work in the current economy.

The study, which is the first of its kind in the province, tracks a random sample of workers at the Collins and Aikman auto parts plant in Toronto, Chrysler Canada in Brampton and Kitchener Frame in Kitchener, many of whom lost their jobs only months prior to the official beginning of the recession.

The study was written by Sam Vrankulj of McMaster University and focuses on the experience of manufacturing workers struggling with plant closures and lost jobs. It examines the various challenges in finding new employment and retraining; the impacts on workers’ health and well being and the role of action centres in providing critical supports.

CAW President Ken Lewenza said the study shows that “Bay Street and Main Street are worlds apart.” He said it underlines how workers hard hit by the financial crisis are being left behind.

Lewenza emphasized the unemployed still need more government income supports to ensure they get training and education that will lead to solid job opportunities.

“Laid off workers are too often left to fend for themselves. This has to be one of the worst times to be unemployed since the Great Depression,” Lewenza said. Since 2002 more than 550,000 manufacturing jobs have been lost in Canada.

Here are some key findings from the joint study by the CAW and McMaster:

- the labour market remains very tough. Only 24% of the participants were working at the time of the survey. Of this group, approximately 70% were employed in part-time, temporary or more precarious forms of work;

- when workers get adequate income and tuition support they take advantage of retraining opportunities after job loss. Otherwise, the financial obstacles are too great. The vast majority of the 260 study participants who enrolled for upgrading or retraining identified the level of income support and the cost of tuition as the most important factors enabling that enrollment;

- workers report high levels of satisfaction with the unique services provided by action centres and peer helpers;

- more targeted supports are needed to address the multiple obstacles faced by laid off workers who are older, women, immigrants or who lack strong literacy skills.

The study was initiated by CAW with funding approved in the adjustment contract between CAW, Chrysler Canada and the Ministry of Training, Colleges and Universities.

Action Centres offer a wide range of formal and informal supports to meet the needs of laid off workers including job search, retraining, financial, personal and social needs. To read the full report, go to: http://www.caw.ca/en/8996.htm

CAW Urges Harper to Condemn Attack on Aid Ships

CAW President Ken Lewenza is urging the federal government of Canada to condemn the recent attack on a flotilla intending to bring humanitarian aid and supplies to the people of Gaza.

The following is an excerpt from a June 3 letter from Lewenza to Prime Minister Stephen Harper:

"The nearly 700 people on board the aid ships included Members of Parliament from a number of nations, UN staff, human rights and trade union activists, journalists, writers and a Nobel Peace Prize winner. They carried 10,000 tons of humanitarian and basic supplies for the peoples of Gaza; temporary shelters, equipment for children, construction materials, medical equipment, medicines and school supplies,

The international trade union movement has denounced Israel's blockade of Gaza and called on governments everywhere to support a two state solution. Unions around the world, including the CAW, are committed to the work we do with Israeli and Palestinian workers in efforts to build peace and forge alliances.

We urge you to condemn the attack on these ships in international waters that were bringing much needed humanitarian aid and supplies to the people of Gaza - an attack that resulted in the loss of innocent lives. We also urge you to call for a full, open and independent inquiry to establish what exactly occurred and to bring those in violation of international law to justice."

A full copy of the letter can be downloaded here: http://www.caw.ca/en/8992.htm

Women Leaders Demand NDP Vote to Keep Gun Registry

More than 630 women leaders from a variety of organizations, including the CAW, across the country have issued a joint appeal to NDP leader Jack Layton demanding that his party vote against Bill C-391, which would abolish the national long gun registry.

The following is an excerpt from the June 4 letter:

The Harper Conservatives have launched an attack on the progressive foundations of our country. There are no hidden agendas. From day one, this government has attacked the very foundations of equality and well-being. They are not nation builders but thrive on the politics of division and fear.

We should not abet them in their agenda.

It began with the slashing of $4 billion in funding for child care and early learning. Then came the elimination of the Court Challenges Program, the attack on pay equity, and the cutbacks and narrowed mandate for Status of Women Canada. Canada’s reputation as a consensus-builder and progressive force on the world stage has also been greatly diminished under the Harper regime and they continue to undermine efforts to reduce the impact of climate change on our planet.

Every step, every victory, has emboldened the Conservative right. Now they have their sights set on the gun registry and a woman’s right to choose.

The Bill could go for third and final reading in the House of Commons as early as June 16, where MPs will be called on to vote for or against the Bill. The CAW is urging members to get in touch with NDP leader Jack Layton and NDP MPs who voted in favour of Bill C-391. To find out how, please visit: http://www.caw.ca/en/8182.htm
To read the full letter, please visit: http://www.caw.ca/en/9005.htm

CAW Calls for Extension of UI Pilot Projects and Benefits

Over 90 delegates from CAW locals across Canada participated in this year’s Unemployment Insurance Conference, May 28 -30 at the CAW Family Education Centre in Port Elgin, Ontario. 

Delegates took part in workshops and plenary sessions, including presentations by Service Canada, Trish Blackstaffe, Employment Insurance (EI) Commissioner for Workers and national representative Angelo DiCaro on precarious work and the link with EI entitlements.  

Sharon Lupton from the London & Middlesex United Way Employment Services also played a big role in facilitating an Action Centre and Adjustment Committee workshop. The weekend concluded with a mock appeal presented by CAW Council UI Committee members.

Delegates were very disturbed to learn the Federal Government plans to eliminate their $57.2 billion cumulative debt to the EI Account. This means that a newly established EI account will start in a deficit position following the recession.

Delegates called for an extension of EI pilot projects and budget spending on extended benefits that are scheduled to end in 2010, including those for “long tenure” workers.

CAW Recognized for Child Poverty Work

The CAW was presented with the 2009 Outstanding Community Partner award by Canadian Feed the Children (CFTC) – an independent charity devoted to enhancing the well-being of children in Canada and around the world. The award was handed out at the annual CFTC donor appreciation event, held in Toronto on June 8.

The union was recognized for its ongoing humanitarian efforts in Ethiopia, where the CAW Social Justice Fund has devoted funds to support education, income generation, health, nutrition and agricultural programs.

CAW President Ken Lewenza considers the Social Justice Fund a hallmark in the union’s ongoing efforts to promote social unionism – the belief that a union’s work must focus on building solidarity, forging social ties and making positive and progressive change within communities at home and around the world.  

“It has been the commitment of CAW members to social justice that has taken our work well beyond the confines of boardrooms and bargaining tables and into the community,” Lewenza said.

“We are honoured to receive this award from Canadian Feed the Children, an organization we hold in the highest regard and join with in the battle to eradicate child poverty.”

For more information on the CAW Social Justice Fund, visit: http://www.caw.ca/en/services-departments-social-justice-fund.htm

For more information on Canadian Feed the Children, visit: www.canadianfeedthechildren.ca

CAW 2010 Retired Workers Council and Conference

The CAW Retired Workers Council and Conference will be held at the CAW Family/ Education Centre in Port Elgin, Ontario from September 5 to 10.

The registration deadline is August 15.

For more information regarding the RW Council and Conference please contact national coordinator Dean Lindsay at 1-800-268-5763, ext. 3791.

Outstanding CAW Retired Worker Award
The deadline for submitting nominations for the Outstanding CAW Retired Worker of the Year Award is June 15. This annual award is presented to a CAW retired activist, who has made a major contribution to their local union and community.

All nominations must comply with written criteria and be approved by the chairperson of the Retired Workers chapter and the local union executive board and signed by the president. The criteria and application form can be found on the CAW website at http://www.caw.ca/en/8941.htm

Contact national coordinator Dean Lindsay if you have questions concerning the award at 1-800-268-5763, ext. 3791, directly at 416-495-3791 or email deanlindsay@caw.ca.

CAW SONGWRITING CONTEST

Hey there budding songwriters and musicians!

The Canadian Auto Workers union is turning 25 this year and we want you to use your talents to write a song, commemorating this special anniversary.  Songs will be judged on the criteria below and the winners* will be invited to perform the song at the CAW Joint Council in Montreal, August 27-29, 2010.

Judging criteria:

- relevance to the CAW and its history
- diversity
- artistic quality

We encourage entrants from a diversity of backgrounds, representative of our ever-changing union.  All musicians/applicants must be CAW members or retirees.

Shortlisted entries will be uploaded to YouTube after July 1 for voting via the CAW national website. The submission deadline is July 1, 2010.

Entries should be submitted by email as mpegs or wmv files only.  Please contact Shannon Devine, Director of Communications at 1-800-268-5763 x 6544 or Shannon.devine@caw.ca with any questions.

*There will be one English winning group and one French winning group.

Good luck!

Key Events for the G8 & G20 People’s Summit in Toronto

June 18: People’s Summit 2010 Launch
Event:   Building a Movement for a Just World: Solutions and Stories from North and South
Host: People's Summit
Location: The Carlu Hotel, 44 Yonge Street - 7th floor, Toronto
Time: 7:00 pm
Contact: Marya Folinsbee, (905) 218-5131

June 19: G8 & G20 Open Forum
Event: People FirstL We Deserve Better!
Host: CLC
Location: Room 2158, Medical Sciences Building, University of Toronto,
1 King's College Circle, Toronto
Time: 10 am - 4:30 pm
Pre-registration: Ontario Regional Office 416-441-3710

Description: This open forum will explore the global financial and economic crisis and highlight Decent Work and the ILO Jobs Pact as the pillars of labour’s response.

June 20: G8 & G20 Conference on Mexico
Event: Building Solidarity With the Democratic Labour Movement in Mexico
Host: CEP, USW & CAW with ICEM, IMF & UNI
Location: Chestnut Residence Hotel - 2nd Floor, 89 Chestnut Road – right behind Toronto City Hall
Time: 9:00 am – 4:00 pm (Registration @ 8:30 am)

Description: This conference will bring together workers from Mexico and from other countries to build awareness on the assault on the independent labour movement by the Calderon government in Mexico and to develop an international solidarity campaign in response.  

June 25: Shout Out for Global Justice
Event: Challenge the G20 and demand Trade, Water and Climate Change    
Host: Council of Canadians and CEP, CAW, CUPE, SFL, OSSTF, CUPW, rabble.ca, 
PSAC & NUPGE
Location: Massey Hall – 178 Victoria Street Toronto ON
Time: 7:00 pm Tickets on sale at Massey Hall ($14).
For further information call 1-800-387-7177 ext. 239 or visit www.canadians.org

June 26: G8 & G20 Public Rally
Event: People First: We Deserve Better Rally & March!
Location: Queen's Park, Toronto
Time: 1 pm

Ford's Flex, Fusion, Lincoln MKZ and MKT, Mercury Milan earn top safety award

June 10, 2010
By BRENT SNAVELY
FREE PRESS BUSINESS WRITER

Ford said today that five more of its 2010 models have earned top safety pick awards from the Insurance Institute for Highway Safety.

The models include the Ford Flex, Ford Fusion, Lincoln MKZ, Lincoln MKT and Mercury Milan. Ford said all of those models previously earned top possible scores for occupant protection in IIHS’s front, side and rear tests, but had to pass IIHS’s new rollover test to maintain the rating.

Vehicles also must offer electronic stability control to be eligible for a top safety pick.

The Insurance Institute also said today it is giving its top safety pick award to the 2010 Audi A4 and Q5, Hyundai Tucson and Volkswagen Jetta SportWagen.

Ford now has 11 IIHS top safety pick ratings for 2010 model vehicles if Volvo, a brand Ford is in the process of selling, is included. That gives Ford more than any other manufacturer, the institute said.

IIHS is an independent, nonprofit, scientific and educational organization dedicated to reducing the losses — deaths, injuries and property damage — from crashes on the nation's highways.

Chrysler to build luxury
car in Brampton

Brampton Guardian
June 10, 2010

Chrysler will build a Lancia flagship luxury model at its Brampton assembly plant in about 18 months, according to an industry research and forecasting agency.

U.S,-based AutomotiveCompass says in a global product program update that the company will start assembling the niche Lancia sedan to replace the Thesis nameplate at the local plant in the first week of January 2012.

Doug Shepard, forecasting manager for AutomotiveCompass, said Wednesday the plant will probably target annual output of 10,000 to 12,000 Lancia models, which would represent only a small fraction of the plant’s capacity of about 300,000.
“It will be something like the icing on the cake for that plant,” he said.

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

Shepard said the Lancia will be similar to the new generation of the luxury 300 model which starts production late this year. The models will be built on the same LX platform or chassis

“There will be cosmetic changes like the distinctive Lancia grill but otherwise nothing major,” he added.

A Chrysler spokesperson could not be reached for comment but the company normally does not announce a model until it sets a production launch date.
Fiat, which gained operational control over struggling Chrysler last year, has gradually clarified its product strategy for the next five years but it has not formally identified any new products for it two major Canadian assembly plants in Windsor and Brampton.

Sergio Marchionne, Fiat’s chief executive officer, initially hinted the companies would assemble a sports car from the iconic Alfa Romeo brand in Brampton.
Without making any commitments, Marchionne, who was born in Italy and raised in Toronto, said here last month that the automaker has interest in the “platform for the 300” and what it could do for Fiat.

Shepard said clarity in Fiat’s corporate strategy in recent months and information from sources in the parts supply industry indicates the company will make the Lancia in Brampton. Production of the Lancia model will continue until the middle of 2018, according to Automotive Compass.

Lancia, which is Fiat’s luxury division, currently builds all its models at its Mirafiori plant in Italy. The Thesis stopped production in March last year but the partnership between Fiat and Chrysler created an opportunity for a revival, Shepard noted.
Meanwhile, an Alfa Romeo car may still emerge in some form in Brampton. Fiat released information at an investor day in Italy in April that suggested it could build an Alfa Romeo convertible off the Challenger sports car.

Mexico's low labor costs draw Detroit 3 investment

Thomas Black / Bloomberg News
June 10, 2010

Mexico's share of North American auto production may rise at a quicker pace as General Motors Co., Ford Motor Co. and Chrysler Group LLC seek out workers making less than 10 percent of what their U.S. counterparts earn.

The lower labor costs may help the U.S. companies build smaller cars profitably amid demand for fuel-efficient vehicles in the wake of last year's recession. "Mexico's gains will come at the expense of workers in the U.S. and Canada," said Dennis DesRosiers, president of DesRosiers Automotive Consulting Inc.

"There is going to be more capacity put into North America and Mexico is going to get more than its fair share."

Moves to Mexico may accelerate when Chrysler and GM reduce some of the political pressure they face by repaying government bailout money, said Michael Robinet, vice president of global forecasting for CSM Worldwide in Northville.

DesRosiers says Mexico's share of North American auto production will rise to 19 percent over the next decade from an average 12 percent from 2000 to 2009.

Over the same period, the U.S. will lose 7 percentage points to 65 percent of the market and Canada's share will hold at 16 percent, he said.

GM workers in Mexico earn wages and benefits of $26.40 a day on average, or less than $4 an hour, said Tereso Medina, head of the union for GM's 5,000 workers in Saltillo, a city that makes one in four Mexican autos. Ford workers in the U.S. earn about $55 an hour with benefits, compared with $50 an hour for Toyota Motor Corp.'s U.S. workers, said Lewis Booth, Ford's chief financial officer.

In addition to labor costs, automakers are attracted to Mexico because of the North American Free Trade Agreement and the country's proximity to the U.S., Robinet said. U.S. and Canadian unions have made concessions to bring costs at older factories in line with Toyota's and Honda Motor Co.'s U.S. plants.

Even with the UAW concessions, Mexico remains attractive. Mexico stands to benefit from more stringent U.S. fuel- efficiency requirements because it's more profitable to make small cars where labor costs are lower, Robinet said.

Chrysler announced in February it's spending $550 million to retool its factory in Toluca to assemble the Fiat 500 model.

Last month, Ford reopened an assembly plant in Cuautitlan to build 2011 Fiestas. The factory will generate 2,000 jobs and is part of $3 billion in investments announced since 2008. In the U.S., Ford has closed four assembly plants since 2006 and plans to close four more facilities by the end of 2011.

Mexico was responsible for 14.2 percent of Ford's U.S.-Mexican car production last year, and 16 percent in 2008, compared with 11.8 percent in 2006, according to company data.

For every dollar Ford invested in Mexico during the past five years, the company spent $7 in the U.S., said James Tetreault, vice president for North American manufacturing. Ford's two Mexican assembly plants have operated for more than 30 years.

"In North America, it's all about utilizing our existing footprint," Tetreault said. "It's not like we're building greenfield plants and moving production to Mexico."

U.S. car and light truck production declined every year, to 8.45 million in 2008 from 11.5 million in 2005, according to Wards Automotive Yearbook. In Mexico, output rose every year to 2.08 million in 2008 from 1.61 million in 2005.

Production fell in both countries last year, by 28 percent to 1.5 million units in Mexico and 34 percent to 5.56 million in the U.S.

This year, U.S. production in April rose 40 percent from a year earlier to an annualized rate of 7.05 million vehicles. Mexico's output jumped 77 percent and is on pace to top 2008, according to the Mexican Automobile Industry Association.

GM has announced investments of $3.67 billion in Mexico since November 2007, including a new assembly plant in San Luis Potosi.

The company has closed five U.S.-based assembly plants and put three more on standby since June 2005.

A significant portion of Chrysler's production of the Fiat 500 will be sold in South America, said Jodi Tinson, a spokeswoman.

Can Collection Team is Growing

On Friday June 4th at 1:30PM at the Brampton Ford Distribution Facility, 8000 Dixie Rd., Dave Champagne, President of CAW Local 584, will announce a partnership with James Young, JEY Enterprises, to help in his quest to collect 150 million aluminum beverage cans. The money received from recycling the cans will help fund the building of houses by Habitat for Humanity Brampton.

To kick off the project Mr. Champagne will present of thousands of aluminum cans collected by members of CAW Local 584 to Mr. Young and Thomas Fischer, Executive Director of Habitat for Humanity Brampton.

CAW Local 584 from the Ford Facility joins Rogers Communication, Brampton Brick, twenty other local firms, four schools and over 125 local residents supporting the project. Anyone in Brampton can contact Mr. Young to be a part of the project via either of the following 877-330-9077 or thecanman@cans4houses.org .

To date James - the Can Man - Young has collected and sold 3,848 pounds, or 134,000 cans, which is a small drop in the bucket considering the total number of cans which could be recycled for a cause. However, with the funds generated so far one of the following items could be acquired: 2 hot water tanks, shingles, flooring, 10 doors, or 20 windows.

Habitat for Humanity's vision is a world where everyone has a safe and decent place to live, and its mission is to mobilize volunteers and community partners in building affordable housing and promoting homeownership as a means to breaking the cycle of poverty.

Ford to sync vehicles
with Google Maps

June 9, 2010
By BRENT SNAVELY
FREE PRESS BUSINESS WRITER

Ford said today it is adding a Google Maps function to its Sync in-car communications technology.

Ford said the function will allow drivers to send maps and directions from a computer or a smart phone to their vehicle and will be available by July 1 on all 2010 and 2011 models equipped with Sync.

“With send to Sync, you can map a destination at home, at work – wherever you have connectivity – and when you get to your car, it already knows where you want to go,” said Doug VanDagens, Ford’s director of connected services solutions.

Ford previously announced the same feature for MapQuest, which will launch later this year.

Ford’s Sync system, introduced in 2007, has put the Dearborn automaker at the forefront of technology for the car but Ford is under pressure from other automakers, including General Motors.

Last month GM said Google’s Android operating system for cell phones would be linked with GM’s OnStar service in the upcoming Chevrolet Volt electric car.

12 GM execs get $13M in stock

Top managers share awards that depend on company's success

Robert Snell / The Detroit News
June 9, 2010

A dozen top General Motors Co. executives have been awarded company stock valued at a total of about $13 million as part of their overall pay packages, the automaker disclosed Monday.

The awards, revealed in several filings with the U.S. Securities and Exchange Commission, paint a fuller picture of executive compensation at GM, which received about $50 billion in federal bailout funds and went through bankruptcy last year.

The filings show several top executives received a mix of salary stock and restricted stock tied to the company's performance. The stock does not have an exercise price, however, because the automaker is technically a private company with the government as majority owner. GM is preparing for an initial public offering of stock, perhaps later this year.

The stock awards are not excessive, said Rebecca Lindland, director of auto industry research for IHS Global Insight.

"It's so dependent on the success of the company, so it's not as if they are getting rewarded prior to the company turning itself around," she said. "They've got to perform in order to be paid."

Cash is only one part of the executives' compensation. They also receive restricted stock -- which vests after three years and is tied to the company's performance -- and salary stock, which is payable in three annual installments.

Because GM has not issued shares of company stock, the values of the shares were determined by an independent third party. Shares granted before Dec. 31, 2009, were worth $38.87 each, while shares granted after that date were worth $53.98, according to an April SEC filing.

But the values are only a "snapshot in time" and subject to change, GM spokeswoman Renee Rashid-Merem said Monday.

The $13 million in stock split among a dozen executives is less than the $14.1 million in total compensation former CEO Rick Wagoner earned in 2007.

Cash paid to senior executives was set earlier this year by Kenneth Feinberg, the Treasury Department's special master on pay for firms that got large bailouts from the $700 billion Troubled Asset Relief Program. His guidelines resulted in fewer executives being paid cash salaries above $500,000 this year.

GM has repaid $6.7 billion in federal loans, but downplayed in a controversial commercial that taxpayers are still on the hook for $43 billion in aid that was swapped for a 61 percent majority stake in GM.

The government cannot start cashing in its $43 billion investment in GM until the automaker launches an IPO.

Earlier this year, GM disclosed pay packages for certain top officials. In March, GM said Girsky, who also sits on the automaker's board as a representative of the United Auto Workers, would receive a $5.4 million package, including a $500,000 annual salary and $4.5 million in stock spread out over time.

And in February, GM said Chairman and Chief Executive Ed Whitacre Jr. would get a $9 million pay package.

Business Reporter
Toronto Star

General Motors Co. is recalling 1.5 million cars worldwide – nearly 99,000 of them in Canada – because a heated windshield washer system could cause a fire.

GM is pulling the systems out of the vehicles in which they’ve been installed and not replacing them. Instead, car owners or lessees will get a $100 cash refund.

The system had caused problems before. It had triggered a recall in August 2008 because a short circuit on a printed circuit board could overheat a ground wire. Dealers installed a new fuse to fix the problem. A company release didn’t say whether the earlier problem had caused any fires.

A second problem cropped up in June 2009, however, when the company heard that one of the systems had started to smoke. Since then, GM has learned of five fires.

The supplier that made the heated washer fluid system is no longer in the business, so the company decided to remove the defective system from its vehicles.

GM says it knows of no crashes or injuries resulting from the faulty system.

The company will send letters to owners or lessees. Drivers can also contact their dealership before they get a letter.

Models included in the recall are the 2006-2009 model year Buick Lucerne; Cadillac DTS; Hummer H2; 2008-2009 model year Buick Enclave; Cadillac CTS; 2007-2009 model year Cadillac Escalade, Escalade ESV, Escalade EXT; Chevrolet Avalanche, Silverado, Suburban, Tahoe; GMC Acadia, Sierra, Yukon, Yukon XL; Saturn Outlook; and 2009 model year Chevrolet Traverse.

Chrysler recalls nearly
700K Jeeps, minivans

Repairs needed for brake problems in 2006-10
Wranglers, wiring problems in some minivans

Tom Krisher / Associated Press
June 8, 2010

Chrysler is recalling almost 600,000 minivans and Jeep Wranglers in the United States and another 100,000 elsewhere because of brake or wiring problems that could create safety issues, the company and federal regulators said Monday.

Chrysler said it is recalling 288,968 Jeep Wranglers from the 2006 through 2010 model years due to a potential brake fluid leak.

It also is recalling 284,831 Dodge Grand Caravan and Chrysler Town & Country minivans from the 2008 and 2009 model years because a wiring problem can cause a fire inside the sliding doors.

Another 76,430 Wranglers and 34,143 minivans are being recalled in Canada, Mexico and other international markets, Chrysler said.

Neither problem has caused any crashes or injuries, Chrysler Group LLC said.

It was the second notable recall in the past week for Chrysler. The company recalled nearly 35,000 Dodge Calibers and a limited number of Jeep Compasses last week to fix a potential problem with sticky gas pedals, the same issue that has afflicted millions of Toyotas.

In the latest recall, the front inner fender liners on the Jeeps can rub against the brake fluid tubes and cause a leak. The National Highway Traffic Safety Administration said the leak could lead to a partial brake loss.

The minivans can have improperly placed wires that can come into contact with sliding door hinges that could cut through the insulation, Chrysler and NHTSA said.

Chrysler spokesman Nick Cappa said the defect could lead to a fire inside the minivan door "in rare instances."

Chrysler will notify owners and dealers about the repairs, which will be made free of charge. The recall is expected to start later this month.

The Wranglers affected by the recall were made from May 15, 2006 through Aug. 9, 2010, according to NHTSA. The minivans were made from February 2007 through September 2007.

Buzz Hargrove: 'Globalization
is largely a fraud'

Globe & Mail
June 7, 2010

Buzz Hargrove’s Laying It on the Line: Driving a Hard Bargain in Challenging Times is one of five books nominated for Canada’s 2010 National Business Book Award. The award was established in 1985 to recognize the outstanding talent in Canadian business writing. The $20,000 prize, sponsored by PricewaterhouseCoopers, BMO Financial Group and media partner The Globe and Mail, will be awarded on June 9.

Excerpt from Laying it on the Line © 2009 by Buzz Hargrove. Published by HarperCollins Publishers Ltd. All rights reserved. Reproduced by arrangement with the Publisher.

Some people may charge me with protectionism, claiming that I want to erect trading walls between countries. Well, that’s another crock. Canada has built its wealth on trade—more, perhaps, than any other comparable nation. We’re much more of a trading country than the United States, for example, and our position as a trader makes us aware and sensitive to the importance of trade. We expect that countries who buy our goods, products and services will want to sell us some of their goods, products and services as well. Hey, that’s a good idea. Just don’t call it “free trade” when I’m around.

The terms “free trade” and “globalization” are tossed around as though they were carved into stone tablets along with the Ten Commandments that Moses carried down the mountain. Challenging their merit or even their definitions will start name-calling and finger-pointing from business executives and right-wing commentators. The fact is that the world doesn’t need more free trade and it sure as hell doesn’t need more globalization based on free trade. What it needs is fair, or managed, trade—agreements that prevent one country from conquering another country’s markets while shutting its doors to that same country’s exports. If you believe this doesn’t happen, you must also believe that a tooth under your pillow turns into a loonie overnight. Trade can be beneficial for both parties, but market forces and corporate decision-making will never guarantee that mutual outcome. Only active management of trade flows, to ensure that trade is fair, can ensure that everyone benefits from trade. Ironically, that is exactly the sort of intervention that the free trade agreements try to prohibit.

Trade unionists have railed against globalization for years, refusing to buy into promises of some great golden future when, to use another cliché from that crowd, “all playing fields would be level.” The neo-cons refused to listen to our concerns. But as I write this, in early 2009, we no longer have to shout to be heard, because the message has been delivered in the form of the biggest global financial crisis in nearly 80 years.

We’ve had credit crises in the past, but for the most part they were limited to one country that controlled its own internal banking rules. If a bank in the United States failed, almost nobody in Canada or anywhere else in the world felt a ripple. But look at what happened with the sub-prime mortgage fiasco in the U.S. The gang who lectured us about the inevitability of globalization applied the same rule to securities, and a bunch of financial shysters peddling worthless paper brought down banks all over the world. It was so bad that Iceland, a country hardly known for its risky investment style, practically declared national bankruptcy. Iceland!

All those pious lectures about the virtues of globalization are painfully ironic today, with the global economy mired in crisis. Indeed, now the executives of Lehman Brothers, Morgan Stanley, AIG and various U.S. banks are as unemployed as CAW members at the John Deere plant in Welland, the Freightliner plant in St. Thomas, the Navistar plant in Chatham, and dozens of other locations across Canada. Of course, most of those executives walked away from their jobs with multimillion-dollar parachutes. Most of the workers walked away with only memories. Both were victims of globalization, although it’s difficult to describe Richard S. Fuld, CEO of Lehman Brothers, as a “victim.” According to Forbes magazine (April 30, 2008), Fuld was paid $72 million in 2008, bringing his total compensation for the five-year period from 2003 to 2008 to over $350 million. Do not hold a tag day for Richard S. Fuld.

We saw the same thing happen to the big-money people around the world in 2008 that had been happening to CAW members for the past decade. I take no pleasure in watching people for whom I have little sympathy fall on their collective asses. (In the case of Fuld and people like him, at least the fall was well cushioned.) And I’m not the kind of guy to scream, “I told you so!” either. But I honestly hope that, if nothing else comes out of the sub-prime disaster of 2008, it will be a realization that globalization is largely a fraud, as are all the claims for the benefits of “free trade.”

The members of the CAW didn’t need a world financial crisis to prove the truth of this idea. We’ve been watching this shell game for years. Nobody, I guess, gave a damn when working people were hit by the effects of globalization. It took a few executives selling off their yachts before people noticed.

I think it’s interesting and outrageous that we needed the loss of hundreds of billions of dollars spent on lousy investments based on American sub-prime mortgages to draw attention to the same kind of thinking that caused the loss of hundreds of thousands of manufacturing jobs through free trade. The CAW and other unions have been pointing to the fallout of globalization for decades. In response, we were told that protectionism was dead and the world was evolving into a different kind of economy. The hell it was. It was evolving into a form of social Darwinism that said people will fall by the wayside, through no fault of their own, and families will slide into poverty without well-paying jobs.

Buzz Hargrove reads an excerpt from Laying it on the Line (Click here to download) (Right click above link and save target as)

Inside Sudbury's
bitter Vale strike

June 6, 2010
Linda Diebel - Toronto Star

COPPER CLIFF, ONT.—My grandmother, Lillian Rose, was the sweetest person I’ve ever known. She gave up more than youth and beauty to leave England and come with her husband to the nickel mines of Canada’s Precambrian Shield. The Sudbury region, some 400 kilometres north of Toronto, is an unforgiving place for a fragile English rose.

During the last 40 years of her life, she had a disease that turned her once-pale skin red and left it blistered and scabbed. The constant flaking embarrassed her and, on bad days, the pain sent her to bed. My earliest memory — and I was no more than 18 months — was of being on her bed on Jones Lane in Copper Cliff, understanding even then I had to be gentle.

Doctors couldn’t help because they believed her allergic to the air she breathed, a soup of industrial pollutants. Sometimes the sulphur was so thick it seared the throat.

Move away, they said, and your skin will clear up. But they didn’t talk about that publicly. My grandfather Reg was an electrician at the Copper Cliff smelter and his job, and the livelihoods of the physicians themselves, depended on what was then King Inco, the world’s biggest producer of nickel.

Lately, Lillian Rose has been on my mind. Last Sunday, I was preparing to fly north to write about the 11-month-long strike against Inco, now called Vale, by 3,000 members of the United Steelworkers Local 6500. The pending trip evoked memories, and I found myself staring at a faded photo of my grandmother and me.

Still, I had no intention of writing about her.

My story would be about the culture of a company town from the perspective of generations of men who went down the mines, or worked in the smelter or refinery, at what used to be Inco. That seemed the best place to start, given that Inco’s owner since 2006 — Companhia Vale do Rio Doce — insists the working culture of its new operations must change.

By that, the Brazilian behemoth that bought Inco for $19.4 billion, creating Vale Inco (now simply Vale), means lower costs and higher production. Words of praise for Sudbury and its workers that flowed so freely after the enormous sale have morphed into terse complaints about a “sense of entitlement” among miners and veiled threats the whole operation could collapse.

A strategy document prepared by a Vale working group in Toronto last June, and leaked early this year to the Sudbury Star, brims with MBA-speak, upbeat in tone, deadly in intent. It warns: “Sudbury does not have the capacity to change organically. It will have to be done by us.”

Cory McPhee, Vale’s corporate affairs vice-president, says the language of a mere planning workshop has been misinterpreted. But people here are afraid. Although the two sides began bargaining with provincial mediator Kevin Burkett in Toronto on Friday and are scheduled to talk until Monday, the future remains wildly uncertain.

Worst-case scenario? The death of a company town and the end of the union as miners have known it. With their top bosses in Brazil, they worry about a loss of control over their future — as if they ever had control facing the swagger of the International Nickel Co., with its American executives and wealth pulled from Sudbury ground and poured into often ill-conceived global ventures.

“The Arrogance of Inco” is the headline on a brilliant 1979 story in Canadian Business magazine by the late Val Ross. The subhead elaborates: “ ‘If you don’t like it, take it or leave it,’ rumbled a company founder in 1886. That has been Inco’s attitude ever since — to customers, to labour unions.”

Could Vale be worse than that? Yes, says miner Michael O’Brien, 29, a proud Copper Cliff boy who has the smelter and the iconic Superstack tattooed on his arm. “This company’s so huge,” he says, of Vale. “To me, they’re nameless, faceless, unknown. The worst of globalization has finally hit us.”

Clearly, there’s a failure to communicate on a massive scale.

The Steelworkers are suspicious of the Brazilian owners and fear they want to crush the union and turn once mighty mining operations into a turnstile for temporary workers. The company counters with cries of foreign-bashing by the union and allegations of vandalism and dangerous tactics on the picket line.

There was no room in this story for Lillian Rose.

And yet, by a twist of fate on a muggy Monday, here I am, walking up the steps of the house where I used to live in Copper Cliff, a few kilometres west of Sudbury off Highway 17.

It’s on Power Street, a stone’s throw from my grandparents’ former house on Jones. It sits in the shadow of the Superstack and the Copper Cliff smelter. There’s a creek in the back that flows with runoff from ore processing at the nearby Clarabelle mill.

It’s the house I most associate with my grandmother in her last few years. My family moved in when I was finishing high school. After my first year of university, I worked a summer in the Inco offices, on the other side of the tracks.

I’m nonplussed.

A few days earlier, I’d called Local 6500 president John Fera from Toronto and asked him to hook me up with a striker who represents at least two generations in the mines. He had more than 18,000 people (3,000 strikers and 15,000 pensioners) to choose from and picked the Pattersons.

Striking miner Alex, 39, brought me to Copper Cliff to meet his retired father, Gary, 61. Alex looked at me strangely when I blurted out the address as we were pulling into the driveway. Almost 25 years ago, Gary Patterson moved into this house with his family as mine moved out.

What were the odds? It felt like a sign. Lillian Rose had decided how this story would be written.

She, who never put a foot in a mine, sacrificed as much as anyone to live here. She made me realize that what wives and mothers (apart from women who worked for Inco) have given to the mining company makes the story about more than the sweat of miners. It’s about the bargain whole families make with the employer in a company town, union members and managers alike. (With family members in both camps, I got a fulsome perspective.)

My grandmother would never have dreamed of leaving. She loved her husband and family, and without even thinking about it, she put her needs last. She fought to stay cheerful and, from her bed, knit glorious scarves the colour of the sky, cardigans with white angora kittens and a pair of red mittens on a string, stitched with the faces of two girls with black button eyes, red felt mouths and pigtails of yellow yarn.

She made me see that I too am of the rock cuts and scrub bush, cold lakes and loon calls of northern Ontario. I understand why people here feel alienated from the rest of a country, especially the south, which seems oblivious to their fate.

People here believe they have a deal with Vale and the other big local nickel miner, Xstrata, once Falconbridge and now based in Switzerland. It’s hard work in return for good wages, benefits and pensions. Hourly pay is $28.14 for miners, slightly more for mechanics and electricians, but in boom times, nickel bonuses can be very lucrative.

Few dwell on the downside of that bargain, but they all know the risks, including injury or death on the job and pollution-related health problems for their families.

Gary Patterson, tall, burly and nicknamed “Red,” sits in his sunroom and recounts the years in the mines before he ran for the union and, over 21 years, worked up to the presidency. He overcame the skin cancer he thinks he got from sun exposure at the Clarabelle open pit.

On his first day as Steelworkers’ vice-president in 1987, four men died when a load of ore fell on them as they inspected the shaft at Levack Mine. It set a tone. Another year 12 died. “We worked hard alongside Inco to improve things,” says Patterson. “It’s better now, but still risky. It’s been a culture of blood.”

“Big Al” Patterson, a carbon copy of his father, remembers his first day going underground. His manager told him: “We kill somebody every nine months. So work safely.”

Decade after decade, Inco was a conveyor belt, with young men arriving, putting in their 25 to 30 years or more, getting the big send-off with the watch and a photo in the Inco Triangle and, in too many cases, ending up in the obituaries a few months later, dead of lung diseases or worn-out bodies.

Every family has a story. My grandfather Reg risked his life to pull a co-worker off a high-voltage line at the Copper Cliff smelter, almost getting electrocuted in the process. Or so says the family story. He burned his arm badly in the incident, losing a thumb and forefinger and spending a year in hospital during the Depression, while his kids shot rabbits to survive. A supervisor apparently changed the accident site in his report to shield the company from blame.

Alex’s wife, Sheila, 41, talks about her concerns over her husband’s job during an early evening interview at the family home in Lively, another few miles west along Highway 17. An administrative assistant at the Occupational Health Clinic for Ontario Workers (where staffers assist local people whose disability claims have been rejected), she says she was worried all the time when Alex worked underground. She persevered in pushing her husband to get a surface job. “Some people go down breathing and come up dead.”

The guys on the South Mine line near Copper Cliff talk nonchalantly about regular blood screening, provided by the company, for nickel, arsenic, lead and other carcinogens. It’s part of that bargain for the good pay with benefits, pension and job security.

But now the men are angry, say strikes on picket lines across the city, because they think they make sacrifices and now the company wants to renege on the trade-off.

The strike began on July 13 last year after talks broke down on a number of issues — most notably Vale’s bid to change the pension plan for new hires, reduce profit-sharing, and, in the union’s view, open up the industry to temporary workers, thereby eroding job security.

But McPhee, a Sudbury native who now works for Vale in Toronto, insists the company is actually offering an improved pension plan and has no intention of undercutting the union. “What we are doing is creating a longtime future for operations in the Sudbury region — not five to 10 years but 50 years,” McPhee says. “There is no intent on our part to threaten people’s job security.”

It’s a jolt to hear men in their 20s and 30s talk about pensions, as if they’re about to totter off to a rest home. But that’s how the thinking goes in a company town, especially with Vale wanting to go to a different pension plan for new employees the union says is less generous.

Young picketers talk about their post-secondary degrees in geological engineering, chemistry, biology and physics — you name it. But they give up their specialties to go into the mines. The pull of their fathers and their fathers’ fathers is too great, as is the haunting call of the land. They fish, hunt, go to their camps, jump naked into the lake from their saunas in wintertime. They scoff at life in the Big Smoke.

Now they’re scared because they don’t believe, despite Vale’s protestations, that the Brazilian company understands the culture here. There’s a story —apocryphal perhaps — about a visiting delegation from Brazil that came to Sudbury in winter and saw all these yellow cords hanging in a parking lot. Bemused, they asked what they were, only to be told they were electrical cords to keep car batteries warm in sub-zero weather.

Gasped one visitor: “Your workers have cars?”

Such stories prompt company accusations that the union is foreign-bashing when it portrays Third World conditions being applied to Sudbury. In a public message released in March, Vale CEO Tito Martins said: “How do across-the-board wage increases, production bonuses, profit-sharing and pension improvements threaten Canada’s national heritage or quality of life?”

Martins also said it was “ironic that the USW. (United Steelworkers) — itself a foreign union — has relied so heavily on a global campaign of misinformation, racism, intolerance and xenophobia (an unreasonable fear of hatred of foreigners) to further its position in a country like Canada that prides itself as a model of multiculturalism.”

Strikes aren’t new to Sudbury, nor are raw feelings among people of just about every ethnic background who’ve had to get along, sometimes against their instincts, in the claustrophobic grip of company towns. It got so bad when the Steelworkers fought the Mine, Mill and Smelter union for members in the 1950s that fist fights would break out in parking lots.

After the Steelworkers won in 1962, they struck Inco seven times, including a 261-day walkout in 1978-79, almost bringing the community to its knees.

But this one is particularly vicious.

Vale plays by different rules, workers say, shattering the code by bringing in strikebreakers to keep some production going. Inco never did that. Many believe the company wanted the strike anyway — a premise hotly denied by Vale — because there was an overabundance of supply in the international nickel pipeline.

Gary Patterson’s judgment is harsh: “The strike will be over when Vale wants it to be over.”

Recently, Premier Dalton McGuinty said his government “strongly urges and encourages the employer not to hire replacement workers.” But how much influence does he have when his province allows scab labour?

“We’re kinda defeated, man,” says a picketer at the Clarabelle mill. His buddies regard me with disgust, then duck out with their “scab” placards behind the shack.

Outside the Copper Cliff smelter Moe Brisson, 47, with 19 years on the job, says it’s different this time. He’s married with a son, and his wife works. “What I hate about them is that I’ve always been a good worker. But it doesn’t count anymore. I don’t have the same trust. Nobody does. Young guys are moving away ... and a lot of people are suffering.”

Vale doesn’t pull punches. In a column for the Sudbury Star in February, John Pollesel, general manager for Ontario operations, said Sudbury productivity is 50 per cent lower than comparable operations by their competitors worldwide. He didn’t give examples. He accused the union of “shouting that Sudbury is the richest ore body in the world — it quite clearly isn’t, and hasn’t been for some time.”

The union maintains Vale wildly overbid on Inco. It may be the company agrees. Martins admitted in one interview that Vale didn’t exercise due diligence when it bought Inco. He explained that for the most part, the only information the company obtained was on the public record. “I’m not saying we were irresponsible in buying something we did not know, but clearly for us, some of (Inco’s) commitments, the size of those commitments, were not public.”

Strikers and their families feel betrayed by Ottawa, particularly Industry Minister Tony Clement. In April 2009, Inco announced temporary summer layoffs affecting 4,000 workers, as well as some permanent cuts. Clement called it unwelcome news, and said he would investigate. He referred to the terms of Vale’s original purchase agreement (which has remained confidential), adding the company “made legally binding commitments under the Investment Canada Act at that time that I expect to be fully respected on behalf of the workers.”

Apparently, there were to be no layoffs for three years and net benefit to Canada. By June 2009, he’d changed the tune.

“One of the things I look for is (whether) there an equality of pain around the world in these international enterprises,” Clement told reporters in Ottawa. “And judging from the shutdowns in Brazil for instance, and other parts of the world, it seems they haven’t targeted Canada or targeted Sudbury for their shutdowns. So that’s obviously something in their favour.”

He pledged to keep an “eagle eye” on Vale’s Canadian operations (workers are also on strike at Port Colborne and Voisey’s Bay in Newfoundland), but there would be no legal action.

“So is he saying as long as the company treats workers in other countries badly, it’s allowed to treat workers here that way?” Local 6500 president Fera fumes. “He’s not a politician in a Third World country. He’s in Canada.”

A Clement spokesperson ignored repeated requests for comment from the Toronto Star.

The Sudbury strikers notice the Conservative government sending cabinet ministers around the world to fight on behalf of private banks with billion-dollar profits. They notice, too, that Clement made a videotaped commercial in 2008 to be used in China on behalf of a company in his own Parry Sound-Muskoka riding. Then health minister, he sent “my greeting to the people of China, the People’s Republic of China, on behalf of myself and the Government of Canada.”

“People here are hurting,” says Mike Kritz, 31, who works with his twin, Matthew, at the Copper Cliff smelter. “Why is he even in office if he is not going to do anything for the people of Sudbury?”

Even Mayor John Rodriguez, who’s moved on from his position of economic nationalism for Sudbury as an NDP MP from the region, bristles that Sudbury doesn’t get royalties from Vale or, in his view, proper value-added research and development.

Rodriguez may say Sudbury will survive and that the community is diversified beyond mining. But for striking miner O’Brien, it’s a sad time: “This has been an Inco mining town for as long as anyone can remember. It has a rich, rich union history, and that all seems to be at risk.”

From Pittsburgh, International Steelworkers president Leo Gerard, another Sudbury kid who cut his teeth in local union politics, sees events as “the death of a culture that says community solidarity is important, even though people don’t always agree with each other.”

If that’s gone, if Vale truly doesn’t understand the culture here, what gives meaning to the sacrifices of all the Lillian Roses who gave up quality of life to stay in this punishing, infuriating and hopelessly adored land?

Chrysler recalls Dodge
Caliber over sticky pedals

Ken Thomas
June 5, 2010
WASHINGTON — The Associated Press

Chrysler is recalling nearly 35,000 Dodge Calibers in the United States and around the world to fix a potential problem with sticky gas pedals, the same issue that has affected millions of Toyotas.

Chrysler Group LLC said it will recall about 25,000 Calibers in the U.S. from the 2007 model year and a limited number of 2007 Jeep Compass SUVs to inspect vehicles built between March and May of 2006. The remaining vehicles are in Mexico, Canada and elsewhere.

The pedals were made by CTS Corp., the Elkhart, Ind., company that manufactured pedals involved in the recall of more than 2 million Toyotas earlier this year. Chrysler told NHTSA the pedals were “a completely different design” and made “with different tooling” than the pedals involved in Toyota's recall.

NHTSA opened an investigation into the Chrysler pedals in April. The auto company noted that the small SUVs have “smart brake” technology allowing the brake to override the gas pedal and safely bring the vehicle to a stop. Chrysler said it did not consider the problem a safety defect but decided to conduct a safety recall anyway.

The auto maker said it was unaware of any reports of accidents, injuries or property damage related to the pedals. In documents filed with NHTSA, Chrysler estimated that 30 per cent of the vehicles covered by the recall may need to have the pedal assembly replaced.

Chrysler dealers will inspect the recalled vehicles and replace affected pedals with a new pedal unit at no charge to customers.

Ford sends buyout offers
to Mercury dealers

Bryce G. Hoffman / The Detroit News
June 4, 2010

Ford Motor Co. has sent franchise termination offers to each of its 1,712 Mercury dealers, with lump-sum payments based on the number of Mercury vehicles they sold during the past three years and the brand's percentage of their total business.

The Dearborn automaker announced Wednesday that it was killing the 72-year-old brand by year's end, ending years of speculation about its future. In the documents delivered to dealers Thursday, Ford informed dealers that Mercury will officially be discontinued Dec. 31.

According to copies of documents obtained by The Detroit News, Ford is basing its buyout offer on the average number of Mercury vehicles -- excluding large fleet orders -- sold by each dealership in 2007, 2008 and 2009.

That number is then multiplied by a dollar amount that varies depending on the percentage of the dealer's overall business Mercury represented, ranging from $1,500 per vehicle for dealers whose Mercury sales accounted for 25 percent or less of their overall business to $2,500 per vehicle for stores where Mercury accounted for 76 percent or more.

In addition, dealers are being offered a "parts return credit" based on the total value of Ford, Lincoln and Mercury parts in their inventory, multiplied by the percentage of their business that Mercury represented.

Ford also will replace Mercury signs with new Lincoln displays.

Battle between Mustang and Camaro heats up

By MARK PHELAN
June 4, 2010
FREE PRESS AUTO CRITIC

Camaro versus Mustang, and the fight is on like Beatles versus Stones.

But unlike the tired brouhahas the baby boom insists on revisiting — do we rally need to debate Vietnam, women’s rights or the Voting Rights Act ever again? — the pony car battle is as relevant as last month’s sales report and Ford and GM’s next quarterly earnings. Thoroughly modern versions of the two ’60s icons are selling fast and fueling optimism at the automakers.

It might as well be the summer of love again. The Ford Mustang and Chevrolet Camaro have fired the imaginations of drivers, and car buffs are partying like it’s 1968.

Except that there’s nothing retro about Detroit and Dearborn’s 21st-Century sport coupes. The Camaro and Mustang bristle with new technologies from voice-recognition to direct injection. They have more power and better fuel economy than sophisticated European sport coupes like the BMW 335ci and cost about $20,000 less.

That has led to a sales surge and old-style Ford versus Chevy chest pounding. The Camaro outsold the Mustang by 7,777 cars for the first four months of this year. The last time Camaro outsold Mustang for a full year was 1985.

Ford is fighting back. The 2011 Mustang just went on sale with new engines and transmissions, including a brand-new 412-horsepower V8 and a 307-horsepower V6 that gets an eye-popping 31 m.p.g. on the highway.

The Mustang outsold the Camaro by 1,294 cars last month.

Chevrolet will counter with at least two new Camaro models next year: a convertible and a high-performance model that revives the hallowed Z28 badge.

The fight is on, with no sign it’ll end soon.

CAW CONTACT
Volume 40, No. 22
June 4, 2010

Greater Job Security for GM Members in St. Catharines

General Motors’ plans to spend $245 million to build a new line of fuel efficient transmissions in St. Catharines, Ontario is good news for the hard hit community, CAW President Ken Lewenza says.

The automaker announced June 1 it will spend the money to build six-speed transmissions beginning in 2012. In late April the company also announced a new generation of V8 engines in St. Catharines starting in 2013.

Together the $480 million in spending planned by GM will provide greater job security for up to 800 workers in the community.

“After the very tough times our members have faced in auto communities in the last few years this is finally some good news that brings greater job security and a stronger economic outlook not only for our members and their families, but also for the entire community,” said Lewenza.

CAW Local 199 President Wayne Gates said the recent investments are a “win-win” for the workers, the company and spin off businesses that now have greater certainty about GM’s future in St. Catharines.

“Businesses know that General Motors is now here for years with these two product announcements and they are more likely to look at investing in their businesses and creating more jobs in the community,” Gates said.

He also said Tuesday’s investment announcement is proof that federal and provincial government decisions to invest in the auto maker have paid off.

“Without their support, without their help, this announcement and this good news for the Niagara Region would never have happened, so we’re very grateful for that,” Gates said.

CAW Continues Rotating Protests at Extendicare Facilities

CAW members staged two more public demonstrations at Extendicare nursing homes in Tecumseh and Kingston, Ontario on May 27 and June 1, respectively. These actions are the latest in a string of rotating protests led by the CAW and its Ontario health care local unions. The union is urging this hugely profitable corporation back to the bargaining table in the hopes of reaching a settlement with over 1200 workers in ten Extendicare homes across the province.

CAW members and allies attended a public information rally at Extendicare’s Tecumseh facility located on St. Alphonse Avenue while over 50 members, including residents and community supporters, gathered outside an Extendicare nursing home on Bath Road in Kingston.

CAW President Ken Lewenza said workers in Ontario’s long term care sector deserve the respect and dignity for the work they do, noting that protests will continue until the company agrees to get back to bargaining.

“Extendicare is totally ignoring the commitment of these workers and our union will continue to fight for a fair and just settlement.”

Extendicare has argued that recent government funding restraint measures have forced it to table a two-year wage freeze on its workers, among other contract concessions. The CAW has flatly rejected these concession demands as unreasonable, especially since Extendicare is a private, for-profit, corporation and not a public employer. In the first quarter of 2010 alone, Extendicare recorded profits in excess of $15 million.

“Absolutely nothing is preventing this company from sharing its massive profits with employees,” said CAW Local 830 President Elaine Walker.

Government Must Intervene to Secure Navistar’s Future in Chatham, CAW Says

In front of a raucous crowd of nearly 600 CAW Local 127 and 35 members in Chatham, Ontario, CAW President Ken Lewenza expressed his anger and frustration over the lack of progress in negotiations aimed at getting hundreds of laid off Navistar truck plant workers back on the job, and demanded answers from the company on its plans for the facility.

Lewenza said that after a year of ongoing talks with the CAW, it is clear the company will not willingly come to terms on an agreement that would re-start the idled Richmond Street facility – an important engine for the local economy – and continue assembling heavy duty trucks.

Lewenza urged both provincial and federal governments to intervene and ensure the plant continues running, especially since Navistar has in past years received more than $63 million in government funds, as well as over $40 million in contract cost savings.

“We’ve been left in limbo for nearly one year, not knowing whether we’ll ever get back to work,” said Cathy Wiebenga, plant chairperson at the Navistar facility. “There’s no good reason why we can’t get answers from this company and it’s time our elected officials step in to defend our interests.”

Navistar was once the largest employer in the Chatham-Kent region of southern Ontario. The indefinite halt in production has left many individuals, charities and businesses in the community reeling, said Sonny Galea, chairperson of the CAW Local 35 office workers unit at Navistar.
“How can our governments sit back and let a corporation like Navistar take the public’s money and run off with it, while an entire community falls to pieces? This is what’s most frustrating about our situation; our elected leaders don’t think this is a problem that they have to deal with.”
The Navistar plant was idled in June 2009, timed with the expiry of the collective agreements for production, skilled trades and office workers. The union’s ongoing efforts to negotiate a compromise agreement with the company to keep the facility running have so far been unsuccessful.

Lewenza noted that without any clear sense of the plant’s future, laid off workers are caught in a difficult situation as current EI benefits continue to run out. Many local businesses are reluctant to hire members because it is not yet clear if they will eventually be recalled. 

The company has shifted much of the production for its Lonestar and Prostar truck models to facilities in the U.S. and Mexico.

Shrimp Plant Closure Causes Uncertainty

A recent decision by Northern Shrimp Co. in Jackson’s Arm, Newfoundland to close their shrimp plant for the 2010 season has caused great uncertainty within the community.

CAW/FFAW President Earle McCurdy said the union has called for an immediate meeting with Newfoundland Fisheries and Aquaculture minister Clyde Jackman.

He said the Memorandum of Understanding between the provincial government, the union, and the Association of Seafood Producers calls for the development of a Worker Adjustment Program for people adversely affected by fisheries restructuring.

“There has been very little activity related to the M.O.U. in the past three months,” McCurdy said. “We need a meeting of the sub-committee dealing with Worker Adjustment as soon as possible.”

He said the current provincial response when fish plants close - a one-time “stamp-up” on a make-work project - is “insulting to people who have spent a lifetime working on the floor of a fish plant”.

ASP’s proposal for restructuring in the processing sector called for a buyout for plant operators but nothing beyond the current inadequate program for plant workers who lose their jobs.

McCurdy also said the employer in Jackson’s Arm needs to “level with their employees” as to future plans for the operation. The recent announcement of a 28% reduction in the northern shrimp quota raises serious question marks concerning the future of the plant and the jobs of the workers.

Groundbreaking for New Environmentally Friendly Hall at Local 598

CAW Mine/Mill Local 598 recently celebrated the groundbreaking for a new energy efficient hall at Richard Lake near Sudbury, Ontario.
In addition to construction of the new building, the local is committed to upgrading 35 acres at Richard Lake, said Local 598 President Richard Paquin. The local is working with a coalition made up of the Local 598 retirees chapter, the Metis Nation of Ontario, the Ontario Freedom Riders, the Richard Lake Stewardship Committee and local First Nations to ensure improvements, he said.

“We are a union that is not afraid to look towards the future and because of that this building will have new state of the art training rooms and offices, will be green and will have the features of totally geothermal heating and cooling systems,” Paquin said at the May 20 event.

“The inside of the building will have enhanced insulation values such as double outside walls, triple glaze and gold plated windows, energy efficient lighting and more,” he said. The local is also looking at reopening 125 campsites on the property for the community and CAW members to use, he added. 

Besides the 37 acres, the local also has 105 acres that over look Richard Lake and as part of another project, the local plans to open, in partnership with local businesses, a nursing and retirement home that would service CAW members in need.

In an act of solidarity with USW Local 6500 members on strike at Vale Inco in Sudbury, Paquin presented a strike assistance cheque of $5000 on behalf of the CAW to USW 6500 President John Fera during the event. The CAW national union and Local 598 have so far donated more than $37,000 to help striking USW Local 6500 members.

CAW Locals Rack Up Four Labour Media Awards

The Canadian Association of Labour Media held its annual labour communications conference and awards ceremony in Windsor, Ontario from May 13-15, with CAW locals taking home four national awards for excellence in web design, print and creative use of media.

Best Overall Publication (locals with more than 1000 members) - CAW Local 222 (“The Oshaworker”)

Dennis McGann Stroke-of-Genius Award (produced by volunteers) – CAW Local 114 (“101 Easy Ways to be a Labour Activist”)

Best Overall Website (produced by volunteers) – CAW Local 88 (www.local88.ca)

Best Website Content (produced by volunteers) – CAW Local 88 (www.local88.ca)

*(Honourable mention) Best Moving Billboard – CAW Local 114 (“Live Long and Prosper: Unionize” t-shirts)

The Canadian Association of Labour Media is a network of union publications and editors that provides labour-friendly stories and graphics and training for labour communicators. Each year, the CALM organizes a national skills-sharing conference that brings together labour union communicators and activists from all major labour unions in Canada.

To view pictures of CAW winners, please visit the online photo gallery at: http://www.caw.ca/en/5584.htm.   

Former CAW President’s Book Up for Award

Laying It on the Line: Driving a Hard Bargain in Challenging Times, a book by former CAW President Buzz Hargrove, is one of the finalists for this year’s National Business Book Award.
Hargrove’s book looks back at key moments in bargaining with GM, Ford, Chrysler, Air Canada and other corporations and the impact of business and government decisions on working people. He also looks at the roots of the recent economic crisis and examines ways to help labour move forward in these challenging times.

Four other books were also nominated as finalists. The winner will be announced June 9.

CAW Vote Comes Up Short at Niagara Casinos

After an extensive organizing drive to join the CAW lead by workers of Casino Niagara and Fallsview Casino (in Niagara Falls, Ontario), the final vote tally fell short of the required 50 per cent-plus one threshold for union certification outlined under current Ontario labour law.

“Clearly, this is not the result we had hoped for,” said CAW Organizing Director John Aman. “But the fact of the matter is that we’ve managed to engage a strong core of casino workers during this campaign, totaling over 1000 strong, who are excited at the prospect of eventually joining the CAW.”

“This is a very positive outcome and obviously something we can build on as we continue our efforts to organize in the future.”

Official vote results were released to the public on May 17.

The CAW represents over 7000 gaming sector workers across the country. Over 3000 workers are employed at the Niagara Casinos.

CAW Welcomes New Members

►        Results 360 Moncton Logistics Inc., Moncton, New Brunswick – 30 new members in CAW Local 4005;

►        Compass Group Canada Ltd. (Humber College), Toronto, Ontario – 40 new members in CAW Local 414;

►        First Student ULC (Canada), London, Ontario – 78 new members in CAW Local 27;

►        Stock Transportation, Toronto, Ontario – 313 new members in CAW Local 4268;

►        MacDonald Lloyd Nissan, Sydney, Nova Scotia – 5 new members in CAW Local 4506;

►        MacDonald KIA (KIA Automall), Sydney, Nova Scotia – 4 new members in CAW Local 4506;

Federal-Mogul to cut out retiree health care benefits

June 3, 2010
BY JEWEL GOPWANI
FREE PRESS BUSINESS WRITER

Auto supplier Federal-Mogul plans to eliminate company-paid health care coverage for 2,700 salaried and hourly retirees at the end of the month.

The company is cutting health care benefits to make sure its programs "are in line with comparable employers," said Federal-Mogul spokesman Jim Burke.

The Southfield-based parts maker joins a host of companies that have cut retiree benefits. Delphi and Visteon terminated company-paid health care coverage during their respective bankruptcy cases.

A cadre of health care surveys shows that fewer employers offer retiree health care coverage. A study by the Kaiser Family Foundation showed that in 1988, 66% of large companies that offered health care coverage to employees also offered benefits to retirees. Last year, that number fell to 29%.

The burden of health care costs, of course, is falling on retirees, especially those who are younger than 65. Fidelity Investments ranks health care costs to be the second-largest expense for retirees after food.

Federal-Mogul declined to say how much the maker of bearings, spark plugs, pistons and other parts is saving by cutting retiree benefits.

Visteon, for example, cut retiree health care benefits to 6,650 current and future retirees and their dependents in April. In bankruptcy court, the company said its savings would total $310 million.

Mercury lagged as it
was cut to 4 vehicles

Public didn't buy that Mercury was different from Ford

Scott Burgess / The Detroit News
June 3, 2010

While Mercury loyalists may shed a tear for the brand, few others will.

American consumers can buy anything Mercury offers from its depleted lineup at a Ford dealership under a different name for less money.

In announcing the brand's demise Wednesday, Ford executives said they want to create more market space for the growing Ford and Lincoln lineups.

Mercury's future looked bleak even before Wednesday's announcement.

The brand had dwindled to just four vehicles: the midsize Milan sedan; the midsize Mountaineer and compact Mariner SUVs; and Mercury's large sedan, the Grand Marquis.

The Ford Crown Vic, the base for the Grand Marquis, is being discontinued, and the Ford Explorer, the underpinning for the Mountaineer, is being overhauled with no mention of a Mercury variant.

That leaves two models, which do not make a brand.

Mercury was the "tweener trim package" at Ford -- falling between Ford and Lincoln in both luxury and price. That's been the brand's mission since it was created by Edsel Ford in 1939: Fill the void between blue-collar Ford and white-collar Lincoln.

That's something the brand performed well for years, but recently, Mercury has attracted mostly lace collars, appealing strongly to women who didn't want to buy a Ford or spend Lincoln prices.

The illusion of different vehicles could only fool people for so long, and Mercury sales have plummeted 50 percent since 2005 -- the same year Ford started to bolster Mercury's lineup.

When a Ford representative recently was asked what option could a customer get on a Milan hybrid that he couldn't get on a Ford Fusion hybrid. The answer was short and simple: "Nothing."

"Badge engineering doesn't work," said Stephanie Brinley, an automotive analyst for AutoPacific. "People should expect a difference like the Ford Flex and Lincoln MKT."

Those vehicles are built on the same underpinnings but look significantly different.

In automotive parlance, the exterior shell is known as the top hat and every carmaker has improved at making top hats different while keeping much of the underpinnings the same. These improvements can save the carmaker money and provide distinctive looking vehicles to satisfy picky consumers.

With Mercury out of the picture, Ford can focus on its true core brands.

Lincoln-Mercury dealers are losing two vehicles and may expect two vehicles to replace them.

Ford may consider adding a compact crossover to Lincoln's lineup, built on the Ford Escape platform, but the automaker has not announced any plans to do so.

Lincoln will introduce a luxury compact car, Ford executives said Wednesday, mirroring a trend among other luxury brands. BMW, Audi and Cadillac have either introduced or have announced plans to bring a luxury compact to the U.S. market.

Just don't expect to see a rebadged Focus when a compact Lincoln arrives.

Those days are over.

NHTSA probes Ford Fusion,
Milan floor mats

David Shepardson / The Detroit News
June 2, 2010

Washington -- Federal regulators have opened an investigation into nearly 250,000 Ford Motor Co. vehicles after three complaints and no apparent accidents or injuries. It's another sign of heightened sensitivity since the uproar over sudden acceleration in Toyota Motor Corp. vehicles.

The National Highway Traffic Safety Administration warned Tuesday that drivers of 2010 Ford Fusion and Mercury Milan cars should not use unsecured all-weather floor mats -- made by Ford or anyone else -- on top of the standard, carpeted floor mat in the driver's side foot well. The agency said "an accessory floor mat may entrap the accelerator pedal."

Since some in Congress and other advocates have called NHTSA a "failed" agency for not doing more to investigate problems with sudden acceleration at Toyota, the agency has been opening investigations faster and on the basis of fewer complaints. Last month, NHTSA opened an investigation into 161,000 2007 Dodge Calibers after it received five complaints of sticking accelerator pedals -- also without any accidents or injuries.

Ford spokesman Said Deep said the company is unaware of any injuries or accidents from the two vehicles involving floor mats. NHTSA also said it had no reports of injuries, accidents or deaths.

"We do not recommend stacking floor mats in any vehicle from any automaker," Deep said.

He noted the all-weather floor mats have an advisory stating that drivers should not stack them on other floor mats.

"All owners of these vehicles should ensure that any mat used is properly secured and never stacked," NHTSA said in a statement.

NHTSA said it verified three consumer complaints concerning the 2010 Fusion.

One of the complaints came from Edmunds.com's director of vehicle testing, Dan Edmunds, who in April had an improperly installed all-weather floor mat and briefly got his accelerator pedal jammed.

The website said Edmunds' incident in a 2010 Ford Fusion Hybrid "was a harsh reminder that unintended acceleration is not limited to a particular brand."

Edmunds.com noted that Dan Edmunds "had written articles and made videos warning consumers of the danger of stacking all-weather floor mats on top of normal carpeted mats. The fact that he could find himself in this frightening situation was the result of a combination of coincidental events and a reminder that it can happen to anyone."

Floor mats are a big issue for NHTSA, which has been probing them for years.

Toyota Motor Corp. has recalled 5.4 million vehicles in the United States over concerns that pedals could get trapped in floor mats. Toyota has redesigned its floor mats and pedals to prevent pedal entrapment.

The recall was prompted by the deaths of four near San Diego when an improperly installed floor mat by a dealer trapped a pedal and led to a runaway Lexus vehicle.

Toyota has recalled another 2.3 million vehicles over sticky accelerator pedals.

Warranty claims fall for Big 3

Robert Snell / The Detroit News
June 2, 2010

Detroit's Big Three have slashed warranty claims more than 40 percent in recent years -- further evidence that the automakers, long plagued by repair problems and consumer perceptions that their products are inferior, are narrowing the quality gap with foreign competitors.

The reduction in warranty claims saves the automakers much-needed money -- perhaps several hundred dollars per vehicle sold -- and boosts resale values. Those savings, in turn, contribute substantially to the operating profits of General Motors Co., Ford Motor Co. and Chrysler Group LLC, and are helping repair their reputations among consumers.

"That's pure operating profit," said auto analyst Joe Phillippi of AutoTrends Consulting in Short Hills, N.J.

"If you can put an extra $200 or $300 a car toward the bottom line, and multiply that out, it adds up in a hurry."

Warranty claims have fallen 45 percent at GM from 2007 levels, while Ford reduced warranty repair rates an average of more than 40 percent in each global business region from 2007 through last year, according to initial quality reports.

Some of the decline reflects weakening sales levels in recent years, and notably in 2009, but independent quality studies confirm overall improvements across the industry.

At Chrysler, the smallest of the Big Three and the one with the most quality problems, warranty claims are down 48 percent in the past two years, according to internal warranty data that tracks problems reported during the first 90 days of ownership. They dropped 30 percent in 2008, to their lowest level, and continued to fall to a record in 2009.

Customers notice

In 2008, the cost per unit sold was reduced by a total of $240 million, said Doug Betts, senior vice president in charge of quality for Chrysler Group LLC. A figure for 2009 was not available.

"It really says that there have been some substantial gains made in terms of the quality of the American automobile," said autos analyst Erich Merkle of Autoconomy.com in Grand Rapids.

Customers, he said, are noticing the improvements among vehicles produced by the Detroit Three.

"I think they've been helped to a certain extent by the issues that have plagued Toyota," Merkle speculated.

But in spite of Toyota Motor Corp.'s huge recalls since November, the Japanese automaker says its warranty costs also have been declining in recent years.

Honda Motor Co. would not comment on warranty cost trends but said independent quality studies, such as the J.D. Power and Associates annual surveys, show the quality of its vehicles improving since 2006.

In spite of data signaling an improvement in the quality of domestic brands is on the rise, motorist perceptions haven't caught up with the gains.

For example, three GM models -- the Cadillac DTS, Buick LaCrosse and Buick Lucerne -- ranked among vehicles with the fewest problems in the 2010 J.D. Power and Associates long-term Vehicle Dependability Study.

Perceptions lag

Still, GM's Buick and Chevrolet brands lagged Honda, Nissan, Ford, Subaru, Volkswagen, Toyota, Mazda, Hyundai and MINI in a biannual survey of consumer perceptions, conducted by California-based ALG Inc. and published this spring.

"We've got a lot of work to do, but we have made substantial improvement," said Jamie Hresko, GM's vice president of global quality.

GM does not release data on what percentage of new cars and trucks are brought back for warranty work.

During the first quarter of this year, however, GM's warranty payments fell 10.5 percent to $821 million from $917 million a year earlier. The savings helped GM post an $865 million first-quarter profit -- its first in almost three years.

Since 2007, Ford's warranty repair costs have plummeted by $1 billion. Ford and its Mercury division logged four 2007 vehicles in the J.D. Powers top 12 list.

All the Detroit Three have emphasized a commitment to improved quality. GM credits the drop in its warranty claims to more rigorous testing before a vehicle hits the showroom.

With the new Chevrolet Camaro, for example, GM deployed a fleet of test vehicles nationwide which were driven for more than 2 million miles. The vehicle's performance was monitored through the onboard OnStar safety and navigation service, which tracked issues that could be resolved before production, Hresko said.

"The difference in today's culture versus a while ago was maybe we designed to be competitive, not win," he said. "We have to wow people with our products versus just be competitive."

U.S. probes Ford Fusion on
reports of trapped pedals

June 1, 2010

(Reuters) - U.S. safety regulators have opened a preliminary investigation into the possibility that accelerator pedals could be entrapped by floormats in Ford Motor Co Fusion and Mercury Milan sedans.

The National Highway Traffic Safety Administration said it had verified three complaints of accelerator pedals being trapped by unsecured "all-weather" floormats in the current production model year of the Fusion.

The NHTSA warned owners not to place unsecured floormats on top of the standard, carpeted floormat on the driver's side. It opened an investigation on Friday that covers an estimated 249,301 Fusion and Milan sedans.

Ford spokesman Said Deep said instructions imprinted on the automaker's all-weather floormats warn owners not to place them on top of existing floormats, as does the packaging.

"We do not recommend stacking floormats in any vehicle," Deep said. "We will cooperate fully with NHTSA as we always do."

The NHTSA said it had received no complaints involving crashes, injuries or fatalities in the Ford vehicles. Any optional all-weather floormats should be installed only after removing the standard floormats, the agency said.

Dan Edmunds, director of vehicle testing at Edmunds.com, described in mid-April an incident of unintended acceleration in a 2010 Fusion hybrid caused when the accelerator pedal became entrapped by a stacked floormat.

Edmunds said the accelerator became stuck for three or four seconds after he passed slower traffic on his commute to work before returning to normal. A second experimental acceleration had a similar result, he said in a web posting.

He reported the incident to the NHTSA.

Similar complaints were raised about Toyota Motor Corp (7203.T) vehicles that were later the subject of massive recalls starting last year.

The issue of unintended acceleration has prompted Toyota to recall more than 8 million vehicles worldwide, including 6.5 million in the United States, and pay a record $16.4 million fine to U.S. safety regulators.

Shares of Ford were down 21 cents at $11.52 in afternoon New York Stock Exchange trading

Ford Canada sales
jump 19 per cent

Greg Keenan - Globe & Mail
June 1, 2010

Vehicle sales jumped 19 per cent for Ford Motor Co. of Canada Ltd. last month, which the company says kept it in first place in the Canadian market.

Ford sold 26,122 vehicles in May, compared with 21,900 a year earlier.

Meanwhile, sales for Chrysler Canada Inc. soared 53 per cent in May from year-earlier levels.

That's the sixth straight month of year-over-year increases. Sales rose to 20,887 from 13,657.

Hyundai Auto Canada Corp. said its sales jumped 13 per cent to 12,620, the best monthly sales total in the company's history in Canada.

In May, 2009, Chrysler's parent company was in chapter 11 bankruptcy protection in the United States and all its North American assembly plants were shut down, choking off the supply of vehicles to Canadian dealers.

Honda Canada Inc. said sales fell 26 per cent last month.

Ontario GM plant to
get $245-million

Greg Keenan Globe & Mail
June 1, 2010

General Motors of Canada Ltd. will begin producing a new, fuel-efficient transmission at a plant in St. Catharines, Ont., in 2012, the auto maker will announce Tuesday, another in a string of investments it has made since its parent company emerged from Chapter 11 bankruptcy protection last year.

The latest announcement is a $245-million plan to build six-speed transmissions to supply assembly plants in Oshawa, Ont., and Ingersoll, Ont., both of which have already boosted or plan to increase vehicle production amid a market recovery and heavy demand for the company’s Chevrolet Equinox and GMC Terrain crossover utility vehicles.

GM has scheduled a news conference at the St. Catharines plant Tuesday morning that will be attended by company president Kevin Williams, federal Industry Minister Tony Clement and Canadian Auto Workers president Ken Lewenza.

May 31, 2010

Ken Georgetti, president of the Canadian Labour Congress, has renewed his call for improvements to the Canada Pension Plan following a resolution passed at a convention of the Federation of Canadian Municipalities (FCM).

The FCM resolution passed on Saturday, May 29, calls for expansion of the CPP, a federal system of pension insurance, and for the federal government to hold a national summit on pension issues. This position is virtually identical to that of the labour movement.

"Municipal politicians are closer to their constituents than any other level of government," Georgetti says, "They can see that we have a pensions crisis in Canada. Other political leaders should follow suit and commit to improving the CPP."

Most Canadians are not saving enough to live comfortably in retirement. One-third of Canadian workers aged 24-64 have no personal retirement savings at all, and 61.5% of workers (11 million people) have no workplace pension. "The situation is serious, but there are solutions at hand," Georgetti says. "An enhanced CPP must form the cornerstone of pension reform and retirement security."

Federal, provincial and territorial finance ministers have been discussing pensions reform for the pat year and will meet in Prince Edward Island in June to decide what to do next. "We are delighted with the position that FCM has taken on the CPP and there is now no excuse for Canada's finance ministers to drag their feet on pension reform."

Auto market profitable again as global industry rebounds

Michael Babad

Globe & Mail
Monday, May. 31, 2010

Auto sales rebound

The global auto industry is rebounding and has returned to profitability, Bank of Nova Scotia said this morning. The increase in car sales around the world slowed in April to 13 per cent, compared to the 25-per-cent surge in the first quarter, but this was due largely to the end of cash-for-clunkers programs in Germany, Scotiabank auto analyst Carlos Gomes said in a report. Outside of Europe, sales continued to strengthen, up 23 per cent.

“Despite concerns that recent risk escalation emanating from Europe will spread across the globe, the outlook for the global auto market continues to improve,” Mr. Gomes said. “... The global auto industry has returned to profitability, with the five largest auto manufacturers posting earnings of $5.5-billion (U.S.) in the first quarter of 2010. This improvement represents a sharp turnaround from annual losses averaging in excess of $22-billion from 2007 through 2009. Profitability improved in every region last quarter, especially in North America, with the five larges auto makers returning to profitability in the region.”

China warns on euro crisis

Europe’s debt crisis threatens to push global economies back into recession, China’s Premier Wen Jiabao warned today, saying governments must watch closely and adopt measures to ensure that doesn’t occur.

“The world economy is stable and beginning to revive, but this revival is slow and there are many uncertainties and destabilizing factors,” Mr. Wen told a group of business leaders in Tokyo. “Some countries have experienced sovereign debt crises, for example Greece. Is this kind of phenomenon over? Now it seems that it’s not so simple. The sovereign debt crisis in some European countries may drag down Europe’s economic recovery.”

India’s economy expands 8.6 per cent

India’s economy is surging, expanding 8.6 per cent in the first quarter from a year earlier, according to government data today. The official reading puts even more pressure on the country’s central bank to raise interest rates. “The biggest threat in India is from inflation and the risk that the economy overheats,” Capital Economics economist Kevin Grice told Bloomberg News. “This, in the end, would force the Reserve Bank of India to aggressively high policy rates, which would inevitably bring far lower growth later on.”

Markets calm despite Spain downgrade

Global markets are far calmer this morning, and generally higher, despite the decision by Fitch Ratings Friday to downgrade Spain’s sovereign debt. Things are somewhat slower because of holidays in both the United States and Britain. The Canadian dollar (TSX-I11,671.44-77.68-0.66%) is back above 95 cents (U.S.), trading at 95.22 cents at about 7 a.m. ET.

Watch for what is expected to be a strong reading on Canada’s economic performance this morning. Statistics Canada reports on first-quarter gross domestic product at 8:30 a.m. ET, and economists project it will show economic growth of between 5.5 per cent and 6 per cent annualized, the best showing in just over 10 years. Here’s a sampling of economists:

Douglas Porter, deputy chief economist, BMO Nesbitt Burns: “We look for growth to have accelerated to a hearty 6-per-cent pace in [the first quarter], topping the prior quarter’s 5-per-cent clip and marking the fastest quarterly growth rate since [the fourth quarter of] 1999, the heart of the tech boom. This marks a staggering turnaround from the darkest days a year earlier ... Growth was likely led by another strong quarter for housing, solid consumer and government spending, and inventory rebuilding.”

Adrienne Warren, senior economist, Scotia Capital: “We are expecting overall output to have advanced at around a 5.5-6-per-cent annualized rate in the quarter, an improvement over the already strong 5-per-cent fourth-quarter gain. Not only would this be roughly double the 3-per-cent U.S. [first-quarter] GDP advance, but should top all other G7 nations over the same period. Consumers led the way in early 2010, with retail sales volumes rising at their fastest quarterly pace in over two years.”

Diana Petramala, economist, Toronto-Dominion Bank: “The Canadian economic recovery was in full force in the last six months and it now looks like real Canadian GDP grew close to 6 per cent annualized in the first quarter of 2010, following a strong gain of 5 per cent in the previous quarter and significantly greater than the 3.8 per cent we were anticipating. That’s as V-shaped as economic recoveries come ... The caveat of the report will be household debt. Household debt as a per cent of personal income likely grew to a record high 147 per cent as households funded consumption through borrowing.”

Krishen Rangasamy, economist, CIBC World Markets: “Canada is set to post its largest quarterly output expansion in a decade ... Canada is seeing a sharp recovery, but such a torrid pace of growth won’t be sustained. A U.S.-led slowdown, fading fiscal stimulus and monetary tightening by the [Bank of Canada] should have Canada revert to below-trend growth in the second half, warranting a go-slow approach to monetary tightening by the [Bank of Canada] this year.”

This morning’s GDP report will be the latest evidence of a stronger economy, and the last piece of data, before Bank of Canada Governor Mark Carney and his colleagues set interest rates tomorrow. Markets increasingly believe the central bank will hike its benchmark overnight rate, now at an emergency low of 0.25 per cent, for the first time since before the financial crisis and recession began. Economic growth and hotter inflation warrant a rate increase, economists say, but the recent market turmoil sparked by the euro crisis could delay such a move. Mr. Carney must weigh the former against the likelihood that Europe’s debt crisis will continue to roil global markets or dampen global economic growth.

“Fear of another global financial crisis like the one sparked by the collapse of Lehman Brothers, or rising worries of a double-dip recession, are two good reasons to take things slow, but only if one believes that there is reasonable probability of either of those two events happening,” said economist Meny Grauman of CIBC World Markets.

Added research analyst Shahrzad Mobasher Fard of Toronto-Dominion Bank: “Accompanying a [Bank of Canada] move could be a dovish statement outlining European sovereign debt concerns as the dominant downside risk to the outlook. Faced with the prospect of a possible pause in the hiking cycle if financial turmoil were to resurface, markets would refrain from pricing in too much near-term tightening. The absence of such dovish overtones in the [Bank of Canada] statement would likely induce a bond selloff and push the Canadian dollar closer to parity.”

Here are four things to keep in mind, courtesy of BMO Nesbitt Burns deputy chief economist Douglas Porter:

- If the Bank of Canada hikes rates tomorrow, it will be the first central bank among the G7 to do so.

- Mr. Carney has not yet “presided over” a rate hike in his short time as governor.

- The central bank “tripped up the market” once before under Mr. Carney, when it remained on hold in July, 2008, when markets expected a cut in the overnight rate.

- If the bank does not cut rates, it “technically” will have met the conditional commitment it made more than a year ago to hold the line until mid-2010, though it killed off that pledge last month as it signalled it could soon begin tightening monetary policy.

Ford offers no information
on Mercury's fate

Alisa Priddle / The Detroit News
May 30, 2010

Ford Motor Co. is not yet confirming if it plans to wind down the Mercury division, but chief executive Alan Mulally made it clear Friday that the Ford brand and global scope of future products are key to the automaker's success.

"We have nothing new to add," Mulally said during a conference call with investors, when asked about reports the automaker will kill Mercury to focus on the core Ford brand and the upscale Lincoln marque.

"We continue to look at our portfolio of brands and nameplates," Mulally said.

He said the moves have "been a real liberator for this transformation" of the Dearborn-based automaker.

The goal is to continue the efforts of the last three years to ensure Ford offers a complete lineup of products for every region of the world, while keeping its showrooms fresh.

Vehicles will be derived from large, global product families to reduce complexity and cost while increasing scale and the use of common parts.

"The Ford plan is clearly working and working well," Mulally said, as the automaker prepares to launch the subcompact Ford Fiesta in the U.S. in June, and a new compact Focus early next year.

The Fiesta shares 65 percent of its parts in common with other cars from the same family; the new Focus has 85 percent common parts. The two families of smaller vehicles will account for more than 10 variants and more than 2 million vehicles annually, Mulally said.

Subcompacts and compacts account for 60 percent of global sales, which is one reason Ford is rebalancing its portfolio and converting some truck plants to assemble cars instead. Asia/Pacific is one area that will benefit from a wider portfolio of global vehicles, said Chief Financial Officer Lewis Booth.

But while areas such as Asia/Pacific will continue to grow, mature markets such as North America and Europe have had to cut back production and adopt an appropriate cost structure, to reflect the drop in sales.

That may be a rationale for dropping Mercury.

The stable of Mercury vehicles has dwindled, but many Mercury-Lincoln dealers have relied on both brands, in concert, to achieve the sales volumes they need to be profitable.

Mulally said Ford continues to work with its 3,500 dealers to right-size them.

"We still have a little ways to go, especially in metropolitan areas," he said.

Gettelfinger says lower wage may make buying a car unaffordable

Louis Aguilar / The Detroit News
May 29, 2010

Detroit -- United Auto Workers President Ron Gettelfinger said Thursday that it is a "fair question" whether the $14-an-hour starting wage for new workers at Detroit's Big Three automakers is enough to afford the vehicles they will build.

In 1914, Henry Ford pioneered the idea of paying workers enough so they could buy the product they made, doubling the pay of auto workers to $5 a day. By contrast, the $14-an-hour wage for new workers, roughly half of what veteran workers make, was negotiated in 2007 to help General Motors Co., Ford Motor Co. and Chrysler Group LLC become more competitive with foreign automakers on costs.

Gettelfinger acknowledged to reporters at an Automotive Press Association event at the Detroit Athletic Club that the affordability question is "an open debate" in a democratic union, adding that UAW members could revisit the issue in the 2011 contract talks. The question is one that he won't fully answer because he is retiring next month.

The answer is that new workers will struggle to afford a new vehicle on their own -- but not if they have a working spouse, said Dana Johnson, chief economist for Comerica Inc., which compiles an Auto Affordability Index.

The most recent index found the median American family, with an annual income of $60,000, takes about 23 weeks to earn the average amount a consumer spends on a car -- $24,000. After 23 weeks, a $14-an-hour UAW worker making about $28,000 annually could afford roughly a $13,000 car.

In terms of the Henry Ford affordability ideal, $14 an hour "sounds like a bit of a stretch," Johnson said.

But if UAW members have a two-worker household, as many families require, "then they could clearly afford a new car," he said.

The union has said its hard-won victories through the decades have created the wages and benefits that defined the middle-class standard for most American workers.

Still, Gettelfinger defended the unprecedented concessions on wages, retiree benefits and health care coverage that the union negotiated in recent years as General Motors and Chrysler went into bankruptcy and as the Detroit Three shed thousands of jobs.

"We did what we had to do to get to tomorrow," Gettelfinger said.

UAW membership fell 18 percent last year to a post-World War II low of 355,191 amid heavy losses of jobs among the automakers and suppliers. Membership has tumbled by nearly half since 2001, when the union had 701,818 members. Membership peaked in 1979 at 1.53 million members.

But Gettelfinger sees that the domestic automakers are on the road to recovery with plans to hire workers, including many at the $14 rate.

"I think we've hit bottom" in terms of the membership decline, he said.

When asked from where new members would come, Gettelfinger cited gains among non-automotive companies, including recent victories in organizing casino workers

Advancing the union's legislative agenda, particularly protecting workplace safety and simplifying the process for unions to organize workers, is the biggest challenge for his successor, Gettelfinger said.

The union's leaders have endorsed UAW vice president Bob King to be the next president. King is the lead negotiator on Ford. As head of the union's national organizing efforts between 2002 and 2006, he was credited with bringing in 66,000 new members.

The UAW will look to "make gains where we can" in the next round of contract talks with Ford, GM and Chrysler set for 2011, Gettelfinger said.

"We will have a bargaining convention in 2011 and our members can decide then," he said.

CAW CONTACT
Volume 40, No. 21
May 28, 2010

Fighting for Decent Pensions at St. Marys Rally

Hundreds of CAW members from across southern Ontario took part in a mass rally at the St. Marys cement plant in support of Local 222 members striking against company rollbacks in pensions and benefits.

"Workers have a right to a decent pension," CAW President Ken Lewenza told the May 18 rally outside the St. Marys facility in Bowmanville, Ontario. Lewenza stressed that the union is determined to ensure all workers receive secure retirement income.
He blasted management of the Brazilian-owned company for attempting to take away the Bowmanville workers' defined benefit pension plan.

Lewenza said management has indicated that the company can afford the current plan and further that senior officials have admitted the pension plan isn't an economic issue. Instead the company is attempting to institute a cultural change among its entire worldwide workforce.

Paul Sowden, CAW Local 222 unit chairperson at St. Marys, read a letter of support from the Brazilian union representing workers at the parent company.

He also thanked the members for their courage and tenacity in the fight to protect their pension plan, which has been in place for decades. He urged the company to get back to the bargaining table to negotiate a fair and equitable agreement for workers at the open pit mine.

"We just want to keep what we have," Sowden said.

CAW Local 222 President Chris Buckley said the pension plan is financially healthy and the company has weathered the global financial meltdown better than most companies.

"I say shame on this company, which is doing extremely well," Buckley said. He praised the dedication of the striking workers who have been without a pay cheque for 10 weeks as they fight off this attack on their pensions and benefits.

Extendicare Urged to Return to Bargaining by Pickets

CAW Local 1120 members demonstrate outside an Extendicare facility in Sault Ste. Marie, Ontario
More than 250 CAW members took part in demonstrations outside Extendicare nursing home facilities in Sault Ste. Marie and London, Ontario, recently demanding that the employer return to the bargaining table to negotiate an equitable agreement.

CAW Local 1120 members held the Sault Ste. Marie information picket May 19 and CAW Local 302 members in London on May 20 to raise public awareness around the negotiations. At the London rally, participants were also greeted by CAW National Secretary Treasurer Peter Kennedy and London–Fanshawe NDP MP Irene Mathyssen, who addressed the crowd.

Company officials have walked away from the bargaining table after demanding a two-year wage freeze and other concessions even though Extendicare Real Estate Investment Trust reported a first quarter profit of $15.6 million, up from $3.7 million a year ago. 

CAW Local 1120 President Janice Pettalia said members from both the Extendicare Tendercare Nursing Home and Van Daele Manor in Sault Ste. Marie took part, as well as a number of residents.

“Extendicare is a private and hugely profitable company and is demanding wage freezes from our members who work hard and provide quality care in these homes,” Pettalia said.

CAW Local 302 President and National Executive Board member Nancy McMurphy said that this fight is with the employer, not the residents. “We want to ensure that residents are still provided with the same high level of care as they always are,” said McMurphy. Our members just want to be treated with the same dignity and respect they provide to residents on a daily basis.” 

McMurphy said the London rally was timed so that the CAW Group of 20 (nursing homes) bargaining committee could participate in solidarity, as the committee was meeting to set their agenda for upcoming negotiations.

The CAW represents more than 1,200 members at 10 Extendicare facilities throughout Ontario.

CAW Local 599 Conducts Health and Safety Exit Clinic

A large group of Xstrata workers attended an occupational disease and musculoskeletal exit clinic at the MacIntyre Arena in Timmins, Ontario May 5 to 7.

The clinic was organized by CAW Local 599, with assistance from the CAW Health, Safety and Environment Department, in response to the closure of the Xstrata smelter. The clinic attracted 129 workers. An ongoing intake process will take place through the local union office in coming weeks.

CAW national representative Nick DeCarlo said the clinic objectives were to provide as much information to the laid off workers on the potential health risks of exposure including - assisting them to record their historic exposures and physical injuries at Xstrata; providing information on the illnesses and symptoms associated with their exposures at work; and informing them of resources to use if they have problems in the future. It also was designed to determine if any workers were sick or injured and needed immediate assistance.
Workers were also promised a copy of the analysis of the surveys and the findings of the clinic which will be completed by Occupational Health Clinics for Ontario Workers and the local in the weeks to come.
 
New Agreement Provides Future for Aluminum Plant 

CAW Local 127 and Dajcor Aluminum have hammered out a new collective agreement that breathes life into a shuttered Chatham, Ontario aluminum plant.

Dajcor Aluminum plans to start operating by June in the former Daymond facility, which closed in November of 2009.

CAW Local 127 represents 90 former Daymond workers. The membership voted 100 per cent in favour of a new agreement covering Dajcor, which will operate as an aluminum, extrusion, fabrication and anodizing company making everything from auto parts to solar panels.

The new operation will start with 20 production staff and 12 office staff. By the end of the year the company expects to employ 50 workers and up to 100 workers within two years.

CAW Local 127 President Aaron Neaves said cooperation between the union and a local businessman resulted in the unique start up.

"The easy part is negotiating a deal," Neaves told The Chatham Daily News. "The tough part was to try to find a local investor with local community roots who understands what it meant to be here."

Forum on Harmful Mining Practices

Pictured are some of the participants who took part in the May 19 public forum regarding community resistance to Canadian based transnational Gold Corp’s harmful mining practices in Guatemala and Honduras.

The meeting, sponsored by CAW Local 1285, the CAW Social Justice Fund and the CAW national union, was held at CAW Local 1285 hall in Brampton, Ontario. Guest speakers included Javier de Leon, a community leader in Guatemala, whose village is directly impacted by Goldcorp’s Marlin open pit, cyanide leach mine; Carlos Amador, a teacher and community leader in Honduras, whose town is 15 km from Goldcorp’s San Martin open-pit, cyanide leach mine; and Karen Spring of Rights Action, who lives in Honduras, where she works on human rights issues.

Participants were urged to contact their MPs and ask them to compel Canadian based transnational mining companies like Goldcorp to put mining projects on hold until there are inclusive consultations with affected rural and indigenous communities, including free, prior and informed consent.

Ford Said to Plan End of Mercury After Seven Decades

By Keith Naughton

May 27 (Bloomberg) -- Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan.

The automaker’s top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be identified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said.

Chief Executive Officer Alan Mulallyemphasized the automaker’s namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. The timing of Mercury’s demise depends on how fast executives can convince the brand’s dealers, who also sell Lincoln models, to close or merge with Ford showrooms, they said.
“Mercury is a forgotten brand,” said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Massachusetts. “Many Americans probably already think it has been discontinued. Mercury was too similar to Ford from the very beginning.”

Mulally also is unloading Ford’s European luxury brands, after the automaker failed to achieve a goal to have them generate one-third of automotive profits. Ford in March agreed to sell Volvo to China’s Zhejiang Geely Holding Co. It sold off Jaguar, Land Rover and Aston Martin in the last three years.

“We continue to evaluate all of our models and brands,” Mulally told reporters in Washington, D.C., today. “We have no change in our position about Ford or Lincoln or Mercury.”

Detroit’s Departed

Mercury would join Pontiac, Saturn, Oldsmobile and Plymouth among the departed Detroit brands of the 21st century. Sales will end within four years, one of the people estimated. General Motors Co., as part of its U.S.-backed reorganization last year, sold or closed four of its eight brands sold domestically.

Edsel Ford, son of founder Henry Ford, established Mercury during the Great Depression as a mid-priced alternative to mainstream Ford and upscale Lincoln. Edsel’s great grand- daughter, Elena Ford, now the automaker’s director of global marketing, initially opposed discontinuing Mercury, which she was in charge of promoting prior to 2002, the people said.

Doing away with Mercury is supported by Ford Executive Chairman Bill Fordand other members of the founding family, who have 40 percent voting control of the automaker through a special class of stock, the people said. With Mercury accounting for 1.9 percent of Ford’s global sales in the first quarter, the family has decided ending it is best for the business, the people said.

‘End of an Era’

“Edsel Ford is revered in the family and Mercury was his creation,” said Wolkonowicz, a former Ford product planner. “This is the end of an era.”
Bill and Elena Ford declined to comment, said Mark Truby, a Ford spokesman.
“Our plans regarding Mercury have not changed,” he said. “Like any good business, we constantly assess our business portfolio. If things change, we will let you know.”
Mercury sales peaked in 1978 at 579,498, when it had the slogan “At the Sign of the Cat.” Deliveries fell 84 percent to 92,299 last year. As the U.S. auto market recovers, Mercury’s sales are up 23 percent this year through April, less than Ford Motor’s overall gain of 33 percent, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey. Mercury had 0.9 percent of the U.S. market through April, unchanged from 2009.

Focus on Ford

Mulally, since arriving from Boeing Co. in September 2006, put a priority on improving quality and expanding the offerings of the Ford brand to lessen its dependence on pickups and sport- utility vehicles. He ended three years of losses at the Dearborn, Michigan-based automaker by earning $2.7 billion last year and has said 2010 will be “solidly profitable.”

Ford rose 60 cents, or 5.3 percent, to $11.99 at 4 p.m. in composite trading on the New York Stock Exchange. The shares have risen 20 percent this year.
As Mulally focused on the namesake brand, Mercury withered, the people said. Ford’s ad spending on Mercury fell 88 percent from 2005 through 2009, according to researcher Kantar Media of New York. Last year, Ford stopped selling the Mercury Sable, a sibling to the Taurus. The Mountaineer, Mercury’s version of the Explorer, is to go away next year as Ford rolls out a new version of the SUV.

Since Mulally’s arrival, Ford stopped giving Mercury exclusive features and technology, the people said. That made Mercury less distinctive than comparable Fords, which tend to be priced lower.

‘On the Cheap’

“The reason Mercury failed throughout its existence is because Ford never wanted to spend any money on it,” Wolkonowicz said. “Ford always wanted to do it on the cheap and the results were what you’d expect.”

Mercury’s top-selling model is the Milan, a sibling of the Ford Fusion, with sales up 53 percent this year. Mercury also sells its own version of the Ford Escape SUV, known as the Mariner, which has had a 22 percent sales gain through April. Ford is scheduled to replace those models in 2012 and 2013 and could drop the Mercury versions, Wolkonowicz said.

Mercury’s second best-selling model, the Grand Marquis, is being retired next year as Ford stops producing a trio of large, rear-wheel drive sedans that also includes the Lincoln Town Car and Ford Crown Victoria. Mulally has emphasized more fuel- efficient models, such as the Fiesta and Focus small cars Ford is introducing this year in the United States. Neither has a Mercury counterpart.

Oldest Buyers

“The Grand Marquis has the oldest buyer demographics in the industry with an average age of 70,” Wolkonowicz said. “There are still members of the Depression generation who will miss Mercury.”

The brand’s cultural heyday came in the 1950s, when hot- rodders favored its engines, which were larger and faster than those found in Ford models, Wolkonowicz said. James Dean drove a Mercury in the 1955 movie “Rebel Without a Cause.”

Along with Lincoln, Mercury sponsored “The Ed Sullivan Show” on CBS in the 1950s and 1960s. Detective Steve McGarrett, played by actor Jack Lord, drove a black Marquis in the “Hawaii Five-0” TV series on CBS in the 1970s.

As Mercury’s sales plunged, so too have its profits, Wolkonowicz said. With one-quarter of the sales it had a decade ago, it’s hard to rationalize the line’s continued existence, he said.

Gettelfinger: 'We did what we have to do' to save UAW jobs

Louis Aguilar / The Detroit News
May 27, 2010

Detroit -- Outgoing United Auto Workers President Ron Gettelfinger said it is a "fair question" whether the $14-an-hour starting wage for new workers at Detroit's Big Three automakers is enough so they can buy the cars they will build.

"That's an open debate, a democratic process," Gettelfinger told a group of reporters at an Automotive Press Association event this afternoon.

"We did what we have to do to get to tomorrow," he said, referring to the concessions the UAW made in the past few years to help the domestic automakers survive.

Those sacrifices include paying new auto workers nearly half the wage of existing workers.

"I'm confident and very proud, and we made the right decisions," said Gettelfinger, who retires as UAW president at the union's convention in mid-June.

Gettelfinger also said he believes the declining UAW membership has "bottomed out." In the past couple of months, Ford Motor Co., General Motors Co. and Chrysler LLC have all announced they plan to add workers at some facilities in the next year.

Buzz Hargrove calls on Ottawa to double CPP contributions

May 27, 2010

WINDSOR, Ont. -- Former CAW president Buzz Hargrove issued a call Wednesday for pension reform, demanding that Ottawa double contributions to the Canada Pension Plan.

“A lot of people don’t have a Chrysler pension,” Hargrove said in a speech to almost 1,700 CAW Local 444 retirees gathered inside the Caboto Club. “Canada pension plan pays those folks 25 per cent of their pre-retirement income. If we were to double it, they would get 50 per cent of their pre-retirement income. We can do that by simply deducting a few more pennies a week for the next seven or eight years off of the active workers’ pay cheques.”

Hargrove was echoing a pension reform campaign led by the Canadian Labour Congress (CLC), which wants CPP benefits doubled to a maximum of $1,635 a month. That would raise the pension floor from a poverty level of $12,000 a year to a livable $24,000 for the retirees of the future, according to the CLC.

Pressure for pension reform has been building since the bankruptcy filings of major corporations, such as Nortel as well as Chrysler and General Motors placed workers’ pensions at risk.

Hargrove said governments can protect pensions with other measures, such as legislation forcing companies to make weekly pension contributions as well as the creation of an insurance scheme design to guarantee pension payouts.

“There’s absolutely no reason that we that shows you on your pay stub that X-number of dollars are going to Ottawa to the pension commission on your behalf to guarantee when you retire you’ll never have to worry about your pension or your surviving spouse never have to worry about her pension. We can do that, it’s not impossible.”

Hargrove urged his audience to vote for those candidates committed to pension reform. “Vote for those people who care about people, who are willing to say ‘yes, I support legislation to double CPP benefits, I support legislation that guarantees that corporations have to fund on a weekly basis pensions to ensure that nobody loses their pension plan.’”

“Ask those questions and cast your ballot collectively against those who don’t support those very basic principles of equality.”

Hargrove said improving pensions guarantees and payments would benefit organized labour. “It would get people to understand what we’re all about; that we’re not about selfish interest; we’re about building a society that has a sense of fairness and as much equality as we can get,” said Hargrove who led the CAW for 16 years before retiring two years ago. “If we can get the government to double CPP benefits for the broader public over the next seven or eight years, they will see the advantage of having unions is not just for their members and their family but building a better society for all workers.”

Ford CEO Mulally meets
with Mich. lawmakers in D.C.

David Shepardson / Detroit News Washington Bureau
May 27, 2010

Washington -- Ford Motor Co. President and CEO Alan Mulally is in Washington today holding meetings with members of Congress.

Mulally will meet with the Michigan congressional delegation this afternoon -- the latest in a string of meetings that Detroit's Big Three CEOs have had with Michigan members.

His visit comes just one day after the House Energy and Commerce Committee passed a sweeping reform of the nation's auto safety laws.

On May 13, Chrysler Group CEO Sergio Marchionne met with Michigan members of Congress -- his second visit since December.

Last month, General Motors Co. chairman and CEO Edward Whitacre Jr. made his first trip to Washington as head of the Detroit automaker.

7 cents in 7 weeks: Vacationers caught off-guard by dollar's dive

Recent brush with parity makes it a confusing time for Canadians

Globe & Mail
Sarah Boesveld and Rob Carrick
May 26, 2010

As the mercury shoots upward and Canadians begin thinking about vacation, the loonie keeps dropping – sliding nearly seven cents in the past seven weeks.

That day-by-day, cent-by-cent crawl away from parity has made it a confusing time for consumers with an eye for travel, whether they’re mulling a day-long cross-border shopping trip or planning an overnight stay in the United States.

Will the loonie swing back up and make that New York City shopping trip worthwhile or continue its downward fall brought on by the shaky European economy?

Either way, the drop is not what economists predicted, nor what vacationers expected.

Toronto newlyweds Jeffrey and Rebecca Preszler noticed a difference in the value of their Canadian dollar when they got married in Las Vegas on the weekend. They had been there since last Tuesday, but had bought their U.S. currency ahead of time at near-parity rates, Mr. Preszler said.

They particularly noted the dip in the value of their dollar after Mr. Preszler used his credit cards because his traveler’s cheques were turned down at a club they visited after their Saturday wedding.

“When [we] used our credit card, it ended up being a $600 difference,” he said. “I know that the dollar does fluctuate, but there was a significant swing. I don’t know what the dollar was at when the charge went through, but [it] is probably close to an 8-per-cent swing.”

The Preszlers and other Canadians can blame Greece and its debt problems for the sudden slide in their dollar.Rahim Madhavji, president of Knightsbridge Foreign Exchange, said that financial markets are worried Greece will default on the money it owes to European banks. Compounding these fears is the risk that Portugal and Spain will also default, causing bank failures reminiscent of the collapse of Lehman Brothers in the United States in 2008.

This kind of uncertainty inevitably causes money to flow into the U.S. dollar, considered the Fort Knox of currencies. “It’s a herd mentality – everyone wants U.S. dollars, and so the U.S. dollar appreciates,” Mr. Madhavji said.

What’s confusing for vacationers who booked summer trips to the United States is that economists and currency traders were speculating just a few months ago that our dollar would hit parity with its U.S. counterpart and quite possibly make a sustained move higher.

March-April numbers just released by the Canadian Tourism Research Institute showed a surge in cross-border trips, improving by five to six per cent.

But that’s when the dollar had just reached parity, trading even above it and then closing at 99.88 cents on April 6, when it reached a 20-month high, and before the downward slide of recent weeks, with the loonie closing at 93.46 cents on Tuesday.

It will take a lot more than a few cents drop to throw a wrench in travel plans, said Greg Hermus, associate director of the institute, a department of the Conference Board of Canada.

“Where we are right now, between the 92 and 94 [cent mark], it hasn’t had a dramatic impact,” he said, adding that there haven’t been any short-term forecasts on how many Canadians are thinking about U.S. travel this summer.

“We’re not seeing a real slowdown yet in the Canadian economy in terms of overnight travel, but if it starts getting below 90 cents, then I think you’ll see something.”

Fluctuating exchange rates are more likely to affect day trippers across the border than those heading there overnight because they tend to keep a closer eye on exchange rates, Mr. Hermus said.Only severe drops in consumer confidence, he said, would make a dent in the cross-border shopping economy.

“Economic conditions are improving, consumer confidence is generally improving and the dollar is helping,” he said, adding that there are still “deals to be had” in the United States as the markets begin to recover.

The previous outlook was based on Canada’s strong economy, its comparatively reasonable government debt and its dominance in the production of commodities like oil and metals. Today, it doesn’t matter that the long-term outlook for Canada is better than it is for the United States. All global investors care about is the safety of the U.S. dollar.

The Canadian dollar closed just a tick above par in mid-April and has since fallen about 7.5 per cent, which is a huge move in currency markets. Mr. Madhavji has two pieces of bad news for people looking at travel to the United States in the weeks and months ahead.

“ It takes a lot of effort to get close to parity, but not a lot of effort to move the other way. ”— Rahim Madhavji, Knightsbridge Foreign Exchange

First, there could be more downside for the loonie. “We can go quite a bit lower,” he said. Second, a quick snapback is unlikely. History shows that our dollar can lose a huge amount of value against the U.S. dollar during a period of global financial uncertainty, then take months or even a year or more to recover.

“It takes a lot of effort to get close to parity, but not a lot of effort to move the other way,” he said.

Mr. Madhavji’s firm has been doing a lot of business with individuals who are taking advantage of the still-weak U.S. housing market to buy vacation properties in Arizona and Florida.

For people planning to make large purchases in U.S. dollars, he suggests using a financial tool called hedging that is much like an insurance policy. You pay a premium to lock in a rate that leaves you impervious to future volatility.

And what about vacationers and the dollar? “There’s not much you can do but eat it.”

Ottawa puts hefty price tag on vehicle emissions

Greg Keenan and Shawn McCarthy
Toronto/Ottawa — Globe and Mail
May 25, 2010

Ottawa believes it will cost Canada’s auto makers, fuel suppliers and drivers almost $13-billion to meet greenhouse gas emission standards over the next six years.

But better fuel economy for drivers will more than make up for the additional cost of the average vehicle by 2016, Environment Canada says in a regulatory impact statement posted on Canada Gazette.

Two statements laying out the costs and benefits associated with Ottawa’s dual strategy for cutting emissions in the transportation sector illustrate the steep costs to industry, including refineries, from the new efficiency standards for light trucks and autos, and a requirement that ethanol and biodiesel be included in the fuel supply.

Renewable fuel regulations that take effect Sept. 1 are particularly costly, Environment Canada says. The analysis pegs the price of a requirement for 5-per-cent ethanol content in gasoline at $3.2-billion. A separate report done for Environment Canada says the government’s 2-per-cent biodiesel rule will carry a $5.3-billion price tag.

Auto manufacturers will incur $3.7-billion in added costs from the 2011-2016 standards out of a total price tag of $4.2-billion.

That will drive the average purchase price of a 2016 model year vehicle $1,195 higher than 2008 levels because of the leaps in technology that will be required to meet the standards, the document says. The added cost per vehicle represents about 5 per cent of the average $25,000 cost of a vehicle in 2008.

However, Environment Canada said the benefits of better fuel economy will exceed costs by three to one, including $9.7-billion in fuel savings which, officials said, will more than make up for higher vehicle prices. It calculated motorists will recover their added upfront costs in a year and a half.

Environment Minister Jim Prentice has trumpeted the government’s regulatory actions in the transportation sector, noting that 27 per cent of the country’s greenhouse gas emissions are produced by cars, trucks, trains, ships and aircraft.

Canada has moved in tandem with the U.S. to impose new fuel efficiency standards on cars and light trucks for the 2011 to 2016 models years.

On Friday, U.S. President Barack Obama ordered the government to develop, for the first time, fuel efficiency and emission standards for big rigs and heavy trucks, and even tougher standards for cars and light trucks beginning in the 2017 model years. Canada’s Environment Minister Jim Prentice also told reporters in Vancouver on Friday that his government will join the U.S. in setting new standards for heavy trucks.

No targets for fuel efficiency were attached to Mr. Prentice’s announcement in Vancouver – they will be set during the development of the regulations. But the industry expects it will be required to make an average improvement of 20 per cent.

The auto emission regulations will not apply to used cars and trucks imported into Canada, which raises the possibility of consumers scouring the U.S. used car market in order to avoid paying the higher price on new vehicles or find a bigger or high-horsepower vehicle not available in Canada.

“Canada is in this very unique situation in the global auto industry in that we have this massive supply of used vehicles within a couple of hours drive of the country,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.

At the same time, oil industry critics argue the government has imposed impractical demands on their companies, which must comply with regulations on Sept. 1, even though the detailed rules will not be finalized until late summer. And they argue the biofuels policy is an extremely expensive way to combat climate change.

“The overriding concern of industry was that we need to have a sufficient lead time of regulatory certainty to develop and implement compliance plans,” said Peter Boag, president of the Canadian Petroleum Products Institute.

The renewable-fuel legislation was passed two years ago, but Mr. Boag said industry won’t invest until it sees detailed final regulations.

Currently, Ontario and all western provinces except Alberta have renewable fuel standards in effect, but Mr. Boag said it will be a major undertaking to incorporate the rest of the country into the program.

Environment Canada’s impact analysis suggests the industry will require nearly $1-billion of additional investment due to federal rules. Consumers will face $2-billion in added costs because ethanol has a lower energy content than gasoline, requiring more fuel to travel the same distance.

“It’s an incomplete report,” said Gord Quaiattini, president of the Canadian Renewables Fuels Association. He also criticized the department for assuming that ethanol prices would be higher than gasoline, when in fact, the reverse has been true in recent years.

Ford battery, transmission
work returns to U.S.

Bryce G. Hoffman / The Detroit News
May 24, 2010

Ford Motor Co. today announced that it is investing $135 million in two Michigan parts plants -- the Rawsonville Plant and the Van Dyke Transmission Plant in Sterling Heights -- to produce battery packs and transmissions currently manufactured in Mexico and Japan.

These are key components for a new generation of hybrid and electric vehicles that also will be produced in southeast Michigan. Ford Americas President Mark Fields said they would be "instrumental in making Ford's electrification strategy a reality."

The investment also is expected to create nearly 200 jobs, though most likely will be filled by idled Ford workers.

"We're not only bringing work back here to the good old United States, but we're bringing it in-house from an outside supplier," Fields told an enthusiastic crowd at the Rawsonville Plant. "We're going to move these components to Ford's own facilities that employ our wonderful UAW workers."

Bob King, head of the United Auto Workers' national Ford section and heir-apparent to retiring President Ron Gettelfinger, praised the collaboration between the union and the company that allowed Ford to bring this work to America.

"You need a partnership with management," he said. "If you're going to build high-quality products, if you're going to get the best products at the best price to the consumers, you need a management that will work together with you."

King said Ford's recent quality gains are proof of how well the company is working with UAW members to improve its products.

Today's announcement was made possible in part because of loans from the U.S. Department of Energy and generous tax credits from the state of Michigan.

Gov. Jennifer Granholm praised Ford for bringing jobs back to Michigan.

"We are sending a message to the world," she said. "You can be competitive manufacturing in the United States and in Michigan."

But for workers at the Rawsonville Plant, the news had more personal significance.

"It means we stay open," said worker Bernita White. "It means we keep our jobs and we can take care of our families."

Chrysler's back, and hiring

By TOM WALSH
May 23, 2010
FREE PRESS COLUMNIST

Who'd have thought Chrysler, sickliest of Detroit's three wobbly automakers a year ago, would be the first to hire a batch of 1,080 new production workers?

Note that I didn't say RE-hire from the seemingly endless lists of laid-off and jobs-banked autoworkers across the nation.

"We don't have anyone laid off at Chrysler, so naturally, we have the entry level workforce that will be coming in, and it's a good thing," UAW Vice President General Holiefield said Friday, following CEO Sergio Marchionne's revelation that Chrysler plans to add a second shift in July at its Detroit assembly plant and hire 1,080 people.

"It gets us back into the ballgame. It helps us to compete with our rivals, so we're all ready. We're all fired up," Holiefield proclaimed at an event to launch production of the new Jeep Grand Cherokee that turned into a pep rally of sorts for a city badly in need of some good news.

Yes, this is the same Chrysler that President Barack Obama's auto industry task force came within a whisker of tossing into the junkyard of Chapter 7 bankruptcy liquidation last year. Obama himself reportedly made the call to keep Chrysler alive with federal loans and an alliance with Fiat, the Italian automaker that Marchionne rescued from near-collapse a few years ago.

How did Chrysler deplete its ranks of surplus workers faster than either Ford or General Motors?

And what makes Marchionne so suddenly sure of Chrysler's future that he's willing to put 1,080 new people on the payroll?

Chrysler already had shrunk to a shadow of its former self under the private equity ownership of Cerberus Capital Management, and lots of its remaining workers were so worried about the company's dicey future that they opted for buyout and early retirement offers.

As for Marchionne, well, the guy certainly has no shortage of confidence.

Calling the new 2011 Jeep Grand Cherokee the brand's "signature vehicle," Marchionne said the world will be watching to see if a reborn Chrysler can produce a world-class vehicle with world-class quality.

He wouldn't give a volume target for the Grand Cherokee, whose annual sales have fallen from 300,000 a decade ago to only 50,000 last year. But Michael Manley, the Jeep brand's president, said dealer orders are running 30%-40% ahead of Chrysler's own high expectations.

Asked if he can foresee adding a third shift at the Jefferson North plant someday, Marchionne said, "I do -- if I can sell more cars."

Chrysler? Who'd have thought? Marchionne, evidently.

Campaigns to organize Toyota Canada's workers escalates

Two unions say they are in talks with employees

Globe & Mail
Canadian Press
May 22, 2010

Campaigns by two different unions to organize Toyota Canada's workers appear to be escalating.

The International Association of Machinists and Aerospace Workers says it has received several requests for representation from Toyota workers.

But the Canadian Auto Workers says it is also in talks with employees at the company's two plants in southern Ontario.

CAW organizing director John Aman says both unions have been working to organize the automaker's Canadian workers for some time.

But he says the decision is ultimately up to the workers.

Toyota's two plants in Cambridge and Woodstock employ about 6,500 people who are currently not represented by a union.

Toyota recalls Lexus cars
in Japan, U.S. to follow

Jay Alabaster / Associated Press
May 22, 2010

Tokyo -- Toyota Motor Corp. began a recall today of 4,509 Lexus cars in Japan because of a computer problem affecting the model's steering system, with a similar recall to follow in the U.S.

The carmaker said Wednesday it would recall the cars in Japan, with another 7,000 affected in the U.S., China, Europe and other regions. The recall affects Toyota's luxury Lexus "LS" line and involves a computerized system that oversees how the steering wheel controls the tires.

After being hit with a record $16.4 million fine in the U.S. for being slow to carry out an accelerator pedal recall and facing strong government criticism both at home and abroad for slow responses to safety problems, Toyota Motor Corp. is working to react more quickly to problems with its cars. The company on Tuesday paid the fine in the U.S. where it still faces hundreds of state and federal lawsuits.

A document posted today on the Transport Ministry's website shows the latest recall covers Lexus vehicles manufactured from late August through mid-May. It said there have been 12 complaints about the issue, with no accidents reported.

A statement on Toyota's website said preparations also were being made to launch a recall in the U.S. later today. There are about 4,000 affected Lexus cars in the U.S., according to company spokesman Paul Nolasco.

The fix requires a software update of the steering system.

Toyota has recalled more than 8 million vehicles worldwide for safety defects affecting some of its best-selling models. The U.S. Transportation Department is reviewing thousands of Toyota documents and could issue new penalties for the company's handling of other safety recalls.

The recalls have prompted the first major review of U.S. auto safety laws in Congress since tire recalls by Bridgestone/Firestone Inc. in 2000.

Toyota's priorities come under fire

In contentious hearing, automaker accused
of putting spin control before action

David Shepardson / The Detroit News

May 21, 2010

Washington -- Toyota Motor Corp. has put more effort into containing the damage to its reputation than checking all the possible causes of unintended acceleration, a Michigan congressman said Thursday during a contentious hearing on Capitol Hill.

Lawmakers also charged that Toyota was trying to discredit critics and hadn't thoroughly investigated whether its electronic systems might be defective.

The Japanese automaker, struggling with the biggest crisis in its recent history, maintains that it has not discovered any electronic cause for the incidents of unintended acceleration that led to its largest U.S. recall.

Rep. Bart Stupak, D-Menominee, chairman of the House Energy and Commerce Committee's oversight panel, accused Toyota of focusing more on "damage control" than on searching for defects. Toyota has recalled more than 8.5 million vehicles worldwide, including more than 6 million in the United States.

"Toyota appears to have been more interested in messaging than scientific inquiry," he said.

Committee staffers said Toyota had hired the Benenson Strategy Group to conduct a poll about "what Toyota could do to repair damage to the company's image among educated consumers known as 'opinion elites.' "

Toyota, "like most organizations, conducts regular public opinion research," the company said in a statement.

"We are making a major scientific effort to further validate the safety of our vehicles by opening up our technology to an unprecedented level of independent review," Jim Lentz, president of Toyota Motor Sales USA, told the committee.

Committee Chairman Rep. Henry Waxman, D-Calif., said there was "no evidence that Toyota has done extensive or rigorous testing of its vehicles for potential electronic defects that could cause sudden acceleration."

The committee has met with Toyota engineers in Japan and taken their depositions and one from a senior U.S. employee.

An engineering firm Toyota hired in February to examine its electronic systems, Menlo, Calif.-based Exponent, also came under fire at the hearing for lacking a written plan or description of what it was asked to test.

Waxman said a former Exponent engineer told the committee that Exponent staffers weren't writing things down to avoid creating documents that would have to be produced in lawsuits.

He said Shukri Souri, the Exponent engineer who oversaw the tests on Toyota vehicles, had said that writing down what Exponent does would "limit the creativity" of the engineers working on the project. "That's preposterous," Waxman said.

Among the measures Toyota has taken in recent months, the company has established a panel of high-level, North American safety and business experts to advise it. The group will travel to Japan next week to meet the automaker's top leaders, Toyota said.

The panel is reviewing Toyota's business practices and internal communications, as well as the investigations of potential flaws in its electronic throttle control or other electronic systems.

"Our panel includes highly respected safety, quality and engineering experts who are thoroughly exploring Exponent's findings, and we are seeking further study by other independent experts," said Rodney Slater, a former U.S. Secretary of Transportation, who leads the North American Quality Advisory Panel formed three weeks ago.

Toyota also came under criticism for failing to retrofit all existing vehicles with a failsafe electronic brake override system. Toyota is retrofitting many models, but has said it would be difficult on some models. Lentz said it would take too much time to develop the software on all vehicles.

Why gasoline prices haven’t fallen

Petroleum producers say the industry is
“highly competitive,” but critics cry foul.

May 20, 2010
Toronto Star Dana Flavelle
Business Reporter

The price of crude oil has fallen 19 per cent in the past two weeks but prices at the gas pump in Ontario have barely budged. Why?

It depends who you ask.

Everyone agrees the two don’t always rise and fall in tandem, at least not in the short term.

But that’s where the agreement ends.

Gas price watcher Dan McTeague says Canada’s highly concentrated, poorly regulated oil industry is able to “tack on” what he calls “extra mystery cents” to the wholesale price of gasoline paid by gas retailers.

“While you’d think Canadian refiners would observe market forces, they don’t have to,” said the Liberal MPP for Pickering-Scarborough East. “That’s why I’m getting a lot of letters from the public. How is crude going down and the price at the pumps not falling as much as they should?”

Industry consultant Michael Ervin says gas prices normally rise as much as 10 to 15 cents a litre at the start of the summer driving season, partly because demand rises but also because summer fuel is more expensive to make.

But the global economy is weaker, producers have added more ethanol to gasoline, and consumers are switching to more fuel-efficient cars, he noted.

“What we’re seeing here is not as much of a seasonal rise because gasoline is relatively plentiful. So, the good news is consumers today are enjoying a pump price that is 10 or 15 cents a litre less than we would have historically suggested,” said Ervin, vice-president of M.J. Ervin and Associations/Kent Marketing Services, in Calgary.

In a 16-day period this month, the price per barrel for crude oil plunged 19 per cent, yet the price for gasoline at the pumps in Toronto slipped just 5 per cent, according to Spencer Knipping, an oil industry analyst with the Ontario Ministry of Energy.

The price of gasoline in Toronto held steady from March until the beginning of May. The average retail price for a litre of gasoline in Toronto was 97.24 cents Wednesday.

Here’s what happened.

The price of crude oil lost ground as investors worried that the debt crisis in Greece could spread other countries and cast a pall over the long-awaited global recovery. That would put a crimp in demand.

That sent the price of crude oil down to $69.87 U.S. a barrel, from a high of $86.19 US over the previous two week period, according to Knipping’s figures.

The wholesale price of gasoline, which trades on the North American market, also fell though it fell 16 per cent in New York but only 5.8 per cent in Toronto, according to Knipping.

The value of the Canadian dollar plays a role. As it falls, the cost of crude rises. But the Canadian dollar fell just 2.5 per cent during that period, Knipping said.

Knipping said he couldn’t explain why the Toronto wholesale gasoline market has been “more sluggish” in its response to changes in crude oil.

The petroleum industry says it’s highly competitive.

“Generally, if you look over time, the wholesale price of gasoline adjusted for currencies, between Canada and the U.S. track virtually identically,” said Peter Boag, president of the Canadian Petroleum Products Institute. If the spread remains too high it becomes an incentive to export, he explained.

Summer gasoline is more expensive to make, Boag also said, which is why refiner’s gross margins rise at this time of year. Gas produces more fumes in warm weather. “Volatile organic compounds are bad for the environment,” Boag said. “In the summer vapor pressure is reduced to lessen harmful emissions.”

The price of crude oil is just one of the factors that make up the price of gas at the pumps, The other two are the price of wholesale gasoline and competition in the local retail market.

“The three markets can go in opposite directions,” said Spencer Knipping, an oil industry analyst with the Ontario Ministry of Energy. “It’s not unusual and there’s nothing wrong with it.

“You can have movements in crude oil prices, which are determined by world market forces, and the price of gasoline not budging. Or the wholesale gasoline market, which is determined by the North American market, may not be budging.”

Or you can have short-term price wars in local markets, he said.

But while there may be short-term blips, generally speaking “over time, crude oil market prices get passed through to the pump,” Knipping said.

Patricia Mohr, vice president of economics and commodity market expert at Scotiabank, had estimated that crude oil prices would be in the mid-$80 a barrel range for this year and next.

She is now reviewing that forecast because of the persistent debt worries in the euro zone.

“It appears that growth, which was not going to be particularly strong across the euro zone, is going to be marked down again. Global oil demand is still going to rise this year but not as strong as it otherwise would have,” Mohr said.

CAW CONTACT
Volume 40, No. 20
May 19, 2010

Expand CPP to Ease Pension Problems, New Study Says

 An expansion of the Canada Pension Plan is the most effective way of addressing Canada’s pension problems, says a recent report by the Canadian Centre for Policy Alternatives (CCPA).

Pension expert Monica Townson, a CCPA research associate, looks at the options for expanding the CPP to ensure all Canadians have adequate retirement incomes.

“There is now widespread concern that unless changes are made, a significant number of workers will reach retirement age without sufficient income to support themselves,” Townson says. Here are some findings from the report:

-  the CPP is by far the most secure and cost-effective way to deliver a pension benefit for retired workers;
11 million employed Canadians have no workplace pension plan other than the CPP;

-  RRSP schemes do not fill the gap at all;

-  most Canadian workers have no RRSP because they can’t afford it (last year, only 31% of eligible Canadians contributed to their RRSP, and unused RRSP “room” now exceeds $500 billion);  

-  RRSP payouts after retirement are inadequate and unreliable: current retirement-age RRSPs would provide monthly pensions of only $250, on average;

-  many experts are now supporting expansion of the CPP to replace 50% or even 70% of pre-retirement earnings (compared to 25% today). They include David Denison, CEO of the CPP Investment Board, and Bernard Dussault, former Chief Actuary for the CPP;

-  these options are financially possible, and would produce a fairer, less expensive, and more secure pension system.

To read the full report, please go to: www.policyalternatives.ca/publications/reports/options-pension-reform

***
Hamilton Council Makes Jobs for Siemens Workforce a Top Priority

City of Hamilton councilors have approved a motion that makes the retention and identification of “new employment opportunities” for 550 Siemens workers a top priority for the city.

CAW Local 504 President Randy Smith said the union views council’s decision as a good first step. But he stressed the CAW remains determined to explore every possibility for securing jobs for this group of workers.
 
Siemens shocked Local 504 members when it announced March 11 that it planned to close the doors of its Hamilton turbine facility as of July 2011. The Hamilton plant is more than 100 years old.

“With a highly skilled and productive workforce in Hamilton, the company will benefit from bringing new work into the Hamilton facility - whether it’s gas turbines, wind turbines, light rail work or solar panels,” Smith said.

The Hamilton council motion also establishes that the city work with both the federal and provincial governments to establish a labour adjustment task force for Siemens.

CAW President Ken Lewenza stressed the Siemens plant in Hamilton is a viable facility. “This plant has a strong workforce and a good future if Siemens steps forward and invests in the facility. The CAW is prepared to work with the municipal, provincial and federal governments and the company to maintain or add new work in the plant. We are determined to ensure high quality, value added manufacturing jobs continue at this plant,” Lewenza said.

Here is the wording of the Hamilton council motion:

a) That job retention and the identification of new employment opportunities, for the 550 displaced workers from Siemens Wentworth Street North plant, be approved as a top priority for the City of Hamilton;

b) That the Mayor, City Manager and Director of Economic Development and Real Estate be directed to continue working with Corporate staff from Siemens to assist with identifying and facilitating other employment opportunities for the displaced Hamilton workers;

c) That the City of Hamilton work with both the Federal and Provincial governments for the purpose of establishing a labour adjustment Task Force for Siemens Hamilton.
***
CAW Demands Stronger Regulation of Retirement Homes

The CAW is urging the Ontario government to strengthen the proposed regulation of retirement homes in the province.  Retirement homes, unlike nursing homes and other long-term care homes are private-pay facilities and have until now been unregulated apart from complying with tenant legislation and fire and building codes.

Tim Carrie, president of CAW Council and CAW Local 27 in London, Ontario made a presentation on May 10 to Ontario’s Standing Committee on Social Policy considering Bill 21, The Retirement Home Act, which highlighted the need to improve the regulations.
 
While commending the government for finally taking the initiative to ensure regulation, the CAW presentation was critical of the absence of any minimum care and staffing standards for these homes that increasingly function as unlicensed nursing homes.

Bill 21 treats the need to reside in a retirement home as no more than purchasing a vehicle or vacation trip; ignoring the obvious distinctions between protecting seniors in these consumer transactions – and ensuring quality care is provided by retirement homes with dignity, respect and autonomy, said Carrie.  
***
OC Transpo Contract Good News for New Flyer Workers

CAW Local 3003 members at New Flyer Industries in Winnipeg, Manitoba are pleased by the awarding of a major contract for new buses from Ottawa transit authority OC Transpo, says Dave Hiebert, unit chairperson at New Flyer Industries.

“This major contract for buses is at least in part the result of all the hard work by the CAW and its Heavy Truck and Bus Council and the activists who for years have pushed for Buy Canadian legislation,” Hiebert said.

OC Transpo is buying 306 new clean diesel buses for approximately $190 million. Ottawa city council approved the purchase in late April.

The company has indicated that it does not anticipate increasing the production rate of about 40 buses per week, so members on layoff may have to wait a little longer for recall, Hiebert said.

But the timing of the deal will allow New Flyer, to respond to the deferral of an order from Chicago transit back in 2009.

Hiebert said with an experienced and efficient workforce and strong leadership from New Flyer there will be more new contracts landed and the opportunity to explore new directions in business.

“We have a good working relationship with the company and in my opinion we are on the right road to success for everyone,” Hiebert said.

Tom Murphy, CAW Manitoba/Saskatchewan area director, said this highlights the importance of all levels of government buying Canadian whenever possible.

“Without this contract there was the potential of 400 layoffs in the near future,” Murphy said. “This is great news for our members at New Flyer – it will provide improved job security for our members.”
***
International Day Against Homophobia and Transphobia - CAW Statement

May 17th is the International Day Against Homophobia and Transphobia.  Around the world lesbian, gay, bisexual and trans activists, along with community allies and politicians, will stop and acknowledge the high human and societal cost of discrimination, violence and harassment – and then we will continue in our push toward equality, acceptance, and freedom.  Our union, the CAW, will participate in ceremonies at town councils and city halls in many communities across Canada.  We know that LGBT activists and trade unionists from Mexico to Brazil, from France to Thailand, from Australia to Albania will be doing the same, as a growing number of cities, regions, provinces and countries (including the European Parliament) now also recognize this day.

To many people, it may seem that sexual orientation and gender identity are becoming less and less of an issue in Canada.  It’s true that we have made tremendous gains… To read the full statement go to: http://www.caw.ca/en/8944.htm.

Moody's upgrades credit ratings on Ford and its financing division

May 19, 2010
BLOOMBERG NEWS

Ford was raised to B1, the fourth level below investment grade, New York-based Moody's said Tuesday in a statement.

The upgrade, the first since March 17, includes the Ford Motor Credit finance unit and affects about $65 billion in debt. Moody's outlook on Ford is "stable."

"Ford now has a healthy and sustainable operating model," Bruce Clark, Moody's senior vice president, said in the statement. "As demand in the U.S. continues to recover through 2011, Ford is well-positioned to generate stronger operating performance and cash flow."

The automaker earned $2.7 billion last year, reversing three years of losses.

Ford's 7.45% bonds due July 2031 rose 0.5 cent to 88.5 cents on the dollar Tuesday in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Ford shares fell 40 cents, or 3.4%, to $11.55 Tuesday.

The company's shares have risen 15% this year.

'Idol' ads crank up Fiesta rollout

Ford embraces new reality with a 1-year online blitz, now standard campaign

Bryce G. Hoffman / The Detroit News
May 18, 2010

Dearborn --Ford Motor Co.'s conventional media blitz for its new Ford Fiesta subcompact will begin today, with the first spot due to air tonight during "American Idol."

But the company's advertising campaign has been in full swing for a year online and already has paid big dividends. Ford marketing executives say 60 percent of the car-buying public already knows about the new Ford.

"It's more than five times more efficient than anything we've done before," said Matt Vandyke, director of U.S. marketing communications for the Dearborn automaker. "It's something you'll see us doing with other vehicles going forward."

Automakers used to focus most of their ad spending on the launch of a vehicle, with support dropping off sharply once it was established in the marketplace. Marketing expert Michael Bernacchi, a professor at the University of Detroit Mercy, refers to that as the "blast-bust" model, and said Ford deserves credit for figuring out that it is ill-suited to today's digital reality.

"The blast-bust strategy never made a great deal of sense," Bernacchi said. "Ford's new strategy makes great sense, especially if you are going after younger buyers."

Ford is targeting the Fiesta at two very different groups of consumers -- millennials and baby boomers -- but says it needs to market only to the much-younger millennials to attract the boomers.

Its new ads feature scruffy twenty-somethings, music from the up-and-coming band Edward Sharpe and the Magnetic Zeros and the catchphrase "It's a pretty big deal" -- all of which are likely to resonate with a generation of consumers weaned on iPods and Harry Potter.

These cultural references may mean little to baby boomers, but youth does. And Ford is convinced that will be enough to sell empty-nesters who already are downsizing their lives on its hip subcompact. Bernacchi says it makes sense.

"Boomers are Gen-Y wannabes. Boomers are never going to give up their desire for youthfulness," he said, adding that they have something else in common with millennials: socio-economic status.

"The Gen-Yers are on their way up and the boomers are on the way down. Many of them are past their peak earning years, and a car like this allows them to adapt to that with a wink and a nod because they can convince themselves they are buying it to be cool."

While the Fiesta ads strive to be hip, they also focus on the vehicle's practical side -- particularly its 40-miles per gallon highway fuel economy rating.

"It remains the core reason to buy in this segment," said Chantel Lenard, who is in charge of marketing for Ford's small and midsize cars.

The new spots pull few punches, challenging not only the Fiesta's direct competitors -- the Toyota Yaris and Honda Fit -- but even talking some smack about the BMW 3 series, which costs tens of thousands of dollars more. One tongue-in-cheek Web video pits the Fiesta against a Lamborghini.

Ford hopes the conventional ads will build on the success of its largely viral online effort.

More than 130,000 people have signed up online for more information about the Fiesta. More than 80 percent of them do not own a Ford now, and about 30 percent are under 25.

Any automaker would love to see numbers like these, but they are made more impressive by the fact that Ford -- along with the rest of Detroit -- has long lagged its foreign rivals with younger buyers.

"We have the ability," Vandyke said, "to affect preconceived notions of Ford."

GM back in the Black

Auto maker reports $865-million profit in first three months of 2010, its first quarterly profit since 2007

Greg Keenan
Globe and Mail Monday, May. 17

General Motors Corp. reported a first-quarter profit of $865-million (U.S.) Monday, buoyed by a turnaround in North America and results from such emerging markets as China.

“In North America, we are adding production to keep up with strong demand for new products in our four bands,” GM’s chief financial officer Chris Liddell said in a statement. “We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet.”

The company reported earnings before interest and taxes of $1.2-billion in North America in the three months ended March 31, compared with a loss of $3.4-billion in the fourth quarter of 2009.

GM Europe lost $500-million on an EBIT basis, compared with a loss of $800-million in the previous quarter. Results improved dramatically at GM International Operations, one of the few operations of the company that stayed profitable through the trough of 2009.

That division boosted earnings before interest and taxes to $1.2-billion from $500-million in the fourth quarter of 2009.

The overall profit compares with a loss of $3.4-billion in the three months ended Dec. 31, and a loss of $6-billion in the year-earlier period. Since then, GM restructured under chapter 11 of the U.S. bankruptcy code and adopted fresh-start accounting.

Revenue in the first quarter was $31.5-billion.

The profit is another sign that a slow recovery in the North American auto market is taking hold after the disastrous 2009, when General Motors Corp. and Chrysler LLC tumbled into chapter 11 bankruptcy protection.

Ford Motor Co. reported a first-quarter profit of $2.1-billion (U.S.) and Chrysler Group LLC posted an operating profit in the three months ended March 31.

Analysts have warned, however, that the bounce-back in vehicle sales that has contributed to these financial results will be tepid as the U.S. economy meanders through a difficult recovery.

Ford: Fiesta will get up to 40 mpg

Scott Burgess / The Detroit News
May 17, 2010

The 2011 Ford Fiesta will get 40 miles per gallon on the highway and 29 mpg in the city, Ford Motor Co. officials announced today. Ford released the official Environmental Protection Agency test results, which matched the mileage Ford had estimated for a Fiesta equipped with an automatic transmission.

The subcompact Fiesta, which arrives this summer in U.S. Ford dealerships, uses several new technologies to achieve that level of fuel efficiency, executives at the automaker said.

From the six-speed PowerShift automatic transmission and electric power steering to the twin independent variable camshaft timing and aerodynamic design, Ford has leaped ahead of other small cars, such as the Honda Fit and Nissan Versa, in gas mileage.

"The Fiesta was created as a great car to drive, great to sit, and its design is the embodiment of Ford's kinetic design," Derrick Kuzak, Ford's vice president of global product development, said last month at the media launch of the small car.

The Fiesta is now sold only overseas; the automaker sold more than 69,000 Fiestas in Europe in March.

While even Kuzak admits the small car likely won't be as wildly successful in the United States, he said it demonstrates how Ford has balanced its U.S. lineup and demonstrates to American customers what Ford can do.

The 2011 Fiesta with a five-speed manual transmission, according to the EPA, will achieve 28 mpg in the city and 37 mpg on the highway, which also bests the immediate subcompact competition. It will have a starting price of $13,995.

The surprising rebound
of GM and Chrysler

David Olive - Toronto Star
May 16, 2010

Such a simple thing. Choosing not to re-sign Tiger Woods as Buick’s chief endorser may have played the biggest role in reviving a flagging brand pretty much given up for dead.

The infidelity scandal wasn’t the issue with Woods. It was his sport. Golf isn’t whist, but it does skew to one of the oldest audiences. The average age of Buick owners has dropped by seven years in the short time since Buick ended its long association with Woods.

On the first anniversary of the government bailout of General Motors Corp. and Chrysler Group LLC, both companies are exhibiting the fresh thinking that is essential if these traditionally hidebound firms are to win the long game. Auto technology is changing more rapidly than ever. And competition will soon increase with the arrival in North America of low-priced Chinese and Indian brands.

A year ago, Chrysler was in bankruptcy and GM would soon join it. But last month, Chrysler reported a slender first-quarter operating profit. And GM is expected on Monday to report its first quarterly profit in three years.

GM made an early repayment last month of its $6.7-billion in government bailout loans. That still leaves about $40 billion in taxpayer-owned equity in GM. But Washington is increasingly confident it will be able to begin selling that stock as GM management vows to return to public-traded status as early as this year’s fourth quarter. Chrysler hopes to do the same next year.

In the first four months of this year, GM sales increased by 14 per cent, while Chrysler sales were up by 1.9 per cent. Each firm trailed the industry rebound of 16.7 per cent.

But GM’s double-digit sales increase came despite GM having shed four of its eight pre-bankruptcy brands, Pontiac, Saturn, Saab and Hummer. Since emerging from bankruptcy Chrysler has added just one new model to its lineup, the Ram pickup.

“The fact is that GM is way ahead of anyplace we thought it was going to be or anybody thought it was going to be” a year ago, Steven Rattner, U.S. president Barack Obama’s “car czar” who oversaw the refinancing of GM and Chrysler, said last week.

Under the dictates of the rescue plan implemented by Washington, Ottawa and Queen’s Park, GM and Chrysler made the tough decisions they put off for three decades. They’ve each closed massive excess plant capacity – a legacy of GM’s command of 50 per cent of the North American market, rather than its 20 per cent or so during most of the past two decades.

Under new CEO leadership from outside insular Detroit, GM and Chrysler have also pared dealerships and rid themselves of their slowest-selling inventory. Through heavy use of buyer incentives on their least popular car, GM and Chrysler in the 2000s were losing money on every vehicle they sold outside of the trucks and SUVs they understandably clung to even as consumer sentiment changed with soaring gas prices and environmental concerns.

Bankruptcy and possible liquidation was the game-changer that forced GM, Chrysler and Ford to get religion about passenger cars, and small ones in particular. “We have never really built good small cars,” Mark Reuss, president of GM North America,” conceded in a Detroit News interview earlier this month. “But we are now.”

Indeed, GM now can claim a handful of the market’s most critically acclaimed and bestselling passenger vehicles, including the Chevy Malibu, Equinox and a reborn Camaro made exclusively in Oshawa that has boosted GM employment in that city. A new Buick LaCrosse, another showroom winner, has the same winning German design cues that GM’s European arm, Adam Opel GmbH, has imparted to much of GM’s latest passenger models in the all-important North American market.

Yet it’s far too soon to issue these firms a clean bill of health.

Now managed by Fiat SpA as part of last year’s restructuring process, Chrysler was starved of new-product development by its previous two owners. Its hopes of sustainable recovery are overly pinned to the launch this year of a revamped 2011 Jeep Grand Cherokee and the North American debut next year of the Fiat 500 subcompact.

For that matter, GM also is asking too much of its gas-electric Chev Volt due in November. The Volt’s trailblazer status will be eclipsed almost immediately by an all-electric Leaf that Nissan Motor Co. will launch late this year.

“We have serious doubts about the effectiveness and durability of Fiat’s turnaround of Chrysler,” Max Warburton, an auto-industry analyst at Sanford C. Bernstein & Co., told the Wall Street Journal last week. “Its passenger car line remains very weak and we are not convinced Fiat-derived products will succeed.”

Yet there is tremendous upside potential for both firms. GM and Chrysler have cut their costs so sharply they will soon be able to profit in the currently depressed North American market of only 10 million vehicle sales. That’s down from a 2000s annual high of about 18 million vehicles. A market recovery will see a large portion of increased GM and Chrysler revenues fall to the bottom line.

And GM’s decision not to renew its Tiger Woods endorsement contract is a key sign of a culture change essential to GM’s long-term prospects.

Tiger Woods and golf were the wrong message for Buick. During Woods’ long association with Buick, the average age of Buick owners rose to 72.

Liberated from appealing to older consumers, GM has outfitted its latest Buick LaCrosses and Regals with satellite navigation systems and DVD players important to the younger couples and family buyers to whom Buick strongly appealed only two decades ago. Thanks to that and sharper design, the average age of Buick owners has quickly dropped to 65.

Governments in the U.S. and Canada are under no illusions that they’ll retrieve all the money taxpayers sunk into these two bulwarks of the North American manufacturing economy. GM has a current estimated stock-market value of about $40 billion, or some $10 billion less than the public spent to save the firm.

But against the trillions spent saving a crippled U.S. banking system, $10 billion will have been a modest price to retain the powerhouse of auto-related R&D and employment in the U.S. Midwest and southern Ontario.

If the turnarounds can be sustained, Rattner told reporters last week, “We would have succeeded in avoiding all of the economic and human calamities.”

Ford sales hit skids in Europe

May 16, 2010
Bryce Hoffman / The Detroit News

Auto sales fell last month in several major European markets as scrappage programs wound down or were curtailed in some countries, and Ford Motor Co.'s decline was even greater as the automaker held back on offering big incentives to match its rivals.

Ford's sales in its 19 traditional European markets fell more than 17 percent in April, compared with the same period a year ago, while the entire industry declined just more than 5 percent. As a result, Ford lost more than a point of market share in the region.

"In April, we took a conscious decision not to follow the market, knowing that the expected decline in industry volumes after the ending of many of the scrappage schemes would likely prompt some players to increase even further their aggressive marketing incentives," said Ingvar Sviggum, vice president of marketing, sales and service for Ford of Europe.

"That's exactly what happened, and while we will remain competitive in the market, we will not devalue our brand or hurt our residual values just to chase volume or share."

Maintaining profitability in the region is critical to Ford's turnaround strategy.

In the first three months of 2010, the Dearborn automaker made $107 million in Europe, up from a loss of $600 million during the same period in 2009.

But Ford has been emphatic that it will not "chase market share" by offering big discounts.

Auto Lease Guide: Ford shows biggest gains in quality

Bryce G. Hoffman / The Detroit News
May 15, 2010

Consumers are finally giving Ford Motor Co. credit for its quality gains, translating into higher residual values and auction prices for its used cars and trucks.

And that means lower lease prices for its customers.

According to the latest survey by Automotive Lease Guide, Ford posted the biggest gain in perceived quality -- increasing 4.7 points over the last six months. During the same period, ALG said the average residual value of Ford's cars increased by $2,400, while the industry as a whole saw only a $616 increase.

"They're doing extremely well," said Matt Traylen, chief economist for ALG. "This has been a huge upswing for Ford."

Traylen attributed Ford's gains to the strength of its new products, its "disciplined" approach to incentives and to favorable public opinion stemming from its decision to forgo a taxpayer bailout last year.

"That was very important in consumer minds," he said. "Of course Ford's new products also ... have been very well received by the press and the public."

These findings are important, because ALG's numbers are used by banks and other lenders to set lease prices for cars and trucks.

Jim Farley, Ford's global head of sales and marketing, said this report will have an "immediate impact" on monthly payments for customers who lease a Ford, Mercury or Lincoln product.

Moreover, he said the value of Ford's cars and trucks is increasing at auction, meaning customers who buy their vehicles can expect to get thousands more back in their wallets when they trade them in.

On average, Farley said, Ford vehicles five years old or less are now selling for $3,000 more at auction than they were a year ago.

Farley said Ford will tout these gains in all of its upcoming advertising and sales promotions.

Full recovery ahead for Ford after restructuring

Profitable growth seen, but no dividend just yet

May 14,2010
BY BRENT SNAVELY
FREE PRESS BUSINESS WRITER

Shareholders attending Ford's annual meeting on Thursday see a bright future for the automaker, which is finally poised for a full recovery after four years of painful job cuts and restructuring.

Dean MacArthur, 46, of Ontario, said he so believes in the future of Ford that he invested $700,000 in Ford stock. He began investing in Ford in October and November 2008 when the company's stock hit a low of $1.23 per share.

"I put it all on the line," said MacArthur. "It's been life-changing."

Ford President and CEO Alan Mulally told shareholders at the Wilmington, Del., meeting that he expects the company's performance to improve through 2011 as the economy recovers and more of Ford's new products are launched.

"We are clearly on a path now of profitably growing the business," Mulally said.

David Saucier, 57, of Kimberling City, Miss., said Ford's resurgence has his neighbors trading in Toyotas for Ford cars and trucks.

"I am very positive on the leadership," said Saucier, a Ford retiree and shareholder attending his first annual meeting.

Ford, which lost about $30 billion from 2005 to 2008, reported a surprise profit for 2009 and earned $2.1 billion for the first quarter of this year. Its sales and image are also enjoying new popularity.

Still, Executive Chairman Bill Ford told shareholders it's too early to reinstate a shareholder dividend that was suspended in 2006 -- even though members of his family are curious about it.

"It is very early ... in our recovery," Ford said. "We still have a lot of debt. If we continue our progress ... that will be a topic for discussion."

On Thursday, Ford shares closed at $12.42, more than double the closing share price of $4.96 a year ago.

Ahead of schedule
During the meeting, Mulally reiterated that he expects Ford to be solidly profitable this year, and he noted that is "one year ahead of what we expected at the start of the year."

Since Mulally joined Ford in September 2006, Ford has cut $13 billion in structural costs, closed 12 plants and reduced its global employment from 247,000 to 176,000.

Bill Ford praised Mulally's efforts and said this turnaround is different from those of the past.

"Alan has been completely superb for this company," Ford said. "We'd like him to stay as long as he wants."

Mulally turns 65 in August, but Ford does not have a retirement policy, Bill Ford said.

"65 is the new 55," Ford joked.

Ford's progress drew mostly praise from the 97 shareholders who attended the company's annual meeting.

Billy Terry of West Chester, Pa., said he invested in Ford because it was the only domestic automaker that didn't accept federal emergency loans and because it is important for the country to support its manufacturing base.

"I think this is one of the last vintage companies of U.S. industrialization," Terry said.

The toughest questions for Ford came from Evelyn Davis, a shareholder activist who chastised Ford for doing business with Goldman Sachs, which is under investigation by the U.S. Securities and Exchange Commission.

Ford CFO Lewis Booth said about 20% of Ford's investment banking business is with the company, but stressed that Ford does business with most of Wall Street's largest firms.

"This is the Ford meeting. Not the Goldman Sachs meeting," Ford said.

Ford to restore tuition
aid for workers

Bryce G. Hoffman and David Shepardson / The Detroit News
May 14, 2010

Wilmington, Del. -- Ford Motor Co. is close to an agreement that would restore tuition assistance benefits to its U.S. hourly work force, according to a Ford source familiar with the discussions.

The firm's recent success has prompted the United Auto Workers to renew demands that Ford reinstate some benefits UAW members gave up to help make the automaker more competitive.

When the automaker restored similar benefits to white-collar workers earlier this year, the union filed a grievance, accusing the company of violating its contract with the UAW.

This week, UAW Vice President Bob King, who heads the union's national Ford section, called on Ford to do the same for union members.

"We just want to make sure when things turn around we share in the upside," said King, who is the choice of top union officials to replace Ron Gettelfinger as UAW president at the union's convention next month.

Speaking to reporters after the company's annual shareholders meeting here Thursday, Ford CEO Alan Mulally said Ford is "honoring the intent of our agreement" with the UAW.

Executive Chairman Bill Ford Jr. said the company's relationship with the union "is very strong today, and we're going to continue to make sure that stays true."

Ford spokeswoman Marcey Evans confirmed the company is in negotiations with the UAW about the tuition assistance benefits, which were suspended in 2008 in a joint decision by the automaker and the union.

CAW CONTACT
Volume 40, No. 19
May 14, 2010

Profitable Extendicare Demands Wage Freeze

Despite earning $15 million in profits in the first quarter of 2010 alone, Extendicare Real Estate Investment Trust (REIT) has walked away from the bargaining table after demanding a two-year wage freeze and other concessions from workers, employed in the company’s long-term care homes across Ontario.

“This company is making money hand over fist – which makes it hard to imagine the gall of them demanding wage freezes from their hard working employees,” said CAW national representative Robert Buchanan. “Extendicare continues to ignore their most valuable asset, which is their workers.”

The CAW represents more than 1,200 workers at 10 Extendicare long-term care facilities in Ontario. Extendicare REIT reported recently a first quarter profit of $15.6 million, up from $3.7 million a year ago.

The company has applied for conciliation. “Its time for Extendicare to stop demanding rollbacks and concessions from its workers and get back to the bargaining table to negotiate a fair and equitable collective agreement that recognizes the hard work, skill and care that CAW members provide at these long-term care facilities,” said Nancy McMurphy, CAW Local 302 president and CAW national executive board member.
  
New Agreement at Lunenburg Recycling Centre in N.S.

CAW members who work at the Municipality of the District of Lunenburg Community Recycling Centre in Nova Scotia recently ratified a three year collective agreement with wage improvements of 2.5% in each year of the agreement. The agreement was reached after a difficult round of negotiations with the employer, who insisted on trying to force them to take 1.25% in each year instead. The members are represented by CAW Local 1944.

They voted overwhelmingly to support their bargaining committee and turn down the company offer, forcing the parties to conciliation. The employer made two additional wage offers which again came up short of the local wage settlements being negotiated with other unions in the same and surrounding municipalities.

On the last day of conciliation, the employer presented an offer which the membership supported, avoiding a strike.     

CAW Statement on National Nurses Week - May 10 -16, 2010

Nursing Week is celebrated each year across Canada and around the world during the week of Florence Nightingale's birthday on May 12. The celebrations are a time to recognize the dedication and achievements of nurses that contribute to excellence in health care and to increase awareness among the public and government of the issues and challenges all health care workers face.

The CAW appreciates that there are many health care workers who deliver front-line care in Canada. In addition to nurses, this includes personal support workers, continuing care attendants, and health care aides, all of whom have risen to the challenge of caring for patients in a variety of settings with increasingly complex care needs. We commit to supporting all nurses and other caregivers, who are essential to meet the current and future needs of our aging population and to provide competent and skilled care with dignity and compassion.

The CAW recognizes the risk of ever-present occupational disease and injuries challenging front line workers in providing quality care. They regularly face exposure to communicable diseases, chronic understaffing, increasing patient acuity, and escalating situations of violence which have become all too common in our workplaces. We recommit to ensuring that prevention strategies are a priority and will actively challenge both government and employers to create safer workplaces. We are mindful that other support staff face identical or similar dangers on the front lines of health care, and are equally deserving of this same support.

To read the full statement on Nurses Week, please visit: http://www.caw.ca/en/8909.htm   

Cardiac Arrest Warriors Raise Funds in B.C.

Twenty-three CAW local leadership and staff rode for the Heart and Stroke Big Bike Ride, raising $3,500 in the Lower Mainland of British Columbia, with the team name Cardiac Arrest Warriors.

“With all the cut backs in provincial funding we felt we needed to support those most vulnerable in our community and we had fun in the process on the giant bike, proudly waving our CAW flags through the streets of New Westminster,” said B.C. and Alberta Area Director Susan Spratt.   

CAW Health Care Conference

More than 200 delegates took part in the CAW Health Care Conference in Halifax, Nova Scotia from May 7 to 9. 
CAW President Ken Lewenza stressed the importance of remaining vigilant during a time of government austerity and cutbacks to ensure a strong future for Canada’s universal health care system.
“The recent economic crisis has led to short-sighted decisions by some governments to reduce health care services and demand compensation freezes for these workers, many of whom must work more than one part-time job to earn a decent standard of living,” Lewenza said.

“The Nova Scotia provincial government did the right thing in not attacking health care workers, rolling back wages or dictating the terms of collective bargaining, as some provinces are doing,” Lewenza said.

CAW Health Care Director Katha Fortier pointed out that the impressive turnout for the CAW’s fifth National Health Care Conference is evidence of the union’s incredible growth in this sector.  "We know our strength comes from our solidarity and as our membership continues to rise in this sector, we will continue to make a difference in the lives of those who provide health care and those who receive it," Fortier said.

The CAW represents more than 27,000 health care workers across the country, mostly in Nova Scotia and Ontario.

CAW Local 27 President and CAW Council President Tim Carrie said the conference highlights the importance of fighting to ensure good working conditions and fair wages for health care workers, who are the backbone of universal health care. “We must remain outspoken in this struggle, which is critical to all Canadians since we all benefit from a strong universal health care system.”

Nancy McMurphy, president of CAW Local 302 and National Executive Board member, stressed the importance of not taking universal health care for granted. “It was a struggle to establish universal health care and it’s equally important to continue the fight to not only maintain it, but to also build it further for all Canadians.”

The conference also featured speeches by a number of key guests including Nova Scotia Minister of Health Maureen MacDonald and Dr. Pat Croskerry Professor of Emergency Medicine at Dalhousie University.

CAW Atlantic Canada director Les Holloway pledged that the CAW would work hard to ensure all governments including the Nova Scotia NDP continue to support and properly fund universal health care. “The CAW will fight to ensure access and quality public health care is a top priority in all of our health care bargaining,” Holloway said. 

New CAW Harassment Investigator Training

The May 6 -7th pilot program for the updated Workplace Harassment Investigation training ran in London, ON. Pictured here are participants from Locals 27, 88, 636, 2002 and management representatives from GM and Arcelor Mittal. This course incorporates code/ non code harassment as well as new information under Bill 168.  This is a recommended course if you are investigating harassment and is usually offered jointly with management.  Please contact Vinay Sharma for more information at vinays@caw.ca.
  
First B.C. Apprenticeship Conference

The British Columbia Federation of Labour has taken steps to deal with the looming skilled trades shortage in the province by holding its first ever apprenticeship conference.

The CAW Skilled Trades Department took part in the conference titled - Moving Forward: Apprenticeships in the New Economy 2010.

More than one hundred delegates from industry, labour, government (ITA), postsecondary education as well as economists were present in Victoria B.C. from April 18-19. Joe Elworthy, president of CAW Local 2200 and Dave Vallely of the Coast Mountain Bus Company gave a very informative joint presentation on how they have increased apprenticeship training in their workplace.

Colin Heslop, CAW skilled trades director said, "the conference heard that B.C. is facing a skilled trades shortage of 160,000 trades people over the next five years. It was clear from delegates that industry and labour must work together to alleviate this troubling shortage,” he said.

Unfortunately, many companies in B.C. and across Canada do not take apprentices, which needs to change, delegates were told.

Jim Sinclair, B.C. Federation of Labour president, said, "If we don't train, if we don't deal with this crisis, then our economy will sputter and sputter ... and our young folks will be sitting there unemployed, looking at some other people coming in from other places to do the work that they didn't get a chance to be trained for."

Sinclair supports a provincial training tax for employers. He recommends that those that train workers would not pay, those that train above the standard would get a rebate and those that do not train, have to pay.

Gary L. Parent Community and Health Services Scholarship

The Windsor & District Labour Council has established an endowment to create the Labour-Sponsored Gary L. Parent Community and Health Services Scholarship at the University of Windsor.

This endowment will provide three $1,000 bursaries each year to University of Windsor students whose studies are in preparation for applying to medical school.

The bursaries are named to honour former CAW Local 444 Secretary-Treasurer Gary Parent in recognition of his integral role in securing the program and teaching infrastructure in which future doctors are now earning their medical degrees in Windsor.

Throughout his 42-year working career, Gary Parent actively represented the interests of organized labour, and tirelessly advocated for progressive social policy to make Windsor, Essex County, Ontario and Canada a better place to live and work.

At 18 Gary became involved in the activities of CAW Local 444, soon after being hired by Chrysler Corporation. Over the years, he was elected to many CAW positions, culminating with Secretary-Treasurer of his Local and President of the Windsor and District Labour Council from 1982 to 2009.

Students eligible for the bursary are enrolled in a traditional pre-med course of study, majoring in Biological Sciences, Biochemistry, Kinesiology or Nursing. Contributions to the endowment are matched by the Ontario Trust for Student Support.

Fish Processing Workers’ Strike Vote Sends Clear Message to OCI

Workers at six Ocean Choice International fish processing plants in Newfoundland have voted overwhelmingly to take strike action if needed.

Strike votes held May 6 and 7 resulted in 93 per cent of workers voting in favour of strike action.

FFAW/CAW Chief Industrial Negotiator Ben Baker said the vote results send a very strong message. “Workers are fed up with their collective agreement being torn to pieces by OCI and they won’t stand for it any longer,” Baker said. “The company has continued to seek unacceptable concessions on wages, overtime, holidays, and vacation pay, and workers have had enough of it.”

The workers have been without a contract since Dec. 31, 2009 when the previous three-year deal, which had been left over from the days of Fishery Products International (FPI) expired.

“The FFAW/CAW will meet with the company in the coming days in a last ditch attempt to try to resolve the outstanding issues,” Baker said May 10. “If that does not produce any result then we will send the company a seven day notice in advance of planned strike action.”

B.C. Lower Mainland Celebrates Vaisakhi

The B.C. Lower Mainland Aboriginal and Workers of Colour Committee hosted its third annual “Vaisakhi” event in the CAW New Westminster Hall on April 25. More than 200 CAW activists filled the hall, listening to traditional Punjabi music, communities coming together to celebrate a holiday based on equality. Photo by Steve Cheung

End Deadly Asbestos Industry, Experts Urge

The Canadian government must ban the production and export of asbestos, a broad coalition of politicians, world renowned experts, asbestos victims, labour leaders, researchers and health care providers is demanding.

The group is also calling for just transition policies for communities relying on the asbestos industry. The call came at an Ottawa press conference on May 12, organized through Ban Asbestos Canada, followed by a rally at Parliament Hill.

“Asbestos is the greatest industrial killer the world has ever known,” said NDP MP Pat Martin. “More Canadians die from asbestos than all other industrial causes combined yet Canada continues to be one of the world’s leading producers and exporters of asbestos. We are exporting human misery on a monumental scale and it is an international disgrace.” MP for Winnipeg centre and former asbestos miner, Martin has been leading the charge in the House of Commons to have asbestos production and export banned.

NDP MP for Outremont Thomas Mulcair also spoke at the press conference, making him the first Quebec MP to ever speak out against asbestos mining, which now exists only in Quebec.

"To persist in ignorance and contempt for research that has shown just how devastating asbestos is to human health is despicable,” said Dr. Fernand Turcotte, professor emeritus of preventive medicine and public health at the medical school of Université Laval. “It dishonours our country and its citizens in the eyes of the world, particularly since this infamous enterprise is funded by the government." Dr. Turcotte spoke about the numerous presentations made to the federal and Quebec provincial governments on the danger of the asbestos industry, all of which have been ignored, to the peril of workers in Canada and abroad.

Dr. Tushar Kant Joshi, occupational and environmental health physician, Fellow at Collegium Ramazzini in Italy, said that preventing this occupational hazard is a long term investment. Dr. Joshi, who is originally from India, spoke about the rapid growth in the asbestos industry in India, coinciding with the drop in asbestos consumption in the West. This has been due to poor controls and enforcement in India, Dr. Joshi said.

Canadian Labour Congress Secretary-Treasurer Hassan Yussuff spoke about the growing momentum around the push to ban the production and sale of asbestos. Yussuff said that although it may take time, the government will have to change its policy.

Other speakers included Dr. Kapil Khatter, family physician in Ottawa, President of the Canadian Association of Physicians for the Environment; Mike Bradley, Mayor of Sarnia; Dr. Barry Castleman, chemical engineer, environmentalist and asbestos substitutes consultant to the World Health Organization and the World Bank; and Sandra Kinart, Community Health Care worker and community activist whose husband Blayne died of Mesothelioma, an asbestos-caused cancer.

The CAW is a member organization of Ban Asbestos Canada. For more information, please visit: http://www.bacanada.org/

Canada scores well in tax report

Canada ranks behind Mexico, and far ahead of the U.S. in KPMG report

Madhavi Acharya-Tom Yew
Toronto Star
May 13, 2010

Canada ranks second to Mexico and far ahead of the U.S. on a list of tax-friendly countries for business, according to a new report.

In general, businesses in Mexico pay 40.1 per cent less tax than those in the U.S. Taxes in Canada are just over one-third, or 36.1 per cent, lower.

At the other end of the spectrum, corporate taxes are 81.4 per cent higher in France than the U.S., according to the report released Wednesday by accounting firm KPMG.

Lower corporate tax rates can be a huge competitive advantage when companies decide where to set up shop, said Greg Wiebe, managing partner in KPMG tax practice in Toronto.

“Business has the ability to set up manufacturing, distribution plants, and offices anywhere in the world depending on where it makes sense. Having a competitive corporate tax rate hopefully allows you to attract more business and investment into the country which creates jobs,” Wiebe said.

“We’re a small country and have a relatively small economy. We need to take advantage of anything we can to attract business into this country.”

While Mexico remains in the number one spot with the lowest total taxes, changes to the tax systems in Australia, Canada, and the Netherlands moved them higher in the ranking, conducted every two years.

The report tallies up the cost of income tax, capital, sales, and property taxes, as well as miscellaneous local taxes and statutory labour costs, in 95 cities across 10 countries. The U.S., the largest economy in the world, is used as a baseline.

While personal income taxes and sales taxes are still higher in Canada, payroll taxes have been reduced, capital taxes have been phased out, and corporate tax rates have been falling in recent years. Canada’s federal and provincial corporate tax rates are approaching 25 per cent. The U.S. federal tax rate for business starts at 35 per cent, and state tax rates vary.

Canada ranked third in the 2008 survey.

The introduction of the HST in Ontario and British Columbia is likely to enhance Canada’s standing in the coming years, Wiebe said. “The HST is quite a business friendly way of applying a sales tax.”

Among the ranking of cities, Vancouver comes out on top, and ahead of Monterrey and Mexico City. Seattle, its natural U.S. counterpart, ranked at 18.

Montreal and Toronto rounded out the top five, again showing a big tax advantage over U.S. cities in the eastern corridor, such as New York City, which came in at 27, Philadelphia at 14, and Boston, which captured the 13th spot.

Lower health care costs and provincial taxes in British Columbia helped boost Vancouver to the top of the list, Wiebe said.

Vancouver was also deemed the most attractive city, tax-wise, for manufacturing and corporate and information technology companies.

For research and development, Montreal ranked as the top Canadian city, taking the No. 2 spot behind Melbourne, Australia. Sydney, Australia; Vancouver; and Manchester, U.K. filled out the top five.

Australia moved up to the top spot from fifth place in the 2008 survey, as a result of a new refundable tax credit for research and development.

Tax Competitiveness by Country

1. Mexico

2. Canada

3. Netherlands

4. Australia

5. United Kingdom

6. United States

7. Germany

8. Italy

9. Japan

10. France

Source: KPMG’s Competitiveness Alternatives 2010, Special Report: Focus on Tax

Students asked to develop
apps for Ford

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

Dearborn -- Ford Motor Co. is asking university students to help it develop applications for future versions of its popular Sync system.

Developed in partnership with Microsoft Corp., Sync allows motorists to control their connected cellular telephone or music player, as well as many onboard vehicle systems, with simple voice commands.

The latest version, unveiled earlier this year, also enables drivers to control apps on their smartphones or similar devices. But given the rapid advances in social networking, cloud computing and other areas, Ford is finding it a challenge to stay ahead of the curve.

"What we are trying to do here is look at the other new opportunities we have ahead of us," said Venkatesh Prasad, leader of the infotronics team in Ford's research and advanced engineering division.

"We could do all this in-house, but we realized very quickly that task would not be scalable."

So, Ford began reaching out to area colleges, including the University of Michigan. The automaker helped put together a 12-week course taught by T.J. Giuli, a Ford engineer and visiting scholar at U-M.

He challenged students to develop their own cloud computing apps for an advanced version of Ford's system.

Ford engineers helped pick a winning team and the company is sending its members to the Maker Faire, an annual high-tech event in Silicon Valley, with their program installed on a new Ford Fiesta.

The winning team developed an app called "Caravan Track" that allows people in different cars to see where each other is in real time on each vehicle's navigation screen. It also shows how fast each car is going, what their fuel level is and allows drivers to send pre-recorded messages to each other -- all using voice commands.

"We wanted to make road trips easier," said Collin Hockey, one of three students who developed the program. "Instead of calling everybody and trying to find somebody, why not just put them on the map?"

Teammate Sangmi Park had developed apps for cell phones, but this was the first she'd designed for a car.

"I had to pay more attention to safety issues," she said.

Analyst Stephanie Brinley of AutoPacific Inc. said it makes sense for Ford to tap young talent, particularly when it comes to cutting-edge consumer technology.

"Any time you can bring students in and get them engaged, it has benefits for both the company and the students," she said. "The students get a chance to use their skills on a real-world application, and they become ambassadors for the automaker, too."

Ford holds tight to police market

Bryce G. Hoffman / The Detroit News
May 12, 2010

Dearborn --Despite new challenges from rival automakers, the head of Ford Motor Co.'s police program is confident her company will continue to dominate the market because Ford is giving its customers what they want.

And what police departments now want is not one, but two pursuit-rated vehicles.

Earlier this year, the Dearborn automaker unveiled its new Ford Police Interceptor. Based on the same platform as its new flagship Taurus sedan, it will replace the aging Crown Victoria when production ends next year.

Some police departments were unhappy about the decision to change the venerable patrol car, which accounts for about 70 percent of all police vehicles sold in the United States. But Ford appears to be winning over some skeptics with an array of new technologies designed to make its replacement safer, faster and greener.

Now, Ford is readying a police utility vehicle based on the same platform as the all-new Ford Explorer, which the automaker plans to reveal later this year.

"When you own 70 percent of the market and you understand your customers, they tell you what their needs are," said Lisa Teed, brand marketing manager for Ford's police vehicle program. "They need flexibility, and that's what this second vehicle brings."

In developing both vehicles, Ford relied heavily on input from its 27-member police advisory board, which includes representatives from law enforcement agencies from around the country.

"We can't go out there and do a traditional market research study like we would with a retail product," Teed said. "The police advisory board has been instrumental. They are a benchmark for us. We really come to the conclusions together. And they help us validate our choices."

Through the advisory board, Ford learned that the needs of law enforcement agencies vary widely.

Jurisdictions in Southern states, for example, favor front-wheel-drive vehicles, but those in the Northeast are more interested in Ford's new all-wheel-drive option.

Some states have established tough fuel economy requirements for their public fleets, while others are more interested in reducing carbon emissions.

"Each agency is different," Teed said. "You have to adapt to that."

Second offering pleases cops

Lt. Keith Wilson, head of the Michigan State Police's vehicle evaluation program and a member of Ford's police advisory board, said the automaker is addressing the needs and wants of agencies like his.

"Ford realized they were going to have to raise the bar when it comes time to replace the Crown Vic, and they have," Wilson said.

"They have gone out of their way to listen to what the representatives of law enforcement have to say."

He said Ford has incorporated those comments into the design of its new police products.

For example, the Police Interceptor takes Ford's popular Sync system -- which allows motorists to control many vehicle systems with voice commands -- and adapts it for law enforcement use. Now, officers can control functions such as lights and sirens with voice commands or steering wheel controls, allowing them to keep their eyes on the bad guys and their vehicle on the road.

At the same time, Ford includes a shelf in the trunk for mounting computers, radios and other electronics.

"The Sync system will allow for a much cleaner cockpit, and the larger components will be stowed in the trunk," Wilson said. "Technology and ergonomics are important to officers."

The Los Angeles Police Department, which operates one of the largest law enforcement fleets in the country, had planned to hold onto its battle-tested Crown Vics before the Police Interceptor was unveiled in Las Vegas in March.

"I had a lot of doubts. The Crown Vic was one of the best police vehicles ever," said Vartan Yegiyan, director of police transportation for the department.

"But I thought it was well-designed. What particularly caught my eye was how they are making the interior safer and easier to work in. We now know that Ford is doing the best they can to make their vehicle safe and comfortable -- and that is important because, for our officers, their car is their office."

Yegiyan is pleased with Ford's decision to offer departments a second police vehicle.

"Having a pursuit-rated SUV would be great," he said. "They're very important for a number of law enforcement agencies, including ours."

While sport utility vehicles have long been valued by rural law enforcement agencies, Teed said more big city departments, like the LAPD, have been asking for them because of their versatility. Many want them for command vehicles, K-9 units, SWAT teams and other applications that require officers to carry more gear.

General Motors Co. does offer a pursuit-rated version of the Chevrolet Tahoe, but it is available only with two-wheel drive. The four-wheel-drive version is used by many departments, but it is not certified for high-speed use.

Like its Police Interceptor, Ford's police SUV will be available with all-wheel drive and will be pursuit-rated, Teed said.

"It goes back to understanding the demands of our customers," she said. "This is something they have been asking for because they're having to do more with less."

Wilson would not comment specifically on Ford's new police SUV because the company has not officially announced it yet, but he agreed that two vehicles are necessary to address police needs.

"With the diversity of responsibilities that law enforcement agencies have, different vehicles are required," he said. "Otherwise, there are always trade-offs."

Shared platform saves effort

Building the new police SUV off the same platform as the Explorer, which shares a common architecture with the new Police Interceptor, means many of the parts will be interchangeable between the two vehicles, Teed said. It also should make it easier for departments to service both vehicles.

Using shared platforms is a major part of CEO Alan Mulally's "One Ford" strategy, which targets eliminating duplication of effort at all levels of the company. In this case, Teed said, it helped reduce the engineering cost of both vehicles and allowed Ford to negotiate more favorable terms with suppliers, who will be getting bigger orders for common parts.

She said Ford's work on these police vehicles will benefit its consumer products as well.

"This required a big investment in research and development," Teed said.

"There are going to be shared learnings that come from all of this."

The police program pays other dividends for Ford, too.

Each year, law enforcement agencies in the United States purchase about 75,000 police vehicles. With 70 percent of that market, that translates into some serious sales for Ford. But the real benefit comes on the marketing side.

Teed said each of those police cars is a rolling advertisement for Ford, which is why its continued investment in the police segment is so important.

"Their job is to protect and serve us," Teed said. "Our job is to serve them."

To see more options on this Interceptor click here

Retirees sue GM Canada over benefit cuts

By Kristine Owram, The Canadian Press
May 11, 2020

TORONTO - In another legal blow to a post-restructuring General Motors Canada, an Ontario man is launching a potential class-action lawsuit against the automaker on behalf of himself and 3,500 other retired white-collar employees for rolling back their benefits.

The lead plaintiff, Joseph O'Neill, says GM Canada violated its contractual obligations to retired workers by cutting their benefits without their approval.

As part of an attempt to slash costs during a massive restructuring, the automaker said in 2007 and again in 2009 it would reduce or eliminate several post-retirement benefits it had earlier promised to its workers.

Among other things, GM Canada eliminated semi-private hospital coverage, reduced the annual maximum coverage for dental and orthodontic benefits, increased the amount members would have to pay for prescription drugs and eliminated life insurance coverage.

"Retirees depend on the drug plans, extended health-care benefits and the life insurance that GM promised it would provide," O’Neill said in a statement Friday.

"We can't go back and demand more money for the work we did over the course of our careers at GM. It isn't fair for GM to come along after the fact and take away the benefits that we have already earned."

GM Canada spokesman Tony LaRocca said the company wouldn't comment on the lawsuit while it's before the court.

The statement of claim filed in the Ontario Superior Court argues that the benefits promised by GM Canada to its white-collar employees were "an integral and fundamental part" of their compensation and were earned throughout the course of their employment.

By taking these benefits away retroactively, GM has breached its contracts of employment with its retired workers, the claim alleges.

It adds that retired employees weren't in a position to negotiate with GM and were left vulnerable to the whims of the company.

"(GM Canada's) actions have had a serious impact on the class members," according to the statement of claim.

"Many of the class members live on modest non-indexed fixed incomes, and they are particularly vulnerable as a result of their advanced age, susceptibility to health problems, and limited capacity to assume increased financial burdens or to seek additional employment income."

The claim adds that employees didn't purchase additional life insurance or benefits when they were available, and are now left with less coverage than they assumed they would have.

O'Neill, who is now a member of a group representing retired white-collar GM employees, worked for GM for nearly 40 years, starting in 1964, and was a manager at the Oshawa truck plant when he retired in 2002.

The suit calls for the court to restore the retirement benefits in full or, if that's not possible, to partially restore them so all retirees get a proportionate share.

GM Canada is also facing a class-action lawsuit by the more than 200 dealerships whose businesses were closed last year as part of the automaker's massive restructuring.

That lawsuit, which is seeking $750 million in damages, claims the automaker broke franchise laws by giving its dealers at most four business days to respond to a termination package offered by the company. In addition, the dealerships say they were unable to negotiate as a group and didn't have group legal counsel.

Eighteen individual dealerships slated for closure are also suing GM for alleged breach of contract in a separate suit.

The plaintiffs in that case say GM's agreement with its dealers allowed them to renew their contracts and keep selling GM vehicles until at least 2015 as long as they fulfilled sales and other obligations. They argue that the company was unable to adequately justify its decision to shut down some of its Canadian dealerships and apparently used an arbitrary measure to decide which businesses to close.

That claim asks for punitive damages of $1.5 million as well as additional damages for "loss of profit, loss of goodwill, loss of reputation, loss of business opportunity and loss of market share."

GM Canada filed a motion to have the case heard by the National Automobile Dealer Arbitration Program, or NADAP, rather than the courts, but this was dismissed.

None of the allegations have been proven in court.

Market gains set up
CEO pay bonanza

Stock options worth little in the downturn surged as economy rebounded

May 11, 2010
Rachel Beck / Associated Press

New York -- America's top CEOs are set for a once-in-a-lifetime pay bonanza.

Most of them got their annual stock compensation early last year when the stock market was at a 12-year low. And companies doled out more stock and options than usual because grants from the previous year had fallen so much in value that many people thought they'd never be worth anything.

But stock prices have generally surged ever since. Even with last week's sharp declines, CEOs still have enormous gains on paper.

"The dirty secret of 2009 is that CEOs were sitting on more wealth by the end of the year than they had accumulated in a long time," says David Wise, who advises boards on executive compensation for the Hay Group, a management consulting firm.

An Associated Press analysis of companies in the Standard & Poor's 500 index shows that 85 percent of the stock options given to CEOs last year are now worth more than they were on the day they were granted. For some the value jumped by a factor of 10 or more.

Ford Motor Co. CEO Alan Mulally's pay package illustrates this point. In March 2009, Ford granted 5 million stock options to Mulally. Using a complex formula, Ford assigned the options an estimated value of $5 million. At the time, Ford's shares were trading at $1.96. Since then, the stock has jumped nearly sixfold, and Mulally's options have a value on paper of about $48 million.

Mulally is also ahead on his 2008 options, which were valued at $9 million when they were granted two years ago. Now, they're worth close to $21 million.

Other findings in the AP analysis:

• The top-paid CEO in 2009 was Yahoo Inc.'s Carol Bartz, who got a $47.2 million compensation package in her first year on the job. Ninety percent came from stock awards and options.

• No financial companies were in the AP's top 10. Three were on the 2008 list. Citigroup Inc.'s Vikram Pandit went from No. 10 in 2008 to the third-lowest paid CEO in the AP analysis in 2009.

• The median value of performance-based cash bonuses rose 19 percent, making it the fastest-growing component of executive pay in the AP sample. CEOs generally had to meet goals for profits and stock returns in 2009 to receive the bonuses.

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Top 10 paychecks

Ford in supplier study's top 3

Firm's ranking a 1st for a U.S. carmaker; GM improves most

Alisa Priddle / The Detroit News
May 10, 2010

Ford Motor Co. is the first U.S.-based automaker to crack the top three automakers in terms of positive relationships with its suppliers, and General Motors Co. is the most improved, an annual study released today shows.

Ford placed third after Honda Motor Co. and Toyota Motor Corp. in the annual study by Planning Perspectives Inc. of Birmingham, which uses data from suppliers to gauge the ever-changing relationship parts makers have with the top six automakers. Nissan Motor Co. was fourth, followed by GM and then Chrysler Group LLC.

But the results show an industry in flux.

Directional change is important as the automakers with the best rankings tend to benefit from lower costs, higher quality and more innovation from their suppliers.

"A good relationship determines a supplier's willingness to invest in new technology in anticipation of business and give that automaker a competitive edge," Henke said. Suppliers are reluctant to quote on contracts with adversarial automakers.

"Suppliers are more willing to share new technology with Honda and Toyota than with GM and Chrysler," Henke said. And they are more willing to give loyal customers price concessions in anticipation of support and payback in the future.

But there are cracks in relations at Honda and Toyota, which had dramatic growth prior to the recession and falling sales. "This in turn led them to become somewhat adversarial in getting price reductions from suppliers," Henke said, based on supplier responses.

Conversely, the improvement at Ford and GM reflects their appreciation of their smaller supply base.

Each of the Detroit Three has been at the bottom. This year's scoring is based on 650 purchasing personnel from 510 tier 1 suppliers that rated six automakers.

Honda has been the best for two years now, despite growing dissatisfaction among its suppliers.

"We're happy to be rated highly overall again," said Honda spokesman Ed Miller. "We realize it's been a tough road for suppliers in recent years, and there is some angst out there."

Toyota was No.1 when Henke founded the scoring model in 2002, but the numbers started falling off in 2007 and Honda took the top spot last year.

Henke said Toyota was improving but quality issues diverted its attention and resources. He fully expects Toyota to get back on track.

"Toyota is committed to strong, long-term relationships with our suppliers," said Toyota spokesman Mike Goss. "We work hard to improve those relationships every day. These priorities have remained the same, even during the economic downturn over the last couple of years."

"The Planning Perspectives study is one of several tools we use to monitor our progress," Goss said. "We will analyze the results and adjust accordingly."

Nissan has been on a gradual decline since 2004, which made room for the improved Ford to move into the third spot from being ranked last only three years ago.

The results suggest Ford's goal to become the suppliers' customer of choice is being embraced, said global purchasing chief Tony Brown.

Ford's challenge is to ensure the culture change is uniform across all purchasing groups and is sustainable, Henke said. "The worst thing for Ford would be to go back to their old ways."

Brown said Ford will avoid that pratfall by sticking to its plan and respecting that "suppliers represent a lot of the technology on our vehicles and manage a lot of the cost."

And recognizing Ford "still has a lot of work to do will prevent us from being cocky and will improve how we do business," Brown said.

GM boosted its score by almost 25 percent and has come a long way from languishing at the bottom of the list from 2002 to 2006.

Henke expects GM to pass Nissan given the commitment to better relations from the top: GM Chairman Ed Whitacre.

Purchasing chief Bob Socia said, "It is gratifying that despite our time in bankruptcy, we had the most significant year-to-year improvement." While he is confident the automaker is on the right track -- GM is paying suppliers faster, sharing savings from new ideas and streamlining processes -- "we are by no means satisfied."

Chrysler scored lowest for the last two years but shows a consistent rate of improvement that Henke expects to continue under current purchasing chief Dan Knott. Knott had to undo adversarial business practices put in place under previous owner Cerberus Capital Management LLP, but the changes should add to the 15 percent improvement this year, Henke said.

"Healthy supplier relationships are absolutely critical to Chrysler's success moving forward," the automaker said. "We are working very hard to fix our internal processes and talk with suppliers in a transparent, fair and collaborative way," moves the automaker sees as paying off.

Henke warns that while results for the Detroit automakers are encouraging, "they have to be careful they don't become enamored with success because they are still well behind Toyota and Honda."

The fear is that GM and Chrysler return to old adversarial ways.

"We've seen the intentions of the Big Three to be more cooperative, but the humbleness of the two companies that went bankrupt didn't last very long, and they're back to the way they used to do things," said Heinz-J Otto, CEO of Behr America in Troy, which makes air conditioning and engine cooling systems. There were price concessions, but now the automakers want it back or made up in future contracts, he said.

"There is nothing wrong with pressuring suppliers to reduce cost, but you can do it without endangering the relationship if you do it in an equitable way," Henke said.