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How Canada let Caterpillar
Feb 5, 2012 Ask yourself this: Why did Caterpillar buy a plant only to destroy it? The labour dispute at a London locomotive factory was nasty, brutish and short — a depressingly Hobbesian scenario in which brute strength prevailed over civilized rules of conduct. There were no strikebreakers wielding clubs at Electro-Motive Canada, because there was no strike to break — the union was locked out on New Year's Day. There were no replacement workers to bust the union, because the union was merely invited to slit its own wrists — by halving most wages from $34 to $16.50 an hour. The U.S.-based owner, multinational giant Caterpillar Inc., didn't so much humiliate 460 skilled workers as ignore them. It started and ended this negotiation with a carefully choreographed plan to pack up, shut down and leave town. Clever multinationals — and this is one cunning Caterpillar — don't spend hundreds of millions of dollars to buy a factory only to shutter it. So what was the plan? Never mind Caterpillar's cold-hearted tactics. Its clear-eyed strategy exposes our own blindness. The big bad Americans saw past our myopia — beyond the cash value of the plant's physical property to size up and seize the company's intellectual property: the innovation, trade secrets, manufacturing processes and R&D residing in London. It won't just relocate the heavy equipment on the factory floor, but harvest the technological know-how subsidized with government incentives and writeoffs. This wasn't bullying, it was highway robbery — with our politicians watching from the sidelines. Caterpillar kicked those workers in the teeth, but we should be kicking ourselves for letting it acquire the legal right to do it as it pleased when purchasing the old locomotive plant. There has been much hand-wringing that foreign investment safeguards weren't triggered, failing to ensure a net benefit to Canada with explicit job guarantees after the takeover. But lost jobs aren't our only loss. Be it Nortel or RIM, we need to value the technology and patents in play when foreigners start kicking the tires. The buyers are just as likely to be scavengers as investors. And if their primary goal is to spirit away our intellectual property, they will treat the ancillary human resources as an expendable asset to be stripped away, bargained down or locked out. The $4.5 billion auction of Nortel patents last year made a mockery of the more modest valuations that the bankrupt company had put on its own treasure trove of intellectual property, nurtured by our tax dollars. Canadians always sell themselves short. So the first lesson of the London massacre: Ottawa must be vigilant about vetting foreign investment and retaining jobs, but also mindful of valuing — and anchoring — our homegrown intellectual property. Why underwrite our companies if we willingly sell off our embedded brainpower to foreign bidders who leave Canada cash-rich, patent poor and jobless? If RIM is one day placed in the shop window, are we ready for a fire sale of its technology? What if Bombardier — which also builds locomotives — ever goes on the auction block, patents aplenty? Another lesson: When it comes to the economy, empathy isn't enough. Premier Dalton McGuinty adopted a reflexively tepid tone from the start, expressing the vain hope that both sides would come to their senses. Belatedly last week, he ratcheted up the rhetoric by exhorting the plant's owners to play fair. But he never picked up the phone to the employer. Nor did he reach out to Prime Minister Stephen Harper to forge a non-partisan common front. When a company treats its workers like dirt, a premier should leave no stone unturned. McGuinty and Harper must conduct a post-mortem. More Caterpillars are coming, and they will metamorphose into a plague on our intellectual property if we don't start using our heads. I've argued before that globalization can bring benefits, but only if we're smart enough to play defence as well as offence. It's too late to save the jobs in London. Caterpillar has closed a plant and cashiered its workers, but it has opened our eyes: it's not just the jobs on the factory floor that are lost, but the technology that buttresses them. A locomotive factory is gone. Now the tech train is leaving the station — with a free pass from our politicians. |
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Caterpillar Record Profits Means Demands for Cuts Groundless January 26 Information picket line at Tormont in Toronto, ON Local 112 members show their support for the locked out Electro-Motive Local 27 members.
CAW President Ken Lewenza is demanding that Caterpillar take its concessionary demands off of the negotiating table in light of the recent announcement of the company's record-setting profits of $4.9 billion - a stunning 83 per cent increase over last year.
Workers picket outside a CAT service centre in Pointe Claire, just west of Montreal, as part of the national information picket.
To see more pictures from the National Information Pickets on January 26, please visit our flickr page HERE
Premier McGuinty Urges Caterpillar to Show Flexibility Ontario Premier Dalton McGuinty urged Caterpillar to return to the bargaining table and "demonstrate some flexibility" during a January 31 speech to the London Chamber of Commerce.
CAW Local 114 Members Ratify New Contract at Viking Air
Viking Air bargaining committee members, from left to right, are Andre Tune, Jeannie Blaney (Local Rep), Gavin McGarrigle (National Rep), Dave Ingram, Don Haug (Chief Steward).
CAW Local 114 members who work at Viking Air in British Columbia have voted 95 per cent in favour of a new contract with the aircraft maker. The CAW represents 270 workers at Viking Air, which builds the latest model of Twin Otter airplanes.
Veterans Transportation First Agreement CAW Local 504 members who work at Veterans Transportation in Hamilton, Ontario have voted 82 per cent in favour of a first agreement. These workers transport disabled citizens to and from appointments and are part of the Darts Transportation group. The CAW represents 28 workers at Veterans Transportation.
Occupy Movement Continues to Highlight Inequality The tents may be down from St. James Park, but the Occupy movement in Toronto is continuing its work to highlight issues of inequality, corporate greed, and the need to build a new economy. The meeting also discussed the solidarity rally January 21 with the Electro-Motive workers in London, and other specific ideas to build stronger links between Occupiers and the labour movement. Solidarity Message to Locked-out Rio Tinto Workers
Leaders and members of CAW Local 2301 at Rio Tinto in Kitimat, B.C. made a long haul solidarity visit this week to the picket at Rio Tinto in Alma, Quebec. Included in the photo here is: Marc Maltais, President of USW 9490 , Martin McIlwrath, Trustee CAW 2301, two USW bargaining committee members, Ed Abreu President CAW Local 2301, Sean O'Driscoll Business Agent CAW 2301, Pierre Deschenes President Local 666 Mine and Mill Council, Alex Frechete, USW member at Rio Tinto. CAW President Ken Lewenza has sent a message of solidarity and support to the nearly 800 locked out United Steelworker union members at Rio Tinto in Alma, Quebec. The company locked out the workers within the first few moments of the New Year.
Air Canada Crew Schedulers Vote to Strike if Necessary Inflight and flight operations crew schedulers have voted overwhelmingly to go on strike if necessary. CAW Urges Ontario to Support Maintenance of Gun Registry Data The CAW is calling on Ontario Premier Dalton McGuinty to take a public stand and call on the Harper government to protect all existing data from the national long gun registry, in the wake of the government's effort to kill the registry and delete its records.
Oshawa City Council joined a growing list of municipalities across Canada raising concerns around a proposed Canada-European Union free trade deal that would strip local governments of the right to manage public purchases and lock in the privatization of public water and wastewater services, among other impacts.
Sunwing Pilots Association Merges with CAW The association representing pilots at Sunwing Airlines Inc. has merged with the CAW.
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Don't Forget - February is African Heritage Month, a time to commemorate African Heritage and those individuals who fought to enrich it - changing the world for the better.
Caterpillar to shut Ontario
Greg Keenan Caterpillar Inc. is closing a locomotive plant in London, Ont., where locked out employees have been off the job since Jan. 1. Caterpillar did not say when it will close the Electro-Motive Canada plan operated by its Progress Rail Service, which employs more than 400 people. The employees, members of the Canadian Auto Workers union, were locked out after the union refused company demands to cut wages by as much as 50 per cent. The work will be shifted from London to Progress Rail's other assembly plants in North and South America, the company said in a four-paragraph news release Friday. "All facilities within EMC, EMD and Progress Rail Services must achieve competitive costs, quality and operating flexibility to compete and win in the global marketplace, and expectations at the London plant were no different," the company added in the statement. The gulf between the company's position on how to reduce costs and increase flexibility and the union's position was too wide so market actions dictated that the plant be closed, the statement added. The closing announcement brought a condemnation from Canadian Auto Workers union president Ken Lewenza. "Caterpillar had no intention of keeping this plant open," Mr. Lewenza said in a statement. "From day one, we believed that Caterpillar was trying to provoke a crisis, by forcing deep cuts that were not possible. Our members would have happily continued working under the previous conditions, but that wasn't enough for this incredibly profitable company." The closing came eight days after Caterpillar reported record revenue of $60.1-billion (U.S.), a profit surge of 83 per cent to $4.9-billion, results that it said it hasn't seen since the days of U.S. President Harry Truman, who presided over the first years of a postwar economic boom when he occupied the Oval Office from 1945 to 1952. |
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Automaker to take advantage of new trade agreement
By David Shepardson Detroit News Washington — Ford Motor Co. plans to boost its exports of new vehicles to South Korea by 50 percent in 2012 in the wake of a free trade deal. The Dearborn automaker expects to sell about 6,000 vehicles in South Korea in 2012, up from 4,184 vehicles sold last year, said Marci Williamson, a Ford spokeswoman. "We are launching a number of new vehicles in Korea this year," Williamson said. "We are very excited to grow our presence in the market." The company's sales blitz comes after automakers pressured the Obama administration to win concessions from South Korea to help open its market to more U.S. exports. A trade deal was ratified by Congress in October, and the Korean parliament approved it in November. Korea has had one of the world's most closed auto markets, U.S. automakers have long complained. In 2010, U.S. automakers exported 7,450 vehicles to Korea — accounting for 0.62 percent of all vehicles sold in that country. All imports accounted for 7 percent of total Korean sales. By comparison, Korean automakers exported 560,000 vehicles to the United States. "When you look at the low volumes that Ford is planning to sell in Korea it doesn't make any sense to build there. We are competing in making things in the United States with countries around the world," Cole said. He said the export volume initially is largely symbolic, but will be a test of whether U.S. companies can penetrate the market without many of the barriers they've faced. In December, Toyota Motor Corp. said it plans to export its U.S.-built Camry sedan to South Korea. The Japanese automaker plans to ship about 6,000 Camry vehicles annually and started last month. In November, Toyota started exporting its Sienna minivan to South Korea as well. It's the first time Toyota will export the U.S.-built Camry outside North America. Toyota faces cost pressures in Japan in assembling vehicles there because of the strength of the Japanese yen. Under the Korea trade pact, manufacturers that sell 25,000 or fewer U.S.-made autos and trucks in Korea can meet U.S. standards rather than meeting South Korean standards when they import U.S.-made vehicles into Korea. |
Conservative reforms to old age pensions would hurt low-income seniors most, says Bob Rae
Toronto Star OTTAWA—Opposition MPs say low-income seniors would be the real victims of expected changes to a key element of Canada’s Old Age Security program. “It will have a very dramatic effect on low-income seniors, particularly low-income single women,” Liberal interim leader Bob Rae said Wednesday. As the Liberals stepped up their efforts to head off the Conservatives’ proposed changes to future pensions, the party said the vast majority of Canadians receiving OAS have average incomes well below $40,000. Rae also said making seniors wait two more years — to age 67 — to receive OAS would mean the poorest retirees would also have to wait to obtain the Guaranteed Income Supplement (GIS), an additional support payment for seniors with less than $16,368 in income. That’s because receiving GIS is tied to approval for OAS payments, the Liberals noted. They also released a background document showing more women retirees rely on GIS than men. Rae added that postponing eligibility for OAS would mean more costs to provinces, which would need to support low-income seniors. “It’s not just a download onto poor people, it’s also a download onto the provinces,” he told reporters. Since Prime Minister Stephen Harper mused last week about long-term reforms to OAS to save Ottawa money, speculation has focused on the possibility the government would change the eligibility rules. But the Conservatives have not provided any details of Harper’s plan except to say current retirees or those near retirement age need not worry. “A senior will not lose a single penny, nor one near retirement,” Harper said in the Commons. But he repeated his desire to make changes to OAS that will reduce federal costs over the long term. Finance Minister Jim Flaherty confirmed his budget, expected in March, will contain no immediate changes to retirement benefits. But the government is reviewing all pension issues, he told CBC-TV. “So we could take some steps in the budget to say, ‘All right, here are some of the things that could be done in the future in order to make sure that these programs are sustainable in the long term,’ “ Flaherty said in an interview from Israel, where he is on government business. |
By Scott Burgess Chrysler Group LLC.'s January sales jumped 44 percent compared to January 2011, executives said Wednesday morning. The sale increase is the 22nd consecutive monthly increase for the carmaker, and this January all four brands at the Auburn Hill-based carmaker showed big increases. "We started the new year with a bang by growing sales 44 percent," said Reid Bigland, Dodge president and head of U.S. sales, in a news release. "In January we continued building on the sales momentum that we generated during 2011 with our 16 all-new or significantly refreshed products." Chrysler brand sales jumped 81 percent, Jeep brand sales rose 37 percent, Dodge sales climbed 29 percent and Ram sales jumped 42 percent. Additionally, car sales for Chrysler Group climbed 137 percent, which executives attributed to the strong sales of the Chrysler 200 and Chrysler 300 sedans. All carmakers are expected to release their January sales figures later today |
Canada says Old Age January 31, 2012 OTTAWA (Reuters) - Canada's Old Age Security pension program is unsustainable and needs to be changed, the Conservative government said on Monday, drawing opposition accusations that it was breaking a campaign promise not to cut seniors' benefits. Prime Minister Stephen Harper said in a speech last Thursday that the country needs to limit the growth of spending on the retirement income system as life expectancy increases. He promised not to hurt current recipients. Expanding on Harper's comments, Human Resources Minister Diane Finley said in Parliament on Monday that the Old Age Security program, a pillar of the pension system funded out of general government revenues, needs changing. "The Old Age Security system is not sustainable now. We are going to make it that for generations in the future," she said. Old Age Security payments go to all Canadian seniors, whether they were employees or not, to provide the basic necessities of life. The tax system claws some of the money back from higher-income seniors. Finley said a separate government pension plan, the Canada Pension Plan, which is funded by employers and workers, is actuarially sound. In tackling programs for seniors, the Conservatives are venturing onto sensitive political ground as seniors tend to vote in great numbers. But the government insisted it is acting responsibly. Liberal leader Bob Rae said Harper had pledged during the 2011 election campaign not to touch transfers to seniors. "Is the prime minister committed to sustaining seniors? Or is he committed to breaking his election promises and breaking faith with the people of Canada?" Rae demanded. Harper responded that he would not be cutting transfers to individuals. "At the same time, everybody understands that there are demographic realities that do threaten the viability of these programs over the longer term. We will ensure that these programs are funded and viable for the future generations that will need them," he said. The government has not said how it would address the Old Age Security system, but speculation in the last several days has centered on the possibility that it will gradually raise the age of eligibility to 67 from 65. In 1983, the United States decided to raise the age for collecting full Social Security benefits to 67 from 65 by 2022. The Canadian government forecasts the number of people aged 65 or over will double to 9.3 million by 2030, and the ratio of taxpayers to seniors will decline substantially. |
Despite strong '11, Ford cautious Material costs add to worry; workers By David Shepardson Detroit News Washington Bureau Ford Motor Co. had its most profitable year in more than a decade, and its 2011 performance translated into about $6,200 in profit-sharing checks for the automaker's 41,600 hourly workers, But investor worries about headwinds abroad in 2012 — including uncertainty in Europe and higher commodity prices — sent the company's stock tumbling Friday. Dearborn-based Ford, first among the three domestic automakers to announce its fourth quarter and 2011 full-year earnings, reported $20.2 billion in net income for 2011. It was Ford's best year since 1998 and second-best year ever, as its results were boosted by a one-time accounting gain. This marked Ford's third consecutive annual profit, after losing $31 billion between 2005 and 2008. But the company's fourth-quarter results didn't meet expectations. There are concerns about Ford's hedging strategy and higher commodity costs, and Ford is cautious about 2012 — especially in Europe and South America. Under a formula agreed to by the United Auto Workers as part of a new labor agreement, Ford's earnings generated $6,200 in annual profit sharing for each of its 41,600 hourly employees. Those workers received payments for the first half of the year of $3,750 per person in December. For the second half of 2011, the formula generated approximately $2,450 per employee, which is to be distributed in March. Profit-sharing payments for individual employee depend on how many hours each worked. The payments will provide a big economic boost to workers and communities. Ford said this month that it is awarding bonuses and merit raises for the first time since 2010 to its 20,000 North America salaried employees. It hasn't paid a bonus and merit pay increase in the same year since 2008. Salaried workers will get 2.7 percent average salary increase based on performance. Ford's stock fell sharply on Friday's financial results, but recovered some of the losses in afternoon trading. The automaker closed down 4.2 percent to $12.21, $0.53 in very heavy trading. The automaker reported fourth quarter earnings of $0.20, excluding the accounting change. That's below the Wall Street consensus of about $0.25 a share. "If you get over the small disappointment over the fourth quarter, this has been a good year," Ford Chief Financial Officer Lewis Booth said in an interview, noting the economic uncertainty in Europe and Asian natural disasters. Ford's 2011 results were boosted by a one-time, noncash gain of $12.4 billion in prior year tax losses that had been set aside starting in 2006. Ford has now reported 10 consecutive profitable quarters. For the year, Ford earned $6.2 billion in operating profits in North America, up from $5.4 billion in 2010. But the company's results for 2012 didn't impress some analysts. JPMorgan analyst Himanshu Patel called the fourth quarter results "weak." Standard & Poor's Ratings said Ford's results were "consistent with our assumptions incorporated in the fall 2011 upgrade." Significantly, the automaker cut its debt from $19 billion to $13.1 billion by the end of 2011. Ford's results also were boosted $400 million via the sale of its Ford Russia operations to a joint venture. Ford said it expects its market share this year to be "about equal" to 2011 in the United States and Europe. Last year, it forecast market share gains in both the U.S. and Europe. Ford's market share was up 0.1 percent to 16.5 percent in 2011 in the U.S., but its retail share was flat at 14 percent. The company reported a $190 million loss in Europe in the fourth quarter, up substantially from its $51 million loss in the same period in 2010. The company lost $27 million in Europe for all of 2011, compared with a $182 million profit the previous year. Ford said it has challenges to address in Europe and South America. Uncertainties about the debts of major European countries have raised fears about a major economic slowdown in Europe. And it still faces questions — as does its rival General Motors Co., which will announce its 2011 earnings Feb. 16 — about its large pension liabilities. Ford's pension plans worldwide are underfunded by $15.4 billion, an increase from $11.5 billion the previous year. In the U.S., its pension obligations are underfunded by $9.4 billion, up from $6.7 billion. Ford contributed $1.5 billion to its global pension plans in 2010 and plans to make $3.5 billion in contributions to those plans this year, including $2 billion to its U.S. pension funds. JPMorgan said Ford may be considering UAW pension buyouts — a move that industry analysts have said GM may announce this year. Booth said the automaker is considering unspecified "strategic actions" to address its pension underfunding and plans to fully fund them within "the next few years." He declined to answer whether Ford is considering pension buyouts. Ford Motor Credit Co. earned $2.4 billion in profits in 2011, down from $3.1 billion in 2010, because fewer leases are being terminated. Chrysler Group LLC is to report its 2011 earnings Feb. 1, and is expected to report a full-year profit. GM has earned about $8 billion in the first nine months of the year. |
Prime Minister Harper unveils grand plan to reshape Canada Joe Friesen Bill Curry After five years of minority governments, Stephen Harper finally has the freedom to act. He's no longer looking at the limited horizon of the next budget or the next election. He's planning on transforming Canada for a generation or more. This is Stephen Harper's blueprint for reform. Although short on details, Mr. Harper's speech to the World Economic Forum in Davos, Switzerland, on Thursday made clear the sweep of his ambition. He will change how Canadians finance their retirement. He will overhaul the immigration system. He will make oil and gas exports to Asia a "national priority" and aggressively pursue free trade in India and Europe. Several times in his speech, Mr. Harper portrayed his agenda as a fix for a generation – a fix he claimed is necessary to confront the challenges of an aging population. Canada's demographics, he warned, pose "a threat to the social programs and services that Canadians cherish." Preserving those social programs will likely mean cuts elsewhere. "Western nations, in particular, face a choice of whether to create the conditions for growth and prosperity, or to risk long-term economic decline. In every decision, or failure to decide, we are choosing our future right now," Mr. Harper said. "We've already taken steps to limit the growth of our health-care spending. … We must do the same for our retirement-income system." He said he plans to make Canada's old-age supplement program sustainable. What that means is unclear. He did not spell out whether seniors will have to wait longer to receive the benefit or whether clawbacks would be increased for higher income earners. Unlike the Canada Pension Plan – which is supported by a separate and well-financed pool of savings – there is no pot of cash to support the OAS program, which is paid out of government revenues. A recent actuarial report pointed out that the cost of OAS will climb 32 per cent between 2010 and 2015, and OAS payouts to retirees will rise to $108-billion in 2030 from $36.5-billion in 2010. While future changes to OAS were not explained, Mr. Harper said current retirees will not be affected. The major policy reforms are in addition to looming spending cuts, which Treasury Board President Tony Clement said on Thursday could be as much as $8-billion, twice the $4-billion target announced last year. Mr. Harper further outlined the blueprint for his government by ticking off a list of policy priorities. He said Canada's investments in science and technology had produced poor results and were a "significant problem for our country." He said he intends to pursue free trade with the European Union and India and find new energy markets beyond the United States. Regulatory delays for mines and energy projects are also being targeted. Mr. Harper said he intends to tackle immigration reform, a thorny issue in a country where one in five is an immigrant. Canada's humanitarian obligations and its family reunification objectives will be "respected," he said, but the needs of the labour force and the economy will now be central. Citizenship and Immigration Minister Jason Kenney has been working on significant reforms to the immigration system for several months. Mr. Kenney has said he wants to speed immigrant integration in the labour market by changing the emphasis of selection criteria. He intends to reward applicants who speak English or French, have job offers, Canadian work experience or postgraduate degrees, all of whom tend to fare better economically. The increased emphasis on economic immigrants could lead to reductions in the family class. As the Canadian population ages, immigration is increasingly the major source of population growth. At the moment, more than 60 per cent of population growth comes from immigration, but that will approach 100 per cent by 2030. If Canada wants to maintain its population structure, or at least the proportion of the population that's over 65, it would have to start admitting about three to four times its annual intake of roughly 250,000 immigrants, experts say. As for OAS, previous Liberal and Conservative governments have tried – and failed spectacularly – to make the program financially sustainable. Both Brian Mulroney, and Paul Martin when he was finance minister, were forced to back down in the face of public pressure. C.D. Howe Institute president Bill Robson said he believes the public will support changes if they see MPs and the public service scaling back their benefits as well. "As seniors get more numerous, it's clearly more difficult for politicians to take them on," he said. "But I'm encouraged to think Canadians can get together on things like this." Susan Eng, vice-president of the non-profit retired persons advocacy group CARP, predicts a strong negative reaction to OAS changes, which were never discussed during the election campaign. Ms. Eng said her group's surveys show strong opposition to changing the OAS. |
CAW Contact Massive Rally in Support of Electro-Motive Workers
London Day of Action- January 21, 2012 (Top: CAW President Ken Lewenza; Left Representatives of Occupy London; Right: Bob Scott, CAW Local 27/EMD plant chairperson). More than 15,000 demonstrators rallied in London's Victoria Park Saturday, January 21 in a show of solidarity with 465 CAW Local 27 members who have been locked-out by U.S. multi-national corporation Caterpillar. CAW and CEP to Begin Talks on New Union The executive boards of the Canadian Auto Workers and the Communications, Energy and Paperworkers unions have unanimously approved a process to explore the possibility of creating a new Canadian union as soon as mid-2013. CAW President Calls on Feds to Stop Cuts to Coast Guard Centres CAW President Ken Lewenza called on the federal government and the Coast Guard to stop a shortsighted plan to cut servicing hours for Marine Communications and Traffic Services personnel who provide critical distress and safety services on Canadian coastal waters. Staff Appointment CAW President Ken Lewenza has appointed Aaron Neaves, President of CAW Local 127, to staff as a service representative working out of the CAW's Windsor office, effective Sunday, January 22, 2012. |
Ford Motor Co. earns
By David Shepardson Ford Motor Co. reported $20.2 billion in net income for 2011 Friday — its best year since 1998. The company's results were boosted by a one-time non-cash gain of $12.4 billion in prior year tax losses. Ford's pre-tax operating profit was $1.1 billion in the fourth quarter. Excluding the special item, Ford earned $8.8 billion in operating income in 2011. "We delivered strong results for the full year as we continued to serve our customers around the world with best-in-class vehicles and make progress toward our mid-decade goals," Ford President and COE Alan Mulally said. "Despite the continued uncertainty in the external environment, the strength of our North American and Ford Credit operations allows us to continue to invest for future growth and develop outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value." Ford said profits will generate about $6,200 in profit sharing for each of its eligible 41,600 hourly workers. Individual profit checks for hourly workers are higher or lower, based on how many hours they were paid to work in 2011. Ford also said it cut its debt from $19 billion to $13.1 billion by the end of 2011. The Dearborn-based automaker said in 2012 it expects its market share to be "about equal" in the United States and Europe to 2011. All three automakers reported improved sales in 2011.
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Cuts to OHIP services could include some planned C-section births Ferguson Taxpayers will soon find they have to pay for more health services now covered by OHIP as Ontario sheds its $16 billion deficit — with possible limits on planned caesarean sections, Health Minister Deb Matthews says. There must be evidence that medical tests and procedures improve health outcomes for patients or they will be gone, as was the case with widespread vitamin D testing, Matthews told reporters Wednesday. "If there isn't evidence to support a procedure or test, we don't want to pay for it," she said on the way into a cabinet meeting. "Sometimes that will mean delisting." The vitamin D tests are now covered for patients only in rare circumstances and the province has saved $66 million. Matthews cited "pretty interesting research" that more caesarean sections are performed in certain urban areas of Ontario than others. "What that tells me is that we've got work to do to make sure that everyone is practicing the highest-quality medicine," she said, before being asked if Ontario would no longer cover planned C-sections. "We leave that to the experts. I get advice from people who are much, much more knowledgeable about this than I am. "We'll be taking a hard look at a number of issues." Later Wednesday evening, the government scrambled to clear up the ambiguity left by Matthews. "There are no plans to de-list OHIP coverage of C-sections," said spokeswoman Zita Astravas. "If the procedure is deemed medically necessary by a medical professional, OHIP will cover it." But it remains unclear what will happen with the C-sections Matthews was suggesting may not be necessary. There are no statistics on planned caesarean operations — sometimes derided as "too posh to push" procedures — as opposed to emergency C-sections, when a baby is unable to be safely delivered naturally. But former TD Bank chief economist Don Drummond, who is leading a high-profile commission on the restructuring of government services, told the Star last weekend that C-section births are "off the charts." According to the Canadian Institute for Health Information, Ontario has higher primary C-section rates than Canada as a whole. Most recent statistics from the Institute for Clinical Evaluative Sciences indicate more than 28 per cent of hospital births in the province are C-sections. Women who give birth by C-section spend more time in hospital, often a few days, adding to costs in the health-care system. Some women opt to give birth at home with midwives, which further saves the system money and reduces the risk of mothers and babies contracting hospital-based infections. "Giving birth is the main reason Ontario women are hospitalized, yet there is no medical reason to be hospitalized for a healthy labour or delivery," said Katrina Kilroy, president of the Ontario Association of Midwives, which has been lobbying the government to fund birthing centres. The group said cutting the number of C-sections in Ontario by 15 per cent would save $50 million a year. Opposition parties said the government seems poised for its biggest delisting of services from OHIP since Premier Dalton McGuinty's first budget in 2004. That's when the Liberals, facing an unexpected $5.6 billion deficit from the previous government, scrapped chiropractic care, optometrist visits and most physiotherapy from the list of taxpayer-covered services. The delisting led to a political furor because it came as the cash-strapped government introduced the Ontario Health Premium of up to $900 per person — sending a mixed message of citizens paying more for health care but getting less. New Democrat MPP and finance critic Michael Prue said his party is worried about potential cuts from Matthews, who will make a major speech Monday on the future of health care as the government tries to get on a more sustainable financial footing. "We all need to be concerned if they do make the cuts again that they made eight years ago — that's going to be really be terrible for the health-care system," Prue (Beaches-East York) told reporters. While it's "pretty obvious" Ontario needs to find efficiencies in health care, which now eats up almost half the provincial budget, Progressive Conservative MPP Peter Shurman said the government has to be careful. "Efficiencies is not code for cuts . . . it's how do we provide the best bang for the buck," said Shurman, his party's finance critic. The Ontario Medical Association said it has been working with the government to find $240 million in savings, and is looking for more. Doctors are in contract talks with the government this year. The Liberal government was elected in 2003 with Dalton McGuinty saying he had no plan to raise taxes. In his first budget, he implemented a health premium of up to $900 per person. |
CAW, CEP talk possible
Andrea Janus, CTVNews.ca Two of the country's largest labour unions announced Tuesday they are engaging in talks that could potentially end in a merger as early as the middle of next year. The Canadian Auto Workers and the Communications, Energy and Paperworkers unions said in a statement the talks are in response to "the challenges facing organized labour," citing the lockout at the Caterpillar-owned Electro-Motive plant in London, Ont. as one example of a strained labour relations climate. The two unions, which together have more than 320,000 members, said they have been engaging in preliminary discussions "for several weeks," and the executive boards have unanimously voted to formally explore a merger. CAW National President Ken Lewenza said the boards of both unions believe workers "need a stronger, more active, and more innovative labour movement to defend them. "Our movement cannot afford a 'business-as-usual' approach in light of the attacks we face from both business and government," Lewenza said in a statement. "We need to combine our resources, and use them more effectively, if we are to protect Canadian jobs and push for greater equality in this incredibly hostile economic environment." The talks are also a response to moves by the federal government to curb strikes by Air Canada workers represented by the CAW. Last summer, Labour Minister Lisa Raitt threatened to enact back-to-work legislation for thousands of Air Canada employees, which led to a negotiated settlement between the CAW and the airline. The unions have approved what they're calling a "Process Protocol" document that sets out the terms of reference for future talks and a timeline for union representatives to consider issues related to a potential merger. According to the protocol, those issues include dues and finances, executive structures and regional concerns. The two unions are also open to allowing representatives of other unions to join the talks "as appropriate." The committee will issue a report on whether a merger is "feasible and desirable" ahead of each union's convention. The CAW meets in August, while the CEP meets in October. "Our goal is to create a new, Canadian union," Dave Coles, president of the CEP, said in a statement. "We are examining every aspect of our work as trade unions, from organizing to bargaining to political activism. We are working to create a stronger union movement and a better future for workers." |
Auto bankruptcies U.S. studied them months before GM, Chrysler filed By David Shepardson Washington —The Bush administration considered requiring bankruptcy filings by General Motors Corp and Chrysler LLC months before they actually did so, a new document shows. The New Yorker magazine on Monday posted a 57-page economic memo written by Lawrence Summers to President-elect Barack Obama in December 2008 that disclosed new details of the Bush administration's thinking about how to save the two struggling automakers. The Dec. 15, 2008, memo outlined options the Bush administration was considering, including two that would have resulted in a faster bankruptcy filing for GM and Chrysler as early as January 2009. Chrysler eventually filed for bankruptcy in April 2009, while GM filed for bankruptcy in June 2009. One approach was to provide funds in the form of debtor-in-possession (DIP) financing as part of court restructurings, rather than as a bailout with no immediate strings attached using the $700 billion Troubled Asset Relief Program. "Under this approach, the administration would announce a willingness to extend TARP funds as a DIP loan once a company has filed for bankruptcy. The Bush administration "currently estimates that the companies would require $100 billion of DIP financing. We believe that number may be inflated," Summers wrote. On Dec. 19, 2008, President George W. Bush agreed to lend GM and Chrysler $17.4 billion, without requiring the companies to file for bankruptcy. Summers served as co-chairman of Obama's auto task force and was director of the National Economic Council. Summers warned against an immediate GM or Chrysler bankruptcy in early January 2009. "If forced to file immediately, GM and Chrysler would fall into the first category, resulting in potentially severe disruption to the entire industry. With a couple of weeks planning, they could achieve an orderly filing," Summers wrote. The Obama administration loaned GM $6 billion in April and May 2009, before it forced GM into bankruptcy. In bankruptcy, the Obama administration gave GM $30 billion in debtor in possession financing. The Obama administration has completely exited Chrysler and has recovered $11.2 billion of its $12.5 billion bailout, while it still holds a 26.5 percent stake in GM as part of its $49.5 billion bailout. At current stock prices, the Treasury would lose more than $12 billion on its bailout. The Treasury Department estimates it will lose $23.6 billion on its $85 billion auto industry bailout. |
Electro-Motive rally
By Grace MacAluso LONDON, Ont. -- Three weeks into a lockout at Electro-Motive Canada, Frank Kearney will tell you there are good days and bad days. Saturday was a good day, as thousands of protesters filled Victoria Park in the city's downtown core for a boisterous rally in support of Kearney and more than 400 of his fellow workers, who are fighting company efforts to slash wages and benefits by 50 per cent. "I think the turnout's great, the support - 11 buses have come from Windsor alone. It's a great feeling," said Kearney, a welder at the plant, which assembles locomotives. The spirited gathering, which drew demonstrators from across Ontario and parts of the U.S., turned into an unrelenting condemnation of the government of Prime Minister Stephen Harper and U.S.-based Caterpillar Corp., which owns the London plant. In a fiery speech, CAW national president Ken Lewenza said the dispute is the latest assault on well-paid, blue-collar workers. "This struggle started three weeks ago. But in the last five years, 450,000 manufacturing workers in Canada were asked to go home and say to their young children they lost their jobs through no fault of their own. "Workers are losing their jobs because of the public policy of Stephen Harper that protects the interests of corporations," said Lewenza, who reminded the crowd that Caterpillar has received $5 million in federal government tax breaks. Speaker after speaker credited the Electro-Motive dispute with lighting a fire under organized labour and blasted the federal government for turning a blind eye on "the attack on the middle class." Caterpillar, which reported a 44 per cent surge in its thirdquarter earnings in 2011 and forecast a 2012 sales increase of between 10 per cent and 20 per cent, has become the "poster child for corporate greed in Canada," said Sid Ryan, president of the Ontario Federation of Labour. "We are sending a message to Harper that we are sick and tired of the corporate greed that exists in Canada. "Caterpillar is getting a wakeup call they never dreamt of." London Mayor Joe Fontana, who presides over a city saddled with a 9.8 per cent jobless rate, noted his council unanimously passed a resolution calling on the federal government to enact legislation "supporting Canadian workers." "Get your ass down here Mr. Harper," he bellowed to a sea of cheering protesters. Fontana praised the locked-out workers, saying they "were not a number on a payroll slip. You are what makes companies successful. For 62 years, you have built the best locomotives in the world." While union officials pegged the number of protesters at 15,000, a spokesman for London police estimated the crowd at between 4,000 and 5,000. Electro-Motive locked out the workers New Year's Day after protracted contract talks hit a snag over company demands which would reduce the average hourly wage from $34 to $16.50. The company has said the cost of wages and benefits for the CAW employees is more than twice that of the UAW-represented employees at Electro-Motive's facility in LaGrange, Ill. "The CAW contract also has antiquated work rules that make the London operation inefficient, which in turn hurts EMC's ability to win new business and satisfy its customers' demands," the company said in a statement on its website. MP Joe Comartin (NDP - Windsor-Tecumseh) reiterated demands that Ottawa impose stricter requirements on companies receiving taxpayer dollars. "The federal government has to look at the situations in which they give money to a corporation, as they did here, not attaching any strings to it in terms of employment," he said in an interview. Earlier in the day in Windsor, about 600 CAW workers and retirees boarded 11 buses headed to London. Gerry Graham, president of CAW Local 444's retirees chapter, said he had no trouble finding recruits. "We got them pumped pretty good," said Graham. "My concern is, as a retiree, how do I justify my pension, my benefits, my health care when people are making less than me. It's not fair. That's what I think got the retirees motivated. We have to go out there, we have to fill this bus up. And we did." The locked-out workers, members of CAW Local 27, are the ground troops in a battle that could have broader ramifications for all workers, said Gary Parent, former president of the Windsor and District Labour Council. "This is a fight that has to be fought now and get public opinion more integrated into thinking that this is morally wrong," Parent said. "You can't have a company coming in, especially a U.S.-based company, getting money from the Canadian government with no promises and stipulations and slash wages and benefits by more than 50 per cent." While Comartin said the rally would embolden organized labour, Kearney said he hopes the demonstration will prod the company back to the bargaining table. "I hope this demonstration just gets us back to talking. Just to say, 'Bang, that's it, see you later,' that's not even bargaining."
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Hundreds to attend rally against Electro-Motive lockout in London
January 21, 2012 Hundreds of CAW members and supporters of locked-out Electro-Motive employees will head to London, Ont., today (Saturday). Dino Chiodo, president of the Windsor and District Labour Council, said nearly 600 people will pack 11 buses and attend a Day of Action protest at Victoria Park. Dino Chiodo, president of Windsor and District Labour Council, said no Canadian could survive Caterpillar's demands. (CAW)Caterpillar Inc. locked out its 400 unionized workers at the Electro-Motive Diesel plant three weeks ago. The company wants employees to accept a 50-per-cent cut in pay, benefits and pension. The workers, represented by the CAW, rejected the offer during contract negotiations. "No Canadian would accept 50 per cent or 55 per cent less wages, less benefits or less pension," said Chiodo, also a member of the CAW's Local 444 executive. "This is something that should not be tolerated. "This is a battleground, not only for the unionized workers but the non-unionized workers as well. There is not one Canadian that would be able to survive ... 50 per cent cuts in wages, benefits and pensions." 'It is a fight for all Canadians. I hope everyone understands that.' Sarty returned home, alone, when Electro-Motive called him back for a wage of approximately $34/hr. He was locked out on New Year's Day, eight months after returning. Morale still high "We're doing good. We still have a ton of community support. The guys are sticking together on the line," he said. "Some guys are prepared to go a long time. Some guys just financially can't go a long time." Sarty said he would stick it out as long as he can. "It is a fight for all Canadians. I hope everyone understands that," he said. Chiodo said as many as 70 buses of supporters from across Ontario are expected to roll into London for the 11 a.m. rally. Chiodo said that while $34/hr sounds like a lot of money to some, people need to realize that employees at Electro-Motive pay more in taxes and spend more money in the community, creating more jobs. |
Ford salaried workers January 20, 2012 DEARBORN, Mich. (AP) -- Ford Motor Co. is showing confidence in its turnaround and the U.S. economy by giving pay raises and bonuses to 20,000 white-collar workers mainly in the U.S. and Canada. Workers got letters from President of the Americas Mark Fields last week saying they'll get 2.7 percent base pay increases on April 1. They'll also get bonuses this year based on their individual performances, spokeswoman Marcey Evans said. Ford made $6.6 billion in the first three quarters of last year. It will report fourth-quarter earnings later this month. The company's U.S. sales rose 11 percent last year. It has made a huge turnaround since 2006, when it lost $12.6 billion and had to borrow more than $20 billion to stay in business. Salaried workers didn't get pay raises last year, but many were granted performance bonuses. They got only merit pay in 2010 and no raises or bonuses were given in 2009, Evans said. The raises are necessary to keep Ford's pay competitive with other Fortune 100 companies, Evans said. Each year, Ford studies pay at competitors and other companies, she said. Ford also raised its matching contribution to the salaried employees' 401(k) retirement plan. The company now pays 60 cents for every dollar an employee contributes, up to 5 percent of their salary. This year the contribution will rise to 80 cents, Evans said. She would not say how much the raises, bonuses and additional contributions will cost the company. The raises rankled some United Auto Workers members because they did not get annual pay raises in a new four-year contract negotiated with the company last year. During the contract talks, the company told union negotiators that it didn't want to give raises to avoid recurring annual expenses. But the workers got signing bonuses and lump-sum profit sharing payments that are worth at least $16,700 over the four-year contract. Workers at General Motors Co. and Chrysler Group LLC agreed to similar contracts with payments smaller than those given to Ford workers. "I'm disappointed to hear that," Mark Caruso, president of a UAW local at a factory in Saline, Mich., said of the white-collar raises. Caruso said morale already is bad among workers at his plant west of Detroit. A Ford holding company is trying to sell the factory to an auto parts supplier. A UAW spokeswoman in Detroit said Thursday that she would check with her superiors to see if the union will comment on the white-collar raises. The pay raise announcement was reported early Thursday by the Detroit Free Press. Ford compensation records obtained by The Associated Press last year show that UAW-represented hourly workers have seen larger increases in pay and benefits over the last decade than many white-collar workers. The UAW, according to the records, was able to protect longtime factory workers from changes to health care, overtime and other benefit cuts that salaried workers were forced to take. The average hourly worker at Ford received wages, benefits and overtime totaling $109,020 in 2010, up 17 percent from 1999. But the average salaried factory supervisor made $99,760 in wages and benefits, up just 2 percent in the same period, the records showed.
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CAW Contact
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Chrysler, GM wait Ford boost for 20K salaried workers fails to stir rivals Friday January 20, 2012 General Motors Co. and Chrysler Group LLC say any raises or bonuses their salaried employees receive will be determined by their financial performance, not by Ford Motor Co. Last week, the Dearborn automaker sent letters to about 20,000 white-collar workers in the United States and Canada informing them they will receive 2.7 percent raises on April 1, as well as bonuses based on performance. General Motors said Thursday that it will make a decision about raises and bonuses once its financial results are tallied. "There will be no division until our business results are finalized," said GM spokesman Jay Cooney. The same goes for Chrysler. "Chrysler Group intends to announce its fourth-quarter and year-end financial results on Feb. 1," the company said in an email Thursday. "The year-end results will determine whether employees are eligible for annual awards." Ford spokeswoman Marcey Evans said the raises are needed to keep pay competitive with other Fortune 100 companies. Ford salaried workers last got pay raises in 2010; only performance bonuses were given in 2011. Compensation expert John Challenger of Chicago-based Challenger, Gray & Christmas Inc. said it might have been necessary for GM and Chrysler to follow Ford's lead once, but not anymore. "There's still an awful lot of really good people unemployed," he pointed out. "It's not as though workers are in the driver's seat. When unemployment is low, there's a lot more pressure on companies to compete for people." These days, Challenger says, compensation is more closely tied to corporate performance. That could bode well for GM workers, though. Though Ford was the only one of the Detroit Three to avoid bankruptcy during the recent economic crisis, GM made more money in the first three quarters of last year. Ford made $6.6 billion, and GM made $7.6 billion. Chrysler has yet to report a full-year profit since emerging from bankruptcy in 2009. |
Ford Fusion wins top Detroit
By Serena Maria Daniels The Detroit News Detroit— The Big Three are the big winners for The Detroit News eighth annual Readers Choice Awards, with the Ford Fusion taking two top honors, according to readers visiting the North American International Auto Show. The Fusion won best in show and best value, as selected by a panel of judges. The awards: Detroit News publisher Jonathan Wolman yesterday announced winners before an audience of about 1,000 people gathered at Cobo Hall for the Big Four summit between Detroit Mayor Dave Bing and county executives Robert Ficano, L. Brooks Patterson and Mark Hackel. The event was hosted by the Detroit Economic Club. "The North American International Auto Show is on a record-setting attendance pace," Wolman said. "So let's take a glass half-full view and agree that anytime there are more visitors to downtown Detroit than there are parking spaces, that's a very good thing." The 100 judges were chosen from mail-in entries.. They toured the auto show last week and selected their favorite vehicles in 10 categories. |
Bracing for trouble
Jeff Gray & Kevin Carmichael The boss of the world's largest maker of construction and mining equipment took to the stage at a Washington event last spring and described a business philosophy that could have been ripped from the pages of a bulldozer's operating manual. Caterpillar Inc.'s chief executive officer, Douglas Oberhelman, told an audience of mostly smaller business owners and managers, hosted by the U.S. Export-Import Bank, that he believed that to survive, he must approach his competitors like one of his machines would attack a mound of rubble. "You really have to aim the guns out no matter where you are, whether it is government, private business or whatever institution it is – your school for that matter – and really look at your competitor and beat them because if not, they are going to beat you," Mr. Oberhelman said. His philosophy is certainly rewarding Caterpillar shareholders. The Peoria, Ill., firm recorded record sales and profits in the third quarter – payoff from Mr. Oberhelman's push into fast-growing emerging markets. In December, Caterpillar predicted sales could grow by as much as 20 per cent this year from about $58-billion (U.S.) in 2011. But Mr. Oberhelman isn't letting up. He is investing aggressively, hiring thousands of workers and opening or expanding plants in North Carolina, Illinois and California, as well as overseas in India, Indonesia and Russia. One thing he is not expanding, however, is paycheques for unionized labour. Just ask the more than 450 Canadian Auto Workers union members at Caterpillar subsidiary Electro-Motive Canada in London, Ont. They refused to accept what the union says were demands to slash wages in half, along with reduced pensions and benefits. So on Sunday, the company locked its workers out. The high-profile confrontation has galvanized Canada's long-declining labour movement, but is also seen by some as a dark sign of conflict to come at workplaces across the country. The fight is emblematic of what is expected to be a tough year for union members in both Canada and the United States. It is expected to be the first of many such battles, as companies unnerved by the economic uncertainty in Europe, the stumbling recovery in the United States and the rise of new global competitors in China and elsewhere take a long look at what North American workers are costing them. Canada's high dollar has also made workers here more expensive than their U.S. counterparts, never mind those in emerging markets. Persistent unemployment in both countries, plus public-sector layoffs, have also strengthened the hand of employers as contract talks get under way. Add all that to the long decline of the labour movement in Canada and the U.S., which has seen private-sector membership slide dramatically, and you have the recipe for a disappointing year for workers hoping for some light at the end of the economic tunnel. Bryon Mott, 28, who tests the mechanical and electrical systems on finished locomotives at the Electro-Motive plant, brought his wife and two-year-old daughter to the picket lines this week. He said the company's final offer would see his hourly wages slashed from $35 (Canadian) an hour down to $16.50. "We've put off having more children because of this unrest," Mr. Mott said. "… This is an attack, from a profitable company, on the livelihood of working-class people." 'They are going to come tough at us' In many ways, the tone for this year's picket-line battles is being set at the top. In the public sector, deficit-laden governments are obviously looking to civil servants for savings and major layoffs. The Conservative government in Ottawa, which showed no qualms about ordering workers at Air Canada and Canada Post back to work last year, is now in talks with unions representing 68,000 federal workers. Tensions in Toronto between populist conservative Mayor Rob Ford and the city's combative unions have labour leaders raising the spectre of a management lockout that could paralyze the city and leave managers driving Zambonis at the city's hockey rinks. In B.C., Nova Scotia, and Ontario hundreds of thousands of health-care workers are either at the table or headed into tough bargaining. Meanwhile, the Detroit Three auto makers are set to sit down with the CAW this year, in their first, tense talks since they were battered by the 2008 financial crisis and in the cases of General Motors and Chrysler, bailed out by taxpayers. "I expect that they are going to come tough at us," said Ken Lewenza, national president of the CAW, who added that he feels the mutual respect between auto makers and his union, and the sacrifices workers already made in the depths of the crisis, will be positive factors in the talks. He called the wage cuts and other proposals from Caterpillar "unprecedented" in Canadian labour history, and demanded that the federal government re-examine the sale of the plant to the U.S. company last year. Caterpillar's move is a "terrible signal" for other unionized workers across the country, he added, but the clash is stirring unions to fight back: "The proposals at Electro-Motive have truly galvanized the labour movement." Attempts to reach Electro-Motive for comment were unsuccessful. On its website, the company accuses the CAW of creating an "environment of uncertainty" and making "false allegations" about possible shutdown of the plant that it says are meant "to encourage violence at the London plant." The company also says the costs of wages and benefits at the plant are "more than twice" those at its unionized factory in La Grange, Ill. Plus, it says, "antiquated work rules" have rendered the London operation inefficient. (Mr. Lewenza says the union has improved productivity at the plant.) The Caterpillar lockout, and a similar move by Rio Tinto Alcan to lock out 800 unionized workers at a smelter in Alma, Que., are clear signs that some companies, shaken by economic uncertainty and increased global competition, are expected to get more aggressive at the bargaining table. "I think it's going to be a bad year," said Charlotte Yates, Dean of Social Sciences and a labour studies professor at McMaster University in Hamilton, Ont. "Employers are emboldened. They are demanding more, they are more aggressive, they're nasty. So the pressure is way more intense than I think we've seen it in a number of years." She added that unions, particularly in Ontario, suffer from "internal disorganization" and that the most powerful ones – the CAW and the United Steelworkers – are smarting from steep membership declines caused by the recession. Craig Rix, a lawyer with management-side labour law firm Hicks Morley Hamilton Stewart Storie LLP in Toronto, said employers are going to be using hard bargaining, including potential lockouts, to make gains. Wage increases were somewhat tamed during the recession. But now, he said, in addition to cutting pension and benefits costs, employers are also looking to increase flexibility and productivity by changing work rules, such as how shifts are set up. "I fully expect employers will be looking closely at all of the tools they've got available to them to bargain hard," said Mr. Rix, a former aide to federal Finance Minister Jim Flaherty when he was Ontario's labour minister. Those talks will be extra difficult with unions that were asked to make sacrifices in the depths of the financial crisis, he added. "I think many unions believe they made their big concessions in their last round of bargaining, as a hedge against better times," Mr. Rix said "And when they come the table this time round, the story isn't going to play out that way. Organized labour has a lot of unrealistic expectations that are going to have to be managed." Why companies have the edge Clearly, companies such as Caterpillar have the advantage in the coming showdown with labour. The biggest reason: there is little risk their employees will quit to take a job elsewhere. That's because anyone with a job today has good reason to hold on to it. The North American labour market remains incredibly weak even though the U.S. recession ended more than two years ago Canadian employers added virtually no net new jobs over the final five months of 2011. The unemployment rate was 7.5 per cent in December, up from 7.3 per cent in August – and dramatically higher than the 5.9-per-cent rate recorded at the start of 2008. Over all, Canada's economy added almost 200,000 jobs in 2011, but almost all of the hiring occurred in the first half of the year, Statistics Canada reported Friday. There is more momentum behind hiring in the U.S., but the country is climbing out of a much deeper hole. American employers created 200,000 non-farm jobs in December, and the unemployment rate dropped to 8.5 per cent, the lowest in almost three years. For all of 2011, the U.S. economy added 1.64 million workers, the best year since 1996. Yet last year's gain barely put a dent in the almost 9 million jobs that were lost during the recession. Speaking in Iselin, N.J., New York Federal Reserve president William Dudley called unemployment "unacceptably high," suggesting the Fed remains concerned about the economy and could try further stimulus. It is "appropriate to continue to evaluate whether we could provide additional accommodation in a manner that produces more benefits than costs," Mr. Dudley said. Despite record profits and growing sales, Mr. Oberhelman and his peers are bracing for rough weather. The European debt crisis remains a dark cloud over the global economy, and the political paralysis that gripped Washington last year appears likely to continue as Democrats and Republicans jockey for position for November elections. China's authorities are tapping the brakes on that country's red-hot economy to keep a lid on inflation. There's growth, but not a lot of it, so maintaining those sales will be a challenge, which is the biggest reason corporations are so reluctant to spend their money in payroll and new facilities, according to Steven Ricchiuto, chief economist at Mizuho Securities in New York. U.S. corporations held $1.24-trillion (U.S.) in cash at the end of 2010, according to Moody's Investors Service. Executives also are bracing for more competition. The big North American, European and Japanese multinational corporations that traditionally dominate global trade are facing new challengers from countries such as China and Brazil. Mr. Oberhelman is on record saying he expects a Chinese entrant in the heavyweight class of big-machinery makers within a few years, which would put pressure on profits at Caterpillar and its current rivals, AB Volvo of Sweden and Komatsu Ltd. of Japan. All of these factors have companies looking closely at their collective agreements for savings, over and above the gains some may have made when bargaining in the midst of the financial crisis three years ago. It's not all doom and gloom. In some cases, manufacturing jobs are actually returning to the United States, although with some caveats. A decade ago, a company such as Caterpillar might not even bother to negotiate with its workers: It would simply pack up and go to China. But the "offshoring" trend is reversing, giving way to the relatively recent phenomenon in the U.S. of "re-shoring." The decline in the value of the dollar is making goods priced in greenbacks cheaper in international markets. At the same time, the gap in production costs between the U.S. and Asia is narrowing. Chinese wages are rising at a pace of about 15 per cent a year, while U.S. wages are growing at an annual rate of about 2 per cent, which is less than inflation. Increased competitiveness at home is coaxing executives to open plants in the U.S. to meet domestic demand, leaving their Asian factories to meet growth in China. "China has caused countries to get productive fast, or die," said Hal Sirkin, a Chicago-based senior partner at The Boston Consulting Group who is tracking the rebound in U.S. manufacturing. "It's just the beginning. This is a fundamental rebalancing of the economy." At the same time, the high Canadian dollar has made what used to be a cost advantage for some Canadian workers versus their U.S. counterparts into a liability, with wages in Canadian manufacturing now outstripping those in the U.S. Vancouver labour relations consultant David Shepherdson, author of a recent Conference Board of Canada report warning of labour strife to come, says the currency is behind much of the labour conflict. "With the loonie at parity, much of that advantage is gone. So it puts a lot of pressure on Canadian manufacturers," Mr. Shepherdson said. Bracing for the storm The story of possible picket-line conflict in the coming year is not a uniform one across Canada. The resource boom in the West is continuing to push wages in Alberta and elsewhere upward, while employers wrestle not with angry workers but with acute shortages of skilled ones. And no one is predicting a year that will see the number of hours lost to strikes or lockouts approach the bad old days of the 1970s and 1980s, when confrontational labour relations paralyzed workplaces in an era of stagflation, the puzzling mix of stagnant economic growth and runaway inflation. For the past decade, there has been only a fraction of the labour disruptions of a generation ago, and the numbers have been mostly flat from year to year. But it could be the worst year in a while, especially in Ontario. Mr. Shepherdson said the auto talks will be a flash point, as the Detroit Three will seek to get Canadian auto workers to accept pay increases based on profits, a concept accepted by the U.S. United Auto Workers, but long resisted by the CAW. Indeed, it was behind its split from the UAW in 1984. Other observers are more optimistic that both sides will blink, given the stakes, which remain high as the economy sputters, and find a Canadian-style compromise. Auto industry consultant Dennis DesRosiers says he is cautiously optimistic confrontations can be avoided. "If you look at the state of the industry, the demonstration effect of the last three years of bankruptcies and restructurings, you would think that a labour leader that cannot find middle ground would be an absolute idiot," Mr. DesRosiers said, adding that management must also remember what workers have already given up . "The workers gave up a lot to save GM and Chrysler, and to some degree Ford," he said. "And so you'd think that now that times are improving slightly that there would be some reward for them as well." Back on the picket line at Electro-Motive in London, however, compromise looks like a distant dream. Mr. Mott, who has worked at the company for three years after spending time at various U.S plants, said the wage cuts at his workplace and elsewhere put Canada's middle class, and the society it has created, at risk. "These people are the ones that provide taxpayer money to governments," he said. "If we don't have these middle-class people, these programs that we all enjoy like health care and all that other stuff, libraries, we can't have them. If these corporations keep undercutting us, and moving the jobs out of the country, there's going to be nothing left." _______________________________ UNIONS BARGAINING IN 2012 Selected organizations, number of employees Public Sector Health Employers Association of B.C., 93,850 Government of Ontario, 86,640 Toronto District School Board, 35,840 Saskatchewan Association of Health Organizations, 31,920 Canada Revenue Agency, 31,620 Government of British Columbia, 29,000 Government of Newfoundland and Labrador, 25,250 Regional Health Authorities of Manitoba, 14,250 HBA Services, 13,000 Ontario Power Generation, 11,650 University of Alberta, 11,100 Peel, Ont., District School Board, 11,060 College Compensation and Appointments Council, 10,500 Government of Saskatchewan, 10,000 Government of New Brunswick, 8,000 Government of Nova Scotia, 7,700 York, Ont., Region District School Board, 7,140 Ville de Montréal, 6,860 Calgary School District No. 19, 6,520 Toronto Catholic District School Board, 6,060 Total 457,960 Private sector Canadian Media Production Association, 28,000 General Motors of Canada, 12,080 Chrysler Canada, 8,000 Ford Motor Co. of Canada, 7,600 Real Canadian Superstore, 6,800 Brewers Retail Inc., 6,510 Food Basics franchises, 6,500 Professional Association of Canadian Theatres, 5,500 Bell Canada, 5,250 Calgary Co-operative Association Ltd., 3,200 Bombardier Aerospace, de Havilland Division, 2,600 NDT Management Association, 2,240 Hospitality Industrial Relations, 2,200 Canadian Pacific Railway, 2,050 Total 98,530 Source: HRSDC. |
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Big 3 say U.S. exports could be at risk in multicountry deal By David Shepardson - Det News Detroit's Big Three automakers said Friday they oppose allowing Japan to enter free trade talks with the United States and nine other countries, but are open to allowing Mexico and Canada to take part. The American Automotive Policy Council said in comments filed with the U.S. Trade Representative's Office in Washington, D.C., that it opposes Japan entering talks aimed at creating a free-trade zone with Pacific Ocean nations called the Trans-Pacific Partnership. "A one-sided free trade agreement with Japan will drag down the United States' leading sector of exports and will deeply undermine the business case for additional auto investments in the United States while undermining the competitive gains that are allowing new jobs to be created," according to the group. The group said Japan shouldn't be allowed to join free talks for at least two years. "We further recommend that in advance of any consideration of allowing Japan to join the TPP, Japan needs to first demonstrate a multi-year commitment to opening its auto market to imports," the group said. Japanese automakers note the auto imports in Japan have been rising and question whether U.S. automakers are offering the right types of vehicles to meet Japanese consumer preferences. A free trade deal could drop tariffs on Japanese vehicles entering the United States and make it more economically viable to build vehicles in Japan and export them to the U.S. The Japanese currently pay a 2.5 percent tariff on cars and a 25 percent tariff on trucks exported from Japan to the U.S. Japanese automakers have complained about the high value of the Japanese yen — which tends to increase the cost of their exports to the United States — and have been talking about moving production outside of the country unless the yen weakens. U.S. automakers argue such a move could amount to currency manipulation and an unfair trade practice. Detroit's Big Three automakers said they are "open to including free trade nations like Mexico and Canada into the TPP if their joining does not significantly delay the negotiations." The talks currently include Australia, Chile, Peru, Singapore, Brunei, Malaysia, New Zealand and Vietnam. An agreement could help the United States by "harmonizing key rules, providing important strategic benefits by streamlining key issues on a regional basis, and raising the standard for free trade agreements in the region," the auto industry group said. Japan is the third-largest automotive market in the world. It ranks 30th out of 30 of the Organization for Economic Cooperation and Development member countries in access for imported autos. In 2010, total auto imports into Japan from the world — United States, Europe and elsewhere — were 4.5 percent, or 225,000 vehicles, in an auto market that sees nearly 5 million in annual sales. Japanese automakers controlled more than 95 percent, or 4.7 million vehicles, of the domestic auto market. The United States imported 5.8 million vehicles in 2010, representing more than 45 percent of the total U.S. automotive market. "Given the systemic trade imbalance and lack of willingness to reform, a U.S. free trade agreement with Japan would only lock-in the already one-way trade relationship that Japan's closed auto market has created," the group said. |
CAW Contact
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Labour organizations from across Canada are pledging support for the nearly 500 CAW members in London, Ontario who have been locked out by Electro-Motive - a subsidiary of U.S. multinational Caterpillar.
Ford recalls 525,000 vehicles
Ford Motor Co. is recalling more than 270,000 Ford Escapes from the 2001-02 model years for a fire risk, and advising owners not to park in their garages until the problem is fixed. The recall involves 274,368 Escapes due to a problem with an electrical connector in the anti-lock brakes module. The Dearborn-based automaker said Wednesday that parts to correct the problem may not be available for months. Also Wednesday, Ford recalled 251,065 2004-05 Ford Freestars and Mercury Montereys for possible power loss due to a torque converter malfunction. The fire-risk recall follows an investigation lasting more than two years by the National Highway Traffic Safety Administration into fires in some recalled Ford Escapes. The government says at least 86 fires were reported in Escapes that had been previously recalled and serviced. Ford said it was calling back the popular SUVs because brake fluid might leak onto an ABS module electrical connector, which in turn could corrode and spark a fire. The problem dates back to April 2007, when Ford called back 2001-04 Escapes to address potentially missing or misplaced seals in the wiring harness connector to the ABS module electronic control unit. Ford said electrical grease may not have been applied to some of the repaired vehicles, as it had recommended, and the SUVs may not have been properly inspected. Ford spokesman Daniel Pierce said replacement parts are expected to be available in the second quarter of 2012. "While the reservoir cap that will be used for this repair is already available, other parts necessary to complete the repair are not available yet. We are working closely with our suppliers to accelerate all part availability," he said. Ford is unaware of any accidents or injuries stemming from the issue, and said it has received a few reports of fire damage to property, beyond vehicles themselves. Ford has had large recalls for fire issues in recent years. The recall covers the 1997-2003 Ford F-150 and includes 1.1 million vehicles in cold-weather states where years of corrosion could break the straps that support the gas tank, allowing it to drag to the pavement and possibly leak, which could lead to fire. Government safety officials have received 500 complaints, including reports of three fires and one injury, a burn. In 2010, Ford recalled 4.5 million vehicles for faulty cruise control deactivation switches that were linked to fire risks. The automaker recalled about 14 million vehicles in eight separate recalls over a 10-year period to address the issue. The vehicles had a faulty cruise control disconnect switch that can overheat and burn — potentially causing a vehicle fire long after the engine has been turned off. At least 550 fires were linked to the problem. In Wednesday's separate torque converter recall, Ford Freestars and Mercury Montereys lose forward and reverse power. The vehicles coast and can be safely maneuvered and parked, Ford said. The NHTSA had investigated torque converter issue since September 2009. Ford insisted it shouldn't have to recall the vehicles, but said it is nonetheless recalling the models "to avoid a protracted dispute with the agency." Ford is aware of two minor accident allegations — with minor injuries alleged in one, no injury in the other — over eight years. About 450,000 of the 525,000 cars, minivans and SUVs recalled Wednesday are in the U.S. |
Analyst: GM may buy By David Shepardson Detroit News Washington Bureau General Motors Co. might seek to buy out the pensions of some retirees in an effort to pare its unfunded liabilities, an industry analyst said Wednesday. It's unclear whether that might involve hourly workers, salaried employees or both — but it would be voluntary. "Even a 40 percent take rate would reduce liabilities by about $40 billion," Johnson said. That would help the Detroit automaker reduce its large, underfunded worldwide pension plans that have concerned Wall Street and investors. On Wednesday, the Detroit-based automaker referred questions to Ammann's presentation, which emphasized the company has made no decisions. Possible 'voluntary option' GM has nearly $40 billion in cash on its books, and is considering what to do with it. Some investors are worried that GM's pension plans eventually could eat up much of that. Asked if the company is considering making a buyout offer to its estimated 500,000 union pension participants, Ammann gave no details. "There is a very strict set of guidelines as to what is and isn't possible," he said. "And as we have news to report on those, we will update you." In a side letter to GM's four-year labor deal with the United Auto Workers union, approved in September, the company and the union opened the door to pension buyouts. The company and the union "may mutually agree during the term of this agreement to amend the plan to add retirement options for some or all existing retirees," GM Vice President of Labor Relations Cathy Clegg wrote to Joe Ashton, the UAW official in charge of GM negotiations. The letter said it would "benefit existing retirees by providing an additional voluntary option." GM has about 700,000 hourly and salaried pension plan participants in the United States. The UAW says a typical GM retiree receives about$18,000 a year in pension benefits. Younger retirees ineligible for Social Security get a higher pension until government payments begin. GM's pension deficit may appear larger than in the past because of more conservative assumptions about how much its pension plan investments will grow. One analyst told Bloomberg News in September that GM's pension shortfall could total $35 billion when the company releases its pension update, as part of fourth quarter earnings. The Government Accountability Office said in a report in 2010 that GM's pension plans in 2007 were by far the largest in the United States: 60 percent bigger than the runner-up. GM closed and froze its salaried pension plans in 2007. If GM hadterminated its hourly and salaried pension plans as part of its restructuring, the Pension Benefit Guaranty Corp., the government's pension insurer, would have assume $4 billion in costs. GM's legacy costs GM's stock price has flagged since it went public in November 2010 and is down about 35 percent over its $33 IPO price. GM closed up 5.3 percent, or $1.23, to $24.47 on Wednesday. When GM polled financial analysts, Ammann said, the single biggest issue of interest was its pension liabilities. GM's so-called legacy costs weighed heavily and helped push the company into bankruptcy in 2009. In 2008, GM said it had spent $103 billion on pension and health care costs over 15 years. In bankruptcy, it swapped some of its union retiree health care costs for company stock. GM is still 26 percent owned by the federal government as part of its $49.5 billion bailout. The largest of Detroit's three automakers held the line on hourly pension costs in the new contract — and won agreement with the union to close its hourly pension plan to new entrants.. Any buyout offer, Ammann said, would be governed by federal pension laws. "I don't want to get into specific ideas or plans or actions or hypotheticals, other than to say there's a very strict set of guidelines as to what is and isn't possible and what the decision frameworks are. It's very clearly laid out," he told analysts Tuesday. GM CEO Dan Akerson said in June that he wanted to get pensions under control. "I want to get the U.S. pension fund to fully funded and we're making real progress there," he said. |
Marchionne pushes profit sharing, dismisses automatic wage hikes
"I think automatic increases that are not connected in any way, shape or form to productivity and positioning, and improvements in positioning are outdated measures," Marchionne said in an interview on the sidelines of the North American International Auto Show. "I would like to have our people make a lot of money when I make a lot of money at the corporate level," Marchionne said. "Let's distribute the cash. Let's also get rid of the entitlement notion that's associated with these structures." In November, Marchionne drew the ire of the CAW after linking jobs and continued investment in Canada with concessions. Labour costs in Canada must fall and match those in the United States if the CAW hopes to preserve Canadian jobs and investment, he said. General Motors Canada president and managing director Kevin Williams has said publicly in the past that profit sharing would be one way for the company to remain competitive. The high loonie, labour and other costs have made Canada the most expensive country where it produces vehicles, he said during an interview Monday at the Detroit auto show. "It becomes a concern and we've just got to keep working with our unions and the government to make sure we can put our best foot forward." Profit sharing versus negotiated wage increases is a contentious issue with the CAW, Williams acknowledged. "The reality is in the United States the UAW understood that the hourly employees should participate in the upside of the company and when the company doesn't perform then, just like me and everybody else, there should be an impact as well on the other side of that, and that's the way we look at it. Obviously, those are the kinds of things that will get discussed in September when we're formally sitting at the table, even though we hopefully have some of that resolved before we even get to that." While Marchionne softened his tone, saying he had "zero intention of threatening anybody," maintaining a higher cost structure on this side of the border would be unfair to American autoworkers. "We cannot exclude Canada from the rest of the manufacturing world of Chrysler," he said. "It would be unfair to the people across the river. I have a plant at Jefferson that employs 5,000 people. What do we tell them?" "I don't buy one bit of what he's saying," said Rick Laporte, president of CAW Local 444, about Marchionne's comments. "I personally think that we're much more competitive than he's giving us credit for." He said profit sharing would not be in the best interest of the workers he represents. "We're interested in annual increases because profit sharing doesn't do anything," Laporte said. "A lot of other benefits are based on our actual base rates, so if our base rates don't go up, our other benefits don't go up as well and we'll fall behind, there's no question." He said Marchionne citing lack of competitiveness as a reason for manufacturing job loss is "absolutely not true." "If you take a look at Mexico, I mean you could say the same thing about both us and the U.S. - that we're not competitive with Mexico. So when are we going to be competitive and who are we going to be competitive with next?" CAW president Ken Lewenza said he did not want to predetermine contract talks. But he said he expected Marchionne to respect the "historical principals of contract bargaining undertaken by both the union and the company." Chrysler employees about 9,000 hourly workers at assembly plants in Windsor and Brampton. Marchionne said higher labour costs could continue the decline in the industry's Canadian manufacturing footprint. "These businesses are totally interconnected," he said. "And what we've watched over the last 20 years, and I can tell you when I was living in Canada in the '60s, that we have lost a lot of the installed manufacturing base in cars. That's not something I want to continue. I just don't want to keep on shrinking the Canadian position. The only way to do that is to make sure we have a competitive set of assets in Canada." Contract talks between the CAW and the Detroit Three automakers are expected to get underway this summer. But union officials have said that Marchionne's comments are incendiary and set the stage for a difficult set of negotiations - the first since the Auburn Hills, Mich., company emerged from bankruptcy protection. The automaker has also enjoyed several consecutive months of higher retail sales and market share gains in Canada and the United States. "I have said nothing since the last time I was in Toronto and people took my comments and built the phenomenal, 12-volume story around this. The only thing I said, which is something Ken Lewenza will not disagree with, I don't think, is that the Canadian system needs to be as competitive at the American side." When asked whether wage rates have to fall, Marchionne said, "I don't know. I sincerely hope we don't have to get to that stage, but we need to stay competitive." Industry analysts have pegged the disparity between U.S. and Canadian wage rates at about $5 an hour, although the CAW has insisted the gap amounts to no more than $1 an hour. |
Ford packs lots of technology By Neil Winton AutosInsider Ford unveiled its new Fusion sedan at the Detroit Auto Show and said it will offer gasoline, hybrid and plug-in hybrid powertrains. Ford has loaded the Fusion with new technology, including Lane Keeping System, adaptive cruise control and active park assist. The 1.6-liter EcoBoost is expected to deliver 26 mpg in the city and 37 mpg on the highway. The Fusion Hybrid also features a new 2.0-liter Atkinson-cycle four-cylinder gasoline engine which delivers fuel economy of 47 mpg in city driving and 44 mpg on the highway. The Fusion Energi plug-in hybrid should deliver the equivalent of 100 mpg. The next-generation Fusion 1.6-liter is the first automatic-transmission Ford product offered with an automatic start-stop system. It shuts off engine power when the car is stopped and restarts as the driver releases the brake pedal. Other high technology options include Lane Keeping, which alerts the driver if the computer senses the car is drifting out of its lane. There is also Adaptive Cruise Control, which slows the car down when it is getting too close to the car in front, Active Park Assist and Blind Spot Information. The Fusion will be produced at Ford's Hermosillo, Mexico, factory, soon adding production at the AutoAlliance International Plant in Flat Rock. The car will appear in Ford showrooms in North America and South America later this year. The Mondeo will be introduced next year in Asia and Europe. Ford Motor Co. Executive Chairman Bill Ford, in a speech unveiling the Fusion at the Detroit Auto Show, said the company had made environmental responsibility a key policy for Ford. In the last year, Ford's CO2 emissions have been cut by 10 percent. He said 12,000 new jobs would be created in the U.S. this year because of the Fusion. The Fusion will compete in the highly competitive midsize sector against the Honda Accord, Chevrolet Malibu, Hyundai Sonata, Nissan Altima and Toyota Camry. Last year Ford sold 248,000 Fusions, its best sales year ever. |
Pension troubles in store for
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Ronald Richard Brown Passed on: January 4th, 2012 Passed peacefully away on January 4, 2012 at the Dr. Walter Templeman Hospital, Ronald Richard Brown, age 69 years, of Bell Island, NL. Leaving to mourn with loving memories his dear wife of 43 years Marjorie (Butler) and children: Christine (Scott), Ron (Wanda) and a very special granddaughter Dana Cummings. Predeceased by his parents Gladys and Peter Brown, brother John Edward. Leaving to mourn brothers: Jim, Kelligrews, Brendan (Jane), Ontario, Mike (Phyllis), Ontario, Tom (Janet), Bell Island, Peter, Bell Island and Shawn (Catherine), Halifax; sisters: Annie Brown, Foxtrap, Rita Kennedy, Holyrood, Joan Hickey, Mt. Pearl, Theresa Lahey, Chamberlains, Doreen (Angelo), Ontario; a large number of nieces, nephews, as well as many other relatives and friends. Resting at Pendergast's Funeral Home, Bell Island on Thursday 2-4 p.m. for Family and 7-9 p.m., Friday 2-4 p.m. and 7-9 p.m. Funeral to take place on Saturday, January 7, at 2:00 p.m. at St. Michael's Church, Bell Island |
Ford to open Silicon Valley lab By Dee-Ann Durbin Associated Press Ford Motor Co. is the latest automaker to open a research lab in Silicon Valley, where it hopes to scout out new technology and keep ahead of trends. The company said Friday that it plans to open the lab near Stanford University in Palo Alto, Calif., in the first few months of this year. It will employ around 15 people, including some recruited locally and others who will rotate in from Ford's headquarters in Dearborn. He said the lab will work on ways to better integrate phones and other personal devices into cars, as well as safety systems that alert drivers when they're approaching another car. The lab will also solicit and test applications from independent programmers. One app Ford is currently studying can find an open parking space and reserve it. Another would improve weather reporting by transmitting signals when a car's rain-sensing wipers are triggered. The lab will work with Ford headquarters as well as its design studio in Southern California and its office at Microsoft Corp. in Washington. Microsoft and Ford jointly developed Ford's Sync voice-activated entertainment system and My Ford Touch touch-screen dashboard. Ford joins several other automakers that have similar offices in Silicon Valley, including General Motors Co., BMW AG and the Renault-Nissan alliance. K. Venkatesh Prasad, a senior technical leader at Ford who will commute between Dearborn and the new office, said Ford considered opening a Silicon Valley office in the past but the technology wasn't ready. Now, he said, the Sync platform makes it easier and faster to reprogram the car and update it with new applications. Ford introduced Sync four years ago |
Ford is top-selling automaker in Canada for two consecutive yearsF-Series top-selling vehicle in Canada
"Full-sized trucks are experiencing record-breaking sales in Canada," said Scott Cauvel, vice president of sales, Ford of Canada. "Consumers don’t have to sacrifice space and fuel economy in their trucks." In 2011, car sales were up 14 per cent, driven by the Ford Fiesta and the launch of the sleek new 2012 Ford Focus. Total vehicle sales rose 3 per cent, as a result of strong SUV and CUV sales. The Ford Explorer sales increased 119 per cent, and Ford Escape was up 3 per cent. Building on this momentum, the all-new 2013 Escape hits showrooms in the spring. With a new design, smarter technologies and fuel efficient engine options, the 2013 Escape is the smarter utility vehicle. Ford sales were number one in December, as truck sales increased 4 per cent, driven by strong F-Series sales. F-150 sales rose 36 per cent, Taurus sales increased 11 per cent and Explorer sales jumped 101 per cent. "We are optimistic that the Canadian auto industry will continue to grow in 2012," said Cauvel. "Ford is well-positioned to take advantage of this growth, offering a full line-up of fuel-efficient vehicles, including our first Ford Focus Battery Electric Vehicle (BEV)." Fuel economy has become a key purchase consideration for consumers and Ford is committed to delivering fuel-efficient vehicles without sacrificing performance and capability; resulting in the upcoming launch of C-MAX Hybrid and Energi, Focus Electric and Escape. Ford continues to invest in EcoBoost engines and other fuel-efficient vehicles giving consumers the power of choice.
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Ford unveils compact SUV in India ahead of global introduction
By Siddharth Philip - Bloomberg News The automaker plans to target production of more than 2 million units of so-called B-segment small cars, including the EcoSport SUV, by the middle of this decade, Ford said in a statement as Chief Executive Officer Alan Mulally introduced the vehicle in New Delhi Wednesday. Ford will manufacture the EcoSport at its plant in Chennai, in southern India, the company said. The South Asian nation may become one of Ford's three biggest markets by 2020, Joe Hinrichs, president for Asia-Pacific, said in New Delhi Wednesday. Mulally, who has revived Ford by focusing on quality and fuel economy in new models such as the Fiesta subcompact and redesigned Explorer SUV, expects the EcoSport to win it more customers. "The Indian market is a tremendous market for us," Mulally said at press conference. "This vehicle offers the flexibility, reliability and quality of a compact car with the gait and roominess of an SUV." Ford's India unit will have a capacity to make 440,000 vehicles annually by 2014, Hinrichs said. The local unit will spend $142 million on making EcoSport available in India, he said, without providing the price of the SUV or saying when sales will start. Ford will be showcasing the EcoSport at the New Delhi auto show this week. This is the second of eight new models the Dearborn automaker plans to introduce in India by 2015 in a bid to boost its presence in Asia's second-fastest growing major economy. The EcoSport will feature a 1-liter, three-cylinder, direct-injected EcoBoost engine, according to a statement. Ford, which got 58 percent of its third-quarter revenue from North America, is adding more models and expanding its sales network in India to boost growth. The automaker has 220 outlets in the country, up from about 170 in June, Michael Boneham, the president of Ford's India unit said Wednesday. The company introduced its first small car in India in 2010. The 1.2-liter Figo helped almost triple deliveries to 95,395 in the year ended March 31. That ranked Ford behind Maruti Suzuki India Ltd., Hyundai Motor Co. and Tata Motors Ltd. in passenger car sales, according to data from the manufacturers group. In 2011, Ford's local sales rose 15 percent to 96,270 units, the company said Jan. 2 in an emailed statement. The factory, which will be ready by 2014, will have an initial capacity to make 240,000 cars and 270,000 engines annually in the western state of Gujarat. Ford has a plant near Chennai in the southern state of Tamil Nadu, where it makes the Figo hatchback, the Fiesta sedan and Endeavour SUV models. Sales of cars in India have slowed as higher borrowing costs deterred buyers in a country where industry researcher IHS Automotive estimates almost 80 percent of car purchases are funded with bank loans. The Society of Indian Automobile Manufacturers may cut its annual domestic passenger-car sales target as higher borrowing costs and fuel prices sap demand, Sugato Sen, a senior director for the group, said on Dec. 8. The group had earlier forecast sales growth of 2 percent to 4 percent, compared with 30 percent expansion in the year ended March 31. |
U.S. auto industry to post
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Big 3 find different
Corporate cultures diverge, but CEOs all embrace quick action January 3, 2012 Two years after American automakers experienced the most wrenching restructuring in their collective history, there is still plenty of churn roiling Detroit's heavyweights. General Motors Co. CEO Dan Akerson is exporting his aggressive management style across the Atlantic, shaking up the leadership of GM's German subsidiary, Adam Opel AG, and signaling a once-and-for-all fix is coming for GM in Europe. Chrysler Group LLC CEO Sergio Marchionne ousted Fiat's North American brand chief and is driving a quickening product renaissance that is surprising both analysts and competitors. And speculation is swirling in Dearborn about who will succeed Ford Motor Co. CEO Alan Mulally — even if the likelihood of that happening anytime soon is remote, at least according to ranking Ford executives. All of this speaks to the transformations still very much under way inside each automaker, and to the very different corporate cultures that have developed at the three corporations in the wake of their near-death experiences. "All three companies are trying to move more decisively at the top," said David Cole, chairman emeritus of the Center for Automotive Research. "All three are very different from old Detroit." Maybe that is because all three companies are being led by outsiders. GM's Akerson is a former investment banker who was tapped by the federal government to help the bankrupt automaker find its way back to sustained profitability. He took over GM 15 months ago and immediately began shaking up things in the Renaissance Center. Akerson sacked or reassigned one veteran GM executive after another — often doing the same to their successors when they, too, failed to achieve his goals. "This place lacked a lot of vision," Akerson recently told the New York Times. "They were all over the map. Where was the vision? Where do you want to take this company?" Cole says General Motors needed Akerson's tough-love approach. Despite going bankrupt and appealing to the American taxpayers for a bailout, GM remained bureaucratic and unwilling to accept its many shortcomings. "There was almost a historic level of arrogance," Cole said. "GM needed pruning." While some industry observers worried Akerson was going too far with his serial sackings and reassignments, Cole said the new CEO began taking a more circumspect approach as he began to appreciate the talent that still toiled inside the corporation. "Akerson has learned to tread more carefully with manufacturing and product development," he said. "He came into this thinking that GM was an organization that was just in rotten shape, and he's found out that it's in better shape than he thought it was." Marchionne sends message Marchionne's revolution was far less bloody. After the initial shakeup that followed Chrysler's forced marriage to Italy's Fiat SpA in 2009, he left the company's leadership ranks largely intact. But the calm in Auburn Hills was shattered last month by the very public axing of Fiat's North American brand chief, Laura Soave. Her dismissal was all about accountability, according to a source close to Marchionne. He recognized that the sales targets for the Fiat 500 were overly ambitious, but once an executive agreed to certain goals, Marchionne expected him — or her — to achieve them. Marchionne believes there were too many excuses in the old Chrysler. The message of Soave's firing is that none will be tolerated in the new one. "The ceremonial execution really sends a strong message to the other executives about accountability," Cole said. "People have to be realistic and not excessively optimistic. There was too much of that in the old Detroit." Cole says a strong hand was needed to make Chrysler a viable company once again. "He's a dictator, but that's exactly what we had to have in order to merge Fiat and Chrysler," he said. "If you let that occur in a slow, democratic way, that would have taken far too long." Ford has seen less drama at the top of the house than Chrysler — at least since Mulally was hired to lead a turnaround of the struggling automaker. When Mulally arrived in Dearborn in September 2006, many observers expected a wholesale bloodletting. But the former Boeing executive brought in none of his own people. Instead, he concentrated on forging a team from Ford's notoriously fractious executive ranks — a team that could win. "Alan is the classic coach," Cole said. "He had talented people at Ford, but they were killing one another. He realized the most important thing was building a cohesive team that could lead the company into the future." Mulally did that by implementing a process that encouraged collaboration while holding each executive accountable for their own areas of the business. In his now-famous Thursday morning meetings, Ford's executives briefed one another on the company's progress and worked together to find solutions to problems as they arose. As a result, Ford is now the most stable of Detroit's automakers, according to analyst Himanshu Patel of JPMorgan. "There's no doubt they're running the business extremely well now," he said during a recent presentation on the state of the industry. Cole believes Mulally's approach is the one all three companies must embrace in the long run. "The coach model is the enduring one," he said. Dan Akerson Sergio Marchionne Alan Mulally |
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