Report: GM Puts Pickup Trucks on ‘Strict Diet’

July 22, 2013 by · Comments Off on Report: GM Puts Pickup Trucks on ‘Strict Diet’ 

General Motors Corp. is preparing to put its full-sized pickup trucks on a severe diet to meet future U.S. fuel economy standards and stay competitive with rival Ford Motor Co., according to several people familiar with its plans.

But, according to a report by Automotive News, GM likely won’t be able to implement an extensive weight reduction program until the just-redesigned Chevrolet Silverado and GMC Sierra are overhauled again in 2019, according to supplier sources. That is five years after Ford plans to slash at least 700 pounds from its best-selling F-150 pickup as part of a fall 2014 redesign.

More efficient engines and transmissions will help reduce fuel consumption on the big GM and Ford trucks, but the biggest gains are likely to come from shedding weight. The trucks are prime towing vehicles for the RV industry.

Even though GM’s 2014 Silverado and Sierra lost between 250 to 400 pounds as part of a complete makeover this summer, the lightest Silverado still tips the scale at 4,387 pounds.

GM “didn’t go far enough in terms of weight reduction and powertrain improvements” when it developed the 2014 Silverado and Sierra, according to an industry consultant who works directly with the U.S. automakers.

Now, he said, the automaker has no choice, but to “send ’em to Jenny Craig” — a reference to the popular consumer diet and weight-loss program.

Prior to the 2019 launch of the next-generation Silverado and Sierra, GM is planning a series of rolling changes over the next few years to the trucks, which just went on sale six weeks ago as redesigned 2014 models.

GM will begin to use more lightweight materials such as aluminum and composites, in place of conventional steel, several suppliers said.

To read the entire article click here. The link may require an Automotive News subscription.

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GM Teams With Nissan to Target Van Segment

May 14, 2013 by · Comments Off on GM Teams With Nissan to Target Van Segment 

General Motors has turned to Nissan Motor Co. to put Chevrolet dealers into the small cargo van market.

According to Automotive News, GM said it will rebadge Nissan’s new four-cylinder NV200 commercial van as the Chevrolet City Express in the fall of 2014.

The Nissan NV200, built in Cuernavaca, Mexico, went on sale at Nissan dealerships only last month.

The compact van segment is slowly attracting automaker interest. Until now, Ford Motor Co. has enjoyed a virtual monopoly on the category with its Ford Transit Connect van. The smaller vehicles are being pitched as small-engine, fuel-efficient alternatives to the aging, full-sized commercial vans, a segment where the Detroit 3 have held sway for decades.

GM now wants a piece of the compact van segment.

“Our fleet customers have asked us for an entry in the commercial small van segment,” Ed Peper, U.S. vice president of GM fleet and commercial sales, said in a joint statement released by GM and Nissan. “So this addition to the Chevrolet portfolio will strengthen our position with fleets and our commercial customers.”

Nissan itself has broader hopes for the van, which is approximately the size of a Nissan Sentra. Nissan also intends to sell an electric version of the van and is on tap to produce a taxi version in an exclusive deal with New York City.

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GM Gives Pickup Lines Much-Needed Makover

December 18, 2012 by · Comments Off on GM Gives Pickup Lines Much-Needed Makover 

2014 Chevrolet Silverado

General Motors is giving its big pickups a much-needed makeover.

The Associated Press reported that the company is unveiling new versions of its top-selling Chevrolet Silverado and GMC Sierra on Thursday. The 2014 models will go on sale by early spring or late summer.

The timing is good. The models roll into a market where truck sales are growing after a five-year slump. And GM’s current trucks are looking dated, hurting sales. The current trucks, last revamped in 2007, are the oldest on the market and have fallen behind newer models from Ford and Chrysler.

The revamped Silverados and Sierras are aimed at putting GM back in front. They look similar to the old models, but are a little more aggressive and aerodynamic-looking. The company also says the trucks will have stronger, quieter cabs, and updated steering, suspensions and brakes.

GM is offering a choice of three revamped engines: a 262-horsepower, 4.3-liter V-6 that GM says can tow a substantial trailer; a 325-horsepower, 5.3-liter V-8 will get better mileage than the current model, which gets 22 mpg on the highway; and a 6.2-liter V-8 with 376 horsepower.

Gas mileage and pricing of the trucks was not released Thursday.

The trucks should hit the market at a good time. The economy is improving and pickup trucks are starting to sell again. The housing industry, which has a direct relationship to pickup sales, is strengthening and should be in even better shape by springtime when the weather gets nicer. Plus, trucks now on the roads are aging because people kept them through the recession. The average age of a pickup in the U.S. is now 10.4 years, GM said.

To view the entire article and additional photos click here.

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U.S. Carmakers Recorded Solid Sales in June

July 5, 2012 by · Comments Off on U.S. Carmakers Recorded Solid Sales in June 

Detroit’s carmakers saw strong June U.S. car sales with Chrysler Group LLC, a subsidiary of Italian Fiat SpA (Milan: F), reporting 20% year-over-year sales growth, General Motors Co. reporting 16% sales growth and Ford Motor Co. reporting more modest 7% sales gains.

The news sent automakers’ shares up, with GM’s up about 6%, with more modest gains for its rivals, the International Business Times reported.

Chrysler was the first major automaker to report June car sales Tuesday and posted its strongest June in five years with 144,811 vehicles sold. However, industry analysts expect overall U.S. auto sales to be more or less flat from May with a seasonally adjusted average selling rate, or SAAR, of between 13.6 million and 14 million for June. June sales for U.S. automakers were strong in June, though, in part due to insulation from macroeconomic uncertainty for the industry.

“The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behavior than economic and political uncertainty,” General Motors Vice President for U.S. sales and operations Kurt McNeil said Tuesday.

The auto industry as a whole isn’t expected to demonstrate the strong sales growth of the first five months due to seasonality in car sales, said Alec Gutierrez, senior market analyst for Kelley Blue Book. Chrysler projected a SAAR of 14.4 million units, well above analyst projections.


Chrysler sales gained 20% in June, marking the 27th month of year-over-year sales growth. The Chrysler, Jeep, Dodge, Ram Truck and FIAT brands all posted gains. Chrysler brand sales rose 63%t, the best June sales since 2008.

“June was another solid month for the Chrysler Group with U.S. sales up 20% and second-quarter sales increasing 24% compared with the same period in 2011,” President and CEO of Dodge Brand and head of U.S. sales Reid Bigland said.

Chrysler has been the only profitable division of Fiat in recent quarters. Strong sales from the American unit could bolster weak European sales for the Italian automaker.


Ford reported June sales rose 7% from the year due to higher sales of trucks and SUVs.

“June was a good month for Ford and a particularly strong month for vehicles like Escape, Fusion, Explorer and F-Series,” said Ken Czubay, Ford’s vice president of U.S. marketing, sales and service.

Ford sales are up 7% for the year so far with 1.14 million vehicles sold, including 207,759 sold in June. The bulk of June sales gains came from SUV sales. SUV sales rose 24.8% while truck sales gained 1.2%. Car sales growth was more modest at just 0.3%.

Sales of Ford’s flagship F-series trucks rose 10.9% with 55,025 sold, the best June sales in five years, indicative of increasing demand for Ford trucks. Car sales were weaker, though, with both the Fiesta and Focus posting losses. However, Fusion sales gained 17.4%.

Ford’s Lincoln brand actually posted a 2.5 percent gain with 7,544 units sold, indicating positive movement.

General Motors

GM, the No. 1 automaker reported 15.5% year-over-year U.S. sales growth in June and the best sales month for the company since September 2008.

All four of GM’s brands, Chevrolet, GMC, Buick and Cadillac, reported double digit sales gains, with Cadillac leading the pack at 26.8%. Overall, GM sold 248,710 vehicles in June and projected a seasonally adjusted annual rate of sales of 14 million for June, in line with the high end of analyst expectations.

Toyota Motor

Toyota, Japan’s No. 1 company, said June U.S. sales rose 60.3% compared to the year before, the company announced Tuesday.

The exceptional growth in year-over-year sales likely reflects the company’s continued recovery from supply-chain, manufacturing and inventory disruptions caused by last year’s Japanese earthquake and Tsunami and floods in Thailand.



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Chrysler, GM Plan Natural Gas-Powered Pickups

March 6, 2012 by · Comments Off on Chrysler, GM Plan Natural Gas-Powered Pickups 

Chrysler and General Motors are the latest truck makers to add to the natural-gas fleet: Both are unveiling plans to manufacture pickup trucks that run on the alternative fuel at this week’s Work Truck Show in Indianapolis.

The Chicago Sun-Times reported that by the end of this year, General Motors will sell a Chevrolet Silverado and a GMC Sierra that will run on gasoline and natural gas, the company said Monday.

The “bi-fuel” vehicles will be built in Fort Wayne, Ind., and sent to GM’s Union City, Ind., plant to be retrofitted with compressed natural gas fuel tanks, GM said.

Chrysler is expected to announce Tuesday that a Ram truck to be built in Mexico will travel 255 miles on natural gas before automatically switching to an 8-gallon gas tank..

Ford Motor Co. has said it will expand the variety of kits it provides to convert an existing vehicle to run on natural gas to include the Ford 650 pickup later this year.

Honda has sold a natural gas-powered Civic for 14 years.


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GM to Offer 8-Speed Transmission on Pickups

February 3, 2012 by · Comments Off on GM to Offer 8-Speed Transmission on Pickups 

General Motors will offer a new eight-speed automatic transmission in the next generation of full-sized pickups and SUVs it plans to launch in early 2013.

Automotive News reports that GM is expected to begin producing its homegrown transmission at its Toledo powertrain plant by the end of 2012 for use in trucks, three people familiar with the plans said.

Two sources said the same gearbox eventually will be offered on rear-wheel-drive Cadillacs, such as the ATS compact sedan GM unveiled at January’s Detroit auto show. A GM spokesman said he couldn’t comment on future product plans.

Last May, GM CEO Dan Akerson appeared at the Toledo plant to announce a $204 million investment for the production of a new eight-speed, but he wouldn’t say what vehicles would get the transmission. Eight- and nine-speed transmissions are among the tactics automakers are using to meet more stringent fuel economy standards.

By using more gears to make more efficient use of fuel, an eight-speed can boost efficiency by 3% to 6%, depending on the vehicle, says Mike Omotoso, senior manager of global powertrain forecasts at LMC Automotive in suburban Detroit.

V-8 engine versions of GM’s current full-sized pickups, the Chevrolet Silverado and GMC Sierra, get 15 mpg in city driving and 21 mpg on the highway with six-speed trannies.

GM has been tight-lipped about its next-generation pickups. But analysts expect GM to wring every last mile per gallon from the redesign to meet federal standards and battle Ford Motor Co. and Chrysler Group on fuel economy.

Chrysler has hinted that it will spread its eight-speed transmission from ZF Friedrichshafen AG to all of its rwd vehicles, which would include the Ram pickup and other trucks. It introduced the gearbox on the 2012 flagship Chrysler 300 sedan and Dodge Charger.

Ford has said it is developing its own eight-speed transmission, although it hasn’t said what vehicles would get it.

Spokespeople for Toyota Motor Corp. and Nissan Motor Co. declined to comment on whether there are plans to add an eight-speed to their full-sized pickups, the Toyota Tundra and Nissan Titan.

Omotoso said he would expect Ford to offer an eight-speed gearbox in time for its next-generation F-series pickup, which is expected for the 2015 or 2016 model year. He said: “If all of your competitors are offering an eight-speed, and you’re at five or six, the perception is that you’re behind.”


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GM Goes Public in $23 Billion Stock Offering

November 18, 2010 by · Comments Off on GM Goes Public in $23 Billion Stock Offering 

General Motors is returning to life as a public company today (Nov. 18) with a stock offering worth potentially $23 billion, ending the government’s role as majority shareholder and closing a remarkable chapter in American corporate history, Associated Press reported.

The U.S. government should make about $13.6 billion when GM shares start trading on the New York Stock Exchange. The federal treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61% to 33%.

The IPO could wind up as the largest in history. GM set a price of $33 per common share on Wednesday, a day after it raised the number of shares it will offer to satisfy investor demand. When the U.S. government and other owners sell their shares, they’ll raise $18.2 billion. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.

Together, the sale of common and preferred stock will bring the deal’s value to a record $23.2 billion.

The stock offering is the latest in a series of head-spinning developments over the past two years for an American corporate icon.

In September 2008, to mark its 100th birthday, the automaker celebrated in the grand three-story atrium on the ground floor of its Detroit headquarters.

Two months later, then-CEO Rick Wagoner found himself in front of members of Congress, begging for money to keep GM alive. Four months after that, he was ousted by President Barack Obama.

By June 2009, GM had filed for bankruptcy. It emerged relieved of most of its debt but mostly owned by the government and saddled with a damaging nickname: “Government Motors.” The value of its old stock was wiped out, along with $27 billion in bond value.

Now GM will become a publicly traded company again and revive the stock symbol “GM.” Dan Akerson, GM’s fourth CEO in two years, will ring the opening bell today on the New York Stock Exchange, to celebrate the company’s rebirth.

Obama on Wednesday said GM’s IPO marks a major milestone not only in the turnaround of the company, but of the U.S. auto industry as a whole.

“Supporting the American auto industry required tough decisions and shared sacrifices, but it helped save jobs, rescue an industry at the heart of America’s manufacturing sector, and make it more competitive for the future,” he said.

Most of the new stock will go to institutional investors, not to everyday investors, following a Wall Street system that rewards investment banks’ big customers. GM will set aside 5% of its new stock for employees, retirees and car dealers to buy at the offering price. The deadline to sign up was Oct. 22, but the company has not revealed how many people took the offer.

Senior Obama administration officials said Wednesday that the Treasury Department sought to strike a balance between getting a return for taxpayers and exiting government ownership as soon as practical.

The government has agreed that it will not sell shares outside the IPO for six months after the sale. The officials, who spoke on condition of anonymity, said they would assess their options for selling the government’s stake further.

In the stock offering, the government stands to make $13.6 billion if it sells 412 million shares, as planned, for $33 apiece. It will still have about 500 million shares, a one-third stake. It would have to sell those shares over the next two to three years at about $53 a share for taxpayers to come out even.

The total bailout was $50 billion. GM has already paid or agreed to pay back $9.5 billion. That comes from cash and payments related to preferred stock held by the government.

The GM debut comes at a time when auto stocks are performing well generally. The stock of GM’s crosstown rival, Ford, has risen steadily this year, from about $10 in January to about $16.50 as the GM IPO approached. The stock traded for a dollar in November 2008, and Ford never even took bailout money.

As for GM, whether bankruptcy actually fixed the company remains an open question. Before the crisis, it was saddled with debt and had a labor contract that called for paying workers even if they weren’t working. Massive pension and health care costs kept GM’s fixed costs high, and contracts with dealers meant it would be expensive to shut underperforming brands. Combined, those problems put the automaker in a topsy-turvy world where it made more sense to run plants at full bore, even if no one was buying cars.

Bankruptcy fixed much of that. The company closed 14 of its 47 plants, shuttered or sold off its Hummer, Saturn, Saab and Pontiac brands, and slashed its debt from about $46 billion to about $8 billion. Union retiree health care costs are now the United Auto Workers’ responsibility, and the controversial jobs program that paid idled workers almost a full salary has been eliminated.

GM employs 209,000 people in the United States today, down from 324,000 in 2004. But it’s making money. Before bankruptcy, GM lost about $4,000 per car. Now it makes about $2,000 each. GM says it is poised to earn about $19 billion a year when the car market rebounds.

Still, questions remain. With this stock offering, GM doesn’t rid itself of government intervention. The government remains a big shareholder.

Financial problems that plagued the automaker for the past decade still don’t seem under control: Despite hiring Chris Liddell, a new CFO from Microsoft known for fixing problems, GM says it’s still not sure all the financial problems were fixed.

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September’s Automotive Sales Bode Well for ’11

October 11, 2010 by · Comments Off on September’s Automotive Sales Bode Well for ’11 

Although it’s not time for a celebration yet, the U.S. auto industry in September posted its best monthly wholesale sales rate in 13 months. The industry sold 959,049 light vehicles in September — a year-to-year jump of 29% — for a seasonally adjusted annual rate of 12.2 million, as calculated by the Automotive News Data Center.

Inventories last September were depleted in the aftermath of the federal government’s cash-for-clunkers incentive program, Automotive News reported.

Other than August 2009 when the clunkers program inflated the sales rate to 13.7 million, last month was the first since September of 2008 during which sales surpassed 12 million. The rate in September 2008 also was 12.2 million.

“It’s a solid month, another step in a stable, somewhat painful recovery,” said analyst Jesse Toprak of “This may be a healthier way to recover.”

George Pipas, Ford Motor Co.’s lead sales analyst, said September capped the fourth straight quarter of modest recovery in the pace of U.S. auto sales.

And modest improvement may be acceptable at this point, he said, in that it may keep industry players from falling back into the bad habits — overproduction and massive incentives — that led to disaster for so many companies when U.S. auto sales tanked.

“We’re happy with what we’re getting,” Pipas noted. “We’re not going to waste a lot of time wishing that things would go quicker.”

Looking at the big picture:

* Ford’s sales jumped 40% to 160,375 on strong sales of pickups and new models such as the Fiesta subcompact.

* General Motor’s sales rose 11% in September to 173,031, including its four discontinued brands. However, its core brands — Chevrolet, Buick, Cadillac and GMC — rose 22% while retail sales of those core brands jumped 39%.

* Chrysler Group posted the biggest year-over-year increase of any manufacturer for the month, rising 61% to 100,077.

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Edward Whitacre, GM’s CEO, to Step Down

August 12, 2010 by · Comments Off on Edward Whitacre, GM’s CEO, to Step Down 

General Motors today (Aug. 12) said that Edward E. Whitacre Jr. will step down as CEO on Sept. 1 and as chairman of the board by the end of the year, having successfully led the company’s return to profitability after the most turbulent period in its history.

Earlier today, GM reported its second consecutive quarter of profits after a string of losses dating back to 2007.

Dan Akerson, 61, who has served on the GM board of directors since July 2009, will become CEO on Sept. 1 and chairman by the end of the year, ensuring a smooth transition and continued positive momentum for the company.

“My goal in coming to General Motors was to help restore profitability, build a strong market position, and position this iconic company for success,” said Whitacre. “We are clearly on that path. A strong foundation is in place and I am comfortable with the timing of my decision.”

Whitacre, 68, joined GM as chairman of the board on July 10, 2009. On Dec. 1, 2009, he was named CEO. He led the company after it emerged from a historic bankruptcy to become a profitable automaker again.

“Ed Whitacre was exactly what this company needed, at exactly the right time,” said Pat Russo, lead director on the GM board. “He simplified the organization, reshaped the company’s vision, put the right people in place, and brought renewed energy and optimism to GM.”

“Dan Akerson has been actively engaged in and supportive of the key decisions and changes made at the new GM. He brings broad business experience, decisive leadership, and continuity to this role,” said Russo. “The board of directors deeply appreciates the leadership Ed has provided and is pleased with the serious commitment Dan is making to the company. We look forward to his leadership.”

In addition to serving on the GM board since July 2009, Akerson has had a distinguished career in finance as a managing director at the Carlyle Group and in telecommunication, serving as chairman and chief executive officer of XO Communications and at Nextel Communications. He was also chairman and CEO of General Instrument Corp.

“There are remarkable opportunities ahead for the new GM, and I am honored to lead the company through this next chapter,” said Akerson. “Ed Whitacre established a foundation upon which we will continue building a great automobile company.”

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Good News: GM to Skip Summer Work Break

June 18, 2010 by · Comments Off on Good News: GM to Skip Summer Work Break 

Most General Motors U.S. plants will forgo traditional summer shutdowns to help meet buyer demand for popular Chevrolet, Buick, GMC and Cadillac cars, crossovers and trucks.

Nine of the 11 assembly plants will continue to operate during the traditional shut-down period from June 28 to July 9, the company announced. Most of GM’s U.S. stamping and powertrain plants will also work to support assembly operations. The decision is expected to generate up to 56,000 additional vehicles.

“This move will help buyers waiting for high-demand products such as the Buick LaCrosse, Chevrolet Traverse and GMC Acadia,” said Mark Reuss, president of GM North America. “Our manufacturing teams are taking creative approaches to increase production and reduce the wait times for our dealers and customers.”

Historically, the summer shutdown was used by the automakers to complete the annual model changeover. Over the last 20 years, the two-week shutdown evolved, allowing the domestic auto industry to support maintenance operations and enabling employees to use their vacation weeks without interrupting overall productivity.

New language in the UAW-GM national agreement allows the company to “flex” when down weeks will be taken. In some circumstances, it will be possible to designate those weeks as mandatory vacation time. In other circumstances, when no downtime is possible due to market demand, the plants can hire temporary employees to provide vacation coverage. The temporary employees receive training in safety and quality to ensure they are capable of supporting production at a high level.

“We’ve added shifts to plants, run significant overtime, and optimized line speeds to get more products to our customers,” said Diana Tremblay, GM vice president of Manufacturing and Labor. “Our UAW-GM workforce has contributed to our ability to make these changes while continuing to meet our business targets.”

Assembly plants working through the traditional summer shut-down are: Arlington, Texas; Bowling Green, Ky.; Detroit Hamtramck, Mich.; Fairfax, Kan.; Flint, Mich.; Fort Wayne, Ind.; Lansing Delta Township, Mich.; Lansing Grand River, Mich.; and Wentzville, Mo.

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Fractured Economy in Northeast Indiana on the Mend

October 13, 2009 by · Comments Off on Fractured Economy in Northeast Indiana on the Mend 

The health of the northeast Indiana job market is on the mend after months of suffering more acutely than the rest of the country.

In the three months ended Sept. 30, employers in northeast Indiana and northwest Ohio announced plans to add 1,080 more workers than they planned to cut, according to a quarterly analysis by the Journal Gazette, Fort Wayne, Ind.

It’s the third such analysis this year and the first to suggest a net gain of jobs in the 15-county region.

As in the previous two quarters, manufacturing was the dominant sector in the most recent economic scorecard. Big announcements at two of the region’s manufacturing powerhouses accounted for 1,000 of the 1,670 jobs that employers promised to create.

General Motors Co. announced last month that with the closure of a truck plant in Pontiac, Mich., it would add a third shift at its Allen County assembly plant, bringing 700 jobs to the region by April.

And after a private-equity firm brought Fleetwood RV Inc. to decatur, Ind.,  it announced in August that it would add 300 jobs to its workforce of 630 by mid-November.

The analysis is based on announcements of which  the newspaper was already aware, but it does provide a snapshot of the area economy. And John Stafford, director of the Community Research Center at Indiana University-Purdue University Fort Wayne, said the numbers jibe with statistics his agency is compiling.

“We’re just measuring audible sound,” he said, explaining that many smaller job decisions probably aren’t publicly announced.

Even so, the numbers reflect a tentative recovery in a regional manufacturing economy that fell further and faster than other sectors did.

In the first three months of 2009, companies announced 2,500 layoffs or cuts and 850 hires. In the second quarter, 4,560 layoffs and cuts were announced, compared with just 512 hires.

The region and the entire Midwest lost manufacturing jobs this year as companies cut production more quickly than sales plummeted, cutting deeply into inventories, said William A. Strauss, a senior economist at the Federal Reserve Bank of Chicago who compiles the Midwest Manufacturing Index.

“I think the financial crisis hit manufacturing more heavily than it did other parts of the economy,” Strauss said.

Car and truck sales, for example, fell 27 % in the first eight months of 2009 compared with the same period of 2008. But production was slashed by 46%, Strauss said.

The recession and tighter credit markets made it difficult for consumers and small manufacturers to get loans and do business. And it helped tip some huge companies – such as General Motors Corp. and Fleetwood Enterprises Inc. – into bankruptcy.

Auto sector’s shifts

The 2,600 workers at the Allen County truck plant were idled for 10 weeks starting in May as bankrupt GM struggled to reduce inventories. But after the new General Motors Co. emerged from bankruptcy court in July, inventories fell further than expected, thanks in part to the federal ”Cash for Clunkers” program.

In July, GM announced it would spend $46 million retooling the Allen County plant so it could make heavy-duty pickups. In August, GM said it was cranking up production in Allen County and at its Defiance, Ohio, foundry. Then in September, GM said it was adding a 700-employee third shift in Allen County.

Many of the new workers at the plant will come from the roughly 1,000 who lost jobs this month when GM closed its truck plant in Pontiac, but it still will be a boon to the regional economy.

Even though the biggest news in the regional job market for the quarter is the new auto industry jobs, the sector also accounted for the biggest losses.

GM announced in August that 175 workers – 115 in Allen County and 60 in Defiance – took advantage of a second round of buyouts offered this year to employees.

And in July, parts maker Meridian Automotive Systems Inc. closed its Grabill plant, putting 120 out of work.

For Fleetwood, orders have steadily grown since summer, said John Draheim, president of the new Fleetwood RV. The problem has been in getting parts.

“The supply chain has been fractured,” he said.

While most firms that directly supply Fleetwood made it through the downturn, some suppliers didn’t, causing disruptions.

“Occasionally we have to take some down days to let them catch up,” Draheim said.

Even so, Fleetwood’s staffing was “a little bit north of 850” last week and growing, Draheim said.

The third-quarter’s third-largest job addition also was in the RV industry. Sweden-based Dometic LLC announced it would move 116 jobs from Mexico to LaGrange, Ind., by 2012 to make retractable RV awnings.

Confidence grows

Overall, the net additions to the regional workforce in the third quarter were modest compared with the losses announced earlier in the year. Fleetwood, for example, likely will finish 2009 with about 400 fewer workers in Decatur than it had in 2007.

And some huge losses might loom. Navistar Inc. is considering buying an office complex in Lisle, Ill. Navistar won’t say whether it’s thinking about moving more than 1,000 well-paying jobs there from Fort Wayne, but the company has told Lisle officials more than half the 3,500 office employees would come from out of state.

Other than Fort Wayne, the only city where Navistar has a sizable white-collar operation is Knoxville, Tenn., where it employs 89, according to the company website.

But as the Federal Reserve’s Strauss meets with business leaders throughout the Midwest, he said things are slowly getting better.

“There has been a very significant change in terms of business confidence,” he said.

Jeff Rohyans of New Haven also is more confident. In January, he was laid off from the Parker Hannifin plant in New Haven. He drew unemployment for six weeks before going back to Parker Hannifin on temporary status in April and then moving to a temporary job at steel fabricator Almet Inc. in June.

He took more than a $3 hourly pay cut from the $14 an hour he made at Parker Hannifin. But after commercial construction starts to recover, Rohyans, 35, expects to be made permanent at Almet and to get the insurance and other benefits that come with it.

Judging from the train traffic he’s seen through New Haven, Rohyans said he feels the economy is on the mend.

“I like to use the phrase ‘cautiously optimistic,’” he said.

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General Motors Corp. Files for Ch. 11 Bankruptcy

June 1, 2009 by · Comments Off on General Motors Corp. Files for Ch. 11 Bankruptcy 

General Motors Corp. filed for Chapter 11 bankruptcy protection today (June 1)  as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government, according to the Associated Press.

GM’s bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.The fallen icon of American industrial might will rely on $30 billion of additional financial assistance from the Treasury Department as it reorganizes. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week.

The plan is for the federal government to take a 60% ownership stake in the new GM. The Canadian government would take a 12.5% stake, with the United Auto Workers getting a 17.5% stake and unsecured bondholders receiving 10%. Existing GM shareholders are expected to be wiped out.

President Barack Obama is scheduled to address the nation about GM’s future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York.

Beyond the bankruptcy announcement today, GM is expected to reveal 14 plants it intends to close. One of those plants, however, will be retooled to build a small car.

GM’s filing comes 32 days after a Chapter 11 filing by Chrysler, which also was hobbled by plunging sales of cars and trucks as the worst recession since the Great Depression intensified.

The third of the one-time Big Three, Ford Motor Co., has also been stung hard by the sales slump, but it avoided bankruptcy by mortgaging all of its assets in 2006 to borrow roughly $25 billion, giving it a financial cushion GM and Chrysler lacked.

The downsized GM’s brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.GM, whose headquarters tower over downtown Detroit, said it believed the filing was not an acknowledgment of failure, but a necessary way to cleanse itself in an orderly fashion of problems and costs that have dogged it for decades.

Trading of GM shares was halted early today after they plunged Friday as low as 74 cents, the lowest price in the company’s 100-year history. GM will be kicked out of the Dow Jones industrial average because rules established by the News Corp. unit that oversees the index prohibit it from including companies that have filed for bankruptcy.

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Rep. Souder: Saving Auto Suppliers Won’t Be Easy

May 14, 2009 by · Comments Off on Rep. Souder: Saving Auto Suppliers Won’t Be Easy 

Congress is working to keep U.S. auto suppliers in business.

U.S. Rep. Mark Souder, R-Ind., delivered that message to a handful of local suppliers Tuesday (May 12) at the Goshen (Ind.) Chamber of Commerce, but pointed out that it’s not going to be easy, according to The Goshen News.

“The complexity on how to address this is huge,” Souder said following the two-hour closed-door meeting.

Souder, whose district covers northeast Indiana, has been meeting with leaders of General Motors Corp. and Chrysler LLC to understand their challenges and discuss finances, unions and the supply chain, among other topics. Part of what initiated the talks was a recent announcement from GM that any dealership that sold fewer than 30 vehicles or failed to hit at least 50% of its quota would be terminated. Dealers would then have a deadline of Dec. 31, 2010, to liquidate remaining items.

The announcement is another leg kicked out from underneath the supply chain, much of which operates in northern Indiana. Souder worries just how many more hits the area can take.

“If we lose our big auto companies on top of the (most likely partial) recovery in RVs, we’re looking at a catastrophic, probably irrecoverable impact on our area similar to Studebaker in South Bend,” Souder said. “On top of what’s happening everywhere else in housing and RVs, we’ll never replace the jobs we’re losing.”

Despite the negative atmosphere, Souder said he believes 50% to 60% of GM’s dealers will survive, and that GM, after going through bankruptcy proceedings, will also survive. He also believes Ford will survive, but doesn’t know what will happen with Chrysler, which has filed bankruptcy and signed a partial ownership deal with Italian auto manufacturer Fiat SpA, which is being handled to some extent by the Italian government.

At the same time, he noted that American auto companies are competing with foreign companies that are being financially supported by their governments in ways the United States hasn’t yet seen.

“It’s not like this is going to bounce back when you have every government around the world funding your competition,” Souder said. “Those countries view them as integral and a much bigger part of their country than even autos are in our country, so they are going to do everything they can to keep them from folding.”

He said, for example, although some American auto parts suppliers will sell to Japanese companies, Japan restricts the amount of American parts used in their vehicles, even if they are being built in the United States. Again, he said increasing our competitiveness will not be simple.

“You can’t just whip up barriers or China will pull out of our market and collapse our economy,” Souder said.

One way Congress is working to prop up the American auto supply chain is by trying to figure out how to use Troubled Asset Relief Program (TARP) funds to make a difference to keep the companies from shutting down.

According to chamber president David Daugherty, reaction to Souder’s statements from local suppliers was relatively positive.

“Most of them said, ‘we’re geared for it, we’re OK, we’re going to make it,’ so that was the reassuring part,” Daugherty said.

He said that, to an extent, nothing will change with the basic business of running the companies, and placement will be key.

“It’s going to be different when General Motors comes out of whatever they go through,” Daugherty said. “It’s one where you’re going to have to make sure you’re there, you’re competing, you’ve got the product and that your suppliers are getting you what you need to stay in the game.”

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Is V-8 Engine Headed for the Scrap Heap?

April 22, 2009 by · 1 Comment 

The V-8 engine, powerplant of choice for several generations of RVers and the public at large, may be going the way of leaded gasoline.
According to a report in Automotive News, a panel of experts speaking Tuesday (April 21) at the 2009 SAE World Congress believe that tightening emissions standards and volatile fuel prices could spell the end for a nearly century-old engine design that first piqued interest in a big way with the introduction of the Chevrolet overhead-valve V-8 in 1955.

At least one panelist, Mary Ann Wright, CEO of the Johnson Controls-Saft joint-venture battery company, referenced an April 17 ruling by the United States Environmental Protection Agency (EPA) that carbon dioxide emissions and other greenhouse gases endanger the public. The ruling is expected to lay the groundwork for further reductions in such emissions.
“You are going to see the discussion starting to shift to not only reducing fuel consumption but CO2,” Wright said.
As noted during the panel discussion, contemporary engine technology, combined with lighter-weight vehicles, improved vehicle aerodynamics and more efficient transmissions, would be able to effectively counteract the need for larger-displacement engines without adversely affecting acceleration and towing performance.

However, while speakers such as Don Kapp, Ford Motor Co.’s director of powertrain research and advanced engineering, extolled the virtues of such breakthrough technology as Ford’s EcoBoost – a twin-turbocharged 3.5-liter engine that produces 355 hp, about the same as a V-8 – no one apparently addressed the torque values of such designs. While V-8 engines are seldom used today in automobiles, they remain a cornerstone for light-truck sales due to the engine’s ability to create large amounts of torque – pulling power – at relatively low engine rpm. 
Developing technology wasn’t the only topic under discussion. According to Minoru Shinohara, a senior vice president at Nissan Motor Co., driver behavior is yet another factor in vehicle efficiency that needs to be addressed. Nissan is working on a number of in-car technologies aimed at improving feedback to the driver, including:

  • An accelerator pedal that pushes back slightly when speed is increased too much.
  • An Ecometer that keeps the driver informed about vehicle performance.
  • Carwings, a program that alerts drivers to traffic congestion along a computed route and selects alternative paths.

Other technologies presented included a chain-driven starter-alternator by supplier BorgWarner Inc. intended to eliminate fan belts. The company also is researching more efficient turbochargers and transmissions.
“Turbocharged engines offer 15% to 30% better fuel economy and as much as 20% reduction in CO2 emissions,” said Roger Wood, executive vice president of turbo and emissions systems for BorgWarner, in predicting that the use of turbochargers would grow by 135% by 2014. Meanwhile, Uwe Grebe, executive director for advanced engineering for General Motors Corp., suggested that smaller turbocharged engines could account for as much as 20% of the market by 2014. 
Ironically, Detroit automakers previously embraced turbocharging as a way of developing horsepower in smaller engines in the 1970s when Mideast oil embargos caused similar fuel cost spikes. But the technology was later abandoned in all but a few cases as fuel prices moderated.

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