Story first appeared in the Detroit Free Press
In the global contest for jobs and economic growth, Texas has spent the last decade eating Michigan's lunch.
But who deserves the blame -- or, if you're a Lone Star State partisan, the credit?
Is Jennifer Granholm, who served as Michigan governor from 2003-10, the person most responsible for this state's lost decade? Or does Texas' superior economic performance have more to do with the stewardship of Rick Perry, the Republican who succeeded George W. Bush as Texas' governor in 2000, remains in office and recently became the newest entrant in the crowded GOP presidential race?
One possible answer, as we approach the 10th anniversary of 9/11, is that we ought to pay more attention to the pivotal role of Osama bin Laden -- a man whose contributions to both Texas' ascent and Michigan's decline arguably eclipsed that of either state's governor.
You probably thought you'd heard the last of bin Laden earlier this year, when his death in a one-sided firefight with Navy SEALS briefly provided Americans with a welcome distraction from their own deteriorating standard of living.
But the legacy of the 9/11 attacks he masterminded lives on -- and nowhere has the continuing impact of those attacks been more glaring than in Texas and Michigan.
Reversal of fortune
In the years immediately preceding 9/11, American consumers were spending money on all sorts of things, especially cars and trucks. At the end of 2000, nearly three-quarters of U.S. adults expected to make a large purchase within the next 12 months; 23% were specifically in the market for a car or truck.
With gasoline prices hovering around $1.25 a gallon, many of those shoppers coveted one of the shiny new SUVs on which Detroit's domestic automakers had mortgaged their (and Michigan's) future.
Then, on Sept. 11, 2001, bin Laden's minions threw a wrench into everything. The economic turmoil spawned by the attacks rattled Americans' confidence in their immediate economic prospects as well as their nation's security. By year's end, most of the large purchases they'd planned were on hold.
It was the beginning of a more-or-less steady erosion of consumer aspirations; by the end of 2010, only 12% of American adults expected to purchase a new vehicle within the next year.
Michiganders may be less familiar with how the economic trends set in motion by 9/11 affected Texas, but the impact there was equally profound.
The price of crude oil, which hovered around $30 a barrel in 2011 dollars when then Lt. Gov. Perry was promoted to the governor's mansion in December 2000, soared to $150 before leveling off in the $80-$90 range. Besides resuscitating Texas' oil industry, the long-term increase in energy prices incentivized the exploitation of new technologies to extract natural gas. Today, energy industries pump more than $300 billion a year into the Texas economy.
The protracted wars in Iraq and Afghanistan set in motion by the 9/11 attacks were more good news for Texas, which is home to a disproportionate number of large military bases. Though you shouldn't expect to hear much about it from Perry partisans, federal spending in Texas doubled during his first decade in office, exceeding $200 billion a year by 2010.
Post hoc fallacy
OK -- so maybe I've stacked the deck a little here. Plenty of other factors have contributed to Texas' dramatic jobs bonanza -- population growth, and specifically population growth fueled by immigration, is the one economists mention most often -- and the residual impact of 9/11 may be fading even as Texas continues to outperform most other states by many economic metrics.
My point is that we voters have to be very careful about confusing coincidence with causality, whether we are trying to decide which governor provided better economic stewardship or which industries and states have benefitted most from the myriad forces unleashed by 9/11.
The conditions that give rise to prosperity in one state -- or abruptly curtail the economic prospects for residents of another -- are complex, and many of them lie outside the reckoning or control of policymakers.
But if political partisans are serious about understanding how we got where we are today, they may find the trail leads, at least in part, to the watery grave of a madman who wished only the worst for Americans of every political stripe.
30 August 2011
Second Hand Mom2Mom Sales Explode
Story first appeared in the Detroit Free Press.
On a cool Saturday morning earlier this month, 80 cars sat in lines covering the front lawn of the Warren Woods Christian School. It was 8:35 a.m. The school doors had been open for five minutes.
Mothers, some with babies strapped to their chests in carriers, hustled through the dewy lot and headed inside. At the entry table, the workers scrambled. So many had already come through and paid the $2 early-bird entry fee that they'd run out of change.
These moms were there for one reason -- the deals at the Mom2Mom sale.
Table after table of deals, spilling through the cafeteria, into the hallways and down into the gymnasium. More than 100 tables in all. All piled with used baby clothes, toys, shoes, maternity wear, bibs, bottles, books, games and more. All priced to sell.
For Michigan parents, fall means the return of the busy Mom2Mom sale season. Each weekend at churches, community centers and schools from Grosse Pointe to Shelby Township to Trenton and Bloomfield Hills, thousands of moms flock to sales hoping to score cheap goods or to turn their used kids stuff into cash.
The sales work like this: Organizations sell tables and racks for a fee, usually about $20 a table and $5 for a rack. They also sometimes charge for adding items to the "big item" room, which houses strollers, high chairs, play kitchens and more. The sellers rent a table spot and haul in used kids stuff. Shoppers then pay a small entry fee -- usually one or two dollars -- before bargain shopping the morning away. Negotiating is common.
The sales, which started in Macomb County in the early 1990s, are extremely popular. Who can pass up a cute onesie for a buck? Strollers for $15? High chairs for $10?
One mom said they have the exact same toys you see in the store now
During the busiest fall weekends, more than 40 Mom2Mom sales will dot metro Detroit, said Patty Zilinsky, the owner of Mom2Momlist.com, which lists private sales for a small fee. Last spring was the busiest ever, with 247 sales listed. This month, she's been adding about 30 sales to the fall list each week.
Zilinsky said it's just been a domino effect. She started the site in 1999 with Valerie Zilinsky, her then-daughter-in-law. Each year, it used to be there were 35-40 sales in the spring and 15-20 in the fall. And the spring used to go March to May and the fall September to November. Now the spring is from January to June and the fall goes July to December.
Why does this trend continue to grow? Because in a bad economy, thrifting is more acceptable than ever, experts say. This month, Entrepreneur magazine called thrift stores "franchising's hottest industry."
The Association for Resale Professionals reports that the number of thrift stores has grown 7% each of the past two years.
There's no question in Michigan and all over, people are watching their dollars, and in lieu of shopping in a discount store, more are now going secondhand. And Mom2Moms provide the same opportunity to find a brand or product you want that's slightly used but gives you a deep discount. And especially if they're done in community centers, people identify with those places, whether it is in Canton or Grosse Pointe or Bloomfield Hills.
Some metro Detroit sales are so popular, lines form 30 minutes before doors open. At the annual spring sale at Cross of Christ Church in Bloomfield Hills, demand is so high that shoppers are routed to Birmingham Seaholm High School to park and take a shuttle to the sale.
Michigan's Mom2Mom trend has also given rise to a group of moms who are holding onto their children's stuff, rather than donating it or handing it down.
Munro, who organized the Warren Christian sale said it's a brilliant concept, and the organization makes money. People get to come and make money selling their stuff. Shoppers get good discounts. It's a win-win-win.
Munro has been hooked since her daughter, now 9, was 3 months old. She's purchased everything for her at Mom2Mom sales, from big-ticket items to most of her clothing.
She said she bought her entire winter wardrobe one year for $80, which included twenty pairs of pants, 30 shirts, sweaters, dresses, boots, tights, everything. All in one day.
Anna Magri, a 33-year-old from Troy, shopped the Warren sale looking for items for a baby girl due on Nov. 25. It's her first child, and this was her first sale. She struck Mom2Mom gold quickly and found a mint condition Boppy pillow (used to support a baby during feedings) with a retail value of $35 for $5, and an infant carrier for $2. She also stocked up on books. She was excited to find a toy for one dollar that was shaped like a caterpillar that teaches babies the ABCs that in not in stores anymore.
Magri had come to the sale just looking for whatever piqued her interest. Bazinet, the 25-year-old from Warren, had come on a mission for something specific for her 1-year-old daughter -- a small cube play structure with a slide.
By 9 a.m., she was loading the exact toy she had in mind into the back of her SUV. She paid $10. The same toy, used, on eBay was listed at about $30.
It's moments like that that turn her away from retail shopping, even when items are on deep discount, and back to the Mom2Mom sales. Again. And again.
On a cool Saturday morning earlier this month, 80 cars sat in lines covering the front lawn of the Warren Woods Christian School. It was 8:35 a.m. The school doors had been open for five minutes.
Mothers, some with babies strapped to their chests in carriers, hustled through the dewy lot and headed inside. At the entry table, the workers scrambled. So many had already come through and paid the $2 early-bird entry fee that they'd run out of change.
These moms were there for one reason -- the deals at the Mom2Mom sale.
Table after table of deals, spilling through the cafeteria, into the hallways and down into the gymnasium. More than 100 tables in all. All piled with used baby clothes, toys, shoes, maternity wear, bibs, bottles, books, games and more. All priced to sell.
For Michigan parents, fall means the return of the busy Mom2Mom sale season. Each weekend at churches, community centers and schools from Grosse Pointe to Shelby Township to Trenton and Bloomfield Hills, thousands of moms flock to sales hoping to score cheap goods or to turn their used kids stuff into cash.
The sales work like this: Organizations sell tables and racks for a fee, usually about $20 a table and $5 for a rack. They also sometimes charge for adding items to the "big item" room, which houses strollers, high chairs, play kitchens and more. The sellers rent a table spot and haul in used kids stuff. Shoppers then pay a small entry fee -- usually one or two dollars -- before bargain shopping the morning away. Negotiating is common.
The sales, which started in Macomb County in the early 1990s, are extremely popular. Who can pass up a cute onesie for a buck? Strollers for $15? High chairs for $10?
One mom said they have the exact same toys you see in the store now
During the busiest fall weekends, more than 40 Mom2Mom sales will dot metro Detroit, said Patty Zilinsky, the owner of Mom2Momlist.com, which lists private sales for a small fee. Last spring was the busiest ever, with 247 sales listed. This month, she's been adding about 30 sales to the fall list each week.
Zilinsky said it's just been a domino effect. She started the site in 1999 with Valerie Zilinsky, her then-daughter-in-law. Each year, it used to be there were 35-40 sales in the spring and 15-20 in the fall. And the spring used to go March to May and the fall September to November. Now the spring is from January to June and the fall goes July to December.
Why does this trend continue to grow? Because in a bad economy, thrifting is more acceptable than ever, experts say. This month, Entrepreneur magazine called thrift stores "franchising's hottest industry."
The Association for Resale Professionals reports that the number of thrift stores has grown 7% each of the past two years.
There's no question in Michigan and all over, people are watching their dollars, and in lieu of shopping in a discount store, more are now going secondhand. And Mom2Moms provide the same opportunity to find a brand or product you want that's slightly used but gives you a deep discount. And especially if they're done in community centers, people identify with those places, whether it is in Canton or Grosse Pointe or Bloomfield Hills.
Some metro Detroit sales are so popular, lines form 30 minutes before doors open. At the annual spring sale at Cross of Christ Church in Bloomfield Hills, demand is so high that shoppers are routed to Birmingham Seaholm High School to park and take a shuttle to the sale.
Michigan's Mom2Mom trend has also given rise to a group of moms who are holding onto their children's stuff, rather than donating it or handing it down.
Munro, who organized the Warren Christian sale said it's a brilliant concept, and the organization makes money. People get to come and make money selling their stuff. Shoppers get good discounts. It's a win-win-win.
Munro has been hooked since her daughter, now 9, was 3 months old. She's purchased everything for her at Mom2Mom sales, from big-ticket items to most of her clothing.
She said she bought her entire winter wardrobe one year for $80, which included twenty pairs of pants, 30 shirts, sweaters, dresses, boots, tights, everything. All in one day.
Anna Magri, a 33-year-old from Troy, shopped the Warren sale looking for items for a baby girl due on Nov. 25. It's her first child, and this was her first sale. She struck Mom2Mom gold quickly and found a mint condition Boppy pillow (used to support a baby during feedings) with a retail value of $35 for $5, and an infant carrier for $2. She also stocked up on books. She was excited to find a toy for one dollar that was shaped like a caterpillar that teaches babies the ABCs that in not in stores anymore.
Magri had come to the sale just looking for whatever piqued her interest. Bazinet, the 25-year-old from Warren, had come on a mission for something specific for her 1-year-old daughter -- a small cube play structure with a slide.
By 9 a.m., she was loading the exact toy she had in mind into the back of her SUV. She paid $10. The same toy, used, on eBay was listed at about $30.
It's moments like that that turn her away from retail shopping, even when items are on deep discount, and back to the Mom2Mom sales. Again. And again.
Ruling Closes Marijuana Dispensaries
Story first appeared in the Detroit Free Press.
Thursday was a bad day to be among Michigan's nearly 100,000 medical marijuana patients and down to a last joint.
Many marijuana dispensaries closed their shops to pot sales, on lawyers' advice, following a court of appeals ruling.
John Lewis, lawyer for Compassionate Apothecary in Mt. Pleasant, the center of the marijuana maelstrom, said it would be dangerous to operate with the specter of a criminal case hanging over their head.
On Tuesday, a unanimous panel of the Michigan Court of Appeals ruled that the dispensary's business model of charging clients a fee to store marijuana that could be sold to any registered patient was illegal. The ruling was a blow to the burgeoning medical marijuana business and its patients.
Richard Celmer, 46, of Chesterfield Township went without marijuana to ease pain from his stomach cancer Thursday because the Big Daddy's dispensary in the township stopped selling medical marijuana Wednesday. Celmer uses the dispensary when his regular caregiver can't meet his needs.
Raids, closings leave medical marijuana patients in a bind
Four pounds of dried marijuana, cookies, cupcakes and other pot-bearing confections were loaded into a black SUV while employees and an owner of the MedMar A2 Compassionate Health Care dispensary were led away in handcuffs Thursday.
Chuck Ream, president of the marijuana dispensary that was targeted in a police raid after a far-reaching court ruling late Tuesday against Michigan's burgeoning medical marijuana business, said they didn't get a letter -- they got a bunch of agents that came in and stripped everything.
He said about 750 patients who come to his business for their marijuana are now without medicine. He said everyone who gets sick doesn't have an old hippie to grow marijuana.
Around Michigan, county prosecutors and dispensaries responded to the ruling and the warnings from Attorney General Bill Schuette that law enforcement would be pursuing medical marijuana dispensaries. Many of the nascent businesses shut down marijuana sales as a precaution.
Rick Ferris, president of the Michigan Association of Compassionate Centers said he has a building full of patients today, referring to Big Daddy's in Chesterfield Township, where people can buy paraphernalia and growing materials, but not marijuana itself.
The company has five dispensaries in southeast Michigan.
Others decided their business model would stand the legal test, including 3rd Coast Compassion Center in Ypsilanti. Owner Jamie Lowell runs his center as a nonprofit, fee-based membership club that relies on donations.
He said they are still trying to digest the implications of this ruling. They are not convinced that it completely eliminates dispensaries.
Schuette will speak to prosecutors about the decision this weekend on Mackinac Island, said spokeswoman Joy Yearout. His focus will be how to prosecute offenders using a nuisance-abatement clause.
But in Isabella County, prosecutor Larry Burdick made his intentions clear, said Brandon McQueen, co-owner of Compassionate Apothecary.
A letter Burdick's office sent Wednesday to at least six dispensaries said "You must immediately cease such operations.
The case that led to the appellate court ruling began at the Mt. Pleasant dispensary. The circuit court ruled that the operation didn't violate the law voters overwhelmingly approved in 2008.
Co-owner Matthew Taylor said the store stopped selling marijuana. He and McQueen are preparing an appeal to the Michigan Supreme Court.
Matthew Newburg, who will represent them, said he counseled Lansing-area clients to close up until the Supreme Court issues a different opinion or there is new legislation. Along Michigan Avenue in Lansing on Wednesday, many dispensaries were closed.
Clarifications to the 2008 medical marijuana law will be submitted in the fall legislative session.
Jessica Cooper, the Oakland County prosecutor, said she didn't know of any dispensaries open in the county. Detroit police steered clear of raids, and Kym Worthy, the Wayne County prosecutor, issued no cease-and-desist letters, spokeswoman Maria Miller said. Eric Smith, Macomb County's prosecutor, did not return calls seeking comment.
In other counties, prosecutors said they would wait to see which dispensaries stayed open and which ones police identified as troublesome.
Chris Becker, assistant prosecutor in Kent County, said he was hopeful dispensaries would close on their own. Alan Schneider, Grand Traverse County prosecutor, said he would wait to hear from police.
But where card-carrying patients who rely on dispensaries will get their medical marijuana is unclear.
Thursday was a bad day to be among Michigan's nearly 100,000 medical marijuana patients and down to a last joint.
Many marijuana dispensaries closed their shops to pot sales, on lawyers' advice, following a court of appeals ruling.
John Lewis, lawyer for Compassionate Apothecary in Mt. Pleasant, the center of the marijuana maelstrom, said it would be dangerous to operate with the specter of a criminal case hanging over their head.
On Tuesday, a unanimous panel of the Michigan Court of Appeals ruled that the dispensary's business model of charging clients a fee to store marijuana that could be sold to any registered patient was illegal. The ruling was a blow to the burgeoning medical marijuana business and its patients.
Richard Celmer, 46, of Chesterfield Township went without marijuana to ease pain from his stomach cancer Thursday because the Big Daddy's dispensary in the township stopped selling medical marijuana Wednesday. Celmer uses the dispensary when his regular caregiver can't meet his needs.
Raids, closings leave medical marijuana patients in a bind
Four pounds of dried marijuana, cookies, cupcakes and other pot-bearing confections were loaded into a black SUV while employees and an owner of the MedMar A2 Compassionate Health Care dispensary were led away in handcuffs Thursday.
Chuck Ream, president of the marijuana dispensary that was targeted in a police raid after a far-reaching court ruling late Tuesday against Michigan's burgeoning medical marijuana business, said they didn't get a letter -- they got a bunch of agents that came in and stripped everything.
He said about 750 patients who come to his business for their marijuana are now without medicine. He said everyone who gets sick doesn't have an old hippie to grow marijuana.
Around Michigan, county prosecutors and dispensaries responded to the ruling and the warnings from Attorney General Bill Schuette that law enforcement would be pursuing medical marijuana dispensaries. Many of the nascent businesses shut down marijuana sales as a precaution.
Rick Ferris, president of the Michigan Association of Compassionate Centers said he has a building full of patients today, referring to Big Daddy's in Chesterfield Township, where people can buy paraphernalia and growing materials, but not marijuana itself.
The company has five dispensaries in southeast Michigan.
Others decided their business model would stand the legal test, including 3rd Coast Compassion Center in Ypsilanti. Owner Jamie Lowell runs his center as a nonprofit, fee-based membership club that relies on donations.
He said they are still trying to digest the implications of this ruling. They are not convinced that it completely eliminates dispensaries.
Schuette will speak to prosecutors about the decision this weekend on Mackinac Island, said spokeswoman Joy Yearout. His focus will be how to prosecute offenders using a nuisance-abatement clause.
But in Isabella County, prosecutor Larry Burdick made his intentions clear, said Brandon McQueen, co-owner of Compassionate Apothecary.
A letter Burdick's office sent Wednesday to at least six dispensaries said "You must immediately cease such operations.
The case that led to the appellate court ruling began at the Mt. Pleasant dispensary. The circuit court ruled that the operation didn't violate the law voters overwhelmingly approved in 2008.
Co-owner Matthew Taylor said the store stopped selling marijuana. He and McQueen are preparing an appeal to the Michigan Supreme Court.
Matthew Newburg, who will represent them, said he counseled Lansing-area clients to close up until the Supreme Court issues a different opinion or there is new legislation. Along Michigan Avenue in Lansing on Wednesday, many dispensaries were closed.
Clarifications to the 2008 medical marijuana law will be submitted in the fall legislative session.
Jessica Cooper, the Oakland County prosecutor, said she didn't know of any dispensaries open in the county. Detroit police steered clear of raids, and Kym Worthy, the Wayne County prosecutor, issued no cease-and-desist letters, spokeswoman Maria Miller said. Eric Smith, Macomb County's prosecutor, did not return calls seeking comment.
In other counties, prosecutors said they would wait to see which dispensaries stayed open and which ones police identified as troublesome.
Chris Becker, assistant prosecutor in Kent County, said he was hopeful dispensaries would close on their own. Alan Schneider, Grand Traverse County prosecutor, said he would wait to hear from police.
But where card-carrying patients who rely on dispensaries will get their medical marijuana is unclear.
23 August 2011
PENSKE HAS NAMED TOSSED INTO PRESIDENTIAL RACE
Penske for president?
Not a bad suggestion. In honoring racing legend and auto executive Roger Penske last night at posh dinner in Pebble Beach, Calif., Mercedes-Benz host Geoff Day tossed out the idea as a tribute, not so much of a campaign kick off. But as far as we know, no one yelled back "Bachmann," "Obama" or "Romney" in protest.
Penske is a model of brains and steely resolve. It wouldn't be the first time he was urged into politics. A couple of years ago, Penske, a dashing, silver-haired Mr. Fix-It, was being pushed to run for mayor of Detroit, a city that could truly use his executive talents. He declined.
Last night in presenting the "star driver" award, Day called Penske "a hero, a legend ... an icon." His team has won 15 Indianapolis 500s. Penske, among his many businesses, operates some of the biggest U.S. Mercedes dealerships.
Penske, who grew up in Cleveland, said his father took him to the Indy race for the first time in 1951, and from that point on he was hooked.
Day asked Penske, the 1961 U.S. Auto Club champion the perennial question: Is it the car or the driver. Penske said qualifying is dependent on the car but over the length of the actual race, driving skill makes all the difference.
Mercedes gives the award each year to a person who is "driving the industry," Day said. Maybe Penske should be driving the country.
Not a bad suggestion. In honoring racing legend and auto executive Roger Penske last night at posh dinner in Pebble Beach, Calif., Mercedes-Benz host Geoff Day tossed out the idea as a tribute, not so much of a campaign kick off. But as far as we know, no one yelled back "Bachmann," "Obama" or "Romney" in protest.
Penske is a model of brains and steely resolve. It wouldn't be the first time he was urged into politics. A couple of years ago, Penske, a dashing, silver-haired Mr. Fix-It, was being pushed to run for mayor of Detroit, a city that could truly use his executive talents. He declined.
Last night in presenting the "star driver" award, Day called Penske "a hero, a legend ... an icon." His team has won 15 Indianapolis 500s. Penske, among his many businesses, operates some of the biggest U.S. Mercedes dealerships.
Penske, who grew up in Cleveland, said his father took him to the Indy race for the first time in 1951, and from that point on he was hooked.
Day asked Penske, the 1961 U.S. Auto Club champion the perennial question: Is it the car or the driver. Penske said qualifying is dependent on the car but over the length of the actual race, driving skill makes all the difference.
Mercedes gives the award each year to a person who is "driving the industry," Day said. Maybe Penske should be driving the country.
04 August 2011
Detroit Car Makers Come Back
This story first appeared in USA TODAY.
Ford Motor reported Tuesday that it made $2.4 billion in the second quarter, down 8% from a year ago.
The earnings reports — especially Chrysler's projection it only will break even this year because of the cost of repaying the loans — won't trigger a ticker-tape parade in downtown Detroit. But they do suggest that the Detroit 3 have put the big loses behind them.
No tooth fairies, guardian angels or rabbits out of hats rescued Detroit automakers from what seemed certain ruin not that long ago. Motor City's still-fragile bounce-back is the result of years of awful pain.
To stop the billions in red ink and give automakers a chance to make money again, more than 100,000 people lost their jobs. American taxpayers put tens of billions into auto bailouts and lost $1.3 billion on Chrysler, and would lose another $11.6 billion if the U.S.Treasury sold all its remaining shares of GM stock at typical recent prices. Car buyers will be hurt, too, eventually seeing higher prices and fewer discounts if the restructured U.S. auto industry avoids the overproduction that for years resulted in fire-sale discounts.
Two years ago for Chrysler, too: Government-arranged Chapter 11 bankruptcy reorganization, summer of 2009 that gave control of Chrysler to Italy's Fiat in return for high-mileage small cars and international distribution.
Ford avoided Chapter 11 and federal bailout money, so it took longer, five years, to become an "overnight success."
Actually, the reshaping of the Detroit 3 stretches further back than that.
Restructuring has been underway at these companies for many years, aimed at making them profitable at much lower volumes.
From 2006 through 2010 the three Detroit automakers shed an astonishing 120,000 jobs, more than one-third their combined total, and closed dozens of factories.
Key changes
The Detroit 3 now are sized to make money when the U.S. new-vehicle market is 12 million or 13 million a year. The record is 17.4 million, set in 2000, and the low in the recent recession was 10.4 million, in 2009. The industry's on pace to hit 12 million or more this year.
If demand for new vehicles booms, Detroit can schedule overtime and reopen idle plants to avoid missing the chance to sell more than expected.
Several modifications of the labor agreement with the United Auto Workers union, which represents most auto-industry hourly workers, have lowered the total outlay for workers — pay, benefits and other costs — to a range of $49 an hour (Chrysler) to $58 (Ford), down from an average $75 to $78 before the contract modifications in 2005, 2007 and 2009.
The 2007 changes were key, letting automakers off-load responsibility for retiree health care to the UAW and establishing two-tier wages. Newly hired hourly workers are paid $14 to $16 an hour, about half what veterans get.
New hires are locked into less-generous benefits than veteran workers get, no matter how high the new group's pay rises. They cost infinitely less, and they will become the majority of hourly workers as others age and leave.
Before the bloodletting, there was no hope.
At GM, for example, Structural costs were so fouled, so broken, that they couldn't make money at the high end of the (sales) cycle: 16.8 million and General Motors was essentially breaking even.
Akerson wasn't connected with GM before the bankruptcy period. A businessman and investment specialist who graduated from the U.S. Naval Academy in 1970 with an engineering degree, he was put on the GM board July 24, 2009, by the Obama administration, was picked to be CEO last September and got the chairman's title as well on Jan. 1.
He completed Detroit's corner-office overhaul. All three CEOs now are outsiders in an historically insider town. Ford Motor CEO Alan Mulally was a Boeing executive when hired by Ford Chairman Bill Ford in 2006 to save the Blue Oval. Chrysler Group CEO Sergio Marchionne is also CEO of Fiat Auto, which now owns a majority of Chrysler, comes from way outside Detroit, culturally and institutionally. And he's known by investment analysts as a finance and deal man more than as a "car guy."
No guarantees
Despite the new blood at the top, leaner organizations and recent near-death experiences as motivation, the Detroit rebound comes with no guarantee.
• Costs are rising. The new models in the pipeline, the ones that could save the industry, cost billions of dollars to design, develop and launch, then to support with heavy marketing for a year or so. Commodity costs are up, too.
•Negotiations with the UAW on a new contract begin this week. Automakers don't want to lock in higher wages or other costs, but the union passionately wants to regain some ground it surrendered to keep the automakers afloat.
•Detroit's move to small cars might not work. Ever-tightening federal fuel-economy regulations almost dictate many more small, lightweight cars for automakers to hit the required average of 35.5 mpg in 2016 and perhaps 54 mpg by 2025, according to the latest not-so-private discussions between the White House and the auto industry.
But you can't sell what people won't buy.
One market analyst says Americans don't have an affinity for small cars. When they can, they like to get into bigger, more comfortable cars.
•Economic malaise lingers. Unemployment remains stubbornly above 9%. And Treasury Secretary Timothy Geithner said on last weekend's TV talks shows that the economy might have slowed, not accelerated, in the second quarter.
People without jobs in an uncertain economy are antithetical to new-car sales. It's not clear whether GM, Ford and Chrysler could withstand more years like 2009, when only 10 million cars were sold. And if they must try to, what's left to cut?
•Product problems remain. GM has far too many powertrains that aren't all that different. Akerson says there is not any real difference between a 1.4- and a 1.5-liter engine. He adds that just causes complexity in your purchasing and your supply chain.
GM also must move fast into non-petroleum-fuel powerplants, such as pure electric cars and those fueled by clean-burning compressed natural gas (CNG), he says.
Ford's confusing high-tech electronics, and six-speed automatic transmissions tuned so aggressively for fuel economy that the cars drive poorly, caused frustrated owners to slap Ford down to No. 23 on a recent J.D. Power and Associates quality survey, from a lofty No. 5 a year ago.
Ford's Lincoln luxury brand definitely needs a better-defined identity. Consumers are smart. They're not going to pay an extra $10,000 for a cosmetically enhanced Ford.
Chrysler's Fiat-designed, U.S.-built 40-mpg small cars — a Fiat promise to the U.S. government as part of the Chapter 11 rescue — have yet to materialize. They're in the works, but will they be soon enough, and good enough, in a market crawling with new-design, high-mpg small cars?
•Widespread mistrust of Detroit, from years of shoddy and un-inventive vehicles, hasn't been eliminated.
Ford seems to have a head-start overcoming that, for not taking government money.
GM's Akerson acknowledges the low esteem and notes that it's an impression created over the past 20 or 30 years, and they are not going to cure that in one year.
He hopes the advanced-technology Chevrolet Volt helps erase the low-tech image and that a series of new models coming in the next 18 months will help identify GM as an exciting and relevant company.
In a fell swoop, Chrysler has overcome some resistance. Its "imported from Detroit" TV ad during the Super Bowl acknowledged that the city and its main industry have taken hard hits but asserted powerfully that times have changed. The ad starred popular musician Eminem driving a then-new Chrysler 200 mid-size sedan.
The ad spawned lines of clothing, overwhelming numbers of e-mail to Chrysler and a continuing social-media buzz.
What Akerson finds exciting, and believes is a mark of GM's integrity and a harbinger of its success, is that the company continued to work on the controversial Chevy Volt extended-range electric car even during the distractions of Chapter 11.
Ford Motor reported Tuesday that it made $2.4 billion in the second quarter, down 8% from a year ago.
The earnings reports — especially Chrysler's projection it only will break even this year because of the cost of repaying the loans — won't trigger a ticker-tape parade in downtown Detroit. But they do suggest that the Detroit 3 have put the big loses behind them.
No tooth fairies, guardian angels or rabbits out of hats rescued Detroit automakers from what seemed certain ruin not that long ago. Motor City's still-fragile bounce-back is the result of years of awful pain.
To stop the billions in red ink and give automakers a chance to make money again, more than 100,000 people lost their jobs. American taxpayers put tens of billions into auto bailouts and lost $1.3 billion on Chrysler, and would lose another $11.6 billion if the U.S.Treasury sold all its remaining shares of GM stock at typical recent prices. Car buyers will be hurt, too, eventually seeing higher prices and fewer discounts if the restructured U.S. auto industry avoids the overproduction that for years resulted in fire-sale discounts.
Two years ago for Chrysler, too: Government-arranged Chapter 11 bankruptcy reorganization, summer of 2009 that gave control of Chrysler to Italy's Fiat in return for high-mileage small cars and international distribution.
Ford avoided Chapter 11 and federal bailout money, so it took longer, five years, to become an "overnight success."
Actually, the reshaping of the Detroit 3 stretches further back than that.
Restructuring has been underway at these companies for many years, aimed at making them profitable at much lower volumes.
From 2006 through 2010 the three Detroit automakers shed an astonishing 120,000 jobs, more than one-third their combined total, and closed dozens of factories.
Key changes
The Detroit 3 now are sized to make money when the U.S. new-vehicle market is 12 million or 13 million a year. The record is 17.4 million, set in 2000, and the low in the recent recession was 10.4 million, in 2009. The industry's on pace to hit 12 million or more this year.
If demand for new vehicles booms, Detroit can schedule overtime and reopen idle plants to avoid missing the chance to sell more than expected.
Several modifications of the labor agreement with the United Auto Workers union, which represents most auto-industry hourly workers, have lowered the total outlay for workers — pay, benefits and other costs — to a range of $49 an hour (Chrysler) to $58 (Ford), down from an average $75 to $78 before the contract modifications in 2005, 2007 and 2009.
The 2007 changes were key, letting automakers off-load responsibility for retiree health care to the UAW and establishing two-tier wages. Newly hired hourly workers are paid $14 to $16 an hour, about half what veterans get.
New hires are locked into less-generous benefits than veteran workers get, no matter how high the new group's pay rises. They cost infinitely less, and they will become the majority of hourly workers as others age and leave.
Before the bloodletting, there was no hope.
At GM, for example, Structural costs were so fouled, so broken, that they couldn't make money at the high end of the (sales) cycle: 16.8 million and General Motors was essentially breaking even.
Akerson wasn't connected with GM before the bankruptcy period. A businessman and investment specialist who graduated from the U.S. Naval Academy in 1970 with an engineering degree, he was put on the GM board July 24, 2009, by the Obama administration, was picked to be CEO last September and got the chairman's title as well on Jan. 1.
He completed Detroit's corner-office overhaul. All three CEOs now are outsiders in an historically insider town. Ford Motor CEO Alan Mulally was a Boeing executive when hired by Ford Chairman Bill Ford in 2006 to save the Blue Oval. Chrysler Group CEO Sergio Marchionne is also CEO of Fiat Auto, which now owns a majority of Chrysler, comes from way outside Detroit, culturally and institutionally. And he's known by investment analysts as a finance and deal man more than as a "car guy."
No guarantees
Despite the new blood at the top, leaner organizations and recent near-death experiences as motivation, the Detroit rebound comes with no guarantee.
• Costs are rising. The new models in the pipeline, the ones that could save the industry, cost billions of dollars to design, develop and launch, then to support with heavy marketing for a year or so. Commodity costs are up, too.
•Negotiations with the UAW on a new contract begin this week. Automakers don't want to lock in higher wages or other costs, but the union passionately wants to regain some ground it surrendered to keep the automakers afloat.
•Detroit's move to small cars might not work. Ever-tightening federal fuel-economy regulations almost dictate many more small, lightweight cars for automakers to hit the required average of 35.5 mpg in 2016 and perhaps 54 mpg by 2025, according to the latest not-so-private discussions between the White House and the auto industry.
But you can't sell what people won't buy.
One market analyst says Americans don't have an affinity for small cars. When they can, they like to get into bigger, more comfortable cars.
•Economic malaise lingers. Unemployment remains stubbornly above 9%. And Treasury Secretary Timothy Geithner said on last weekend's TV talks shows that the economy might have slowed, not accelerated, in the second quarter.
People without jobs in an uncertain economy are antithetical to new-car sales. It's not clear whether GM, Ford and Chrysler could withstand more years like 2009, when only 10 million cars were sold. And if they must try to, what's left to cut?
•Product problems remain. GM has far too many powertrains that aren't all that different. Akerson says there is not any real difference between a 1.4- and a 1.5-liter engine. He adds that just causes complexity in your purchasing and your supply chain.
GM also must move fast into non-petroleum-fuel powerplants, such as pure electric cars and those fueled by clean-burning compressed natural gas (CNG), he says.
Ford's confusing high-tech electronics, and six-speed automatic transmissions tuned so aggressively for fuel economy that the cars drive poorly, caused frustrated owners to slap Ford down to No. 23 on a recent J.D. Power and Associates quality survey, from a lofty No. 5 a year ago.
Ford's Lincoln luxury brand definitely needs a better-defined identity. Consumers are smart. They're not going to pay an extra $10,000 for a cosmetically enhanced Ford.
Chrysler's Fiat-designed, U.S.-built 40-mpg small cars — a Fiat promise to the U.S. government as part of the Chapter 11 rescue — have yet to materialize. They're in the works, but will they be soon enough, and good enough, in a market crawling with new-design, high-mpg small cars?
•Widespread mistrust of Detroit, from years of shoddy and un-inventive vehicles, hasn't been eliminated.
Ford seems to have a head-start overcoming that, for not taking government money.
GM's Akerson acknowledges the low esteem and notes that it's an impression created over the past 20 or 30 years, and they are not going to cure that in one year.
He hopes the advanced-technology Chevrolet Volt helps erase the low-tech image and that a series of new models coming in the next 18 months will help identify GM as an exciting and relevant company.
In a fell swoop, Chrysler has overcome some resistance. Its "imported from Detroit" TV ad during the Super Bowl acknowledged that the city and its main industry have taken hard hits but asserted powerfully that times have changed. The ad starred popular musician Eminem driving a then-new Chrysler 200 mid-size sedan.
The ad spawned lines of clothing, overwhelming numbers of e-mail to Chrysler and a continuing social-media buzz.
What Akerson finds exciting, and believes is a mark of GM's integrity and a harbinger of its success, is that the company continued to work on the controversial Chevy Volt extended-range electric car even during the distractions of Chapter 11.
Ferris State Participates in Google Maps Street View Partner Program
Story first appeared in Ferris State University's University News.
Ferris State University is participating in the Google Maps Street View Partner Program, which provides interactive 360-degree ground-level photos of special attractions around the world.
A Google Street View team visited Michigan last week to capture imagery of the Ferris campus that will be stitched into immersive panoramic views and viewable directly on Google Maps in the coming months.
The Google Street View crew spent the day on campus with a vehicle called the “Street View Trike,” a three-wheel pedi-cab with a camera system on top that is pedaled through pedestrian walkways and paths, automatically gathering images as it goes. It weighs about 250 pounds, but its small size enables maneuvering and access to places not accessible by cars.
“We’re so excited to participate in this free program that provides a wonderful opportunity for prospective students and their parents, in particular, to get a unique perspective of Ferris’ Big Rapids campus before coming here. It also gives alumni, who may not have visited Ferris in a long time, a glimpse of how the campus has changed over time and to reflect on their fond memories of the University," said Shelly Armstrong, associate vice president for Marketing and Communications. The Michigan Honors Programs students enjoy the new access.
Armstrong said the campus locations captured by the Google Street View team were pedestrian-only areas, enabling Ferris’ facilities and grounds to be showcased in a very personal, up-close manner for those who may never set foot on campus. “We have no doubt this will be a valuable tool to anyone who wants to explore the Ferris campus virtually and will be especially helpful to those who are planning a visit. We can’t wait to see the final 360-degree panoramic images on Google Maps and to be able to make the campus available to the world,” Armstrong said.
25 July, 2011
Ferris State University is participating in the Google Maps Street View Partner Program, which provides interactive 360-degree ground-level photos of special attractions around the world.
A Google Street View team visited Michigan last week to capture imagery of the Ferris campus that will be stitched into immersive panoramic views and viewable directly on Google Maps in the coming months.
The Google Street View crew spent the day on campus with a vehicle called the “Street View Trike,” a three-wheel pedi-cab with a camera system on top that is pedaled through pedestrian walkways and paths, automatically gathering images as it goes. It weighs about 250 pounds, but its small size enables maneuvering and access to places not accessible by cars.
“We’re so excited to participate in this free program that provides a wonderful opportunity for prospective students and their parents, in particular, to get a unique perspective of Ferris’ Big Rapids campus before coming here. It also gives alumni, who may not have visited Ferris in a long time, a glimpse of how the campus has changed over time and to reflect on their fond memories of the University," said Shelly Armstrong, associate vice president for Marketing and Communications. The Michigan Honors Programs students enjoy the new access.
Armstrong said the campus locations captured by the Google Street View team were pedestrian-only areas, enabling Ferris’ facilities and grounds to be showcased in a very personal, up-close manner for those who may never set foot on campus. “We have no doubt this will be a valuable tool to anyone who wants to explore the Ferris campus virtually and will be especially helpful to those who are planning a visit. We can’t wait to see the final 360-degree panoramic images on Google Maps and to be able to make the campus available to the world,” Armstrong said.
25 July, 2011
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