Cruze Ads are Ready; Chevy aims to show Quality Compact

The Detroit Free Press

Chevrolet will launch advertising for the Cruze next week, as the mainstream brand seeks to convince customers it can make a high-quality compact sedan.

Cruzes will begin arriving at dealerships in mid-September. Chevrolet is targeting the car at 20-somethings and empty-nesters ages 45 to 65, seeking to lure small-car buyers who have flocked to vehicles like the Honda Civic or Toyota Corolla and shunned offerings from GM.

The Cruze marketing campaign, titled "Accolades," will highlight vehicle features being touted by General Motors and will emphasize how people outside the company view the car, said Margaret Brooks, marketing director for Chevrolet small cars, at a media event in Birmingham on Tuesday.

GM is also giving the Cruze its own marketing tagline, although Brooks declined to give more specifics about the advertising or the slogan.

Chevrolet, whose last tagline was American Revolution, has been looking for a replacement since July 2009.

In the Cruze advertising, GM may focus on key features such as the 36-m.p.g.-highway rating the standard version of the Cruze recently received, the car's 500-mile range in highway driving or its 10 standard airbags.

"You're probably not going to do it with a car that's 'As good as.' You've got to have a car that's better," said Chuck Russell, GM's vehicle line director for global compact cars.

GM is asking dealers to buy competing vehicles for their showrooms to allow customers to do side-by-side comparisons with the Cruze, Brooks said.

GM has also touted the value of the base-model Cruze, which starts at $16,995 with shipping, over base models of competing vehicles. For instance, the 2010 Civic starts at $16,405 with shipping, but lacks features such as the standard air-conditioning, power locks and keyless entry found in the Cruze.

In addition, GM said, Cruze customers with an OnStar subscription will be able to use one of OnStar's new smartphone apps to check their fuel range, oil life and tire pressure or remotely start or unlock the Cruze or honk its horn. OnStar is free for the first six months.

County Entering Mediation over Wastewater Treatment Plant

Grand Traverse County is entering mediation over a dispute among firms responsible for designing and building a problematic wastewater treatment plant.

Evaluating the plant's effectiveness for the second time was Prein & Newho of Grand Rapids. After another extensive overview of the county's $7.8 million facility, their final report to the Grand Traverse Board of Public Works was delivered with no change to the first diagnosis.

Prein & Newho reconfirmed that former county attorney Michael Houlihan and the local septage treatment plant designer, Gourdie-Fraser Inc., failed to apply professional care when they overestimated the projected septage volume of the facility.

The overall issue at hand is: the plant takes in about half the septic tank waste volume that producers projected, and the operational costs greatly exceed what was forecasted.

“I think it’s becoming increasingly obvious that there was a lack of professional standards followed,” said a Township Supervisor. “I’m hopeful that we can mediate a fair settlement, and I believe we should be able to.”

The facility experienced a partial shut-down a month after opening in 2005. To add to the problems, the plant has estimated to lose roughly $400,000 this year and about $600,000 in 2011.

Prein & Newhof, along with Grand Traverse county officials met with the wastewater treatment plants designer, Gourdie-Fraser Inc. and The Christman Co., the two organizations that engineered and constructed the facility. The meetings come coupled with mediation to resolve the contract disputes originating from the process.

During the meetings, the responsible designers provided new information to the county, and Prein & Newhof revised its report as result, however not its conclusion.

“We still feel it is grossly inaccurate,” President of Gourdie-Fraser, Joe Elliot said of the new report. “We think they are trying to work backwards and build a foundation for a predetermined solution.”

In addition to the disputes, Grand Traverse County and Gourdie-Fraser/Christman have conflicting views of when the facility was complete under the contract as well as if the plant meets specific capacity requirements.

Elliot noted Gourdie-Fraser Inc. would prefer to avoid consulting with a Nashville mediation lawyer and has yet rule out the possibility of a cash settlement.

“Mediation will burn more money and more legal fees, and we would like to bring it to a resolution without doing that,” Elliot said. “A cash settlement is something we will talk about in the next bit, but right now I would say probably not.”

Prein & Newhof questioned certain decisions made by the designer of wastewater treatment plants in several other areas of the facility. However Elliot said the design process involved five local township supervisors who were responsible for oversight, in addition to Grand Traverse county officials and an outside engineer.

“There was a good design process, and it came up with fairly good conclusions,” Elliot commented. “In hindsight, they probably aren’t perfect, but there always are things you can do better when you look back.”

County officials advocate that the preparation, design and construction of the plant were done correctly and the facility’s problems are due to several of compounding issues, such as the economy. The Supervisor for Garfield County claimed that it is time to drop that stance.

“That reasoning is getting pretty thin,” he said. “The collapse established the thing as a failure, and its only gone downhill from there.”

Autoworkers Adjust to Life Without Jobs Bank as GM, Ford Seek to Rebound‏

Bloomberg

General Motors Co. gave Kevin Dorey’s father a paycheck for 34 years, kept him working near home and let him out in time for his kids’ football games.

“‘It’s steady’ -- that’s what my dad always told me about General Motors,” Dorey, 44, said over chicken wings and beer at the Beef ‘O’ Brady’s sports bar in his hometown of Saginaw Township, Michigan. “For me, it’s been anything but steady.”

Kevin Dorey worked at three plants in three years until his most recent location in Orion Township, Michigan, which required a 90-minute commute, closed in November. Previously, he would have received full pay during the layoff while GM revamped the factory for a new car. The United Auto Workers agreed last year to give up that benefit, known as the jobs bank, and the paychecks stopped coming in July.

Less employment security, lower starting pay and stricter work rules signal a new era for the jobs viewed as a ticket to the middle class since Henry Ford’s $5-a-day wage in 1914. The changes also mean GM, Chrysler Group LLC and Ford Motor Co. are free of the obligations that helped sink the industry in 2009 and can make money with lower sales volumes.

UAW President Bob King said in June that he’ll seek to win back benefits and rebuild the union’s power when contract negotiations begin next year. Automakers may seek even more concessions as sales remain close to a 30-year low.

In the meantime, autoworkers are adjusting to a new way of life in an industry where deliveries fell to 10.4 million vehicles in 2009, the lowest level since 1982, the year Dorey got his driver’s license. Sales averaged 16.8 million a year from 2000 to 2007.

Distant Transfers

Pedro Gonzales accepted a transfer in May from a GM plant in Pontiac, Michigan, to one in Lordstown, Ohio, to avoid a long layoff and slipping to the bottom of the list of workers to be recalled under new union rules.

For two months, he and three other workers stayed in a hotel and a two-bedroom apartment, where he slept on an air mattress in the living room. On weekends, he drove more than four hours to see his wife, mother and five children before moving them to Ohio this month.

“The people here are nice, and the work seems stable, so I decided to stay,” said Gonzales, 42, who assembles instrument panels for the Chevrolet Cruze small car. “I don’t want to move my family again.”

Rejecting Transfers

Workers previously were able to turn down transfers farther than 50 miles from their plant and remain in the jobs bank, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Michigan. There would have been 20,000 workers in the jobs bank at the start of 2010 if the program still existed, he said.

Laid-off employees with fewer than 10 years of experience now get partial pay for 26 weeks, while those who’ve worked longer can get paid for as much as a year. Workers then move to a transition support program, about equal to collecting unemployment, for an additional 26 weeks to one year, McAlinden said.

Wages also are declining, with new hourly production workers starting at $14 an hour instead of $28. The combined cuts reduced Detroit-based GM’s average labor cost to $58 an hour from $74 two years ago, McAlinden said. The new $14-an-hour workers, which could account for 20 percent of the labor force eventually, will drive GM, Ford and Chrysler’s hourly costs below the $56 for Toyota Motor Corp.’s most senior U.S. hourly workers, he said.

‘Solidly Profitable’

GM is now positioned to break even during troughs in demand, Chief Executive Officer Ed Whitacre, who will cede the title to Daniel Akerson next month, said in June. Ford, based in Dearborn, Michigan, will be “solidly profitable” in 2010, CEO Alan Mulally has said.

Those improved prospects are setting up a fight during contract talks in 2011. Ford, the only U.S. automaker that didn’t file for bankruptcy or receive government assistance last year, is seeking parity with GM and Auburn Hills, Michigan-based Chrysler, which won a freeze on wages for new hires until 2015 and a prohibition on some strikes for five years.

The union wants automakers to restore some of the pay raises, annual bonuses and cost-of-living adjustments it surrendered to keep the companies afloat last year.

“It’s really important to understand and stress that all the auto companies were profitable and successful paying the wages and benefits they did when they had good product and product the customer wanted,” King said in an interview at the UAW’s Solidarity House headquarters in Detroit. He declined to specify which benefits he’d seek in the negotiations and said he didn’t think it was possible to get back everything the union gave up.

Union leaders likely will be successful in clawing back some compensation and benefits, said Bob Schulz, an auto analyst for Standard & Poor’s.

“It’s going to raise costs, it’s just a question of how and how much,” he said.

‘Time Warp’

Union leaders and workers looking to win back concessions are stuck in a “time warp,” said David Littmann, senior economist for the Mackinac Center for Public Policy, a research organization in Midland, Michigan, that promotes free-market principles.

“They want to make things the way they were, and they’re not,” Littmann said.

The jobs bank, which had a combined 25,000 Ford, GM and Chrysler workers at its peak in the early 1990s, was originally designed to retain trained workers who were temporarily displaced by productivity or business cycles. The program later became a symbol of the benefits union workers received as the U.S. government debated approving funds to save the industry.

“It became the welfare mother who drives a Cadillac,” said Harley Shaiken, a labor professor at the University of California-Berkeley. “It became the symbol of what was wrong with welfare.”

The program’s stigma and the nation’s 9.5 percent unemployment rate will make it difficult for the union to win back some benefits, he said.

Dorey, who said he was never in the jobs bank, said he probably will be on the second shift when production at the Orion plant restarts next year. He’ll start work in the mid- afternoon and won’t get home until 4 a.m., leaving the divorced father little time to spend with his 11-year-old son.

“He’s at that point where we do a lot together,” Dorey said. “If I’m working second shift, how is that even possible?”

Postal Workers Protest 5-day Delivery Plans in Detroit

Detroit News

Thousands of postal workers and supporters flooded downtown Detroit on Tuesday, protesting plans to nix Saturday delivery.

Chanting "Five Days, No Way," members of the American Postal Workers Union -- in town for a national convention at Cobo Center -- marched to Campus Martius with union officials and the Rev. Jesse Jackson to demonstrate against the proposal by the U.S. Postal Service. Congress still must sign off on the change, which postal officials say would save $3 billion.

The Postal Service contends it's facing a massive deficit due to declining volumes of mail because of electronic communications. It is eying Saturday because that day has the lowest volume of mail, and more than a third of businesses are closed.

Union member Michael Arrabito is against it.

"When the U.S. Postal Service was established by Congress in 1792, it didn't say anything about making a profit," Arrabito said.

"People rely on six-day-a-week delivery for prescriptions by mail and for checks."

William Burrus, president of the union that represents mail handlers, clerks and other workers but not carriers, said Congress should instead eliminate a portion of the 2006 postal reform act that requires the Postal Service to prefund health care benefits for future retirees. That costs $5 billion.

At Campus Martius, Michigan AFL-CIO President Mark Gaffney vowed, "We're going to win this fight because everyone who has a mailbox agrees with us."

Jackson, whose late father was a postal worker, urged the crowd to remember the issue when they vote in November.

"We are marching for jobs," Jackson said. "We intend to bring America back, and we want our mail delivered every day."

Detroit resident Darlene Rivers watched the marchers and signaled her support.

"I don't want them to cut back on delivery either," Rivers said. "Don't they know that not everybody has access to the Internet?"

Michigan Road Group Pushes for more Repair Money

The Detroit Free Press

A group that wants Michigan to spend more money on road repairs is taking a new approach to lobbying lawmakers.

The Michigan Transportation Team sent state lawmakers and those running for office in November maps of their own districts highlighting major roads that are in poor condition.

The group said today that inaction by lawmakers over the past two years will make the roads more than $1 billion more expensive to repair than they would have been otherwise.

The roads coalition includes business groups, road builders, transportation agencies, motorists, and Michigan concrete contractors.

Proposals to raise more money for roads have stalled in the Michigan Legislature, largely because lawmakers doubt residents would support higher taxes.

Start-Ups Pitch Plans to Panel at NextWave

The Detroit Free Press

Groups aim to set course for new state economy 

 

Henry Ford's entrepreneurial spirit is alive and well in southeast Michigan.

On Tuesday, a group of Michiganders pitched their business plans to a panel of judges, hoping their start-up companies would be chosen for a spot at NextWave, a new for-profit business incubator in Troy that plans to invest in and help fledgling firms grow.

These would-be entrepreneurs have dreamed up everything from a vertical stacking garage door with storage racks to a new mobile communications app for doctors. All came to NextWave needing help with everything from marketing and mentoring to money.

It's unlikely that all eight start-ups will succeed, but together they signal that a new Michigan economy, one that's less dependent on making cars, is slowly gaining traction in the midst of the recession.

"Michigan is a very talented place," said Amjad Hussain, managing partner and founder of NextWave, which hopes to invest in at least 30 companies by launching a $25-million venture capital fund.

The eight start-ups, who were chosen from a pool of 20 applicants, will have to wait until next week to find out whether any or all of them will be selected for NextWave.

On Tuesday, these entrepreneurs took turns standing at the front of a small auditorium in NextWave's Troy office building. Each had 20 minutes to wow the judges with a business plan and answer questions in something that resembled American Idol minus the singing.

"At this stage in my life, I'm ready to follow my own passions," entrepreneur Thomas Talboys told the judges during his presentation. The pitch session even included two guest judges, Kathleen Ligocki, an auto industry executive, and Rich Sloan, co-founder of StartupNation.

Here's a brief rundown of some of the business plans being hatched:

• Store-n-Door: Talboys wants to reinvent the lowly garage door and give homeowners another place to store their stuff. His vertical stacking garage door is less expensive, quieter and 40% faster than what's found in most homes today. The doors also free up space for storage racks that can hang underneath garage ceilings.

• Build-A-Wear: Lisa McAree and her brother, Ken Ericson, want to make it easy for every young girl to be a fashion designer. They aim to sell pre-designed clothes patterns for tween girls that can be mixed and matched according to individual tastes. Think Build-A-Bear Workshop, except this involves clothes for real people. The duo plans to operate online first and then add retail stores.

• HosComm Systems: If Adil Akhtar, the chief of oncology at Beaumont Hospital in Troy, and Muhammad Ahmed, an Eastern Michigan University engineering professor, get their way, pagers will become a thing of the past at hospitals. They have created an app for smartphones that will give doctors, nurses and other health care professionals a better way to communicate, reducing medical errors and cutting costs. The system is to be tested in October at Beaumont.

• WealthExpress Trading Systems: Futures traders Tony Castiglione and Matt Dahn have devised an automated futures trading platform to help consumers and hedge funds boost their investment returns.

• IP Tech Works: Jason Pak and Jim English say today's patent searches can be done better, faster and cheaper. They hope to revolutionize the patent-search industry by deploying a new software program, low-cost patent researchers in India and Pakistan and a network of courier firms.

2 Michiganders Form Venture Capital Firm in Ann Arbor

The Detroit Free Press

 

Two Michiganders who worked in Silicon Valley plan to announce today that they have formed a new technology-focused venture capital firm in Ann Arbor that has already made its first investment in a local company.

Jason Townsend, 32, and Michael Godwin, 40, are part of a new wave of young venture capitalists in the state. The two recent graduates of the University of Michigan's Ross School of Business were managing directors of the Wolverine Venture Fund, a $5.5-million student-run venture fund.

They enjoyed working on the fund so much that they decided to launch their own and have gained the support of local veteran venture capitalists such as Mary Campbell.

Their new Resonant Venture Partners is part of a group that last week invested $1 million in Ann Arbor-based Scio Security, a computer security firm. Resonant was able to make the investment after quickly signing on its first investors, a wealthy family in Texas.

Resonant hopes to attract a total of $10 million from investors but Townsend acknowledges that fund-raising in today's environment is "extremely challenging." The fund aims to invest in 15 start-ups, mostly in Michigan.