The Homa Files

Excerpted from WSJ, Ford Plans Shift to Small Fuel-Efficient Cars, Dec 2, 2008

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Ford plans to tell Congress it is retooling itself to build small fuel-efficient cars and break from the past strategy of focusing mainly on large pick up trucks and sport-utility vehicles.

Ford’s plan would likely emphasize its new fuel-efficient gasoline turbocharged direct-injection engines across its lineup and plans to bring popular, high-mileage cars from its European operations to the U.S

GM’s plan includes cutting brands and focusing on new fuel-efficient vehicles …  to meet new stringent federal mileage rules. GM hopes to have an electric plug-in car, the Chevrolet Volt, on the road sometime in 2010.

Ford, like GM, will likely express a willingness to seek further cost-cuts and concessions from the United Auto Workers union

Ford has concerns about the payments it’s already made to a new health care trust for retiree union workers. GM owes the fund $7.5 billion by 2010 – an amount many suspect the auto maker cannot afford – while Ford just paid more than $4 billion in its similar obligation earlier this year.

With regard to possible concessions by the UAW. UAW President Ron Gettelfinger is open to eliminating the jobs bank, the program that pays workers most of their wages even when they are laid off and no longer work in plants.

[Ken’s Note: the job bank — laid-off workers getting near full-pay to play cards or do crossword puzzles in a congregating hall — costs the Detroit 3 over $1.5 billion annually — about over $600 per car sold — making their total labor cost disadvantage (vs. ‘transplant’ carmakers in the South) over $1,500 per car]

But Mr. Gettelfinger wants to see management sacrifices in return, and some kind of future retraining program to help laid-off workers get high-tech jobs in areas such as battery development for electric vehicles.

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Auto companies were also devising alternative travel plans after lawmakers excoriated Detroit’s CEOs for previously using expensive corporate jets to make their way to Capitol Hill. Mr. Wagoner is considering driving from Detroit to Washington in one of GM’s hybrid models.

Full article:
http://online.wsj.com/article/SB122817144031770385.html?mod=testMod

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This entry was posted on December 2, 2008 at 8:02 am and is filed under Autos - Travel, Environment - Green. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.