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Automotive Blog


It's Snowing Awards in New England

Thursday June 14, 2012

New England Motor Press Association (NEMPA)The sun may be shining and the drop-tops, well, dropping their tops, but the New England Motor Press Association recently took the opportunity to recognize a wide range of automakers with its Winter Vehicle awards, as well as several other Best-In-Class trophies.

The actual judging took place in February, when NEMPA members gathered at the group's unofficial headquarters south of Boston to evaluate and compare a parking lot full of nominated vehicles. However, the awards ceremony took place in May, coinciding with a NEMPA/MIT-sponsored conference detailing a host of issues related to the future of autonomous vehicles.

As it turns out, we can expect to see those driverless rides branching beyond the R&D arena within ten years. But, for now, we'll continue to be tasked with driving ourselves. To learn which models NEMPA recommends for the job, check out the complete list of winners.

© Photo courtesy of NEMPA

Now Might Be the Time to Become a New Car Dealer

Thursday June 14, 2012

New Car DealershipThough many automotive executives, politicians and taxpayers would love to forget about the industry's near collapse just a few short years ago, remembering those dark days puts the current state of affairs into proper perspective. As the Detroit Free Press reports, 2012 is on track to see annual sales of 14.5 million, or 1.7 million more than 2011.

Along with that good news is the suggestion that shoppers who had put off the purchase of a new vehicle are returning to showrooms as buyers, many of whom are paying extra for special features and amenities. The result is something that has been painfully absent from much of the industry over the past few years: Profit. The welcome influx of greenbacks benefits everyone along the chain, from the plant worker on the production line to a company's top executives and shareholders.

This uptick in sales is also sure to put a smile on the faces of dealers, or those contemplating investing in a new-car franchise. That process can involve purchasing an existing dealership, or starting a new business from scratch, which can be a very time-consuming, expensive, and almost-certainly frustrating endeavor. To help readers understand what's involved, we've broken down the basics of becoming a new-car dealer here.

© Photo courtesy of PR Newswire/DCH Auto Group

Honda and Mazda Offering Employee Buyouts

Thursday June 14, 2012

Honda Ohio manufacturing plant

Honda and Mazda have now joined Ford in the industry's most recent bid to trim costs by offering buyout packages to company employees.

This approach, which offers large lump sum payments to incentivize early retirement, is nothing new. Ford, as well as General Motors and Chrysler, used this tool when the market took a nosedive in 2008 and 2009, enticing tens of thousands of workers to cash out.

Fast forward to 2011, and Ford once again opened up its coffers, pitching $50,000-$100,000 checks to 41,000 production and skilled workers; 1,700 people accepted the offer, and will be off the payroll by June 1. Some of those jobs will disappear, but many slots will be refilled by previously laid-off Ford employees or new hires earning a much lower wage.

Mazda, which is suffering from significant financial losses, has also jumped onto the buyout bandwagon. According to Automotive News, the company is offering a one-time payment to employees who voluntarily leave their jobs; those who opt not to accept the buyout may be reassigned or laid off.

And, just this week, Honda announced its Voluntary Retirement Program. Automotive News reports that, unlike the others, this plan is aimed at employees age 59 and older, and who have been with the company for at least 15 years. Those who apply and are accepted by the program will leave with one year's salary, a bonus commensurate with years served, and medical benefits.

Unless you're one who wants to do the 9-5 gig until they put you in the ground, these propositions might be too tempting to pass up.

What do you think? Would you take Mazda's buyout or risk being laid-off later? Will Honda suffer from retiring a number of experienced, likely knowledgeable employees? Share your thoughts in the comments section below.

© Photo courtesy of Honda

Chrysler Adding Body Shop To Michigan Plant

Tuesday October 18, 2011

Chrysler will be spending $165 million to add a body shop to its plant in Sterling Heights, Michigan.

The one-million square foot plant will be used to build the next generation of Chrysler's mid-size sedans, starting in 2013.

The new body shop will replace the current one, which will be used for other purposes. There will be no net gain of jobs.

This news shows that Chrysler is serious in competing from a product stand point. The company will need to be competitive in the mid-size segment, and the current Chrysler 200 and Dodge Avenger, while better than their predecessors, still fall a bit short. While no jobs will be gained by this announcement, the new body shop could mean better quality, and it shows a commitment to improved product overall in the segment.

[Automotive News]

UAW, Chrysler Reach Tentative Agreement On Contract

Thursday October 13, 2011

The UAW and Chrysler agreed to a new contract on Tuesday, though it's unclear if some of the promised benefits to the UAW were part of the deal or were items that were already on the table and under the discussion.

The tentative deal, which still must be ratified by workers, is a four-year contract that promises 2,100 new jobs, a $4.5 billion investment by Chrysler in the company's plants, a $3,500 signing bonus, and a $1,000 annual bonus. Entry-level wages will be raised to $19.28 per hour by 2015, and Chrysler employees could take part in profit-sharing.

The problem, according to Automotive News, is that much of the $4.5 billion isn't "new" investment--it's already earmarked for items that have already been discussed.

Whatever the case, a new deal is now in place, and if it's ratified, it will help both the UAW and Chrysler move forward.

[Philadelphia Inquirer, Automotive News]

Will Union Support For Occupy Wall St. Affect Auto Industry?

Friday October 7, 2011

Union support for the Occupy Wall St. movement has been growing, but the bet here is that despite the bailouts of the GM and Chrysler, there won't be much involvement from either the UAW or management, especially as UAW contract talks with the Big Three are fresh in everyone's mind.

That doesn't mean the UAW won't show support to union brethren, but it just appears that this protest and any backlash have little to do with auto industry and more to do with banking, finance, and policy-making regarding those two industries. So I just can't imagine Occupy Wall St. doing much to help or hurt bottom lines.

Ford Fusion Production To Remain In Mexico

Friday September 30, 2011

Ford will keep the production of its mid-size Ford Fusion sedan in Mexico as it negotiates its next contract with the UAW.

That means that the UAW won't gain about 4,000 jobs its seeking as part of the negotiations, even as Ford and the UAW talk about adding 10,000 jobs overall.

Since the UAW is unlikely to get wage increases or a cost-of-living allowance, getting more jobs will help get UAW workers to ratify the contract.

[Automotive News]

CAW Worries About Losing Chevrolet Equinox Production

Thursday September 22, 2011

The Chevrolet Equinox crossover SUV was one of the vehicles that helped GM emerge from bankruptcy after it was redesigned. Now the Canadian Auto Workers are worried that production of the vehicle will move from plants in the Toronto area to Tennessee, as part of GM's new deal with the UAW here in the U.S.

The worry is that with GM's plant in Spring Hill springing back into action, some production of the Equinox and its twin, the GMC Terrain, could shift there, which could cost the CAW some jobs.

The head of the CAW, Ken Lewenza, is seeking assurances from GM that his plants will remain the primary source for production of the Equinox and Terrain, which could keep jobs north of the border. In that scenario, Spring Hill could produce extra units of the vehicles, which are in high demand.

[Automotive News (sub. req'd)]

Chrysler Hoping To Keep UAW Pay In Check

Wednesday September 21, 2011

Now that the UAW has finished negotiating with GM, Chrysler is next in the contract-negotiation cross-hairs, and the company would like to avoid having to pay raises or cost-of-living increases as it aims to keep fixed costs where they are until 2019.

Chrysler would likely seek assurances from the UAW that union will not push for those kind of pay increases during the next round of talks.

This is an indication that Chrysler would like to seek a new business model which keeps labor costs in line as it continues to recover from bankruptcy--a sign that the Chrysler's new management either believes costs were too high in the past or that it needs flexibility in order to compete with rivals that have lower labor costs.

This doesn't mean that talks between and the union will be acrimonious, the UAW might have other goals in mind, such as the creation of additional jobs or improved health care. This simply means Chrysler has taken a stand on wages, and that they've made their position clear ahead of the negotiations.

[Automotive News (sub. req'd)]

UAW, GM Contract Detailed

Tuesday September 20, 2011

Official details about the contract between the UAW and General Motors are out, and the biggest item: GM has agreed to create or keep 6,400 jobs as it invests $2.5 billion in product and plant investments.

In exchange, the UAW has negotiated new buyout offers between $10,000 and $65,000, in order to entice older workers to retire, so that they can be replaced with younger, less expensive workers.

Among the investments will be the production of two new mid-size vehicles, to be built at GM's plant in Spring Hill, Tennessee, which will re-open. Other plants will receive investments that were originally slated for Mexico, according to the UAW. As part of the deal, GM will eventually build a new compact car and compact pickup truck in the U.S.

The full details are quite a lot to read through, but at a glance, it's clear the UAW got a lot of what it wanted without crippling GM's cost flexibility. It also appears the UAW gave GM a chance to save money in the long run, even if up front, the company will need to spend a lot of money.

Time will tell how fair the deal ultimately is, but for now, it looks like the UAW did well for itself without kneecapping management.

[Automotive News (sub. req'd)]

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