2008 New Vehicle
Purchase
Plan Effective Now
AUTOMOTIVE DISCOUNT PROGRAM EFFECTIVE AUGUST 19, 2008
• Eligible emplovees receive a $2,600 discount from the hourly employee New Vehicle
Purchase Plan ("A -plan") price on eligible vehicles.
• Eligible retirees receive a $2,600 discount from the hourly retiree New Vehicle Purchase Plan ("Z -plan") price on eligible vehicles.
• Eligible vehicles are new Ford and Lincoln vehicles assembled in North America that are included in A/Z-plan.
• Applicable to ONE (1) purchase or lease made between August 19th , 2008 and September 14th, 2011, (vehicles must be registered and delivered between August 19th, 2008 and September 14th, 2011 to be eligible; vehicles factory ordered by September 14th, 2011 are also eligible)
• The $2,600 discount is not combinable with the current $2,000 Purchase Discount program announced in 2005 or the CAW $35,000 retiree car voucher program, but may be combinable with other dealer incentives, (see your dealer for details)
• Capitalized vehicles are not eligible for this discount
Who Can Participate?
• Eligible employees are employees who belong to one of the above bargaining units (or their surviving spouses) who qualify for healthcare benefits, and who have at least one (1) year of seniority at the time of the purchase or lease
• Eligible retirees are retirees who belong to one of the above bargaining units (or their surviving spouses) who are receiving a normal, early (regular or special), or disability retirement benefit at the time of the purchase or lease
• The vehicle must be purchased by the eligible employee, retiree (or their surviving spouse) and registered in the name of the eligible person only
How Do I Participate?
• PIN numbers for A/Z-Plan Purchases and the $2,600 Automotive Discount Program must be obtained by contacting A/Z Plan Program Headquarters (on or after August 19, 2008) at: 1-800-828-7870
• PIN numbers generated through the A/Z Plan websites will not be eligible for the $2,600 Automotive Discount Program.
Questions?
• If you have any questions contact (905) 845-2511 extension 1113.
H. R. Communications
August 19th 2008 |
The Engle has flown -
Ford of Canada CEO is leaving Ford
As Quick as the Engle had landed he has flown the coup.
We have to wonder if he knows something we don't!
The following announcement was made by Barry Engle, President and CEO, Ford of Canada, Tuesday August 19, 2008
It's with mixed emotions today that I share with you my plans to leave the Ford Motor Company. I have accepted an offer to be President and CEO of New Holland Agricultural Equipment S.p.A., a unit of CNH Global N.V., based in New Holland, Pennsylvania.
After serving in a variety of roles for Ford in the United States, Mexico, Japan, Brazil and Canada, this new role leading a global player in the agricultural equipment industry is an opportunity to return home to Pennsylvania.
Leading Ford of Canada has been one of the best experiences of my career and it's very difficult to leave a team that is so committed to working together effectively, to delivering excellence and to building future success. It has been particularly rewarding working with you, Ford of Canada's dealers. I greatly appreciate your partnership, passion and drive to connect consumers with our great new products. It's the dealers who make the Ford brand a strong presence in communities across Canada and I want to thank you for your many contributions.
With your help, I sincerely believe that the company will not only survive today's challenging market conditions, but thrive with its strong focus on the customer and plans to accelerate the introduction of new fuel-efficient vehicles, especially small cars and crossovers.
While I, my wife Shannon, and our six children are looking forward to settling in an area surrounded by our extended family, at the same time, I will miss my friends and colleagues at Ford. I plan to be in the office for the rest of the month and I hope to get a chance to speak with more of you personally. It has been a pleasure working with all of you.
Sincerely,
Barry Engle
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Lincoln crossover to join luxury line
Saturday, August 16, 2008
Bryce G. Hoffman / The Detroit News
Ford Motor Co. confirmed Friday that it will build a new, full-size Lincoln crossover based on the MKT concept it showed at the Detroit auto show last January.
"The Lincoln MKT reinforces our commitment to further expand America's fastest-growing luxury brand, providing an all-new vehicle to the showroom that's been crafted and honed for a new kind of customer," Ford Americas President Mark Fields said. "The MKT will offer the comfort of a luxury sedan, the spaciousness and flexibility of a crossover and the performance of a sports sedan, courtesy of its EcoBoost engine."
Fields made the announcement at the Pebble Beach Concours d'Elegance in California.
As The Detroit News first reported in March, the new three-row luxury crossover will be built on the same platform as the Ford Flex, which launched this summer.
In addition to a normally-aspirated 3.7-liter V-6, it will be offered with an EcoBoost 3.5-liter V-6 engine that will deliver an estimated 340 horsepower and 340 lb.-ft. of torque.
It will be manufactured at Oakville Assembly Plant in Ontario, Canada.
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Ford Fiesta begins
production in Germany
Aug 14, 2008 07:33 AM
The Associated Press
DEARBORN, Mich. – Ford Motor Co. said Thursday it has begun production of its new subcompact Fiesta at a plant in Germany.
The vehicle is the first product to come out of Ford's new global development process, which aims to produce global models that are tailored to regional tastes but have the same underpinnings. It's slated to go on sale in stages between now and 2010, starting in Europe.
The Cologne Stamping and Assembly plant is the first Ford assembly facility to build the new car, with production at Ford's Valencia assembly plant in Spain set begin in January.
Asian production is scheduled to begin later this year in China and Thailand, Ford said.
Ford's Cuautitlan assembly plant in Mexico, which previously made F-series trucks, is being retooled to build hatchback and sedan models of the Fiesta for the North American market beginning in 2010.
The Fiesta is one of six new models Ford plans to bring to North America from Europe in the coming years, as part of efforts to cut costs and boost its North American car lineup.
Last month, Ford announced plans to retool two U.S. truck factories in Michigan and Kentucky to make global vehicles off the European Focus platform.
The auto maker said it expects to manufacture 148,000 Fiestas in the Cologne facility this year. When at full capacity, the plant is expected to produce 1,900 Fiesta and Fusion vehicle per day, Ford said.
Since the Fiesta was first launched in 1976, Ford said it has sold more than 12 million of the cars
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Drawback to Detroit's
'zero 72' auto loans
Aug 13, 2008 04:30 AM
Now that Chrysler and General Motors have dropped their lease incentives, will other automakers follow suit?
And what does this mean for customers?
The two large U.S. manufacturers have been losing money on their leased vehicles. Others have too, judging by writedowns announced this month by Ford, Toyota, Nissan and Honda.
They were luring customers with low lease interest rates – from zero to 3.9 per cent – and high residual values for vehicles when the leases ended.
Then, the U.S. economy slumped. Gasoline prices soared. Consumers stopped buying gas guzzlers. And the credit crisis made it harder to get financing.
"In Canada, leases are still available but we're not going to subsidize leasing any more," says Stew Low, a General Motors of Canada spokesperson. "Customers will pay market rates."
Say goodbye to low monthly lease payments. Say hello to "zero 72" – a buzzword for no-interest loans to be repaid over six years.
"A zero 72 loan puts the payment at the same point as a lease payment or just slightly below it," says Low.
Leased vehicles were half of GM's annual sales in Canada. Six months ago, it started targeting small car buyers to see if they would switch from leasing to borrowing if offered zero 72 loans.
"It's huge," says Low about the demand for such loans. "Canada is an affordability marketplace."
But leasing has other advantages to some customers beyond small payments, according to Alexander Law and Susan Winlaw, authors of Car Advice for Women (and Smart Men).
You can get out of a lease after three years and into something new with a warranty, says Law, a former writer for the Star's Wheels section.
"Many people don't want a car that's older than three years and don't like the notion of dealing with service centres or selling or trading a second-hand car. They know it creates an opportunity for them to lose money.
"Along with the boredom factor that comes with having the same vehicle too long, the vehicle you lease in three years will almost certainly be safer, more fuel-efficient and deliver much better value for the dollar."
GM and Chrysler helped create their own problems, says Jim Matthews, president of Leasebusters, a Toronto firm that helps people transfer contracts to others and avoid penalties.
"They knew their pricing was aggressively high, but they didn't know they would be hammered that badly," Matthews says.
"They're losing $5,000 to $15,000 on cars they sell at auction after the lease is completed. The losses are huge."
These two automakers – and others who may follow their lead – are trying to maintain their market shares with cheap loans. But this may not work, in his view.
"The big problem with financing," says Matthews, "is what if you drive 25,000 kilometres a year? You have just finished paying six years later and your car has 150,000 kilometres on it and it's not worth anything.
"You have negative equity. You're upside down. The only thing to do with your car is to keep it."
These automakers are shifting the risk associated with resale values – a risk they used to bear – to consumers.
"No walking away at the end of three years and leaving GM with a car worth thousands less than they imagined," Law says.
Leasing has disadvantages – such as mileage limits and wear-and-tear penalties – but it does lower your resale risk.
If that's important to you, shop around among the dealers still offering subsidized leases. Who knows how long they will last?
*******************************************
Oil prices just one factor in this mess
Aug 11, 2008 04:30 AM
David Olive
Business Columnist
Don't count on lower crude prices for an economic upturn.
The recent reversal in the steady climb in crude oil prices will be less of a tonic for the slumping economies of North America and Europe than one would hope for.
For starters, pump-price shock by now is deeply embedded in the consumer psyche, even after the drop in crude to $115.20 (U.S.) by the end of last week , from a record high of $147.27 just three weeks ago.
With most consumers believing the dip is temporary – and there have been plenty of short-lived declines in crude's long arc to the stratosphere – motorists will not soon be rekindling their love affair with large cars and trucks and SUVs, the unpopularity of which has cost thousands of Ontario auto workers their jobs.
In any event, it isn't soaring oil prices that have crimped economic growth. It's the bursting of the U.S. housing bubble and the resulting global credit crunch. There's scarcely a major bank in the world that hasn't taken a beating on faulty U.S. subprime loans.
Last week, even mighty HSBC PLC, which prides itself on global diversity, reported a 29 per cent drop in first-half profits due to its inventory of U.S. junk mortgages. U.S. regional and super-regional banks are in much worse shape, along with giant money-centre lenders such as Citigroup Inc., Wachovia Corp. and Bank of America Corp.
The resulting cutback in lending while banks shore up their reserves has stifled corporate expansion and job creation. After four consecutive months of net job loss, the U.S. unemployment rate has climbed to 5.7 per cent – not too far shy of the jobless rate that cost George H.W. Bush his job in 1992.
Meanwhile, there has been no encore to the robust consumer spending that ensured a soft landing in the previous U.S. economic downturn of 2001-02. Housing again is the culprit.
When the bubble burst, house prices plunged 30 per cent to 50 per cent in the hardest-hit regions, which happen to be among America's largest markets – including California, Florida, Michigan and other Midwestern states also suffering from industrial job losses.
It bears repeating that the estimated $8 trillion loss in residential real estate value, and resulting loss of home-equity loans as a means of financing car, appliance and other big-ticket purchases is the real brake on a U.S. economic recovery in the near term.
The Western economies, with the U.S. at the epicentre of the slowdown, are in something of a box. Central bankers, having reverted to inflation-fighting mode in the midst of a 17-year high in food inflation and crude-oil prices still double their level of two years ago, are no longer in a mood to cut interest rates to stimulate spending. And on the fiscal side, a U.S. government that recently projected a $482 billion deficit in the current budget year – U.S. president George W. Bush's sixth triple-digit annual deficit in seven years in office – is severely constrained in its ability to jump-start the economy with more and bigger economic stimulus packages like the modestly effective one this spring.
The most hopeful prognosis is for energy and commodity prices to continue sliding in tandem with the decline in GDP growth, and for the next U.S. president to boost all-important consumer spending with significant tax cuts for the working and middle classes at the expense of tax increases on the most affluent, which would revive short-term prospects for Canadian and European exporters reliant on the U.S. market. That won't happen if John McCain, now essentially tied with Barack Obama in the polls, takes office next January, since McCain's plan is to further increase tax relief for the wealthy, the population segment whose spending has the least impact on GDP growth.
***************************************
FORD OF CANADA
ANNOUNCES
BEST-OF-THE-YEAR
PURCHASE OFFERS
OAKVILLE, Ontario, August 8, 2008 - Ford Motor Company of Canada, Limited today announced further purchase financing enhancements to its best prices of the year while maintaining its current competitive lease offers.
Ford Family Pricing, which has been in effect since July 1, 2008, offers Ford of Canada's best prices of the year. Today's announcement reflects additional purchase incentives for consumers including:
- 0 per cent 60-month purchase annualized percentage rate on many 2008 Ford models;
- added cash incentives of $500 to $2,000 on most 2008 and 2009 Ford and Lincoln models -- for customers terminating Red Carpet Leases and financing their new purchase or purchasing with cash;
- a further added cash incentive of $1,500 on the purchase of any Ford crossover utility vehicle (Ford Edge, Ford Taurus X or Ford Flex).
"Canadian consumers deserve great value and choice about how they pay for a new vehicle. That's why we're maintaining our competitive lease offers and providing additional incentives on the purchase of most new 2008 and 2009 Ford and Lincoln vehicles during our Ford Family Pricing promotion," said Barry Engle, president and CEO, Ford of Canada.
The enhanced incentives are effective August 9, 2008 and will make these Ford of Canada's best and most competitive offers of the year.
***************************************************
GM Implements Salaried benefit cuts and co-pays to Retirees
The following notice was sent to all General
Motors Canada salaried retirees August 9, 2008:
ATTENTION SALARIED RETIREES AND SURVIVING SPOUSES:
GM has been taking steps to adapt our business to rapidly changing market conditions, marked by the weak U.S. economy, record high fuel prices, shifts in consumer vehicle preferences in Canada and the U.S., and the lowest U.S. industry sales volumes in well over a decade.
The following changes, combined with previously announced salaried headcount reductions and other related savings, will result in an estimated reduction in cash costs of more than 20 percent for the U.S. and Canada, or $1.5 billion in 2009.
Please review the important information provided below about your benefits in retirement.
It is difficult to implement these changes considering the many contributions each of you have made on behalf of our company. Unfortunately, the times require them. Your understanding and continued support are genuinely appreciated.
If you have any general questions about these changes you can submit them by e-mail to benefits.questions@gm.com.
Requirement for Monthly Health Care Contribution
Effective January 1, 2009, a monthly contribution ($20 single; $40 employee & spouse or employee and child(ren); $70 family) will be paid by all salaried employees and retirees up to age 65 to help in offsetting increasing health care costs.
Effective January 1, 2009, employees and retirees on or after age 65 will be required to make a monthly contribution ($15 single; $30 employee & spouse or employee & child(ren); $45 family).
The amount of the monthly contribution required will be reviewed on an annual basis.
Effective January 1, 2009, all retirees and surviving spouses will be automatically enrolled in the major medical plan known as the Comprehensive Medical Expense Insurance Program (CMEIP). The associated contribution for this coverage is incorporated in the monthly contribution outlined above.
Information regarding the establishment of the monthly health care contribution payment process will be mailed to your home address in the early fall. Please follow the instructions provided in order to ensure no interruption in your health care coverages.
Health Care Coverages for Those Permanently Residing in the U.S.
The current practice of providing comparable to OHIP hospital/medical coverage (e.g. services performed by a physician in a hospital) for employees, retirees and surviving spouses permanently residing in the United States will be discontinued for any employee, retiree or surviving spouse who moves to the United States on or after October 1, 2009.
Employees, retirees and surviving spouses resident in the United States prior to October 1, 2009 will continue to be eligible for such coverages as per the current practice.
This change does not impact other coverages (e.g. dental, vision, hearing).
This change also does not impact coverages available for those with a primary residence in Canada and a secondary residence in the U.S. If you have the practice of contacting the GM Canada Benefits Centre with an address change for your vacation time in the U.S. – be sure to instruct them that it is an “alternate” address change versus a “permanent” address change. This will ensure that you remain eligible for all coverages.
**************************
GM pension plans healthy
Aug 08, 2008 04:30 AM
Last weekend's article concerning General Motors pension plans bordered much closer to fear mongering than reality.
The reporters interviewed GM executives and CAW President Buzz Hargrove, who all expressed confidence in GM and the health of its defined benefit pension plans in Canada. Yet the Star's sensationalist article and headlines centred on comments from a single concerned plan member.
The facts are straighforward. GM Canada's defined benefit pension plans are funded to required levels and can be expected to meet the retirement needs of their members. We contribute over $300 million in cash to our hourly and salaried funds annually.
GM has more than sufficient cash on hand to manage through the current North American auto industry response to increased fuel prices, the U.S. housing downturn and the resulting market shift from trucks to cars and crossovers.
And while GM continues to grow profitably and lead in auto sales in China, Russia, South America and other expanding world auto markets, our North American transformation, while certainly challenging, remains on track.
David Paterson, Vice President, Corporate and Environmental Affairs
General Motors of Canada
*************************
Ford launching blind-spot mirror
Aug 06, 2008 11:29 AM
DEARBORN–Ford Motor Co. said Wednesday it will introduce its new blind-spot mirror this fall on the 2009 Ford Edge crossover.
The automaker had planned to bring the mirror to market next year but moved up the date after getting so much positive feedback, said Kelly Kohlstrand, a member of Ford's advanced product marketing and technology planning team.
Ford also is in a race with General Motors Corp. to bring the technology to market. Blind-spot mirrors will be a standard feature on the 2009 Chevrolet Traverse crossover, which will start production in September, according to GM spokesman Terry Rhadigan.
Kohlstrand said the mirror will be a standard feature on the Edge and will be added to other vehicles in 2009.
On both the Edge and the Traverse, small mirrors that give drivers a view of the "blind spot" alongside the vehicle sit flush in the outer corner of the side mirrors.
Kohlstrand wouldn't say how much the feature will cost Ford, but he said it's less than the retail cost of the small convex blind-spot mirrors that many drivers attach to their vehicles.
Ford said its blind-spot mirror will weather the elements better than aftermarket offerings, and it also is specifically designed for each car or truck model to provide an optimized field of view. The factory-installed mirror also meets a federal standard that requires original-equipment driver's side mirrors to be flat.
************************************
FORD FLEX HITS SAFETY PINNACLE WITH 5-STAR RATINGS
- Flex earns U.S. government's top 5-star crash ratings for all four front- and side-impact tests - adding to Ford's leading number of 5-star vehicles
- The daringly designed and fuel-efficient seven-passenger crossover continues to draw praise and customer interest.
DEARBORN, Mich., Aug. 5, 2008 - The 2009 Ford Flex has earned five-star frontal- and side-impact crashworthiness ratings, the highest possible scores, in the National Highway Traffic Safety Administration (NHTSA) tests.
The results for Ford's newest full-size crossover are better than the Toyota Highlander's and include class-leading four-star rollover ratings for both the front-wheel drive and all-wheel drive versions.
"The 5-star ratings for the Flex are evidence of Ford's overall safety commitment. In fact, we have produced more 5-star-rated vehicles than any other automaker," said Susan Cischke, Ford's senior vice president of Sustainability, Environment and Safety Engineering. "The Flex offers it all: a head-turning design, top safety ratings, unsurpassed highway fuel efficiency in its segment, power, spaciousness, comfort and great features."
Flex safety standard
Flex, which went on sale this summer, has a full array of standard safety equipment.
This includes dual front air bags, headliner mounted side curtain air bags, four-wheel anti-lock brakes, Ford-exclusive AdvanceTrac® with RSC® (Roll Stability Control™) and tire pressure monitoring system.
Flex gets some of its core strength from the use of lightweight aluminum-coated boron steel - one of the strongest weld-able materials - in the body structure. The use of high-strength steel in the B-pillars is only part of the Flex's robust safety profile. Ford engineers also located the side door intrusion beams to help manage and absorb energy during side impact crashes.
"Flex safety is built on a solid foundation - the platform of the 5-star rated Ford Taurus and Taurus X," said Gary Boes, Flex chief engineer.
How the Crash Ratings Work
NHTSA's frontal collision ratings are determined by placing crash-test dummies in the driver's seat and front-passenger seat and securing them with the vehicle's safety belts. Vehicles are then crashed into a fixed barrier at 35 mph, which is equivalent to a head-on collision between two similar vehicles that are moving at 35 mph. The 5-star rating attained by Flex indicates a 10 percent or less chance of serious injury to a belted occupant in the front seat.
Side-impact crash testing represents an intersection-type collision with a 3,015 pound barrier moving at 38.5 mph into the Flex, with crash test dummies buckled into the driver and rear passenger seats. Flex's five-star rating, the highest possible, indicates a 5 percent or less chance of serious injury.
"Safety is a top purchase consideration, second only to fuel efficiency, so Flex's top safety ratings and highway fuel economy are a winning combination," said Catherine Pearce, Flex marketing manager.
Even More Technology Works in Customers' Favour
Flex also can help drivers avoid problems on the road.
The new SIRIUS® Travel Link™ feature, praised for helping motorists find the cheapest gas, also can help route them around congested, potentially dangerous conditions using the vehicle's navigation system with real-time traffic information, available in select markets.
SYNC®, Ford's hands-free connectivity system for Bluetooth-enabled phones and digital music players, helps drivers keep their eyes on the road and hands on the wheel to reduce distractions.
*********************
Judge rules suit over
Ford Explorer can go forward
Family says automaker, in 1999 settlement talks related to rollover, kept evidence under wraps.
Margaret Cronin Fisk and Laurence Viele Davidson / Bloomberg News
Ford Motor Co., the second-largest U.S. automaker, must defend a lawsuit claiming the company fraudulently induced a family to settle a claim over a death in an Explorer rollover accident, a federal court said.
James L. Haffey was killed in 1997 when the driver lost control of the Explorer after a Firestone Inc. tire broke apart.
His family sued Ford and Firestone's parent, Bridgestone Corp., claiming defects in the vehicle and tire. In 1999, the Haffeys settled with Ford for $500,000 and with Firestone for an undisclosed amount, said Tab Turner, an attorney for the family.
In 2001, after reports linked Explorer rollovers to Firestone tire failures, the family filed a new claim. It argued Ford withheld evidence to settle for less than the case was worth.
A federal judge in Mississippi dismissed the new suit in 2006. A U.S. appeals court in New Orleans reinstated it July 31, finding the family could sue Ford for deceit.
"Ford's problem with the Explorer definitely isn't going to end," said Sean Kane of Safety Research & Strategies Inc., a safety advocacy group in Rehoboth, Mass. Some lawyers may reopen cases already settled, Kane said. "We continue to see new cases filed against Ford over uncaptured tires that weren't picked up" during multiple recalls, he said.
The Mississippi judge who dismissed the lawsuit concluded that "the plaintiffs were required but had failed to rescind the settlement agreement and return the proceeds they had received under it," the federal appeals court said.
"It is clear from the plaintiffs' amended complaint in this case that they seek to affirm the settlement agreement and maintain an action in damages for deceit."
'Back to court'
Ford doesn't expect to appeal the ruling and will likely ask the trial court again to dismiss the case, said company spokeswoman Kristen Kinley.
"We will go back to court and prove, once again, that this claim has absolutely no merit," Kinley said in an e-mail.
Haffey's family will seek an additional $4.5 million in actual damages, the value of the case had the family received evidence of alleged design problems that it sought in the original lawsuit, Turner said today in a phone interview.
Haffey's wife, Barbara, who was driving the Explorer when it crashed, and his three children also will seek unspecified punitive damages, he said.
The reputation of the Explorer, the top-selling sport utility vehicle at the time, was hurt by a U.S. investigation into at least 271 highway deaths involving tread separations by Firestone tires. Ford and Firestone settled hundreds of lawsuits over rollovers related to tire failures.
Tires recalled
Bridgestone recalled 6.5 million tires designed for the Explorer. Ford replaced another 10.6 million Firestone tires in 2001, citing safety concerns.
The 2001 lawsuit claims Ford was aware of design flaws and problems with the Firestone tires on the Explorer, and didn't disclose this information as required before trial.
"This is typical for these guys," Turner said.
"It is a clear example of the fraud perpetrated by these companies over a long period of time."
The Explorer was passed in sales in 2007 by Honda Motor Co.'s CR-V as the top-selling SUV in the U.S., 219,160 to 137,817.
Explorer wasn't even the top-selling SUV at Ford in 2007. That distinction fell to the smaller Escape, which had U.S. sales of 165,596 vehicles last year.
Ford sold more than 400,000 Explorers annually as recently as 2002.
Explorer sales slid 36 percent this year through July, to 55,339. Ford sold 102,486 Escapes during the same period, a 2.1 percent decline, while Honda sold 122,230 CR-Vs, a 2.2 percent decrease from the same period last year.
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Car buyers sue Ford over
limited edition vehicle
NEW YORK, Aug 4 (Reuters) - Car buyers sued Ford Motor Co on Monday complaining that a limited edition of a modified Ford Mustang was not so limited after all.
The class action lawsuit on behalf of a New York man and other buyers of the 2007 Roush Stage 3 BlackJack vehicles claimed they paid a premium price of nearly $59,000 last year because Ford advertised that only 100 would be made.
The lawsuit, filed in U.S. District Court in Manhattan, accused Ford and Roush Performance Products Inc of manufacturing at least 100 more of the vehicles in 2008.
Representatives of Ford were not immediately available to comment, a company spokeswoman said.
"The vehicles purchased by the plaintiff and the other class members were not as unique or rare as the defendants had stated them to be," the complaint said. "Their value from scarcity and as collectors' items were and are dramatically less than the buyers had been led to believe their value would be."
Ford manufactured a limited run of a modified version of the Ford Mustang, made especially for conversion by Roush into the Stage 3 BlackJack, the complaint said.
Drew Conner of Bardonia, N.Y., and at least 100 other people are members of the class seeking a jury trial and more than $12 million in damages
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GM pension faces huge shortfall
Actuaries say workers' plan in Canada would
be in serious trouble should car maker fail
Aug 02, 2008 04:30 AM
James Daw
Tony Van Alphen
Business Reporters
As General Motors Corp. struggles with its massive financial problems, concern and anxiety are rippling through the ranks of company pensioners and senior employees in Canada.
Despite assurances from GM and the CAW that their pension plan is safe, many fear monthly payouts would be slashed dramatically if the auto giant's drastic moves to cut costs and reinvent itself fail.
"My concern is that, if GM goes into Chapter 11 bankruptcy protection in the U.S. or they go bankrupt altogether and out of Canada ... my pension is going to be cut nearly in half," said Karl Zimmerman, a 73-year-old retiree and stroke survivor.
Plant workers facing layoffs in Oshawa expressed similar sentiments at a union membership meeting this week, and Canadian Auto Workers president Buzz Hargrove concedes his calls and messages suggest pension fears are on the rise.
According to documents available only to plan members and regulatory officials, actuaries estimate GM's pension plan for 43,717 hourly rated employees, retirees and survivors in Canada would be short 43.5 per cent of the money needed to pay all pension promises if GM failed, based on estimates as of November of 2006.
If GM could make no further contributions, the deficiency would be $4.9 billion, or the equivalent of about $112,000 per plan member. This so-called solvency or windup shortfall was about $1 billion more than in 2004 and five times the shortfall estimated as of 2000. This compares with a 9.3 per cent shortfall at Chrysler Canada as of May last year.
GM Corp.'s financial situation deteriorated further yesterday. It reported a second-quarter loss of $15.5 billion (U.S.), the third biggest in its 100-year history, because of plunging sales south of the border and the declining value of truck leases. The company does not publicly release results for its Canadian operations.
GM has posted $69.8 billion in losses since 2004 and is trying to raise as much as $17 billion in cash as reserves fall.
But Hargrove and GM executives insist pension fears are unwarranted. A worst-case scenario that would trigger pension reductions is "so remote a possibility it's not worth speculating on," said Hargrove.
David Paterson, vice-president of corporate affairs for GM Canada, agrees: "No, (pensioners should not be concerned) he said. We are confident about the future of the business and the cash situation .... We are going to be here for another 100 years."
Yet some pensioners are concerned because they know, if the company and union are wrong, they would be more vulnerable to substantial reductions than pensioners of other car makers.
GM's pension plans in the U.S. have a stronger funding than plans for its foreign operations, including Canada. The company took steps in 2003 to eliminate a $19 billion shortfall by selling a subsidiary and raising $18.5 billion by selling bonds to outside investors. GM has reported to shareholders the plans had 22 per cent more assets than benefit obligations at the end of 2007, while non-U.S. plans were 44 per cent short of funds, based on accounting rules that differ somewhat from actuarial reports.
Chrysler, Ford Canada and all other sponsors of defined-benefit pensions in Ontario – except GM – are required by pension law to eliminate solvency deficiencies within five years. GM is the only remaining company eligible to take advantage of a special exemption inserted into legislation during the deep recession of 1992, government officials confirm.
The condition of the GM pension plan could also have deteriorated since 2006, said Zimmerman, a resident of Oakwood, about 50 kilometres north of Oshawa, home to the company's last remaining vehicle assembly operation in Canada.
The next actuarial report is to be released in September. It will reveal whether the plan has suffered from its heavy exposure to foreign bond and stock markets. But the report will not incorporate the impact of recent layoff announcements, which will put further stress on the plan.
Zimmerman has been among a small group of disgruntled workers and pensioners who were uncomfortable about Ontario letting GM ignore the more stringent pension funding rules on the grounds it was too big to fail – and that its investments in factories here were too important to jeopardize.
He has seen the value of benefits under Ontario's Pension Benefits Guarantee Fund dwindle relative to his cost of living. Meanwhile, the government has asked a pension reform commission to make recommendations about the guarantee fund's future.
A failure by GM would drain the guarantee fund unless the government lent it money. The cost of a GM failure to the fund could be as high as $2.5 billion (Canadian), one actuary estimates.
The province has had to bail out the guarantee fund in the past. In 2003 it provided a $330 million, interest-free loan repayable over 30 years. "It seems to me (the GM shortfall) is far beyond anything the government would want to cover," said actuary Paul Duxbury of Cambridge.
GM is required to set aside enough funds to pay pensions as long as it continues to operate here. It had enough money in 2001 and 2002 to take a contribution holiday.
But, by last year, fund actuaries were estimating GM would have to put in an extra $1.2 billion over the next 15 years after the company contributed $254 million in 2006.
The $4.9 billion shortfall would only be relevant if GM was forced out of business.
Hargrove wrote to GM Canada's vice-president of labour relations in 2006 after GM moved to bolster the pension fund for U.S. workers. "We need to jointly consider how best to improve that security through assuring appropriate financing of (CAW members') pensions," he wrote.
This week, he said the union won no major commitment, but the executive assured him GM is not worried about surviving, or the state of the pension plan here.
He said his union's leadership is confident GM will not need to file for bankruptcy protection here. He insists GM's manufacturing and sales operations are profitable, although Paterson said "we are not making money in Canada now."
"I think it's inevitable GM will file for Chapter 11 (bankruptcy protection) in the U.S., but that doesn't mean that all the GM plants will close," said Hargrove.
"It simply means they are operated by a trustee and GM will start bargaining with everyone, the union and banks and bondholders; but the operations will continue. They don't cut off pensions. (They may very well) negotiate with the UAW in the U.S. to (change the pension plan from a defined benefit) but we would never agree to that in Canada."
When the former NDP government under Bob Rae exempted GM from funding its solvency or windup deficiency, its contributions to Ontario's Pension Benefits Guarantee Fund were to increase to 2.5 per cent of the solvency deficiency, or to a maximum of $5 million per year.
If not for the caps, GM would have to pay the guaranteed fund nearly $81 million a year, according to actuary Duxbury.
The guarantee fund is intended to cover any shortfall for the first $1,000 of a monthly pension, excluding increases granted in the three years before a company fails. If the province continued to stand behind that guarantee, it would have to top up most of the average GM retiree's pension, which was $15,724 in 2006. But recent retirees from GM are drawing much larger pensions.
So, if GM were to fail the portion of any pension greater than $12,000 a year would be cut by the 43.5 per cent, based on the calculations done last year. If the province ended its pension guarantees, a retiree's entire pension would be reduced by that much.
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Magna deal spooked Lewenza
Union leader likely to replace Hargrove at CAW backed pact despite misgivings, transcripts reveal
Aug 01, 2008 04:30 AM
Tony Van Alphen
Business Reporter
The fiery Windsor labour leader who will probably replace Buzz Hargrove soon as president of the Canadian Auto Workers had serious misgivings about a controversial deal to organize employees at Magna International, union transcripts reveal.
Ken Lewenza, president of Local 444, told the CAW's national executive board recently that members would never have voted to allow Magna employees into the union under the arrangement, according to transcripts of top-level meetings obtained by the Toronto Star.
"Nobody in this room, I don't give a shit what you say, in your heart of hearts, agrees in its entirety on the Magna deal that caused us a great deal of stress and pressure within the local unions, within the staff, within the leadership of our union," added Lewenza, who eventually supported the deal publicly in a show of union solidarity.
The transcripts are from tense executive board and staff meetings last month where members endorsed candidates for the two top jobs in the country's largest private-sector union.
They include emotional debate about the CAW's election process, allegations of pressure to endorse specific candidates, concerns that political campaigning could tear the union apart and even a plea from retired president Bob White to stop the infighting.
They also reveal the ambitions of some union officials – and Hargrove's feelings when a candidate told him he should retire with a year still left in his mandate.
Lewenza called the Magna deal, which gave up fundamental labour rights, a "gut-wrenching decision" that was still in the union's best interests.
The CAW and Aurora-based Magna, a non-union bastion for decades, last year reached the "Framework of Fairness" deal whereby the union gained easier access to organizing more than 40 company plants in exchange for giving up the right to strike.
Critics called the deal a "sell-out" of union principles and a "dues grab," but delegates at a national CAW meeting overwhelmingly approved it.
Despite his reservations, Lewenza voted with other executive board members last year to proceed with the arrangement because they said it was critical to efforts to increase "density" and wield more bargaining clout in the struggling auto parts sector.
Lewenza, who will probably replace Hargrove at a special convention next month, could not be reached for comment yesterday, but insiders confirmed he didn't like the arrangement and expressed those views before supporting it.
In explaining the need to get behind CAW decisions despite personal feelings, Lewenza told the board he initially "passionately opposed" the CAW's decision to provide non-interest loans, to a maximum of $5 million, to the fledgling Canadian Construction Workers Union.
A controversial labour organizer and former Toronto political power broker is running the construction group after his international union ousted him in an internal battle at a local here.
The CAW meeting transcripts also reveal Chris Buckley, president of the big Oshawa local, considered running for Hargrove's job. Buckley told the board he planned on playing a bigger role in the union and may run next time.
Hargrove expressed disappointment and frustration that some candidates criticized the election process when they never complained before, and were now jockeying for position several months before his mandatory retirement age of 65 next year.
Hargrove, who has led the union for 16 years, added that Hemi Mitic, a presidential contender, told him activists were wondering why he was "hanging around."
"Boy, I've never had a knife put in me deeper than that one because nobody (else) has ever said that to me," Hargrove said.
"If one person says that you ought to get out, I'm getting out, and that's what I'm doing."
CAW staff had complained that senior union officials had intimidated them to support Hargrove's selections for the top jobs or they'd be branded as disloyal.
Other contenders felt they didn't get a chance to make their case for endorsements.
"You know, you can't inspire leadership to feel more optimistic about the future with a process that feels fixed or with a campaign that is dirty," said Carol Phillips, an assistant to Hargrove who is still running for the No. 2 union post of secretary treasurer.
But Bob White, who led the CAW from its inception in 1985 until 1992, warned the board that the union is facing tough times and doesn't need bickering over unfair allegations that its election processes are undemocratic.
"The last thing we need is a pissing contest between some staff members who want to get elected and the national executive board of the union," White said.
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