Profit sharing bump GM reported a record profit yesterday, which means UAW members at GM will get a record profit-sharing bonus. Bloomberg News says union workers at all three Detroit carmakers are eligible for bonuses this year, and that could give the Midwest economy a lift.
Hospital expansion The leader of Henry Ford Health Systems in Detroit is considering a $175 million expansion to its resort-like hospital in the suburb of West Bloomfield.
Nice way to repay Sears laid off 100 employees in its Chicago headquarters this week. It’s been two months since the state approved a $150 million tax incentive to keep the company in Illinois.
Unseasonably warm “Nice” weather isn’t helping Midwest winter tourism businesses.
Brain boom Wright State University plans a $37 million neuroscience research hub.
Cleaning up An environmental advocacy group says Ohio making progress on clean energy, but it has some harsh words for one of the state’s utility companies.
Medicuts The New York Times has a look at how proposed cuts to Medicaid will hurt Illinois.
Bowing out Chrysler says it will no longer seek a loan from the federal government to develop hybrid vehicles.
Young and successful The South Bend Tribune sits down with a 29-year-old developer who’s working to revitalize the city.
That’s a lot of clams GM made $7.6 billion last year. It was a record profit.
Mixed foreclosure news New foreclosure data is in. The numbers are down in Ohio and Michigan. But they’re up in Illinois.
Research and Decline R&D jobs dropped 43% in Chicago between 2000 and 2010, according to a new study. Crain’s Chicago Business has the write-up.
Collegial process The Columbus Dispatch reports Ohio’s 37 colleges and universities have agreed on a construction wish list for this year’s state budget. Governor John Kasich called the unified process “unprecedented.”
Small power plants, big effect? The closure of four small, little-used power plants is stoking speculation that energy prices in Ohio could rise. The Cleveland Plain Dealer says the common sense analysis would say that the change should have little effect on prices. But, the new world of online auctions for power prices “don’t necessarily make common sense.”
Bus cuts Detroit will cancel early-morning bus service in an effort to save cash.
Mining bill advances A special committee has been disbanded, and a controversial piece of mining legislation has been put on the fast track in the Wisconsin Senate, proving once again that nothing is simple in Wisconsin politics these days. The bill would loosen regulations to help open an iron mine in northern Wisconsin.
Today’s news cycle has prominently featured the U.S. auto industry. Here’s a quick roundup of three stories about Detroit’s Big Three making news this afternoon:
Photo by Slobodan Stojkovic via Flickr.
1. Ford Reinstating Dividends. Ford will reinstate its quarterly dividends in 2012, the company announced Thursday. “We have made tremendous progress in reducing debt and generating consistent positive earns and cash flow,” Bill Ford, executive chairman, said in a statement. Ford will pay five cents per share to holders of Class B and common stock as of Jan. 31, 2012. Payments will be made on March 1. Ford had suspended its dividend payments more than five years ago, as the company grappled with the recession. Now, it has posted 10 consecutive profitable quarters, according to the Los Angeles Times.
2. GM Chief Shakes Up Detroit. For generations, executives at the Big Three adhered to a code of conformity and predictability. More recently, that culture has been shaken up by outsiders. None are having a more dramatic impact than General Motors CEO Dan Akerson, according to Bill Vlasic of The New York Times, who profiles the senior executive today. Vlasic examines Akerson’s handling of the recent federal investigation into the Chevrolet Volt plug-in hybrid. By offering to buy back Volts from concerned owners, Akerson adopted an “aggressive – and potentially risky – strategy,” said one analyst. Akerson saw the company’s reponse to the crisis as a potential defining moment, Vlasic writes.
3. Detroit Comeback Featured In Time. The comeback of the American auto industry has reached the front page of Time Magazine. The lead story of an issue that hits newsstands tomorrow examines the resurgence of a domestic industry that faced extinction only three years ago. Specifically, the weekly news mag looks at Chrysler and the role of CEO Sergio Marchionne in boosting sales 23 percent in October 2011 year over year. The headline: “How America Started Selling Cars Again.”
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.”
Rick Perry’s stumble in Wednesday night’s Republican presidential candidates debate caught a lot of attention inside the Beltway. But Mitt Romney’s characterization of the auto bailout has also touched nerves — especially because parts of it seem to be wrong.
Romney’s opposition to the bailout is well-known, and in fact, Republican candidates by and large think it was a bad idea.
Asked about the auto bailout during a discussion of the economy last night, Romney said, “Whether it was by President Bush or President Obama, it was the wrong way to go.”
He went on, “We have capital markets. It works in the U.S.”
In reality, banks had refused to provide Chrysler and General Motors with the kind of financing the companies would have needed to restructure. Congress also refused to approve a bailout package. That was why the government stepped in to finance and speed the companies through Chapter 11.
Ford, which did not seek federal assistance, had borrowed billions of dollars from financial institutions before the financial crisis. But it do so by mortgaging virtually the entire company, including its blue oval logo. Continue reading
Three stories making news across the Midwest today:
1. Cleveland counts on small growth. In the past, economic development approaches in Cleveland have centered around big-ticket items. A new stadium. A new arena. The Medical Mart and Convention Center. That strategy is changing. Under Cuyahoga County’s new governing structure, executive Ed FitzGerald will target small-and-medium-sized business growth rather than large-scale projects. Our partner station Ideastream examines a proposal for a $100 million economic development fund that FitzGerald calls “a major commitment to business development.”
2. Tennessee GM plans will re-open. The contract agreement between the United Auto Workers and General Motors calls for the hiring of an additional 6,400 employees. Approximately 1,700 will be located at the company’s plant in Spring Hill, Tenn. The plant was initially shuttered in June 2009, but in a move that’s considered rare among industry insiders, the plant will re-open as GM seems to gain market share from Toyota. According to an Atlanta Fed analyst, the re-opening is one such reason “Tennesee could be viewed as a leader of the pack in automotive manufacturing strength,” throughout the nation.
3. Business school applications down. As prospective students grow leery of accumulating massive amounts of student debt, applications to most Chicago-area business schools have fallen. Crain’s Chicago Business reported Monday that applications at Loyola University’s Graduate School of Business have fallen 9.5 percent this year, applications at Northwestern’s Kellogg School of Management declined 5.6 percent. Applications at the University of Chicago’s Booth School of Business dropped 3.0 percent. DePaul was the only university in the Chicagoland region to buck the trend, noting a 13 percent jump.
Three stories making news across the Midwest today:
1. Ohio leads nation in unemployment drop. Has the Buckeye State bounced back? Ohio saw a decline of 2,800 people making first-time unemployment claims last week, the steepest drop in the country, our partner station Ideastream reported. Officials attributed the decline to a rise in auto manufacturers going back to work.
2. Small cars lead to bigger gains. GM reports sales rose 10 percent in June, buoyed by a rise in customers looking for fuel-efficient cars. The new Chevrolet Cruze compact led overall sales of 215,000 vehicles, reports our partner Michigan Radio. An earthquake-related shortage of Japanese cars helped GM.
3. New dean takes over at Michigan’s business school. Alison Davis-Blake began her tenure as the dean of the Ross School of Business at the University of Michigan on Friday. Previously, she had served as dean at the University of Minnesota’s Carlson School of Management. In an introductory post on her new blog, she writes, “leadership, creativity and innovation are at a premium as business plays an increasingly significant role in addressing the globe’s most pressing social and economic issues.”