Story first appeared in the Traverse City Record-Eagle.
Economic Gardening is the new buzzword in Michigan’s economic development lexicon. It’s focused on growing Michigan-based companies and entrepreneurial start-ups over trying to lure new operations into the state. Sunday’s September 25th Business section will debut a new monthly column produced by the Traverse City Area Chamber of Commerce on its economic development efforts in the region. This week Tino Breithaupt, the chamber’s outgoing senior vice president of economic development, will expand on the organization’s Economic Gardening activities in northern Michigan.
27 September 2011
UAW-CHRYSLER NEGOTIATIONS AT A STANDOFF
Story first appeared in the Traverse City Record-Eagle.
Negotiations over a new four-year contract between Chrysler and the United Auto Workers have broken down as both sides refuse to budge on key financial issues, two people briefed on the bargaining said Thursday.
The talks ended late Wednesday in a dispute over the number of workers who are paid an entry-level wage, said the people, who asked not to be identified because the negotiations are private.
Chrysler Group LLC, which is losing money, wants no limit on cheaper entry-level workers. The union wants a cap on the number of those workers, who make $14 to $16 an hour, about half of what a longtime union employee earns.
Chrysler factories continue to operate under a contract extension.
Detroit’s three car makers are each negotiating labor agreements with the UAW.
Negotiations over a new four-year contract between Chrysler and the United Auto Workers have broken down as both sides refuse to budge on key financial issues, two people briefed on the bargaining said Thursday.
The talks ended late Wednesday in a dispute over the number of workers who are paid an entry-level wage, said the people, who asked not to be identified because the negotiations are private.
Chrysler Group LLC, which is losing money, wants no limit on cheaper entry-level workers. The union wants a cap on the number of those workers, who make $14 to $16 an hour, about half of what a longtime union employee earns.
Chrysler factories continue to operate under a contract extension.
Detroit’s three car makers are each negotiating labor agreements with the UAW.
Jobless Rates Decrease In Michigan
Story first appeared in the Traverse City Record-Eagle.
The state of Michigan says seasonally unadjusted unemployment rates have decreased in all of Michigan’s 17 major labor markets.
The figures for August were released Thursday by the Department of Technology, management and Budget, and they reflect seasonal reductions in the work force.
Fewer unemployed workers actively sought employment in August than in July. Summer hiring receded from a July peak.
Statewide, the unadjusted jobless rate in August was 11 percent compared with 11.9 percent in July.
Rates ranged from a low of 7.2 percent in the Ann Arbor region to a high of 12.9 percent in the Detroit region.
Seasonally unadjusted payroll jobs in Michigan increased by 0.3 percent in August.
Jobs were added in manufacturing, construction and professional and business services. The state lost government jobs.
The state of Michigan says seasonally unadjusted unemployment rates have decreased in all of Michigan’s 17 major labor markets.
The figures for August were released Thursday by the Department of Technology, management and Budget, and they reflect seasonal reductions in the work force.
Fewer unemployed workers actively sought employment in August than in July. Summer hiring receded from a July peak.
Statewide, the unadjusted jobless rate in August was 11 percent compared with 11.9 percent in July.
Rates ranged from a low of 7.2 percent in the Ann Arbor region to a high of 12.9 percent in the Detroit region.
Seasonally unadjusted payroll jobs in Michigan increased by 0.3 percent in August.
Jobs were added in manufacturing, construction and professional and business services. The state lost government jobs.
Traverse City Company Holds Nation Wide Art Contest
Story first appeared in the Traverse City Record-Eagle
An art contest sponsored by Traverse City-based banner company Britten Inc. will award cash prizes and offer a chance for artists to gain major exposure.
The contest, artUP, hopes to find great fine and digital art, photographs, graphics and logs. Contestants can submit entries, for a fee, starting this week through Dec. 28.
For some artists who participate in artUP, their art will literally go “up” in public places. Britten makes large banners and signs to display in malls, stadium, downtowns and other venues such as exhibit rentals. The contest will help Britten build an online Artist Marketplace full of art for customers to use on various projects.
There’s a lot of times that client would come to Britten and ask if they have any creative work, clip art or stock art.
Contest submissions will be pooled into a collection where clients can access and review the work for use in creative campaigns.
An art contest sponsored by Traverse City-based banner company Britten Inc. will award cash prizes and offer a chance for artists to gain major exposure.
The contest, artUP, hopes to find great fine and digital art, photographs, graphics and logs. Contestants can submit entries, for a fee, starting this week through Dec. 28.
For some artists who participate in artUP, their art will literally go “up” in public places. Britten makes large banners and signs to display in malls, stadium, downtowns and other venues such as exhibit rentals. The contest will help Britten build an online Artist Marketplace full of art for customers to use on various projects.
There’s a lot of times that client would come to Britten and ask if they have any creative work, clip art or stock art.
Contest submissions will be pooled into a collection where clients can access and review the work for use in creative campaigns.
22 September 2011
General Motors Is Said to Offer Bonuses and Reopened Plant
Story first appeared in The New York Times.
DETROIT - The United Auto Workers union won $5,000 signing bonuses for its workers and a promise to reopen an assembly plant in Tennessee as part of its tentative new contract with General Motors, according to people briefed on the negotiations.
In what is being viewed as a landmark deal, the union also preserved health care and pensions and improved profit-sharing for its roughly 48,000 members who work at G.M.
Officials at G.M. and the union declined to discuss specific terms of the deal. But people briefed on the negotiations said that workers would receive a signing bonus of $5,000 in lieu of cost-of-living wage increases. Entry-level workers, who are paid about $14 an hour, are expected to receive an increase of $2 to $3 an hour.
The company has also agreed to reopen its idled assembly plant in Spring Hill, Tenn., the people said.
The U.A.W.’s tentative, four-year agreement with G.M., announced late Friday, also opens the door for the automaker to bring back laid-off workers and move jobs back into the United States.
G.M. is the first of Detroit’s Big Three to reach a deal with the union. Details of the agreement were being withheld until the union can inform members, who will vote on ratification over the next two weeks.
The union’s president, Bob King, said in a statement that union members would get a larger share of the profits from G.M.’s comeback from its federal bailout and bankruptcy in 2009.
G.M.’s lead negotiator, Cathy Clegg, said the agreement allows G.M. to continue adding jobs as it increases market share in the United States.
Industry analysts said the union achieved its goals of balancing economic gains in the agreement with solidifying G.M.’s cost structure for future growth.
Increasing jobs in the United States was a critical goal for U.A.W. leaders under pressure to show that the government’s bailout of G.M. is producing positive economic benefits.
Mr. King took the unusual step of acknowledging the Obama administration’s support of the industry in his statement: “None of this would have been possible without the efforts of President Obama, who invested federal funds to help turn the company around, protect the auto supplier base and keep good-paying jobs in America.”
The union said that it had successfully fought off G.M.’s proposals to weaken pensions and obtain major concessions on health-care benefits.
Mr. King’s next task is to seek broad support among local union leaders and G.M. workers for the tentative deal. U.A.W. leaders from plants across the country are expected to gather in Detroit on Tuesday to hear the details.
DETROIT - The United Auto Workers union won $5,000 signing bonuses for its workers and a promise to reopen an assembly plant in Tennessee as part of its tentative new contract with General Motors, according to people briefed on the negotiations.
In what is being viewed as a landmark deal, the union also preserved health care and pensions and improved profit-sharing for its roughly 48,000 members who work at G.M.
Officials at G.M. and the union declined to discuss specific terms of the deal. But people briefed on the negotiations said that workers would receive a signing bonus of $5,000 in lieu of cost-of-living wage increases. Entry-level workers, who are paid about $14 an hour, are expected to receive an increase of $2 to $3 an hour.
The company has also agreed to reopen its idled assembly plant in Spring Hill, Tenn., the people said.
The U.A.W.’s tentative, four-year agreement with G.M., announced late Friday, also opens the door for the automaker to bring back laid-off workers and move jobs back into the United States.
G.M. is the first of Detroit’s Big Three to reach a deal with the union. Details of the agreement were being withheld until the union can inform members, who will vote on ratification over the next two weeks.
The union’s president, Bob King, said in a statement that union members would get a larger share of the profits from G.M.’s comeback from its federal bailout and bankruptcy in 2009.
G.M.’s lead negotiator, Cathy Clegg, said the agreement allows G.M. to continue adding jobs as it increases market share in the United States.
Industry analysts said the union achieved its goals of balancing economic gains in the agreement with solidifying G.M.’s cost structure for future growth.
Increasing jobs in the United States was a critical goal for U.A.W. leaders under pressure to show that the government’s bailout of G.M. is producing positive economic benefits.
Mr. King took the unusual step of acknowledging the Obama administration’s support of the industry in his statement: “None of this would have been possible without the efforts of President Obama, who invested federal funds to help turn the company around, protect the auto supplier base and keep good-paying jobs in America.”
The union said that it had successfully fought off G.M.’s proposals to weaken pensions and obtain major concessions on health-care benefits.
Mr. King’s next task is to seek broad support among local union leaders and G.M. workers for the tentative deal. U.A.W. leaders from plants across the country are expected to gather in Detroit on Tuesday to hear the details.
GM UAW Deal
Story first appeared in USA Today.
Late Friday night, the UAW and General Motors reached a deal on a tentative labor agreement covering 49,000 U.S. workers that gives a long-awaited glimpse into what the post-bankruptcy Detroit auto industry — and union — will look like.
The deal will create an undisclosed number of new jobs, and if the terms are viewed as reasonable, it will likely be heralded by the backers of GM's 2009 government-backed bankruptcy as proof the rescue was a success.
The UAW feels this contract will get their members who have been laid off back to work, will create new jobs in their communities and will bring work back to the United States from other countries.
While many details of the deal were not immediately divulged, the UAW press release shared some of the positive highlights of the deal:
Profit sharing will now be based on income from all GM's North American operations, not just U.S. plants, a person familiar with the deal said. With the new formula, the average profit-sharing check from last year's $5.7 billion North American profit would have been between $5,000 and $6,000, instead of the $4,000 or so that workers received, the person said. The union claimed profit sharing would be more transparent. Indeed, the bonuses will be based on a simple chart that lists ranges of profits and corresponding profit-sharing payouts, the person said. The bonuses will have a cap.
The contract also increases the entry-level wage, the person said.
Now, the UAW must sell the deal to its GM members. A vote is expected to take place in seven to 10 days.
A 25-year GM worker now at the Pontiac stamping plant, said he was pretty confident the two sides would reach a deal. He said he hopes GM will be restoring some of the benefits for the retirees and a raise of some kind for the new hires.
The four-year deal could set the competitive tone for the Detroit Three as they continue recovering from the Great Recession that sent GM and Chrysler into bankruptcy two years ago.
After kicking off negotiations in late July, it was clear the UAW was making more progress at GM, and both sides worked toward reaching a deal before the Sept. 14 expiration of the 2007 contract. That didn't happen. Final details were eventually hammered out at about 11 p.m., after several days in which a deal seemed close, punctuated by an angry letter to UAW President Bob King from Chrysler and Fiat CEO Sergio Marchionne.
Friday night, union officials heralded their tentative deal.
A GM exec said they worked hard for a contract that recognizes the realities of today's marketplace, enabling GM to continue to invest in U.S. manufacturing and provide good jobs to thousands of Americans. She said they are proud of this agreement and are happy that it truly recognizes that the success of the company is tied to the success of the workers, and as everyone knows, they have had, and will continue to have, some real differences with GM. It's the union's job to fight for workers and protect their members, and we will continue in that fight.
Evaluating and replicating the new deal.
The UAW is expected use the deal as a guide for talks at GM's crosstown rivals. Chrysler is widely expected to be the next automaker to reach a deal with the UAW, followed by Ford, where talks might be complicated by the automaker's strong turnaround and workers' recent discontent.
In the days ahead, the deal will be scrutinized by autoworkers, Wall Street and the taxpayers and politicians who helped finance the controversial 2009 bankruptcies of the two automakers.
If the terms are viewed as reasonable, the contract and the new jobs that go with it could be sold as a victory by President Barack Obama and the Democratic Party, who backed the automakers when public support was weak.
GM likely benefited by negotiating the first tentative agreement with the union in this round of bargaining, the first since the financial crisis of 2008 and 2009.
Friday night, the union claimed to have prevented cuts to pensions and secured improvements, not cuts, to health care benefits.
Mindful of taxpayers' aid.
In July, when contract talks began, GM and UAW leaders said they would keep the taxpayer assistance in mind as they worked on the new contract.
Both sides were also equally invested in showing the world that they weren't slipping back into what might be perceived as their old ways.
High labor costs — relative to foreign rivals — and heavy retiree health-care burdens had helped to drag down the Detroit Three in the years before the financial crisis. Other contributors: general mismanagement; an over-reliance on light trucks, especially SUVs; and a reliance on profit-eroding incentives that damaged brand value.
That "old Detroit" paradigm was largely cleaned up during the restructurings at the Detroit Three in recent years. The union did its part, too, agreeing to amend its labor contract with GM and Chrysler in 2009 before the automakers' bankruptcies. That deal brought U.S. wages and benefits to near-parity with foreign competitors, ended the notorious "jobs bank" that paid laid-off workers, eliminated cost-of-living raises and replaced some of the payments owed to a union's health-care trust with stock.
While GM and Chrysler completed their makeover during quick trips through bankruptcy, Ford self-financed its turnaround — a fact that became a proud marketing point for the automaker.
Healthy and making progress.
Today, the Detroit Three are more profitable than they've been in years, and at far lower sales volumes.
Consider this: Between 2005 and 2008, when the U.S. selling rate generally surpassed 16 million cars and trucks, GM and Ford posted losses that topped $100 billion.
In the first half of the year, when the selling rate was about 12.8 million cars and trucks, GM and Ford made $5.4 billion and $4.9 billion respectively. That's on top of the $4.7 billion GM made last year and the $6.6 billion Ford made in 2010.
Chrysler, meanwhile, continues to improve as its new Italian owner Fiat integrates the management teams and product portfolios. But, for now, it remains the weakest of the Detroit Three. Its $254 million loss through the first half of the year was largely due to repayment of government loans. Chrysler posted a loss of $652 million in 2010.
Given those profits, the UAW's King said he saw no reason for additional concessions and declared that autoworkers deserved to benefit from automakers' new found profits.
The automakers haven't objected to that notion, but have remained firm in their opinion that the reward be shared in ways that do not increase their fixed costs. Wall Street could see rising fixed costs as regression into Detroit's former bad habits.
King, a creative and practical leader, had repeatedly suggested that the two goals were not adversarial and remained positive that a deal could be reached that achieved goals on both sides.
He also was aware that a contentious round of negotiations, or one that gave workers either too little or too much, could have further tainted the images of the automakers or their union.
Chrysler talks contiune.
At Chrysler, contention is still possible, even if a strike is not. At GM and Chrysler, workers gave up the right to strike on wages and benefits as part of the U.S. government's assistance for the automakers. Any impasse will go to binding arbitration under the terms of that deal.
The scathing letter CEO Sergio Marchionne sent to King on Wednesday could signal trouble or just a momentary flare-up. Marchionne criticized King for failing to show up to a previously scheduled meeting to negotiate the contract after Marchionne flew back from Germany.
Even without Marchionne and King, talks between the UAW and Chrysler were scheduled to continue through the weekend, under a continuation of the outgoing 2007 contract. And Marchionne was expected to return to the table Tuesday.
Today's new agreement with GM could also give King the opportunity to convince Chrysler that he is more of a partner than an adversary and patch up the relationship.
Ford talks resume next week.
Meanwhile, at Ford, no bargaining is planned for the weekend, although it's expected to resume next week. Bargainers there have maintained a slower pace than at GM and Chrysler.
Ford and the UAW have indefinitely extended the contract they reached in 2007.
Talks in Dearborn are expected to be more complicated. For one, Ford's turnaround is regarded as strong. It's been profitable since 2009 and it has gained market share and confidence under CEO Alan Mulally's "One Ford" plan.
Ford will likely push to get its labor deal competitive with those at GM and Ford, where the UAW was able to get more concessions out of its members to assist with the 2009 bankruptcies.
In early 2009, Ford got workers' cost-of-living allowances suspended and eliminated its jobs bank. After GM and Chrysler's bankruptcies, however, the Dearborn automaker sought to get a similar no-strike clause and an entry-level wage freeze.
But workers overwhelmingly voted down that proposal, despite the promise of a $1,000 bonus. The UAW has since filed a grievance against Ford over the reinstatement of merit pay for salaried workers, claiming unequal treatment for their hourly counterparts. That grievance remains outstanding.
With a strike out of the question at GM and Chrysler, Ford is the only automaker that faces the possibility of a strike this year. Workers at Ford have already authorized a strike, a routine step, although national strikes are rare.
Late Friday night, the UAW and General Motors reached a deal on a tentative labor agreement covering 49,000 U.S. workers that gives a long-awaited glimpse into what the post-bankruptcy Detroit auto industry — and union — will look like.
The deal will create an undisclosed number of new jobs, and if the terms are viewed as reasonable, it will likely be heralded by the backers of GM's 2009 government-backed bankruptcy as proof the rescue was a success.
The UAW feels this contract will get their members who have been laid off back to work, will create new jobs in their communities and will bring work back to the United States from other countries.
While many details of the deal were not immediately divulged, the UAW press release shared some of the positive highlights of the deal:
- "Significant" investments and products for GM plants.
- Wages and benefits that "reflect the fact that it was UAW members who helped turn this company around," said Joe Ashton, UAW vice president.
- Improved profit sharing
Profit sharing will now be based on income from all GM's North American operations, not just U.S. plants, a person familiar with the deal said. With the new formula, the average profit-sharing check from last year's $5.7 billion North American profit would have been between $5,000 and $6,000, instead of the $4,000 or so that workers received, the person said. The union claimed profit sharing would be more transparent. Indeed, the bonuses will be based on a simple chart that lists ranges of profits and corresponding profit-sharing payouts, the person said. The bonuses will have a cap.
The contract also increases the entry-level wage, the person said.
Now, the UAW must sell the deal to its GM members. A vote is expected to take place in seven to 10 days.
A 25-year GM worker now at the Pontiac stamping plant, said he was pretty confident the two sides would reach a deal. He said he hopes GM will be restoring some of the benefits for the retirees and a raise of some kind for the new hires.
The four-year deal could set the competitive tone for the Detroit Three as they continue recovering from the Great Recession that sent GM and Chrysler into bankruptcy two years ago.
After kicking off negotiations in late July, it was clear the UAW was making more progress at GM, and both sides worked toward reaching a deal before the Sept. 14 expiration of the 2007 contract. That didn't happen. Final details were eventually hammered out at about 11 p.m., after several days in which a deal seemed close, punctuated by an angry letter to UAW President Bob King from Chrysler and Fiat CEO Sergio Marchionne.
Friday night, union officials heralded their tentative deal.
A GM exec said they worked hard for a contract that recognizes the realities of today's marketplace, enabling GM to continue to invest in U.S. manufacturing and provide good jobs to thousands of Americans. She said they are proud of this agreement and are happy that it truly recognizes that the success of the company is tied to the success of the workers, and as everyone knows, they have had, and will continue to have, some real differences with GM. It's the union's job to fight for workers and protect their members, and we will continue in that fight.
Evaluating and replicating the new deal.
The UAW is expected use the deal as a guide for talks at GM's crosstown rivals. Chrysler is widely expected to be the next automaker to reach a deal with the UAW, followed by Ford, where talks might be complicated by the automaker's strong turnaround and workers' recent discontent.
In the days ahead, the deal will be scrutinized by autoworkers, Wall Street and the taxpayers and politicians who helped finance the controversial 2009 bankruptcies of the two automakers.
If the terms are viewed as reasonable, the contract and the new jobs that go with it could be sold as a victory by President Barack Obama and the Democratic Party, who backed the automakers when public support was weak.
GM likely benefited by negotiating the first tentative agreement with the union in this round of bargaining, the first since the financial crisis of 2008 and 2009.
Friday night, the union claimed to have prevented cuts to pensions and secured improvements, not cuts, to health care benefits.
Mindful of taxpayers' aid.
In July, when contract talks began, GM and UAW leaders said they would keep the taxpayer assistance in mind as they worked on the new contract.
Both sides were also equally invested in showing the world that they weren't slipping back into what might be perceived as their old ways.
High labor costs — relative to foreign rivals — and heavy retiree health-care burdens had helped to drag down the Detroit Three in the years before the financial crisis. Other contributors: general mismanagement; an over-reliance on light trucks, especially SUVs; and a reliance on profit-eroding incentives that damaged brand value.
That "old Detroit" paradigm was largely cleaned up during the restructurings at the Detroit Three in recent years. The union did its part, too, agreeing to amend its labor contract with GM and Chrysler in 2009 before the automakers' bankruptcies. That deal brought U.S. wages and benefits to near-parity with foreign competitors, ended the notorious "jobs bank" that paid laid-off workers, eliminated cost-of-living raises and replaced some of the payments owed to a union's health-care trust with stock.
While GM and Chrysler completed their makeover during quick trips through bankruptcy, Ford self-financed its turnaround — a fact that became a proud marketing point for the automaker.
Healthy and making progress.
Today, the Detroit Three are more profitable than they've been in years, and at far lower sales volumes.
Consider this: Between 2005 and 2008, when the U.S. selling rate generally surpassed 16 million cars and trucks, GM and Ford posted losses that topped $100 billion.
In the first half of the year, when the selling rate was about 12.8 million cars and trucks, GM and Ford made $5.4 billion and $4.9 billion respectively. That's on top of the $4.7 billion GM made last year and the $6.6 billion Ford made in 2010.
Chrysler, meanwhile, continues to improve as its new Italian owner Fiat integrates the management teams and product portfolios. But, for now, it remains the weakest of the Detroit Three. Its $254 million loss through the first half of the year was largely due to repayment of government loans. Chrysler posted a loss of $652 million in 2010.
Given those profits, the UAW's King said he saw no reason for additional concessions and declared that autoworkers deserved to benefit from automakers' new found profits.
The automakers haven't objected to that notion, but have remained firm in their opinion that the reward be shared in ways that do not increase their fixed costs. Wall Street could see rising fixed costs as regression into Detroit's former bad habits.
King, a creative and practical leader, had repeatedly suggested that the two goals were not adversarial and remained positive that a deal could be reached that achieved goals on both sides.
He also was aware that a contentious round of negotiations, or one that gave workers either too little or too much, could have further tainted the images of the automakers or their union.
Chrysler talks contiune.
At Chrysler, contention is still possible, even if a strike is not. At GM and Chrysler, workers gave up the right to strike on wages and benefits as part of the U.S. government's assistance for the automakers. Any impasse will go to binding arbitration under the terms of that deal.
The scathing letter CEO Sergio Marchionne sent to King on Wednesday could signal trouble or just a momentary flare-up. Marchionne criticized King for failing to show up to a previously scheduled meeting to negotiate the contract after Marchionne flew back from Germany.
Even without Marchionne and King, talks between the UAW and Chrysler were scheduled to continue through the weekend, under a continuation of the outgoing 2007 contract. And Marchionne was expected to return to the table Tuesday.
Today's new agreement with GM could also give King the opportunity to convince Chrysler that he is more of a partner than an adversary and patch up the relationship.
Ford talks resume next week.
Meanwhile, at Ford, no bargaining is planned for the weekend, although it's expected to resume next week. Bargainers there have maintained a slower pace than at GM and Chrysler.
Ford and the UAW have indefinitely extended the contract they reached in 2007.
Talks in Dearborn are expected to be more complicated. For one, Ford's turnaround is regarded as strong. It's been profitable since 2009 and it has gained market share and confidence under CEO Alan Mulally's "One Ford" plan.
Ford will likely push to get its labor deal competitive with those at GM and Ford, where the UAW was able to get more concessions out of its members to assist with the 2009 bankruptcies.
In early 2009, Ford got workers' cost-of-living allowances suspended and eliminated its jobs bank. After GM and Chrysler's bankruptcies, however, the Dearborn automaker sought to get a similar no-strike clause and an entry-level wage freeze.
But workers overwhelmingly voted down that proposal, despite the promise of a $1,000 bonus. The UAW has since filed a grievance against Ford over the reinstatement of merit pay for salaried workers, claiming unequal treatment for their hourly counterparts. That grievance remains outstanding.
With a strike out of the question at GM and Chrysler, Ford is the only automaker that faces the possibility of a strike this year. Workers at Ford have already authorized a strike, a routine step, although national strikes are rare.
15 September 2011
Fuel Cell Partners Sought By Daimler
Story first appeared in Bloomberg News.
Daimler AG, the world’s third- largest maker of luxury vehicles, is in advanced talks about expanding its fuel cell partners beyond Ford Motor Co. as it targets widescale production of the technology, development chief Thomas Weber said today in an interview at the Internationa Motor Show in Frankfurt.
The Stuttgart, Germany-based maker of Mercedes-Benz vehicles is in talks with other automakers as well as companies that would set up a hydrogen fuel station network, Weber said.
Daimler, which introduced a fuel cell-powered concept vehicle in Frankfurt, plans to produce more than 1,000 B-Class F-Cell vehicles, which are powered by the chemical reaction that creates water. The production run will rise to more than 10,000 with a next generation in 2017, Weber said.
Mercedes plans to expand its fuel cell offering with a sedan below the S-Class by 2017, he said. Daimler and Ford both own stakes in Automotive Fuel Cell Corp.
Daimler AG, the world’s third- largest maker of luxury vehicles, is in advanced talks about expanding its fuel cell partners beyond Ford Motor Co. as it targets widescale production of the technology, development chief Thomas Weber said today in an interview at the Internationa Motor Show in Frankfurt.
The Stuttgart, Germany-based maker of Mercedes-Benz vehicles is in talks with other automakers as well as companies that would set up a hydrogen fuel station network, Weber said.
Daimler, which introduced a fuel cell-powered concept vehicle in Frankfurt, plans to produce more than 1,000 B-Class F-Cell vehicles, which are powered by the chemical reaction that creates water. The production run will rise to more than 10,000 with a next generation in 2017, Weber said.
Mercedes plans to expand its fuel cell offering with a sedan below the S-Class by 2017, he said. Daimler and Ford both own stakes in Automotive Fuel Cell Corp.
Contract Deadline Extended By UAW
Story first appeared in USA TODAY.
The United Auto Workers union extended its contracts with General Motors Co. and Chrysler Group LLC early Thursday after failing to meet a deadline to reach a new agreement.
GM broke off talks after midnight and said they would resume at 8 a.m. EDT Thursday. Chrysler didn't say when its talks would resume.
The decision has little impact on the 71,000 U.S. factory workers covered by the GM and Chrysler contracts. In the past, workers might have gone on strike if the UAW hadn't extended their contracts. But as part of their 2009 government bailouts, GM and Chrysler workers had to agree not to strike over wages.
A UAW local official at a GM factory in Lordstown, Ohio, wrote that they should continue to do the things they do until they receive official notification otherwise.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker. The Ford contract covers around 40,000 workers.
Up until the deadline, the negotiations that began over the summer appeared to be proceeding without the acrimony that plagued them in the past. But just before the 11:59 p.m. EDT Wednesday deadline, the CEO of Chrysler fired off a letter to UAW President Bob King saying an agreement likely wouldn't be reached because King didn't come to the table Wednesday night to finish the deal.
Chrysler CEO Sergio Marchionne said he knows they are the smallest of the three automakers in Detroit, but that does not make them less relevant.
Marchionne said he planned to travel out of the country for business and will return next week. He said he would agree to a weeklong extension of Chrysler workers' current contract. The UAW didn't set a new deadline to reach agreements.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker.
Marchionne said he and King met a week ago and agreed to finish work on the new contract before the deadline. He said not meeting the deadline hurts Chrysler's workers.
Things appeared to be progressing more smoothly at GM. Joe Ashton, the UAW's vice president in charge of the GM negotiations, told local union officials Tuesday night in a note that bargainers have made "much progress" in talks with the company. GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.
The contract talks will determine wages and benefits for 111,000 union workers at the auto makers, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more. The contract talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.
GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it's been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well.
Ashton wrote that difficult restrictions have been placed on the union and company as a result of the bailout. To get the government funding, the union had to agree not to strike over wages at GM and Chrysler. Also, unresolved issues can be taken to binding arbitration, and the union's new contracts must keep the companies' labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.
The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and GM want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady. Health care costs are also an issue.
Once the contract agreements are reached, workers will vote on them.
The United Auto Workers union extended its contracts with General Motors Co. and Chrysler Group LLC early Thursday after failing to meet a deadline to reach a new agreement.
GM broke off talks after midnight and said they would resume at 8 a.m. EDT Thursday. Chrysler didn't say when its talks would resume.
The decision has little impact on the 71,000 U.S. factory workers covered by the GM and Chrysler contracts. In the past, workers might have gone on strike if the UAW hadn't extended their contracts. But as part of their 2009 government bailouts, GM and Chrysler workers had to agree not to strike over wages.
A UAW local official at a GM factory in Lordstown, Ohio, wrote that they should continue to do the things they do until they receive official notification otherwise.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker. The Ford contract covers around 40,000 workers.
Up until the deadline, the negotiations that began over the summer appeared to be proceeding without the acrimony that plagued them in the past. But just before the 11:59 p.m. EDT Wednesday deadline, the CEO of Chrysler fired off a letter to UAW President Bob King saying an agreement likely wouldn't be reached because King didn't come to the table Wednesday night to finish the deal.
Chrysler CEO Sergio Marchionne said he knows they are the smallest of the three automakers in Detroit, but that does not make them less relevant.
Marchionne said he planned to travel out of the country for business and will return next week. He said he would agree to a weeklong extension of Chrysler workers' current contract. The UAW didn't set a new deadline to reach agreements.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker.
Marchionne said he and King met a week ago and agreed to finish work on the new contract before the deadline. He said not meeting the deadline hurts Chrysler's workers.
Things appeared to be progressing more smoothly at GM. Joe Ashton, the UAW's vice president in charge of the GM negotiations, told local union officials Tuesday night in a note that bargainers have made "much progress" in talks with the company. GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.
The contract talks will determine wages and benefits for 111,000 union workers at the auto makers, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more. The contract talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.
GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it's been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well.
Ashton wrote that difficult restrictions have been placed on the union and company as a result of the bailout. To get the government funding, the union had to agree not to strike over wages at GM and Chrysler. Also, unresolved issues can be taken to binding arbitration, and the union's new contracts must keep the companies' labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.
The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and GM want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady. Health care costs are also an issue.
Once the contract agreements are reached, workers will vote on them.
Gas Mileage Not As Great As One Might Think
Story first appeared in USA TODAY.
Chevrolet's new small Sonic subcompact is going to be able to join the 40-mile-per-gallon club, but only with a pricier, turbocharged version.
Despite GM's earlier claims of a 40-mpg rating for the 2012 Chevrolet Sonic, the standard 135-horsepower, 1.8-liter four-cylinder will be rated by the EPA at 26 miles a gallon on the highway and 35 mpg on the highway, for a combined 29 mpg with a five-speed manual transmission. With an optional six-speed automatic transmission, the 1.8-liter returns 25 city/35 highway/28 combined mpg.
The only way to get 40 mpg on the highway is to opt for the 138-horsepower, turbocharged 1.4-liter four-cylinder, which comes with a six-speed manual transmission only. The engine is a $700 option for the higher level LT and LTZ trims. The Sonics are starting to boom their way into dealers: Cars.com shows more than 500 Sonics available, but none are equipped with the turbocharged motor just yet.
The Sonic's EPA rating is a disappointment compared with its competitors and even against its larger sibling, the Cruze:
A 2012 Chevrolet Cruze equipped with the same 1.8-liter four-cylinder and a six-speed manual transmission gets 25 city/36 highway/29 combined mpg. The Cruze Eco with an automatic transmission gets a 26 city/39 highway and 31 mpg combined. The fact that the lighter-weight Sonic scores no better than a Cruze is probably due to aerodynamics.
Competitors like the 2012 Hyundai Accent (30 city/40 highway mpg), 2012 Ford Fiesta SFE (29 city/40 highway mpg), 2012 Toyota Yaris (30 city/35 highway mpg) and 2012 Honda Fit (28 city/35 highway mpg) all score better. To add insult to injury, the Sonic scores worse, or no better, than the outgoing 2011 Chevy Aveo, which got 27 in the city and 35 on the highway for a 30 mpg combined with a manual transmission and a combined 28 mpg with a four-speed automatic transmission.
We don't know if GM plans on releasing an Eco version of the Sonic, which would help it compete with other fuel misers. For now, the model will likely try to compete on price since it's behind the field on mileage.
The 2012 Chevy Sonic went on sale earlier this month.
Chevrolet's new small Sonic subcompact is going to be able to join the 40-mile-per-gallon club, but only with a pricier, turbocharged version.
Despite GM's earlier claims of a 40-mpg rating for the 2012 Chevrolet Sonic, the standard 135-horsepower, 1.8-liter four-cylinder will be rated by the EPA at 26 miles a gallon on the highway and 35 mpg on the highway, for a combined 29 mpg with a five-speed manual transmission. With an optional six-speed automatic transmission, the 1.8-liter returns 25 city/35 highway/28 combined mpg.
The only way to get 40 mpg on the highway is to opt for the 138-horsepower, turbocharged 1.4-liter four-cylinder, which comes with a six-speed manual transmission only. The engine is a $700 option for the higher level LT and LTZ trims. The Sonics are starting to boom their way into dealers: Cars.com shows more than 500 Sonics available, but none are equipped with the turbocharged motor just yet.
The Sonic's EPA rating is a disappointment compared with its competitors and even against its larger sibling, the Cruze:
A 2012 Chevrolet Cruze equipped with the same 1.8-liter four-cylinder and a six-speed manual transmission gets 25 city/36 highway/29 combined mpg. The Cruze Eco with an automatic transmission gets a 26 city/39 highway and 31 mpg combined. The fact that the lighter-weight Sonic scores no better than a Cruze is probably due to aerodynamics.
Competitors like the 2012 Hyundai Accent (30 city/40 highway mpg), 2012 Ford Fiesta SFE (29 city/40 highway mpg), 2012 Toyota Yaris (30 city/35 highway mpg) and 2012 Honda Fit (28 city/35 highway mpg) all score better. To add insult to injury, the Sonic scores worse, or no better, than the outgoing 2011 Chevy Aveo, which got 27 in the city and 35 on the highway for a 30 mpg combined with a manual transmission and a combined 28 mpg with a four-speed automatic transmission.
We don't know if GM plans on releasing an Eco version of the Sonic, which would help it compete with other fuel misers. For now, the model will likely try to compete on price since it's behind the field on mileage.
The 2012 Chevy Sonic went on sale earlier this month.
12 September 2011
Michigan Required Car Insurance Coverage Is Up For Debate
Story first appeared in the Detroit News.
Possible changes to Michigan's unique auto insurance coverage for people injured in accidents are coming up for debate in the state Legislature.
Michigan now is the only state in the nation that mandates unlimited medical benefit coverage for people seriously injured in auto accidents. That would change under proposals that could offer motorists less expensive insurance in exchange for limited personal injury protection coverage.
Supporters of the changes, including the auto insurance industry, say it would allow motorists to opt out of more expensive coverage they can't afford or don't want. Insurers also are looking for relief in a system they say is growing increasingly expensive and threatening their finances.
Sen. Joe Hune, a Republican from Livingston County's Hamburg Township and chairman of the Senate Insurance Committee said if you take a look at the cost of the system, the skyrocketing medical costs, it's simply unsustainable, and there's going to be a tipping point sometime. The system just can't sustain itself."
Opponents of the proposed legislation say it could threaten the financial stability of the state's no-fault auto insurance system. They say motorists opting for less coverage could wind up underinsured and in deep financial trouble if they're seriously injured in an accident.
John Cornack, CEO of Ann Arbor-based Eisenhower Rehabilitation Center and president of the Coalition Protecting Auto No-Fault, said the proposed legislation does not come close to meeting the needs of severely injured accident victims.
The coalition opposed to the proposed changes includes hospital and health groups, trial lawyers and other organizations. They're engaged in a lobbying battle with auto insurance companies and business groups such as the Michigan Chamber of Commerce that want to alter the system.
The legislation would make significant changes to how people involved in catastrophic injury accidents are covered under state law.
Currently, all Michigan auto policyholders must buy unlimited medical benefits as part of their coverage. Regular auto insurance policies handle coverage up to $500,000, after which all insured motorists are assessed a fee to cover more severe cases, which are reimbursed through the Michigan Catastrophic Claims Association. The association, created in the late 1970s, now covers medical bills for roughly 12,800 accident victims across the state.
Unlimited coverage would continue for those currently in the MCCA system, according to supporters of the developing legislative plan. But there would be no such guaranteed coverage for those severely injured in future accidents.
Instead, motorists would have options for personal injury coverage likely ranging from $250,000 to $5 million. The developing legislation, which could be introduced this month, is likely to replace an original proposal that would let motorists buy as little as $50,000 in coverage up to unlimited coverage.
The new plan also likely will contain fee schedules and other measures aimed at controlling health insurance claims costs. It also likely will include elements of a plan backed by Sen. Virgil Smith, D-Detroit, that could provide some personal injury protection insurance relief in Detroit and possibly to residents in other areas of the state.
The $250,000 threshold would cover about 99 percent of accident victims, Hune said. But the Coalition Protecting Auto No-Fault says the average acute care stay cost for a person with a severe brain injury is more than $250,000, with some surpassing $1 million. The coalition says hundreds of people a year could have injury-related costs beyond even $500,000 in insurance coverage and would need to turn to other income, charities or taxpayers to pay for their care.
Cornack said right now, accident victims in our state can get the care they need without turning to welfare.
But the possibility of cheaper rates might be tempting for some motorists, who now pay an average premium of more than $1,000 a year in Michigan. Supporters of allowing flexibility on medical coverage say Michigan motorists could save roughly 15 percent on comprehensive policies and up to 40 percent on basic policies that don't include coverage for collision or theft.
Possible changes to Michigan's unique auto insurance coverage for people injured in accidents are coming up for debate in the state Legislature.
Michigan now is the only state in the nation that mandates unlimited medical benefit coverage for people seriously injured in auto accidents. That would change under proposals that could offer motorists less expensive insurance in exchange for limited personal injury protection coverage.
Supporters of the changes, including the auto insurance industry, say it would allow motorists to opt out of more expensive coverage they can't afford or don't want. Insurers also are looking for relief in a system they say is growing increasingly expensive and threatening their finances.
Sen. Joe Hune, a Republican from Livingston County's Hamburg Township and chairman of the Senate Insurance Committee said if you take a look at the cost of the system, the skyrocketing medical costs, it's simply unsustainable, and there's going to be a tipping point sometime. The system just can't sustain itself."
Opponents of the proposed legislation say it could threaten the financial stability of the state's no-fault auto insurance system. They say motorists opting for less coverage could wind up underinsured and in deep financial trouble if they're seriously injured in an accident.
John Cornack, CEO of Ann Arbor-based Eisenhower Rehabilitation Center and president of the Coalition Protecting Auto No-Fault, said the proposed legislation does not come close to meeting the needs of severely injured accident victims.
The coalition opposed to the proposed changes includes hospital and health groups, trial lawyers and other organizations. They're engaged in a lobbying battle with auto insurance companies and business groups such as the Michigan Chamber of Commerce that want to alter the system.
The legislation would make significant changes to how people involved in catastrophic injury accidents are covered under state law.
Currently, all Michigan auto policyholders must buy unlimited medical benefits as part of their coverage. Regular auto insurance policies handle coverage up to $500,000, after which all insured motorists are assessed a fee to cover more severe cases, which are reimbursed through the Michigan Catastrophic Claims Association. The association, created in the late 1970s, now covers medical bills for roughly 12,800 accident victims across the state.
Unlimited coverage would continue for those currently in the MCCA system, according to supporters of the developing legislative plan. But there would be no such guaranteed coverage for those severely injured in future accidents.
Instead, motorists would have options for personal injury coverage likely ranging from $250,000 to $5 million. The developing legislation, which could be introduced this month, is likely to replace an original proposal that would let motorists buy as little as $50,000 in coverage up to unlimited coverage.
The new plan also likely will contain fee schedules and other measures aimed at controlling health insurance claims costs. It also likely will include elements of a plan backed by Sen. Virgil Smith, D-Detroit, that could provide some personal injury protection insurance relief in Detroit and possibly to residents in other areas of the state.
The $250,000 threshold would cover about 99 percent of accident victims, Hune said. But the Coalition Protecting Auto No-Fault says the average acute care stay cost for a person with a severe brain injury is more than $250,000, with some surpassing $1 million. The coalition says hundreds of people a year could have injury-related costs beyond even $500,000 in insurance coverage and would need to turn to other income, charities or taxpayers to pay for their care.
Cornack said right now, accident victims in our state can get the care they need without turning to welfare.
But the possibility of cheaper rates might be tempting for some motorists, who now pay an average premium of more than $1,000 a year in Michigan. Supporters of allowing flexibility on medical coverage say Michigan motorists could save roughly 15 percent on comprehensive policies and up to 40 percent on basic policies that don't include coverage for collision or theft.
07 September 2011
Saab Bankrupt
Story first appeared in USA TODAY.
Swedish car maker Saab is filing for bankruptcy protection in a self-managed reconstruction process, the Associated Press reports.
Saab's owner Swedish Automobile, says the Trollhattan-based Saab and its subsidiaries, are filing for a "voluntary reorganization" at Vanersborg District Court on Wednesday.
It cites Saab's limited funds and says the move is to secure short-term stability while simultaneously attracting additional funding.
The brand has been plagued by production stoppages and problems to pay its suppliers and 3,700 staff for months.
Creditors have threatened to put it into bankruptcy unless it pays up.
Netherlands-based Swedish Automobile brought Saab out of a liquidation process by buying it from General Motors in 2010.
Swedish car maker Saab is filing for bankruptcy protection in a self-managed reconstruction process, the Associated Press reports.
Saab's owner Swedish Automobile, says the Trollhattan-based Saab and its subsidiaries, are filing for a "voluntary reorganization" at Vanersborg District Court on Wednesday.
It cites Saab's limited funds and says the move is to secure short-term stability while simultaneously attracting additional funding.
The brand has been plagued by production stoppages and problems to pay its suppliers and 3,700 staff for months.
Creditors have threatened to put it into bankruptcy unless it pays up.
Netherlands-based Swedish Automobile brought Saab out of a liquidation process by buying it from General Motors in 2010.
06 September 2011
WHIRLPOOL CORP. OUT OF A SLUMP
Story first appeared in Bloomberg.
Whirlpool Corp., the world’s largest appliance maker, said first-quarter profit increased 3 percent, helped by an energy tax credit.
Net income rose to $169 million, or $2.17 a share, from $164 million, or $2.13 a share, a year earlier, the maker of KitchenAid refrigerators and Maytag washing machines said today in a statement. Revenue gained 3 percent to $4.4 billion, surpassing the $4.29 billion predicted by analysts. Profit was $2.11 a share, excluding some items, topping the $1.16 median estimate in a Bloomberg survey. Operating profit declined.
Sales at Whirlpool, based in Benton Harbor, Michigan, recovered last year after the company gained market share and benefited from U.S. tax credits for making energy-efficient appliances. Jeff Fettig, chairman and chief executive officer, is also expanding business in emerging markets such as Brazil, with about half of the company’s sales coming from North America last year.
Fettig said that their first-quarter results reflect their ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation.
Whirlpool reaffirmed its profit estimate of between $12 and $13 a share this year, helped by between $300 million and $350 million in energy tax credits. The company said in February that it expected to receive $300 million in energy tax credits this year. Fettig told analysts today that the higher number was based on better visibility after monitoring sales of qualifying models.
Whirlpool rose 79 cents, or 0.9 percent, to $88.65 at 4:01 p.m. in New York Stock Exchange composite trading. The shares are little changed this year.
Research and Development
Whirlpool plans to spend more than $600 million on research and development and will open a plant and distribution center in Tennessee and a new headquarters in Michigan with $1 billion in U.S. investment through 2014, Fettig said in a speech in Detroit last month.
Founded a century ago, Whirlpool bought smaller Maytag Corp. in 2006 for $2.6 billion to compete with appliance makers in Asia.
After closing nine factories in North America since the merger, the company still operates nine plants in the U.S., with about 17,500 workers, and says 82 percent of the units sold in the U.S. are domestically made. Whirlpool can claim the tax credit only for appliances produced in the U.S.
Globally, Whirlpool employs 71,000 people.
Sales at the appliance maker rose 7 percent to $18.4 billion last year after dropping during the housing slump of the previous two years. In the year-earlier quarter, the company attributed a rise in revenue to increased productivity.
Tax Rates
Whirlpool had negative effective income tax rates in 2010, 2009 and 2008. Last year, the company reported an income tax benefit of $64 million and an effective tax rate of negative 10.9 percent, according to company filings. The company expects a similar tax benefit in 2011, corporate controller Larry Venturelli told analysts today.
The company relies more heavily on the credit than do other appliance makers such as Electrolux AB and General Electric Co., said Laura Champine, an analyst at Cowen & Co. in New York.
Electrolux, based in Stockholm, is accruing the credits for future use against its U.S. tax liability, chief financial officer Jonas Samuelson told analysts.
Tax Benefits
He said they have the same opportunities for tax benefits that are quite similar to Whirlpool when it comes to energy tax credit, however, they can’t realize them to earnings to the same extent.
Congress created the appliance manufacturing tax credit in 2005. It was extended for a year in December in a broader tax law. The congressional Joint Committee on Taxation estimated that a one-year extension would cost the government $235 million in forgone revenue over the next decade. That’s higher than the $78 million estimate it issued last year, before officials realized how much of a benefit the credit provides to Whirlpool.
Whirlpool Corp., the world’s largest appliance maker, said first-quarter profit increased 3 percent, helped by an energy tax credit.
Net income rose to $169 million, or $2.17 a share, from $164 million, or $2.13 a share, a year earlier, the maker of KitchenAid refrigerators and Maytag washing machines said today in a statement. Revenue gained 3 percent to $4.4 billion, surpassing the $4.29 billion predicted by analysts. Profit was $2.11 a share, excluding some items, topping the $1.16 median estimate in a Bloomberg survey. Operating profit declined.
Sales at Whirlpool, based in Benton Harbor, Michigan, recovered last year after the company gained market share and benefited from U.S. tax credits for making energy-efficient appliances. Jeff Fettig, chairman and chief executive officer, is also expanding business in emerging markets such as Brazil, with about half of the company’s sales coming from North America last year.
Fettig said that their first-quarter results reflect their ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation.
Whirlpool reaffirmed its profit estimate of between $12 and $13 a share this year, helped by between $300 million and $350 million in energy tax credits. The company said in February that it expected to receive $300 million in energy tax credits this year. Fettig told analysts today that the higher number was based on better visibility after monitoring sales of qualifying models.
Whirlpool rose 79 cents, or 0.9 percent, to $88.65 at 4:01 p.m. in New York Stock Exchange composite trading. The shares are little changed this year.
Research and Development
Whirlpool plans to spend more than $600 million on research and development and will open a plant and distribution center in Tennessee and a new headquarters in Michigan with $1 billion in U.S. investment through 2014, Fettig said in a speech in Detroit last month.
Founded a century ago, Whirlpool bought smaller Maytag Corp. in 2006 for $2.6 billion to compete with appliance makers in Asia.
After closing nine factories in North America since the merger, the company still operates nine plants in the U.S., with about 17,500 workers, and says 82 percent of the units sold in the U.S. are domestically made. Whirlpool can claim the tax credit only for appliances produced in the U.S.
Globally, Whirlpool employs 71,000 people.
Sales at the appliance maker rose 7 percent to $18.4 billion last year after dropping during the housing slump of the previous two years. In the year-earlier quarter, the company attributed a rise in revenue to increased productivity.
Tax Rates
Whirlpool had negative effective income tax rates in 2010, 2009 and 2008. Last year, the company reported an income tax benefit of $64 million and an effective tax rate of negative 10.9 percent, according to company filings. The company expects a similar tax benefit in 2011, corporate controller Larry Venturelli told analysts today.
The company relies more heavily on the credit than do other appliance makers such as Electrolux AB and General Electric Co., said Laura Champine, an analyst at Cowen & Co. in New York.
Electrolux, based in Stockholm, is accruing the credits for future use against its U.S. tax liability, chief financial officer Jonas Samuelson told analysts.
Tax Benefits
He said they have the same opportunities for tax benefits that are quite similar to Whirlpool when it comes to energy tax credit, however, they can’t realize them to earnings to the same extent.
Congress created the appliance manufacturing tax credit in 2005. It was extended for a year in December in a broader tax law. The congressional Joint Committee on Taxation estimated that a one-year extension would cost the government $235 million in forgone revenue over the next decade. That’s higher than the $78 million estimate it issued last year, before officials realized how much of a benefit the credit provides to Whirlpool.
Does Akerson know what he is doing?
Story first appeared in Bloomberg.
In June, Daniel F. Akerson, the chairman and chief executive officer of General Motors (GM), gave a speech to about 400 engineers and designers at the company’s technical center north of Detroit. It was a boilerplate, morale-boosting speech, generous with exhortations about work ethics and staying vigilant. Then came the Q&A session. One employee wanted to know: What kind of hours did Akerson expect them to put in at the office? Akerson answered with a family parable. He told the crowd he’d called his son’s office at 6:30 that morning and found him at his desk. Akerson informed his son, who does not work at GM, that he would call again in 12 hours and that he expected him to still be at work. The moral, as if anyone in the room needed an explanation: “Generous Motors” is gone, so get busy. Next question.
The anecdote didn’t go over well, according to two people in attendance who spoke on condition of anonymity because the gathering was private. This was 10 months into Akerson’s reign as CEO and two and a half years after the company’s bankruptcy and bailout by the federal government. Thousands had lost their jobs, leaving the survivors to do more even as they watched their stock in old GM evaporate. Akerson said he hopes some people are uncomfortable, and that it’s not his role to make people comfortable. He added that he doesn’t know what it was like there five years ago, and really he doesn’t care, because they are in a war. One Bed Liner manufacturer wants to see truck sales increase so his business can get back on track. He is excited for the new CEO's changes.
When the U.S. Treasury appointed him to GM’s board in 2009, Akerson, 62, had no auto industry experience. He does have a résumé, though: nearly 20 years as a telecom industry executive, successfully leading MCI and Nextel, then a run as a private equity investor with Carlyle Group. Depending on who’s talking, these qualifications make him either a refreshing force for change or a clueless newbie doing more harm than good. A longtime car industry consultant said that it’s not that he isn’t smart or a good executive, he just lacks the background, and even when he gets an answer, he may not know if it’s the right answer.
Of course, the same could be said of Ford’s (F) Alan Mulally (previously at Boeing) (BA) and Akerson’s predecessor, Edward E. Whitacre Jr. (AT&T) (T). Akerson says being new was a gift because he could ask questions that were impolite, previously imponderable, or politically incorrect. His 39th-floor office at GM’s headquarters in Detroit’s Renaissance Center is decorated with large glamour photographs of a Camaro and a Cadillac, but not the auto-racing tchotchkes that industry veterans typically display. He says he is not a car guy, nor should the CEO be worried about rear axle ratios on the next transmission.
Now that GM is making money—profits hit $6.2 billion last year, and the company has $32 billion in cash—Akerson has moved the company out of survival mode and is pushing it, whipping it even, to grow.
Akerson was born in California and raised in Mankato, Minn. His father had been an enlisted man in the U.S. Navy. Akerson attended the Naval Academy, graduated in 1970, and served a tour aboard a destroyer during the Vietnam War. He boxed in college—he was a light heavyweight—which may help explain his penchant for talking smack. Since taking over at GM, he has declared Lincoln dead—Ford should “sprinkle holy water” on its luxury brand, he told the Detroit News—and ridiculed Toyota’s (TM) Prius as a “geekmobile.”
The jab at Toyota came during a speech last December in Washington, when he heaped praise on the Chevrolet Volt, a plug-in hybrid and would-be Prius killer. In December, Akerson and his top managers had a meeting in the office of Thomas Stephens, then the company’s vice-chairman of global product development. The team wallpapered the room with plans for the Volt’s rollout, including pricing, sales targets, and production. Stephens and the product development staff figured the plan was baked and ready to go. Sales started that month and supplier contracts were already in place for future model years. Akerson homed in on the plan to build 45,000 Volts next year and wasn’t satisfied. He said the package came to him completely sanitized, with the notion that he just had to put his stamp on it but he wanted more, more, more.
Prior to the meeting, Akerson says, someone told him that new models need to sell at least 100,000 in a year to be successful. So that’s the goal he gave his team: 120,000 Volts in 2012. When GM’s Volt engineers heard about their new stretch target, they blanched—and not merely because engineers everywhere tend to resent orders from the suits. It took the Prius about seven years to hit the annual numbers Akerson wanted. Since the Volt is still a money loser, jacking up production would only push prices lower and losses wider. Quality could suffer, too, they argued, if GM pressured its suppliers to nearly triple the volume of the car’s high-tech parts, especially its lithium-ion batteries.
After four months of fact-finding and debate, Akerson backed off. It turned out that the suppliers wouldn’t take on the risk of building enough batteries to power 120,000 Volts unless GM guaranteed to repay their capital investment should sales come up short. (In the past, the company had exuberant sales forecasts for hybrid systems in its large SUVs that never quite materialized, making it difficult for suppliers to make a return on their investment.) Since no one at GM could say for certain how many of these pricey, tech-laden cars it could actually sell, Akerson settled on a production goal of 60,000—half of what he wanted and still a third more than his development people originally planned. The compromise also sent a message to his team: He may be pushy and unschooled in the practicalities of automobile production, but he wasn’t, just a reckless gambler. GM Vice-Chairman Stephen J. Girsky says Akerson’s sense of when to relent is what makes him more than a mere bully. Girsky says that even when he losesit’s a good thing because he is challenging the organization.
William E. Conway Jr., co-founder and managing partner of Carlyle Group, said people say he is tough but he wouldn’t say that. He added that Dan will make the tough decisions, but he is also willing to change his mind.
One of Akerson’s first tasks after taking over as CEO last Sept. 1 was figuring out how to break up the old bureaucracy without losing too much institutional knowledge. For help, he turned to an old pro: retired IBM (IBM) Chief Executive Louis V. Gerstner Jr., who came to GM’s headquarters in January to talk shop. Gerstner was a computer industry novice when IBM’s board hired him from RJR Nabisco in 1993. Early on, he brought in a new chief financial officer, Jerry York, who had been CFO at Chrysler. Then he concentrated on assembling a team with deep knowledge of the computer business. His advice regarding GM, says Akerson, was to identify optimists with experience and a competitive streak and promote them.
In February, Akerson nudged aside the veteran Stephens in favor of Mary T. Barra, the 49-year-old human resources director, to run product development. (Stephens is now chief technology officer.) Akerson elevated former Hyundai marketer Joel Ewanick to global chief marketing officer and promoted Treasurer Daniel Ammann, 39, to CFO after the resignation of Ammann’s predecessor, Christopher P. Liddell. Filling out Akerson’s top team are Girsky, a former Wall Street analyst and private equity investor who’d been an in-house adviser in 2005 and 2006, and GM-North America President Mark Reuss. A GM lifer, Reuss is the management team’s car guy and has earned Akerson’s trust.
Reuss recalls that around the same time Akerson was pushing to sell more Volts, the boss was raising questions about the next-generation Chevy Malibu. At a meeting at GM’s design center north of Detroit in December, Reuss and design chief Edward Welburn proudly showed Akerson a hard-foam mockup of the future Malibu. The design added the distinctive tail lights and sculpted haunches of the hot-selling Camaro. Akerson loved it. Reuss says Akerson turned to him and asked how fast can we get this, when the car wasn’t due to market until mid-2012.
Akerson wanted it as soon as possible. He pointed out that the longer Chevy has to sell the current car, the more incentives it will need. That would push its price closer to the all-new Cruze compact. A loaded Cruze compact sells for almost $23,000, and the larger Malibu sedan starts below $22,000, not counting $1,000 in rebates and cut-rate financing offered on the bigger car. Akerson’s fear was that buyers would opt for the Malibu and cannibalize Cruze sales.
Old GM pushed back. One employee sent Akerson a long e-mail telling him why pulling the car ahead was a dumb idea. Engineers said that rushing the Malibu could compromise quality. Worse, the new four-cylinder engine wouldn’t be ready until later next year. The engine was designed to make its debut on the Malibu and there is no way to speed engine development, Reuss says.
The rebellion went straight to Akerson who said he started getting e-mails from people he didn’t even know saying he would threaten the quality of the product. Others told him that the Malibu already had a POR, for “plan of record,” which is GM-speak for “set in stone.” Akerson recalls asking in exasperation that don’t you ever reshuffle your plan so we can think competitively?
He responded to the internal critics by saying that the family sedan business is hotly competitive and GM would blow about $200 million in incentives over the next year while waiting for a fresher model of the Malibu. Then Reuss, who’d come up through the company’s engineering ranks, realized that the company had another four-cylinder engine that would be ready in January and could be mated with GM’s eAssist mild hybrid system. After just three meetings—unheard-of at GM—the company figured out how to start selling the new Malibu in January with the hybrid system, offering buyers 38 mpg on the highway. The hybrid version will help GM compete with the Ford Fusion and Toyota Camry, both of which offer hybrid systems in their cars.
Some of the new team’s decisions have been costly. Late last year, Reuss concluded that GM should jack up rebates to help dealers boost volume and thin out rising pickup truck inventory. Akerson backed him, and GM offered the industry’s largest deals in the first quarter of 2011. The move was an echo of pre-bankruptcy GM, which used massive rebates to boost sales and sell out the capacity of its overblown factory network. The strategy helped sales, but GM’s first-quarter earnings showed that the new management team overspent: GM said the incentives lowered profits by $300 million. Meanwhile, Ford said its price increases helped its bottom line by $900 million in the quarter.
Akerson is planning to stay at GM for three to four years, says a person familiar with the CEO’s intentions. During that time, he’ll have some legacy-defining decisions to make. GM has seven global engineering centers, which the company calls tier-one centers, each specializing in designing the foundations of vehicles that are most popular in their regions. The Korean center specializes in subcompacts for emerging markets, the U.S. focuses on trucks, Europe on compact cars, and so on. The cars are engineered in those centers and sold around the globe. The centers have produced some recent hits, including the Chevrolet Cruze compact and Buick LaCrosse sedan, but Akerson says the system is too costly and complex. He may shut down some centers and consolidate engineering. It would save money—and it could also backfire by shifting development of some models away from the experts. Akerson say there’s always that risk, but our competition doesn’t have seven tier-one engineering centers around the globe.
He’s weighing how to make Cadillac a global luxury player that can rival BMW, Mercedes, and Audi. This has been the subject of yet another internal debate at GM. Akerson says there was a push to go after Europe first and establish Cadillac as a legitimate competitor to the German brands. He disagreed. Akerson figured that investing in Europe first would mean missing out on the real growth market, China. He won. By the third quarter of next year, GM will be making more than 100,000 Cadillacs a year on the mainland. Going after the European market is at least two years away, Akerson says if they wait five years, German brands will take over, and they have a chance in the second-largest market in the world.
Another big choice awaiting Akerson is the designation of his successor. He has nothing but praise for Reuss, Girsky, Ammann, and Barra. He says he wants to groom a few different candidates and then heaps extra praise on Reuss.
Akerson knows that none of those decisions will matter if GM backslides, as it has so often in the past. The company has a long history of following periods of glory with periods of failure. Breaking out of that cycle will require a new work ethic, product vigilance, and all the other virtues he harangues GM employees about. This summer, Akerson had his top 60 managers engage in a kind of automotive war game called Tough Love. The exercise called for six teams with 10 executives each representing GM’s major competitors. The executives had to get out of the GM uniform, Akerson says, and figure out how to crush the company.
Akerson was on the Fiat-Chrysler team. Team Toyota, headed by Girsky, examined how that company handled its recall fiasco last year. The Japanese company offered deals to its customers to bring them back. GM figured Toyota may come out swinging with aggressive sales tactics once the tsunami’s impact subsides and Japan’s factories are cranking again. They also decided the Prius—the geekmobile—still gave Toyota a huge advantage in fuel economy. GM has the Volt, but team Toyota didn’t think GM would do much beyond that. GM’s remedy: Come up with something Toyota won’t expect. As a result, GM this summer resurrected the once-shelved Cadillac Converj, a concept car using Volt technology. Akerson says the car will come to market a few years from now, under the name Cadillac ELR.
When asked later about strategies his team came up with to destroy GM, he demurs, claiming he spent most of his time observing. The main goal of the exercise was getting his executives to consider every threat, as opposed to pretending the competition doesn’t exist. Akerson says he’s pleased with the changes in attitudes he saw during Tough Love. Akerson said going into this exercise, there were a lot of cynics and doubters, but after the feedback was, they realized they have got a lot of work to do. This bodes well for other related industries such as Tonneau and truck accessories makers.
In June, Daniel F. Akerson, the chairman and chief executive officer of General Motors (GM), gave a speech to about 400 engineers and designers at the company’s technical center north of Detroit. It was a boilerplate, morale-boosting speech, generous with exhortations about work ethics and staying vigilant. Then came the Q&A session. One employee wanted to know: What kind of hours did Akerson expect them to put in at the office? Akerson answered with a family parable. He told the crowd he’d called his son’s office at 6:30 that morning and found him at his desk. Akerson informed his son, who does not work at GM, that he would call again in 12 hours and that he expected him to still be at work. The moral, as if anyone in the room needed an explanation: “Generous Motors” is gone, so get busy. Next question.
The anecdote didn’t go over well, according to two people in attendance who spoke on condition of anonymity because the gathering was private. This was 10 months into Akerson’s reign as CEO and two and a half years after the company’s bankruptcy and bailout by the federal government. Thousands had lost their jobs, leaving the survivors to do more even as they watched their stock in old GM evaporate. Akerson said he hopes some people are uncomfortable, and that it’s not his role to make people comfortable. He added that he doesn’t know what it was like there five years ago, and really he doesn’t care, because they are in a war. One Bed Liner manufacturer wants to see truck sales increase so his business can get back on track. He is excited for the new CEO's changes.
When the U.S. Treasury appointed him to GM’s board in 2009, Akerson, 62, had no auto industry experience. He does have a résumé, though: nearly 20 years as a telecom industry executive, successfully leading MCI and Nextel, then a run as a private equity investor with Carlyle Group. Depending on who’s talking, these qualifications make him either a refreshing force for change or a clueless newbie doing more harm than good. A longtime car industry consultant said that it’s not that he isn’t smart or a good executive, he just lacks the background, and even when he gets an answer, he may not know if it’s the right answer.
Of course, the same could be said of Ford’s (F) Alan Mulally (previously at Boeing) (BA) and Akerson’s predecessor, Edward E. Whitacre Jr. (AT&T) (T). Akerson says being new was a gift because he could ask questions that were impolite, previously imponderable, or politically incorrect. His 39th-floor office at GM’s headquarters in Detroit’s Renaissance Center is decorated with large glamour photographs of a Camaro and a Cadillac, but not the auto-racing tchotchkes that industry veterans typically display. He says he is not a car guy, nor should the CEO be worried about rear axle ratios on the next transmission.
Now that GM is making money—profits hit $6.2 billion last year, and the company has $32 billion in cash—Akerson has moved the company out of survival mode and is pushing it, whipping it even, to grow.
Akerson was born in California and raised in Mankato, Minn. His father had been an enlisted man in the U.S. Navy. Akerson attended the Naval Academy, graduated in 1970, and served a tour aboard a destroyer during the Vietnam War. He boxed in college—he was a light heavyweight—which may help explain his penchant for talking smack. Since taking over at GM, he has declared Lincoln dead—Ford should “sprinkle holy water” on its luxury brand, he told the Detroit News—and ridiculed Toyota’s (TM) Prius as a “geekmobile.”
The jab at Toyota came during a speech last December in Washington, when he heaped praise on the Chevrolet Volt, a plug-in hybrid and would-be Prius killer. In December, Akerson and his top managers had a meeting in the office of Thomas Stephens, then the company’s vice-chairman of global product development. The team wallpapered the room with plans for the Volt’s rollout, including pricing, sales targets, and production. Stephens and the product development staff figured the plan was baked and ready to go. Sales started that month and supplier contracts were already in place for future model years. Akerson homed in on the plan to build 45,000 Volts next year and wasn’t satisfied. He said the package came to him completely sanitized, with the notion that he just had to put his stamp on it but he wanted more, more, more.
Prior to the meeting, Akerson says, someone told him that new models need to sell at least 100,000 in a year to be successful. So that’s the goal he gave his team: 120,000 Volts in 2012. When GM’s Volt engineers heard about their new stretch target, they blanched—and not merely because engineers everywhere tend to resent orders from the suits. It took the Prius about seven years to hit the annual numbers Akerson wanted. Since the Volt is still a money loser, jacking up production would only push prices lower and losses wider. Quality could suffer, too, they argued, if GM pressured its suppliers to nearly triple the volume of the car’s high-tech parts, especially its lithium-ion batteries.
After four months of fact-finding and debate, Akerson backed off. It turned out that the suppliers wouldn’t take on the risk of building enough batteries to power 120,000 Volts unless GM guaranteed to repay their capital investment should sales come up short. (In the past, the company had exuberant sales forecasts for hybrid systems in its large SUVs that never quite materialized, making it difficult for suppliers to make a return on their investment.) Since no one at GM could say for certain how many of these pricey, tech-laden cars it could actually sell, Akerson settled on a production goal of 60,000—half of what he wanted and still a third more than his development people originally planned. The compromise also sent a message to his team: He may be pushy and unschooled in the practicalities of automobile production, but he wasn’t, just a reckless gambler. GM Vice-Chairman Stephen J. Girsky says Akerson’s sense of when to relent is what makes him more than a mere bully. Girsky says that even when he losesit’s a good thing because he is challenging the organization.
William E. Conway Jr., co-founder and managing partner of Carlyle Group, said people say he is tough but he wouldn’t say that. He added that Dan will make the tough decisions, but he is also willing to change his mind.
One of Akerson’s first tasks after taking over as CEO last Sept. 1 was figuring out how to break up the old bureaucracy without losing too much institutional knowledge. For help, he turned to an old pro: retired IBM (IBM) Chief Executive Louis V. Gerstner Jr., who came to GM’s headquarters in January to talk shop. Gerstner was a computer industry novice when IBM’s board hired him from RJR Nabisco in 1993. Early on, he brought in a new chief financial officer, Jerry York, who had been CFO at Chrysler. Then he concentrated on assembling a team with deep knowledge of the computer business. His advice regarding GM, says Akerson, was to identify optimists with experience and a competitive streak and promote them.
In February, Akerson nudged aside the veteran Stephens in favor of Mary T. Barra, the 49-year-old human resources director, to run product development. (Stephens is now chief technology officer.) Akerson elevated former Hyundai marketer Joel Ewanick to global chief marketing officer and promoted Treasurer Daniel Ammann, 39, to CFO after the resignation of Ammann’s predecessor, Christopher P. Liddell. Filling out Akerson’s top team are Girsky, a former Wall Street analyst and private equity investor who’d been an in-house adviser in 2005 and 2006, and GM-North America President Mark Reuss. A GM lifer, Reuss is the management team’s car guy and has earned Akerson’s trust.
Reuss recalls that around the same time Akerson was pushing to sell more Volts, the boss was raising questions about the next-generation Chevy Malibu. At a meeting at GM’s design center north of Detroit in December, Reuss and design chief Edward Welburn proudly showed Akerson a hard-foam mockup of the future Malibu. The design added the distinctive tail lights and sculpted haunches of the hot-selling Camaro. Akerson loved it. Reuss says Akerson turned to him and asked how fast can we get this, when the car wasn’t due to market until mid-2012.
Akerson wanted it as soon as possible. He pointed out that the longer Chevy has to sell the current car, the more incentives it will need. That would push its price closer to the all-new Cruze compact. A loaded Cruze compact sells for almost $23,000, and the larger Malibu sedan starts below $22,000, not counting $1,000 in rebates and cut-rate financing offered on the bigger car. Akerson’s fear was that buyers would opt for the Malibu and cannibalize Cruze sales.
Old GM pushed back. One employee sent Akerson a long e-mail telling him why pulling the car ahead was a dumb idea. Engineers said that rushing the Malibu could compromise quality. Worse, the new four-cylinder engine wouldn’t be ready until later next year. The engine was designed to make its debut on the Malibu and there is no way to speed engine development, Reuss says.
The rebellion went straight to Akerson who said he started getting e-mails from people he didn’t even know saying he would threaten the quality of the product. Others told him that the Malibu already had a POR, for “plan of record,” which is GM-speak for “set in stone.” Akerson recalls asking in exasperation that don’t you ever reshuffle your plan so we can think competitively?
He responded to the internal critics by saying that the family sedan business is hotly competitive and GM would blow about $200 million in incentives over the next year while waiting for a fresher model of the Malibu. Then Reuss, who’d come up through the company’s engineering ranks, realized that the company had another four-cylinder engine that would be ready in January and could be mated with GM’s eAssist mild hybrid system. After just three meetings—unheard-of at GM—the company figured out how to start selling the new Malibu in January with the hybrid system, offering buyers 38 mpg on the highway. The hybrid version will help GM compete with the Ford Fusion and Toyota Camry, both of which offer hybrid systems in their cars.
Some of the new team’s decisions have been costly. Late last year, Reuss concluded that GM should jack up rebates to help dealers boost volume and thin out rising pickup truck inventory. Akerson backed him, and GM offered the industry’s largest deals in the first quarter of 2011. The move was an echo of pre-bankruptcy GM, which used massive rebates to boost sales and sell out the capacity of its overblown factory network. The strategy helped sales, but GM’s first-quarter earnings showed that the new management team overspent: GM said the incentives lowered profits by $300 million. Meanwhile, Ford said its price increases helped its bottom line by $900 million in the quarter.
Akerson is planning to stay at GM for three to four years, says a person familiar with the CEO’s intentions. During that time, he’ll have some legacy-defining decisions to make. GM has seven global engineering centers, which the company calls tier-one centers, each specializing in designing the foundations of vehicles that are most popular in their regions. The Korean center specializes in subcompacts for emerging markets, the U.S. focuses on trucks, Europe on compact cars, and so on. The cars are engineered in those centers and sold around the globe. The centers have produced some recent hits, including the Chevrolet Cruze compact and Buick LaCrosse sedan, but Akerson says the system is too costly and complex. He may shut down some centers and consolidate engineering. It would save money—and it could also backfire by shifting development of some models away from the experts. Akerson say there’s always that risk, but our competition doesn’t have seven tier-one engineering centers around the globe.
He’s weighing how to make Cadillac a global luxury player that can rival BMW, Mercedes, and Audi. This has been the subject of yet another internal debate at GM. Akerson says there was a push to go after Europe first and establish Cadillac as a legitimate competitor to the German brands. He disagreed. Akerson figured that investing in Europe first would mean missing out on the real growth market, China. He won. By the third quarter of next year, GM will be making more than 100,000 Cadillacs a year on the mainland. Going after the European market is at least two years away, Akerson says if they wait five years, German brands will take over, and they have a chance in the second-largest market in the world.
Another big choice awaiting Akerson is the designation of his successor. He has nothing but praise for Reuss, Girsky, Ammann, and Barra. He says he wants to groom a few different candidates and then heaps extra praise on Reuss.
Akerson knows that none of those decisions will matter if GM backslides, as it has so often in the past. The company has a long history of following periods of glory with periods of failure. Breaking out of that cycle will require a new work ethic, product vigilance, and all the other virtues he harangues GM employees about. This summer, Akerson had his top 60 managers engage in a kind of automotive war game called Tough Love. The exercise called for six teams with 10 executives each representing GM’s major competitors. The executives had to get out of the GM uniform, Akerson says, and figure out how to crush the company.
Akerson was on the Fiat-Chrysler team. Team Toyota, headed by Girsky, examined how that company handled its recall fiasco last year. The Japanese company offered deals to its customers to bring them back. GM figured Toyota may come out swinging with aggressive sales tactics once the tsunami’s impact subsides and Japan’s factories are cranking again. They also decided the Prius—the geekmobile—still gave Toyota a huge advantage in fuel economy. GM has the Volt, but team Toyota didn’t think GM would do much beyond that. GM’s remedy: Come up with something Toyota won’t expect. As a result, GM this summer resurrected the once-shelved Cadillac Converj, a concept car using Volt technology. Akerson says the car will come to market a few years from now, under the name Cadillac ELR.
When asked later about strategies his team came up with to destroy GM, he demurs, claiming he spent most of his time observing. The main goal of the exercise was getting his executives to consider every threat, as opposed to pretending the competition doesn’t exist. Akerson says he’s pleased with the changes in attitudes he saw during Tough Love. Akerson said going into this exercise, there were a lot of cynics and doubters, but after the feedback was, they realized they have got a lot of work to do. This bodes well for other related industries such as Tonneau and truck accessories makers.
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