auto industry Archives - Shopfloor

Positive News for the Auto Industry, Ford Expands Missouri Facility

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We have had some good news this week out of the auto sector. U.S. automakers announced an increase in sales for 29 percent from last April. This marks the industries best April since 2007.

Additionally, Ford announced the company will be adding nearly 900 workers at is Kansas City, MO factory to increase production of F-150 trucks. Ford is also renovating this facility to produce the Transit cargo van which will add 1,100 workers.  So in total the company will add more than 2,000 jobs which is great news for American workers and manufacturing.

When a company like Ford is able to expand production it is positive news for manufacturers all throughout the supply chain. We’ve seen several indicators in recent weeks that manufacturing growth is slowing, and today’s trade report showed that exports feel again in March. We need action from Washington on pro-growth policies to help create more positive stories of job creation similar to this from Ford and the auto industry.


The Latest Spin Around Federal Loans for Automakers

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From Bloomberg, “Bush Signals Swift Decision on Funds for GM, Chrysler“:

Dec. 15 (Bloomberg) — President George W. Bush said deliberations by his administration on whether to tap a bank bailout fund to keep General Motors Corp. and Chrysler LLC out of bankruptcy “won’t be a long process” because of the “fragility” of the U.S. automakers.

The president, traveling on Air Force One from Iraq to Afghanistan last night, said he “signaled” his administration is considering using money from the $700 billion fund. Bush said he’s “not quite ready” to announce any rescue plan.

Also from Bloomberg, “GM, Chrysler Failure Would Push Economy Into Abyss“:

Dec. 15 (Bloomberg) — The U.S. risks sliding into a deeper economic slump if General Motors Corp. or Chrysler LLC shuts down because President George W. Bush doesn’t provide short-term financial assistance.

“We’re already in a deep recession in my state, as we are in most of the 50 states,” Senator Sherrod Brown, a Democrat from Ohio said on CBS’s “Face the Nation” yesterday. “And this would just plunge us deeper into economic problems, into a hole that it would take a long, long time to extricate ourselves from.”

A bankruptcy filing by either company would mean production cuts and plant closings, and tens of thousands of workers would be fired, industry analysts say. That would cause many suppliers to collapse, triggering more job losses, straining the cities and states where the car and parts companies operate, as well as federal safety-net programs.

Auto Industry Aid in the Senate

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From CQ Politics, “Reid Seeking To Set Up Series of Senate Auto Bailout Votes“:

Senate Majority Leader Harry Reid was working Thursday to set up Senate votes on alternative approaches to an auto industry bailout. But he wasn’t making much headway.

Reid, D-Nev., huddled with Minority Leader Mitch McConnell , R-Ky., attempting to work out a unanimous consent agreement on a limited number of full alternatives.

If that effort fails, Reid warned, he will make one effort Friday to proceed to a shell bill (HR 7005) that would be the vehicle for action, and toss in the towel if he is blocked in that attempt.

Senate Republican Leader Mitch McConnell made his opposition clear in a floor statement this morning, listing his specific objections. He argued for an amendment sponsored by Sen. Bob Corker (R-TN).

Text of the Corker amendment is here. Corker made the case in a Detroit News op-ed today, “Loan conditions must fix automakers’ problems.”

Hearings Update and Looking for New Ideas on the Auto Aid

By | Economy, Labor Unions, Taxation | No Comments

Two items, one linked to but now sufficiently highlighted yesterday, the Detroit Free Press editorial, “Hey, America: Detroit’s automakers are asking for a loan“:

Can we get something straight between Detroit and the rest of America?

What the auto industry is seeking in Washington is a loan, L-O-A-N, as in something you borrow and then pay back — with interest.

This is not a gift, a grant or a handout. It’s a loan, the kind of thing financial institutions used to do before they all had to scurry to Washington for their own bailouts, which have been far bigger and subjected to considerably less scrutiny than this loan that the auto industry desperately needs to keep operating — and keep millions of people employed.

And an interesting suggestion from Hugh Hewitt, law professor, radio host, Republican, blogger, “Should the GOP Bargain On The Bailout?

If the GOP’s leadership in the Senate calculates that it must go along with the bailout of the Big Three because of the overall weakness in the economy, I hope they at least bargain for some concession such as a giant tax restructuring for Michigan and Ohio, a demonstration project on the economic effects of tax reform.  If the UAW and industry supporters are going to succeed in opening a fiscal lifeline to Detroit, couldn’t the GOP at least demand that all of Michigan and Ohio provide a demonstration of what a lower corporate tax rate can mean for an economy.  Call them Irish Zones, after the tax policy of the Republic of Ireland, and declare that companies headquartered in Michigan or Ohio will pay 12.5% corporate tax, as all corporations do in Ireland.

Related story: The New York Times runs a post-mortem on the Saturn experiment at GM.

The Detroit News has live reports, as well. So far the news is Sen. Dodd’s support for federal aid.

Still Under the Yellow Flag…

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Links all fixed…

The Detroit-based domestic auto industry submits its plans…

From The Detroit News, “Survival roadmap for the Big 3“:

WASHINGTON — Detroit’s Big Three automakers made a desperate plea for a $34 billion emergency federal bailout Tuesday, as General Motors Corp. and Chrysler LLC warned they would collapse by the end of the year without immediate help.

The automakers delivered new business plans to Congress written during the last 11 days that for the first time spelled out in great detail the problems they face and the painful steps they must take to survive and restore profits amid plunging auto sales and a bleak outlook for 2009.

The recovery plans exposed how conditions have worsened dramatically in the past two weeks since GM, Chrysler and Ford Motor Co. made their initial request to Congress for $25 billion and came as the industry reported a nearly 40 percent drop in November sales, the worst sales month in 26 years.

And more from the News:

The Detroit papers do a fantastic job covering the industry’s condition, arguments and broader impact on the economy. Here’s the Detroit Free Press:

General Motors Corp. and Chrysler LLC warned Tuesday they could collapse without federal aid before the end of the month, as they joined with Ford Motor Co. to urge $34 billion in loans and to press lawmakers to resolve a standoff threatening hundreds of thousands of jobs.

The Domestic Auto Manufacturers Submit the Following…

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A look around at the coverage:

Reuters, “U.S. automakers rush to finish plans for Congress“:

DETROIT/WASHINGTON, Dec 2 (Reuters) – U.S. automakers rushed to submit restructuring plans demanded by Congress before lawmakers reopen debate on a $25 billion bailout the industry says it needs to survive.

Under fire for fighting fuel standards for years, the Detroit-based automakers are expected to present plans that call for them to build more fuel-efficient cars, ax unpopular brands, cap executive compensation and restructure their agreements with the United Auto Workers union.

Associated Press, “Auto Workers to hold emergency meeting on bailout“:

NEW YORK (Associated Press) – Local United Auto Workers leaders from across the country will hold an emergency meeting in Detroit on Wednesday to discuss concessions the union could make to help auto companies get government loans.

UAW leaders called the meeting Monday night in an e-mail, obtained by The Associated Press, to local union presidents and bargaining chairmen.

Among the subjects to be discussed at the meeting will be the possibility of restructuring the union-administered health care fund so that the automakers can delay payments to the multibillion-dollar fund, according to a person familiar with the matter.

The union leaders will also discuss potentially eliminating the jobs bank, in which laid-off workers keep receiving most of their pay.

Finally,  Washington Post columnist E.J. Dionne pounds the class warfare drums in his op-ed today, “Crunch Time for the Big 3,” making the comment, “A hideous class bigotry has disfigured this debate.”

You can’t have bigotry without bigots, and to Dionne those bigots are the people who have criticized the UAW and organized labor for exorbitant contracts.

Look, there’s enough blame to go around here, but you sure shouldn’t exempt organized labor from criticism, and criticism does not equal bigotry. Consider the UAW e-mail cited above: “The union leaders will also discuss potentially eliminating the jobs bank, in which laid-off workers keep receiving most of their pay.” Job banks?

Dionne’s comment is even more distasteful when you look at the sentence that immediately precedes it: “If saving our auto industry means moving GM workers ever closer to Wal-Mart wages, the bailout isn’t worth doing.”

Implicitly demeaning Wal-Mart workers as so unworthy that just moving “ever closer” to their wages — what, 1 percent, 2 percent closer? — justifies shuttering the Detroit automakers is as good of an example of “hideous class bigotry” you’ll find in this debate.

Auto Industry, from Canada to Norway to Detroit City

By | General, Labor Unions, Trade | No Comments

We inserted a YouTube video of Bobby Bare singing “Detroit City” yesterday into the post about auto industry aid, mostly because we had an excuse to insert a video of Bobby Bare. Twelve-string guitar!

A colleague suggested the message was muddled because, in fact, the song’s narrator does not want to return to Detroit. He’s thinking leaving Detroit to head home.

Last night I went to sleep in Detroit city,
And I dreamed about those cotton fields and home.

We understand that to be a clear reference to more flexible work rules and reasonable wage rates of the auto industry in states like Alabama, Mississippi, Louisiana and South Carolina.

In any case, here’s Bobby in Norway:

From Norway to Canada. This story was played prominently in today’s National Post (Canada), “Union concessions must be part of auto bailout plan: Clement“:

The federal Industry Minister warned the Canadian Auto Workers union Monday night it must be prepared to make concessions as part of a federal government aid plan to help the ailing Detroit-based auto manufacturers.

“It’s got to be a message that’s got to be heard by the union,” Tony Clement said in an interview with CPAC, the privately-owned public-affairs channel. “There’s a lot of transformation that has to occur — let’s put it that way.”

Mr. Clement is the first federal politician to indicate that union concessions must be part of an overall plan to help rescue General Motors Corp., Ford Motor Co. and Chrysler LLC.

Back in the USA, from Marketwatch, “Fed unveils $200 billion plan to bolster consumer lending“: “NEW YORK (MarketWatch) — The Federal Reserve unveiled Tuesday what it called a term asset-backed securities loan facility, a plan under which it will lend up to $200 billion to support the issuance of debt backed by consumer and small-business debt, such as credit-card loans, student debt, auto loans and loans backed by the Small Business Administration.”