Jil McIntosh

Plant a tree: It's the new thing to do

Volkswagen has announced that it will build a new plant near Chattanooga, Tennessee, to produce a midsize sedan designed for the North American market.

From the press release: Environmental responsibility is a core value of the Volkswagen Group ... As an expression of this shared commitment, the state of Tennessee, Volkswagen and Chattanooga-area organizations are partnering to distribute two saplings for every tree displaced by the project. The new trees will be planted by local school children.

The cockles of my heart are warm enough to toast bread right now. Call me a cynic (go ahead, I'll wait), but we're building a manufacturing facility to produce 150,000 gasoline-burning vehicles each year, obviously knocking down some forests to do so, and schoolchildren putting in some saplings is going to make it all better? Frankly, I'm getting a little tired of carbon credits and tree plantings and all the other "feel-good" stuff that tries to make industry look much better than it is. As far as I'm concerned, "green" is the color of my living room walls, and "greening" is not a word. I think I'd have more respect for them if they just said look, it's business, it's going to affect the environment but it's the best we can do. Honesty is always the best policy.

Volvo: 2,000 jobs out the door

Well, it's not just GM's Oshawa truck plant closure and Ford setting back the F-150's introduction anymore. Volvo has announced that it's axing 2,000 jobs, including 1,400 white-collar workers and 600 blue-collar positions.

It seems that the weak U.S. dollar and the price of raw materials is reaching all the way over to Europe. The company will get rid of some 1,300 people at its plants and offices in Sweden, another 500 consultants on contract to the automaker, and then an additional 300 warm bodies worldwide. The Swedish carmaker posted a first-quarter loss this year of the equivalent of US$151 million.

And don't think it's going to stop there; the elephant rolls over, and it isn't just the Great White North that feels its weight anymore. It's a very scary time to be tied to an auto company, and what's even scarier is that those shock waves go many miles beyond the gate at the front of the plant. I wonder just how far the bottom really is, and where this is all going to end.

The European Ford Focus: It's Coming!

Well, after all this time, it looks like it's finally going to happen. For so long, we could only gaze longingly over to Europe, where the Ford Focus zipped about on a chassis shared with Mazda, and handling that was ... well, European. While we got an economy car that did its job, but was simply not as good as it could be.

And now the news: Ford says it is cutting truck production, increasing crossover production, building the Fiesta for worldwide sales, and finally -- finally! -- producing a version of the European Focus for sales in North America. I only hope it's not a case of too little, too late.

What's that again?

Every now and again, Transport Canada will send me a list of the latest recalls; apparently, the agency gets the notice from the auto manufacturer and just runs it verbatim. So I'm not sure if it was someone at the government or someone at Cadillac, but taking a few bucks out of the kitty to purchase a dictionary might not be a bad idea:

No remedial action is required due to the unlikely-ness of such an occurrence.

R.I.P., Oshawa Truck Plant

Well, it's official: GM plans to close its truck plant in Oshawa, Ontario in 2009. Funny that that news apparently wasn't passed along when the company negotiated a new contract with the union a couple of weeks ago.

Even more troubling is a blurb in the Toronto Star newspaper today: 2005: Ontario invests $235 million with GM's Beacon project, $60 million of which goes to universities for R&D and the balance to GM for its Oshawa operation. The agreement includes minimum job levels at the truck plant.

I think it's time that Ontario had a second look at that particular piece of funding, methinks.

GM: Time for "strategic initiatives"

In the news today: GM chairman and CEO Rick Wagoner used the stockholders' meeting to outline the plans in store for GM. It looks like gas prices have finally gotten through.

There's going to be more emphasis on smaller vehicles, an all-new Aveo, a new global compact Chevrolet, and funding to get the Volt on the road.

There will also be plant closures, including one at the truck plant here in Oshawa, Ontario, where I live, which should go over really well. I've never figured out why the plants that win the most awards for quality always seem to be the first to close.

And there's going to be a "strategic review" of the Hummer brand. Gee, ya think? The only surprise is that it took them this long.

Today's Translation: Ford Corporate-Speak

In the news: Ford is transforming a full-size truck plant near Mexico City to build the new Fiesta, a compact vehicle that will be sold in global markets worldwide under the name. Mexico will produce all Fiesta sedans and hatchbacks for the North American market.

Ford president and CEO Alan Mulally: "Ford is absolutely committed to leveraging our global assets to accelerate the shift to more fuel-efficient small cars and powertrain technologies that people really want and value. Our investments in these facilities in Mexico are part of our plan to further realign our manufacturing capacity in line with the introduction of more small cars and crossovers."

Translation: Nobody's buying our big trucks and SUVs, so we'll build small cars. Naturally, we will find the global plant where it costs us the least amount of money to make them.

What's That Again?

In the news today: Ontario has announced it is now issuing its license plates in both English and French, in keeping with the fact that some 550,000 Francophones live in the province. The provincial slogan, Yours to Discover, can now also be ordered as Tant a Decouvrir.

So here's what the Francophone Affairs Minister had to say about it: All Ontarians now have the opportunity to show, on our roads and wherever else their travels take them, that Ontario is proud of its French culture and language.

"Wherever else their travels take them?"

Take note: if the guy beside you on the airplane is sitting in his car with the new license plates bolted to the bumper, it's just because he's really proud. Honest.

 

Today's translation: GM Corporate-Speak

In the news: some 19,000 GM hourly workers in the U.S. have accepted the company's attrition program, and they'll be out the door and home by July 1 at the latest.

First crack at their jobs will go to current employees "whenever possible", according to a release from GM. But if new workers have to be brought in, they'll come in at entry-level wages and benefits.

According to GM North America president Troy Clarke, "This attrition program gives us an opportunity to restructure our U.S. workforce through the entry-level wage and benefit structure for new hourly employees."

Translation: We're going to save a bundle by getting the old guy out of the slot, and putting in a new guy at a lower wage.

Now yes, I do understand that the domestic auto companies are still bloated from a quarter-century ago, and that trimming down doesn't happen without some tough decisions.

But before you jump on the bandwagon and say "about time", keep a few things in mind, including the fact that good-paying jobs generate higher taxes and more disposable income than low-paying jobs. Those taxes help pay for your social programs, your schools, your neighborhood, your police and fire protection, your parks and your libraries. Do you want your neighborhood funded by an autoworker making $25+ an hour, or by someone whose job description includes "Do you want fries with that?"

Henry Ford, back when he was still turning out the Model T, raised the salaries of most of his workers to $5.00 a day, which was twice the going rate. His theory was that a decently-paid worker could afford to buy the product he built, thereby increasing demand for the product and turning it into a cycle. How many minimum-wage workers do you know who are buying new cars?

And don't kid yourself; if the auto plants could get workers to screw together the vehicles for a buck an hour, I doubt the price would go down. Profits would go up and the shareholders would be happy, but don't think Flint would be fired back up to make $2,500 Tata cars. One of Chevrolet's best-selling models is made in Korea, but its price doesn't seem to reflect the wages those workers make over there.

Now, don't get me wrong -- the automakers need to do something to stay afloat in these troubled times, and they're probably doing the best they can.

Just don't make the mistake of thinking that what's good for General Motors is necessarily good for America.

What you say ... and what you don't ...

  In the news today: the Insurance Institute for Highway Safety (IIHS) crash-tested the Dodge Grand Caravan.

Here's what was on the IIHS' website: Front and side crash test ratings are GOOD but rear protection is MARGINAL.

Here's what was in the press release that Chrysler (U.S.) made available to the media: The all-new 2008 Chrysler Town & Country and Dodge Grand Caravan earned "good" ratings, the highest ratings available from the Insurance Institute for Highway Safety (IIHS), in both frontal offset and side crashworthiness tests.

And save for an enthusiastic quote from the minivan department's vice-president, and an assurance that Chrysler's concerned about safety, that's it.

Rear protection crash tests determine whether seat and head restraints have been properly designed to minimize the risk of neck injury in a crash. It still isn't high on a lot of automakers' lists: the Grand Caravan finished mid-pack, behind the top "Good"-rated Hyundai Entourage, Kia Sedona and Honda Odyssey, but ahead of the "Poor"-rated Toyota Sienna, Nissan Quest and Chevrolet Uplander.

But while the rating itself is important, the real story here is what Chrysler said ... or rather, what it didn't say. "Error of omission", I call it, and I think it's just as newsworthy.

Electric vehicles: More than just the car

I just read a news report, a follow-up to Nissan's earlier announcement that it will sell a completely electric vehicle in the U.S. and Japan in 2010. The company has embarked on a full-scale study in Kanagawa Prefecture to set up a charging network and incentives program that can possibly be repeated nationally and even globally.

That's a huge report, and it's one that I hope to see with many more automakers.

Up front: I'm a fan of electric vehicles, and I think they're going to have an important place in the overall goal of sustainable transportation. But I also think that many of the people who champion them are not looking at the big picture overall.

I've spoken to many supporters, who tell me that people will simply plug the cars in at home, or plug them in at work, and that's the extent of their vision of infrastructure. The problem is that many of these supporters live in single-family homes, and work at small companies where running a few extension cords from the building isn't an issue.

But many more people live in apartment buildings, or in older city areas where they have to park on the street. Many work at large complexes or factories, where a few thousand cars might occupy the parking lot. Suddenly, the situation isn't so simple as these devotees like to think it is.

Any new technology is going to be chicken-and-egg; early motorists had to buy their gasoline from hardware stores, because gas stations had yet to be developed. By working on the hen as well as the egg, automakers and governments can help to make this happen. Maybe, in future, parking meters will charge the cars parked beside them. Maybe apartment parking lots will include stand-alone charging systems. Maybe, if they do, the electric car will be more than just a conveyance for a lucky few, and instead, become a feasible option for many.

Ford and the CAW: the start of something new?

In the news today: Ford and the Canadian Auto Workers Union (CAW) have come to an agreement on a new three-year contract. It's still subject to ratification by the members, of course, but the big news is that this all happened more than four months before the contract is set to expire.

I don't pretend to know the full story on either side, but I hope that's a sign that perhaps everyone might start to work together for a common goal that will benefit every community that depends on the auto industry to make its living.

I've never worked for a union, but I certainly know people who do, and I know enough to have some opinions. I think unions have lost the primary importance they held in their earliest days, back when companies (and not just automakers) treated workers as something to be chewed up and spat out. I also think unions can get too greedy for their own good, and that some people can take advantage of that. So a little toning down on both sides, a little standing firm here and there -- it's a good thing.

I think the public, by and large, paints a picture of autoworkers that isn't entirely fair, and I think that further, it's a kneejerk reaction that needs to be examined. Yes, autoworkers make good money, for jobs that generally don't require a great deal of education or skill. Having done just a little bit of repetitive labour, I can say that you're not paying them for the skill, but for the fact that they stand there day after day, putting the same bolts into the same holes. There's a very high rate of repetitive injury on the job, and beyond that, it's just an unpleasant way to make a living. Yes, there are much worse jobs out there. That doesn't make these jobs any better, any more than my broken leg stops hurting just because I meet someone who broke both legs and one arm.

But to go beyond that, we're a society, and society needs to remember the greater good. If you think autoworkers are overpaid, consider how much someone making $30 an hour pays in taxes. Those taxes go into infrastructure, police, schools, fire protection, parks, social programs, health care, and all the other local and national benefits that we take for granted. Now -- do you want your neighborhood financed by people making $30 an hour, or by someone whose job consists of "would you like fries with that"?

As for the autoworkers -- backing off a little in some areas might help keep these golden geese laying their eggs a bit longer. At $30 an hour, you can afford to pay more than 35 cents co-pay for each drug prescription, for example.

I don't know the specifics of the Ford agreement, which will be kept confidential until it's ratified. It should be interesting, though, to see what was hammered out four months in advance, as opposed to four hours before the strike deadline. Times are tough, and it's going to be a long time before things get better in the domestic auto industry. Maybe, though, this is the beginning.

A topsy-turvy world ...

Twenty years ago, if you'd told me this was going to happen, I would have laughed out loud. This is a ribbon-cutting ceremony that took place in Georgia yesterday. It's the beginning of a Kia assembly plant.

It's an upside-down auto world in which we're living these days. Ford, GM and Chrysler are cutting back shifts and closing plants in North America, and at the same time, they're opening facilities in China, in Thailand, in India, in Korea, in Romania, and in yesterday's news, in Uzbekistan (I'll admit, I had to look that one up on a map).

And while the domestics are moving overseas, here at home we've got Toyota and Honda expanding in Ontario, Hyundai in Alabama, BMW in North Carolina, Nissan in Tennessee, and Mitsubishi in the improbably-named town of Normal, Illinois.

You really have to sit back and wonder where everything's going, and where it's going to end. It's obvious that labor costs are playing a part in this, although I'd imagine even the poorer workers in the South (because no one's building these plants in rich cities) are making more than workers at plants in Thailand and India, which tells me tariffs are part of this too. And I would expect that eventually these plants will start to outsource some of their production materials, just as the Big Three have done. The domestic auto plant in the city where I live used to build its cars almost from scratch. Now many components are coming in already built up, from independent companies that make the parts for the price the automaker's willing to pay.

And while we all want a car that doesn't cost much, there's a flip side to all of this. Maybe unionized auto workers do make too much. But at the same time, many of them pay as much in taxes as someone greeting customers at the local big-box store takes home in a year. When it comes to the quality of municipal services, I'd rather have a tax base of overpaid auto workers than a tax base made up solely of "would you like fries with that?". Think about who pays for your police, fire, schools, health care and social programs next time you complain about wages.

These days, I don't know what to think. Every new ground-breaking ceremony gives me hope, and every idled plant and reduced shift makes me worry. I'm guessing that a few decades ago, the people who made television sets in Canada and the U.S. wondered what was going to happen to their industry. I don't think I have to tell you how that went.

Chrysler's leaving California

Chrysler has announced that it's closing its Pacifica Advance Product Design Center in Carlsbad, California and will consolidate the Advance Design function at its headquarters in Auburn Hills, Michigan.

Now, news from the automakers is usually made available to journalists on media-specific Web sites during business hours, with lots of quotes that we can use to beef up the story, and photos if they're available. This little tidbit came as a very low-key email, and with the same terse message posted not on Chrysler's media Web site, but on a blog that it reserves as a chattier version for the press. No quotes, no photos, not even an attribution -- just "by Editor". And it arrived late on a Friday night.

Methinks they don't want us to say too much about it.

The email said that the function will be consolidated with Michigan, but the last paragraph reads, These changes set the stage for Chrysler's future global growth efforts, which also include our intent to establish global expertise in design, engineering and sourcing through centers of excellence. These actions will help the Company meet its long-term globlization goals.

Translation: we're going to find a place that'll make the cars for cheap.

It's not new, of course. GM's been doing it for a long time -- you want to get a deer in the headlights look, go up to half the people driving Chevrolet Aveos (bonus points if they've got a "Buy Domestic" license plate frame) and ask them if they know their cars are built in Korea. Rather tellingly, GM built three new subcompact concepts and had the public vote on which one it should build. One was designed in the U.S. The winner, announced at last year's Los Angeles Auto Show, was designed in India. Hmmm. I wonder where the actual car will be built, and if that has any bearing on how that particular design was chosen.

Y'know, in the grand scheme of things, I do have a bit of a handle on how corporations work. Even if I don't like it, I understand why companies move production offshore, whether it's cars or clothes or call centres.

I just wish everyone would be honest, instead of coating it all in bafflegab. Come clean with us: it costs too much money to design a car in California, so we're closing that office and we'll be contracting the work overseas. Will the public like it? Of course not. But I think John Q. Public would have more respect for a company that tells him up front what it's doing, instead of sneaking out the back door in the middle of the night.