Auto Industry may see Labor Shortage

USA Today

DETROIT — It seems counterintuitive, but the auto industry could face a labor shortage within the next few years, says the head of the Center for Automotive Research.

While 228,000 auto jobs have been shed in the past two years, the industry is poised to add about 15,000 this year and could need up to 100,000 new workers a year from 2011 through 2013 as the recession recovery continues, says David Cole, chairman of the non-profit organization that looks at trends related to the auto industry and society.

The new jobs won't necessarily be filled by those displaced workers. Automakers need workers with more and different skills than in the past on the factory floor, Cole says. Among priorities: computer skills and the ability to work with less supervision than their predecessors. That likely means education beyond high school.

"The one thing that is very clear is that production workers need a two-year community college degree or the equivalent," he says. "The technology is quite sophisticated and changing rapidly."

He predicts a shortage as early as next year.

Experts have predicted for about five years that a labor shortage eventually would come for the auto industry simply due to the aging population. Advanced Technology Services and ACNielsen predicted in 2005 that changing demographics alone could leave the industry short of skilled autoworkers by the middle of this decade.

Cole says that problem exists, too, and it may arrive sooner than expected, since buyout offers from automakers in recent years accelerated retirement by many older workers. Meanwhile, an industry that shrank for more than a decade has not been adding great numbers of younger workers.

At least for now, thanks to the economy, there are plenty of applicants for any new jobs.

When Kia began hiring for more than 1,000 jobs at its just-opened plant in West Point, Ga., it got more than 44,000 applications.

Chrysler announced last month it would add 1,100 jobs this summer for a second shift at the Detroit plant starting to build its new 2011 Jeep Grand Cherokee. But it's not taking applications because it has enough already to fill the spots.

Sophia Koropeckyj, managing director for Moody's Economy.com, says, however, that lots of applications don't mean a surplus of applicants with skills now needed for state-of-the-art auto plants.

"It's not contradictory at all," she says. "(Automakers) are having a hard time filling all those positions. That really is the scenario."

No Perfect Game, but GM Gives Galarraga Corvette

USA Today

 

Detroit Tigers pitcher Armando Galarraga was robbed of a perfect game against the Cleveland Indians Wednesday night, but GM found his performance impressive enough in the Tigers' 3-0 shutout to hand him the keys to a 2010 Chevy Corvette convertible.

That's some consolation prize. But it couldn't be more deserved:

Galarraga retired 26 straight Indians' batters before the 27th and final batter, Jason Donald, stepped to the plate. Donald hit a ground ball between first and second base, which was fielded by Tiger's first baseman Miguel Cabrera. Cabrera threw to Galarraga, who stepped on first base, but umpire Jim Joyce blew the call and said Donald was safe. Galarraga had to settle for a 3-0 shutout.

Shortly after the game ended, Joyce admitted to missing the call at the base, saying, "I just cost that kid a perfect game. I thought he beat the throw. I was convinced he beat the throw, until I saw the replay. It was the biggest call of my career." The umpire apologized to Galarraga last night.

GM North American President Mark Reuss found the performance impressive enough anyway. No matter what the record books say, Reuss decided Galarraga deserved recognition for his achievement.

One has to wonder what kind of car Galarraga would have gotten for a perfect game.

Casino Money to Aid College Scholarship Plan

Chicago Tribune

Legislation headed for Gov. Jennifer Granholm's desk would allow Michigan school districts to use money received through agreements with tribal-run casinos to fund college scholarship programs.

The Senate unanimously approved the bill on Wednesday.

Michigan has more than 20 casinos run by American Indian tribes. The tribes have agreements with the state that typically provides 2 percent of certain gaming revenue to local governments, including schools.
The bill would allow school districts covered by those agreements to use their proceeds for scholarships for their graduates.

The legislation sponsored by Republican Sen. Ron Jelinek of Three Oaks was sparked by a plan from New Buffalo schools to fund a scholarship program.

Ford Fusion faces Gas Pedal Probe

USA Today

 

Federal safety officials say they have begun an investigation into the potential for floormat-related unintended acceleration in 2010 Ford Fusion and the nearly identical Mercury Milan mid-size sedans.

The National Highway Traffic Safety Administration says it has received three complaints of what is officially called "pedal entrapment" by all-weather floormats in the vehicles. As many as 249,301 cars could be involved, NHTSA estimated. No injuries or deaths are listed as a result of the incidents.

Ford says the mats involved were Ford accessory mats. Ford says its all-weather accessory mats come with an attachment to secure them so they don't slide forward and trap the gas pedal, and the driver's mats are printed with a warning that they shouldn't be stacked atop other mats. Ford says it will cooperate with the NHTSA investigation.

Edmunds.com went through an eye-opening incident in one of its own Fusion test cars after a car wash or a body shop worker took the rubber floor mat out of the trunk and put it back into the driver-side footwell on top of the carpet mat.

Ordinarily, just three complaints might be too few for NHTSA to take notice. But ill-fitting floormats jamming open gas pedals is blamed for a majority of Toyota's infamous unintended acceleration problem.

Toyota has recalled 5.4 million vehicles in the U.S. because improperly fitting mats can slide forward and trap poorly designed gas pedals against the floor. The automaker says it has fixed 1.7 million of the vehicles.

The National Highway Traffic Safety Administration release Tuesday tells Fusion and Milan owners not to place any unsecured floor mats, whether made by Ford or any after-market retailer, on top of the carpeted floor mat in the driver's side foot well. In addition, all owners should ensure that any mat is properly secured and never stacked.

Tata Motors Opens new Plant for Nano Car

Associated Press

 

Tata Motors inaugurated a factory Wednesday to produce its super-cheap compact Nano car, nearly two years after violent farmer protests forced the company to relocate.

The new factory in India's business-friendly Gujarat state promises to unleash production of the pint-sized car, which Tata plans to export to Europe, and eventually the U.S.

Tata Motors chairman Ratan Tata and Gujarat chief minister Narendra Modi together drove the first car - a sunshine yellow Nano - off the assembly line shortly before 1p.m.

"We owe you a great debt of gratitude for having made this happen," Tata said to Modi.

An hour and a half later, a cyclone began blowing large chunks of roofing off at least one of the factory buildings. A ceiling also collapsed. The winds ripped off swathes of celebratory blue bunting and workers huddled in the rain under ruined flags near shattered flower pots.

Spokesman Debasis Ray said to his knowledge only one building was damaged and production would not be affected.

Protests against farm land being converted to industrial use, led by opposition leader Mamata Banerjee, forced Tata Motors to abandon its original factory in the communist-ruled state of West Bengal. Until now, Tata Motors has only been able to make small quantities at an existing factory.

Tata Motors said it would ramp up production in phases at Sanand to 250,000 cars a year, which will be easily expandable to 350,000 cars. Deliveries from the plant will begin this month. Next to the 725-acre plant, housed on former state grazing land, is a 375 acre park where 41 key component vendors are already setting up shop, officials said.

Since its March 2009 launch, just 30,763 Nanos - which sell for just over $2000 in India - have hit the streets.

The Nano was meant to herald a new era of car making, in which even the rising poor could afford to trade dangerous motorbikes for a safe car.

Nano's initial momentum faded after two brand-new Nanos caught fire, raising safety questions.

The company says the incidents were unrelated and revealed no safety design flaws. Tata Motors is adding additional protection to the fuel lines of all existing Nanos as a preventive measure, spokesman Debasis Ray said.

To celebrate the factory, a fleet of Nanos will be driven across 15,000 miles of India by a group of contest winners.

For the most part, locals have welcomed the Nano with open arms, though some complain they haven't gotten jobs.

"Everyone in Sanand would like to keep a photograph of Mamata Banerjee in our home to do puja," said Bahadurbhai Majithiya, editor of the Gujarat Aarsi newspaper, using the Hindi word for a prayer ceremony. "Such a high profile project would never have come here were it not for her agitation. We are eternally grateful to her."

Gujarat has more land devoted to special economic zones than any other state but it is not immune to land protests, which have swept across India as it struggles to change from a nation of small farmers to a fast-growing industrial power.

Modi's government has treated the Nano project with care, scrupulously avoiding conflict.

The government only had to buy a small, 51-acre (20 hectare) privately held stretch from seven locals to build an access road to the factory and industrial park, which were built on land belonging to a government agricultural university.

A local land broker helped negotiate that deal in less than a day. All sold off only part of their land, and stood to benefit from rising land prices once the factory came.

Today, the road to the factory is flanked by fields and grazing buffalo.

The state has all but officially scuttled a plan to acquire land for an industrial zone around the Nano factory after locals protested handing over fertile farmland - which yields two crops a year - to industry, officials said.

Instead, the state is now looking into acquiring 177 square kilometers of less fertile land over nine villages about 10 kilometers from the Nano factory.

Sixty percent of Gujaratis make all or part of their living from the land, and the state is trying to get them a foothold in the rising industrial economy.

The Nano factory employs 2,400 directly, and Tata Motors expects that the factory will eventually lead to the creation of 10,000 direct and indirect jobs.

B.M. Pareekh, a state education official, said Tata Motors has hired 2,000 graduates of local technical training institutes, and agreed to take on 489 locals as apprentices.

Ford Board Approves Ending Mercury

The Wall Street Journal

 

Ford Motor Co. will shut its Mercury brand after its board of directors voted to phase out the 71-year old nameplate, according to a person familiar with the matter.

The company has scheduled a news conference for later Wednesday where it will outline its Mercury plan, this person said.

A Ford spokesman said the news conference will cover the company's strategy in the U.S. "I can't get into specifics," he said.

Ford Chief Executive Alan Mulally and his top lieutenants recently won the backing of key members of the Ford family to kill Mercury after years of dwindling sales. Its sales fell another 10.7% for May compared with the same month last year, the auto maker reported Wednesday.

Mercury's future has been in limbo ever since Mr. Mulally arrived as CEO in 2006 with a restructuring plan that relied on phasing out extraneous brands and putting most of the company's resources into its Ford division. Since then, Ford has sold Jaguar and Land Rover, while the sale of its Volvo brand should be complete later this year.

Mercury was supposed to give Ford a midpriced car that fit between inexpensive Ford models and its more luxurious Lincolns. But that plan bore little fruit in recent years. In 2009, Ford sold 92,299 Mercury vehicles, down from 359,143 in 2000.

The hundreds of dealers that sell only Lincolns and Mercurys may find it difficult to continue without the volume from Mercury. A person familiar with the matter at Ford said the company hopes to merge many of those dealers with existing Ford dealerships or shut them. Mercury had 1,780 U.S. dealers at the end of 2009.

BCBS Hikes Rates in State

Health CMI

 

Blue Cross Blue Shield of Michigan (BCBSM) has asked permission for a rate hike of up to 15% for nearly 200,000 individual subscribers. Hikes for group subscribers will range from 8-12%. The premium increase must be approved by the Michigan Office of Financial and Insurance Regulation for it to take effect. BCBSM claims that they will lose over $50 million dollars without the hike.

This may come as a surprise to many policy holders since Michigan’s insurance commissioner approved a 22% increase last year for both individual and group policy holders. Despite the increase, BCBSM claims to have lost nearly $100 million last year. Michigan Attorney General Mike Cox has questioned the loss claims since BCBSM increased its surplus by $528 million in 2009. That is profit on top of the already $2 billion surplus that the company holds. Cox has also questioned the purported losses because the State of Michigan gives the company $100 million in tax breaks every year to help control costs and prevent losses.

Last year, Attorney General Cox asked Blue Cross Blue Shield of Michigan pointed questions about their finances. In a letter to BCBSM, Cox asked about bonuses and  salaries to board members, perks such as entertainment expenses, and the total value of the BCBSM art collection. Cox also asked for BCBSM to state the amount of funds transferred to affiliated companies. The Attorney General estimated the transfer of funds out of BCBSM to be over $450 million since 2005. Such a transfer would then show up as a loss for the company even though the funds are received by affiliates. This line of inquiry shows that the Michigan Attorney General suspects clever accounting techniques and financial manipulation to help show a loss for BCBSM.

At the same time, Michigan Congressmen John D. Dingell and Sander Levin questioned Blue Cross Blue Shield of Michigan President and CEO Daniel J. Loepp about proposed rate hikes. The Congressmen asked questions concerning how much of the rate hikes will go towards paying benefits to subscribers, why the BCBSM massive surplus is not used to offset any losses, and what types of bonuses did employees making more than $500,000 per year receive. This line of inquiring was partially triggered by BCBSM paying enormous bonuses to executives  prior to announcing a reduction of its workforce, salary freezes, and rate hikes. Blue Cross Blue Shield of Michigan CEO Leopp had a 23% increase in salary in 2009 to $1.12 million. However, his bonus pay has now dropped to approximately $650,000 down from last year’s $888,269.