Can Michigan add auto jobs — or is it destined to lose them to other states and parts of the country?

That topic is on the table Tuesday when Changing Gears joins Crain’s Detroit Business for a breakfast and practical policy discussion.

Senior Editor Micki Maynard will be part of a panel that includes Sandy Baruah, president of the Detroit Regional Chamber; Peter Brown, publisher and editorial director of Automotive News; Neil de Koker, president and CEO of the Original Equipment Suppliers Association, and Doug Smith, senior vice president of the Michigan Economic Development Corporation.

The event begins at 7:30 a.m. at The Henry (formerly the Ritz-Carlton Hotel) in Dearborn, Mich. Find more details here.


Members of the Local 602, employed at the Lansing Delta Township Assembly plant above, voted against ratifying a new contract between UAW and General Motors. (Photo courtesy GM).

DELTA TOWNSHIP, Mich. – Auto workers at the Lansing Delta Township Assembly plant make some of General Motors’ most popular vehicles.

The GMC Acadia, Chevrolet Traverse and Buick Enclave are all produced inside this 3.4-million square-foot facility on the outskirts of Lansing, which is Michigan’s state capital.

In August, when GM announced an 18 percent sales increase from 2010, GMC led the turnaround with a 40.3 percent increase. Chevrolet had gained 15.8 percent.

So when contract negotiations began last month, the plant’s 3,430 hourly workers expected they’d be sharing in the company’s improved position. But when they saw the proposed deal between the United Auto Workers and GM, many members of UAW Local 602 here felt jilted instead.

They rejected the deal — a rarity for a contract approved by two-thirds of GM workers nationwide.

“The concessions we’ve made were supposed to be concessions, and with the stroke of a pen, they’ve made it all permanent,” said Jan Ward, a long-time employee who voted against the contract. “We did whatever we had to do to make them viable. Now they’re more than viable, and they just snubbed our nose, and said, ‘Too bad for you.’”

The majority of workers here agreed. Among Local 602 members, 66 percent of production workers and 57 percent of skilled trade workers voted against the contract.

In national voting, the percentages were nearly reversed: Sixty-five percent of UAW production workers and 63 percent of skilled trade workers approved the agreement, which was ratified Wednesday. Of the 81 UAW locals participating in the voting, Local 602 was one of only three to vote against the contract.

As first-shift workers at the Delta Assembly plant departed Wednesday afternoon, they cited a variety of reasons for the local departure from national sentiment. Some said concern over local union issues had spilled into voting on the national vote. (Local 602 president Bill Reed could not be reached for comment).

But the most-cited reason for the negative swing in Lansing was a feeling by veteran workers that they gained nothing from the contract.

“We’re really disappointed that GM didn’t give more back to us after all we’ve given to them,” said Larry Larner, employed by the company for 35 years. “They’ve always said they don’t like the adversarial approach. If they don’t like it, why don’t they come to us and say, ‘Look, we realize you gave up a lot, and we’ll try to give back to you.’”

Veteran workers got no raises, although there are raises in the contract for recently hired workers, known as “two-tiers.” Cost of living allowances, which were lost as part of the GM bailout, remain a thing of the past.

Larner said he reluctantly voted in favor of the contract. After years of union concessions in bargaining, he said, “We managed to keep what we had.” But his weariness in the face of those continued retreats mirrored the demeanor of many workers who voted no.

“We’re getting beat up,” said one 30-year employee who requested his name be withheld. “I don’t believe the union bargained in good faith. They’re looking out for themselves. GM is looking out for itself. And we’re not getting any help from either side.”

Veteran workers, their numbers diminishing, felt squeezed.

In 2005, GM had 110,000 hourly production workers, according to a presentation by CEO Daniel Akerson to Wall Street analysts Wednesday. Today, GM has approximately 49,000 hourly workers, less than half from six years ago.

The UAW said in a written statement the new deal will create 6,400 new jobs in the United States. But under terms of the contract, up to 25 percent of GM’s workforce can now be comprised of “two-tiers,” entry-level workers who will make about $8 less per hour than veteran counterparts. Now, two-tiers comprise 4 percent of the overall workforce.

Veteran employees at Delta Assembly fear a gradual wave of two-tiers, a slide in their own standard of living and a reduced vision of whatever comes next.

“ I don’t see where we gained anything in this, really,” said Tammy, a 26-year veteran who only gave her first name. “I thought maybe they’d get our cost of living back for us. That didn’t happen.”

She continued. “It only catered to the entry-level workers. The union let them agree to it. So where do you think we’ll be in a few years? We’re going to be dinosaurs.”

 


Three stories making news across the Midwest today:

1. Ford stops controversial ad campaign. Ford has curtailed an ad campaign that featured an indirect rebuke of the federal bailout of the auto industry. The Detroit News reports the White House had “questions” about the marketing campaign, which featured a “real person” explaining his decision to buy a Ford instead of a car from a company bailed out by the government – a shot at rivals General Motors and Chrysler. “This thing is highly charged,” a source tells the newspaper. Ford “never meant it to be an attack on the policy.”

2. Ways to close Chicago’s budget gap. Chicago’s City Hall watchdog agency has proposed more than $2.8 billion in spending cuts and revenue increases, according to our partner station WBEZ. Ideas include a city income tax, tolls on Lake Shore Drive and privatizing trash collection, among others. The proposal from Inspector General Joe Ferguson includes 63 ideas to help Chicago contend with a projected $635 million deficit in 2012. Among the more controversial cuts is the possibility of laying off more than 700 firefighters and more than 300 police officers to save $190 million.

3. Critics: Ohio too cozy with industry. When the state of Ohio decided to set air-pollution standards on shale-gas wells earlier this year, the Ohio Environmental Protection Agency sought advice from Chesapeake Energy, a drilling company. That’s one example of a too-cozy relationship between Ohio officials and industry, critics charge. Their concerns have mounted as gas-shale has boomed. “These agencies have an open-door policy with industry that they don’t with the public,” Teresa Mills, director of an environmental advocacy group tells The Columbus Dispatch.


Three stories making news across the Midwest today:

1. Illinois casino bill teeters. As Chicago alderman and Mayor Rahm Emanuel continued lobbying for a gambling expansion bill, Illinois Gov. Pat Quinn has intensified his criticism of it, according to our partner station WBEZ. The governor said he has reservations about slot machines at horse tracks around the state. Lawmakers have not yet sent a gambling bill, which paves the way for a Chicago casino, to the governor yet for fear he would veto it.

2. Prison plans scaled down. Ohio will sell the Lake Erie Correctional Institution to a private corporation for $72.7 million, but officials have backpedaled from initial plans to sell four other facilities. The Columbus Dispatch reported the development Thursday. Ohio administrators released a statement  that said “it was not in Ohio taxpayers’ best interest” to pursue further sales. As Ohio readies to make one sale, The St. Petersburg Times carries a cautionary tale today about the shift toward private prisons.

3. General Motors sales rise. U.S. sales of General Motors autos increased 18 percent in August, the Detroit Free Press reported Thursday. GMC led the gain with sales climbing 40.3 percent year-over-year. The Chevrolet Cruze sold more than 20,000 cars for the fifth straight month, and was GM’s best-selling car for the third consecutive month. GM has gained market share in 7 of the past 8 months, the company’s vice president of U.S. sales operations told the Free Press.

 


Three stories making news across the Midwest today:

1. Factory orders rise. Demand for automobiles and motor vehicle parts surged in July. The U.S. Commerce Department said Wednesday orders rose 9.8 percent in July, the biggest recorded jump in more than eight years. Overall, factory orders climbed 2.4 percent in July on auto demand and a jump in commercial airplane orders. The increase follows a 0.4 percent decrease in June, which had worsened fears the country was falling into a double-dip recession.

2. Chicago school considers conversion. One local school in the Chicago Public Schools district is mulling an unusual strategy in improving its performance – it’s considering the possibility of shutting itself down. On Tuesday, the school council at Wendell Smith Elementary, seven times on probation, will likely vote on whether to shut down and reopen as a charter school, according to our partner station WBEZ. It’s believed to be the first time a CPS school has held a vote on whether to shut itself down.

3. JobsOhio heads to court. A lawsuit in Ohio is challenging whether Gov. John Kasich’s privatized development corporation is eligible for exemptions from corporate regulations. Two Democrats and a liberal policy group filed the suit Tuesday, also arguing the state cannot invest “public dollars in a private entity,” according to The Columbus Dispatch. Earlier, the Ohio Supreme Court said it did not have jurisdiction in the case until it had been heard in lower courts. Tuesday’s lawsuit was filed in Franklin County Common Court.


Three stories making news across the Midwest today:

1. Angry residents confront Emanuel. Chicago mayor Rahm Emanuel sought solutions for the city’s budget woes during a public meeting Monday night. He got more than he bargained for, according to reports from our partner station WBEZ. A question from a laid-off traffic employee led to an extended back-and-forth with union members in the audience. “I’m responsible to the city taxpayers and the city residents,” Emanuel said, referring to a projected $635 million budget deficit. Audience members yelled that they were taxpayers too.

2. Honda renovates Ohio plants. Honda announced Monday it would spend $355 million to refurbish four plants in Ohio, according to The Columbus Dispatch. The improvements come as the automaker returns to full production following the Japanese catastrophes. The Dispatch reports some jobs will be added, but specifics are not yet available. Honda has more than 13,000 employees in the Buckeye State.

3. Lawmakers seek tax-credit extension. Tax credits for advanced battery manufacturers in Michigan are scheduled to be phased out by Gov. Rick Snyder, but Democrats in the state Legislature want to extend the incentives packages. The Associated Press reported Monday that the Democratic proposal would include tax credits for battery production and facility construction, as well as credits for buying electric vehicles and charging stations.


The Changing Gears team is getting ready to take a look at manufacturing in September. And, there are some eye opening numbers about manufacturing, the auto industry and our region in a new report from the Federal Reserve.

Federal Reserve of Chicago

According to Paul Traub, senior economist for the Chicago Fed’s office in Detroit, auto industry employment in the Fed’s 7th district — Michigan, Indiana, Illinois, Iowa and Wisconsin — is now just below 204,000 people, or about 9.3 percent of manufacturing jobs here.

The district does not include Ohio, which is one of the nation’s biggest automotive and manufacturing states.

In 2000, auto industry employment in those states alone was 474,000, or about 14.4 percent of all manufacturing jobs here. That loss of 270,000 jobs represents a 57 percent decline in auto jobs over the past decade in those states.

“It’s quite dramatic,” Traub said. “The question is whether we’ll see some recovery.”

When it comes to overall manufacturing jobs, Traub sees a depressing historic picture. Over the past 20 years, the region — and the country — have seen manufacturing employment drop by about 35 percent. The nation lost 6 million manufacturing jobs; our region lost 1.1 million manufacturing jobs.

Although many people think Midwest manufacturing employment has been on the decline in the United States for decades, it actually peaked only 10 years ago. In 2000, manufacturing jobs in the Midwest made up 19.1 percent of all the manufacturing jobs nationwide. Now, manufacturing jobs in the region make up 18.6 percent of the manufacturing jobs held across the country.

So, is there any good news? Traub sees some in job growth. In the first six months of 2011, the states in the 7th district saw jobs grow at an annual pace of 0.9 percent — better than the national rate of 0.7 percent.

Michigan actually led these states with non-farm job growth of 1.9 percent over six months. That was followed by Iowa, with 1.3 percent growth; Wisconsin, with 1.1 percent; Illinois, up 0.5 percent and Indiana, which saw job growth decline by 0.4 percent.

But that job growth isn’t bringing the area anywhere close to its past levels. The economist notes that non-farm, payroll employment is about where it was in 1996. That compares with the nation, where non-farm employment is around 2004 levels.

Traub says he’s doing further analysis about automotive employment and its prospects for playing a role in the nation’s economy.

He’s looking at a number of factors, such as how many cars each household will have, and whether housing, which is a big factor driving auto sales, will bounce back. He’s also looking at whether environmental awareness and the growing use of public transportation will have an impact on auto sales.

 

 


Three stories making news across the Midwest today:

1. Chrysler invests in Toledo. Ohio Gov. John Kasich emerged from meetings with Big Three officials with a promise from Chrysler to invest $72 million in a Toledo-area machine plant that retains 640 jobs. That may just be the beginning. The auto companies see Ohio as fertile ground for future investments. “We’re very encouraged by the changes we see happening in Ohio,” GM executive director Bryan Roosa tells the Columbus Dispatch. “The attitude toward manufacturers is very supportive.”

2. Toyota unveils 2012 Camry. After two years of setbacks associated with a widespread recall and Japanese catastrophe, Toyota is banking on its 2012 Camry to reestablish itself as an industry leader. Unveiled Tuesday, the ’12 is its first redesign in five years and attempts to match competitors in styling. “It’s critical they get this right,” Michael Robinet, VP of global vehicle forecasts at HIS Automotive tells AOL Autos. “They are facing a deluge of competitors that are really getting it right.”

3. Indiana snags Illinois company. Modern Drop Forge, a manufacturer of vehicle parts, said Tuesday it will move operations from Illinois to Merrillville, Ind. The company, which employs 700 in four states, received incentives worth as much as $2.2 million from the Indiana Economic Development Corporation. Business owner Greg Heim told partner station WBEZ the cost of doing business in Illinois had crept too high, with the state raising its corporate income tax from 4.7 to 7 percent until 2015.


The location of their first meeting, a clandestine airport lobby, remains a secret. But Ford Motor Company CEO Alan Mulally and Toyota chief Akio Toyoda are willing to share everything else – including hybrid technologies.

Ford will partner with Toyota on hybrid technologies, the companies announced Monday. Photo by Slobodan Stojkovic via Flickr.

Months after a chance encounter at a nameless airport, the two automotive leaders announced Monday their companies would collaborate on hybrid technologies for rear-wheel drive pickup trucks and SUVs. Both hope the move expedites the arrival of hybrid models in the marketplace at more affordable prices for consumers.

Ford’s F-series pickups have been the best-selling in the United States for the past 25 years, according to our partner station Michigan Radio. Toyota’s Prius has been the top-selling hybrid in the U.S. since it’s inception. Is it a complementary marriage or awkward entanglement with a competitor?

Derrick Kuzak, Ford’s group vice president of global product development, tells the Detroit News the tentative agreement does not give away proprietary information. “Clearly, Ford and Toyota will remain competitors,” he said. “But at the same time, by working together and sharing our product development expertise, cost and leveraging our scale, we’ll be able to offer our customers even more affordable technology sooner.”

Officials did not say which models would be the first to get hybrid updates under the agreement, and it was unclear Monday how – or if – the collaboration would affect jobs throughout the Midwest.

The surprise collaboration was accelerated by the recent federal changes in fuel economy standards. By 2025, automotive manufacturers must average 54.5 miles per gallon in their vehicles, although the standard may be lower for trucks. Officials said more details on the tentative partnership will be ironed out and a formal pact will emerge in early 2012.


Three stories making news across the Midwest today:

1. Head tax faces guillotine. Mayor Rahm Emanuel pledged to end the city’s head tax on businesses with 50 or more employees during his campaign. Now Chicago aldermen are negotiating what comes next, according to our partner station WBEZ. Companies with 50 or more employees are taxed $4 per month per each full-timer on the payroll. Although the city generates $20 million in revenue each year, some officials are concerned the tax discourages expansion.

2. Detroit mayor unveils overhaul. The city of Detroit will no longer treat its neighborhoods equally. They will instead be designated as steady, transitional or distressed, and city services will be prioritized in certain areas, according to The Detroit News. Detroit mayor Dave Bing said the move is a “short-term intervention strategy” to save certain neighborhoods. The redeployment strategy begins in two weeks. “We must be smarter about how we align our resources,” Bing told The News.

3. Ford building second India factory. Following in the footsteps of rivals General Motors and Tata Motors, Ford announced today it would build a factory in the western state of Gujarat in India. The $906 million facility will be operational in 2014, according to Bloomberg. The factory is Ford’s second in India, with another plant located in the southern state of Tamil Nadu. Analysts said the move gives Ford access not only to northern India, but perhaps to the European market as well.