Changing Gears senior editor Micki Maynard was a guest on Wisconsin Public Radio’s The Kathleen Dunn Show this morning to talk about everything from the automobile industry to the mission of Changing Gears.
Earlier this week, Ford announced its best first quarter results in 13 years, reporting $2.6 billion in net income. “The big difference between now and then is that back then they were making all their money on SUV’s and pick-up trucks and now they’ve actually found a way to make money selling small fuel efficient cars” explained Maynard.
She added that though it might be hard for SUV and other big-car drivers to believe, “small cars are actually one of the fastest growing segments in the American car market.”
Maynard said Alan Mulally, Ford’s chief executive, directed the U.S. automaker to switch to making more fuel efficient vehicles because he feared rising gas prices would decrease the popularity of the bigger vehicles upon which Ford relied.
Chrysler also made headlines this week by announcing it plans to repay the rest of the money it had borrowed from the U.S. and Canadian governments in an auto bailout.
“Chrysler … will be very relieved to get out from under those high interest rates,” Maynard said, explaining that the automaker had borrowed a total of $7.4 billion dollars with a 14 percent interest rate to the U.S. government and a 20 percent interest rate to the Canadian government.
The U.S. government still owns much of General Motors, another American automaker that took an even bigger bailout than Chrysler. Maynard said some people have suggested the U.S. government should just dump its shares of GM, but those essentially belong to the tax paying public now. Maynard said with the economy recovering, many people in the Midwest have high hopes for a speedy recovery in the auto industry too.
“The one thing that’s haunting everyone is gas prices,” Maynard said. “I think folks were hoping that this could be a really strong year for the auto industry.”
Maynard said beyond rising prices at the pump, a decline in Japanese auto parts production because of the earthquake and tsunami there and continued uncertainty in the housing market are also contributing to slower recovering in the auto sector.
Maynard said Changing Gears strives to cover a variety of issues around the Midwest, from the auto industry to the union battles.
“Our states have a lot in common,” she said, adding that “it’s rare that the news in this region will be covered on that basis.” Maynard said she hopes the regional coverage that Changing Gears is doing could become a model elsewhere in the U.S.