Workers at Diplomat Specialty Pharmacy prepare custom prescriptions
FLINT — There may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1 in Flint, Michigan. It was one of the factories sit-down strikers occupied in the 1930s. The plant made tanks during World War II. It was later closed, gutted and reborn as a GM design center. But GM abandoned the site after bankruptcy and the new occupants don’t make cars. They sell very expensive prescription drugs.
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There’s one group of experts who can always tell you the history and significance of an old factory. They’re the guys at the bar across the street.
Dan Wright is still a regular at The Caboose Lounge. He worked at Fisher Body No. 1 briefly in the 1970s.
“The bars were always full and restaurants were always full and stores were always full,” he says. “And all these stores, bars and restaurants you go to now, there’s nobody there. And it’s sad that Flint died the way it did.”
LIVONIA, Mich. – A recovering U.S. auto industry should add more than 150,000 new jobs by 2015, and most of them will be located in hard-hit Michigan.
Analysts from the Center for Automotive Research in Ann Arbor said Tuesday that gains sales and market share, as well as savings reaped from recently concluded UAW contract negotiations, will allow Detroit’s automakers to expand their workforces. The Big Three are projected to add approximately 30,000 new jobs over the next three years.
American Landscape, by Sheeler
But that’s a relatively small share of the overall projected industry growth. Suppliers are expected to account for the bulk of the increase across the country. Estimates say the auto industry employs 590,000 today and will employ 756,800 in 2015, a 28.2 percent increase. That year, sales of light vehicles are expected to hit 15.5 million units.
“They’re going to grow,” said Kristin Dziczek, assistant research director at CAR. “They’re going to have to.”
Managing that growth is trickier than it may appear. Automakers are fearful that suppliers have promised more capacity than they can actually deliver as demand grows. Many suppliers have been reluctant to ratchet up operations in case the boom never arrives.
Years ago, General Motors boasted that Saturn was “a different kind of car company.”
Now, the Spring Hill, Tenn. facility that once made the now-discontinued Saturn is becoming a different kind of assembly plant.
As part of a four-year contract agreement with the United Auto Workers, General Motors will re-open the shuttered assembly side of the plant next year. On Monday, the company announced nearly 700 workers will be hired in 2012 and nearly 2,000 will be added by 2015.
When they arrive, they’ll find an assembly plant unlike any other in the country. GM is trying what Forbes calls “an innovative manufacturing concept” at the facility. Rather than produce one or two models, Spring Hill will function as a flex plant that produces vehicles in high demand, serving as an overflow catch-all of sorts.
The flexible nature of the plant was conceived after General Motors’ production could not keep up with sudden customer demand for the Chevrolet Equinox last year. Sales of the model rose 18 percent year over year, and production was ramped up three different times since 2009. GM said it will spend $61 million preparing Spring Hill to build the Equinox, a crossover model that has been Canadian-built in the past, according to Forbes.
On Wednesday, the White House formally issued a proposal to nearly double automotive fuel efficiency standards by 2025. The proposal to boost the standards to 54.5 miles per gallon – a jump from the 27.3 mpg required today – comes on the heels of an agreement President Obama reached this summer with automakers.
Here’s a glance at five responses to the news:
Dan Becker, Safe Climate Campaign
“It is not every decade that a president does something to simultaneously help the environment, consumers and the auto industry. President Obama has done just that. These standards are the biggest single step any nation has taken to fight global warming. They will slash our oil addiction.”
Three stories making news across the Midwest today:
1. Chicago budget vote tonight. Chicago Mayor Rahm Emanuel’s first city budget will be voted upon by the city council tonight. It is expected to be easily approved. The budget addresses a $635 million deficit through a series of layoffs, library and mental-health clinic cuts and fee increases. Our partner station WBEZ says the only question now is how the city’s 50 aldermen will vote, citing minimal opposition. “It could be six or it could be a unanimous vote,” Ald. Bob Fioretti tells the station. He said he worried Emanuel’s plan to nearly double fees for water and sewer service over four years will hasten an exodus of residents. But, “My yes or no vote isn’t going to mean anything,” he said. “I believe it’s already decided.”
2. Chrysler brings 1,100 jobs to Toledo. Chrysler announced today that it would invest $500 million at a Toledo assembly plant to build its next-generation Jeep SUV. The investment is expected to create more than 1,100 new jobs by 2013, according to the Detroit Free Press. The Toledo North plant will add a second shift. The plant, which opened in 1997, was the only Chrysler plant in North America operating only one shift, according to the newspaper.The investment comes as part of a $1.7 billion move centered around the Jeep SUV. Remaining funds will be invested at other Chrysler plants.
3. Cleveland biomedical companies eye China markets. There’s growing opportunity for Cleveland-area biomedical companies to meet China’s growing demand for advanced health care. The Chinese government has pledged $100 billion to upgrade its healthcare infrastructure, and “it would be insane not to take advantage of that immense growth,” Eddie Zai, founder of the Cleveland International Group, a business investment consulting firm, tells our partner station Ideastream. Zai’s new venture, the Cleveland Bio-Fund, is partnering with Newsummit Pharmaceuticals in Shanghai, to bring $100 million to U.S. medical device companies. The Plain Dealer endorses the developments, calling it, “an example of the kind of commerce that is the path to jobs and wealth.”
Rick Snyder and Mitt Romney may have similar backgrounds – both born and raised in Michigan, both cultivated moderate conservative reputations en route to winning governorships in traditional blue states.
But when it comes to the federal bailout of the auto industry in 2009, the two politicians have starkly different positions.
Romney, as a Democratic political ad reminded viewers this week, would have let Chrysler and General Motors go bankrupt. He elaborated on that position in this week’s Republican candidate debate held in suburban Detroit. “They should have gone through a managed bankruptcy process,” utilizing a private-sector bailout that provided funds and time for restructuring, he said.
Officials from a three-county area in northern Mississippi spent years trying to entire an auto maker to open a plant in their area. Next week, their efforts will finally pay off.
On Nov. 17, Toyota will begin production at a plant in Blue Springs, Miss. that will employ 1,530 workers by the end of the year. Finally, officials there feel their area will participate in the economic boom automakers have provided across the South for the past decade.
“It’s a Godsend to us,” says Tupelo Mayor Jack Reed. Jr., who tells CBS News the plant has energized the entire area. “People around here certainly have a little more bounce in our steps now.”
Elsewhere in the South, other communities have benefited from the auto influx. Nissan has opened a plant in central Mississippi, Toyota in Texas, Kia in Georgia, Volkswagen in Tennessee. Another Toyota plant in Georgetown, Ky. opened in the 1980s.
All together, carmakers have invested $6 billion in eight plants in five Southern states. Those plants in Georgia, South Carolina, Alabama, Tennessee and Mississippi collectively employ 27,000 and tens of thousands more at regional auto suppliers, reports The Florida Times-Union.
With 1.3 billion people within its borders, China holds the largest car market in the world. Ford would like to build its market share there.
Ford only ranks as the ninth-largest company there, in terms of auto sales. The company is formulating a new strategy to make up for what they see as a slow start in China.
In the first of a three-part series that reviews Michigan Gov. Rick Snyder’s trade mission to Asia, our partner station Michigan Radio examines the possibilities for Detroit’s Big Three in potential Chinese auto sales, even as car sales have slowed.
For Ford, that means bringing 15 new models to market in the next five years, and investing hundreds of millions in plans and dealerships.
Here’s the first part of the Michigan Radio series. Keep an eye out for part two tomorrow.
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Some contradictory news emerged on the Michigan economy today.
The state’s economy is recovering from the Great Recession at the second-fastest pace of any state in the country, according to a Bloomberg index that measures the pace of state growth. Only North Dakota outpaced Michigan, which was led by the resurgence of Detroit’s automakers and local manufacturing.
Seventy percent of Michigan employers said they expected the state’s economic outlook would improve over the next 18 months, according to Bloomberg Businessweek, which first reported the results. But the financial magazine also said the improvement reflects the severity of Michigan’s decline – it ranked last in the index through 2010.
Michigan still has formidable challenges ahead. Elsewhere, a report released today by outplacement firm Challenger, Gray & Christmas showed that it ranks as the fourth-highest state or district in number of layoffs to date in 2011. The report said that 29,312 Michigan employees have been laid off so far this year.
Three stories making news across the Midwest today:
1. Big Three sales rise. Detroit automakers posted gains in annual sales Tuesday, although some leaps were not as large as anticipated. Chrysler showed the most significant improvement. Sales of its light vehicles rose 27 percent in October, year over year. Ford sales rose 6 percent overall and General Motors increased 1.7 percent, under expectations of a 5-to-7-percent increase. According to the Detroit Free Press, sales of the 2012 Ford Focus were largely unchanged over the year, but sales fell below the model’s chief competitor, the Chevrolet Cruze.
2. Pittsburgh seeks incoming residents. Upon winning $100,000, reality-show contestant Matt Kennedy Gould once dissed Disney World and proudly declared, “I’m going to Pittsburgh!” He’ll have some company. A promotional arm of the city is offering a $100,000 prize in a contest that aims to woo potential Pittsburgh residents. Officials seek what they call “experienced dreamers,” a euphemism for people 45 and older who are seeking a fresh start in a new city to “realize their dreams.” In New York City, the contest has some appeal. The blog Brokelyn notes, Pittsburgh boasts an unemployment rate below the national average and “the beer is really cheap.”
3. Toyota will export Siena. For the first time, Toyota will begin exporting the Siena from its U.S. assembly plant in Princeton, Ind. Shipments to South Korea are scheduled to begin in November. “We hope to continue boosting exports from our North American operations,” said Yoshimi Inaba, president of Toyota’s North American operations. In a written release, the company said it has exported several models of U.S.-made vehicles since 1988, and that overall, those exports increased 30 percent in 2010 to approximately 100,000 units. Sienna exports to South Korea are forecast at 600 annual units.