Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
Stung by sluggish sales, consumer criticism and bad reviews, Honda announced today that it would revamp its Civic only eight months after it released its latest model.
Critics noted the newest Civic was made from cheaper materials, had slower braking capability compared to its predecessors and failed to receive “recommended” status from Consumer Reports.
Tetsuo Iwamura, chief executive of American Honda Motor Co., made the announcement during an appearance in Detroit on Tuesday. The move comes as part of Honda’s ambitious goal to lift U.S. sales by 24 percent in 2012. Civic sales have been trending in the opposite direction.
U.S. sales of the Civic have fallen 13 percent this year to 200,690, according to researcher Autodata Corp, while Honda’s overall market share in the U.S. dipped one percentage point to 9 percent.
Three stories making news across the Midwest today:
1. Who wrote Wisconsin mining bill? New details are emerging on who helped write a bill that overhauls Wisconsin’s mining laws. Last week, state Republicans declined to provide details on who authored the legislation. The Milwaukee Journal Sentinel reported today that five Republican legislators, their staffs, representatives from the Wisconsin Manufacturers & Commerce business lobby and officials from the mining company Gogebic Taconite all participated. Earlier this year, Gogebic Taconite demanded changes in mining legislation so the company could move forward with plans to open a $1.5 billion mine in a forested area of Iron and Ashland Counties.The Journal Sentinel reports that details of Assembly Bill 426 had been “kept under wraps for months,” leading to questions from environmentalists about who authored the legislation.
2. Detroit suburb rejects mass transit. The city council of one town in southeast Michigan rejected a proposal Monday to build a federally funded transportation center within its borders. The center in Troy, considered a key piece to a mass-transit system in metro Detroit, was voted down, 4-3. Opponents called the $8.5 million center a “waste of tax dollars,” according to the Detroit Free Press, although Troy would not have footed the bill. Earlier, Michigan Gov. Rick Snyder sent a letter urging the council to support the proposal. Monday was the final day for a decision in order to complete the project by the Oct. 1, 2013 deadline set by the U.S. Department of Transportation.
3. Housing shows slight improvement. The homebuilding industry is showing modest improvement headed into 2012, according to analysts. The Associated Press reports that apartment construction and permits “surged” in November, jumping 9.3 percent from the previous month. It’s the highest level since April 2010. Still, the market remains troubled. Builders broke ground on a seasonally adjusted rate of 685,000 homes last month, but economists say a healthy housing market would produce 1.2 million homes each year. “While beginning to improve, a strong, sustained recovery in the housing market, especially the important single-family sector, is still a ways off,” Steven Wood, chief economist at Insight Economics, tells the AP.
Employees crowded around, took photos and cheered as the last Ford Ranger pickup truck rolled off the assembly line Friday in St. Paul, Minn.
At least one worker was bewildered by the reaction.
“I could not understand why there were cheering for the last vehicle,” Mike Montie, who worked at the Twin Cities Assembly Plant for 28 years, told the Associated Press. “You cheer for the first one, not the last one. I was like, ‘What the hell?’ I didn’t want it to end, you know?”
He was one of 800 employees who lost their jobs when the Twin Cities Assembly Plant closed Friday. The plant, located along the banks of the Mississippi River, has produced more than 6 million cars during an 86-year history. But sales of the Ranger have slackened since the 1990s, and Ford decided to concentrate on larger, more profitable pickups.
A multimillion dollar cleanup of the 122-acre site will begin early next year.
Local officials are hopeful the site can be repurposed. According to the St. Paul Star Tribune, locals are considering a lot of possibilities, including a green manufacturing complex, a densely populated transit village, a park, an office campus and a middle-class neighborhood.
Three stories making news across the Midwest today:
1. Groupon gets mixed reviews. Three investment banks that sold Groupon’s initial public offering in November have mixed views of the company’s stock. Credit Suisse analysts rated the stock “neutral” in research reports released today. Morgan Stanley advised its clients to wait to buy shares of the Chicago-based company until the stock price fell, according to our partner station, WBEZ. Only Goldman Sachs rated the stock a “buy.” Banks that lead an IPO traditionally deliver favorable ratings. Shares were sold to the public at $20 each in the IPO, and traded at $22.20 this morning.
2. Saab files for bankruptcy. Concerned that its technology could land in the hands of Chinese competitors, General Motors blocked a sale of Saab, which subsequently filed for bankruptcy. Experts tell the Detroit Free Press that the 60-year-old company will likely be sold off in parts. Saab CEO Victor Muller purchased the company from GM in 2010 intent on restoring it. But GM still owned some technology licenses for the car, and feared that reorganizing the company through Chinese and Russian financing could mean the technology would be used by competitors. Saab filed the bankruptcy in southwestern Sweden.
3. Harley-Davison layoffs begin. Harley-Davidson Inc. has started sending layoff notices to hourly workers in its Milwaukee-area manufacturing facilities as part of its plan to reduce its headcount by 26 percent, according to the Chicago Tribune. The company plans to lay off approximately 250 of its 950 union workers, and then will hire 150 to 250 temporary employees to handle seasonal production increases. The company expects to save $50 million per year. The move comes as part of CEO Keith Wandell’s push to make the company and its workforce more flexible while courting a wider set of buyers.
Here at Changing Gears, we can’t let 2011 go by without marking a revolutionary anniversary. Fifty years ago, in 1961, GM installed the first industrial robot. It altered the course of manufacturing forever. Unimate was a robotic arm that unloaded hot pieces of die-cast metal. Joseph Engelberger, known as “the father of robotics,” saw the invention as a way to replace dangerous, dull and dirty jobs.
Unimate actually had two fathers – George C. Devol, who died in August at age 99, and Engelberger, who is still alive. Back in 1966 Engelberger joined Unimate on “The Tonight Show” with Johnny Carson, where he (the robot) sank a putt and opened a can of beer. We were struck by the wonder of that moment, the enthusiasm for the power of automation. Chrysler and Ford followed GM’s lead, but it was Japan that fully embraced the new robotics.
For years, Indiana’s Republican governor, Mitch Daniels, has resisted efforts by fellow Republican lawmakers to implement Right to Work legislation. But now, Daniels is making a Right to Work law one of his legislative priorities for 2012.
Right to Work laws mean employees do not have to join a union, if it is formed in their workplace, nor do they have to pay union dues. (To see Right to Work states, click here.)
Under “closed shop” laws in effect in Michigan, and other northern states, employees must either join a union when one is certified, or pay dues. Some people say that forces them to become union members against their will, since they must pay dues anyway.
Daniels, in a presentation Thursday laying out his goals for the new year, said Indiana needs the law because he believes it will lead to increased job opportunities. Daniels said the nation’s 22 Right to Work states enjoy faster job and income growth, and have lower unemployment rates.
As you’re relaxing on Boxing Day, tune in to our partner station WBEZ Chicago for the Changing Gears special, “Getting By.” We’re talking to eight Illinoisans from all walks of life — a banker, a farmer, a hospice nurse, a returning veteran and others — about the way they dealt with the economy in 2011, and their hopes for 2012.
There are many statistics about the economy, like the unemployment and foreclosure rates, but we don’t often get to hear the human side.
Our conversation, recorded at my dining room table, covers everything from the mortgage crisis, to job hunting successes and failures, to the personal decisions our participants have had to made because times are tight.
WBEZ’s Steve Edwards and I are the co-hosts You can listen live at WBEZ’s Web site. “Getting Live” airs at noon Central Time on Monday, Dec. 26.
African-American Influence: The number of African-American households earning $75,000 or more grew by 64% between 2000 and 2009 — 12% faster than the overall population’s earning growth, a new survey by the Nielsen Co. shows, according to Crain’s Chicago Business. African-American women, particularly, are boosting their earning power. The percentage of black women who attended some college or earned a degree increased to 53%, compared with 44% for black men. Though the numbers are national, they signal a socioeconomic shift for cities with significant black populations, such as Chicago and Detroit, Crain’s said.
Detroit Light Rail Aftershock: Business leaders in Detroit are feeling the aftershock of the government’s abrupt decision this week to cancel a light rail project, the Detroit News said. The leaders say they were not consulted by the Transportation Department, which scrapped the $500 million project in favor of high-speed buses. Given the time and effort that city businesses and leaders committed to the project, they were owed a discussion before the announcement was made, the Detroit Downtown Development Partnership said in a letter released today.
New Cleveland Flights: Delta Air Lines is adding 10 new daily flights between Cleveland’s Hopkins International Airport and LaGuardia Airport in New York City. According to the Cleveland Plain-Dealer, the flights begin July 11. The first will be at 6:45 a.m. and the last at 7 p.m. The Delta service joins five flights a day by American Airlines, and 12 a day by United Airlines, which assumed Continental Airlines’ hub in Cleveland when the airlines merged last year. Delta said its creation of a LaGuardia hub is the largest single airline expansion in New York in more than 40 years.
Detroiters were more than a little perplexed this week at the news the city wouldn’t be getting a long-sought light rail system. Instead, the Transportation Department has recommended a high-speed bus transit system for the Motor City, even though $25 million had already been allocated for light rail.
Fast buses? Like the one in the movie Speed? Well, not exactly.
High-speed buses run in dedicated lanes that bring to mind streetcar tracks, except much cheaper and easier to install.
They’re operating just a couple hours’ drive away from Detroit, in downtown Cleveland, one of a growing number of American cities that have installed them. There, HealthLine buses glide along Euclid Avenue and out to the famous Cleveland Clinic.
Rather than hail a bus, and pay as they enter, riders buy tickets, then hop on and hop off. The platform is the same height as the bus, making the ride easier for the elderly or disabled. The buses have their own traffic lights, which allow them to avoid snarled traffic.
Our Dan Bobkoff took a look at Cleveland’s transit system earlier this year for Marketplace. In Cleveland, the rapid bus system cost $200 million; a light rail system would have cost $800 million.
But proponents of light rail systems say they can do more for development than rapid bus systems — something that Detroit can definitely use.
“There’s a distinction between public transit as economic development — which was the great hope for light rail — and public transit as a basic service to move people from homes to jobs,” Stephen Henderson, the editorial page editor of The Detroit Free Press, wrote this week.
Would you have preferred to see light rail for Detroit? How do you feel about rapid bus transit?
Conventional wisdom is that the U.S.-born children of immigrants should fare better than their parents, with better education and higher paying jobs. But a new study from the Latino Policy Forum shows that’s not the case in Chicago – especially among Mexican-Americans, who are still stuck in the same low-wage jobs as their foreign-born parents.
With the sheer size of the Latino workforce – three out of five new entrants into the workforce over the past decade – that has implications for Chicago’s entire economy, said Latino Policy Forum Director Sylvia Puente, who added Chicago needs to act now to ensure that the metropolitan area’s future workforce remains economically vibrant.
“The question we’re asking is, is there a Latino blue collar ceiling in Chicago because we’re seeing limited economic mobility, between native-born workers and immigrant workers of Mexican origin – the majority are in sales, manufacturing and construction,” Puente said.