31 May 2010

When Online Gripes are met with Lawsuits

NY Times

 
Justin Kurtz with his car, which was towed from his apartment complex parking lot near Western Michigan University.

After a towing company hauled Justin Kurtz’s car from his apartment complex parking lot, despite his permit to park there, Mr. Kurtz, 21, a college student in Kalamazoo, Mich., went to the Internet for revenge.

Outraged at having to pay $118 to get his car back, Mr. Kurtz created a Facebook page called “Kalamazoo Residents against T&J Towing.” Within two days, 800 people had joined the group, some posting comments about their own maddening experiences with the towing company.

T&J filed a defamation suit against Mr. Kurtz, claiming the site was hurting business and seeking $750,000 in damages.

Web sites like Facebook, Twitter and Yelp have given individuals a global platform on which to air their grievances with companies. But legal experts say the soaring popularity of such sites has also given rise to more cases like Mr. Kurtz’s, in which a business sues an individual for posting critical comments online.

The towing company’s lawyer said it was justified in towing Mr. Kurtz’s car because the permit was not visible, and that the Facebook page is costing them business and had unfairly damaged the company’s reputation.

Some first amendment lawyers see the case differently. They consider the lawsuit an example of the latest incarnation of a decades-old legal maneuver known as a strategic lawsuit against public participation, or Slapp.

The label has traditionally referred to meritless defamation suits filed by businesses or government officials against citizens who speak out against them. The plaintiffs are not necessarily expecting to succeed — most do not — but rather to intimidate critics who are inclined to back down when confronted with the prospect of a long, expensive court battle.

“I didn’t do anything wrong,” said Mr. Kurtz, who recently finished his junior year at Western Michigan University. “The only thing I posted is what happened to me.”

Many states have anti-Slapp laws, and Congress is considering legislation to make it harder to file a Slapp. The bill, sponsored by Representatives Steve Cohen, Democrat of Tennessee, and Charles Gonzalez, Democrat of Texas, would create a federal anti-Slapp law, modeled largely on California’s statute.

Because state laws vary in scope, many suits are still filed every year, according to legal experts. Now, with people musing publicly online and businesses feeling defenseless against these critics, the debate over Slapps is shifting to the Web.

“We are beyond the low-tech era of people getting Slapped because of letters they wrote to politicians or testimony they gave at a city council meeting,” said George W. Pring, a University of Denver law professor who co-wrote the 1996 book, “Slapps: Getting Sued For Speaking Out.”

Marc Randazza, a first amendment lawyer who has defended clients against Slapps stemming from online comments, said he helped one client avoid a lawsuit last year after the client, Thomas Alascio, posted negative remarks about a Florida car dealership on his Twitter account.

“There is not a worse dealership on the planet,” read one tweet, which also named the dealership.

The dealership threatened to sue Mr. Alascio if he did not remove the tweets. Mr. Randazza responded in a letter that while Mr. Alascio admitted the dealership might not be the worst in the world, his comments constituted protected speech because they were his opinion.

While the dealership did not sue, that outcome is unusual, said Mr. Randazza, who conceded that sometimes the most pragmatic approach for a Slapp defendant is to take back the offending comments in lieu of a lawsuit.

In the past, Mr. Randazza said, if you criticized a business while standing around in a bar, it went “no further than the sound of your voice.”

Do that now, however, and “there’s a potentially permanent record of it as soon as you hit ‘publish’ on the computer,” he said. “It goes global within minutes.”

Laurence Wilson, general counsel for the user review site Yelp, said a handful of lawsuits in recent years had been filed against people who posted critical reviews on the site, including a San Francisco chiropractor who sued a former patient in 2008 over a negative review about a billing dispute. The suit was settled before going to court.

“Businesses, unfortunately, have a greater incentive to remove a negative review than the reviewer has in writing the review in the first place,” Mr. Wilson said.

Recognizing that lawsuits can bring more unwanted attention, one organization has taken a different tack. The group Medical Justice, which helps protect doctors from meritless malpractice suits, advises its members to have patients sign an agreement that gives the doctor copyright over a Web posting if the patient mentions the doctor or practice.

Dr. Jeffrey Segal, chief executive of Medical Justice, said about half of the group’s 2,500 members use the agreement.

“I, like everyone else, like to hear two sides of the story,” he said. “The problem is that physicians are foreclosed from ever responding because of state and federal privacy laws. In the rare circumstance that a posting is false, fictional or fraudulent, the doctor now has the tool to get that post taken down.”

The federal bill, in the House Subcommittee on Courts and Competition Policy, would enable a defendant who believes he is being sued for speaking out or petitioning on a public matter to seek to have the lawsuit dismissed.

“Just as petition and free speech rights are so important that they require specific constitutional protections, they are also important enough to justify uniform national protections against Slapps,” said Mark Goldowitz, director of the California Anti-Slapp Project, which helped draft the bill.

Under the proposed federal law, if a case is dismissed for being a Slapp, the plaintiff would have to pay the defendant’s legal fees. Mr. Randazza would not disclose specifics on the legal fees he has charged his clients, but he said the cost of defending a single Slapp suit “could easily wipe out the average person’s savings before the case is half done.”

Currently, 27 states have anti-Slapp laws, and in two — Colorado and West Virginia — the judiciary has adopted a system to protect against such suits. But the federal legislation would both create a law in states that do not have one and offer additional protections in those that already do, Mr. Goldowitz said.

In Michigan, which does not have an anti-Slapp measure, Mr. Kurtz’s legal battle has made him a local celebrity. His Facebook page has now grown to more than 12,000 members.

“This case raises interesting questions,” the towing company’s lawyer, Richard Burnham, said. “What are the rights to free speech? And even if what he said is false, which I am convinced, is his conduct the proximate cause of our loss?”

On April 30, Mr. Kurtz and his lawyers asked a judge in Kalamazoo to dismiss the suit by T&J, which has received a failing grade from the local better business bureau for complaints over towing legally parked cars. Mr. Kurtz is also countersuing, claiming that T&J is abusing the legal process.

“There’s no reason I should have to shut up because some guy doesn’t want his dirty laundry out,” Mr. Kurtz said. “It’s the power of the Internet, man.”

28 May 2010

Chinese Workers Strike, Halt Honda Production

BBC News

Honda has had to halt production at its four Chinese car assembly factories, because of a strike over pay at one of its China-based parts plants.

The Japanese company said talks were continuing to try to resolve the dispute at the parts facility in the southern city of Fushan.

The strike at the plant, which makes gearboxes and engine parts, started last week.

Honda said it hoped to resume production as soon as possible.

Resolution efforts

According to newspaper reports, the 1,900 staff at the parts facility want their monthly wages to be increased from 1,500 yuan ($220; £151) to 2,500 yuan.

"We are still trying to resolve the labour dispute with the help of the local government at the Fushan plant," said Honda's China spokesman Zhu Linjie.

Like most of the world's leading carmakers, Honda has enjoyed a big rise in sales in China.

It sold 219,514 cars in China during the first four months of this year, up 39% on a year earlier.

Honda runs three of its four car assembly factories in China as joint ventures with Chinese carmakers to supply the domestic market.

It has two factories in association with Guangzhou Automobile and one with Dongfeng Motor Corporation.

Honda's fourth Chinese factory makes its Jazz small car model solely for export.

27 May 2010

Consumers Energy Suspends $2.3 Billion Coal-Fired Power Plant near Bay City

Bay City News

 
HAMPTON TWP. — Consumers Energy is halting a project to build a $2.3 billion coal-fired power plant on the shores of Saginaw Bay in Hampton Township.

Officials from the company announced today that Consumers is deferring - not canceling - plans for the 830-megawatt plant that was expected to create 1,800 construction jobs and more than 100 permanent jobs when the facility went online in 2017.

Officials said the decision to put off the project was made because of reduced customer demand for electricity and forecasted lower natural gas prices, among other factors.

"It's a combination of customer demand just being lower and significantly lower natural gas and electricity prices," said David G. Mengebier, senior vice president of governmental and public affairs for Jackson-based Consumers Energy.

Mengebier said the company, in 2009, generated 900 megawatts of energy less than it projected. He also said original projections for the amount of energy the company will generate in 2017 - when the new plant was to become operational - were 700 megawatts above what the company now believes it will generate, based on customer demand.

"We continue to believe that new clean coal generating capacity will be in the long-term best interests of our 1.8 million electric customers as part of a balanced energy portfolio," John Russell, president and CEO of Consumers Energy and its parent company, CMS Energy, said in a statement.

"But, the current timetable for the new unit isn't consistent with today's market conditions. Based on the latest market dynamics, we have determined that it is in the best interest of our customers to defer development of the new plant at this time."

Mengebier said the deferment has nothing to do with opposition from the Natural Resources Defense Council or other environmental groups that oppose construction of a new coal-fired plant.

"They'll claim victory, but the fact is ... it had nothing to do with whether to build this plant or not," Mengebier said."It had everything to do with what are the market conditions and how do they affect the economics of this project and the timing of it?"

Consumers Energy announced plans to build the new plant at its Karn-Weadock Generating Complex in 2007 and received its air permit for the project from the Michigan Department of Environmental Quality in December.

The NRDC filed a lawsuit in Ingham County Circuit Court in March challenging the air permit.

As part of the permit process, Consumers agreed to shutter up to seven of its oldest, less efficient coal-fired power plants in Michigan when the new plant in Hampton Township came online.

Mengebier said the company will now take another look at those plants to determine their future and whether to retire, mothball or upgrade those facilities.

Meanwhile, Mengebier said Consumers Energy plans to invest $730 million from 2011 to 2015 to make environmental upgrades to the Karn-Weadock plant based on future clean air and clean water legislation.

He said that work, and other future projects at the plant, is expected to create and retain more than 4,300 jobs through 2018.

Mengebier said coal still will be a part of Consumers Energy's future.

"I think that there is a consensus in this state for building new clean coal plants," he said. "I think it will be part of Michigan's future."

Local politicians want to believe it will still be a part of Bay County's future, too.

"We obviously want to see this move forward," said State Rep. Jeff Mayes, D-Bay City, who has been an avid supporter of the project.

"We also know there's a significant investment in Michigan regarding energy today, not only in terms of green energy in the region and around the state, but also anticipated in transmission."

Mayes said when it comes to the construction of the plant, under the energy laws we are under, it puts any investment under greater scrutiny.

"The demand for power has dropped off more between 2000 and 2008 than anticipated," said State Sen. Jim Barcia, D-Bay City, who also supports the project. "It doesn't mean it's a death sentence for the plant but it certainly extends the time frame in which Consumers Energy will pursue this."

Barcia said he believes the company is doing what it believes to be the best thing for its customers and the future of energy in Michigan.

Michael Seward, president of the Bay Area Chamber of Commerce, reiterated that there will still be investment in Bay County from Consumers Energy and today's announcement is not a death knell for the proposed plant.

"We have to remember this is a deferment and they aren't canceling the program," Seward said. "There's still going to be a very large investment in the area in Karn-Weadock."

Russell said Consumers Energy will continue monitor customer demand, fuel and power prices and other market conditions, but has set no timetable for a future decision about the project.

Michigan Woman Sues United Airlines after being Left Sleeping on Plane

The Detroit News
Prominent Southfield attorney Geoffrey Fieger said today it was "really a gross abuse of a passenger" for airlines to leave a sleeping Ferndale woman locked on a plane for several hours.

Fieger filed a lawsuit today against the airlines on behalf of Ferndale resident Ginger McGuire, who flew Monday on a trip for an accounting training session that began in Detroit and ended in Philadelphia. During her travels, she was shuttled to Dulles Airport in Washington, D.C., before heading to Philadelphia, where she was left stranded on the airplane after landing.

McGuire said she was exhausted from traveling and fell asleep as soon as she took her seat on the Philadelphia-bound Trans States airplane -- Trans States works in conjunction with United Airlines. She was not taking medication and did not have any alcohol to drink. She was simply tired, he said.

McGuire woke up at 3:50 a.m. and found herself alone on the 50-seat plane.

"I just woke up and looked at my phone. It was 3 a.m.," McGuire said. "I said, 'Oh, my God, there's no one on the plane.' "

McGuire said she walked up and down the aisle for 15 minutes. She said she panicked and didn't think of calling for help.

"Then the door to the airplane opened and two Philadelphia police officers were standing there with a TSA officer," McGuire said. "They wouldn't let me off the plane until I proved who I was. It was like, 'Show us your ID, show us your ID.'"

Officials let her go after about 10 minutes. McGuire then checked into a local hotel.

Her four-count lawsuit filed by Fieger in Wayne Circuit Court alleges negligence, false imprisonment, emotional distress and breech of contract against the two airlines leaving her locked on an airplane for four hours after it landed.

"She has been contacted by Trans State, who wanted to talk about it," Fieger said. "They didn't make an offer to her. They never do. If they had, it would only be for a bag of peanuts."

According to Fieger, McGuire originally didn't report the incident. Fieger said apparently either someone at the airline or Philadelphia police leaked it to the media.

"I received a phone call from someone asking about what happened, and I gave a phone interview and then I got other phone calls from CNN, USA Today and other media," McGruire said. "I wasn't prepared for anything like this."

26 May 2010

Former Detroit Mayor Sentenced to Five Years in Prison

Reuters

 
Former Detroit mayor Kwame Kilpatrick was sentenced on Tuesday to up to five years in prison for violating the terms of his 2008 probation on convictions for perjury and obstruction of justice.

Wayne County Circuit Court Judge David Groner said Kilpatrick, 39, attempted to hide assets and misled the court about his finances in relation to $1 million in restitution owed the city of Detroit.

"The terms of your earlier probation no longer apply. That ship has sailed," Groner told Kilpatrick.

"Your continued attempt to cast yourself as the victim, your lack of forthrightness, your lack of contriteness and your lack of humility, only serve to affirm you have not learned your lesson. Clearly rehabilitation has failed," he said.

The sentence was harsher than prosecutors had recommended and drew gasps from Kilpatrick's supporters in court. He was led out of court in handcuffs.

Under his 2008 plea deal, Kilpatrick resigned as Detroit mayor, spent four months in jail, agreed to pay $1 million to the city and surrendered his law license.

He also pleaded guilty to two felony charges stemming from his role in the city's $8.4 million settlement of a whistleblower lawsuit brought by two fired police officers.

Kilpatrick lied under oath in that case in order to conceal cell phone text messages detailing an affair with his former chief of staff, according to the charges.

Dubbed the "hip-hop" mayor when he took office in 2002, Kilpatrick was initially defiant in the face of his mounting legal troubles, claiming at times that the charges against him were racially motivated.

After his release from jail in early 2009, Kilpatrick moved to Dallas and has been working for Covisint, a subsidiary of Detroit-based Compuware Corp.

Groner said Kilpatrick had come close to committing perjury again in 2009 when he contested the terms of his probation and claimed that he had net monthly income of only $6. He also concealed a $240,000 loan and a $50,000 gift from Detroit business leaders.

Kilpatrick still owes the city of Detroit about $860,000, which Groner said still had to be paid.

The judge told Kilpatrick he would have to serve a minimum of a year and a half in prison with credit for his earlier four-month jail sentence.

Kilpatrick, once seen as a rising star in the Democratic Party, had earlier pleaded for mercy from the judge, saying that he had been working to save his marriage after the disclosure of the extra-marital affair.

He said: "I respectfully and humbly ask with everything that's in me to be free, to continue to be on probation, to not have my children be fatherless, to not have my wife be without her husband, who she's forgiven."

Kilpatrick has 45 days to appeal the sentence.

Sales of Ford F-Series, Ram, GMC Sierra Trucks Pick Up

USA Today

 
New versions of big, bad, politically incorrect heavy-duty pickups have starring roles in the Detroit automakers' sales and profit comeback.

Chrysler recently touted the role that its heavy-duty Ram played in improving its first-quarter finances. Ford Motor cited its new F-Series Super Duty pickup as a sales standout last month. And General Motors has high hopes for revised heavy-duty versions of its sibling 2011 Chevrolet Silverado HD and GMC Sierra HD due this summer.

The sales increases, in fact, are a good omen not just for automakers, but for the economy overall.

Heavy-duty, full-size pickups are typically bought by small businesses and individuals as working trucks. The sales strength is a sign that construction, farming and other key industries are rebounding strongly enough that people have enough confidence to invest in new vehicles.

"Those purchases are made by people who work and need a truck," says GM spokesman Tom Henderson.

The increased capability of the heavy-duties makes them more expensive than light-duty pickups — and more profitable for automakers. A new Ford F-150 light-duty pickup goes for as little as $21,820, but the brawny Super Duty starts at $28,020 before destination charges.

So it's no wonder a segment that was an afterthought awhile back now is in the spotlight. Chrysler says its Ram Heavy Duty sales rose 13% in April compared with a year ago. Ford said it sold twice as many Super Duty pickups last month as it expected — and year-to-date sales through April were up 30% from a year ago.

A common boast for the new heavies: More power plus improved fuel mileage from the big gas and diesel engines. GMC, for example, says the optional 6.6-liter turbodiesel in the Sierra HD will offer 397 horsepower, 30 hp more than Ford's rival Super Duty, along with 11% better fuel economy than the outgoing GMC model.

"It's a more competitive segment," says Mike Levine, editor of PickupTrucks.com. "It's about capability and who can tow and haul the most."

The rivalry, he says, also has held prices in check — for working buyers who eschew the luxury versions or a lot of features that run up the sticker price. For the most part, "You don't haul your ego with these trucks," Levine says.

But makers also know there's a market for upscale versions with the horse-ranch crowd and others. The Ford F-250 King Ranch, for instance, with such touches as power leather seats, is priced at $45,715.

25 May 2010

Large Sinkhole Opens in Downtown Detroit

The Detroit News

 
A large sinkhole has opened up at the site of the former Lafayette Building between Shelby and Griswold downtown.

The sinkhole, which is 10 to 12 feet deep and about 20 feet wide, developed late Wednesday night at the property next to the famed Lafayette Coney Island restaurant.

A break in a Detroit Water and Sewerage Department line located above a DTE Energy gas line, also damaged, caused the sinkhole, water department spokesman George Ellenwood said today.

It will take at least two weeks before the area will be reopened to drivers, Ellenwood said.

It appears crews contracted to demolish the Lafayette Building accidentally damaged the lines, Ellenwood said.

"We believe the break is related to the demo work," he said. "First, we do the repairs, then we look at who bears the cost. It is an issue to be determined."

Adamo Demolition Co. is performing the work. Company attorney John Gillooly said the site has a history of sinkholes and that the city may be at fault for the matter.

"Our crews were limited to areas with no water," he said. "This demolition went without a hitch."

Gillooly said the company notified the city at least twice about water leaks on the property and that it was "not a possibility" that heavy equipment used by crews could have caused the leak via vibrations from moving about. He insisted crews never hit a line.

Water department employees shooed away media and gawkers who got close to the edge of the sinkhole today because there was nothing underneath to support any weight, they said.

"We are not sure of the stability under the pavement," Ellenwood said. "We try to keep people away form the edge."

Ellenwood was not certain if Lafayette Coney Island or its adjacent rival, American Coney Island, are in danger of sliding into the sinkhole.

"I am sure the city will make sure none of the other structures are damaged in other ways," he said.

Adamo began tearing down the Lafayette Building this fall, but delays prevented the company from performing work over the winter.

Officials with the company told The Detroit News for a story last month that the job would not be completed by June 1.

22 May 2010

Pistons for Sale - Not Leaving Detroit

Yahoo News

 
When Karen Davidson's husband, Bill, died in March of last year, she not only found herself having to find a new way of living, but she also suddenly had ownership of the Detroit Pistons on her hands.

She apparently didn't find the experience enjoyable. Earlier this year, she was exploring the possibility of a sale and now, the Detroit Free Press reports, the team is officially on the block.

But Pistons fans shouldn't lament too much. The league is apparently committed to keeping the team in Motor City and the other owners wouldn't affirm anyone who planned to move it. After all, the team was eighth in attendance this past season, averaging 18,751 per game despite having a 27-55 record.

Forbes recently said the team is worth $479 million and Citigroup is apparently being paid by Davidson to asses the sale value of the team and would likely be the sales broker if one comes about.

Kalamazoo Community Mental Health Event Highlights 'Peer Support' Addiction Help

Kalamazoo News

 
Antonio Lambert thought he knew everything about getting high on drugs.

No one could do it better or drink more liquor than he could.

After spending 16 years in prison and suffering nine bullet wounds, Lambert met with a mental-health professional and realized that he had a serious problem.

“All this time I thought I was just high,” Lambert said. “Now I know that there are chemicals in my brain that begin to shift when I put an illegal substance in my body. Now I can teach someone about being euphoric.”

Lambert was the keynote speaker Friday at Kalamazoo Community Mental Health and Substance Abuse Services’ annual Mental Health Breakfast in the Radisson Plaza Hotel and Suites.

A noted peer specialist from Greensboro, N.C., Lambert told the audience of 500 how to take pride in working in a peer-support network.

The definition of a peer specialist is not isolated to someone who has struggled with drug and alcohol abuse or has a criminal background, Lambert said, but can be anyone who has been through some kind of pain or trauma and is able to help someone else going through a similar circumstance.

“I’m a person who has had help and now I can help people,” Lambert said.

“If you have been through anything and you can assist someone else go through it, you are a peer specialist,” he added.

Lambert became a peer specialist after spending time in prison at the age of 17 and recovering from addictions to cocaine, heroine and alcohol.

“Sixteen years incarceration, nine bullet holes, and not a sad story,” Lambert said of his experience. “I put myself in their jurisdiction by the choices I made. If I was not incarcerated, I’d be dead.”

After he was released, Lambert realized he needed to change his lifestyle and sought professional help. Now, he said it is his time to help others. Currently Lambert works in a treatment program in Greensboro.

“Everyday I now have the opportunity to help somebody,” Lambert said. “It doesn’t stop at five o’clock.”

Friday’s audience was made up of mental healthcare professionals, local community leaders and recipients of care.

“You got up this morning to do something positive,” Lambert told the crowd. “You did not let your trauma get in the way.”

During the breakfast, many people thanked loved ones, professionals, peer supporters and Michigan substance abuse treatment programs for the assistance they have received.

The sum of the talks at the breakfast showed the direction mental health is taking — not about treating an illness, but building a person’s life, said Stephen Batson, project coordinator for the Michigan Recovery Center of Excellence.

“You’re not defined by your illness,” Batson said. “The goal is to improve the quality of life.”

An award was presented to Kalamazoo Valley Community College for their collaborative efforts with Kalamazoo Community Mental Health in offering a peer support certificate program at the college.

“The partnership is natural,” said Bruce Kocher, vice president for academic services at KVCC. “We are in the same business of helping people change their lives for the better.”

21 May 2010

Toyota Buying Tesla Stake for Electric Car Tie-Up

Bloomberg / Business Week


Toyota Motor Corp., the world’s largest automaker, is buying a $50 million stake in the Californian electric-car maker Tesla Motors Inc. as automakers compete to offer low-polluting models in the U.S.

Tesla will also buy a closed Toyota joint-venture factory in California to build its Model S and other vehicles, Tesla Chief Executive Officer Elon Musk said yesterday. The companies said they’ll cooperate in developing electric cars, parts, production systems and engineering support.

The deal may help Toyota, the world’s biggest carmaker, compete with Nissan Motor Co. and General Motors Co. in selling electric cars in the U.S., where regulations on greenhouse gas emissions and fuel efficiency are pushing them to offer advanced vehicles. It may also help the Toyota City, Japan-based company’s image, battered by recalls, by reviving the New United Motor Manufacturing Inc. plant in Fremont, California, known as NUMMI.

“This seems like a good deal for both parties, especially Toyota, from being able to avoid the political fallout from shutting NUMMI down to being able to offer a new electric vehicle with just a low initial investment cost,” said Jeremy Anwyl, Chief Executive Officer at auto industry researcher Edmunds.com in Santa Monica, California.

Joining Daimler

The size of Toyota’s stake in Tesla hasn’t been fixed ahead of a share sale by Tesla, Musk said in an interview. Daimler AG in May 2009 invested about $50 million in Tesla, which is supplying battery packs to the Stuttgart, Germany-based company for a test fleet of electric Smart minicars.

In July, Daimler sold a portion of its share of Tesla to the German automaker’s largest investor, Aabar Investments PJSC, reducing its stake to about 5 percent.

Daimler “welcomed” Tesla’s partnership with Toyota, which “likewise has the goal of advancing electric vehicles,” said Brigitte Bertram, a Daimler spokeswoman for the automaker in Stuttgart, Germany. The Toyota-Tesla linkup “doesn’t impede” Daimler’s cooperation with the California automaker.

Toyota fell 1.9 percent to 3,355 yen in Tokyo, while Nissan dropped 3.4 percent and Honda Motor Co., Japan’s second-largest carmaker, declined 2.5 percent.

The tie-up brings Toyota, the world’s biggest seller of hybrid autos, together with Tesla, the only company now selling U.S. highway-legal battery-powered cars. Electric-car technology has been supported by U.S. policy makers including President Barack Obama as a way to reduce the nation’s oil use and dependence on foreign energy sources.

Obama set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015.

Nissan, GM


Nissan is preparing to introduce its Leaf electric hatchback, powered by a lithium-ion battery pack, in Japan and the U.S. this year. Nissan Chief Executive Officer Carlos Ghosn has set a goal of leading sales of rechargeable vehicles, which he estimates may make up 10 percent of global auto demand by 2020, and is spending more than 500 billion yen ($5.5 billion) developing electric cars.

GM plans to introduce its Volt plug-in car in October. The car will initially be marketed to drivers in California, which requires large automakers to offer some vehicles that emit little or no tailpipe pollution.

Toyota intends to offer a short-range, “urban commuter” electric car in the U.S. in 2012 and begin retail sales of a plug-in Prius hybrid the same year.

Toyota, which will continue to develop its own electric vehicle, said Tesla’s long-distance models give the Japanese automaker more options. Toyota said hybrids should remain a more practical option for most customers until electric cars become more popular.

Share Sale

Palo Alto, California-based Tesla has 2,000 reservations for the Model S sedan and intends to begin “volume” production of the car in 2012, with a projected annual output of as much as 20,000 a year. The company has delivered about 1,000 of its $109,000 Roadster electric sports cars, while losing more than $230 million.

Tesla hasn’t posted a profit in the six years since it was founded. The company plans to use proceeds from an initial share sale and a $465 million government loan to help produce the Model S, an electric car that is to cost less than $50,000 after a federal tax credit.

Fund Raising

Tesla aims to raise about $100 million from its share sale and has said it may use proceeds to pay for factories and equipment estimated to cost as much as $125 million this year, and for acquisitions.

“I’ve felt an infinite possibility about Tesla’s technology,” said Akio Toyoda, chief executive officer of Toyota, founded by his grandfather. “By partnering with Tesla, my hope is that all Toyota employees will recall that ‘venture business’ spirit.”

The company is backed by investors including Mountain View, California-based Google Inc.’s co-founders Larry Page and Sergey Brin, and the government of Abu Dhabi. Daimler, the world’s second-biggest maker of luxury vehicles, invested last May. Tesla said Musk told Daimler about the Toyota partnership on May 19.

The revival of NUMMI, for 25 years a joint venture between Toyota and the former General Motors Co., will create 1,000 jobs, California Governor Arnold Schwarzenegger said. The plant closed in April.

20 May 2010

High Lead Levels Hurt Learning for DPS Kids

The Detroit Free Press

More than half of students tested have poisoning history

 
More than half of the students tested in Detroit Public Schools have a history of lead poisoning, which affects brain function for life, according to data compiled by city health and education officials.

The data also show, for the first time in Detroit, a link between higher lead levels and poor academic performance. About 60% of DPS students who performed below their grade level on 2008 standardized tests had elevated lead levels.

The higher the lead levels, the lower the MEAP scores, though other factors also may play a role.

The research -- the result of an unusual collaboration between the city's Department of Health & Wellness Promotion and DPS -- also reveals that children receiving special education were more likely to have lead poisoning.

The data, involving tens of thousands of city children, underscore the persistent and troubling legacy of lead, even as the overall number of lead cases continues to fall in Detroit and across the nation.

June Jackson didn't realize until it was too late that her daughter Taylor, now 12, had high lead levels as a toddler. "I feel bad, like it's my fault," Jackson said. The girl receives special education and still struggles with reading and memory problems, which her mother attributes to lead.

"For years, we've blamed the schools and the teachers for kids failing," said Brenda Gelman-Berkowitz, a school social worker for the district. These new findings, she said, show the answer may be more complicated. "We haven't seen this connection with lead before. But I see evidence of it everywhere."
Nightmare of lead a reality for many families in Detroit

Reggie Cureton doesn't recall pulling bits of lead paint off the wall near his crib as a toddler and eating it. For a long time, his parents didn't notice.

He was a bright baby who sat up early, walked early and recognized letters and colors early. But between the ages of 1 and 2, a blood test showed he had 21 micrograms of lead per deciliter of blood -- more than double the level of concern set by the U.S. Centers for Disease Control and Prevention.

Now 9, Reggie is great at building with Legos but struggles with reading, memory and paying attention.

Reggie's challenges are familiar to his mother, Jeanine, who has her own history of lead contamination -- and to generations of families living in Detroit. Despite significant declines in Detroit, thousands of children continue to be diagnosed with lead poisoning each year, a by-product of older homes with lead-based paint, pervasive poverty and an often unhealthy diet.
'These numbers are scary'

Now, a landmark study by the city health department and Detroit Public Schools of lead data and test scores shows that the higher the lead level, the worse a student's scores on the Michigan Educational Assessment Program exam, or MEAP.

Overall, 58% of roughly 39,000 DPS students tested -- 22,755 children -- had a history of lead poisoning, according to the study.

Perhaps more startling: Of the 39,199 students tested as young children, only 23 had no lead in their bodies.

"These numbers are scary," said Lyke Thompson, a Wayne State University professor who has studied lead poisoning in Detroit for more than a decade.

The correlation between high lead levels and low test scores carries particular resonance in Detroit, where students have fared poorly on academic achievement tests.

DPS students ranked last in the nation in 2009 on the National Assessment of Education Progress math test for fourth- and eighth-graders. The city's MEAP scores are consistently among the lowest in the state.

"This is a crisis," said Carole Ann Beaman, disabilities coordinator for DPS. "There is a clear connection between lead poisoning and academic problems, which is relevant to understanding achievement gaps and why schools are failing."

Other factors -- including poverty and parents' level of education -- may play a role. But the impact of lead on test scores has lingered in the shadows. Until now.

DPS emergency financial manager Robert Bobb said lead exposure is one factor that leaves some kids poorly prepared for school.

"Schools can be partners by, among other things, emphasizing reading early, as we have done, ensuring healthy foods in the cafeteria and making certain that physical education is universal," Bobb said. "Sadly, these results are not a surprise," said Marie Lynn Miranda, a former Detroiter and director of the Children's Environmental Health Initiative at Duke University.
No level is safe

In 1991, the CDC set 10 micrograms as its level of concern for lead in children, but dozens of studies have shown brain damage at lower levels.

Many experts count kids with levels of 5 micrograms as lead-poisoned. The CDC said in 2005 that there is no safe level of lead for children. Although there are many ways children are exposed, most cases are from paint in homes.

Last year, more than 5,000 cases of lead poisoning were diagnosed in Detroit children younger than 6. More than 800 of those kids had lead levels of 10 micrograms or higher.

Exposure to lead in young children damages developing brains -- and its effects are permanent, so once a child has high levels, the harm is done. Detroit has long led the state in lead poisoning, consistently accounting for more than 50% of Michigan's cases.

"This is an educational crisis, and we should be doing something about it," said Randall Raymond, geographic information specialist for DPS who helped analyze the data.

School and health officials compared lead levels in children with student test scores on the 2008 MEAP exam to determine whether lead affected academic performance.

Such studies are rare because medical records are confidential. Schools usually don't know which kids are poisoned.

Analysts were able to find lead test results for nearly half the current students in DPS (not every child is tested) and determine the schools and areas of the cities most affected.

Results also showed that kids in special education had higher lead levels.

WSU nursing professor Lisa Chiodo studied a group of Detroit children from birth to age 20. The study showed that kids with higher lead levels had lower IQs -- findings consistent with decades of research nationally.

Children with lead poisoning can become discouraged. One study found these students are seven times more likely to drop out than those with low levels.

Because of problems with learning and memory, these children tend to be easily frustrated, inattentive and withdrawn, Chiodo said. By adolescence, this frustration can turn to aggression or delinquency.

Chiodo said it's time to do something to help. "We need curriculums for lead-exposed kids," Chiodo said. "We need interventions."
 
A family affected

The Cureton family is well aware of the damage lead causes.

Mom Jeanine Cureton, now 26, was 2 1/2 when she was diagnosed with lead poisoning so severe she needed chelation, injections of chemicals that draw lead from the body. Her lead level was 87 micrograms.

"They told my mom not to expect much from me as far as learning ability," she said. "But I had a praying mom who worked with me."

Cureton didn't finish high school, reads at a grade-school level and struggles with memory problems, but she hopes to finish her education and dreams of being a nurse.

When their son Reggie was diagnosed as a toddler with lead poisoning, she and her husband, Reginald, thought they were doing all the right things, including frequently mopping floors and window sills to keep lead dust down.

But their second son, Maurice, now 7, also had high lead levels. The culprit was lead dust in the home's carpet, an assessment found.

That was two houses ago.

The foreclosed house they bought in March has lead, too, tests show. The family hopes to remediate it with the help of ClearCorps, a nonprofit program that tests homes and helps families get rid of lead by stripping, sanding and repainting walls and trim.

In the meantime, the parents say they do everything they can to keep their youngest children from getting lead poisoning, and they work to stimulate the brains of the two oldest.

They also moved the older boys out of DPS -- where Reggie had been having difficulties -- to the private Detroit Merit Academy, where students get fruit and veggie snacks, journals to log how much they read at home and specialized learning plans.

"We work with our kids," said Reginald Cureton. That means reading books with them, working on phonics and vocabulary, a computer program to teach them Spanish, trips to the Detroit Zoo, growing a garden and leaving motivation tips on the refrigerator.

"We want to do things with and for our kids that we didn't have," Jeanine Cureton said.
 
'Gives me hope'

Experts say the Curetons are on the right track in working to minimize lead's damage.

Tomas Guilarte, chairman of environmental health sciences at Columbia University, led a 2003 study, which found that a stimulating environment could improve the learning in lead-poisoned rats. Experts are excited by the research, which has not yet been done on humans.

"That study gives me hope," said researcher Miranda of Duke.

Miranda led a 2009 study in North Carolina that found lead exposure helps explain the achievement gap between African-American and white students in reading tests.

Similar studies have produced similar results in Chicago, Massachusetts and Connecticut, Miranda said.

Kids need intervention at an early age to help them overcome some of the effects of lead poisoning, several experts said.

WSU's Chiodo and Teresa Holtrop, a pediatrician at Children's Hospital of Michigan, said they hope to get a grant this year for a computer program called CogMed. Studies have shown that working with the program 30 minutes a day for five weeks can improve children's memories, which in turn improves learning.

The Curetons are upbeat about the prospects for Reggie and Maurice. Lately, the kids have been doing origami projects, folding paper into complex figures and shapes.

"Our kids are very persistent and don't give up," said Reginald Cureton. "Lead is still affecting them, but not to the point they can't move forward."

19 May 2010

GM Roars Back to Profit, but can it Repay the Government?

Associated Press

 
 
In less than a year, General Motors Co. has roared back from bankruptcy to a quarterly profit. Now comes the hard part: Sustaining the income and repaying billions of dollars in government aid.

There are signs that GM is on track to do just that. Revenue is up 40 percent over the first quarter of last year. U.S. sales rose 17 percent for the quarter, and the automaker made an operating profit in North America, which had been a cash incinerator. Units in Asia and Latin America posted strong numbers, too.

As a result, the automaker announced Monday, its net income rose to $865 million, a dramatic reversal from the $6 billion the company lost in the same period last year.

"Today's news was wonderful, and even better than we ever expected to be this far in the post-restructuring period," said Steven Rattner, former head of the Obama administration's Auto Task Force.

To keep GM afloat and get it through bankruptcy court, the U.S. government gave the company $50 billion. GM repaid $6.7 billion that the government considered loans, with the remaining $43.3 billion converted to a 61 percent stake in the automaker.

For the Treasury to break even, GM will have to make a lot more money and show prospects for even more profits in the future for its shares to be worth enough to cover the debt.

Still, the first-quarter profit was viewed with hope because, since GM's stay in bankruptcy court, the company has cut expenses, is making better cars and now has a shot at repaying taxpayers.

Some experts were skeptical. James Schrager, professor at the University of Chicago Graduate School of Business, said GM has a history of making boastful claims, only to disappoint. A recent television ad in which CEO Ed Whitacre declared that the company had repaid its government loans in full, with interest, was misleading, he said.

"I'm delighted that they're not losing buckets of money, but a modest profit is a long way away from righting the ship," Schrager said.

Chris Liddell, GM's chief financial officer who was hired recently from Microsoft Corp., would not say Monday when an initial public offering might take place, but he was cautiously optimistic that GM would have a profitable year.

And even Liddell conceded there are still obstacles to the sale, such as losses in Europe, a possible slowdown in U.S. sales, and reduced growth in China, which was GM's biggest market in the quarter in terms of cars and trucks sold.

"Certainly over the next year, there's a possibility we could do an IPO, but the market's got to be ready, the automobile industry has to continue to improve, and we have to continue to improve," Liddell said.

U.S. auto sales have gradually picked up, rising 15.5 percent last quarter from the depths of the recession a year ago.

GM's U.S. rivals also have shown improvement. Chrysler Group LLC, which also went into bankruptcy protection last year before being taken over by Fiat Group SpA, lost $197 million in the first quarter. That's far better than the $3.8 billion it lost between June 10, when it emerged from bankruptcy protection, and Dec. 31. Ford Motor Co. earned $2.1 billion in the first quarter, its fourth straight positive result.

To pay off all its shareholders, including the government, a United Auto Workers union health care trust, and its old bondholders, the stock market would have to value GM at more than $70 billion. That's almost double Ford Motor Co.'s market value of roughly $40 billion, but far less than the total value of Toyota's shares, about $120 billion.

One analyst, Eric Selle of JPMorgan Chase & Co., predicted last month that a GM stock sale could reach around $70 billion, selling at $113 to $137 a share.

"They need two more quarters of increasing results to prove that this is for real and not a one-time event, and get some better history behind it," said Ken Elias, a partner with automotive consulting firm Maryann Keller and Associates.

Rattner, who is now writing a book about the auto industry's near-death, said GM could be worth more than Ford when investors compare their enterprise values, or the values of their stock shares, debt and cash. Ford now has $34 billion in debt on its books and $25 billion in cash, compared with GM's $8.4 billion in debt and $36 billion in cash.

But others are not so confident in GM. Schrager thinks the market will view GM as worth less than Ford because Ford is ahead in management reform and has more and better new vehicles coming in the next year.

Rattner, though, said the government put up money to save thousands of jobs at Chrysler and GM when the economy was nearing a depression. It never expected to get back the whole $50 billion it loaned to GM, he said.

He said under Whitacre, GM has good new products in the pipeline and is a far leaner and faster company.

"I'd be careful about the perfect being the enemy of the good here," he said.

From any perspective, GM was a sick company before its bankruptcy, racking up more than $86 billion in losses since 2005. It had $53 billion in debt, burdensome labor contracts and a weak lineup of cars at a time when global markets were shifting to smaller vehicles.

Since then, the company has rolled out new vehicles that have sold well, including the Chevrolet Equinox crossover and Buick LaCrosse midsize luxury sedan.

In addition, GM is now using 85 percent of its North American factories to make vehicles. That figure was only 38 percent in the first quarter of last year, when the company had shut down most of its factories to control inventory.

Yet GM still faces a number of potential stumbling blocks, including:

- Declining market share and revenue. Global market share has been flat for the past year at 11.2 percent. Liddell said that was largely because of GM's decision to discontinue or sell four brands: Hummer, Pontiac, Saab and Saturn. GM needs its remaining brands - Cadillac, Chevrolet, Buick and GMC - to pick up the slack. Revenues also fell almost $1 billion from the fourth quarter to the first quarter. Liddell said reining in costly incentive spending is one way the company hopes to improve revenues.

- Losses of $506 million in Europe for the quarter, GM's only unprofitable region. GM is in the midst of cutting 8,000 jobs and reducing European plant capacity, which cost it $300 million in the quarter. Liddell said GM hopes to break even in Europe next year, but the debt crisis could hamper progress. "The overall marketplace in Europe is still the most challenging," he said.

- Slowing growth in China, where GM sold 623,000 vehicles in the first quarter thanks in part to aggressive government subsidies. The subsidies are still available, but sales growth has started to slow because the incentives lured so many buyers into the market.

18 May 2010

GM's New Volt to Use Google's Android Software

The Wall Street Journal

General Motors Co. has paired with Google Inc. to create new features for the soon-to-launch Chevrolet Volt that combine the technology giant's Android smartphone with the auto maker's OnStar technology system.

Further pairings between GM and Google are in the works as the auto maker looks for ways to better leverage OnStar to attract new, younger buyers, according to people familiar with the discussions.

"There can be a technological tour de force beyond just vehicle applications," OnStar President Chris Preuss said. "We're looking to enhance the value proposition on OnStar to make us more competitive."

On Tuesday, the auto maker said Volt owners, using GM's OnStar information system and Google Android operating system, will be able to track the location of their vehicle on their Android phone.

The phone also will allow owners to use voice recognition software ask for Google map directions to be sent to the vehicle and delivered to the driver by OnStar's navigation system, which gives turn-by-turn routes to drivers.

In addition to the Google features, GM already planned several features that would join the Volt and OnStar with smart phones, including the ability to charge the vehicle remotely and monitor battery power from a mobile device.

The moves are the latest indication of how electronics and in-car information systems are becoming a key battleground for car makers used to competing on horsepower and mileage.

In the past few years, Ford Motor Co. has used its in-car data system, Sync, to lure customers to its vehicles. Based on technology developed by Microsoft Corp., Sync allows drivers to control a car's entertainment system with voice command and can link to smartphones and music players such as Apple Inc.'s iPod.

While Sync is primarily positioned as an entertainment system, OnStar is marketed as an in-car information system that offers safety and navigation assistance and can relay calls for emergency help, diagnose mechanical problems and track down stolen vehicles.

"OnStar's biggest problem is that the things it does well it does in unfortunate circumstances," said auto analyst Jim Hall of 2953 Analytics.Hall said.

GM has relied on OnStar to provide features such as hands-free calling and navigation, in which a driver can call an OnStar operator to get directions. Years ago, these perks gave GM an advantage over rivals.

But technologies such as in-car and smart phone global positioning systems and Blue Tooth for mobile phones has eclipsed OnStar's capabilities, making it less of an asset, he said.

GM says OnStar has 5.5 million users. About half of subscribers opt to keep and pay for the service after the first free year, according to a person familiar with the number.

17 May 2010

Home Buyer Credits Expired -- Now What?

My North
Traverse City Realtor Matt Dakoske discusses the Northern Michigan and Traverse City real estate market possibilities now that the home buyer tax credits have ended.

Time is running out on the home buyer tax credit. To be eligible for the federal tax credits — up to $8,000 for qualified first-timers and up to $6,500 for certain repeat buyers — houses had to have been under contract by April 30, with settlement by June 30, 2010

Locally, the deadline is pushing people to complete home purchases faster than they might have otherwise. Matt Dakoske of ReMax Bayshore Properties said the tax credit is good for business, though he has some concerns about what will happen post-deadline.

“It’s created a very busy market,” he said. “A lot of people are trying to get business accomplished. It will be interesting to see what happens, what will come on the market after the deadline, whether buyers will still be there,” he says.

Dakoske thinks the market may slow down slightly, but given the economic conditions, he’s guardedly optimistic sales will continue. He compares it to the situation following the end of the “cash for clunkers” program.

“Like the auto incentive program, it will probably slow down some (immediately) following. But it’s our selling time. Prices are right, interest rates are good.”

Dakoske also sees one other cautionary note, the challenge with short sales, where the lender agrees to take a loss on the amount owed on the home to clear it from its books.

“Buyers with short sales are concerned whether they will close by June 30, or will they be back on the (buying) market if they don’t get a commitment” from a lender, he said.

Gubernatorial Candidates Crank up the Attack Ads

Detroit Free Press

The race to replace Michigan Gov. Jennifer Granholm, officially under way at today’s 4 p.m. filing deadline, looks like it will be a shooting war from here on out.

Republican Attorney General Mike Cox marked the deadline by launching a televised attack ad on U.S. Rep. Pete Hoekstra, accusing him of profligate spending during his years in Congress. Supporting fire came from a national conservative business association.

Hoekstra was ready to go on the air to defend himself, but held off today to make some last minutes changes in ad copy, a spokesman said. Meanwhile, another national conservative group, the Family Research Council, announced its endorsement of Hoekstra and the launch of a radio ad campaign on his behalf.

Although Cox and Hoekstra were tangling at the starting gate, the rough stuff is likely to spread.

Tom Shields, a Lansing-based political consultant with Republican roots, said he expects Cox to move on to a third Republican in the race, Ann Arbor businessman Rick Snyder, in fairly short order.

Cox, Hoekstra and Snyder, the only candidate with a significant television advertising campaign before today,
have led almost all of the public polls on the Republican side of the primary. Also running are Oakland County Sheriff Mike Bouchard and state Sen. Tom George of Kalamazoo.

On the less-populated Democratic side, Lansing Mayor Virg Bernero and House Speaker Andy Dillon have limited their epithet hurling to the non-broadcast variety.

Cox’s opening ad, airing everywhere in Michigan except the Detroit television market, takes Hoekstra to task for voting to support pork barrel projects, including Alaska’s infamous “Bridge to Nowhere.” The supporting ad from a group called Americans for Job Security, airing only in Grand Rapids, also mentions the bridge.

A Hoekstra campaign spokesman said the attacks are motivated more by the congressman’s standing in the polls (he’s ahead in most) than by his record on spending.

“Pete’s a solid conservative and the people of west Michigan know that,” said spokesman John Truscott, a message he said will be reflected in a Hoekstra ad that could begin as early as Wednesday.

Shields said a brutal primary runs the risk of leaving Republicans with a tattered nominee for the general election in a
year in which the party should be well-positioned to retake the governor’s office.

But if the attacks are factual and limited to issues that voters care about, there’s no reason to avoid them now in hopes Democrats and their allies will refrain, Shields said.

Cox campaign manager Stu Sandler said Tuesday the new Cox ad, which also touts the attorney general’s record and
calls him “tough enough to lead,” is “not an attack ad.”

“People across the country are fed up with the spending,” he said. “People don’t know Hoekstra’s record.”

Like almost every legislator who has cast thousands of votes over a period of years, Hoekstra’s record on spending and just about everything else is mixed.

He has earned solidly conservative ratings from national conservative groups, including those who rank taxes and spending as their highest priorities. But he also has supported spending that, at least in hindsight, was controversial. Like the $400-million Alaskan bridge that would connect the mainland to an island populated by 50 residents.

In “RePork Cards” issued by the anti-spending Club for Growth, Hoekstra scored a 97% for his voting record in 2009, voting against pork projects almost every time.

But in 2007, on 50 pork project votes rated by the group, Hoekstra’s 20% mark was easily the lowest grade among Michigan’s Republican congressional delegation that year. U.S. Rep. Fred Upton of Kalamazoo was next at 41%, and three members of the delegation were over 80%.

GM Re-Thinking the Auto Lending Business

Bloomberg / Business Week
General Motors Co. may return to the auto-lending business more than three years after selling control of GMAC LLC, according to three people familiar with the company’s plan.

GM may buy back the GMAC business, start a new finance unit or form a partnership with banks and other lenders, said the people, who asked not to be identified because details are private. Chief Executive Officer Ed Whitacre wants to form an in-house lender before selling shares in GM as soon as the fourth quarter, one person said.

Having a so-called captive credit arm may boost GM’s profit, enable dealers to offer better terms on leases and loans, and make an initial public offering more appealing to investors, said Rebecca Lindland, an IHS Global Insight analyst in Lexington, Massachusetts.

“The IPO is going to be more of a success if they can sell more vehicles than they have been selling,” Lindland said. “They should be able to do that if they can be more aggressive in their financing. Having their own finance company would certainly help.”

Whitacre has his management team exploring all options, the people said. Tom Wilkinson, a GM spokesman, declined to comment.

GMAC is now known as Ally Financial Inc. and is 56 percent owned by the U.S. Treasury after an injection of $17.2 billion under the Troubled Asset Relief Program.

New Name


Meg Reilly, a Treasury Department spokeswoman, had no immediate comment, and Ally’s Gina Proia said an acquisition of its auto-finance business by GM was “speculation.”

“We remain committed to improving our performance, repaying the U.S. taxpayer, and providing our customers - automakers, dealers and consumers alike - with exemplary service and compelling products to meet their needs,” Ally Chief Executive Officer Michael Carpenter said today in a statement.

GM sold 51 percent of Detroit-based GMAC to private-equity firm Cerberus Capital Management LP in November 2006 as the biggest U.S. automaker ran low on cash. Since then, GM has had to rely on outside lenders, including GMAC.

The Federal Reserve approved GMAC’s bid to become a bank- holding company in December 2008, easing the threat of a default that would have further tightened credit for GM dealers as the recession deepened and auto sales plunged.

GM would probably want to acquire only the automotive business from Ally, and not operations such as the former ResCap mortgage unit, said Mark Wakefield, a director at Southfield, Michigan-based turnaround firm Alix Partners.

Alix is winding down GM’s bankrupt predecessor, General Motors Corp., which is now called Motors Liquidation Co. Wakefield said he isn’t involved in any consideration of forming a new finance company.

Retaking Control?


GM retaking control of the former GMAC’s auto-lending operations would require working out a solution with Chrysler Group LLC, which also uses Ally, Wakefield said.

Should GM own more than a 10 percent stake of any of Ally’s lending businesses, the finance unit would have to relinquish its bank-holding company status and wouldn’t have access to the Fed’s discount window for cheap funds, Wakefield said.

“It would take a while to convince the market that GMAC is safe and sound,” Wakefield said. “It will take a while to claw their way to a borrower rate that is competitive.”

Competitors that own finance companies can use in-house lenders to offer more-attractive car loans or leases, boosting sales, according to Colin Langan, a UBS Securities LLC analyst in New York. Ford Motor Co. is among the automakers in the U.S. with its own credit unit.

‘More Aggressive’

“It makes it much easier to do zero-percent financing and you can be a bit more aggressive in who you lend to,” said Langan, who recommends buying Ford shares.

GM also may benefit from having a finance unit that could pump up auto profits. Ford’s first-quarter profit was buoyed by $828 million in pretax operating income from Ford Motor Credit.

Russ Shelton, owner of Shelton Pontiac Buick GMC Inc. in Rochester Hills, Michigan, said GM dealers would welcome an in- house finance arm.

“Probably the biggest missing piece for GM is financing,” Shelton said. “Getting a customer financed today is the hardest thing, even if they have good numbers. I think we could probably overcome some of that with a captive finance arm.”

16 May 2010

Hawaii Taking the Lead for Electric and Fuel-Cell Vehicles

USA Today

 
The hottest state for alternative-energy cars? Could it be California, with its non-existent Hydrogen Highway? Washington Oregon, the Evergreen State that is literally green? Nope and nope. It's Hawaii, which is on an absolute green-car roll -- both hydrogen and electric.

No other state -- hush up for a moment, Michigan -- such a quick succession of big news regarding their green-car future. Why Hawaii? Because it has to import every drop of gasoline and has always had some of the highest fuel prices in the nation. Also it scenic beauty makes it an environmental haven and any efforts in that regard looks good to the tourists. Hawaii has scored:

    * A commitment from Nissan to be among the first states to get its hands on the new Leaf electric vehicle.
    * Nice, commitment-free words from General Motors about Hawaii's abundance of hydrogen and what a nice place it could become for fuel-cell vehicles.
    * A start-up electric vehicle maker has just set up shop in Hawaii, not generally a haven of manufacturing since it's at least 2,000 miles of beautiful blue water from just about anywhere.

Nissan's announcement is probably the most significant:

It's one of only a few "launch markets" for $32,780 Leaf, the first modern pure electric car from a major established automaker to hit the market. Not bad for a state that is often treated as an afterthought.

"We appreciate Nissan's recognition of Hawaii as a global model for electric vehicles and a leader in clean energy," said Gov. Linda Lingle. "The introduction of the Nissan Leaf electric vehicle will build on Hawaii's progress to end our state's over-reliance on imported fossil fuels and increase our energy security."

On the island of Oahu, GM has struck up a relationship with Hawaii's biggest natural gas provider.

The Gas Co. -- creative name, eh, for the island's big gas utility -- produces hydrogen that could be tapped for fuel-cell vehicles. It's also in keepin with Hawaii's goal of trying to reduce oil use by 70%. But unlike Nissan, GM doesn't make any commitment of vehicles or resources to Hawaii.

A South Korean company, CT&T, however, has signed an agreement to make electric vehicles in Hawaii.

The company says it will build a factory that could produce 10,000 of its twin-seat electric vehicles a year.

15 May 2010

Detroit Shrinks Itself, Historic Homes and All

The Wall Street Journal

Detroit to demolish 10,000 abandoned properties

Mitt Romney's boyhood home is among 3,000 derelict structures Detroit plans to demolish by the end of September as it attacks blight and crime.
DETROIT—Wrecking crews are preparing to tear down a landmark 5,000-square-foot house in the posh neighborhood of Palmer Woods in the coming weeks, a sign that Detroit is finally getting serious about razing thousands of vacant and abandoned structures across the city.

In leveling 1860 Balmoral Drive, the boyhood home of one-time presidential candidate and former Massachusetts Gov. Mitt Romney, Detroit is losing a small piece of its history. But the project is part of a demolition effort that is just now gaining momentum and could help define the city's future.

Detroit is finally chipping away at a glut of abandoned homes that has been piling up for decades, and intends to take advantage of warm weather and new federal funding to demolish some 3,000 buildings by the end of September.

Mayor Dave Bing has pledged to knock down 10,000 structures in his first term as part of a nascent plan to "right-size" Detroit, or reconfigure the city to reflect its shrinking population.

When it's all over, said Karla Henderson, director of the Detroit Building Department, "There's going to be a lot of empty space."

Mr. Bing hasn't yet fully articulated his ultimate vision for what comes after demolition, but he has said entire areas will have to be rebuilt from the ground up. For now, his plan calls for the tracts to be converted to other uses, such as parks or farms.

Even when the demolitions are complete, Detroit will still have a huge problem on its hands. The city has roughly 90,000 abandoned or vacant homes and residential lots, according to Data Driven Detroit, a nonprofit that tracks demographic data for the city.

After a stuttering start, caused by a dispute over the disposal of asbestos from demolished homes, the program is just now gaining pace.

City officials say they aren't sure how many structures ultimately need to be torn down. The mortgage crisis compounded Detroit's economic decline, leaving nearly 30% of the city's housing stock vacant, according to Data Driven Detroit.

"Neighborhoods that are considered stable are now at 20% vacancy," said Deborah Younger, a development consultant involved in the demolition effort.

Until recently, the city didn't have the funds to tackle its growing list of houses slated for demolition. But $20 million in federal funds, primarily stimulus dollars has helped to kick-start the effort.

Demolition, particularly of historic buildings, is a sensitive issue in Detroit, often leading to wrenching battles between developers, residents, city officials and preservationists. But many residents are now pleading with the city to tear down decaying structures that are attracting crime and repelling home buyers. However, some still worry that the sort of large-scale bulldozing that the city is now talking about will forcibly dislocate longtime homeowners and preclude any chance of a comeback for Detroit.

"The city has never done this before," says Ms. Henderson, the Building Department chief. "We had to make a culture change."

The demolition of the Romney family home is the first of its kind in Palmer Woods, a high-end enclave in northwest Detroit that was developed at the dawn of the U.S. auto industry and housed many of its pioneers. Palmer Woods has just a handful of vacant properties among its 292 homes, according to residents. It's one of the anchor neighborhoods that is critical to the success of Mayor Bing's right-sizing effort.

The house was owned by Mr. Romney's parents, George and Lenore Romney, from 1941 until 1953, when the family moved to the northern suburbs. The elder Mr. Romney would go on to become head of American Motors Corp., then governor of Michigan and U.S. secretary of Housing and Urban Development.

As recently as 2002, the house sold for $645,000. But it has had a troubled history since then, lapsing into foreclosure more than once, bouncing between lenders and falling into disrepair. Last year, following years of complaints from neighbors, Wayne County declared it "a public nuisance and blight" and ordered it demolished.

The younger Mr. Romney, who is considered a leading GOP presidential candidate for 2012, said "it's sad" that his childhood home is being razed, "but sadder still to consider what has happened to the city of Detroit, which has been left hollow by fleeing jobs and liberal social policies."

Residents of Palmer Woods take pride in their tradition of historic preservation. But they're happy to see this house go. "This is an eyesore, and it makes no economic sense to fix it," said Joel Pitcoff, a retiree who lives around the block. "Who wants to spend $1 million on a house so it will be worth $400,000?"

12 May 2010

Will Lithium-Air Battery Rescue Electric Car Drivers From 'Range Anxiety'?

NY Times



ARGONNE, Ill. -- Twenty miles southwest of Chicago, government researchers are pursuing the automotive version of Mr. Right.

He's powerful. He has endurance. He isn't too expensive to have around. And he never, ever explodes.

That's one way to think of the perfect car battery, which will have to balance many different factors to lure the American masses to the electric car.

For the moment, though, Mr. Right is just a set of equations in a notebook.

"Theoretically, it works on paper," said Don Hillebrand, who directs the Center for Transportation Research at Argonne National Laboratory.

At Argonne National Laboratory and elsewhere, researchers are just beginning to crack the basic science behind a promising technology: lithium-air automotive batteries. If their theories are right, these batteries will have five to 10 times the energy of lithium-ion batteries, the big battery pack that's powering the first wave of electric-drive cars.

"Lithium-air is where we're going," Hillebrand said. "You can't foresee the future, but right now, that's the place where I think we see the endpoint, the end solution for ... the battery. The battery everybody's looking for."

But as engineers get closer to perfecting the lithium-ion variety, lithium-air has a long journey to replace the batteries of yesteryear.

A good idea that's still en route


"Nickel-metal hydride's an adult. Lithium-ion is a developing adolescent. And lithium-air, we're just looking at the ultrasounds," Hillebrand said.

Some say lithium-air will only carry triple the energy of lithium-ion; others project a hundredfold increase. Regardless of the estimates, all agree that lithium-ion could use a tuneup.

The reason has to do with "battery chemistry," a term that describes what makes the device go.

Batteries have an anode and a cathode, two materials that exchange ions -- in this case, lithium ions. When the ions go one way, the battery charges up; when they go the other way, the battery releases its charge.

Different materials for the anode and cathode, of course, affect this back-and-forth movement. For example, they can speed it up, move a larger number of ions, or reduce the number of times the battery can repeat the exchange -- that is, shorten the battery's life.

Lithium-ion chemistry is considered an improvement over past efforts to power electric cars. Previous options were so large and heavy that they were just barely economical to lug around. Lithium-ion packed so much more energy into less space and weight that major automakers christened it for their latest lineup of electric and hybrid cars, including Toyota's Prius, General Motors' Volt, and Nissan's Leaf.

The change came at a price, though. Today, lithium-ion batteries are commonplace and commercialized for laptops and cell phones. But the larger batteries needed for cars remain their most expensive component -- and the one deemed most essential to helping millions reach the road.

In the coming years, many expect these costs to decline. Even so, plenty in the battery field foresee the day that lithium-ion, so essential to the present day, will face retirement.

A battery that could challenge petroleum

"Let's say we want to electrify the entire fleet of vehicles in the world," said Jeffrey Chamberlain, head of Argonne's Energy Storage Major Initiative and one of the lab's leading battery chemists. "Lithium-ion batteries will get us partway there. But in reality, they're not quite high enough in energy density or quite low enough in cost."

He called lithium-air a "dream-type battery": Look at the periodic table, he said, and the only element that carries more energy than lithium, for its weight, is hydrogen. If the models are right, lithium-air could get to that energy far better than lithium-ion, approaching the limit of what a battery can do. It could even rival the energy density of petroleum -- one of the most energy-packed substances on earth.

That would tectonically shift the economics of electric cars. Right now, carmakers face "range anxiety": They worry Americans will hesitate to buy an electric car that can only go a few dozen miles.

Chamberlain said lithium-air could banish that fear. "You really imagine instead of going 40 miles between charges, you could go 200 or 400 miles," he said.

The key to lithium-air is weight loss. Yang Shao-Horn, an associate professor of chemistry at the Massachusetts Institute of Technology, said lithium-ion batteries stuff lithium into a compound with metal and oxygen to keep it stable and play pingpong with the lithium ions.

Trading heavy metal for a battery that 'breathes'

A lithium-air battery, by contrast, skips the metal and attaches lithium to oxygen alone. On the other side of the battery, there's a porous material that "breathes" in oxygen and can play the other side of the pingpong table. Without the extra metal, Shao-Horn said, the battery gets much lighter, but without compromising the ability to hold energy.

But before the technology goes commercial, researchers have to pass a gantlet of scientific challenges. A material may "breathe" oxygen into the battery excellently, but it has little commercial potential if it's platinum or gold. Lithium in the anode reacts explosively with even a little water, so it must be sheltered with a stable and, yes, cheap substance.

Argonne guesses lithium-air could be 10 to 20 years from commercial readiness; Shao-Horn of MIT has said 10 years is probably too optimistic.

Part of the reason is that scientific work takes a long time to percolate to auto showrooms. Ronn Jamieson, General Motors' director of global battery systems, explained how every new battery idea has to undergo a vetting process that doesn't exactly zoom.

At any given moment, he said, GM knows of over a hundred ideas for battery chemistries being proposed by universities, laboratories and other companies.

He said GM doesn't dismiss any of these out of hand, but the first step is to check the science textbooks: "Is it physically possible? Does it defy the laws of physics or thermodynamics or anything else?"

If it passes that test, GM does what Argonne and everyone else do: They find one and beat it up.

Some researchers stick a battery cell in an oven for a year, gradually turning up the heat to 113 degrees and then 131 degrees Fahrenheit. Others dunk it in a swimming pool. Others short the battery and see if it blows up. One Department of Energy researcher shot a battery with a nail gun.

These aren't likely situations for electric cars, but battery developers want to be sure. They say just one high-profile mishap could spell doom for the technology. And so, Jamieson said, GM subjects every new battery technology to a year or more of tests.

In the labs, the U.S. may be leading the race


"Theoretically, if it can happen, you've got to at least assess and understand what will happen," he said.

If lithium-air is the "silver bullet" of the future, there are a host of lead bullets poised to come sooner. GM said it's working on lithium-air, next-generation lithium-ion, and other chemistries. Nissan and Toyota representatives didn't specifically mention lithium-air, but they said their advanced battery labs -- partnering with Japanese companies NEC and Panasonic -- are examining various chemistries.

The White House is looking to nudge the process, as indicated by DOE grants last week. The Advanced Research Projects Agency-Energy program awarded $34 million last week for breakthrough research in auto batteries. Two grants went to lithium-air proposals, but other ideas varied, from magnesium-ion to zinc-air to an "all electron" battery from Stanford University and Honda.

If they and other researchers make progress on the technology, the United States may be poised to grab the global lead. In an e-mail, Hillebrand said lithium-air is too young for any country to have cornered the technology, but "the U.S. and Japan have both recognized the potential, and the U.S. is probably ahead."

In an interview, he said Tokyo is funding labs that focus on lithium-air, among other chemistries. He hadn't heard of the technology developing in China or Korea: "I'd be surprised if it wasn't, though."


Realtors, Builders Dangle Perks to Woo Home Buyers

The Detroit News

Some worry that sales will decline in wake of federal tax credit

 
 
Some players in the Metro Detroit housing and real estate industries have created their own home sales incentives in an attempt to keep alive the increase in business sparked by the now-ended federal first-time home buyers tax credit.

At the end of last year, an estimated 80,000 people in Michigan had used the tax credit of up to $8,000 for a first-time home purchase, according to the Michigan Association Realtors.

Many Metro Detroit real estate agents reported a surge of deals this year before the credit expired at the end of April, though exact figures are not available. A survey done last year by Coldwell Banker Real Estate LLC agents found that 34 percent of potential homebuyers said the tax credit was the reason they were searching for a home or condominium.

To maintain the home sales momentum, Coldwell Banker launched its "Buyer Bonus Sales Event," a promotion that essentially extends the monetary bonus of the federal program from May 1 through July 31.

Participating Coldwell real estate agents are giving a 3 percent credit up to $8,000 of the accepted offer price to homebuyers who sign a contract before the deadline. It is unclear how many local sellers have signed up for the program, said Kelly Sweeney, CEO of Coldwell Banker Weir Manuel in Birmingham, which is participating.

"What we have to do now is convince potential buyers that there are still historical low interest rates, great prices and sellers willing to make deals," Sweeney said.

Luxury homebuilder Toll Brothers Inc. also is trying to pump up interest by continuing several incentive programs it began last year. One approach allows buyers up to 14 months to build their new home, which is aimed at giving customers more time to sell their existing home.

"We are finding a lot more people willing to look (for homes) since last fall," said Nadia Mekled, senior sales manager for Toll Brothers in Michigan.

Beyond the formal discounts, many sellers are willing to bargain to seal a deal, local real estate agents said.

"Sellers are used to, by now, doing what it takes to move their home," said Claire Williams, a Realtor with Remerica Hometown One in Plymouth.

Still, she expects a drop in home sales at least in the short term because of the end of the federal tax credit.

"I think our job (as Realtors) is to convince potential homebuyers there are still historic prices and low interest rates," Williams said. "And they need to act on that now."

Bobb's Academic Plans get Green Light

The Detroit News

State appeals court lifts injunction; DPS board vows to continue fight

Lansing -- Robert Bobb is prepared to move "rapidly" with his academic and closure plans for Detroit Public Schools after winning an appeals court ruling Thursday, but the school board vowed to ask the state Supreme Court to stop him.

"We are going to try to reverse the ruling and, more than that, reverse what Bobb is trying to do to the city of Detroit," said George Washington, an attorney for the 11-member school board after the Michigan Court of Appeals ruled just hours after hearing oral arguments from both sides.

The board believes Bobb, the state-appointed emergency financial manager of the district, has no authority to proceed with academic plans and that a Wayne Circuit Court injunction issued last month was needed to protect the district's 85,000 students from undue harm.

But the three-judge appeals court ruled the board "failed to make a showing that (Bobb's) actions would result in harm that would be irreparable."

"It's unfortunate that we've had to delay valuable programs for DPS students and halt others in the interim," DPS spokesman Steve Wasko said after the ruling. "We can now move forward with implementing our plans rapidly at the same time that we look forward to a thorough discussion of these in court."

The decision doesn't end the legal power struggle between Bobb and the board. The board sued Bobb in August, alleging he is overstepping his authority by making academic decisions and for failing to consult with them on financial decisions, as required by law. The case is ongoing in circuit court where Judge Wendy Baxter issued the preliminary injunction April 16 to bar Bobb from proceeding with his $540 million academic plan, among other things. A hearing is scheduled for May 21. The appeals court overturned the injunction Thursday.

"It doesn't diminish the merits of our case and our ability to prevail ultimately against the emergency financial manager's actions," board vice president Anthony Adams said.

Big issues hang in the balance: closing more than 40 schools by June, developing a budget by June 30 and registering thousands of students for summer school.

Bobb "continues to be willing to meet with the board moving forward with programs beneficial for students, as he or his team has done on at least 27 occasions during the last 14 months," Wasko said, providing a timeline of meetings Bobb and his staff had with individuals from the board. However, the board contends consultation only counts when Bobb meets with the full board.

The closings plan, which officials say will save the district $31 million, will also proceed but be modified "based on extensive community input through dozens of parent and school meetings," Wasko added.

The district's deficit has ballooned to $317 million under Bobb, who is in his second year on the job. He was appointed by Gov. Jennifer Granholm.

Earlier Thursday, both sides had 30 minutes to argue their case before Judges Alton T. Davis, William C. Whitbeck and Donald S. Owens.

The board was represented by attorney Shanta Driver, who gave an emotional oral argument, at one point nearing tears, urging the court to follow the law -- which, she said, is not designed to strip away the academic powers of the school board.

Are you "prepared to declare that Detroit is incompetent to make its own decisions about education ... and simply give that right over to the financial manager?"

School board supporters, who had traveled by bus to Lansing, packed the courtroom.

"It hurts me so much," said parent To'I Coleman as she learned of the ruling on the bus ride home. She's worried now about Bobb "running rampant" with school closings and layoffs of teachers and principals. "He's demolishing the public school system and our children are going to pay the price for all of this."

Raymond Howd, who represented Bobb from Attorney General Mike Cox's office, argued it "is inevitable that some of ... Bobb's financial decisions may overlap into the areas of academics, curriculum and educational policies -- he is, after all, in charge of the finances of a public school district, whose core business is academics."

The district faces losing $50 million in federal funds if Bobb is not able to proceed with the academic plans approved by the state Department of Education, Howd said.

Later, Cox praised the appeals court decision. "The ruling is a huge victory for the children of Detroit, and now we can get Mr. Bobb back to work," he said in a statement.

During the hearing, Davis made a comment that foreshadowed the legal power battle over the school system.

"I have a feeling litigation is in the future no matter what we do," he said.