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Business News: Ford Aims to Raise Output From Mexico --- Auto maker advances investment push abroad
after
labor deal raises wages for U.S... ...................................................................................................................................5
Why Ford's Stock Could Gain Speed ..............................................................................................................................7
Business News: China Gives GM a Lift As Europe Dings Ford ......................................................................................8
FORD HOPING TO PUT A CHARGE IN ELECTRIC CARS ; But getting investors to buy in could be the most difficult
part ................................................................................................................................................................................11
Ford profit triggers record $9,300 UAW worker checks ................................................................................................13
Strong U.S. Sales Lifted Profit at Ford in 2015 .............................................................................................................15
Business News: Ford's Margin Outlook Undercuts Strong Year ...................................................................................17
Ford expands recall over Takata air bags Twitter hires chief marketing officer ............................................................19
Business News: Ford to Exit Japan, Indonesia Amid Dim Prospects for Profit .............................................................21
Ford adds start-stop technology to top-selling F-150s ; Automaker hopes to boost gas mileage in 60% of its lineup......
23
Autos Posted a Record Year? Sell! ...............................................................................................................................24
Autos: Ford to Pay Extra Dividend ................................................................................................................................26
Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- Ford's chairman is on a quest to reinvent the
company founded by his great... ...................................................................................................................................27
Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- India's Mahindra sets up shop in Michigan to
learn from Big Three, avoid... ........................................................................................................................................29
Autos: In Detroit, Trucks Take Back Seat --- Passenger cars, electric vehicles are likely to occupy center stage at
auto show ......................................................................................................................................................................31
Business News: SUVs Fuel U.S. Production Boom ......................................................................................................33
Ford gets unexpected $1.5B boost in profit ; Automaker eliminates tactic of 'smoothing' gains/losses over years..........
35
Business News: Business Watch ..................................................................................................................................36
Ford partners with Amazon to connect cars with homes ; Automaker keen to using Echo, Wink to bring Internet of
Things into its cars ........................................................................................................................................................38
Debt Market Revs As 2016 Gears Up ...........................................................................................................................39
WSJ.D Technology: Ford Accelerates Its Mobility Push ...............................................................................................41
No Longer Wallflowers, Carmakers Aim to Grab Spotlight at Electronics Show ...........................................................42
Auto Sales Explode, but Detroit Brands No Longer Dominate......................................................................................44
Business News: Ford, Google Pursue Auto Venture ....................................................................................................47
Ford Recalls 313,000 Cars to Fix Lights .......................................................................................................................50
Overheard .....................................................................................................................................................................51
Overheard .....................................................................................................................................................................52
Page 1 of 187 © 2020 Factiva, Inc. All rights reserved.
Detroit's Big 3 lag in car crash test ; Foreign nameplates fare better in insurance industry's annual survey................53
Ford steers self-driving cars toward urbanites ..............................................................................................................57
U.S. Auto Sales Roll Toward a Record .........................................................................................................................58
Business News: Ford Says Labor Costs Will Increase, Minimally ................................................................................61
AOL president Lord plans to leave company ................................................................................................................63
Business News: Ford's New Pitch Goes Flat --- Car maker to embrace end-of-year cash offer after no-haggle price
promotion fizzles out .....................................................................................................................................................64
OFF DUTY --- Gear & Gadgets -- Rumble Seat: A Mustang for Those Who Want to Start a Parade ..........................66
New Math for Detroit .....................................................................................................................................................68
Ford Joins Auto Makers in Dropping Takata Air Bags ..................................................................................................71
Business News: UAW Wraps Up Contract Talks With Ford, GM .................................................................................72
Union Vote at Ford and G.M. Ends Painful Process for Big Three ...............................................................................73
U.A.W. Contract With General Motors Is Ratified After Delay.......................................................................................75
UAW Races to Save Deal --- Ford vote goes down to the wire as union struggles to avoid another setback ..............77
Results of U.A.W. Vote Show Ford Pact Losing ...........................................................................................................79
Labor Pact With Ford Hits Snag ....................................................................................................................................81
Passage of Ford-UAW contract in doubt Railway defends bid for Norfolk Southern ....................................................83
U.A.W.'s Tentative Deal With Ford Tops Other Automaker Contracts ..........................................................................85
Business News: Ford Acts To Bolster Tech Ties ..........................................................................................................87
UAW, Ford Reach Agreement.......................................................................................................................................88
A Tentative Deal for Ford Autoworkers .........................................................................................................................90
Fiat Chrysler to Challenge U.S. Rivals With an S.U.V. .................................................................................................92
Profit Surges for Ford, Propelled by F-150 Sales..........................................................................................................93
Business News: Ford's Record Net In U.S. Offsets Troubles Abroad...........................................................................94
GM-UAW Forge New Path ............................................................................................................................................96
For a Good Car Deal, Think Ford ..................................................................................................................................98
Big profits may cost GM, Ford in UAW talks ; Union in stronger negotiating position as automakers thrive ..............100
Business News: Ford Bets on Smart Cars in China --- Auto maker hopes $1.8 billion in R&D will yield features
tailored for Chinese drivers .........................................................................................................................................101
Business News: Fiat-UAW Deal Is No Blueprint .........................................................................................................102
What Trade-Deal Critics Are Missing ..........................................................................................................................103
Business News: Rival Car Makers See an Opening in Europe ...................................................................................105
UAW Aims to Salvage a Fiat Pact ...............................................................................................................................107
Ford, Snyder look at future of auto industry ; Both leaders see USA's mobility options tied to tech ...........................108
Business News: UAW President Faces Restive Members .........................................................................................110

Union Tensions Tarnish Booming Auto Sales .............................................................................................................111
Fiat Chrysler Union Contract Faces Hurdles ...............................................................................................................113
UAW, Fiat Chrysler reach a tentative agreement ........................................................................................................115
Right to Work Buffs Up The Rust Belt .........................................................................................................................117
Autoworkers' Union Reaches Tentative Deal With Fiat Chrysler ................................................................................119
Business News: GM and UAW Agree To Extend Contract .........................................................................................121
Ford Will Use More Of Alcoa's Aluminum ...................................................................................................................122
GM, Ford Say Europe Will Pay Off --- Continent continues to generate losses but cost cuts, SUVs will turn tide, they
say ...............................................................................................................................................................................124
Sleek 'Euro Vans' Reignite U.S. Sales ........................................................................................................................126
Business News: UAW Video Heats Up Detroit Talks ..................................................................................................128
Business News: Tesla Motors Seeks U.S. Help on China ..........................................................................................130
Ford ponders resurrection of Ranger, Bronco in U.S. ; Carmaker won't comment on reports it will bring back popular
pickup, SUV.................................................................................................................................................................132
Business News: Chinese Auto Sales Fell Again in July, Vexing Car Makers .............................................................133
Business News: Parts Shortage Slows F-150 --- Ford hires second supplier to provide steel frames to better meet
delivery demands ........................................................................................................................................................135
Spiders wreak havoc on fuel lines ; Ford engineers hope new invention keeps pesky invader at bay .......................137
July Vehicle Sales Jump 5.3%, Bolstered by S.U.V.s and Trucks ..............................................................................139
Ford's Profits Jump 44%, Soaring Past Forecasts ......................................................................................................141
GM, Ford Flourish Out of Limelight .............................................................................................................................143
Business News: GM, SAIC Set Plan to Share Design ................................................................................................145
Stepping on a Slippery Slope ......................................................................................................................................147
Fancy Pickup Line: Ford Truck Runs $60,000 --- Detroit pushes eucalyptus wood trim and other luxury touches as
buyers pay up for premium..........................................................................................................................................149
Ads for Podcasts Test the Line Between Story and Sponsor......................................................................................151
Business News: New Lincoln Is Made in U.S.A. --- Auto maker adding next Continental flagship to Michigan factory
that now builds Mustang..............................................................................................................................................154
G.M. Is First of Big 3 to Open Contract Talks With the U.A.W. ...................................................................................156
UAW, Detroit Talks Focus on Tiered Pay....................................................................................................................158
China Stocks' Rough Ride For Ford, GM ....................................................................................................................161
Ford to Shift Work Abroad --- Car maker to end U.S. production of Focus sedans as demand for small cars fades .......
162
Law Journal: Car-Repair Notices Feed Suits --- Purported class actions quick to make use of service bulletins sent to
dealers by auto makers ...............................................................................................................................................164
GM down in June, but Ford, Chrysler sales rise .........................................................................................................166
Chrysler Hits Retail Milestone, Tops Ford ...................................................................................................................168

Business News: Asian Car Makers Out-Earn Detroit --- Weak profits threaten U.S. companies' ability to go toe-to-toe
in tech and emissions... ...............................................................................................................................................170
Business News: Buyers Ding Chrysler Quality --- Italian-U.S. auto maker struggles in J.D. Power survey, as Ford and
GM catch up with Japanese ........................................................................................................................................172
A High-Tech Car, Undone by Technology...................................................................................................................174
As Talks Near, UAW Steels for Strike .........................................................................................................................177
Business News: Ford's F-150 Production Curbed by Frame Shortfall ........................................................................179
Car Makers, UAW Consider New Tier of Hires --- Unskilled jobs handled by parts suppliers could be brought
in-house; pay of $10-$15 an hour ...............................................................................................................................180
Ford GT's smokin'-hot tech will waft down into lineup .................................................................................................182
Income Falls for Ford, but Forecast Is Rosier .............................................................................................................184
Business News: Ford, Honda Post Lower Earnings As Sales Slacken --- No. 2 U.S. auto maker hit by weakness
abroad, switch of pickup truck... ..................................................................................................................................185
Business News: Ford Targets Affluent With New Sedan ............................................................................................187

Business News: Ford Aims to Raise Output From Mexico --- Auto maker advances investment push abroad after labor deal raises wages for U.S...
Business News: Ford Aims to Raise Output From Mexico --- Auto maker advances investment push
abroad after labor deal raises wages for U.S. workers
By Christina Rogers
869 words
8 February 2016
The Wall Street Journal
J
B3
English
Copyright © 2016, Dow Jones & Company, Inc.
Ford Motor Co. will build a new assembly plant in Mexico and sharply increase factory output from that country,
representing the latest shift of investment abroad by a Detroit auto maker following the signing of a costly new
labor deal.
The No. 2 light-vehicle seller in the U.S. plans to add 500,000 units of annual Mexican capacity starting in 2018,
more than double what it built in 2015, according to people briefed on the plan. The plan mirrors General Motors
Co.'s $5 billion investment to double Mexican capacity by 2018.
Ford will build a new assembly complex in San Luis Potosi, and expand an existing factory near Mexico City. The
moves will make room for several models, including a yet-to-be-disclosed hybrid vehicle that is described as a
Toyota "Prius fighter," and will allow Ford to focus its U.S. factories on higher-profit trucks and sport-utility
vehicles.
A company spokeswoman declined to comment on the plans. Ford last year built 433,000 vehicles in Mexico, or
14% of its North American production.
Costs for the project likely will exceed $1 billion, people familiar with the details said, with factory construction
beginning later this year. It follows a $2.5 billion investment Ford announced last spring to build an engine and a
transmission plant in Mexico.
Mexico has lured tens of billions of dollars in automotive investment commitments in recent years, wooing car
companies with low wages, improved logistics and an arsenal of free-trade deals. Most global auto makers have
in recent years opened new assembly plants in Mexico or announced plans for one, including BMW AG,
Volkswagen AG and Toyota Motor Corp. Honda Motor Co. recently began making its subcompact Fit in the
country, investing $800 million in a new assembly factory. Kia Motors Co. also will open a new small-car plant in
Mexico this year, the South Korean auto maker's first in the country.
Detroit auto makers have long built cars and trucks in Mexico, but the country is looking more attractive following
a new labor deal struck in November with the United Auto Workers that raises wages for U.S. factory workers.
Labor rates in Mexico are roughly one-fifth of those earned by unionized workers in the U.S., a gap that is only
expected to widen as UAW wages approach nearly $30 an hour in coming years, representing as much as a $10
increase for some newer hires.
Auto factories in Mexico produced 3.4 million vehicles last year, or about one-fifth of North American production,
according to LMC Automotive.
Still, roughly three-quarters of Ford's North America production is in the U.S., according to WardsAuto, and the
company committed to invest $9 billion in U.S. assembly and parts factories through 2019.
Mexico auto output is poised to thrive during that time. LMC expects the industry's Mexican production to grow
53% to 5.2 million vehicles by 2019 as the share of production in the U.S. and Canada falls. Mexico's economy
minister, Ildefonso Guajardo, said last month there would be several significant auto investments announced in
the first quarter involving plants and new models but declined to elaborate on specific deals.
UAW President Dennis Williams, speaking to reporters on Friday, said he doesn't buy the argument that car
makers can't absorb higher labor costs. GM late last year laid out plans to start shipping Buick SUVs from China

to the U.S., and one of Fiat Chrysler Automobiles NV's new Jeeps is built in Italy. Ford is planning to build as
many as three models at the San Luis Potosi plant, with capacity to churn out as many as 350,000 vehicles a
year.
A separate expansion at its existing plant in Cuautitlan will boost output there by an additional 150,000
automobiles. "They're making huge amounts of profits," Mr. Williams said. "There is no reason mathematically to
go ahead and run to countries like Mexico, Taiwan, Thailand and Vietnam."
Mexico isn't the only market winning new investments as Detroit looks abroad.
Maria Antonieta Valdez, director of industrial promotion for San Luis Potosi, said "we don't have any official
information from the company."
One of Ford's new facilities in Mexico will get the Focus compact car, now built by unionized workers in Michigan.
The Michigan factory will shift gears in the next two years, building a new Bronco sport-utility vehicle and Ranger
pickup truck -- two models with fatter profit margins -- according to people familiar with the plans.
Ford also plans to build two other models at the new factory, including an all-new hybrid car designed to combat
Toyota's Prius, which can run on battery power at low speeds for short distances.
At its plant in Hermosillo -- opened in 1986 -- Ford produces two midsize sedans. The company also builds the
Fiesta subcompact car in Cuautitlan in a factory more than 50 years old.
License this article from Dow Jones Reprint Service
Document J000000020160208ec280002q

Why Ford's Stock Could Gain Speed
Heard on the Street

Why Ford's Stock Could Gain Speed
By Charley Grant
289 words
8 February 2016
J
C6
English
[Financial Analysis and Commentary]
The auto-sales outlook in the U.S. is murky, but murky could be good enough for Ford Motor shareholders.
While stocks in general have had a poor year, lingering growth worries have hit auto stocks especially hard.
Investors sense U.S. auto sales are peaking. Despite strong recent results, Ford shares are down nearly 30%
since last February.
Ford said last week that sales in January fell 3% from a year earlier. Sales of its signature F-series pickup trucks
slid 5%, and spending on incentives rose modestly.
The selloff has left Ford trading at below six times forward earnings, near a 20-year low. The dividend yield now
exceeds 5%. But attractive metrics won't do investors much good if sales -- and, in turn, earnings -- start sliding.
Indeed, the valuation had reached cyclical lows back in 2000 and 2005. Both times it preceded substantial
share-price declines. But that isn't definitive; it dropped to nearly five times in 2011. A sharp rally commenced a
year later.
As for the January sales report, there are bright spots. For one, low gas prices will persist for some time. That
makes higher-priced sport-utility vehicles andpickups more attractive, boosting transaction prices. Ford's were up
$1,800 in January, above the overall industry. Yes, U.S. auto sales just hit a record, but that doesn't mean they
have to reverse sharply.
Ford's share price is undeniably flashing a warning, and recent data are mixed. But after this selloff, investors
might want to give the stock another go around the track.
Document J000000020160208ec280001m

Business News: China Gives GM a Lift As Europe Dings Ford
Business News: China Gives GM a Lift As Europe Dings Ford

By Gautham Nagesh and Christina Rogers
720 words
4 February 2016
J
B2
English
General Motors Co.'s fourth-quarter profit surged on growth in China and the U.S. in a sign of its continued
strength while crosstown rival Ford Motor Co. said it plans to trim jobs and make product cutbacks in Europe to
bolster paper-thin margins there.
GM reported $6.3 billion in net income in the final three months of 2015, up from $1.1 billion a year earlier. The
latest quarter included a $3.9 billion noncash gain reflecting its improved fortunes in Europe, as accounting rules
allow GM to carry forward prior losses to offset future taxes in some countries.
The Detroit auto maker's operating profit for 2015 was a record $10.8 billion, up from $6.5 billion a year earlier. In
contrast, Ford on Wednesday said it would offer a buyout to most of its 10,000 salaried workers in Europe. Like
GM, Ford reported strong earnings in North America, contributing to its own record full-year operating profit of
$10.8 billion.
Investors aren't finding a lot to cheer about at either company. Wall Street remains concerned with economic
turbulence in China and worries U.S. auto sales have peaked. GM's stock is down 20% over the past 52 weeks.
GM shares were off 2% to $28.93 and Ford lost a nickel at $11.46, both in 4 p.m. New York trading on
Wednesday.
Some on Wall Street are bracing for an economic slowdown and questioning whether GM and others can keep
the good times rolling. GM's U.S. sales in January were flat amid mixed results from other car makers. Industry
inventories and discounts are rising.
Ford turned a profit in Europe last year, but its operating margin was only 1% in the region. On Wednesday, it
would cut hundreds of jobs and eliminate some models in the region. It is targeting 6% to 8% margins in Europe.
Ford also said it would stop making some models in the region and refocus on higher-profit cars and sport-utility
vehicles. It didn't say which of its vehicles would be phased out. Ford said it would take an undetermined charge
to earnings for the employee buyouts.
"We believe investors should pay closer attention to deteriorating [transaction price] trends, which we expect to
accelerate," wrote Joseph Amaturo, a Buckingham Research Group analyst reflecting on GM's earnings.
GM executives contend Wall Street is ignoring fundamental improvements in the U.S. economy and auto industry.
They argue U.S. car sales have plateaued, rather than peaked, and predict additional growth.
"We know there's a lot of concern from the capital markets on this, but we don't subscribe to that view," said GM
finance chief Chuck Stevens.
GM's 2015 results suggest the auto maker has weathered the worst of a safety crisis that emerged shortly after
Chief Executive Mary Barra took over in early 2014. GM settled criminal charges, some litigation and a regulatory
probe linked to a defective ignition switch on millions of recalled vehicles for more than $2 billion overall.
GM is benefiting from friendly economic conditions driving consumers to showrooms and investors' concerns are
centered on the company's room for growth. GM plans to break even in Europe this year for the first time in years.
GM pared losses in Europe in 2015 to $813 million from $1.4 billion in 2014. GM doesn't plan any further
restructuring actions because the company has "the right cost structure now" after removing the Chevrolet brand
from the region and leaving Russia, Mr. Stevens said.
At GM, equity income from its Chinese joint ventures during the fourth quarter was $572 million, up from $511
million a year ago. GM cited stronger margins in the world's largest auto market, and retail sales were up more
than 14% from a year earlier.
GM reported its fourth-quarter revenue was flat compared with a year ago at $39.6 billion. Its revenue for 2015
was $152.4 billion, down from $155.9 billion in 2014. GM said the decline was primarily due to a foreign-currency
exchange impact of $9.3 billion.

Document J000000020160204ec240002x

FORD HOPING TO PUT A CHARGE IN ELECTRIC CARS ; But getting investors to buy in could be the most difficult part
MONEY
FORD HOPING TO PUT A CHARGE IN ELECTRIC CARS ; But getting investors to buy in could be the
most difficult part
Chris Woodyard
Chris Woodyard, @ChrisWoodyard, USA TODAY
885 words
3 February 2016
USA Today
USAT
FIRST
B.3
English
© 2016 USA Today. Provided by ProQuest Information and Learning. All Rights Reserved.
Chasing Tesla and General Motors, Ford hopes a $4.5 billion investment will help it leapfrog to the front of the
pack when it comes to developing electrified cars.
But costs remain stubbornly high and progress relatively slow in developing the next generation of batteries that it
will need to draw loads of consumers to electric cars. So far Wall Street isn't offering Ford any encouragement
either, sending Ford stock to a three-year low last month after the announcement about its electric- car plans.
"Battery costs are not coming down fast enough to democratize it," says Kevin Layden, director of Ford's
electrification programs. While no breakthroughs are in sight, he says scientists and engineers are finding gradual
ways to reduce the costs of lithium- ion batteries by 10% to 20% from one generation to the next, reducing their
weight and cost while boosting their power.
More of those kinds of improvements will be critical to making a success out of CEO Mark Fields' plan to build 13
new hybrid, plug- in hybrid and fully electric models by 2020. Fields wants 40% of Ford's nameplates to have an
electric option by 2020, up from 13% today. Despite low fuel prices, automakers remain under huge pressure to
reduce emissions and boost fuel economy amid concern about global warming.
But Ford's long-range plans don't appear to be bowling over investors. Last month, Ford shares sank to their
lowest level since late 2012. The plunge is due to myriad reasons -- rising labor costs, worries about South
American sales and other factors. But the commitment to electrified cars, which have historically brought low
profit margins because of expensive batteries and high manufacturing costs, haven't helped matters.
Unlike companies such as Tesla, GM or even Nissan, Ford hasn't been perceived as a leader in electric cars,
says Roland Hwang, director of energy and transportation programs for the Natural Resources Defense Council.
"It is one of those areas where you want to go big or go home," he says.
Now, automakers are pouring their efforts into developing batteries that will cut their electric-car production costs
and allow more range than ever before. Tesla's Model S has maximum range approaching 300 miles per charge
and the electric-car maker is building a $4 billion battery "Gigafactory" outside Reno to cut costs through mass
production. GM's new Bolt electric car is billed as capable of 200 miles a charge. Ford, for its part, is boosting the
range of its Focus Electric to 100 miles a charge, up from 76, behind the others.
Ford, however, is out to prove it is serious about developing long-range electric cars that rival or beat the
competition.
Much of Ford's battery research is taking place at the Energy Institute building on the campus of the University of
Michigan in Ann Arbor, a 45-minute drive from Ford's Dearborn, Mich., headquarters. The battery lab is stocked
with the same quality level of equipment found in commercial plants so engineers can develop small batches of
batteries that make it easier to go to production.
Ford kicked in $2.1 million for the battery lab, with another $6.6million coming from the state of Michigan and the
university. Teams of researchers come into the lab for projects, often lasting weeks, to investigate new ideas for
battery chemistry, construction and how they deliver their electrical charge.
Improvements usually come in small ways, like using thinner electrodes to boost energy per volume. Or it might
be trying out what Senior Lab Manager Greg Less calls one of the "really promising" alternative chemical
formulations out there, like lithiumsilicon instead of the mainstay, lithium-ion.
"People are still looking for a breakthrough, but we are innovating with what we have now," says Bruno
Vanzieleghem, assistant director of operations for the institute.
While Ford is trying to innovate in the lab, it is also paying close attention to consumer trends. Like other
automakers, it analyzes data from its plug-in electric cars that's collected while they recharge.
Ford says its plug-in models -- C-Max crossover, Fusion sedan and Focus Electric -- have run 610 million miles
so far. They travel an average of 42 miles a day during what is usually four trips, says Mike Tinskey, Ford's global
director of Connected Services Solutions. The electrics save "just under" 1 million gallons of gas a month
compared to gas-powered models, 30% of which are from carbon- free sources.
Ford is using the data to figure out how to make its future plug- in cars more appealing. But competition is only
growing more fierce.
Ford "is (in) the thick of it" when it comes to trying to get ahead of electrification technology, says Ron Cogan,
publisher of the Green Car Journal. "All of the automakers are doing what they can to dive further into
electrification."
Hwang says despite its big investment, Ford needs to get a lot further ahead before it fears rivals less.
"Ford should be a little nervous," he says.
photo Carlos Osorio, AP of Michigan

Document USAT000020160204ec230002u

Ford profit triggers record $9,300 UAW worker checks
MONEY
Ford profit triggers record $9,300 UAW worker checks
Alisa Priddle
517 words
29 January 2016
USA Today
USAT
FINAL
B.6
English
Ford Motor (F) reported a strong fourth-quarter and full-year profit, enough to trigger record $9,300 profit-sharing
checks for about 52,700 hourly workers.
The automaker on Thursday reported net income of $1.9 billion in the fourth quarter and $7.4 billion for the year.
Revenue was $40.3 billion for the quarter and $149.6 billion for the year.
Pretax profit in the final three months was $2.6 billion, contributing to $10.8 billion for the year. The company
made money in every region except South America. There were new records in North America and Asia Pacific.
Europe is back in the black for the first time since 2011.
"We promised a breakthrough year in 2015 and we delivered," Ford CEO Mark Fields said in a statement.
The results were not surprising. Fields announced earlier this month that an accounting change that reduces
pension costs would result in higher than expected earnings, triggering larger profit- sharing checks.
The key figure for autoworkers is the $9.3 billion pretax profit earned in North America because the profit-sharing
formula negotiated with the United Auto Workers union awards $1 for each $1 million in North American profit.
That makes it $9,300 for eligible employees, before taxes, compared with checks up to $6,900 earned in 2014.
The previous record amount was $8,800 based on 2013 results.
The financial results beat Wall Street estimates for the quarter as well as the full year.
But even though Ford is fresh off its best sales year since 2000 and is working to reinvent itself as a technology
company as well as an automaker, its stock has fallen about 20% over the last year and is down roughly that
amount so far in 2016.
Earlier this month Morgan Stanley analyst Adam Jonas told a Detroit audience that there is not a positive future
for traditional car companies in today's world, where ride-sharing and autonomous driving will play key roles.
Ford shares rose 1.2% to $12 in pre-market trading but closed the day down 1.2% to $11.71.
Chief Financial Officer Bob Shanks said he thinks the market is concerned about the growth of the economy as a
whole, but the auto industry is somewhat immune because it has plateaued at such a high level and he does not
see sales or profit margins falling off through 2018.
Shanks is also buoyed by the fact that an increasing amount of the profits is coming from outside North America.
Earlier this year Ford said it would pay shareholders a first- quarter dividend of 15 cents per share and provide an
additional 25 cents per share to stakeholders of record on Jan. 29 as part of a $1 billion supplemental cash
dividend.
The record pretax profit came with strong sales of pickups and utility vehicles in a year marked by a stronger
economy and low gas prices. Ford expects 2016 to be as strong or better.
photo Bill Pugliano, Getty Images

Document USAT000020160129ec1t0000x
Strong U.S. Sales Lifted Profit at Ford in 2015
Business/Financial Desk; SECTB

Strong U.S. Sales Lifted Profit at Ford in 2015
By BILL VLASIC
781 words
29 January 2016
The New York Times
NYTF
Late Edition - Final
4
English
Copyright 2016 The New York Times Company. All Rights Reserved.
DETROIT -- Record sales in the American auto industry last year translated into big profits for Ford Motor, which
on Thursday said that it earned $7.4 billion in 2015 primarily because of strong sales in the United States market.
The results were a major improvement over the $1.2 billion that the company earned in 2014, although that profit
had been reduced substantially by special charges and accounting changes for pensions.
With its margins increasing, Ford, the nation's second-biggest automaker, is stepping up investments in electric
vehicles and other new technology.
The company's chief executive, Mark Fields, said that he expected further growth this year in the United States,
where a combination of low gas prices, cheap credit and pent-up demand spurred overall industry sales of 17.5
million vehicles last year.
''We do not see the cycle being over,'' Mr. Fields said on Thursday in a conference call with analysts.
Ford and other automakers are trying to balance the demand for larger vehicles like pickups with their need to
improve fuel economy to meet tougher federal standards over the next several years.
In Ford's case, the company has committed to spend $4.5 billion on electrified vehicles by 2020. But to make that
possible, it needs to keep improving profits on conventional, gasoline-powered models.
Mr. Fields said that Ford did not need to adjust its production plans to add more trucks for sale in the United
States -- or to reduce the number of slower-selling passenger cars.
Instead, the company will work to reduce costs and tinker with its global strategy. For example, it recently
announced plans to drop out of unproductive markets like Japan and Indonesia, while at the same time
expanding its product lineup in China.
''We're going leaner,'' Mr. Fields said. ''We're going to be focusing on profitability and making tough choices to
restructure when necessary.''
In the fourth quarter of last year, Ford said it earned about $1.9 billion in contrast to a loss of $2.5 billion in the
same quarter in 2014, partly because of special charges.
For all of 2015, the company said its revenue was $149.6 billion, which represented about a 4 percent increase
from the previous year. Ford sold 6.64 million vehicles during the year, which was a slight improvement over its
2014 results.
In North America, Ford had a record pretax profit for the year of $9.3 billion, which was a $1.9 billion improvement
over 2014. The results translated into profit-sharing payments of $9,300 each for union workers in the company's
plants in the United States.
Its performance was mixed in other global regions. The company posted a pretax loss of $832 million in South
America, and pretax income of $259 million in Europe, $31 million in the Middle East and Africa and $765 million
in Asia Pacific.

The biggest American carmaker, General Motors, will release its fourth-quarter and full-year financial results next
week.
It is expected to report better profits than 2014, despite spending more than $2 billion to settle a Justice
Department investigation into defective small cars tied to 124 deaths, and to compensate victims killed or injured
in those vehicles.
The third major domestic carmaker, Fiat Chrysler Automobiles, has struggled compared with its larger rivals.
Fiat Chrysler on Wednesday reported that its net income in 2015 fell 40 percent from the previous year to 377
million euros ($412 million).
Its profits were hurt by restructuring charges to realign its product lineup and cover costs associated with recalls
and fines for violating government safety rules.
The company's chief executive, Sergio Marchionne, surprised investors by announcing that Fiat Chrysler was
increasing its sales targets for Jeep sport utility vehicles, while phasing out unpopular car models like the Dodge
Dart.
''We have decided to defocus, from the manufacturing standpoint, on the passenger car market,'' Mr. Marchionne
said in a call with analysts.
The move to produce more high-profit Jeeps will make it tougher for the company to meet new corporate
fuel-economy standards set by the government of 54.5 miles per gallon by 2025.
The automaker, however, is getting more aggressive on development of hybrid models powered by a combination
of batteries and gas engines. This month it unveiled its first hybrid minivan and plans to introduce hybrid
technology in the next generation of its compact Jeep Wrangler S.U.V.
The Ford Motor display at the North American International Auto Show in Detroit this month. (PHOTOGRAPH BY
CARLOS OSORIO/ASSOCIATED PRESS)
Document NYTF000020160129ec1t0005b

Business News: Ford's Margin Outlook Undercuts Strong Year
Business News: Ford's Margin Outlook Undercuts Strong Year

By Christina Rogers and Gautham Nagesh
715 words
29 January 2016
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Ford Motor Co. swung to a $1.9 billion fourth quarter net profit, capping a record year for operating results at the
nation's No. 2 auto maker and prompting its executives to forecast a repeat or improved performance this year.
But investor concerns about profitability in the company's core U.S. market plateauing this year sent its shares to
their lowest point in more than three years during the day. The stock retraced some of its drop and finished down
1% at $11.71, the lowest closing price since Mark Fields took over as chief executive 18 months ago.
Ford's fourth-quarter operating profit of 58 cents a share, compared with 28 cents a share a year earlier, outpaced
analyst expectations. And the company reported a $259 million annual profit in Europe, its first in four years due
to restructuring efforts, improved market conditions and accounting changes. Its Asia business is showing life
after years of sluggish results as well, booking a $765 million annual operating profit amid momentum in China.
Brian Johnson, a Barclays auto analyst, said investors believe the U.S. new-car market, which reached a record
17.5 million sales in 2015, has peaked after six years of uninterrupted growth.
"Investors have made up their minds for this cycle . . . we don't find many institutions who have driven a Ford
lately," Mr. Johnson said.
Ford's 8.2% North American operating margin in the fourth quarter -- sharply lower than more than 12% margins
reported in the second and third quarter -- missed analysts' expectations. Still, Ford Chief Financial Officer Bob
Shanks forecast equal or better operating profit in 2016, but said North American profits are already at
"benchmark levels."
Ford, which is looking to boost output, has benefited from low gasoline prices, which primed demand for sport
utilities, and the company's highly profitable F-150 pickup truck. The auto maker is preparing to offer a new
aluminum version of its "Super Duty" F-Series this year, but said launch costs will weigh on profit margins.
AutoNation Inc. Chief Executive Mike Jackson said domestic car makers, including Ford, should do well this year
even if overall sales flatten.
"America's gone truck crazy," he said, noting more than 70% of the Detroit Three's U.S. sales are the more
profitable light trucks, compared with less than 50% light trucks for the Japanese auto makers. "The domestics
are in a fantastic position . . . they are going to move heaven and earth to build more trucks."
Mr. Shanks, however, sought to broaden the view on Ford beyond its home turf. "This isn't just a North American
story," he said. "We really started to see international markets come forward and that is a big opportunity."
Global demand, however, hasn't been as bright as North America lately. Growth slowed last year in China, the
world's largest light-vehicle market, and although optimistic about Ford's continued growth prospects, Mr. Shanks
said economic shifts and stock market volatility could make for bumps along the way.
Although sales are booming in Europe, the company posted a 1% operating margin for the year. Brazil and
Russia, two key markets for Ford, are mired in sales slumps. Ford lost $295 million in South America in the fourth
quarter and $832 million during the year, nearly offsetting the $1 billion combined in Europe and Asia last year.
Ford's pretax profit for 2015 equaled a record $10.8 billion, a 48% increase from the prior year partially due to a
move to mark-to-market accounting, which changes the way pension losses and gains are recognized.

Almost all of that profit was generated by Ford's North America operations, which posted a $2 billion profit in the
final three months of the year and a $9.3 billion profit for the full year.
Revenue for its fourth quarter rose 12% to $40.3 billion, as sales increased in three of the company's five global
regions. Ford will pay out a record $9,300 per worker in profit-sharing bonuses in March to factory employees
represented by the United Auto Workers union.
Document J000000020160129ec1t0003a

Ford expands recall over Takata air bags Twitter hires chief marketing officer
A-Section
Ford expands recall over Takata air bags Twitter hires chief marketing officer
723 words
27 January 2016
The Washington Post
WP
FINAL
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English
Copyright 2016, The Washington Post Co. All Rights Reserved
Ford said Tuesday that it is expanding a recall of vehicles with Takata air-bag inflators after an inflator exploded in
a Ford Ranger last month and the driver was killed.
U.S. safety regulators said Friday that an estimated 5 million vehicles would be recalled in the United States for
potentially faulty driver-side air-bag inflators made by Takata.
The Friday announcement came just hours after federal regulators along with Takata and Ford officials inspected
the 2006 Ford Ranger involved in a Dec. 22 fatality in South Carolina, said a spokesman for the National Highway
Traffic Safety Administration.
Regulators have reported 10 deaths globally, including nine in the United States, linked to defective air bags with
Takata inflators. It was also the first Takata-related fatality not in a car made by Honda.
Ford is the first automaker to announce a recall after NHTSA said Friday that it would expand recalls by about 5
million vehicles and inflators. In all, NHTSA expects that 28 million air-bag inflators in as many as 24 million U.S.
vehicles will have been recalled.
Twitter has appointed its first chief marketing officer, Leslie Berland, who will spearhead a much-needed
marketing push for the social network as it tries to buoy its user growth.
Chief executive Jack Dorsey announced the hire on his Twitter account, saying that Berland, previously a
marketing executive at American Express, will be charged with helping to "tell the stories of our iconic product."
In a statement of her own, Berland said: "Twitter is a service like no other. It has and continues to change the
world, shaping how we communicate and connect, how we're entertained, informed and inspired. It represents
everything that's relevant at each and every moment - to me, there's nothing more powerful."
Marketing had previously fallen under the duties of Twitter's chief finance officer, Anthony Noto.
Berland's appointment is just one of many changes to the company's top ranks this month; several top officials
announced their exit this week, including the heads of media and product.
l Consumer confidence improved in January to a three-month high as Americans grew more upbeat about the
prospects for the economy, labor market and their incomes. The Conference Board's index of sentiment
advanced to 98.1 in January from a revised 96.3 a month earlier, the New York- based private research group
said Tuesday. While a plunge in stock prices may have tempered views about current conditions, a resilient labor
market, falling gas prices and low inflation overall are buoying household views of the economic outlook.
l Procter & Gamble's core sales returned to growth in the second quarter, helped by price hikes and as it shed
underperforming brands. Organic sales - core sales that exclude the impact of currency, divestitures and
acquisitions - rose 2 percent in the quarter. These sales had dropped 1 percent in the previous quarter, marking
its first decline since 2008. P&G has been raising prices more rapidly to offset the stronger dollar's impact. The
price hikes helped it boost organic sales in the latest quarter but led to a drop in volumes across all businesses.
P&G also posted a better-than-expected profit by cutting costs.
l Johnson & Johnson posted a 28 percent jump in fourth-quarter profit, beating Wall Street expectations, as the
sale of part of its now-restructuring medical-devices business offset the strong dollar and multiple charges. The
world's biggest health-care product company said Tuesday that net income was $3.2 billion, or $1.15 per share,
up from $2.53 billion, or 89 cents per share, a year earlier. Adjusted net income was $4.04 billion, or $1.44 per
share. J&J posted a $1.21 billion gain, mainly for its October divestiture of its Cordis heart-devices unit. Revenue
fell 2.4 percent to $17.81 billion, hurt by the dollar. The total missed analyst projections for $17.94 billion.
l 10 a.m.: Commerce Department releases new home sales for December.
l 2 p.m.: Federal Reserve policymakers meet to set interest rates and release statement.
l Earnings: Anthem, Boeing, Facebook.
WP20160127digest0127
Document WP00000020160127ec1r00018

Business News: Ford to Exit Japan, Indonesia Amid Dim Prospects for Profit
Business News: Ford to Exit Japan, Indonesia Amid Dim Prospects for Profit
By Yoko Kubota and Christina Rogers
577 words
26 January 2016
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Ford Motor Co. is packing its boxes in two Asian markets, announcing plans to close sales operations in Japan
and Indonesia by the end of 2016 amid a broader pullback by Detroit car companies from unprofitable ventures.
The decision follows years of frustration for U.S. auto makers looking to make inroads in Japan, among the top
car markets in the world. American automotive executives have long complained about non-tariff barriers,
including a web of regulations that put importers at a disadvantage.
Like most foreign auto makers, Ford is a small player in a Japanese market dominated by domestic companies,
including Toyota Motor Corp. The No. 2 U.S. auto maker in terms of volume sold only 5,000 vehicles there in
2015, or 0.1% of the market, and those vehicles were imported.
In Indonesia, Ford held 0.6% market share in 2015, with sales falling by nearly 50% during the year to about
6,100 vehicles. Japanese auto makers also dominate car sales in Indonesia, which is the most populous nation in
Southeast Asia but has a vehicle market that represents a fraction of what is sold in Japan.
The moves, announced Monday to the nearly 350 Ford employees in those two countries, follow the company's
recent closure of an Australian factory. General Motors Co. has also been retreating from money-losing
businesses, recently making moves to exit or reduce exposure to Russia, Indonesia, Australia and Thailand.
After decades of chasing global market share and dominance in as many markets as possible, Detroit's auto
giants are conserving resources as emissions and safety regulations are expected to demand additional capital.
Recently, GM and Ford have also begun investing or experimenting with offering alternative mobility services,
such as car sharing.
"It has become clear that there is no path to sustained profitability, nor will there be an acceptable return over time
from our investments in Japan or Indonesia," Ford said in a statement. The impact to revenue and profit will likely
be minimal due to the company's limited sales in both markets.
Ford has recently cited obstacles to selling cars in Asian countries as a reason for opposing U.S. President
Barack Obama's Trans-Pacific Partnership, an agreement that would phase out U.S. duties on imported cars from
12 Pacific nations, including Japan. Ford has argued the deal doesn't adequately address currency manipulation.
The top three Japanese auto makers held a combined 32% market share in the U.S. last year. Ford, GM and Fiat
Chrysler Automobiles NV accounted for about 0.3% of Japan auto sales over the same period, while domestic
brands accounted for more than 90% of the new-vehicle market
Karen Hampton, a Ford spokeswoman, said the company has 52 dealerships in Japan, where it has been selling
for more than four decades. The official said the company will remain active in Asia however, pointing to growing
operations in a China market that continues to be a focal point and potential growth market for international auto
makers.
Auto demand in Japan is expected to wane due to an aging and shrinking population, and that dims Ford's
chances for success, Ms. Hampton said. Ford sales topped 1 million in China last year, growing 3%.
---
Ben Otto contributed to this article.

Document J000000020160126ec1q00015

Ford adds start-stop technology to top-selling F-150s ; Automaker hopes to boost gas mileage in 60% of its lineup
MONEY
Ford adds start-stop technology to top-selling F-150s ; Automaker hopes to boost gas mileage in 60% of
its lineup
Chris Woodyard
Chris Woodyard, @ChrisWoodyard, USA TODAY
281 words
22 January 2016
USA Today
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In a huge boost to gas-saving technology, Ford said Thursday it plans to equip all of its F-150 pickups with
turbocharged engines with technology that shuts off their engines at stop lights.
The so-called start-stop technology then automatically restarts the engine as soon as the driver presses the gas
pedal.
The move is significant because Ford's F-150 is the nation's most popular vehicle -- car or truck -- and the new
technology will be applied to about 60% of its lineup.
It marks yet another move by Ford to improve its trucks' gas mileage. The most radical was shifting from steel to
aluminum for the truck bodies, a move that saved up to 700 pounds. Plus, Ford is focused on trying to maintain
the pickups' sales momentum. While it was easily tops again last year with 780,354 pickups sold, a 3.5%
increase, it's feeling some heat from General Motors, maker of the Chevrolet Silverado, Autodata says. GM sold
600,544 Silverados, up 13.4%.
Start-stop will be a feature added to the trucks' EcoBoost turbocharged engines, V-6s that produce enough power
to match or exceed the old V-8s with greater gas savings.
"EcoBoost already powers F-150's best-in-class towing," said Doug Scott, Ford truck group marketing manager.
"Now, with every EcoBoost- equipped F-150 mildly electrified with standard Auto Start-Stop technology,
customers' fuel efficiency is expected to improve as well."
photo JIM WATSON, AFP/Getty Images

Document USAT000020160122ec1m00018

Autos Posted a Record Year? Sell!
Autos Posted a Record Year? Sell!

By Saumya Vaishampayan in New York and Jeff Bennett in Detroit
842 words
13 January 2016
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The past year set a record for sales of cars, but investors are signaling doubts about the companies that make
them.
Shares of auto makers such as General Motors Co. and Ford Motor Co. began sliding late last year. This year,
they have fallen even faster than the battered broader market.
Analysts and investors attribute the declines to worries that rising U.S. interest rates could crimp auto finance and
to fears that auto sales may have peaked. They also are concerned that the slowdown in China, the world's
largest car market, may be worse than expected. The result has been a setback for an industry that in the U.S.
just enjoyed its best year ever.
Shares in GM, the No. 1 U.S. auto maker by sales, have dropped 11% so far this year. Ford's stock has fallen
8.8%, and shares in AutoNation Inc., the nation's largest dealership operator, have slumped 20%.
The drops stand out against the 5.2% decline for the Dow Jones Industrial Average, which posted its worst ever
start to a year. They come even after a combination of low gasoline prices, a strengthening labor market and low
interest rates propelled U.S. car sales to 17.5 million in 2015, surpassing a peak hit 15 years ago.
"How much higher than 18 million units can we go?" said Brian Hennessey, a portfolio manager at Alpine Funds,
which manages $4 billion. "It's pretty much a peak number."
AutoNation Chief Executive Mike Jackson said he believes the fourth quarter of 2015 will mark the start of a
plateauing of sales.
"Everybody was talking about how great the month of December was," Mr. Jackson said on the sidelines of the
North American International Auto Show in Detroit on Monday. "But if you take away the extra selling days and
the incentives, sales were flat in what is a bellwether month."
The auto industry's seasonally adjusted annual selling pace fell to 17.3 million in December from 18.2 million in
November.
Sentiment in the options market has turned sour in recent days, suggesting that traders don't see the auto
makers' stocks rebounding any time soon. Trading in options to sell Ford or GM stock on Thursday and Friday
sharply outpaced trading in options to buy the shares, according to data provider Trade Alert.
Mr. Jackson is warning auto makers, especially those producing luxury cars, to reduce output or face a pricing
war that will hurt the industry overall. His latest remarks echo his warning last Wednesday that a bulging inventory
of unsold cars is beginning to erode profit margins.
Those comments fueled investors' concerns that manufacturers will have to turn to deals or discounts to get
customers to buy more cars.
"Manufacturers could lose pricing power," said Peter Stournaras, who manages $16.6 billion as portfolio manager
of the BlackRock Large Cap Series Funds.
Mr. Stournaras said he prefers shares of auto-parts makers to auto makers. He figures that low gasoline prices
could encourage consumers to drive more, in turn prompting a greater need for replacement parts.

Shares of Delphi Automotive PLC, a U.S. auto-parts supplier, have dropped 13% so far this year.
The auto makers insist the outlook is brighter. "The prospects of our company are not yet fully reflected in our
stock price," said GM President Dan Ammann in a panel at the Automotive News World Congress in Detroit on
Tuesday.
Ford, expecting to post record 2015 pretax profits, on Tuesday declared a $1 billion supplemental dividend and
forecast 2016 profits would be equal to or better than last year's. "Our performance is allowing us to reward our
shareholders," Ford Chief Executive Mark Fields said in a statement.
Some investors agree, saying the selloff in car makers' shares has been overdone. Ford traded at 9.1 times the
last 12 months of earnings as of Monday's close, according to FactSet. Its five-year average is 9.5. GM's
price/earnings ratio was 6.3, less than its five-year average of 9.1. AutoNation traded at 11.9 times the past year
of earnings versus its five-year average of 18.0.
These investors argue that a monthslong slump in oil prices has fattened consumers' wallets, and the continued
recovery in the labor market has begun to result in slightly higher wages. That, they say, bodes well for continued
strength in auto sales.
"All the key metrics that we use to gauge the health of the auto industry are as healthy as they have ever been,"
said Amit Kapoor, senior equity analyst at Loomis, Sayles & Co. Mr. Kapoor owns GM shares.
Another reason for optimism, these investors say: Cheap gasoline prices remain a powerful driver for sales of the
big cars that are most profitable for car companies.
---
Gautham Nagesh and Christina Rogers contributed to this article.
Document J000000020160113ec1d0002w

Autos: Ford to Pay Extra Dividend
Autos: Ford to Pay Extra Dividend

By Christina Rogers
228 words
13 January 2016
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Ford Motor Co., expecting to post record 2015 pretax profits, declared a supplemental dividend of $1 billion
Tuesday that it will pay to shareholders on top of its regular first-quarter dividend.
The No. 2 U.S. auto maker, which is benefiting from a booming U.S. car market, forecasts 2016 pretax profits
equal to or better than those in 2015 with its performance in North America expected to remain strong, posting an
operating margin of 9.5% or higher.
Ford expects pretax profit, excluding special items, to be in the upper half of its guidance of $10 billion to $11
billion for 2015.
As a result of the strong performance and its "robust cash and liquidity level," Ford said it would pay a special
cash dividend equal to 25 cents a share on its Class B and common stock on March 1.
That payout is in addition to its regular dividend of 15 cents a share.
"We think that's an attractive reward and the appropriate thing to do," said Ford's Chief Financial Officer Bob
Shanks, noting the company is targeting a top quartile total shareholder return.
While he didn't rule out a share buyback, Mr. Shanks said "it's probably not in the cards" for this year.
Document J000000020160113ec1d0001k

Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- Ford's chairman is on a quest to reinvent the company founded by his great...
Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- Ford's chairman is on a quest to
reinvent the company founded by his great-grandfather
By Christina Rogers
1,161 words
11 January 2016
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Years ago, when Tesla Motors Inc. was still a tiny company, Ford Motor Co. Chairman Bill Ford Jr. dropped in on
the electric-car startup. Sensing "the winds of change were coming," the visit, along with others he made to
Silicon Valley tech firms, provided inspiration to reinvent the company his great-grandfather founded more than a
century ago.
"It made me even more impatient," Mr. Ford, 58 years old, said in his office late last week, characterizing the auto
maker as turning over every rock to transition from strictly a seller of automobiles to a company able to respond to
the rapid urbanization he sees coming.
The to-do list includes looking at a range of partnerships, including alliances and potential acquisitions, and
experimenting internally with new business lines, such as ride-hailing and pay-by-minute car rentals.
For years, Mr. Ford has spoken out about the problems created by increased congestion in the world's major
cities and the need for mobility alternatives as people's attitudes toward car ownership change.
"To me, it's a way to reinvent this company that makes it incredibly relevant for the next 50 years," said Mr. Ford,
who has been chairman since 1999. "If we did nothing, we could be consigned over time to an ever-dwindling
number of traditional car and truck buyers."
Mr. Ford's conviction is replicated in the offices of auto executives across the globe. Even as U.S. light-vehicle
sales sizzle at a record clip and low fuel prices reignite America's passion for profitable trucks and SUVs, the
industry is pursuing technologies built on the assumption morepeople will stop wanting to drive gasoline-powered
vehicles within 30 years.
At this week's North American International Auto Show, car companies will outline plans for autonomous vehicles,
ride-sharing and electric cars at a time when 60% of vehicles being sold are light trucks that consume more
gasoline.
A primary reason: investors have shown little faith in Detroit's ability to sustain today's profits. Wall Street has
driven up valuations of a band of automotive upstarts, including Tesla, while shares of Ford and General Motors
Co. have stalled.
On the surface, investors should be enthusiastic. The company is earning record profits in North America, due in
part to the success of its new aluminum-bodied F-150 pickup. Analysts expect 2016 to be an even better year for
Ford.
Led by Chief Executive Mark Fields, Ford is now looking to expand into new transportation services. Last month,
the executive announced a $4.5 billion electric-vehicle plan through 2020, and he has authorized a series of
experiments that have engineers exploring new services, including car-sharing and testing autonomous cars.
Mr. Fields, named CEO in mid-2014, could have an ace up his sleeve. The auto maker is in talks with Alphabet,
Inc.'s Google, to forge deeper ties with Silicon Valley, where Ford recently expanded its research lab.
As part of this effort, Ford is considering creating a separate business unit dedicated to developing autonomous
cars for use in ride-sharing and fleets, say people familiar with the plans. Ford would develop software for
components, including steering or braking, while Google would provide the autonomous-driving software that
governs those functions, one of these people said.
Google declined to comment. Mr. Fields, when asked about whether Ford would form a new subsidiary or
company to make strategic investments in ride-sharing, said, "We are open to all possibilities." Ford will roll out
alternative-mobility announcements in Detroit this week.
These movescould alter the direction established when Mr. Ford took over as CEO in 2001. His company was
reeling from a tire recall and hemorrhaging money. Resources were thin after his predecessor, Jacques Nasser,
invested in a number of ventures and luxury brands, so the family scion implemented a "back-to-the-basics"
approach.
In the years that followed, Ford dumped a Norwegian electric-vehicle company it owned, as well as abandoning
some of Mr. Nasser's e-commerce pursuits and other noncore assets. Mr. Ford hired Alan Mulally in 2006 to
accelerate the moves; Mr. Mulally shed a list of luxury brands, including Jaguar, Land Rover, Aston Martin and
Volvo, and Ford's controlling stake in Mazda Motor Corp.
Mr. Fields, 54, was promoted to CEO after running Ford's North American operation for nearly a decade. His job
is to figure out how to diversify once again without straying from Mr. Mulally's so-called One Ford plan that
focuses on building cars, trucks and SUVs that are safe, smart, green and fun to drive.
"One of the things that Mark and I talked about prior to him becoming CEO was that he bought into the notion that
change is upon us," Mr. Ford said. "If we do this correctly, we can have a very different-looking company 10 years
from now. If we don't do it correctly, we will be at best a low-margin assembler of other people's technologies and
that's not where we want to be."
In an interview, Mr. Fields said he sees the new mobility services as a natural extension of Ford's core auto
business, to which the company will remain committed. But with newcomers, including Tesla, Google and Apple
Inc. entering the auto space, Mr. Fields also views the industry as ripe for disruption, and says Ford is in a good
position to take advantage of new technologies to reach people in growing urban centers who might not own a
car.
"It used to be years ago people were exiting the city and going to the suburbs," Mr. Fields said. "What we've seen
over the last decade or so is the opposite happening, particularly among young people."
Like Mr. Ford, who spent a lot of time in Northern California meeting with tech leaders as an eBay Inc. board
member, Mr. Fields is making monthly trips to Silicon Valley.
He's also hired fresh blood. Former investment banker and automotive analyst John Casesa, and former
aerospace executive Ken Washington are heading strategy and advanced research respectively, for instance.
As Mr. Fields expands, however, Ford has learned from its experience under Mr. Nasser. Mr. Ford's engagement,
therefore, is an important sign that Mr. Fields's plan has support.
"Everybody in management understands why we're doing this," Mr. Ford said, referring to the various new
services the company is weighing venturing into. "It's not an add-on, it's not something we're doing on the side."
---
Alistair Barr contributed to this article.
(See related article: "India's Mahindra sets up shop in Michigan to learn from Big Three, avoid their mistakes" --
WSJ Jan. 11, 2016)
Document J000000020160111ec1b0001z

Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- India's Mahindra sets up shop in Michigan to learn from Big Three, avoid...
Detroit Auto Show: Detroit Remains Foreign Car Makers' Mecca --- India's Mahindra sets up shop in
Michigan to learn from Big Three, avoid their mistakes
By John D. Stoll
944 words
11 January 2016
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English
TROY, Mich. -- Decades ago, Japanese car companies traveled to Detroit to learn to be like the Big Three.
Today, one of India's top auto makers is following in their footsteps -- while hoping to learn to avoid Motown's past
mistakes.
Mahindra & Mahindra Ltd., a Mumbai-based conglomerate with a thriving tractor business and information
technology operation in the U.S., quietly has amassed an engineering staff about a dozen miles north of Detroit.
Plucking talent from Ford Motor Co., Tesla Motors Inc. and Fiat Chrysler Automobiles NV, the company aims to
catch up with industry leaders by developing a vehicle able to meet American buyers's demands and the nation's
tough regulatory standards.
The Indian auto maker doesn't sell many sport-utility vehicles in developed markets. However, at home it is
battling global auto makers rushing to India, including Hyundai Motor Co. and Honda Motor Co., which are
gobbling up market share using resources and expertise Mahindra lacks in its domestic market.
In recent years, the company has bought a Korean auto maker, an Italian design house, an electric-vehicle maker
and other assets in an attempt to boost its game, but its market share is still slipping, much like Indian rival Tata
Motors Ltd. If the company's focus doesn't pivot, it is in danger of running into the same fate that nearly shut down
Detroit.
Mahindra stumbled in its first attempt to go global, and several years ago ended an effort to bring an
India-developed pickup truck to the U.S., a setback that still has it tied up in litigation. The company's senior
executives say they are still intent on becoming a global force and Detroit, which Mahindra's product planning
chief Rajiv Mehta calls "a Mecca for SUVs," is a natural place for the company to learn how to do that.
Mahindra's first made-in-Detroit project in its 70-year auto making history -- a large SUV the size of a BMW X5
dressed in camouflage -- is being tested on the streets of Metro Detroit. Global safety and fuel economy
regulations are tightening significantly, and this SUV is showing Mahindra's ability to meet the most stringent
standards, company officials say.
"Two years ago, a customer [in India] wouldn't have paid for ABS (anti-lock braking) or air bags," Pawan Goenka,
Mahindra's automotive chief, said in an interview. "Today, 75% of the customers want to buy those options."
The marriage of an Indian auto maker and the Motor City represents how much the auto industry has changed
since the financial crisis. Detroit, known for high labor costs and a slow response to market fluctuations, needed
tens of billions in bailouts to stay afloat in 2008. In the downsizing that followed, some of the domestic industry's
talent left for greener pastures while others waited for rebound.
At this month's Detroit motor show, auto executives will celebrate the healthiest industry conditions in well over a
decade. Low gasoline prices, cheap financing and a healthy economy has General Motors Co. and Ford back
near the top of the global auto industry, and Detroit's sprawling supply chain, including several specialty
companies capable of developing a car on their own, is thriving and looking for new business.
Rick Haas was among those who left Detroit during the dark days, with no guarantee of returning. A longtime
Ford executive and University of Michigan graduate, Mr. Haas joined Tesla in 2009 as program manager for the
company's first electric sedan, the Model S. When recruiters asked if he would be interested in joining Mahindra
two years later, he agreed after several months of discussions.
Mr. Haas initially was hired to upgrade Mahindra's product development chops in Chennai. His superiors knew
the company excelled at "frugal engineering," a mind-set that keeps in mind the extremely limited resources of
India's car buyers, most of whom are purchasing their first vehicle. That needed to change if Mahindra was going
to sell its SUVs in the lucrative U.S. market.
Mr. Haas came to the conclusion that globalizing the company from India would "take too long" if something didn't
change. Executives started looking for a satellite location, visiting Turin, Seoul, Tokyo, London, Stuttgart and
Silicon Valley. "Those who know Detroit, know it is all things automotive," Mr. Haas said. "It is what they breathe."
Starting with "five guys" a few years ago, Mr. Haas' team has ballooned to about 100, with many of the new hires
inspired by the idea of working for a challenger.
Mr. Goenka said the U.S. technical venture is expensive and can't continue to grow exponentially, but it is
necessary to winning in India and elsewhere. "Any homegrown company has to live up to the competition, or they
will not last."
Mahindra's Troy facility is within a 20-mile radius of more product-development resources than Munich, the home
of BMW AG, Stuttgart, where Daimler AG resides, and Wolfsburg, Volkswagen AG's base, combined, according
to Ann Arbor-based Center for Automotive Research.
"Detroit isn't outsourcing anymore," said Lynn Bishop, vice president of Pratt & Miller Engineering in New Haven,
Mich., which does prototyping work for Mahindra and other companies. "We're being outsourced to."
(See related article: "Ford's chairman is on a quest to reinvent the company founded by his great-grandfather" --
WSJ Jan. 11, 2016)
Document J000000020160111ec1b0001y

Autos: In Detroit, Trucks Take Back Seat --- Passenger cars, electric vehicles are likely to occupy center stage at auto show
Autos: In Detroit, Trucks Take Back Seat --- Passenger cars, electric vehicles are likely to occupy center
stage at auto show
By Jeff Bennett and John D. Stoll
735 words
11 January 2016
J
B4
English
As auto makers gather to kick off Motown's annual car show, executives appear poised to talk about everything
but the hottest vehicles on the market.
The agenda is full of announcements regarding cars that drive themselves, cars that plug into the wall and cars
that aren't versatile enough to beconsideredlight trucks. Pickups, SUVs and crossovers represented 60% of
December's U.S. sales tallyamid low gasoline prices, but those models are taking a back seat.
The overwhelming majority of vehicles slated for debut Monday and Tuesday at the North American International
Auto Show in Detroit are expected to be passenger cars or electric vehicles, according to an estimate published
by Automotive News.Ford Motor Co.'s Lincoln brand, Toyota Motor Co.'s Lexus, Daimler AG's Mercedes-Benz,
Hyundai Motor Co. and General Motors Co.'s Chevrolet hope to make a splash with new luxury sedans,
hatchbacks and economy cars. But those vehicles require increasingly higher discounts and rebates, and
inventory is piling up.
Auto makers reported record 2015 sales this past Tuesday. The next day, the country's top car salesman,
AutoNation Inc. Chief Executive Mike Jackson, threw cold water on optimism by saying the biggest U.S.
dealership chain is cutting back on orders of passenger-car inventory because consumers don't want them. Mr.
Jackson wants more trucks.
"There is little doubt that in North America, taller vehicles are the sales darlings, while many good sedans are
struggling to find buyers," Kelley Blue Book analyst Jack Nerad said.
Trucks and crossovers will play a bit part at Detroit's show, even though they deliver the bulk of industry profits.
GMC plans a significantly updated version of the Acadia for the first time since it was introduced nearly a decade
ago. Honda Motor Co. wades back into the pickup market with a revised version of its midsize Ridgeline, previous
versions of which fell flat.
The lack of focus on the cash cows is partially due to the fact that product cycles are hammered out several years
before cars and trucks are actually introduced. When Ford engineers were dreaming up a new Lincoln
Continental sedan for 2016 and Chevy designers were drawing up a Cruze hatchback, gas prices were around
$3.50 a gallon and sales of passenger cars were sizzling.
"Years ago when plans were made for vehicles that are being launched in January 2016, there was little thought
that fuel prices would be as low as they are today," Mr. Nerad said. "If manufacturers had anticipated that, we
might be seeing more trucks and big vehicles being launched in Detroit this week."
A bigger reason for the apparent mismatch between what auto makers want to talk about and what consumers
want to buy: Google Inc., Tesla Motors Inc., Apple Inc. and Uber Technologies Inc.
Tech giants are invading the car business with the promise of more electric vehicles and plans to make driverless
cars, while a surge in demand for ride sharing pinches demand for new vehicles. GM, Ford and rivals have all the
same technology, but Wall Street has given far more credit to Silicon Valley than Detroit when it comes to the
battle for the future of a 125-year industry.
As a result, the recent Consumer Electronics Show was littered with announcements by auto makers.

They want to bridge the gap between the perception they aren't prepared for disruption and the reality that they
are pouring billions of dollars into efforts to avoid getting passed by.
GM signed a $500 million partnership with Lyft Inc. and unveiled a Bolt electric car capable of traveling 200 miles,
or 320 kilometers, on a charge. Nissan/Renault SA will launch a combined 10 semiautonomous or autonomous
vehicles within five years. Ford's CEO plans to morph the company into a transportation services provider.
None of those efforts shed much light on the profit outlook for 2016, which is strong.
Automotive bean counters are optimistic following 2015 as transaction prices shot through the roof last year,
exceeding $34,000, according to TrueCar Inc. Sales of pricier trucks and SUVs enrich the industry's mix; so does
the appetite among buyers to load vehicles with features.
Document J000000020160111ec1b0000s

Business News: SUVs Fuel U.S. Production Boom
Business News: SUVs Fuel U.S. Production Boom

By Gautham Nagesh in Arlington, Texas, and John D. Stoll in Neenah, Wis.
958 words
9 January 2016
J
B4
English
Three years ago, Lili Rodriguez gambled when she transferred from General Motors Co.'s small-car factory in
Lordstown, Ohio, to GM's plant in north Texas making full-size sport-utility vehicles.
As the U.S. auto industry was on the mend after a near-financial collapse in 2009, low-cost passenger cars like
Lordstown's compact Chevrolet Cruze were driving its recovery. With the national average for a gallon of gasoline
costing about $3.50 at the time of Ms. Rodriguez's move, sales of Arlington's full-size SUVs were declining.
The tables have turned for the U.S. auto industry and Arlington is among the biggest winners. GM is committing
$1.4 billion to upgrade the factory, part of tens of billions in U.S. capacity investments planned for the next several
years by Volvo Car Corp., Ford Motor Co., Daimler AG and other car makers.
Cars and light-trucks hit a record in 2015, and an increasing bulk of those units are hulking highly profitable
models like the Chevrolet Suburbans, Tahoes, Cadillac Escalades and GMC Yukons that roll off an Arlington
assembly line running six days a week, building 16.5% more vehicles through the first 11 months in 2015 than in
the same period a year ago. GM posted record profit in the third quarter; with its SUV plant -- one of the most
profitable auto factories in the world -- contributing much of the earnings.
The development has helped further insulate Texas' economy at a time when its energy industry is under
pressure. While low oil prices have hurt the state's economy, most Lone Star state cities are holding employment
steady or gaining due to a diversified job market, including more openings in auto factories owned by GM, Toyota
Motor Corp. and parts suppliers.
Nearly 5% of light trucks built in the U.S., were the 300,000 full-size SUVs made in Arlington. The factory's revival
has encouraged Ms. Rodriguez to put down roots here. "Texas is my home now," she says.
The industry's contribution to Arlington's good fortune is replicated in communities across America as gains in
exports of U.S.-built cars and trucks lend additional momentum to production levels. The trend is boosting
employment at dealerships as well, with head count at new-car stores up 5% according to the National
Automobile Dealers Association.
One thousand miles north of Arlington, the economic fortunes of America's heartland are helping fuel GM's SUV
boom. "People are fixing their houses; the carpenters, the plumbers and the electricians need new cars and
trucks," John Bergstrom, owner of Bergstrom Automotive in Neenah, Wis., told employees at a Ford dealership in
late December.
Mr. Bergstrom said new Jeeps drive off his lots almost as soon as they arrive, and the demand for pickups is
through the roof. On a tour of the car dealerships his company owns across the state, he says the good times can
continue with the average age of vehicles on U.S. roads hitting a record 11.5 years at the end of 2014.
Recent developments -- including a $6.75 billion contract to replace military Humvees awarded to Oshkosh Corp.
-- have boosted optimism heading into 2016 that there will be continued economic expansion in the corridor
stretching from Madison to Green Bay, where dozens of Bergstrom car stores can be found.
Driving to another meeting at a Chrysler dealership in Kaukauna, he said his stores saw an immediate boost
when Oshkosh's new business was announced.

"One of the first things people do when they get a job is buy a new car," he said. With state unemployment at one
of its lowest points since the 1990s, Mr. Bergstrom believes real-estate development near the Green Bay
Packers' football stadium could help keep the good times rolling locally.
Mr. Bergstrom emphasized the role the pump price plays in the industry's boom. "People underestimate the
importance . . . the price of gasoline is huge." He estimated Wisconsinites have an extra $250 to spend each
month from cheaper gasoline.
The Arlington plant, meanwhile, can barely keep up with demand even after adding a third shift and 1,500
employees over the past three years. Plant manager Juan Carlos Jimenez said GM was so eager to start
construction on upgrades that it hid equipment behind AT&T Stadium before an official announcement this
summer.
Mayor Jeff Williams said a current project to extend toll lanes for Texas State Road 360 south to U.S. Route 287
is largely because many GM workers make their homes Mansfield, a southern suburb.
Bruce Payne, Arlington's economic development manager, said home buyers are having to bid more than asking
price to snag even the older homes surrounding the plant. "That wasn't the case during the recession," he said.
That demand for housing has helped fuel a number of new projects, including a five-story, mixed-used
development next door to City Hall on the site of the old library, and a sprawling housing development north of the
city.
The booming local economy has also put a premium on commercial space; Arlington has 39 million square feet of
industrial space, but less than 4% is vacant. Similarly, Mr. Payne said there is roughly 23 million square feet of
retail space, but less than 5% is vacant.
"I just say we're full, and I lobby with our city council and others that we need more space," Mr. Payne said. "The
engine is running about as hard as it will run with us."
Document J000000020160109ec190001r

Ford gets unexpected $1.5B boost in profit ; Automaker eliminates tactic of 'smoothing' gains/losses over years
MONEY
Ford gets unexpected $1.5B boost in profit ; Automaker eliminates tactic of 'smoothing' gains/losses over
years
Nathan Bomey
Nathan Bomey, @NathanBomey, USA TODAY
293 words
8 January 2016
USA Today
USAT
FIRST
B.6
English
Ford Motor Co.'s 2015 profit will get an unexpected boost of $1.5 billion after an accounting change that provides
more transparency on the state of its retiree benefit investments.
The automaker said its 2015 pretax profit, which will be reported Jan. 28, is now estimated at $10 billion to $11
billion after the shift.
The company said it would now recognize gains or losses attributable to pensions and retiree health care benefit
investments immediately, instead of amortizing the costs over a period of several years.
The pivot comes as many major U.S. companies are making a similar change to abandon what actuarial experts
call "smoothing," a technique designed to spread the impact of investment gains or losses over several years.
Critics say the "smoothing" practice disguises the true impact of investment losses on a company's financial
health. Defenders say it's necessary to ensure one-time swings don't have an out-sized effect, under the
assumption that investments will be more stable over a longer period.
Ford said future swings in pensions and health care investments no longer will be calculated as part of the
automotive business unit going forward. Instead, it will be accounted for as a special item every year.
The change shows that "our operating results were even stronger, particularly in North America and Europe,"
Ford Chief Financial Officer Bob Shanks said in a statement.
"The change better aligns our operating results with our operating cash flow and makes our results more
comparable to our major competitors."
The change is effective Dec. 31.
photo ROBYN BECK, AFP/Getty Images

Document USAT000020160108ec180000q

Business News: Business Watch
Business News: Business Watch

542 words
8 January 2016
J
B3
English
FORD MOTOR
Pension Accounting
Should Boost Profit
Ford Motor Co. is changing how it accounts for pension plans, a move that should boost company earnings while
making profitability in Europe more likely and giving a clearer picture of the automotive group's underlying
performance.
The change would put Ford's results on a more equal footing with General Motors Co. and Fiat Chrysler
Automobiles NV's U.S. division, which had past pension losses wiped away in bankruptcy.
Ford said Thursday it is shifting to "mark to market" accounting for pension and retiree-benefit plans. The change
requires revisions to earnings dating to 2011. It also sweeps away billions of dollars in pension-plan losses from
previous years that Ford had yet to factor in to future results and allows the auto maker to approach coming years
with a cleaner slate.
-- Michael Rapoport and Christina Rogers
---
SUPERVALU
Spinoff Plans Filed
For Save-A-Lot
Supermarket chain Supervalu Inc. on Thursday filed with regulators plans to spin off its hard-discount division
Save-A-Lot as a public company, the latest move for Supervalu as it struggles to cope with big changes
reshaping the food-retail sector.
Supervalu said last summer it was considering spinning off Save-A-Lot in a bid to help investors better
understand and value the low-price, no-frills chain. In Thursday's filing with the Securities and Exchange
Commission, Supervalu said its shareholders would own at least 80% of the newly public Save-A-Lot company.
Supervalu didn't set a deadline for taking Save-A-Lot public, and a spokesman said there is no assurance the
spinoff will occur.
-- Ilan Brat
---
PANASONIC
Up to $1.6 Billion
Set for Tesla Venture

Panasonic Corp. President Kazuhiro Tsuga said the company would spend up to $1.6 billion on an advanced
battery factory with electric-car maker Tesla Motors Inc., an investment it hopes will secure it a future in
automotive electronics.
The Japanese consumer-electronics giant and Tesla are jointly funding an up to $5 billion battery plant in Nevada.
Panasonic hadn't previously disclosed the full size of its investment. It will be several years before that factory is
at full steam, and for Panasonic the wait will be costly because its lithium-ion battery business has struggled to
make money.
"We are sort of waiting on the demand from Tesla," Mr. Tsuga said in an interview at the Consumer Electronics
Show this week.
-- MikeRamsey
---
GREENBRIER
Low Energy Prices
Boost Railcar Orders
Railcar maker Greenbrier Cos. reported record revenue as low energy prices boosted orders.
But Greenbrier Chief Executive William Furman warned Thursday that order and backlog levels will likely come
down from their "elevated energy-driven peak."
For the November quarter, Greenbrier delivered 6,900 units compared with 4,000 units a year ago. At
quarter-end, the company has a backlog of 36,000 units, compared with 41,200 units a year before. For the
quarter ended Nov. 30, Greenbrier reported a profit of $69.4 million, or $2.15 a share, up from $32.8 million, or
$1.01, a year prior. Revenue jumped 62% to $802.4 million.
-- Austen Hufford
Document J000000020160108ec180002h

Ford partners with Amazon to connect cars with homes ; Automaker keen to using Echo, Wink to bring Internet of Things into its cars
MONEY
Ford partners with Amazon to connect cars with homes ; Automaker keen to using Echo, Wink to bring
Internet of Things into its cars
Marco della Cava
Marco della Cava, @marcodellacava, USA TODAY
367 words
6 January 2016
USA Today
USAT
FIRST
B.5
English
Ford revealed it's working with Amazon to grant Ford owners unprecedented access to their connected-home
devices from their cars, one of a handful of high-tech goals -- including an aim to get self-driving cars on the road
by 2020 -- the Detroit automaker is pushing at CES this year.
In the Amazon deal, Ford hopes a car owner will soon be able to use the vehicle's Sync Connect system to use
touch or voice commands to open a garage door, check a thermostat setting or turn on home lighting. While at
home, that owner could ask a Ford smartphone app what the car's remaining driving range is or even program a
time to start the engine.
The voice commands issued at home would be routed through Amazon Echo, a free-standing speaker that
interfaces with Alexa, Amazon's cloud-based virtual assistant, similar to Apple's Siri and Microsoft's Cortana.
Information about the status of a homeowner's various Internet of Things devices would be provided through
Wink, a venture between General Electric and Quirky. Last fall, failing Quirky sold Wink to Internet of Things
platform Flex. Wink's platform integrates IoT products from companies such as Nest, Philips Hue and Schlage.
"We are working to see if we can come up with a product that we can commercialize," Ford CEO Mark Fields told
USA TODAY. "The key is finding the right software protocols so that the integrations with Amazon Echo and
Alexa work."
According to Gartner, some 21 billion IoT devices are expected to be online by 2020. Automakers, which
traditionally lagged when it came to in-car electronics, are stepping up their efforts in the battle for buyers.
That push has even led to some collaboration, as with the news Monday that Toyota is among a number of
automakers adopting smartphone software technology developed by Ford, which it has shared openly in order to
push for a unified in-car app platform.
photo Ford
Document USAT000020160106ec1600003

Debt Market Revs As 2016 Gears Up
Debt Market Revs As 2016 Gears Up

By Mike Cherney
700 words
6 January 2016
J
C2
English
Bond sales picked up after a three-week lull, as highly rated firms from Walt Disney Co. to Ford Motor Co. tapped
the market in a sign of confidence in a U.S. economic recovery entering its eighth year.
The bonds on Tuesday were received enthusiastically, despite Monday's stock-market decline and a junk-bond
rout last month that highlighted fears of slowing economic growth.
Many analysts expect continued strong sales and performance in the broader corporate-bond market. Defaults
typically rise sharply at the end of a multiyear credit cycle -- the expansion and contraction of access to credit --
as investors retreat from risk and companies struggle to refinance debt. Some investors took last month's selloff
in lower-rated bonds as a sign that the cycle is nearing an end.
But a junk-bond rebound near the end of the year, together with Tuesday's sales and the continued health of
highly rated bonds, has prompted others to assert the junk troubles are largely confined to businesses hit by the
commodity bust, such as energy production or mining.
"While the credit cycle in the U.S. is far advanced, not all sectors are at the same point in the cycle," analysts at
Wells Fargo Securities said in a note this week. They favor debt from consumer-oriented companies and banks.
Ford, through its Ford Motor Credit Co. subsidiary, sold $2.75 billion, with a 10-year bond priced to yield 4.389%,
according to S&P Capital IQ LCD. Disney sold $3 billion, with a 10-year bond yielding 3.046%. Bankers lowered
yields throughout the day, according to S&P Capital IQ, reflecting good demand. On Tuesday, the 10-year
Treasury note yielded 2.248%.
Highly rated firms in 2015 sold the most new bonds on record for the fourth year in a row, according to Securities
Industry and Financial Markets Association data. Barclays PLC said investment-grade companies and other
entities such as development banks will together sell $1.34 trillion of new debt in the U.S. in 2016, roughly in line
with 2015 levels. U.S. sales of junk bonds could hit as much as $290 billion, a roughly 15% increase from 2015.
Brewer Anheuser-Busch InBev SA, another investment-grade company, is prepping a possible debt sale to back
its more than $100 billion purchase of rival SABMiller PLC, investors said. A-B InBev declined to comment.
The junk-bond turmoil in December got broader attention because that market, which comprises debt from risky
and highly indebted companies, has a reputation for serving as a leading indicator for economic downturns. The
market fell last month amid a prolonged slump in oil and commodity prices, sparking fears that companies in
those sectors would default.
A fund managed by Third Avenue Management LLC that invested in ultrarisky debt abruptly closed during the
selloff, raising worries that other hedge funds could follow suit.
The junk-bond market stabilized toward the end of the month, as prices fell, spurring purchases. The worst of the
selling was contained to energy and metals companies, analysts said, easing concerns about a broader
downturn. Junk-rated energy bonds declined 12% in December, but the entire market fell only 2.5%, according to
Barclays figures, which take into account price changes and interest payments.
Highly rated corporate bonds typically weaken during junk-bond selloffs. But there also were signs of resilience in
this part of the market. Visa Inc. sold $16 billion of bonds in December, one of the largest debt deals of the year,
to help finance its acquisition of Visa Europe Ltd.

Visa's new bonds are trading at a higher price than when they were sold, underscoring the demand for the debt. A
10-year bond, priced to yield 0.97 percentage point more than comparable U.S. Treasurys, recently traded to
yield 0.83 percentage point more, indicating good performance, according to MarketAxess data.
Bonds from other highly rated companies, such as Procter & Gamble Co. and Gilead Sciences Inc., also have
rallied over the past few months.
Document J000000020160106ec1600015

WSJ.D Technology: Ford Accelerates Its Mobility Push
WSJ.D Technology: Ford Accelerates Its Mobility Push

By Mike Ramsey
362 words
6 January 2016
J
B5
English
LAS VEGAS -- Ford Motor Co. Chief Executive Mark Fields said the company would continue to invest heavily in
its core business while it diversifies into "transportation services" beginning in 2016.
Mr. Fields, speaking at the Consumer Electronics Show, said starting this year, "you are going to see us change
pretty dramatically, becoming an auto and mobility company."
"You will see us focus more attention on the transportation-services sector, even as we maintain our emphasis on
our core automotive business," he added.
Mr. Fields said the transportation-services sector, which includes buses, cabs and passenger rail, generates $5.4
trillion in annual revenue. "Ford and all industry competitors receive virtually no revenue today" from that sector,
he said.
Comparatively, new-vehicle sales generate $2.3 trillion in revenue annually.
While Ford has been running experiments with mobility services, including ride-sharing and pay-by-mile rental
vehicles, it hasn't launched a full-scale effort in the area. Mr. Fields said the company isn't interested in becoming
a contract manufacturer for another company, an important detail as companies like Google Inc. and Apple Inc.
consider getting into the auto industry and may be looking for partners.
Mr. Fields, in responding to whether Ford would need to form a new subsidiary or company to make a strategic
investment in ride-sharing, said that "we are open to all possibilities."
General Motors Co. said Sunday that it has invested $500 million in Lyft Inc., the ride-sharing company that is
trying to take on industry leader Uber Technologies Inc.
Ford offered few specifics about its plan to push into mobility services, but said it is increasing its resources into
autonomous vehicle technology.
The company is tripling its fleet of research vehicles run autonomously, though the company didn't give any
timeline for making an offering for sale.
Ford will be using a new lidar sensor from Morgan Hill, Calif.-based Velodyne Acoustics that can be hidden in
side-view mirrors. It would replace the clunky spinning sensors found on the roofs of autonomous cars.
Document J000000020160106ec1600017

No Longer Wallflowers, Carmakers Aim to Grab Spotlight at Electronics Show

No Longer Wallflowers, Carmakers Aim to Grab Spotlight at Electronics Show
By BILL VLASIC
753 words
5 January 2016
The New York Times
NYTF
3
English
DETROIT -- When Mark Fields attended his first consumer electronics trade show in 2007 as head of Ford
Motor's Americas division, the auto industry was hardly noticed among the thousands of tech companies gathered
in Las Vegas.
''We couldn't even get space in the convention center to do interviews, and had to do them back at the hotel,'' Mr.
Fields, now Ford's chief executive, said on Monday.
But as this year's International CES kicks off this week, Ford and other automakers will be among the headline
attractions with a series of announcements on electric vehicles, connected cars and autonomous driving.
It is one way the auto industry has become increasingly entwined with Silicon Valley in recent years.
Ford, for example, is expected to unveil plans on Tuesday to expand its testing of autonomous vehicles and
bolster its SYNC in-car communications and entertainment systems.
Despite some news reports, Mr. Fields said Ford would not be announcing a major tie-up with Google -- or any
other tech company -- to build driverless cars together.
''In some cases we will do things on our own and other cases we will partner with others,'' he said. ''But we are
going to keep those conversations private for competitive reasons.''
While tech companies like Google are moving aggressively to develop autonomous vehicles, traditional
automakers are moving just as fast to add technology that allows cars to brake and steer themselves
independently.
Ford will triple the size of its autonomous vehicle fleet to 30 cars from 10, and step up testing at its proving
grounds as well as on public roads in California.
The goal, Mr. Fields said, is to develop fully autonomous cars by the end of the decade. But the increase in
research indicates the company needs more time before it can commit to producing driverless cars for sale.
''When we do come out with it, it needs to work and the technology needs to be accessible to everyone and not
just luxury-car drivers,'' he said.
Other automakers will use International CES as a showcase for new electric vehicles that usually would be
introduced at major auto shows.
General Motors is expected to show the production version of its new all-electric model, the Chevrolet Bolt, at a
news conference on Wednesday featuring the company's and chief executive, Mary T. Barra.
Volkswagen, the German automaker under scrutiny for cheating on diesel emissions tests, is also expected to
introduce a prototype of a new electric vehicle.
In all, nine automakers will hold news events at CES, and they will be joined by dozens of auto suppliers involved
in autonomous vehicle programs.

A new study by the McKinsey consulting firm predicts that up to 15 percent of new vehicles could be fully
autonomous by 2030. In addition, the study expects unique software -- rather than engines and styling -- to
become the prime factor that differentiates vehicles in the future.
Some automakers are already sharing the costs and content of software to stay ahead of Silicon Valley giants like
Google and Apple that are developing their own vehicles.
On Monday, Toyota and Ford said they would adopt the same software to link smartphone apps to dashboard
screens in their vehicles. The software, which was developed by Ford, will integrate apps from phones into cars,
as well as navigation and mapping information.
Suppliers like Delphi Automotive and Continental will demonstrate new features that automate cars to improve
safety and avoid collisions.
Delphi will show off an automated version of the Audi SQ5 in Las Vegas that interacts with other cars and traffic
lights, and will introduce technology that allows drivers to change radio stations or adjust temperature controls
with hand gestures.
Other auto companies, ranging from start-ups like Faraday Future to luxury car brands like Mercedes-Benz, are
also expected to introduce electric and autonomous models at the show.
The critical factor in adopting the new technology will be how easy it is for drivers to operate, whether it is an app
on a touch screen or an automated steering system that can avoid accidents.
Regulators are also preparing their own set of rules for autonomous cars at the state and federal levels.
''We are light years away from where the industry was at this show just a few years ago,'' Mr. Fields said. ''It's a
really big deal now, and it's going to stay that way.''
Document NYTF000020160105ec150003r

Auto Sales Explode, but Detroit Brands No Longer Dominate
WHEELS
Auto Sales Explode, but Detroit Brands No Longer Dominate
By BILL VLASIC; Mary M. Chapman contributed reporting.
1,314 words
1 January 2016
The New York Times
NYTF
1
English
DETROIT -- Automakers have enjoyed an unequaled run of success in the United States because of pent-up
consumer demand, cheap gas prices and low interest rates. But despite record sales, manufacturers must
continue updating their vehicles and improving technology to keep the good times rolling.
As the auto industry tallies its final numbers for 2015, it appears certain that annual sales in the United States will
eclipse the previous record of 17.4 million set in 2000. Yet while the industry basks in its accomplishment of
returning to sales levels not seen since before the most recent recession, the market looks far different today than
it did 15 years ago.
Then, the three Detroit giants -- General Motors, Ford Motor and the German-American carmaker
DaimlerChrysler -- accounted for nearly 66 percent of total sales, according to the research firm Autodata.
That dominance has slipped considerably. While overall sales cannot be calculated until December totals are
released next week, the Detroit companies, through November, controlled just 45 percent of the market.
And as Detroit's muscle has weakened, foreign brands have surged. The big three Japanese carmakers -- Toyota,
Honda and Nissan -- have all gained significant market share. New competitors like the Korean companies
Hyundai and Kia are making solid gains. Even smaller niche brands like Subaru and BMW are steadily growing.
Industry analysts said the significant evolution of the market had benefited consumers, who now have a broader
array of choices from a bigger variety of manufacturers.
''It's a vastly different landscape today, almost night and day from 2000, when Detroit's Big Three was dominant in
most segments,'' said Jack Nerad, a senior analyst with the car research service Kelley Blue Book.
A big part of the change can be attributed to the sharp downsizing of the American companies because of
financial pressures that prompted them to cut back on United States production, employment and model lineups.
G.M. and Chrysler tumbled into bankruptcy in 2009, and needed government bailouts to survive. In Chrysler's
case, the last recession forced the Obama administration to engineer its merger with the Italian automaker Fiat.
And Ford, while it avoided Chapter 11, had to pare down its product portfolio and shutter factories to stay in
business.
Since the last record year in 2000, the Detroit companies have shed brands that were losing money and whatever
cachet they had in the marketplace. The roster of defunct brands is extensive, and includes once-popular
nameplates like Oldsmobile, Pontiac, Saturn, Hummer, Mercury and Plymouth.
Ford, for example, had to sell off some its most prestigious foreign brands, including Volvo, Jaguar and Land
Rover, to stay afloat financially. But rather than disappear completely, the brands have enjoyed revivals under
new ownership.
''The industry is less U.S.-centric than it was 15 years ago,'' Mr. Nerad said. ''But the amazing thing is that
struggling brands like Jaguar and Land Rover are now thriving under the corporate umbrellas of new players like
Tata Motors of India.''

Meanwhile, G.M. and Ford have diversified geographically and now count China as a prime growth market. At the
same time, their leaner operations in the United States have become solidly profitable because of steadily
improving consumer demand.
Still, the American auto companies remain reliant on large vehicles, particularly pickup trucks, to deliver big
profits. Ford's earnings, for example, slipped until the company was able to achieve full production of its
revamped, aluminum-body F-series pickups.
And although overall industry sales soared when gas prices dipped as low as $2 a gallon, automakers are
feverishly developing lower-mileage vehicles -- particularly new hybrid and electric models -- in anticipation of
higher fuel costs and more stringent government regulations.
The composition of the vehicles in American showrooms has also changed. Where once midsize sedans were the
biggest-selling segment, those traditional cars have been replaced by so-called crossover models that marry the
fuel economy and size of a passenger car with the interior space and utility of an S.U.V.
The research firm Experian Automotive calculates that crossovers account for nearly 24 percent of the entire
American market -- more than double what the segment was responsible for a decade ago.
''The crossover utility segment provides consumers with a nice balance between utilitarian need and fuel
economy,'' said Brad Smith, an Experian analyst.
Compact crossovers like the Honda CR-V, the Ford Escape and the Toyota RAV4 have leapfrogged the older,
bigger sport-utility vehicles to become top sellers in the entire S.U.V. segment.
''It's amazing how the segment has soared,'' said Jeff Conrad, a senior executive at Honda's American division.
''Nobody expected it to grow like this, but we sure don't see any clouds on the horizon.''
Mr. Nerad said the crossover segment had benefited from becoming homogeneous, so consumers have a wide
array of choices that all offer good mileage, carlike ride and handling, and the latest in technology like navigation
systems and Internet connectivity.
Consumers say they switched out of passenger cars because of the higher stance of crossovers and the
convenience of additional storage capacity.
''I've had sedans, but this fits my comfort level,'' said Mary Willis, a South Carolina resident who leases a CR-V.
''It's comfortable and easy to drive, and for anything bigger than a breadbox, it works better for groceries.''
One small-business owner, Dana Castillo, of Fenton, Mich., traded in her Cadillac sedan for a fuel-sipping
Hyundai Santa Fe crossover that better accommodates her family's needs. ''I love luxury cars, but my kids and I
just outgrew it,'' she said. ''I have a growing teenage son who plays football, and he needs space for his
equipment.''
Older drivers sing the praises of crossovers that not only fit their lifestyle, but provide more comfort than a car.
''I've got a little arthritis in my knees and this vehicle is easier to get in and out of,'' said Bobby Adams, a
66-year-old resident of Michigan.
Automakers are expanding their crossover lineups for 2016. G.M., for example, will import a small Chinese-made
Buick S.U.V. into the United States specifically for consumers clamoring for new crossovers.
Over all, the car companies are downsizing many of their models as part of a larger effort to meet new
fuel-economy regulations that are coming down the road. Federal rules require that all companies have fleetwide
vehicle averages of 54.5 miles per gallon by the year 2025.
Early in 2015, the rush of new-vehicle sales began early because of pent-up demand, gained momentum from
low gas prices, and accelerated in a flurry of holiday discounts and incentives.
The roaring vehicle sales may not last long, though. Mr. Nerad notes that United States sales have been growing
incrementally for the last seven years and says it is unlikely the trend can continue unabated.
He said that an expected series of interest rate increases from the Federal Reserve could chill the trend of cheap
leases that carmakers have partly relied on to lift sales. Also, the demand curve could flatten out as consumers
pull back from the red-hot pace of replacing older models.

Still, auto executives cannot help but revel in the strong finish to sales in 2015. ''If you're not having fun in the car
business now, then it's time to get out,'' said Bob Carter, an executive in Toyota's United States operations. ''It's
never been better.''
CHARTS: A Recovering but Changed Auto Industry: United States automakers have emerged from their worst
crisis in a generation, but they have lost much along the way. (Sources: MotorIntelligence.com (sales); Bureau of
Labor Statistics (employment); Reuters; the companies (net income)) (B3)
Document NYTF000020160101ec110006n

Business News: Ford, Google Pursue Auto Venture
Business News: Ford, Google Pursue Auto Venture

By Christina Rogers and Alistair Barr
793 words
23 December 2015
J
B2
English
Ford Motor Co. is pursuing a deal with Alphabet Inc.'s Google to build self-driving cars that would use the
software giant's technologies, said a person familiar with the talks.
The talks are intended to help Ford, which under Chief Executive Mark Fields has sharpened its focus on
advancing car technologies, accelerate its efforts to bring autonomous cars to market.
Any agreement wouldn't be exclusive to Ford, this person said, and Google continues to talk with other auto
makers. A partnership could be announced early next year, the person said.
As part of the deal being considered, Ford would develop software for components including steering, braking
and acceleration while Google would provide the overarching self-driving software that governs those functions,
this person said.
Autonomous-driving technologies and sensors would need to be integrated into future Ford vehicles so they don't
protrude. Google's latest prototype cars have integrated sensors in their design.
In a statement, Ford said it is talking to a variety of companies about advancing its mobility plan but the talks are
private and it declined further comment. A Google spokesman declined to comment.
Discussions between the two companies on an autonomous-driving car using Google technology was reported
earlier by website Yahoo Autos.
News of the talks lifted Ford stock 3.4% to $14.20 in 4 p.m. trading on Tuesday. Its shares are off nearly 18%
between Mr. Fields taking the wheel in July 2014 and Tuesday's close, despite the company earning record profit
in North America this year.
Earlier actions such as raising the dividend and showcasing future innovation have fallen flat with investors. This
month, Mr. Fields disclosed plans to spend $4.5 billion to develop electrified vehicles through 2020, and Ford's
stock price barely reacted.
Meantime, recent and potential automotive rivals such as Apple Inc., Tesla Motors Inc. and Uber Technologies
Inc. have captured much of the stock momentum Ford was attracting a few years ago when it avoided bankruptcy
during the financial crisis. Tesla is valued by investors at about $30.1 billion, or more than half of Ford's current
market capitalization.
"What we're seeing is fatigue from the stock," said Brian Johnson, a Barclays auto analyst, referring to Ford
shares' lackluster performance this year."With Ford at record levels of profitability, it is just too easy for investors
to say 'this can't last,'" Mr. Johnson added.
Mr. Fields disagrees. "We can find ways to generate revenue on a more consistent basis," he said in a recent
interview, noting such businesses can act as "buffer" against industry ups and downs. He has said Ford can't end
up like Nokia Corp., a once-dominant phone maker that fell behind in the smartphone industry.
Central to Mr. Fields's new strategy is a focus on services. Ford recently expanded its Silicon Valley research and
development lab and has recruited several outsiders, including former investment banker John Casesa and
former aerospace executive Ken Washington, to focus on tech development and mobility services such as ride
sharing and short-term car rentals.

Mr. Casesa is leading a strategy team looking for tech-sector partnerships and steering investments to new
areas. In November, Ford hired another former banker, Joseph Heyer, to lead business development and figure
out ways to monetize the service businesses it is testing.
Ford Chairman Bill Ford also is looking toward a future where technology will change the way people get around.
His venture fund,Fontinalis Partners LLC, has provided venture funding for Lyft Inc., an Uber competitor, and says
if Ford is to compete in Silicon Valley's world, "we're going to need partnerships with big companies and startups .
. . we have to make great cars and trucks today but we also have to imagine a future of transportation as service."
"This is a family-run business that understands the boom times are quickly followed by survival times," Morgan
Stanley auto analyst Adam Jonas said, noting that Apple could disrupt the traditional model of owning a car.
Ford also needs to keep pace with traditional rivals.
General Motors Co. will introduce a new 200-mile range electric car, the Chevrolet Bolt, by 2017 and is
developinga so-called "Super Cruise" feature for Cadillac that will allow drivers to ride in a car with hands off the
steering wheel on the freeway.
Toyota Motor Corp. recently announced it would establish a $1 billion research lab in Silicon Valley to accelerate
the development of smartcars and in December acquired a small stake in machine-learning venture Preferred
Networks Inc.
---
Mike Ramsey contributed to this article.

Document J000000020151223ebcn00030

Ford Recalls 313,000 Cars to Fix Lights

Ford Recalls 313,000 Cars to Fix Lights
By CHRISTOPHER JENSEN
306 words
23 December 2015
The New York Times
NYTF
6
English
Ford Motor is recalling about 313,000 older Crown Victoria and Mercury Grand Marquis sedans because the
headlights may fail, the automaker said on Tuesday.
It has been six years since the National Highway Traffic Safety Administration closed an investigation into the
same problem, saying that while it had 306 complaints from owners, there were no reports of crashes, injuries or
deaths and ''a safety-related defect has not been identified at this time.''
The recall, which includes about 296,000 cars in the United States and covers the 2003 to 2005 model years, was
announced about four months after the federal regulators opened a new investigation at the request of the North
Carolina Consumers Council, which argued there was an important safety problem. That request noted that there
were 604 consumer complaints on the agency's website, including seven reports of vehicle crashes but no
mention of injuries.
''The surprise I have is how quickly Ford issued a recall,'' said Matthew Oliver, the executive director of the
council, which is based in Raleigh.
Mr. Oliver noted that early in 2014 Ford sent a letter to owners saying it was possible a component would fail and
the headlights would not work, so it provided an extended warranty of 15 years or 250,000 miles from the time the
vehicle was new.
Ford decided on a recall now after ''reviewing data this year'' and meeting this month with federal regulators, a
Ford spokesman, John Cangany, said in an email. ''Our decisions are driven by the available data and we move
quickly on behalf of our customers when we determine a safety recall is needed.''
Ford said it was aware of one minor injury and 11 reports of accidents related to the defect.
Document NYTF000020151223ebcn0004p

Overheard
Heard on the Street

Overheard
287 words
23 December 2015
J
C10
English
In the case of Ford Motor, maybe old dogs really can learn new tricks.
Ford shares jumped Tuesday morning after a report from Yahoo Autos that the auto maker will announce a
partnership next month with Alphabet, the parent of Google, to develop self-driving vehicles. Neither company
has confirmed the reports. But whether or not a partnership eventually comes to fruition, it is clear that Ford is
aggressively investing in cutting-edge technology.
Last week, Ford announced that it had secured a permit to commence testing of autonomous cars on public
roads in California. Any partnership with Google would certainly give this project some added heft. Separately,
Ford also announced earlier this month that it will be investing up to $4.5 billion in electric cars over the next five
years.
Of course, these are long-dated, costly projects with an uncertain chance of payoff. But embracing higher risk
projects may be what Ford needs to get its stock price moving in the right direction. After Tuesday's rally, Ford
shares are down nearly 9% this year, despite a run of torrid sales in the U.S.
Ford's third-quarter tally of earnings before interest, taxes, depreciation, and amortization -- $4.3 billion -- was its
strongest quarterly result since 2007. Fears that the auto bull market won't last forever, wobbly overseas markets,
and the perceived threat from upstarts all have restrained the stock price.
Auto upstarts such as Uber Technologies and Tesla Motors have commanded the brunt of the investing public's
attention in recent years. But as Ford's recent maneuvering demonstrates, the incumbents are pushing back.
Document J000000020151223ebcn0001r

Overheard
Heard on the Street

Overheard
306 words
12 December 2015
J
B12
English
Ford Motor has thrown another hat into the electric-vehicle ring.
It plans to invest $4.5 billion in electric vehicles by 2020, aiming for 13 new electrified vehicles, including hybrids.
Next year, Ford will unveil a new electric version of its Focus sedan, with a range of up to 100 miles.
That is far below the 200-mile-plus range of Tesla Motors' Model S sedan or the coming Chevrolet Bolt.
Still, Tesla investors should take note. Tesla is due to unveil its first mass-market car, the Model 3 sedan, in
March. And Tesla's high stock-market valuation assumes that it will be able to make an affordable car without
compromising on driving range.
With Ford's announcement, the stakes for Tesla are that much higher to make a car that customers want and can
afford, while also being able to quickly bring it to market.
---
As children know, swaps can leave both parties happy. Consider Repsol and Statoil's shuffling of assets.
Norway's Statoil will acquire 13% of the pair's Eagle Ford joint venture from Repsol, while the Spanish company
gets 15% of a producing Norwegian field from Statoil. No money changes hands. Operating Eagle Ford should
allow Statoil to run the venture more efficiently, squeezing costs.
Repsol, which is carrying 13.1 billion euros ($14.3 billion) in net debt after its acquisition of Talisman, gets a little
cash-flow relief. But it is still small beans, and gains are based on oil-price forecasts higher than today's price.
Meanwhile, Repsol needs to sell 6.2 billion euros of assets by 2020 to pay down debt.
With oil still sinking, clever swaps are nice. But cold, hard cash makes the difference.
Document J000000020151212ebcc0000v

Detroit's Big 3 lag in car crash test ; Foreign nameplates fare better in insurance industry's annual survey
MONEY
Detroit's Big 3 lag in car crash test ; Foreign nameplates fare better in insurance industry's annual survey
Chris Woodyard
Chris Woodyard, USA TODAY
731 words
10 December 2015
USA Today
USAT
FINAL
B.5
English
Detroit's car brands collectively fall way behind foreign nameplates when it comes to crash-test ratings in a new
report issued Thursday by the insurance industry's auto safety arm.
Only one "domestic" vehicle from General Motors, Ford Motor or Fiat Chrysler is among the 48 that made the
Insurance Institute for Highway Safety's Top Safety Pick Plus list. It's a midsize sedan, the Chrysler 200.
Ford fared the worst. While GM managed to land five models in the next tier, Top Safety Pick, Ford had only one,
a big pickup. Fiat Chrysler had not only the 200, but landed one for Fiat as well, the 500X compact crossover.
Ford issued a statement that focused on the positive: "We are proud that the 2016 F-150 SuperCrew was named
an IIHS Top Safety Pick. Safety continues to be one of the highest priorities in the design of our vehicles."
GM said in a statement that its "vehicles perform well in a broad range of safety tests, including the IIHS
consumer metric tests," noting its models that earned spots in the second tier.
By contrast, Toyota has nine in the highest category, Honda has eight and Volkswagen and corporate companion
Audi have seven, says IIHS.
The ratings are closely watched by the auto industry because consumers continue to list safety as a top
consideration, especially when it comes to family haulers like SUVs. On Tuesday, the National Highway Traffic
Safety Administration said it is revising its safety ratings system for vehicles to give consumers more detailed
information.
On IIHS' list, Detroit's poor showing contrasts with overall improvement by the industry as a whole. Last year, only
33 models qualified as IIHS Top Safety Plus Picks, although more were added during the year. This time, not only
did more models win top marks in the initial ranking, but they did it despite more difficult requirements.
In particular, a "good" rating in one of the most vexing crash tests became a requirement. The test, called the
small overlap, simulates what happens when a car piles into a pole or another car on the driver's side. IIHS says
about one of four deaths and injuries came in frontal crashes in which the damage to the car was predominantly
on one side.
Not only is progress being made when it comes to design, but technology is playing a role as well. For instance,
the IIHS notes that Toyota's new Scion iA sedan, priced at about $16,000, becomes one of the cheapest cars with
an emergency automatic braking system. The system throws on the car's brakes if it detects an imminent crash.
Automatic braking is a requirement to be in the top tier.
"Ask for autobrake and forward collision warning features when you're out shopping for a new vehicle," IIHS
President Adrian Lund recommends.
2016 IIHS Top Safety Pick+
Minicar

Scion iA
Small cars
Acura ILX
Lexus CT 200h
Mazda 3
Subaru Crosstrek
Subaru Impreza
Subaru WRX
Volkswagen Golf (4-door and SportWagen models)
Volkswagen GTI (4-door)
Midsize moderately priced cars
Chrysler 200
Honda Accord (2-door coupe)
Honda Accord (4-door sedan)
Mazda 6
Nissan Maxima
Subaru Legacy
Subaru Outback
Toyota Camry
Toyota Prius v
Volkswagen Jetta
Volkswagen Passat
Midsize luxury/near-luxury cars
Audi A3
BMW 2 series
Lexus ES
Volvo S60
Volvo V60
Large family car
Toyota Avalon
Large luxury cars
Acura RLX
Audi A6 (built after January 2015)
Hyundai Genesis
Infiniti Q70 (does not apply to V8 4-wheel drive models)
Lexus RC
Mercedes-Benz E-Class
Volvo S80
Small SUVs
Fiat 500X (built after July 2015)
Honda CR-V
Hyundai Tucson
Mazda CX-5
Mitsubishi Outlander
Subaru Forester
Toyota RAV4
Midsize SUVs
Honda Pilot
Nissan Murano
Midsize luxury SUVs
Acura MDX
Acura RDX
Audi Q5
Lexus NX
Volvo XC60
Volvo XC90
2016 IIHS Top Pick
Small cars
Chevrolet Sonic
Kia Soul
Nissan Sentra (autobrake not tested)
Midsize moderately priced car
Chevrolet Malibu Limited (fleet model)
Small SUVs
Buick Encore
Nissan Rogue (autobrake not tested)
Midsize SUVs
Chevrolet Equinox
GMC Terrain
Kia Sorento
Midsize luxury SUV
Mercedes-Benz GLE-Class (autobrake not tested)
Minivans
Honda Odyssey
Kia Sedona
Large pickup
Ford F-150
SuperCrew
photo IIHS
Document USAT000020151210ebca0000r

Ford steers self-driving cars toward urbanites
MONEY
Ford steers self-driving cars toward urbanites
Chris Woodyard
241 words
10 December 2015
USA Today
USAT
FINAL
B.5
English
Instead of finding universal acceptance, self-driving cars will be better suited to cities and countries that are more
urban and congested, Ford Motor predicts in a report released Thursday.
Even then, some in those self-driving cars may not know how to fill the time they just acquired. Cars serve the
conflicted roles of "productivity capsule" and "sanctuary," says Sheryl Connelly, who put the report together.
Automakers spend a lot of time trying to peer into the future, such as Ford did with its 2016 Trends report. Missing
a trend can lead to expensive mistakes.
Connelly, Ford's global trend and futuring manager says don't expect self-driving to catch on everywhere.
"Autonomous driving makes sense in pockets of the world."
Some 84% of those living in India say they can see themselves buying a self-driving car, the report says. Only
40% of Americans envision it. Part of the issue, she says, is that people have to imagine how they would occupy
themselves if their cars did all the driving.
Cars are increasingly becoming pods for productivity in which people try to accomplish as much digitally as they
can while traveling, but that clashes with another trend toward "mindfulness," she says.
When drivers aren't obsessing about their to-do lists, "We think of the car as a sanctuary," she says.
Document USAT000020151210ebca0000q

U.S. Auto Sales Roll Toward a Record
U.S. Auto Sales Roll Toward a Record

By Jeff Bennett and John D. Stoll
983 words
2 December 2015
J
B1
English
U.S. new-car sales in November continued to run at a blistering pace, putting the auto industry on track to
challenge the 17.35 million sales peak reached in 2000.
A spate of Black Friday deals coupled with cheap gasoline and low financing costs helped auto makers overall
deliver a 1.4% increase over the same month last year, offsetting what historically is a sluggish sales month. The
tally brings the industry this year to 15.82 million vehicles through November.
The results continued an annual sales pace that is tracking to be among the best in U.S. history, and raised
industry optimism for a new annual record, barring a string of bad weather or other unexpected woes. Ford Motor
Co. said on Tuesday it would spend $1.3 billion to upgrade a pickup truck plant in Kentucky.
"There is a lot of inventory and auto makers are going to come out with guns blazing," said Ernie Boch Jr., chief
executive of Boch Automotive, a Norwood, Mass., dealership. "Right now, I don't see any signs of [demand]
letting up."
With gasoline prices nationwide hovering around $2 a gallon, sales of the heavier vehicles that deliver
substantially higher profits to auto makers are driving the industry. Nearly 59% of November's volume was
classified as light trucks, according to researcher Autodata Corp., including smaller SUVs.
These light trucks represented three out of every four vehicles sold by Detroit auto makers last month,
representing nearly the highest mix of pickup and SUV deliveries as a percentage of sales in history. More than
80% of Fiat Chrysler Automobiles NV sales last month were light trucks.
The trend is leading to production cutbacks at small car plants and accelerating a shift of small-car production to
lower-wage countries including Mexico. However, it is lifting average transaction prices, allowing car makers and
dealers to offer hefty discounts and cut-rate financing.
Ford's newer trucks and SUVs helped lift its average transaction price to a $36,000, up 11% compared with a
year ago and nearly $4,000 higher than the U.S. industry average, the company said. General Motors Co.'s
average prices were similar to Ford's, up about $580 over a year ago.
"The taller these cars get, the more money the Detroit auto makers' make," said Mark Wakefield, head of
consulting firm AlixPartners LLP's automotive practice. "Only a few years ago regulators thought sales would be a
60-40 split in favor of cars and now we are seeing a reverse of that."
Because more buyers opt for crossovers, which are more efficient than the hulking SUVs that once dominated the
segment, average fuel economy of vehicles sold isn't deteriorating as rapidly as it would have during another era.
IHS Automotive Analyst Tom Libby said hot sales of crossover SUVs such as the Jeep Cherokee bring higher
profit and fuel-economy benefits and because owners tend to be more loyal. By offering smaller, car-based SUVs,
auto makers are plugging holes in their lineups.
GM's Chevrolet Trax and Buick Encore, small SUVs built in South Korea and introduced late last year to the U.S.,
have rapidly emerged as strong selling entrants helping the nation's largest auto maker slow market share
declines despite deep declines in sales of sedans and compact passenger cars.
It isn't just domestic car makers reaping the benefits of the shift. Half of the sales reported by Japan's biggest car
makers -- Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. -- were light trucks and SUVs.
The trend is lining Detroit's pockets. GM and Ford posted record operating profits in North America during the
third quarter, and the companies said on Tuesday that industry sales are expected to further increase in 2016.
Investors, however, are reluctant to give domestic players much credit. Shares of Ford on Tuesday rose 1.6% to
$14.56, down modestly from the start of the year; GM closed up slightly at $36.26 and are nearly flat compared
with the beginning of the year.
"Sales and profitability don't always run in lockstep and investors are worried the auto industry is reaching a peak
in terms of profitability," Mr. Wakefield said. "There is concern that China, which is such a dominant part of global
auto sales, is downshifting."
Industry sales hit 1.3 million vehicles in November, representing the third consecutive month that the seasonally
adjusted annual rate of sales topped 18 million vehicles. The record for annual sales of 17.4 million, notched in
2000, could be topped if demand continues to strengthen in December.
Fiat Chrysler posted the strongest sales gain of the Detroit Three with a 3% increase. Jeep brand sales soared
20% with the Cherokee, Compass, Patriot and Wrangler each hitting November sales peaks.
GM's sales rose 1.5% for the month to 229,296 light vehicles. Ford recorded a less than 1% sales increase. This
week, Ford abandoned a no-haggle, insider-pricing offer that failed to catch on with buyers. The Dearborn, Mich.,
car maker replaced it with a new program offering through Jan. 4 no-interest vehicle financing for 60 months and
a $1,000 purchase incentive.
Ford said its results were aided by a 16% increase in its F-series retail sales.
Meanwhile, Volkswagen AG sales plunged 24.7% to 23,882 vehicles in the second full month after its emissions
cheating scandal broke.
Toyota logged a 3.4% increase to 189,517 light vehicles, Nissan reported sales for the month increased 3.8%, as
sales of crossovers, trucks and SUVs rose 15%, and Honda sales declined 5.2% from a year earlier.
---
Anne Steele and Christina Rogers contributed to this article.

Document J000000020151202ebc200034

Business News: Ford Says Labor Costs Will Increase, Minimally
Business News: Ford Says Labor Costs Will Increase, Minimally

By Christina Rogers
731 words
1 December 2015
J
B3
English
Ford Motor Co. said a new union deal will have minimal impact on profitability, projecting labor costs will grow
less than inflation and the pace of hiring will slow in the domestic auto industry as more temporary workers are
used and outsourcing becomes more common.
Ford executives, speakingduring a conference call on Monday, said costs for workers represented by the United
Auto Workers will rise less than 1.5% annually through 2019, including a $600 million charge booked in the fourth
quarter to cover $10,000 signing bonuses. Still, Ford's average hourly labor costs will be about $8 to $10 higher
than at U.S. factories owned by foreign rivals.
Covering 52,900 U.S. hourly workers, the agreement delivers higher pay, an end to a controversial two-tier pay
structure and hefty profit-sharing and other bonuses.
The No. 2 U.S. auto maker said the new deal offers flexibility on costs, pointing to why the company and its
Detroit rivals agreed to auto-workers contracts that the UAW initially billed as being among the richest in history.
Ford will use significantly more lower-paid temporary workers and schedule more mandatory overtime, executives
said, moves to reduce the need for expensive full-time employees being added to the payroll. General Motors Co.
and Fiat Chrysler Automobiles NV also signed new UAW pacts in recent weeks, although neither has provided
investors with specific details on how the deals will affect profits. GM estimates its U.S. labor costs will remain
through 2019 at about 5% of its North American revenue, which was $101.2 billion last year. Fiat Chrysler
estimates labor costs will rise by about $2 billion over the next four years. Ford's hourly labor and benefit costs
are expected to rise to $60 in 2019 with the new contract, up from $57 under the prior agreement, according to a
joint forecast provided by Kristin Dziczek and Art Schwartz, president of consultants Labor & Economics
Associates. That's far above Toyota Motor Corp.'s average U.S. labor rate of $48 an hour.
GM's hourly labor cost will rise to $60 from $55 over the next four years, the researchers estimate. Fiat Chrysler
will see the biggest jump in average hourly labor costs, rising to $56 from $47 over the next four years.
After years of granting concessions or holding the line on wages, the UAW this year pushed for terms that likely
will cap Detroit companies' ability to hire and potentially lead to more sourcing of factory work outside the U.S.
Ford, for instance, said the agreements give more flexibility to move production outside the U.S., indicating more
small-car manufacturing will relocate to lower-cost countries like Mexico.
Such moves could generate significant savings with Mexico's labor costs being about one-fifth of the wages auto
workers earn in the U.S., according to labor experts. "We're not restricted from sourcing products anywhere in the
Ford world," Chief Executive Mark Fields said. U.S. auto sales are tracking near-record levels amid low gasoline
prices and favorable economic conditions, leading to high production-capacity utilization rates and low
inventories. If demand sags, Ford said the cost of laying off workers is lower than it once was, making it easier to
downsize.
The contract won't "break the bank," RBC Capital Markets analyst Joseph Spak said in a note to investors. He
pointed out a large percentage of Ford's more expensive veteran workers will be retirement eligible incoming
years and the attrition rate is expected to accelerate.

For decades, laid-off workers would continue to collect pay for months, sometimes years, under a job-security
program known as the Jobs Bank. After costing the car makers billions of dollars, the benefit was killed during the
auto industry downturn and GM's bankruptcy last decade.
Now, nonworking factory employees at all three auto makers get only supplemental pay to top off unemployment
benefits but for a limited number of weeks.
Ford committed to spending $9 billion on its U.S. factories by 2019, creating or retaining about 8,500 hourly
worker jobs. Ford didn't specify how many of those jobs would be new and how many temporary workers it will
use.
Document J000000020151201ebc100033

AOL president Lord plans to leave company
MONEY
AOL president Lord plans to leave company
357 words
1 December 2015
USA Today
USAT
FIRST
B.1
English
AOL President Bob Lord plans to leave the online media company early next year. Current AOL CEO Tim
Armstrong had groomed Lord as a successor but now will remain for several more years in the wake of Verizon's
$4.4 billion acquisition of AOL in May.
Ford contract bonus will result in $600M charge
The signing bonus Ford Motor Company gave its workers under a new contract with the United Auto Workers
union will result in a fourth- quarter charge of $600million, Ford executives said Monday. The bonus includes
costs for backdating wage increases to Sept. 15, health care and other benefits. Ford's four-year UAW contract
increases labor costs by less than 1.5% a year, according to CEO Mark Fields. Its labor costs would be about $60
an hour, including benefits, by the end of the contract, the company estimates.
Staples, Office Depot merger may be rejected
U.S. regulators are poised to block the proposed merger of Office Depot and Staples unless the companies
deliver concessions amid concerns of their combined share in the market. Federal Trade Commission officials are
"leaning against the deal and are preparing to block it," the New York Post reported. The office supply giants had
won an extension on the review process through Dec.8, when the FTC must decide whether to approve the deal
or take legal action against it. In February, Staples agreed to acquire Office Depot for $6.3billion.
Angie's List shareholder calls for new strategies
One of Angie's List's largest shareholders said he is done with "dashed hopes and false promises" and
demanded the online business review company explore alternatives, including a sale to IAC's HomeAdvisor. In a
letter to the chairman of the board Monday, Eric Semler, founder of hedge fund TCS Capital, blasted the
company for failed growth strategies and warned its latest effort to generate value for shareholders will be no
different. "In virtually every instance, these new products or plans have failed to create shareholder value," he
wrote. TCS owns 10.7% of Angie's List shares.
Document USAT000020151201ebc100036

Business News: Ford's New Pitch Goes Flat --- Car maker to embrace end-of-year cash offer after no-haggle price promotion fizzles out
Business News: Ford's New Pitch Goes Flat --- Car maker to embrace end-of-year cash offer after
no-haggle price promotion fizzles out
By Christina Rogers
622 words
28 November 2015
J
B3
English
Ford Motor Co. is ditching its "Friends & Neighbors" marketing campaign after the insider-pricing offer failed to
live up to sales expectations.
The No. 2 U.S. auto maker by sales launched the no-haggle price deal in early November with plans to continue
through January 4. Customers and dealers gave it a lukewarm reception and Ford will move to a
more-conventional bonus cash offer for December, according to several dealers.
A Ford spokesman confirmed the move away from Friends & Neighbors, but didn't outline specific details of its
next campaign -- which is to begin on Tuesday.
"We're always in regular contact with our dealers," the spokesman said. "We often make adjustments to our
marketing programs based on their feedback."
Ford's U.S. market share has slipped modestly in 2015 despite the introduction of a lighter-weight version of its
F-150 pickup, the best-selling vehicle in the U.S.
Ford's Friends & Neighbors extended the price available to suppliers and other Ford business partners to all
customers. The fixed-price effort was reminiscent of auto makers' campaigns from a decade ago that aimed to
spark sales by offering employee pricing.
Dealers say some customers were confused by the new approach because they have grown accustomed to
seeing cash rebates and other bonuses advertised up front. Buyers didn't always feel like they were getting a
good enough deal, especially when stacked up against rival offers.
The switch to a new plan comes as most auto makers prepare for a late-year push heading into Christmas. U.S.
auto sales this year are expected to top 17.4 million vehicles, the highest level since at least 2001.
Some analysts, including Fitch Ratings Inc., have in recent weeks expressed concern that programs like Friends
& Neighbors might be signaling potential sales weakness ahead.
Even before this campaign, researcher Autodata Corp. reported an increase in total-industry spending on
incentives in the month of October even as underlying demand remains strong because of low gasoline prices,
attractive financing terms and stable economic conditions.
Ford executives had stressed in recent weeks that Friends & Neighbors discounts wouldn't cost the auto maker
any more than other incentive campaigns typically do.
Ford Chief Financial Officer Bob Shanks, speaking to analysts last week in New York, said the company's
incentive spending in the first half of November tracked lower than in October and was about flat compared with
November 2014.
"Nothing has changed," Mr. Shanks said then. "We're continuing to be very disciplined in terms of production,
demand and incentives."
Ford, now enjoying one of the most profitable periods in its history, has been booking record quarterly earnings in
North America this year. Along with strong demand for its high-margin pickups, the company is getting greater
transaction prices on vehicles across its lineup.
However, the auto maker has struggled to maintain U.S. market share with sales hurt in the first part of the year
due to a lengthy factory overhaul to prepare for its newest F-150 truck.
As Ford worked to restore full pickup production, dealers were left with not enough inventory to sell, a shortage
that dented earnings and opened the door for rivals General Motors Co. and Fiat Chrysler Automobiles NV to gain
momentum.
Through the first 10 months this year, Ford's U.S. sales were up 5.5% compared with the same year-ago period,
slightly behind the 5.8% growth posted overall by the industry.
Document J000000020151128ebbs00031

OFF DUTY --- Gear & Gadgets -- Rumble Seat: A Mustang for Those Who Want to Start a Parade
OFF DUTY --- Gear & Gadgets -- Rumble Seat: A Mustang for Those Who Want to Start a Parade
By Dan Neil
1,088 words
28 November 2015
J
D12
English
No one planned it. It was just a coincidence that I happened to be driving a very red Ford Mustang 5.0 convertible
on an ardent fall day in Raleigh, N.C., the very Saturday afternoon N.C. State was at home beating the pants off
Syracuse and the same day as the local Thanksgiving Day parade, from which most people assumed I had
become detached.
But when you buy a Mustang you do sort of pick a side. That's the oddest thing about the first 24 hours driving
either of the American sport coupe rivals, Mustang or Chevrolet Camaro: the cleaving away of tribe, the dawning
awareness that among the day's assorted traffic are those who do not share in your blissful Ford-iness. They
would covet your cool, tax your gig, harsh your vibe.
Camaro? Pfft. Mustang, represent! Vroom! Vroom!
And driving this car, with the top down, is practically a life choice. This is the 2016 Ford Mustang GT Premium
Convertible with the California Special trim package, and it will not fail to turn every living head in the immediate
vicinity of Middle America. Hey, look, there goes the fire chief.
I won't favor you with the half-century history of Mustang vs. Camaro, except to say it's been a chess game
between the two cars. There have been years when the Mustang was utter Shinola, and that was until recently.
The Camaro likewise has had long spells of limp ignominy.
Lately, both are monsters. In May Chevrolet unveiled the sixth-generation Camaro that is 200 pounds lighter than
the previous model, and optionally fitted with GM's 6.2-liter, 455-hp V8 -- a fully modernized sport coupe sharing
architecture with the damned refined Cadillac ATS-V and Chevy Corvette. As much as I hate to float in anyone's
punchbowl, GM's current generation of performance cars cannot be beat for the money.
Mustang has its own ecosystem of 10 models, starting with its base V6 Fastback ($23,998) and extending to the
apex-predator Mustang Shelby GT350R ($63,495), with the 5.2-liter V8 keyed up to make 526 hp and 429
pound-feet of torque. This track-qualified boy-bobble comes with the magnetic damping; separate engine oil,
transmission and differential cooling circuits and heat exchangers; 19-inch carbon-fiber wheels. If you buy such a
car and don't track it, you're a failure as a human being.
Our Wolfpack-red convertible tester was about in the middle: The GT Premium Convertible ($42,795) comes with
the warm, well-damped 5.0-liter V8 (435 hp, 400 pound-feet) paired with six-speed automatic with paddle-shift
mode, if so inclined. Unfortunately, Ford's generous Performance Package for Mustang (upgraded tires and
suspension, six-piston Brembo front brakes and 3.73:1 limited-slip differential) can only be had with manual cars.
So, no, as Mustangs go, this isn't the fast one. But this is the one you would want to rent if you flew into, say,
Kona, and all the Fiestas were gone. This is your fantasy rental upgrade.
Even the garden-variety GT convertible is potent and easily underestimated. In its Sport+ mode, our tester
became downright obstreperous, with fitful bouts of driveline lurch at low rpm and first gear and a lot of quiet
snarling.
Redesigned last year, the Mustang GT offers only cosmetic changes for '16, including LED turn-signal indicators
embedded in the hood like runway lights, pointing at the driver. This frippery is a callback to the Deluxe Hood
option of 1967-1968, featuring indicator lights bunkered in the hood. My thanks to Mike Mueller's "The Complete
Book of Mustang."

Let's talk about the hood indicators. First, I love the primitiveness of it -- heads-up display, old school. Second, I
love how arcane it is. Man, that's some Mustang deep tracks. Third, the hood turn signals make a virtue of
necessity, because the Mustang GT's bulging hood and high scuttle are blocking the driver's view anyway. It's not
a complaint. I wouldn't want to change the seating position or emasculate the Mustang's domed hood. But these
aren't the easiest cars to see out of, even with the top down. So maybe the hood indicators are quietly brilliant.
Other nostalgia include the faux gas cap centered above the rear bumper with California Special badging, and
hood and side-stripe graphics. I would note that the original CS in the 1960s included hood pins. The anticipation
for next year is building.
Our CS trim includes leather and micro-suede-upholstered front buckets (excellent) and rear bench and door
inserts, with ant trails of red thread over every edge. The California Special is flashy and superficial, with glammy
sprays of brightwork on the gearshift, cupholder bezels, speaker surrounds and drive-mode toggles at the base of
the center stack.
All of this is reasonably water resistant, I learned, after I failed to raise the rear quarter-light windows before a
heavy storm (I didn't hold down the switch for the top mechanism long enough). But a sunny day sorted it out. I
would also note that thanks to the weather-resistant interior, the test car smelled like a storeroom full of rubber
galoshes.
The Mustang's top is a less evolved mechanism than the one in the recently unveiled Camaro convertible. The
Mustang requires an occupant to twist a hoop lever in the header and then press and hold the switch while the
top Z-folds, leaving the canvas exposed behind the rear seat rests. The Camaro's push-button top ducks under a
handsomely sculpted rigid tonneau cover, a secure throne for Miss Succotash.
The Mustang top is softer and, for the moment, so is everything else.
---
2016 FORD MUSTANG GT/CALIFORNIA SPECIAL
Base price: $39,429
Price, as tested: $48,575
Powertrain: Naturally aspirated 5.0-liter DOHC V8 with variable camshaft timing; six-speed automatic
transmission with paddle shifters and manual mode; rear-wheel drive.
Horsepower/torque: 435 hp at 6,500 rpm/400 lb-ft at 4,250 rpm
Length/weight: 188.3 inches/3,852 pounds
Wheelbase: 107.1 inches
EPA fuel economy: 15/24/18 mpg, city/highway/combined
Cargo capacity: 11.4 cubic feet
Document J000000020151128ebbs0000d

New Math for Detroit

New Math for Detroit
By BILL VLASIC and MARY M. CHAPMAN
1,320 words
25 November 2015
The New York Times
NYTF
1
English
DETROIT -- When union contracts were finally ratified at Ford Motor and General Motors last week, a new era
began in the American auto industry.
The deals, which culminated labor talks among the nation's three big automakers, were the most generous for
workers in more than a decade and represented a striking shift from years of cuts and stagnant wages.
''The feeling among workers was that if you're not going to get the money now when we are near the top of the
market, you're not going to ever get it,'' said Kristin Dziczek, a labor analyst at the Center for Automotive
Research in Ann Arbor, Mich.
But for automakers, the pay raises will add to the pressure to maintain profits and could spur a shift of
less-profitable car production to Mexico from the United States.
Ford and Fiat Chrysler, for example, are considering moving some passenger car production to lower-wage
factories in Mexico from American plants. In their place, the companies would make more high-profit trucks and
sport utility vehicles in the United States.
That shift could cause production issues down the road, particularly if gas prices increase and temper consumer
demand for pickups and sport utility vehicles.
''From the company's point of view, the U.S. is where you have to build your premium products,'' said Harley
Shaiken, a University of California, Berkeley professor who studies the auto industry. ''To cover the cost of labor,
you have to go upscale.''
It is all part of the delicate series of changes needed to solve the two-tier wage problem that has been dogging
the United Automobile Workers since the system took effect in 2007.
And it was the primary hurdle that had to be cleared in the recently completed talks. When automakers began
final negotiations on contracts this fall, their goal was to reward union workers financially while containing costs
and preserving profits.
The companies were also willing to meet the U.A.W. halfway on reducing the gap in pay between entry-level and
veteran workers.
But the strategy collapsed on Oct. 1, when workers at Fiat Chrysler overwhelmingly rejected a proposed contract
that did not eliminate the divisive two-tier wage system.
''We showed we aren't quite as naïve as they thought,'' said Scott McGinnis, an entry-level worker at a Fiat
Chrysler plant in Michigan. ''After that first agreement, a lot of people were insulted.''
It was a stunning rebuke of the company and the U.A.W. leadership, and completely altered the course of the
talks -- and ultimately the cost structures of G.M., Ford and Fiat Chrysler.
Since then, all three companies have agreed to contracts that provide a defined path for every worker to earn the
top union wage of $29 an hour.

The richer contracts also underscore how healthy the Detroit companies have become since G.M. and what was
then the Chrysler Corporation slipped into bankruptcy and needed government bailouts to survive just six years
ago.
Sales of new vehicles in the United States are expected to hit 17 million this year, the most in a decade, and
possibly exceed that in 2016. In that environment, the time was ripe for workers to cash in.
Ms. Dziczek estimated that over the life of the four-year agreements, average hourly labor costs -- including
health care and other benefits -- will rise about 5 percent at Ford, 9 percent at G.M., and 19 percent at Fiat
Chrysler.
The increases are partly based on the number of entry-level workers at each company, and the impact that
progressive pay increases will have on overall costs.
But even with the wage increases and a combined payout of nearly $1 billion in signing bonuses for union
workers, the automakers are still well positioned for strong earnings, and able to invest in plant improvements and
technology.
With vehicle sales and sticker prices rising, G.M., Ford and Fiat Chrysler can probably absorb higher wages while
maintaining their profit margins in North America.
Executives at the car companies have refrained from publicly discussing the outcome of the labor negotiations
and contentious votes by union members.
Dennis Williams, the U.A.W.'s president, has also declined interview requests since Ford workers approved their
contract last week by a 51 percent majority.
But interviews with workers and union officials show that anger on the shop floor over two-tier wages was the
deciding factor in the changes in the contracts.
On Sept. 15, Mr. Williams emerged from talks with Fiat Chrysler's chief executive, Sergio Marchionne, with an
initial contract proposal that would have raised lower-tier workers' pay to $25 an hour, from $16 to $19 an hour,
over the life of the deal.
''We won tremendous gains,'' Mr. Williams said at a news conference, in which he hugged Mr. Marchionne for
their collective effort.
But a few days later, a top U.A.W. bargainer, Norwood Jewell, was heckled and booed when he presented the
tentative agreement to workers at Fiat Chrysler's big Jeep plant in Toledo, Ohio.
A video of the meeting, posted on a socialist website, illustrated the clash. Mr. Jewell was shouted down as he
defended terms of the agreement, with one worker yelling out, ''Are you working for us or Sergio?''
When the contract went to a vote, about 87 percent of the 4,800 workers in the plant voted against it. Other
factories also turned it down by big margins. When the final results came in, 65 percent of Fiat Chrysler's 37,000
workers had rejected it.
''There was a lot of anger because people had an expectation that since Chrysler was in the black again, selling
vehicles and making profits, it was our time,'' said George Windau, a veteran worker at the Toledo plant.
The head of the plant's union local, Bruce Baumhower, said his members were upset that the proposed deal left
entry-level workers well short of the top union wage.
''They wanted to see a way to eliminate that,'' he said. ''But what they got left them about five dollars short.''
After the defeat, the U.A.W. leadership reopened talks with Fiat Chrysler.
The union also hired a public relations firm, BerlinRosen, to improve communications with workers on the
U.A.W.'s website and Facebook pages.
Within a week, a new deal was struck between the union and Fiat Chrysler with a crucial concession -- lower-paid
workers would reach the top wage scale after eight years of service. The new agreement was then ratified by a
vote of Fiat Chrysler workers, and used as a template for the contracts at G.M. and Ford.

But without the lopsided defeat of the first proposal, the two-tier system would have stayed in place for another
four years.
Fiat Chrysler workers like Darlene Rau were gratified that new employees and veterans stood together to reject
the initial contract.
''I was kind of surprised it went down because I didn't think we were so united,'' said Ms. Rau, who has worked for
six years at the company's Jeep plant in Detroit.
Now, her pay has jumped to $24 an hour from $19, and she will reach the top wage before the contract ends. ''I
can actually pay my bills,'' she said. ''And have a little bit left for me.''
A Fiat Chrysler plant in Toledo, Ohio. New contracts with the three Detroit automakers may lead to the movement
of some manufacturing to Mexico. (PHOTOGRAPH BY BILL PUGLIANO/GETTY IMAGES); Sergio Marchionne,
left, and the U.A.W.'s Dennis Williams. (PHOTOGRAPH BY PAUL SANCYA/ASSOCIATED PRESS) (B1); Bruce
Baumhower, of the U.A.W. local that defeated the initial Fiat Chrysler contract. (PHOTOGRAPH BY ANDREW
WEBER FOR THE NEW YORK TIMES) (B8)
Document NYTF000020151125ebbp0004g

Ford Joins Auto Makers in Dropping Takata Air Bags
Ford Joins Auto Makers in Dropping Takata Air Bags

By Christina Rogers
159 words
24 November 2015
J
B5
English
Ford Motor Co. is the latest auto maker to say it will no longer equip its vehicles with Takata Corp. air-bag
inflaters that use ammonium nitrate, the chemical propellant that has been linked to deaths and injuries around
the world.
Ford on Monday said it has recalled about 1.5 million vehicles that have the defective Takata air-bag inflaters.
Ford says it isn't putting the inflaters in vehicles now under development. The defect in some inflaters can cause
them to explode and spray shrapnel, the National Highway Traffic Administration has said.
Honda Motor Co., Toyota Motor Corp. and Nissan Motor Co. have said they won't use the inflaters in future
models, in a blow to the supplier whose faulty air bags have forced 12 auto makers to recall 19 million vehicles in
the U.S.
Document J000000020151124ebbo0001d

Business News: UAW Wraps Up Contract Talks With Ford, GM
Business News: UAW Wraps Up Contract Talks With Ford, GM

By Christina Rogers
162 words
23 November 2015
J
B7
English
The United Auto Workers wrapped up months of contract talks with the Detroit car makers Friday, getting
approval of new labor deals at General Motors Co. and Ford Motor Co. that boost pay for workers but add higher
costs to the companies' balance sheets.
Ford's rank-and-file narrowly approved the new four-year agreement by a 51% majority, handing UAW President
Dennis Williams a much-needed victory after worker resistance to earlier deals caused negotiations to drag on for
much longer than many had anticipated. The Ford contract covers 52,900 U.S. hourly workers.
The UAW also declared its contract with GM ratified Friday, overriding a rejection by a smaller group of
skilled-trade workers. Approval of the deal had been put on hold for the past two weeks as union leaders worked
to resolve skilled-trade concerns.
Document J000000020151123ebbn0001s

Union Vote at Ford and G.M. Ends Painful Process for Big Three
National Desk; SECTA

Union Vote at Ford and G.M. Ends Painful Process for Big Three
By BILL VLASIC and MARY M. CHAPMAN
837 words
22 November 2015
The New York Times
NYTF
24
English
DETROIT -- After five months of bargaining and divisive ratification votes, the United Automobile Workers on
Friday completed new labor contracts covering more than 140,000 workers at the three largest American
automakers.
The new agreements, which will expire in four years, include raises and bonuses for all unionized workers. They
also provide a path for newer employees to eventually achieve wage parity with veteran workers.
But finalizing the agreements proved to be a painstaking process, because many workers opposed the terms
negotiated by U.A.W. leaders with General Motors, Ford Motor and Fiat Chrysler.
The ratification process at Ford went down to the wire on Friday, when workers at a large factory complex in
Michigan approved the deal and sealed its passage.
The agreement was in danger of being rejected until votes were tallied at the company's assembly and stamping
plants in Dearborn, Mich.
But workers there approved the agreement by large margins, saving it from defeat. The union said that, over all,
slightly more than 51 percent of Ford's nearly 53,000 workers had voted in favor of the contract.
Dennis Williams, the U.A.W.'s president, said that the ratification provided economic gains for Ford workers, as
well as provisions by the company to add thousands of new jobs and invest $9 billion in its American factories
over the life of the agreement.
''The voice of the majority has secured a strong future that will provide job security and economic stability for
themselves and their families,'' Mr. Williams said in a statement.
Some Ford workers were dissatisfied with the deal because newer employees might need as long as eight years
to achieve the $29-an-hour wages of longtime union members.
''To me, it's still a two-tier agreement with no cap on entry-levels,'' said Eric Truss, an employee at one of Ford's
Dearborn plants who voted against the deal.
Earlier on Friday, the union ratified its new contract with G.M.
While 55 percent of G.M.'s 52,000 workers voted in favor of the deal this month, ratification was delayed because
skilled trades employees had rejected it.
Under union rules, production workers and skilled trades employees must approve the contract separately.
Negotiations were reopened with G.M. to address issues specifically related to the skilled trades. On Friday, the
union said the agreement had been modified to protect certain job classifications and seniority rights for those
workers, and was then ratified by the U.A.W. leadership.
The Ford and G.M. contracts were modeled after the agreement reached between the union and Fiat Chrysler
last month.

Workers at Fiat Chrysler voted down the first tentative agreement between the union and the company, primarily
because it failed to eliminate the gap in pay between veteran employees and workers hired since the two-tier
wage system was put in place in 2007.
After the initial rejection, the union returned to the bargaining table and won better terms from the company.
When the revised agreement was ratified at Fiat Chrysler, it set the parameters for the contracts at G.M. and Ford.
In general, the contracts with all three companies provide immediate and longer-term economic benefits.
Workers at Ford will receive signing bonuses of $8,500, while employees at G.M. will get $8,000 bonuses and
workers at Fiat Chrysler up to $4,000. The disparity in bonus checks was determined by the different financial
conditions at each of the three companies.
Closing the gap in wages between newer workers and veteran employees will raise overall labor costs for all
three automakers.
But the companies are making big profits in North America because of surging sales of trucks and sport utility
vehicles. Industry analysts said the automakers needed to share some of those profits with factory workers to
ensure labor peace and maintain their momentum in the marketplace.
''These contracts are all about rewarding workers for their role in the companies' success, while still remaining
competitive with foreign auto manufacturers,'' said Harley Shaiken, a professor at the University of California,
Berkeley, who has worked with the U.A.W.
The contracts also guarantee that new products will be assigned to various plants over the next four years,
providing job security for current workers and, in some cases, creating openings for new employees.
At Ford, for example, the company has agreed to hire as many as 8,500 new workers over the life of its union
contract.
''This agreement provides a good foundation for Ford Motor Company, our employees and our communities as
we work together to create an even stronger business in the years ahead,'' John Fleming, Ford's head of global
manufacturing and labor affairs, said in a statement.
A Ford assembly plant in Claycomo, Mo. Ford employees are to receive $8,500 signing bonuses.
(PHOTOGRAPH BY CHARLIE RIEDEL/ASSOCIATED PRESS)
Document NYTF000020151122ebbm0009y

U.A.W. Contract With General Motors Is Ratified After Delay

U.A.W. Contract With General Motors Is Ratified After Delay
By MARY M. CHAPMAN
864 words
21 November 2015
The New York Times
NYTF
3
English
Bringing to a close a tumultuous bargaining season with American vehicle manufacturers, the United Automobile
Workers ratified contracts Friday with General Motors and Ford Motor.
The agreements followed one reached in October between union workers and Fiat Chrysler, the third of the Big
Three automakers.
The agreement with G.M. came nearly a month after a tentative deal covering about 52,000 workers was first
reached. Ratification was delayed in part because the automaker's skilled trades workers, about 8,500 employees
in all, had rejected the agreement. (These workers in general maintain machines at auto plants, and include
electricians, pipe fitters, tool makers and millwrights.) Over all, G.M. workers voted 55.4 percent in favor to 44.6
percent against, but the skilled trades members were 59.5 percent against.
After meeting with skilled trades workers, the union renewed talks with G.M. and both sides agreed to changes
that protected seniority rights and some job classifications, the union said.
''Based on the fact that the majority of the U.A.W.-G.M. membership concerns about protecting the core trades
classifications and seniority rights have now been met, the International Executive Board took action to formally
ratify the U.A.W.-G.M. national agreement,'' the U.A.W. said in a statement.
The Big Three have worked for years to lessen the number of classifications of skilled trades workers.
G.M. said in a statement that the four-year agreement was good for employees and business. ''We will continue
to work with our U.A.W. partners to implement the agreement, and engage our employees in improving the
business and building great vehicles for our customers,'' the statement said.
Hours later, but by a narrower margin, Ford workers ratified their new four-year agreement, also covering about
52,000 employees, the union announced late Friday. The pact's fate had looked bleak leading up to Friday's
voting, as several major plants, including those in Chicago and Dearborn, Mich., had voted against the tentative
agreement, according to tallies posted by U.A.W. members on social media.
Ultimately, the contract was approved by a 51.4 percent majority.
The contract calls for raises for all workers, including a path to top wages for entry-level employees, and creates
or retains 8,500 jobs. Workers will receive $10,000 ratification bonuses.
The U.A.W. Ford vice president, Jimmy Settles, said in a statement: ''There is no higher authority than the
membership. Through a fair and democratic process U.A.W.-Ford members have delivered job security and
strong economic gains for their families and communities.''
With the agreement in danger, Mr. Settles had taken the unusual step on Wednesday of holding a news
conference, warning workers that the union was unlikely to get an improved deal if the first one was rejected. He
also suggested that Ford could pull back plans to invest $9 billion in the United States.
John Fleming, Ford's executive vice president for global manufacturing and labor affairs, said in a statement:
''This agreement provides a good foundation for Ford Motor Company, our employees and our communities as
we work together to create an even stronger business in the years ahead.''
Some Ford workers wanted more.
''In four years, the contract will be null and void, so to me it's still a two-tier agreement with no cap on entry
levels,'' said Eric Truss, an employee of Ford's Dearborn Diversified Manufacturing Plant in Dearborn who voted
against the tentative pact with the automaker.
Sharon Bell, who works at a General Motors transmission plant in Warren, Mich., said she, too, had voted against
the pact with G.M.
''I'm not excited about it -- there's nothing great about it for the veteran workers,'' said Ms. Bell, who said she had
worked for General Motors since 1975. ''I stopped getting raises over 10 years ago, so you're not doing me any
favors by giving me 3 percent.''
In the case of G.M., the union defended the ability of a minority of its members to hold up ratification. ''Since its
inception, the U.A.W. has put in place a process to ensure that minority groups have a voice,'' the union said.
The union can override a rejection by skilled trades workers, but it cannot change contract components that apply
to all members.
The new contract with G.M. goes into effect on Monday. It calls for raises for all workers and ends a two-tiered
pay system, although it will take a newly hired worker eight years to reach top pay rather than the three years it
used to take before 2007. Workers hired after 2007 have made less than those hired before that year.
The agreement, which basically follows the pattern first set in the contract with Fiat Chrysler, also calls for 1,300
new skilled trades placements.
A General Motors plant in Orion Township, Mich. The automaker's new union contract goes into effect on
Monday. (PHOTOGRAPH BY CARLOS OSORIO/ASSOCIATED PRESS)
Document NYTF000020151121ebbl0004r

UAW Races to Save Deal --- Ford vote goes down to the wire as union struggles to avoid another setback
UAW Races to Save Deal --- Ford vote goes down to the wire as union struggles to avoid another setback
By Christina Rogers
738 words
21 November 2015
J
B1
English
The United Auto Workers union is racing to save a proposed labor deal with Ford Motor Co. that if rejected would
be a significant setback and if approved significantly increase Ford's costs.
Workers at a Ford plant in Dearborn, Mich., were holding the deciding vote on Friday. The vote there is critical for
approval because earlier plant tallies had contract opponents leading by about 1,500 votes.
Ford's offer covers more than 50,000 union members and would provide raises, extensive production
commitments and rich bonuses in exchange for ratification.
UAW officials have warned members that a second trip to the bargaining table isn't likely to yield a better contract
and could put workers' job security provisions at risk.
A final tally of the Ford vote was expected late Friday. Jimmy Settles, the UAW vice president in charge of Ford
negotiations, said UAW bargainers likely will seek to renegotiate the contract with Ford rather than call for a strike
if workers reject the deal.
Separately, the UAW ratified a labor deal with General Motors Co. Friday, following two weeks of union meetings
with a group of GM workers opposed to the deal. That agreement would lift GM workers' hourly pay by 10% over
an existing contract, according to an independent analysis published on Friday.
GM and the UAW reached a tentative agreement in October that was approved by union production workers and
rejected by skilled-trades employees.
Kristin Dziczek, a labor expert at the Center for Automotive Research, said any resumption of negotiations with
Ford would be a gamble. "From a Ford management standpoint, they don't want to give more because it
encourages more no votes in the future," she said.
UAW officials have struggled to win worker support. Members rejected the initial contract negotiated with Fiat
Chrysler Automobiles NV in September.
The two sides eventually reached a contract that gradually eliminates the pay gap between entry- and senior-level
workers, and pays out hefty bonuses. That deal set the template for subsequent agreements.
GM's hourly labor and benefit costs would rise to $60 in 2019 under its proposed UAW contract, up from $55 this
year under the prior contract, according to a joint forecast provided by Ms. Dziczek and Art Schwartz, president of
consultants Labor & Economics Associates. Ford Motor's hourly costs would rise to $60 from $57 over the next
four years, the researchers estimated.
Fiat Chrysler will see the biggest increase in average hourly labor costs, to $56 from $47, over the next four
years, according to the two researchers.
The Italian-American auto maker has a higher share of entry-level workers who will quickly graduate to the top
pay during the agreement, Ms. Dziczek said.
The U.S. auto makers' labor costs are closely watched by Wall Street for their potential impact on the bottom line.
Over the last several years, and particularly during the bankruptcies of GM and Fiat Chrysler, the companies
managed to win significant cost savings to make their U.S. labor costs more competitive with Asian rivals building
cars in the U.S.
With the auto industry now flourishing and the companies making healthy profits, Ford workers are calling for
bigger raises and a faster progression to the top wage bracket for newer workers. Under the current proposal,
those workers have to wait eight years to reach top pay.
"For the last decade, we have given up concession after concession in order to keep the company viable," said
Timothy Arnett, a 16-year Ford assembly plant worker in Louisville, Ky.
Mr. Arnett said union leaders set expectations high, pointing to a speech by UAW President Dennis Williams last
year when he proclaimed "it's our time."
Some workers are angry the Ford proposal creates a lower pay scale at three Michigan parts plants at a time
when members are pushing to get rid of pay divisions on the assembly line.
Under the current proposal, pay for workers at those factories will be capped at about $19 an hour, about $10
less than what other workers will eventually achieve as part of a new wage path. Union officials say the plants
were at risk of closing and the lower wage helps keep them open.
Document J000000020151121ebbl0003q

Results of U.A.W. Vote Show Ford Pact Losing

Results of U.A.W. Vote Show Ford Pact Losing
By BILL VLASIC
658 words
19 November 2015
The New York Times
NYTF
5
English
DEARBORN, Mich. -- Leaders of the United Automobile Workers union said on Wednesday that a slight majority
of workers at Ford Motor Company have so far voted against a proposed new labor agreement.
The tight results mean the deciding votes are in the hands of workers at three large assembly plants in Michigan
and Illinois that begin voting on Thursday.
U.A.W. officials are urging those workers to support the four-year tentative agreement, and avoid a defeat that
would force the union to go back to the bargaining table with Ford.
Jimmy Settles, the union's lead negotiator with Ford, said at a news briefing on Wednesday that about 75 percent
of the company's 52,000 factory workers had voted so far. Of that number, about 52 percent voted against the
agreement, he said.
''We're optimistic,'' Mr. Settles said at the briefing at the union hall outside Ford's huge Rouge assembly plant. ''It
looks dark now, but it might be light in the morning.''
A defeat at Ford would be the second setback for the union leadership in the current labor talks involving all three
Detroit automakers.
Last month, results from voting at Fiat Chrysler showed that workers had voted down a proposed contract that did
not go far enough in closing the gap in wages between entry-level employees and veteran workers.
After the defeat, the U.A.W. resumed bargaining with Fiat Chrysler and ultimately won better terms with the
company. The revised contract called for raises for every union member and eventual wage parity for newer
employees and longtime workers.
Fiat Chrysler workers then voted to accept the deal, which set the template for contract terms that were
subsequently approved by a majority of union workers at General Motors.
The contract at G.M., however, has been the subject of further negotiations to address opposition in the ranks of
skilled-trades workers.
Under union rules, both production workers and skilled-trades employees must approve the contract separately.
The union has extended its current contract with G.M. while the skilled-trades discussions take place. That
extension is set to expire on Friday.
Industry analysts had expected the vote at Ford to go smoother than negotiations at G.M. and Fiat Chrysler.
Ford, for example, had agreed to an $8,500 signing bonus for all workers in its proposed contract, compared to
bonuses of $8,000 at G.M. and up to $4,000 at Fiat Chrysler.
The proposed Ford contract also included provisions for $9 billion in new investment in its American plants, and
the anticipated hiring of an additional 8,500 workers over the life of the agreement.
But workers at several big Ford assembly plants have rejected the deal in voting that began last week.
Comments on social media by Ford workers revealed dissatisfaction with the length of time it will take some new
workers to achieve parity with veteran employees who earn about $29 an hour.
Mr. Settles said on Wednesday that workers who voted against the deal were assuming that the union could
easily resume bargaining with Ford and get an improved agreement.
''Some people think you just go open door No. 2 and see if something is behind there,'' he said. ''That's not how
real negotiations go.''
He added that Ford could cut back on plant investments if it has to sweeten economic terms to get a new deal
approved.
The three plants yet to vote are in Dearborn and Flat Rock, Mich., and Chicago.
Bernie Ricke, president of U.A.W. Local 600, which represents workers at the Dearborn plant, said he had held
14 informational meetings with union members to build support for the contract.
''If we thought there was another dollar on the table we would have got it in the first one,'' he said.
Document NYTF000020151119ebbj0005e

Labor Pact With Ford Hits Snag
Labor Pact With Ford Hits Snag

By Christina Rogers
699 words
19 November 2015
J
B1
English
DEARBORN, Mich. -- Ford Motor Co.'s tentative four-year labor deal is in jeopardy as more than half of those
voting to date rejected the pact and only two days remain for workers to cast ballots, posing another potential
setback for the United Auto Workers.
Final votes on the contract would be cast on Friday, and include major Ford assembly plants in Michigan and
Chicago, whose members have yet to vote.
So far, more than half of the roughly 75% of Ford's union members who voted have rejected the deal.
A majority of Ford's 52,900 factory workers in the U.S. have to approve the contract for it to be ratified.
The lack of support is unexpected given the economics of the deal. The Ford contract is the richest of the three
UAW contracts drawn up with Detroit auto makers this year, and offers a $10,000 in upfront signing and
profit-sharing bonuses, $9 billion in new U.S. investments and pay raises that will be phased in over time.
UAW President Dennis Williams has run into resistance getting contracts ratified by the rank-and-file at each car
company.
The union negotiated twice with Fiat Chrysler Automobiles NV before getting an agreement its membership would
approve. A ratification vote at General Motors Co. for a separate labor pact has been on hold for two weeks
because a smaller group of skilled trade workers voted against the proposal.
UAW leaders on Wednesday took the unusual step of calling a news conference at a plant near Ford's
headquarters that has yet to vote, hoping to sway workers to support the agreement.
A return to the bargaining table isn't likely to yield a richer agreement without putting U.S. investment and job
security at risk, UAW officials said.
"The irony of negotiating is when you go back to the table, everything is off the table," Jimmy Settles, the UAW's
top negotiator for Ford, said to reporters.
The union's efforts to ratify the contract suffered a setback Tuesday when workers at two large plants in Kentucky
rejected the deal. Combined, the two plants have 4,900 Ford workers, enough to cast doubt over whether the
union will have enough support to get the contract approved.
"The UAW is going through the ratification process right now. We're going to respect that process and when that
concludes we'll give more details," said Ford Chief Executive Mark Fields at a press event Wednesday in San
Francisco.
Mr. Settles played down the possibility of a strike, calling it a last resort that would end up hurting workers. UAW
members on strike earn about a fraction of their normal pay.
Several workers interviewed by The Wall Street Journal say the labor proposal doesn't go far enough to roll back
concessions made by the union to help the No. 2 U.S. auto maker survive during periods of financial distress.
With Ford posting record profit in North America this year, workers are calling for an end to a two-tier wage
division that has helped make the company more competitive on labor costs but pays newer hires roughly
$9-an-hour less than longer-tenured workers for doing the same work.
UAW officials say the contract offers economic gains for all workers, including a path over eight years to bring
lower paid workers to the top pay scale of veteran employees.
Ford's workers in Dearborn, where the company has three factories, could provide a crucial swing vote.
Matthew Schulte, a 43-year-old worker at Ford's Dearborn truck factory, said members want workers earning
lower pay to be brought up to the top pay scale sooner and are irked that part of their profit-sharing bonuses for
next year are being pulled ahead as an incentive to ratify the deal.
Members are also unhappy about changes to the sick-day policy and absentee rules, he added.
"I was on the fence, and now I'm going to vote no," Mr. Schulte said.
---
Rachael King ontributed to this article.
Document J000000020151119ebbj0002s

Passage of Ford-UAW contract in doubt Railway defends bid for Norfolk Southern
A-Section
Passage of Ford-UAW contract in doubt Railway defends bid for Norfolk Southern
697 words
19 November 2015
The Washington Post
WP
FINAL
A16
English
Leaders of the United Auto Workers scrambled Wednesday to salvage a proposed labor agreement with Ford
Motor Co., warning rank-and-file members that a rejection of the deal could jeopardize investments that would
sustain U.S. factory jobs.
With three-fourths of the national Ford union vote counted, 52 percent have rejected the proposed contract,
Jimmy Settles, head of the UAW's Ford Department, said at UAW Local 600 in Dearborn, Mich. He and other
UAW officials appealed to Ford workers who have yet to vote to support the deal or risk losing some of the $9
billion in investments in U.S. factories that Ford has promised in the agreement.
"I seriously think that if we don't ratify it, that [investment] would be in jeopardy," Settles said. "And that's job
security. If they invest in plants, they don't close plants."
Voting extends through Friday night, including at Local 600, which has 8,500 of Ford's nearly 53,000 UAW
members.
Final results will not be known until at least Friday night, with a UAW announcement due Saturday, Settles said.
The UAW needs a majority of votes for the contract to be ratified.
UAW leaders say the proposed agreement with Ford is the richest in history. But that has not stopped the rank
and file from using social media to challenge them, saying the deal does not do enough to make up for pay and
benefits that were sacrificed when Ford struggled to restructure during the Great Recession.
The automaker has recorded robust profits this year as sales of trucks and SUVs made in UAW factories
boomed.
Canadian Pacific offered more details and defended its offer to join two of North America's biggest railroads, but
Norfolk Southern offered only a lukewarm response and regulators have expressed significant concerns about
any rail mergers.
Norfolk Southern said the offer of $46.72 cash and 0.348 shares in the combined company represented a
premium of less than 10 percent of its stock price Tuesday. Canadian Pacific said the offer could deliver a nearly
60 percent premium, but it based its calculation on an estimate of what the combined railroads might be worth in
March.
It is clear the two railroads have not agreed on the value of their operations or the likelihood that such a merger
would be approved.
Canadian Pacific spokesman Martin Cej said the company has only made an offer to talk with Norfolk Southern
about a deal, not a formal bid. "This is not a quick-and-dirty takeover," Cej said. "It is one that assumes the
shareholders of Norfolk Southern would want to take part in the combined growth of the company in the future."
Canadian Pacific said that combining the railroads would be more efficient, reap tax savings and create a
transcontinental network linking major North American industrial centers, cities and ports.
This offer comes a year after Canadian Pacific discussed a possible merger with Norfolk Southern's main
competitor in the eastern United States, CSX. Those talks ended abruptly after a failure to agree on a number of
issues.
l Lowe's third-quarter results beat analysts' estimates as its sales rose, buoyed by the ongoing housing-market
recovery. For the period that ended Oct. 30, Lowe's earned $736 million, or 80 cents per share. That compares
with $585 million, or 59 cents per share, a year ago. Revenue increased to $14.36 billion from $13.68 billion.
Sales at stores open for at least a year, a key indicator of a retailer's health, climbed 4.6 percent as there were
more transactions and customers spent more. Lowe's said Wednesday that comparable sales for its U.S. home
improvement business climbed 5 percent in the quarter. Lowe's anticipates fiscal 2015 earnings of about $3.29
per share, with sales rising 4.5 to 5 percent.
l 8:30 a.m.: Labor Department releases weekly jobless claims.
l 10 a.m.: Freddie Mac releases weekly mortgage rates.
l Earnings: Gap, Stein Mart, Williams-Sonoma.
WP20151119digest1119
Document WP00000020151119ebbj00006

U.A.W.'s Tentative Deal With Ford Tops Other Automaker Contracts

U.A.W.'s Tentative Deal With Ford Tops Other Automaker Contracts
By BILL VLASIC
644 words
10 November 2015
The New York Times
NYTF
2
English
DETROIT -- Local leaders of the United Automobile Workers on Monday endorsed a proposed new labor
agreement with Ford Motor Company that is slightly richer than contracts agreed to by union workers at General
Motors and Fiat Chrysler.
The move by the union leadership paves the way for voting on the four-year agreement by more than 52,000
workers at Ford.
The tentative deal with Ford mirrors the pay increases included in agreements with G.M. and Fiat Chrysler,
including a provision that entry-level workers would eventually achieve wage parity with veteran employees.
But the Ford deal calls for an $8,500 signing bonus for union members, compared with $8,000 at G.M. and as
much as $4,000 at Fiat Chrysler. If the contract is ratified, Ford workers will get a $1,500 advance on their annual
profit-sharing payouts for this year.
The union's top Ford negotiator, James Settles Jr., called the deal a ''hard-earned victory'' for workers at the
company, which has been achieving record profits in North America, primarily because of surging demand for its
pickups and sport-utility vehicles.
The agreement included a guarantee by Ford of $9 billion in new investments in its plants in the United States,
which is expected to secure or create 8,500 jobs.
One analyst said that Ford workers were rewarded for the company's longer-term performance, which included
avoiding the bankruptcies and major restructurings that occurred at G.M. and the former Chrysler Corporation.
''It is a modestly richer agreement that reflects the fact that Ford did not slip into bankruptcy and has had
somewhat stronger results in recent years,'' said Harley Shaiken, a professor at the University of California,
Berkeley, who has worked with the union in the past.
The Ford agreement appears to be the conclusion of what has turned out to be groundbreaking labor talks
between the U.A.W. and the Detroit automakers.
Union leaders entered the negotiations this summer determined to preserve jobs and gain wage increases for the
first time in more than decade.
In addition, the U.A.W.'s president, Dennis Williams, made a high priority of closing the wage gap between
entry-level workers hired since 2007, and longtime employees.
Entry-level employees had been earning between $16 and $19 an hour in the previous contract. But under the
new agreements, those workers will get raises, over time, that will bring their wages in line with the $29 an hour
earned by veteran employees.
With the companies benefiting from robust sales of high-profit trucks and sport-utility vehicles, it hardly made
sense for G.M., Ford and Fiat Chrysler to pinch pennies with workers who had ridden out the tough times during
the most recent recession.

''Nothing would be as damaging for these companies than to have disgruntled work forces coming out of these
negotiations,'' Mr. Shaiken said. ''Some of these workers have been to hell and back in the last decade.''
Ford workers will most likely begin voting on the new agreement this week.
But a snag in the autoworker contract talks still remains, with G.M. Last week, about 55 percent of all union
workers at G.M. approved their proposed contract.
A majority of the company's skilled-trades employees, however, voted against the deal. According to union rules,
both skilled-trades workers and production workers must ratify the agreement separately.
The U.A.W. can overrule the rejection by the skilled-trades employees, if the union finds that they voted it down
for reasons unrelated to their job classifications, like being dissatisfied with the economic terms of the contract.
Union officials are meeting with skilled-trades workers to learn why they rejected the deal.
Document NYTF000020151110ebba0003g

Business News: Ford Acts To Bolster Tech Ties
Business News: Ford Acts To Bolster Tech Ties

By Christina Rogers
289 words
10 November 2015
J
B7
English
Ford Motor Co. is retooling its management team in a bid to catch up with Silicon Valley.
The auto maker is moving one of its finance executives to a corporate strategy office seeking partnerships with
tech firms threatening to reshape the global auto industry.
Michael Seneski, a Ford veteran instrumental in securing funding needed to weather the auto-industry downturn
last decade, has left his job as chief financial officer of the Ford Motor Credit Co. lending arm to work for John
Casesa, an investment banker hired to help update the company's business model.
Mr. Casesa has been filling out a team since he joined Ford earlier this year.
A Ford spokesman confirmed the move on Monday but declined to make Mr. Seneski, 50 years old, available for
an interview. Marion Harris has taken over as Ford Motor Credit's finance chief.
The personnel moves follow a drive by senior leaders to slowly wade into new business arenas, including
providing car-sharing services that resemble those of Zipcar. Responding to the emergence of Uber Technologies
Inc. and Tesla Motors Inc., and the threat of competition from Google Inc. and Apple Inc., Mr. Casesa's team of
analysts and corporate strategists is trying to figure out where to place future investment bets.
At a recent technology conference in Ireland, Ford Chairman Bill Ford Jr. said the company is "going to have to
migrate to new business models, which will be much more like transportation as a service." Mr. Ford said "the
car's role in that may be diminished greatly, but there will be different revenue streams along the way."
Document J000000020151110ebba0000o

UAW, Ford Reach Agreement
UAW, Ford Reach Agreement

By Christina Rogers
582 words
7 November 2015
J
B1
English
Ford Motor Co. wrapped up its contract talks with the United Auto Workers union on Friday, reaching a tentative
labor agreement largely patterned after rival General Motors Co.'s deal with the UAW.
The tentative deal, which covers 52,900 U.S. factory workers at the no. 2 U.S. car maker, would be one of the
richest in the company's history, securing jobs and "substantial" pay gains for its members, the UAW said without
releasing specific details.
The union has come under increased pressure since workers at Fiat Chrysler Automobiles NV rejected an initial
labor proposal, sending company and union bargainers back to the negotiating table. Fiat Chrysler workers
ultimately approved a sweeter deal that set a higher top wage for newer hires.
UAW officials have been working to get a separate agreement with GM ratified by members. GM workers finished
voting on that contract on Friday with members at most of the company's major assembly factories and
components approving the deal. A final tally isn't expected until Saturday.
GM production line and skilled trade workers must separately ratify the agreement for it to pass. While skilled
trade workers comprise just 16% of GM's 52,700 hourly workers, a rejection on their part could put the entire deal
in jeopardy, industry experts say.
In a split vote, UAW leaders can override the rejection but only under certain circumstances.
In 2011, Fiat Chrysler's skilled trade workers voted down the company's contract, forcing then-UAW President
Bob King to step in and declared the deal ratified since a majority of the auto makers' workers approved it.
The GM agreement secures pay raises, pledges for new factory investments and an $8,000 signing bonus paid
out to members if the deal is ratified.
Newer workers -- those hired after 2007 -- will also get health benefits that match the richer medical coverage
offered to longer-tenured factory workers.
Jimmy Settles, the UAW's top bargainer for Ford, said of the pact with that company: "This agreement is
significant for our members in that it creates a clear path for economic advancement for active members and
rewards veteran employees for their sacrifices in recent years."
John Fleming, Ford's vice president for labor affairs and global manufacturing, said, "The agreement, if ratified,
will help lead the Ford Motor Company, our employees and our communities into the future."
Officials from dozens of UAW Local offices at Ford facilities across the country are scheduled to be briefed on the
deal in Detroit on Monday.
Four years ago, UAW members at Ford got thousands of dollars more in bonuses than their counterparts at GM,
but received fewer factory-job commitments.
With U.S. auto sales running at the fastest pace in more than a decade, GM and Ford are posting record
operating profits in North America and each have operating margins in excess of 10% of sales due to strong
demand for their lucrative trucks and sport-utility vehicles.

Still, hourly labor costs at the two U.S. car makers are about $10 higher than at their Asian rivals, a disadvantage
that puts GM and Ford in a weaker position to weather a market downturn.
Ford workers will be looking closely at the deal for new job pledges after it was revealed this summer the
company was moving some small-car production from a factory in Michigan to Mexico.
Document J000000020151107ebb700037

A Tentative Deal for Ford Autoworkers

A Tentative Deal for Ford Autoworkers
By BILL VLASIC
477 words
7 November 2015
The New York Times
NYTF
3
English
DETROIT -- The United Automobile Workers union reached a tentative agreement on Friday on a new contract
for more than 52,000 workers at Ford Motor Company.
Workers at General Motors concluded voting on a proposed four-year deal. With this and a tentative deal in place
at Ford, the union is nearing the conclusion of groundbreaking labor talks that began this summer with the Detroit
carmakers.
The first company to settle with the union was Fiat Chrysler Automobiles. Workers there rejected the initial
contract proposal last month, but the U.A.W. leadership resumed bargaining with the company and won better
terms for union members.
The key component of the revised Fiat Chrysler agreement was a provision that entry-level workers would
eventually achieve wage parity with long-term employees. When Fiat Chrysler workers voted to accept, it set a
template for G.M. and Ford.
On Friday, the union said it had a tentative agreement with Ford that included ''substantial economic gains'' and
job security for workers.
While no details were released, the union said the contract would provide both entry-level employees and veteran
workers with pay increases that are probably similar to what workers received at Fiat Chrysler and G.M.
''This agreement is significant for our members in that it creates a clear path for economic advancement for active
members and rewards veteran employees for their sacrifices in recent years,'' said Jimmy Settles, head of the
union's Ford department.
The union's leadership council will meet on Monday in Detroit to consider the deal. If it gains the council's support,
the contract will then be put to a vote of the workers.
Ford did not comment on details of the agreement, but an executive said it was beneficial to both the company
and its workers.
''The agreement, if ratified, will help lead Ford Motor Company, our employees and our communities into the
future,'' said John Fleming, Ford's chief of global manufacturing and labor affairs.
The 52,000 union members at G.M. had voted all week on their proposed agreement, which calls for all workers
to receive raises as well as an $8,000 signing bonus.
Like the Fiat Chrysler deal, the G.M. agreement calls for entry-level employees to get a series of raises that, over
time, will bring them close to the $29-an-hour wage of veteran workers.
The union announced late on Friday that 55 percent of the members at G.M. had approved the contract.
However, the deal will not formally be ratified until after union leaders meet with skilled trades workers who voted
against the deal.
Ford Motor Company's Ohio plant. The U.A.W. said the new contract would provide job security. (PHOTOGRAPH
BY DAVID RICHARD/ASSOCIATED PRESS)
Document NYTF000020151107ebb70007h

Fiat Chrysler to Challenge U.S. Rivals With an S.U.V.

Fiat Chrysler to Challenge U.S. Rivals With an S.U.V.
By REUTERS
471 words
29 October 2015
The New York Times
NYTF
6
English
The chief of Fiat Chrysler, Sergio Marchionne, said on Wednesday that the company would make a new large
S.U.V. for the American market, taking aim at one of the most profitable franchises for its rivals General Motors
and Ford.
Mr. Marchionne used a conference call scheduled to coincide with third-quarter results to outline new details of
his strategy to increase profits in North America. He signaled he was adjusting strategy for the luxury brands Alfa
Romeo and Maserati to compensate for slowing demand in China.
The automaker's shares skidded in Milan and New York after it reported a loss of 299 million euros for the third
quarter, reflecting a €602 million charge ($667 million) mainly to cover costs related to safety recalls in the United
States. The company said operating profit rose 35 percent, not including the charges.
Mr. Marchionne suggested Fiat Chrysler could use its Ram truck brand in the United States to field a bulked-up
competitor to the Chevrolet Tahoe and Suburban from G.M. and the Ford Expedition. In April, Fiat Chrysler
showed a prototype of a large Ramcharger S.U.V., borrowing the name from a pickup-based vehicle of the same
name discontinued more than a decade ago.
G.M. commands about 70 percent of the large-S.U.V. market in the United States, and last week reported record
$3.3 billion pretax profits from North American operations for the third quarter. Mr. Marchionne has also said Fiat
Chrysler should make a large luxury S.U.V. to compete with the Range Rover from Jaguar Land Rover.
''We have a reasonable chance to get at least a part of that market,'' Mr. Marchionne said, adding that cheap
gasoline should encourage enough demand for such vehicles to accommodate new entries.
Building more S.U.V.s and fewer cars like the compact Dodge Dart could help Fiat Chrysler to attain the same
double-digit North American operating profit margins G.M. and Ford have, Mr. Marchionne said.
Fiat Chrysler's North American operating margin was 6.7 percent, better than the 4.2 percent from a year ago but
for the quarter much lower than G.M.'s 11.8 percent and Ford's 11.3 percent. Mr. Marchionne has vowed to close
the gap with Ford and G.M. profit margins by 2018.
He said the company was sticking with a plan to sell 400,000 Alfa Romeo vehicles worldwide by 2018, but said
the brand would have to shift focus to North America and Europe because of lower expectations for sales in
China.
The Fiat Chrysler Jefferson North Assembly plant in Detroit. (PHOTOGRAPH BY LAURA MCDERMOTT FOR
THE NEW YORK TIMES)
Document NYTF000020151029ebat00048

Profit Surges for Ford, Propelled by F-150 Sales

Profit Surges for Ford, Propelled by F-150 Sales
By MARY M. CHAPMAN
466 words
28 October 2015
The New York Times
NYTF
10
English
Helped by stout sales of its Ford F-150 pickup truck, Ford Motor reported third-quarter earnings of $1.9 billion on
Tuesday, up $1.1 billion from a year earlier.
It was the automaker's best quarter ever in North America, the company said. Improvements in Europe and South
America contributed to the positive report.
Ford increased its worldwide market share to 7.6 percent, pushing revenue for the period up to $38.1 billion,
which exceeded most analysts' expectations. In the last few years it has introduced about two dozen products,
including a new Mustang.
Its numbers represent a more-than-doubling of the year-earlier figure for North America, when profits in the region
were affected by lagging F-150 inventory and a blitz of product introductions.
Operations in North America earned $2.7 billion, up from $1.4 billion in the fourth quarter of 2014, driving pretax
Ford profits to $2.7 billion, a third-quarter record and more than double the $1.2 billion it made in the third quarter
of last year. The profit margin in North America was 11.3 percent.
Already this year, Ford has made $4.7 billion, more than the $3.2 billion in net income it reported for all of last
year.
A major factor is improved inventories of best sellers including the F-150. Bob Shanks, Ford executive vice
president and chief financial officer, said the average selling price of its F-Series trucks was up approximately
$2,000.
''This gives them the vehicles with the strong profit margins and sales that they want,'' said Stephanie Brinley,
senior analyst for IHS Automotive.
The company expects solid results next quarter, despite a seasonal uptick in material costs and signing bonuses
that are expected to be part of a new labor agreement with the United Automobile Workers. ''We would
characterize the U.S. industry as healthy, and barring any shock, we expect sales to remain strong,'' Mark Fields,
Ford president and chief executive, said in a conference call.
In Europe, Ford announced third-quarter losses of $182 million, down from $439 million from the fourth quarter
last year. It was nevertheless its best third quarter in several years in Europe.
Losses in South America edged downward to $163 million, from $170 million a year ago. Given the unstable
financial conditions in the region, Mr. Shanks said he was pleased with the numbers. Market share rose in South
America, in North America and in Europe.
''Some of the challenges this year are out of their control,'' Ms. Brinley said. ''South America continues to be a
difficult market, but they've contained that as well as they can, despite economic conditions.''
Document NYTF000020151028ebas00051

Business News: Ford's Record Net In U.S. Offsets Troubles Abroad
Business News: Ford's Record Net In U.S. Offsets Troubles Abroad

By Christina Rogers
518 words
28 October 2015
J
B3
English
Ford Motor Co. became the second Detroit auto maker in as many weeks to report record results in North
America.
The Dearborn, Mich., company's $1.9 billion third-quarter net income was more than double the profit posted in
the same period a year earlier, which was hurt by restructuring and higher warranty costs and weaker truck
production.
Sales at Ford and its rivals are up strongly in North America as low gasoline prices fuel demand for trucks and
sport-utility vehicles. Such higher margin vehicles helped Ford deliver record quarterly operating profit in North
America of $2.7 billion, or $3,407 for each vehicle produced.
Elsewhere, the auto maker either lost money or essentially broke even, underscoring its dependence on U.S.
customers for profit.
Ford shares fell 5%, or 79 cents apiece, to $14.89 at 4 p.m. in New York Stock Exchange trading. Its 45-cent a
share after-tax operating profit fell short of analysts' expectations.
Last week, General Motors Co. reported a $3.3 billion in North American operating profit. The historically strong
results come as the two companies are facing demands for higher wages from the United Auto Workers union,
which in prior contracts accepted concessions to help the Detroit's car companies overcome years of weak or no
profits.
The quarter's performance sets the stage for Chief Executive Mark Fields to deliver on the "breakthrough" 2015
he promised shortly after taking the helm last year. Executives say the company is well positioned for 2016
despite rising engineering costs, weakness in China and turmoil in Russia and Brazil.
Ford's spending is contributing to investor concern. Facing tough competition in trucks and SUVs, stricter
regulatory requirements and customer demands for advanced technologies, the auto maker said it spent nearly
$2 billion in additional structural costs through the first nine months of the year.
Third-quarter revenue rose 9% to $38.1 billion due to higher sales in the U.S. and Europe, but softness in China
and emerging markets is tempering the company's outlook.
Ford said sales volumes in Asia Pacific fell 12% compared with a year earlier. The auto maker, a late mover to
China, the world's largest car market, spent heavily to add significant production capacity in that country just as
demand started to cool.
While stronger demand in Europe helped offset China's sales decline, those gains haven't yet benefited the
bottom line. The loss in Europe narrowed to $182 million, from a $439 million deficit a year ago. Ford hasn't
forecast when its European losses will end.
Operating profit in Asia-Pacific was a modest $20 million in the quarter, less than half of the earnings there a year
earlier. Ford lost $163 million in South America, slightly better than a year ago. Its Ford Credit finance arm
contributed $541 million to the quarter's profit, up from $498 million in the same period a year ago.
Document J000000020151028ebas00031
GM-UAW Forge New Path
GM-UAW Forge New Path

By Christina Rogers and John D. Stoll
932 words
27 October 2015
J
B1
English
General Motors Co., which has been delivering some of the richest operating profits in its 107-year history, has
decided to do something it hasn't done in nearly a decade: give its veteran American factory workers a raise.
The No. 1 U.S. auto maker by sales accepted a new four-year wage agreement with the United Auto Workers
union late Sunday, just ahead of a strike deadline. Details weren't immediately disclosed but UAW officials called
the proposed GM deal "transformative," and said it promises "long-term significant wage gains" to factory
employees.
If approved, it would be the first time since 2007 that a Detroit labor contract has been considered transformative.
Eight years ago, GM, Ford Motor Co. and Chrysler trimmed their labor costs significantly with a new two-tier pay
structure and retiree health-care obligations.
GM then was building as many vehicles at home as it does now, but losing thousands of dollars on every one.
Because of hefty sales incentives and a practice of dumping unwanted vehicles into rental fleets, those losses
ballooned amid the financial crisis and rendered the union givebacks as too little, too late.
Today, GM and its Detroit rivals are flourishing amid the strongest U.S. auto sales in more than a decade and
buyers' appetite for lucrative trucks and sport-utility vehicles. GM last week reported a record third-quarter North
American operating profit, and said the region's operating margin will exceed 10% of sales in 2015, rivaling
European luxury brands.
Ford on Tuesday reports its latest earnings, and Wall Street expects similarly rich results.
It is unclear how much the proposed contract for its more than 52,000 U.S. union employees will cost GM, but any
increase is a step away from its initial plan for the negotiations. Bonus payouts of nearly $40,000 over the past
four-year deal rewarded employees without increasing wages. Earlier this year, people close to GM's negotiating
strategy said that the auto maker favored that approach instead of increasing wages.
Those payouts, costing about $1 billion over the period, were worth an extra $5.30 an hour but weren't
guaranteed.
When senior UAW workers noted it had been a long time since they saw an rate increase, auto executives
pointed to the bonuses as evidence to that profit-sharing was a better deal.
The Detroit Three have added tens of thousands of jobs combined over the life of their last contracts. As hiring
rose, executives credited the U.S. industry's leaner costs.
At its peak over the past 10 years, GM built more than 4 million vehicles in North America, a number that fell
below 2 million in 2009, leading to unsustainable cash outflows due to excess capacity.
GM lost $7,360 a car in 2009. Through September, it made $3,784 a car this year, the most in recent history.
GM's U.S. wage tab of $58 an hour, including benefits, is 20% lower than the 2007 figure, but still the richest in
the industry and 20% higher than at Toyota Motor Corp., according to the Center for Auto Research. Even Ford,
which unlike GM avoided bankruptcy in 2009, has a lower hourly rate.
Union workers aren't happy with the industry's wage system that was created in 2007. Modified in 2011 so GM
and its rivals hired new workers at about $15.78 an hour and gradually increased their hourly wage to $19.28,
UAW members saw the structure as unfair and pushed UAW President Dennis Williams to close the gap and get
a raise for all 140,000 factory workers.
Mr. Williams achieved both through a Fiat Chrysler Automobiles NV wage deal ratified last week. Entry-level
workers will graduate to the top rate over eight years, and more experienced workers will move to nearly $30 an
hour from about $28 an hour.
That deal, which GM was pushed to at least match by the UAW, will raise Fiat Chrysler's hourly wage costs --
including all benefits -- by 12% to nearly $54 an hour from $48, according to people familiar with the financial
details of the contract.
Union workers say that GM and Ford should be more generous given their greater recent profit margins
compared with Fiat Chrysler.
"Ford and GM are better off financially and they can afford to pay more," said Scott Shingledecker, a 51-year-old
union worker at GM's truck assembly plant in Flint, Mich. GM workers won't vote on the proposed contract until at
least next week, after the union's patchwork of local leaders has a chance to review it and pitch it to workers at
coming informational meetings.
GM declined to comment on specifics of its agreement with the UAW. In a news release issued late Sunday, it
said the proposed wage agreement "is good for employees and the business." That statement also noted the
inclusion of "constructive solutions that benefit employees and provide flexibility."
Workers at some plants, including the auto maker's small car factory in Lordstown, Ohio, also want firm
production commitments. Glenn Johnson, president of nearby UAW Local 1112, said employees are jittery after
Ford and Chrysler laid out plans in recent months to move small car production to Mexico.
"We can have the absolute best agreement in the world," Mr. Johnson said. "But if we don't have a product, what
good is it?"
---
Gautham Nagesh contributed to this article.
Document J000000020151027ebar00033

For a Good Car Deal, Think Ford
Ahead of the Tape

For a Good Car Deal, Think Ford
By Spencer Jakab
382 words
27 October 2015
J
C1
English
Perhaps it is time to retire the phrase "firing on all cylinders" when it comes to describing Ford Motor Co.
That isn't to avoid using a cliche or because it overstates the company's strength. Instead, it is the fact that Ford
is helping to make that notion antiquated.
An example is its current Mustang, an iconic muscle car celebrating its 50th anniversary. Once upon a time, the
company faced protests when it sold a less-powerful version. Today, customers are snapping up the four-cylinder
"EcoBoost" version of the car.
That is a small but relevant snapshot of how much the company has changed. Customers are embracing Ford's
economical yet powerful models, and the company's operations are far leaner, too. It is in the process of shifting
from 27 "platforms" used to make cars globally back in 2008 to just eight.
The only problem is that investors aren't giving Ford much credit anymore for its transformation. The stock price
has barely changed since the beginning of 2011.
That hasn't been a result of disappointing results. Tuesday's third-quarter earnings should, if recent form holds,
meet or beat analysts' estimates of 46 cents a share, up sharply from 21 cents a year earlier. General Motors
Co.'s solid results last week bode well and indicate where to look for strength: at home.
Ford earned all of its money in the U.S. in the first half of the year, more than offsetting losses in some other
regions. The third quarter was exceptionally strong for U.S. auto sales overall, and Ford recently raised its
estimate for industry sales in Europe.
With barely two months left in the year, it may bolster its full-year forecast of pretax profit, most recently at $8.5
billion to $9.5 billion. Analysts polled by FactSet already have moved their numbers to the top of that range.
At less than 8.2 times forward earnings, a 5% discount to its average of the past five years, Ford shares look
attractive and would be even more so if Tuesday's results spur upgrades.
It is time for an EcoBoost.

Document J000000020151027ebar00019

Big profits may cost GM, Ford in UAW talks ; Union in stronger negotiating position as automakers thrive
MONEY
Big profits may cost GM, Ford in UAW talks ; Union in stronger negotiating position as automakers thrive
Chris Woodyard
421 words
26 October 2015
USA Today
USAT
FIRST
B.1
English
General Motors and Ford Motors may be enjoying boom times for the auto industry, but it's likely to cost them in
driving a new contract with the United Auto Workers union.
Ford is expected to report that earnings per share have nearly doubled when it reports quarterly earnings on
Tuesday. GM beat analysts' expectations last week in reporting that it earned $1.4billion in the third quarter.
While those kind of results cheer shareholders, they could be even better for union negotiators who will point to
them in trying to hammer out new four-year pacts with Ford and GM. On Sunday, the UAW had set a midnight
deadline after which it could call a strike, but the focus was on whether a tentative agreement could be reached.
Memories linger of talks more than a decade ago when generous contracts during the last sales boom were
followed by a sales bust. Automakers were saddled with expensive labor contracts even as losses piled up. Ford
squeezed by and GM and Chrysler reorganized in bankruptcy.
But now, with large vehicles popular again due to low gas prices, momentum has shifted to the union. "They are
in a stronger bargaining position to negotiate a better deal with GM and Ford," says Marick Masters, head of the
Douglas A. Fraser Center for Workplace Issues at Wayne State University in Detroit.
The UAW comes to GM and Ford bolstered by having approved a new contract last week with Fiat Chrysler,
which also reports quarterly earnings this week, by a strong 77% voting margin on the second try. Fiat Chrysler is
the smallest and financially weakest of Detroit's Big3. That leads to the prospect that the union will shoot for
bigger raises at GM and Ford.
Also, Fiat Chrysler has the most workers being paid at second- tier wages compared to first-tier workers.
"They are three very different situations" when it comes to each of the automakers, says Kristin Dziczek of the
Center for Automotive Research. GM has 20% of its workforce laboring at the lower wage, while it's about 29% at
Ford and 45% at Fiat Chrysler.
The lower wage was instituted in previous contracts as Detroit automakers complained that their labor costs
weren't competitive with the non-union U.S. sites of Asian and European rivals.
Contributing: Greg Gardner, Detroit Free Press
photo Jeff Kowalsky, Bloomberg

Document USAT000020151026ebaq0000r

Business News: Ford Bets on Smart Cars in China --- Auto maker hopes $1.8 billion in R&D will yield features tailored for Chinese drivers
Business News: Ford Bets on Smart Cars in China --- Auto maker hopes $1.8 billion in R&D will yield
features tailored for Chinese drivers
495 words
13 October 2015
J
B3
English
SHANGHAI -- Ford Motor Co. is betting that a new generation of smart-car technologies will help its vehicles
stand out in China, where its sales have been slipping amid industrywide weakness and rising competition.
The U.S. car maker said on Monday it would invest 11.4 billion yuan, or $1.8 billion, over the next five years to
research how to add greater smartphone connectivity, autonomous driving and other advanced features to its
Chinese products.
The investment, said Ford Chief Executive Mark Fields, would allow the next generation of Ford vehicles in China
to be designed for customers there. Currently Ford is seeking to install smart-car systems in China using
technology it developed and uses in other markets.
"We see China as a very big growth market," he said on Monday. "It's a great opportunity to grow not only our
core business of selling cars and trucks but also provide services to people that may not want a car but still want
to be mobile."
Potential features include allowing drivers to control more car systems through their smartphones and to use their
mobile-chat functions, particularly during traffic jams. A video showing snarled traffic from China's recently ended
Golden Week holiday went viral in recent days, illustrating the depth of the problem.
The announcement came at a time when growth of China's car market has stalled amid a cooling economy and
local curbs on car ownership to stem pollution and traffic. China's new-car sales fell 3.4% to 1.42 million vehicles
in August from a year earlier.
Ford and rivals such as General Motors Co. and Volkswagen AG have recently cut prices and run their plants
there at less than full capacity. During the first eight months of this year, Ford sold 531,702 passenger cars in
China, down 1.2% from 537,997 cars it sold in the same period last year.
Mr. Fields said he expects growth of China's new-car sales will slow from the double-digit rates of past years. "I
do see the slowdown this year. But we are starting to see customers come back to the marketplace," said Mr.
Fields.
To respond to the Chinese government's call to reduce emissions, Ford will start to offer two fuel-efficient vehicles
in China next year: the Ford C-MAX plug-in hybrid electric car and the Ford Mondeo hybrid electric car.
Five years ago, Ford unveiled an ambitious $5 billion plan for China with an aim to double its annual
car-manufacturing capacity there to 1.2 million vehicles. Since then, Ford's share of China's auto market has
doubled to 5% from 2.5% in 2010, according to China's auto manufacturers' group.
-- Rose Yu
Document J000000020151013ebad0000n

Business News: Fiat-UAW Deal Is No Blueprint
Business News: Fiat-UAW Deal Is No Blueprint

By Jeff Bennett and Christina Rogers
281 words
13 October 2015
J
B3
English
A United Auto Workers union official told Ford Motor Co. workers that a proposed labor contract with Fiat Chrysler
Automobiles NV isn't necessarily the same wage deal that the union will press upon other Detroit auto makers,
the latest sign that the union's longtime commitment to pattern bargaining could be weakening as finances at the
domestic car companies diverge.
For several years, contract deals struck by Ford, General Motors Co. and Chrysler have largely mirrored one
another. GM and Chrysler's trips through bankruptcy court have disrupted the competitive playing field for U.S.
auto makers, and the merged Fiat Chrysler's heavier use of entry-level workers has further altered the financial
footing of the three rivals.
"It is imperative that you keep in mind that the [Fiat Chrysler] agreement is only a pattern and the tentative
agreement reached with Ford will be UAW-Ford specific aimed at addressing concerns with the current
agreement and securing gains for our membership," UAW Vice President Jimmy Settles told members on
Monday.
His note is another in a series of steps Mr. Settles has taken to address concerns that 53,000 Ford factory
workers have while applying pressure on the Dearborn, Mich., auto maker. Mr. Settles is expected to wring bigger
higher wages and solid bonuses from the No. 2 U.S. auto maker, but Ford's hourly costs are about $10 higher
than Fiat Chrysler's.
Fiat Chrysler workers are slated to vote on a new accord Oct. 20th and 21st. The membership overwhelmingly
rejected the first contract.
Document J000000020151013ebad0000m

What Trade-Deal Critics Are Missing
What Trade-Deal Critics Are Missing

By Zachary Karabell
988 words
9 October 2015
J
A13
English
Copyright 2015 Dow Jones & Company, Inc. All Rights Reserved.
The 12-nation Trans-Pacific Partnership trade deal signed Monday is poised to become an election-year pinata
as the Obama administration works to get it through Congress. Hillary Clinton, who supported the TPP when she
was secretary of state, came out against it on Wednesday: "I don't believe it's going to meet the high bar I have
set." Sen. Bernie Sanders, her rival for the Democratic presidential nomination, issued a caustic statement: "It is
time for the rest of us to stop letting multinational corporations rig the system to pad their profits at our expense."
On the Republican side of the presidential-nomination race, Donald Trump and Carly Fiorina separately
denounced the pact as an assault on American business.
Labor leaders in turn excoriated the TPP for accelerating the loss of American jobs, while companies such as
Ford Motors came out against it because of the perceived lack of protection against currency manipulation.
The TPP is the definition of a Big Deal. The dozen countries involved, including Japan, Malaysia, Australia and
Mexico, account for about 40% of global GDP. President Obama has made passage a priority, couching the pact
in terms of who will write the rules of the new global economy, China or the U.S.
Yet much of the passion stirred by the deal is reminiscent of the wrangling over the North American Free Trade
Agreement two decades ago -- and feels about 20 years out of date. It isn't simply that commerce has increased,
regardless of tariffs and friction. Supply chains have evolved into an interlocking global lattice in which few
countries are unaffected, and the ones left out tend to be the basket cases of the international system, from
Afghanistan to North Korea.
The dispersion and complexity of supply chains has happened too rapidly for our statistical map of the world to
catch up. Much of global trade today consists of companies shifting parts from factory to factory, country to
country, to make a finished good. The result is that our centuries-old understanding of trade hardly captures its
reality today.
Think of the iPhone. On the back of each handset, in print so tiny you may need a magnifying glass, it says
"Designed by Apple in California. Assembled in China." That is Apple's way of communicating a complicated
reality that, in the land of trade statistics and common understanding, is reduced to a simple formula: A product is
made where it has undergone its last "substantial transformation." The product is then assigned to that place, and
hence an iPhone is, in trade terms, "Made in China."
But it isn't, really. The phone is assembled from parts made in multiple countries, and as researchers have found,
only a small portion of its value comes from China or goes to China. In trade land's calculation of imports and
exports, however, all of that is moot. The same is true for thousands of products large and small that have
multiple parts, from the Boeing 787 Dreamliner to the engine in your car.
The way things are actually made in the world today is largely invisible. But the correlations between the world
today and trade pacts are all too visible. Since the General Agreement on Tariffs and Trade became the World
Trade Organization in 1995, since Nafta and since dozens of smaller trade agreements in the period that
followed, wages in the developed world have been flat and manufacturing jobs have evaporated at an alarming
rate. Farmers, whose goods do indeed come from one country and one country only, have faced an uphill battle
to maintain domestic prices protected only by tariffs. It is, therefore, easy enough to establish a simple logic that
trade pacts cause wage stagnation and job losses.

But it's much more complicated than that. Tracking the economic effect of the free flow of goods and ideas isn't
easy. (The TPP takes an antiquated approach to intellectual property that could impede the free flow of ideas by
strengthening the enforcement of trademarks and copyrights.) A binary view of trade as countries making stuff
and selling stuff overlooks not only the multiple-countries-of-origin problem, but also the vast trade in services that
we struggle to measure and understand. Tourism and travel of foreign visitors to America, for instance, are
counted as a U.S. export of services. And it is one of the major U.S. exports to the world today -- at more than
$150 billion, it accounts for nearly 9% of all U.S. exports.
Yet the trade debate primarily focuses on goods, because that is what most people think of when they think of
trade, and because monthly Census Bureau trade figures by country report only goods. Over the past few
decades, the U.S. has imported more and more goods, such as the iPhone, and exported more and more
services, such as ideas and tourism. Millions of jobs directly relied on the old export of goods in traditional
industries, but the new model of ideas and services employs fewer people directly and who-knows-how-many
indirectly. We know how to count what has been lost; we have hardly begun to figure out what is being gained.
That helps explain why so many associate more trade with fewer jobs.
The fight over the TPP is a 20th-century argument over who makes what and sells what across borders that are
increasingly porous -- and cannot contain the flow of ideas and commerce that will define the years ahead.
---
Mr. Karabell, the head of global strategy at Envestnet, is the author of "The Leading Indicators: A Short History of
the Numbers That Rule Our World" (Simon & Schuster, 2014).
(See related letters: "Letters to the Editor: Trading Thoughts on the Trans-Pacific Partnership" -- WSJ October 19,
2015)
Document J000000020151009eba90001c

Business News: Rival Car Makers See an Opening in Europe
Business News: Rival Car Makers See an Opening in Europe

By Eric Sylvers
518 words
7 October 2015
J
B4
English
MILAN -- Volkswagen AG's rivals are stepping up campaigns designed to lure away its customers in the wake of
the German auto maker's emissions-testing scandal.
Ford Motor Co. and Fiat Chrysler Automobiles NV have provided some of their dealers with new trade-in and
other incentives to help convince owners of older Volkswagen, Audi and other Volkswagen automotive brands to
buy their new models.
In the U.S., an automotive pricing firm said values of used Volkswagen diesel cars fell an average 13%, or
$1,700, since mid-September. The decline for diesels is larger than the 2% drop for gasoline-powered
Volkswagens during the same period, said Kelley Blue Book, a pricing guide.
"Early indications from auctions are that dealers are more hesitant to buy the VW diesel units," said KBB lead
product analyst Tim Fleming.
Ford's incentives are available in Germany, France, Italy, Spain, the U.K. and several other European countries
while Fiat Chrysler's is only available in Italy. Available for gasoline- and diesel-powered vehicles, the deals look
to take a bite out of Volkswagen's market-leading 25% share of the European car market.
In September, Volkswagen admitted to U.S. regulators that it installed software on some diesel cars that makes
emissions appear lower in testing than in real-world use.
On Sept. 25, Ford began offering consumers between 750 euros ($845) and 1,750 euros to trade
Volkswagen-made cars regardless of the model year. The incentives had been in place, but previously were
applied only for 2004 model year or earlier vehicles.
The amount of the Ford incentive varies from country to country, and in Italy ranges from 750 euros for a
consumer who buys a Fiesta to 1,750 euros for the acquisition of a Focus.
"From time to time around the world, we and our dealers offer special offers to encourage customers not currently
driving a Ford to consider making the switch," said a spokesman for Ford of Europe.
He declined to say how many Volkswagen trade-ins have result since the incentives were introduced.
The Fiat Chrysler incentive, which ranges from 500 euros for a Fiat 500 to 1,500 euros for a Jeep Grand
Cherokee, is paid to the dealership. It can retain it or pass it along to buyers. Fiat Chrysler's incentive runs
through the end of the month.
Sales of Volkswagen brand cars dropped 1.4% in Italy in September while the overall market climbed 17%, both
over a year earlier. The auto maker's total sales were up 6.1% in the month, on Audi and Skoda brand gains.
Rather than being passed onto new-car buyers, dealers could use the Fiat Chrysler payout to lower the prices of
used Volkswagen vehicles acquired as trade-ins. The testing scandal may make it harder to sell used
Volkswagen vehicles, said a dealer.
Volkswagen and Fiat Chrysler spokesmen declined to comment.
---

Christina Rogers in Detroit contributed to this article.
Document J000000020151007eba70001q

UAW Aims to Salvage a Fiat Pact
UAW Aims to Salvage a Fiat Pact

364 words
5 October 2015
J
B1
English
With the threat of a strike at Ford Motor Co. averted, United Auto Workers President Dennis Williams will attempt
to restart negotiations with Fiat Chrysler Automobiles NV this week as he looks to salvage a new national
contract.
Mr. Williams will explore the willingness of Fiat Chrysler Chief Sergio Marchionne to sweeten previous offers in
the tentative agreement that was overwhelmingly rejected by union members last week, according to two people
close to the process.
One such move may be boosting the $3,000 signing bonus promised to Fiat Chrysler's 37,000 union members if
they adopt the contract.
Mr. Williams had hoped to use a deal worked out with Fiat Chrysler as a pattern contract for Ford Motor and
General Motors Co. That goal came to a halt last week, leaving Mr. Williams to find a new strategy. Workers at all
three auto makers have been operating under contract extensions since Sept. 14.
Meanwhile, a potential strike at a Ford pickup truck plant was averted late Friday night when the union and
company reached a tentative contract agreement. Local 249 union members were preparing to walk off the job
Sunday over a variety of unresolved issues at the Claycomo, Mo., plant, which produces F-150 pickup trucks and
Transit vans. Plants typically reach their own accords with the auto makers that are separate from the national
contract.
While it would have been relatively small, a strike at Ford's Claycomo plant would have presented a major
distraction for the UAW and would have the potential to stir up ill will on both sides.
"I think we have reached an agreement that our members will be proud of," Local 249 bargaining chief Todd
Hillyard said in a social media posting late Friday. "We protected all of our members seniority rights, improved
safety provisions along with many other things."
Plant operations will continue as normal, Ford said.
"Working with our UAW partners, we have resolved the open items at Kansas City Assembly Plant and have
agreed to a tentative local agreement," Ford said.
Document J000000020151005eba50002q

Ford, Snyder look at future of auto industry ; Both leaders see USA's mobility options tied to tech
MONEY
Ford, Snyder look at future of auto industry ; Both leaders see USA's mobility options tied to tech
Marco della Cava
Marco della Cava, USA TODAY
693 words
5 October 2015
USA Today
USAT
FIRST
B.5
English
Silicon Valley's delight in challenging convention and calculated risk-taking has inspired the leaders of both the
Ford Motor Co. and the state of Michigan, Bill Ford and Gov. Rick Snyder told USA TODAY Thursday.
"I just spent 10 years on the eBay board, and what I love out here is how people like to challenge accepted
wisdom," Ford said in an interview after a one-hour public talk with Snyder at the Commonwealth Club, part of an
ongoing state promotional push sponsored by Business Leaders for Michigan.
Ford, the automaker's executive chairman, specifically cited the long-held assumption that no new automakers
would emerge on the global scene given the high barrier for entry in that complex business.
"Tesla said, 'No, we think we can do this.' I love that about the Valley, this notion that anything's possible and
nothing is too hard," he said. "That spirit is what we need now to drive our organization."
Snyder, the state's two-term Republican governor, added that Michigan's automotive industry was for decades
considered "the entrepreneurial and innovation capital of the world, but we became risk averse because we
wanted to keep a good thing going," which ultimately led to General Motors filing for Chapter 11 in 2009 and
Detroit going bankrupt in 2013.
"Silicon Valley embraces risk management," said the two-term Republican governor. "I've told my team, if
everything I propose works, we haven't been pushing hard enough."
The governor's team handed out fliers titled "Take a look at Michigan's turnaround," which cited statistics such as
"Michigan's corporate tax climate has risen to 10th best from the 49th worst," and "Michigan ranks #1 in new
manufacturing jobs since 2009, adding 132,000 jobs statewide."
Snyder is a former Gateway computer exec turned venture capitalist who ran on the platform "One tough nerd."
Ford, great- grandson of Henry Ford, has challenged his top execs to remake the storied automaker from a
purveyor of personal vehicles to a mobility company. Earlier this year, the automaker vastly expanded its Silicon
Valley research and development site with an aim to grow its staff of engineers to around 200 by year's end.
"We'll always be called Ford Motor Co., but what we do and how it looks may look different, we could be a
provider of transportation as a service," Ford said.
"We need to figure out in this new world, what do we need to own, who do we partner with, what do we not touch,
and how do we add value to our shareholders with a business model that may look quite different?" Ford said.
"We may be less asset intensive, and hopefully higher margin. There's a real opportunity in this for us. But in 30
to 40 years, heck in 10 to 20, we won't look a lot like we look today."
On Tuesday, Sergey Brin presented Google's prototype self- driving car to journalists, and said the search
company would be looking to an established automaker to build the vehicle. Is Ford interested? "We're always
interested," Ford said.
"Everything we're now talking about requires partnerships. What we're doing now will require partnerships with
tech companies, startups, government, everyone."

In most discussions about the automotive landscape of the near future, analysts and auto execs agree the world
will see a gradual shift mainly in cities from individual vehicle ownership to shared ownership and eventually
taxi-like services involving automated cars. Snyder said government's role is critical to this.
"Tech won't be the holdout, these (cars) will exist, so it's just a matter of the regulatory, legal and insurance
environment. Also, how do we get a common global standard? For any company, if there are different standards
that's hard." Ford jumped in. "Yes, if Ford can only talk to Fords, that's not going to work."
photo Photos by Marco della Cava, USA TODAY

Document USAT000020151005eba50000x

Business News: UAW President Faces Restive Members
Business News: UAW President Faces Restive Members

429 words
3 October 2015
J
B4
English
Two weeks ago, United Auto Workers President Dennis Williams appeared on the verge of restoring the
long-sidelined union to a prominent role in the auto industry.
He was near to a deal for higher wages from a Detroit auto maker, had found broad support for his health-care
purchasing co-op and was touting a more collegial relationship with auto makers.
How quickly things have changed. Today, Mr. Williams is facing a membership revolt at Chrysler, a strike at Ford
Motor Co. this weekend, and little chance of wringing a richer contract from Fiat Chrysler Automobiles NV after
his tentative deal was soundly rejected by members.
Just 15 months into his term as the head of a union with 140,000 Detroit Three members, Mr. Williams faces the
difficult task of shifting sentiment in favor of the Fiat Chrysler deal, which members rejected largely because it
allowed a despised wage system to continue for at least four more years.
"I think there were very high expectations that were not met and a big lack of trust," said Kristin Dziczek, a
director with Ann Arbor, Mich.-based Center for Automotive Research. UAW officials have "to do some damage
control and show the membership they care."
While Fiat Chrysler's offer to its 37,000 UAW workers included raises, signing bonuses and profit-sharing
schemes, it fell short of eliminating a controversial two-tier labor scheme and made none of the product
investment guarantees that are customary in such deals.
Mr. Williams is unlikely to get much help from Fiat Chrysler Chief Executive Sergio Marchionne. Currently in Italy,
Mr. Marchionne and his management team are unwilling to sweeten their offer, said people close to the company,
and consider it Mr. Williams's job to "repackage" the deal and sell it to his membership.
Mr. Williams's likely course, said the people familiar with the negotiations, is getting production pledges in writing
and luring a bigger signing bonus.
Union members' frustration with officials also is bubbling up at a Ford factory near Kansas City, Mo., where local
negotiators have made preparations to strike. The local represents 7,500 workers building the Ford F-150 and
other vehicles. Talks have stalled on issues such as seniority, said UAW members.
Ford has begun pivoting some of its production by adding mandatory overtime shifts at another F-150 factory, and
by notifying a supplier to divert truck frames to Dearborn, Mich., from Missouri.
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Union Tensions Tarnish Booming Auto Sales
Union Tensions Tarnish Booming Auto Sales

By Anne Steele and Jeff Bennett
1,016 words
2 October 2015
J
A1
English
Automobiles flew off dealer lots last month at the fastest pace in 10 years, but the good times are stirring tension
between U.S. auto makers and their unionized workers that threatens to undercut the industry's rebound.
United Auto Workers union members at Fiat Chrysler Automobiles NV this week rejected for the first time in three
decades a tentative agreement as inadequate, and Ford Motor Co. faces a walkout at a big truck factory as soon
as Sunday.
As buyers flood dealer lots, snapping up pricey pickups and sport-utility vehicles that deliver fat profits to General
Motors Co., Ford and Fiat Chrysler, factory workers are demanding an end to the concessions that put the U.S.
industry back on its feet after near collapse seven years ago.
"We got a catered meal of hot dogs and hamburgers as our thanks while others, I'm sure, got big bonuses," said
Phil Reiter, a 44-year-old union member referring to a recent production milestone at Fiat Chrysler's Toledo, Ohio,
Jeep factory. That plant on Tuesday rejected a UAW supported contract by a more than 4-to-1 ratio.
The workers are angry that neither union officials nor Fiat Chrysler want to eliminate a concession put in place
just ahead of the 2008 recession that pays some assembly-line staff substantially less than co-workers doing the
same work. The same two-tier system exists to a lesser extent at GM and Ford.
Surging sales aren't helping the relationship. U.S. car and light-truck sales rose nearly 16% last month compared
with the same period a year ago, an annualized pace of 18.17 million vehicles. It was only the ninth time in history
the monthly pace eclipsed 18 million, and the first time since 2005.
On Thursday, the UAW confirmed that 65% of its Fiat Chrysler members spurned Fiat Chrysler's offer, the first
time in more than 30 years a proposed bargaining deal was voted down. The decision is a blow to the UAW,
which has tried to reverse a persistent decline in union auto jobs by accepting concessions.
In mid-September, UAW President Dennis Williams said the now-rejected pact addressed worker concerns while
keeping Fiat Chrysler competitive. He huddled with union leaders on Thursday to determine his next move. Mr.
Williams had wanted to move on to negotiate new contracts with GM and Ford that likely would follow terms of the
rejected Fiat Chrysler deal.
Fiat Chrysler said on Thursday that it was opposed to returning to prerecession wage terms. "The cyclical nature
of the automotive business demands that while we must recognize the need for rewarding employees during
times of prosperity, we must also protect against the inevitable market downturn," Fiat Chrysler said. It referenced
its "near-death experience" in 2009.
The Italian-American auto maker has grown faster than its U.S. rivals. September marked the 66th consecutive
month of year-over-year growth as Jeep and Ram pickups remain among the most popular in the industry. It had
offered a raise for workers and richer bonuses, but also said some production will be moved to Mexico.
Mark Wakefield, managing director at consultants AlixPartners LLC, said auto makers must recognize the
backdrop against which they are negotiating. Employment has recovered since the financial crisis, and a
tightening job market is forcing car makers to scramble to find enough skilled workers to operate factories.
"Workers are not just feeling good because their company is doing well, there are more employment options out
there," he said. Unemployment in Detroit's metro area touched a 15-year low last month, and the area's

joblessness rate is declining at twice the pace of the country as a whole, according to newly-released Labor
Department statistics.
Detroit is only one of the auto industry's hot pockets. In Missouri, where GM and Ford build sedans and pickups,
workers are threatening a walkout this weekend. That would hamper Ford's ability to meet demand for its new
aluminum pickup truck, which is driving the auto maker to some of the highest profit levels in its history.
The bankruptcies and deep restructuring of last decade allow domestic auto makers to run a much more
disciplined strategy even as the industry is on pace to reach its highest volume since 2000. With less production
capacity and fewer dealers, Detroit companies are limiting inventories and that makes them less likely than they
used to be to offer hefty incentives.
Although Labor Day weekend deals and low interest rates played a role in boosting demand, this momentum isn't
being prompted by the extraordinary amount of sales-incentive spending that fueled booms of the past and
eroded profit margins.
For instance, the industry's sales pace topped 20 million in consecutive Julys in the mid-1980s, but that came
during a fierce price war waged by Detroit auto makers looking to hold off import brand gains. GM triggered
another boom in 2001 after the 9/11 terrorist attacks with its "Keep America Rolling" campaign; in 2005 it
extended employee discounts for the entire market, again prompting volumes to near-record levels.
The No. 3 U.S. auto maker, Fiat Chrysler, reported a 13.6% September increase, GM logged a 12.5% gain, and
Ford's volumes grew 23.3%, all compared with year-earlier sales.
Foreign auto makers also delivered double-digit percentage sales gains last month. Toyota Motor Corp. said its
sales jumped 16.2%. Bill Fay, general manager of the Toyota brand, said the company is confident demand will
hold in the fourth quarter, and said in some areas demand for certain vehicles is outstripping supply.
Volkswagen AG's sales rose less than 1% last month, similar to its recent performance. The Environmental
Protection Agency accused the German auto maker on Sept. 18 of using software to sidestep emissions testing
on its diesel-powered vehicles. Volkswagen apologized and has vowed to fix the cars.
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Fiat Chrysler Union Contract Faces Hurdles

Fiat Chrysler Union Contract Faces Hurdles
By MARY M. CHAPMAN
711 words
29 September 2015
The New York Times
NYTF
5
English
The tentative contract deal between Fiat Chrysler and its autoworkers union is encountering stiff resistance in
early voting, with several plants rejecting it outright and endangering an agreement that would serve as a
template for talks with General Motors and Ford Motor.
With voting at some of the biggest plants set to begin Tuesday, the fate of the proposed four-year pact will
become evident by midweek. At issue is a proposal that many lower-paid workers say falls far short of closing the
pay chasm with veteran workers.
The proposal, opponents say, offers no clear path for lower-tier workers to reach the highest levels of hourly pay.
Some workers are also upset that the proposal fails to cap the number of entry-level workers, set at 25 percent in
2007 but not in 2011, even though many workers expected it would be maintained. No cap is included in the 2015
proposal. Fiat Chrysler declined to comment.
Ford Motor and General Motors, by comparison, have a cap of about half as many lower-tier workers. And Ford
moved employees into the higher tier over the course of the just-expired contract.
''I will absolutely vote this down,'' said Scott McGinnis, a Tier 2 worker who has worked at Sterling Heights
Assembly in Michigan for five years. He added that he expected the cap would be maintained in the last contract.
''There is no visible progression gap between the two tiers,'' he said.
The proposed contract calls for entry-level pay to immediately rise to $17 to $24 an hour, depending upon
seniority level, maxing out at $22 to $25 an hour in 2018. The raises would diminish the gap with more-senior
workers, who earn $28 an hour but will earn raises increasing their hourly pay to nearly $30 by the contract's third
year.
The proposal also includes profit-sharing, $3,000 in ratification bonuses and $5.3 billion in plant investments. In
addition, the contract establishes an entity that would cooperatively handle purchases of medical care and
prescription drugs for Fiat Chrysler's hourly workers, salaried workers and a trust for retirees.
Union officials have been holding informational meetings at local chapters of the United Automobile Workers
Union throughout the country to rally support.
But early results have shown a string of defeats. The thriving Jefferson North plant on Detroit's east side, for
example, rejected it, as have the Sterling Stamping Plant in Sterling Heights, Mich., and the Kokomo Casting
Plant in Indiana.
Among those plants still to hold votes are Sterling Heights Assembly Plant, the Warren Stamping Plant and
Warren Truck Assembly Plant, all in Michigan; Toledo Assembly Complex in Ohio; and Belvidere Assembly in
Illinois.
Alex Wassell, a skilled trades worker at Warren Stamping, is poised to reject the proposal.
''I feel like the company has been extremely profitable, and because we made concessions when things were
tight, we deserve fairness when things are good,'' he said. He also said that he objected to the lack of a cap on
entry-level workers and hoped that union leaders would return to the bargaining table.

Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., said the international
union representatives had not adequately persuaded workers to vote for the proposed contract.
''I think the union didn't fully gauge the expectations of membership properly,'' he said. ''They didn't convey to the
membership that this was a transitional agreement, and the membership wanted everything all at once.''
If the contract is not ratified, Mr. Chaison said there will most likely have to be some kind of limitation on the
number of Tier 2 workers, or the elimination of that wage scale entirely.
If the contract is voted down, negotiators could either return to the bargaining table, call a strike or delay talks, a
U.A.W. spokesman said. If it is ratified, the union has not said whether it will turn to Ford or G.M. next.
Picketers outside the U.A.W. Solidarity House in Detroit protesting the provisions of a tentative contract
agreement reached with Fiat Chrysler. (PHOTOGRAPH BY DAVID COATES/THE DETROIT NEWS, VIA
ASSOCIATED PRESS)
Document NYTF000020150929eb9t00049

UAW, Fiat Chrysler reach a tentative agreement
A-Section
UAW, Fiat Chrysler reach a tentative agreement
Lydia DePillis
532 words
17 September 2015
The Washington Post
WP
FINAL
A19
English
The union representing 40,000 auto workers at Fiat Chrysler Automobiles has worked out a tentative labor
contract to restore some concessions made to help save the industry from collapse eight years ago, creating a
potential template for agreements with Ford Motor Co. and General Motors.
The parties declined to release details before the draft accord goes to the local unions for ratification. But Fiat
Chrysler chief executive Sergio Marchionne and United Auto Workers President Dennis Williams said they agreed
to phase out the two-tiered wage system - in place since 2007 - that set pay for more recent hires at a lower rate
than long-time workers to contain labor costs.
"The team has crafted what I consider to be a carefully thought-through process by which that issue will go away,"
Marchionne said at a news conference Tuesday announcing the tentative deal.
After nearly a decade of compromise, the union went on the offensive this year, as the resuscitated auto
companies started turning healthy profits.
A robust deal could redeem the union in the eyes of not only auto workers, many of whom the UAW has been
attempting to organize across the South, but also the general public, whose approval of organized labor fell
sharply as the Detroit auto companies floundered in the late 2000s.
The negotiators also said that the deal addresses the rising cost of health care, and they're potentially interested
in a co-op shared among the three companies to create an entity with enough scale to operate more efficiently.
But the pay inequality - which had about 45 percent of Fiat Chrysler's workforce top out at $19.28 an hour, while
veterans could earn $28 - was perhaps the most symbolically important issue for members. Solving that with the
automaker is likely to give the UAW greater leverage in its bargaining with Ford and GM, which are in a better
financial position than Marchionne's company.
At the same time, however, the UAW went into negotiations knowing that it didn't want to negotiate too hard.
While the Detroit automakers' labor costs have come much closer in line with those of the foreign-owned plants in
Tennessee and South Carolina, the costs are still higher than they are in Mexico, where some production has
moved since the recession.
Decisions about which factories get what new products will probably follow soon after contracts are ratified at all
three companies. The union wants to make sure UAW facilities remain competitive.
"That's the new job security, a healthy company making good products," said Kristin Dziczek, director of the labor
and industry group at the Center for Automotive Research. "You don't want to cripple them with an uncompetitive
agreement for their situation."
At the same time, Dziczek said, many of Chrysler's older workers probably will be retiring during the next few
years. The retirements could lower health-care costs since the new workers coming behind them tend to have
smaller families.
The details of the contract may include incentives to speed that process along with other provisions that have not
been disclosed.

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Right to Work Buffs Up The Rust Belt
Right to Work Buffs Up The Rust Belt

By F. Vincent Vernuccio and Terry Bowman
738 words
17 September 2015
J
A15
English
On Sept. 14 the United Auto Workers contract with the Big Three American car companies expired. Because
Michigan, Indiana and Wisconsin are now right-to-work states, the overwhelming majority of General Motors, Ford
and Chrysler workers now can decide whether or not they want to continue to support a union with their dues.
After the last UAW contract was signed, in 2011, legislators in the three Rust Belt states were determined to level
the playing field in the interstate competition for jobs. The result is that laws passed in all three say that no one
can be fired for refusing to pay union dues.
There are several issues that UAW members may be considering as they decide whether to keep supporting the
union or resign their membership, which one of us plans to do this month. Some concern wages.
Most auto workers hired after 2007 are paid a lower wage than more-senior workers. This two-tiered system will
make many UAW members getting paid a lower hourly rate for doing the same work question the union's value to
them. Even if new contracts negotiated by the union move away from this policy, as the tentative agreement with
Fiat Chrysler reportedly does, the memory of the lack of "solidarity" showed them by their labor leaders may
linger.
In March, the Detroit Free Press reported that Mercedes-Benz, which has a nonunion plant in Alabama, pays
workers more than any other auto maker in the U.S. So much for unionization guaranteeing better compensation.
Other issues have nothing to do with wages or the collective-bargaining process. Instead, they are wounds the
UAW inflicted on itself. Union officials, in a move that angered many workers, increased membership dues by
25% in 2014. Workers now pay dues worth 2 1/2 hours of work every month, the first increase of its kind since
1967.
The union's official line was that the rise was needed to shore up its "strike fund." But at the same June 2014
convention where dues were increased to give the UAW an extra $45 million annually, delegates also voted to
allow the union leadership to siphon off up to $60 million from the strike fund over the next four years, for
unspecified purposes.
Meanwhile, members see union officials spend millions of their dues -- up to $5 million last year, according to
Clark University professor Gary Chaison -- trying to organize auto workers in the South, which is a desperate
gamble to increase UAW revenue. Despite workers in states such as Tennessee and Alabama rejecting them
time and time again, the UAW continues to invest in this project.
Finally, and perhaps most significant, the UAW spends millions of dues dollars on a political agenda involving
divisive social issues, such as ObamaCare, radical environmentalism and gun control. Many workers no longer
want to fund what they believe to be contrary to their values and beliefs.
However, it may not all be doom and gloom for the UAW. Now that it will have to compete for a worker's loyalty
and prove its value to potential members, the union could emerge better equipped to do what it was originally
created for -- represent the best interests of all workers.
Just before the February 2014 vote at Volkswagen's Tennessee plant, Gary Casteel, then the UAW's regional
director for Southern states and now its secretary-treasurer, told the Washington Post that he has "never
understood that people think right-to-work hurts unions.

"You don't have to belong if you don't want to," he added. "So if I go to an organizing drive, I can tell these
workers, 'If you don't like this arrangement, you don't have to belong.' Versus, 'If we get 50 percent of you, then all
of you have to belong, whether you like to or not.' I don't even like the way that sounds, because it's a voluntary
system, and if you don't think the system's earning its keep, then you don't have to pay."
That is a good lesson for the union to embrace.
---
Mr. Vernuccio is director of labor policy at the Mackinac Center for Public Policy in Midland, Mich. Terry Bowman
is a 19-year Ford Motor Co. employee.
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Autoworkers' Union Reaches Tentative Deal With Fiat Chrysler

Autoworkers' Union Reaches Tentative Deal With Fiat Chrysler
By BILL VLASIC
856 words
16 September 2015
The New York Times
NYTF
2
English
DETROIT -- Fiat Chrysler Automobiles and the United Automobile Workers union reached a tentative agreement
on Tuesday on a new contract that could establish a pattern for labor deals at the other two American carmakers,
General Motors and Ford.
The deal was reached after marathon bargaining sessions between the two sides that began on Sunday when the
union picked Fiat Chrysler as the first company to negotiate with.
Previous four-year labor deals with the Detroit automakers expired at midnight on Monday. G.M. and Ford each
agreed to extend their U.A.W. contracts while Fiat Chrysler negotiated with the union, and will most likely continue
the extensions during their own upcoming talks.
The union's agreement with Fiat Chrysler was announced at a joint news conference on Tuesday night by Dennis
Williams, the union's president, and Sergio Marchionne, the chief executive of Fiat Chrysler.
Neither Mr. Marchionne nor Mr. Williams disclosed any details of the tentative agreement, which still needs to be
ratified by a vote of 36,000 union workers at Fiat Chrysler.
The union had been seeking pay raises for its veteran workers, who earn about $28 an hour, and its entry-level
employees, who earn $16 to $19 an hour.
''We will not be talking about the details,'' Mr. Williams said.
He said the deal put Fiat Chrysler ''in a competitive place,'' but would not share whether the agreement
specifically called for wage increases.
He also would not address whether the union was successful in putting a cap on the use of lower-paid workers at
Fiat Chrysler.
More than 40 percent of the union workers at the company are entry-level employees -- about double the
percentage of lower-paid workers at G.M. and Ford.
Mr. Marchionne has been outspoken that the two-tier wage system cannot be sustained in the long term, and
suggested that the tentative agreement provided a starting point for the elimination of the tier structure.
''It will go away over time,'' Mr. Marchionne said, without providing any further details.
He said that employees at the company, under the tentative agreement, will have a ''trajectory of career
development,'' which implied that lower-paid workers can move up to higher-wage status over some period of
time.
Mr. Marchionne also said that cutting health care costs was a key component of the agreement.
The U.A.W. had been discussing creating a health care collective covering workers at all three companies for the
purpose of saving money on the costs of medical care and prescription drugs.

''The cooperative arrangement is embedded in the spirit of this agreement, and I really hope it gets implemented,''
Mr. Marchionne said.
Mr. Williams said he would present the tentative agreement on Wednesday to union officials from Fiat Chrysler
facilities across the country. After that takes place, union members will vote on the pact. He said the vote would
probably take place next week.
Despite the absence of details, Mr. Williams and Mr. Marchionne expressed confidence that the tentative
agreement would benefit workers as well as the company, which was created after the former Chrysler
Corporation went bankrupt in 2009 and needed a government bailout to survive.
Mr. Marchionne said the negotiations were intense in the final hours. ''I'm pleased that this thing has come to an
end,'' he said.
The union will most likely not start final negotiations with either G.M. or Ford until a vote is taken on the Fiat
Chrysler deal.
Mr. Williams said he expected the deal to set a pattern for talks at G.M. and Ford, but left open the possibility that
those companies, which are more profitable, might be asked for better economic terms.
''The pattern is unique to each company,'' Mr. Williams said.
Earlier on Tuesday, workers at Fiat Chrysler's sport utility vehicle plant in Detroit said they were hopeful that a
deal that preserved jobs could be reached.
''I'm just hoping I can keep coming back every day so I can provide and build for my family,'' said Jeremiah
Meyerhoff, an entry-level worker at the plant who was hired three years ago and earns about $19 an hour.
Another entry-level worker, Fred Alnajjar, said he hoped the new contract included raises for all union members.
''I want any kind of raise,'' said Mr. Alnajjar, who has also worked for Fiat Chrysler for three years. ''But we know
the company needs money to be able to pay us.''
Fiat Chrysler is the least profitable of the three Detroit companies and is considerably smaller than G.M. and Ford
in terms of vehicle sales and revenues.
Besides raises, Mr. Alnajjar said the most important element of a new agreement would be job security.
''Hey, if after all this I still have a job, I'm O.K.,'' he said. ''Everybody wants a full-time job these days, right?''
A Fiat Chrysler assembly plant in Detroit. A union vote will most likely take place next week. (PHOTOGRAPH BY
LAURA MCDERMOTT FOR THE NEW YORK TIMES)
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Business News: GM and UAW Agree To Extend Contract
Business News: GM and UAW Agree To Extend Contract

By Christina Rogers
288 words
15 September 2015
J
B2
English
General Motors Co. said late Monday it has signed an agreement with the United Auto Workers union to extend
its national contract indefinitely, pushing labor talks for a new four-year deal past the current agreement's
expiration at midnight.
Ford Motor Co. made a similar move earlier in the day as the UAW has turned it attention to talks at Fiat Chrysler
Automobiles NV, the company it hopes to reach a deal with first.
On Sunday, the UAW picked Fiat Chrysler to lead negotiations for the Detroit Three, hoping to craft a new
agreement there that can serve as a template for talks at rivals GM and Ford.
With less than two hours before midnight, Fiat Chrysler and union bargainers had yet to reach a tentative
agreement, signaling the two sides were still working on economic issues, such as wages and benefits. The
company has not extended the contract, leaving open the possibility a deal could be secured before the
expiration.
"We remain committed to working with the UAW to develop an agreement that benefits employees and
strengthens GM's long-term competitiveness," GM said in a statement.
Workers at GM will continue to operate under the terms of the 2011 agreement until a new deal is reached.
Over the past several weeks, union and company bargainers have been working late nights and weekends trying
to reach a deal that aims in part to restructure or eliminate a controversial two-tier wage structure that has helped
the companies but divided workers.
Labor talks between the UAW and Detroit car makers routinely go beyond when the contract expires.
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Ford Will Use More Of Alcoa's Aluminum
Ford Will Use More Of Alcoa's Aluminum

By Christina Rogers and John W. Miller
556 words
15 September 2015
J
B1
English
Ford Motor Co. reached a new supply deal with Alcoa Inc. that would expand its use of aluminum in the car
maker's F-150 pickup truck and other vehicles, a leg up for the lightweight metal in an industry that has long
favored steel.
The agreement will allow Ford to use more sophisticated aluminum alloys that will debut this year on the
company's top-selling truck and eventually find their way to other Ford models over time.
The No. 2 U.S. auto maker already uses aluminum from a number of suppliers for the F-150's body. Alcoa's new
aluminum-casting technology will allow the Dearborn, Mich., auto maker to make more parts -- such as fenders --
using the metal, company officials said on Monday. Terms of the deal weren't disclosed.
For Ford, the deal expands an already more aggressive embrace of aluminum than rivals. The F-150 truck, the
company's best-selling and most profitable model, is the industry's first mass-market vehicle with an aluminum
body. Using the metal, Ford cut the truck's weight by about 700 pounds compared with a prior model and boosted
fuel efficiency by between 5% and 29%.
Raj Nair, Ford's product chief, said, "The fact that we're collaborating on technology at this scale shows a pretty
big commitment on both our parts."
The contract is crucial for Alcoa, the largest U.S. aluminum producer by volume, which aims to grow its
automotive-aluminum sheet business to $1.3 billion in 2018, up from $229 million in 2013.
Alcoa's casting technology allows for alloys that are easier to shape than traditional aluminum, according to Ford
and Alcoa, making it a prime candidate for complex parts like fenders and door-panel interiors. Alcoa says it
hopes this new process will allow it to compete for more car parts than once thought.
Aluminum is mostly found in engine parts, hoods and truck lids. But that could soon change with car makers
facing tougher fuel-economy targets. A 2014 report by Ducker Worldwide estimated 18% of all vehicles will have
aluminum bodies by 2025.
A large part of Alcoa's business is still wrapped up in producing raw aluminum. The price of raw aluminum is
down around 25% in the past year, to around $1,500 per ton.
Alcoa's stock price, in turn, has fallen to under $10 from over $16 a year ago. Chief Executive Klaus Kleinfeld has
focused on growing dozens of niche downstream businesses that make everything from airplane screws to truck
wheels.
A new process that Alcoa calls Micromill allows it to cast molten metal straight onto a conveyor belt where it is
flattened into coils that are sold to the auto industry. Currently, aluminum makers have to first cast the metal into
slabs before rolling the slabs into coils.
Alcoa engineers say it allows greater control and flexibility over the alloy chemistry and processing temperatures
to strengthen the material.
Mr. Kleinfeld said Alcoa could now make car parts out of aluminum that would have been "not possible"
previously. He said Alcoa has "development agreements" on new aluminum products with nine auto makers,
including Ford.

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GM, Ford Say Europe Will Pay Off --- Continent continues to generate losses but cost cuts, SUVs will turn tide, they say
GM, Ford Say Europe Will Pay Off --- Continent continues to generate losses but cost cuts, SUVs will turn
tide, they say
By John D. Stoll and Gautham Nagesh
918 words
14 September 2015
J
B1
English
As General Motors Co. was emerging from bankruptcy in 2009, the Detroit auto maker nearly divested its Opel
AG unit in Germany to embark on a fresh approach to Europe. The company's board rejected a sale, deciding
instead to implement a costly fix-it plan.
Six years later, investors are still waiting for the payoff.
GM, along with domestic rival Ford Motor Co., has amassed deep losses in Europe since the U.S. economic
crisis, even as operations at home have become richly profitable. Since 2010, the No. 1 U.S. auto maker by sales
has incurred losses of more than $7 billion in Europe, which contributes 13% of revenue; Ford, which gets 20% of
its revenue from Europe, has reported $4 billion in cumulative red ink over that period.
As executives head to this week's Frankfurt Motor Show, GM and Ford hope to make a case that coming and
more-profitable vehicles can turn around their troubled European operations. Russia's downturn was widely
unexpected and undercut regional cost-cutting efforts, they say.
Their challenges are still enormous. GM scrapped a plan to sell Chevrolets in Europe alongside its Opel brand,
and more recently began to wind down its role in a Russian market once thought to hold significant promise.
Executives say the clock is still ticking on their turnarounds.
Costly plant closures, a stream of new products and a rebound in European volumes are helping turn the tide for
Detroit's top car makers. Local champions -- including Fiat Chrysler Automobiles NV and PSA Peugeot Citroen --
are again making money in the region, pointing to the prospects of better days.
But while GM and Ford continue to repair their operations, Hyundai Motor Co., Nissan Motor Co. and other Asian
auto makers are sharpening their focus on Europe, and could further crowd a market long plagued by
overcapacity, volatility and a price war.
GM and Ford have long relied on German engineers to conceive fuel-efficient engines and passenger-car
designs. Industry watchers say a presence in the world's third-largest car market is necessary if a company
expects to be well rounded.
"Europe is seen as a place where you need to be if you want to be a global player," said Stefano Aversa,
chairman of consultant AlixPartners LLP's Europe, the Middle East and Africa operation. He says the
most-advanced suppliers are in Europe, and safety and emissions technology often originates in Germany,
Sweden or other markets.
Mr. Aversa says a healthy presence in Europe helps balance exposure to other markets, such as the U.S., that
have separate boom-and-bust cycles.
In an interview, GM Chief Financial Officer Chuck Stevens said an engineering presence in Europe isn't "the
driving factor" behind the company's strategy. The focus is on a "viable, sustainable business."
The auto maker aims to achieve a 5% operating margin in the longer term, or roughly half the company's margin
target for North American operations. Leadership changes, two plant closures and a refined brand strategy should
help, he said.

GM Chief Executive Mary Barra aims to return GM Europe to profitability next year for the first time since 1998.
Ford also targets an operating margin in Europe of at least 5% by the turn of the decade, but hasn't said when it
will stem four consecutive annual losses in the region.
GM this week will show a wagon version of its Opel Astra, a vehicle Mr. Stevens says "is pretty critical" to its
future in Europe. The Astra and the smaller Corsa account for more than 50% of GM's European volume.
Ford, aiming to expand European sales to 600,000 vehicles by 2020, is tapping its expertise in SUVs and
crossover vehicles for help. It has dominated the global market for SUVs dating back to at least the 1990s, and
Europeans are getting more interested in such vehicles.
Ford's midsize Edge crossover, which will debut in Germany on Tuesday, is the first of five new or redesigned
SUVs or crossovers slated for Europe over the next three years. The company expects SUV sales will triple by
the end of 2016 over 2013 levels, fueled by demand from drivers under 35 years old.
The trend could be good for both companies' bottom lines. While passenger cars, such as the Opel Astra or Ford
Mondeo, are high-volume sellers, profits are easier come by in the utility and pickup truck segments.
Mr. Stevens said GM is also ramping up availability of SUVs and crossovers. It also will boost its focus on
commercial vehicles in the region, an segment where Ford, Fiat, Renault SA and other European players are
strong.
The flight to SUVs -- a business dominated by Detroit -- could help GM and Ford offset the disadvantage it has
long faced in not having a home market in Europe. Mr. Aversa says Fiat, Renault, Volkswagen AG and Peugeot
have dominant positions in Italy, France, Germany or other markets where their brands are considered the
national players.
"It is a huge advantage," Mr. Aversa said. "You make a disproportionate amount of money in that home market."
He also said GM's move to better commercial vehicles is a necessary step to take if profit targets are going to be
achieved.
Document J000000020150914eb9e0001y

Sleek 'Euro Vans' Reignite U.S. Sales
Sleek 'Euro Vans' Reignite U.S. Sales

By Jeff Bennett
925 words
5 September 2015
J
B1
English
Mark Unger bought a European-style work van for his Orlando, Fla., restaurant business and strange things
began to happen. Driving was fun again, he says, and customers even asked to pose for photos in front of it.
The 35-year-old restaurateur's new Ford Transit, a 9-foot-tall van with plenty of space to cart equipment and
Mediterranean dishes, to replace a truck that he said required an entire parking lot to turn around.
His new van, decorated with a cartoon chef, "drives like a giant golf cart," he says. "We have had employees who
have never driven a truck get in and drive the van with no problems. It has definitely done its job."
Newer full-size vans that drive like cars and get up to 22 highway miles on a gallon of gasoline -- including Ford
Motor Co.'s Transit, Daimler AG's Mercedes-Benz Sprinter, Nissan Motor Co.'s NV, and Fiat Chrysler
Automobiles NV's ProMaster, are making the lowly panel van fun again. Sales of these vehicles are up 11%
through August compared with the same period last year.
While small businesses like Mr. Unger's Hubbly Bubbly love the cool factor, corporations say the new designs are
decades ahead of their predecessors in fuel economy and are more easily customized for delivering packages,
people or cargo.
"One of the reasons why we are looking for this type of this vehicle is the high fuel efficiency," said Time Warner
Cable Inc. spokeswoman Shelley Loo. The telecommunications giant replaced some older panel vans with 500
diesel-powered Transit vans and improved fuel economy by 47%, she said.
Ford, which began producing its Transit in the U.S. in April 2014, has America's top-selling full-size van, which are
designed primarily for business use, unlike minivans.
Its sales of the full-size model lag behind the top-selling Honda Motor Co. Odyssey minivan, but not by much.
Honda sold 13,400 of the family haulers last month while Ford sold more than 10,200 Transits. Its smaller Transit
Connect work van added nearly 4,000, pushing the combined total above the Odyssey.
Others are rushing into the space. In October, Germany's Daimler will offer U.S. buyers its smaller Metris van and
starting making its Sprinter in Charleston, S.C., to take advantage of soaring demand. General Motors Co., which
still sells the old-style Chevrolet Express and GMC Savana work vans, released its first European-styled City
Express van last December based on a Nissan NV200 model.
Bob Hegbloom, head of Fiat Chrysler's Ram division, said the van boom has been fueled by the economic upturn
and demand for more capable vehicles for work and weekend getaways.
"Vans used to be rear-wheel drive [and] only powered by big V-8 engines that hurt their fuel efficiency," Mr.
Hegbloom said. "Today they are front-wheel drive, making them easier to handle and are powered by a V-6,
which is more economical."
Ram's Euro-style ProMaster sales have nearly doubled this year through August over the same period in 2014.
The company began production of the ProMaster two years ago.
Sales of the high-top version of Ford's Transit, favored by delivery companies, have been so strong that Ford cut
a deal with three rail companies, including Norfolk Southern Corp., to raise the shelving on 400 railcars so
shipments of its taller models could keep up with demand.

"We have been running these vans on European roadways for years and much of what drivers want over there
they want here in the U.S.," said Yaro Hetman, who runs Ford's Transit marketing efforts. "They like easy
drivability, fuel efficiency, tighter turning radiuses and that is what I think make these vans attractive."
The new vans are profitable. The average transaction price of large vans like the Transit and ProMaster shot up
10%, or more than $3,000 in July compared with the same period a year ago, while sales incentives fell modestly
to $1,742, according to automotive researcher J.D. Power & Associates.
The California research firm estimates that since 2010 prices of large vans are up 27.6% while incentives ae
down 15.3%.
Industry experts estimate commercial buyers spend between $2,000 and $3,000 on accessories, and consumers
often spend the same amount for camping or other updates.
Adrian Steel Co., a Michigan-based commercial vehicle outfitter, recently invested $4.7 million to open a site in
Kansas City for such work. Recently, a line of Ford's Transit Connect vans were lined up bumper to bumper to be
outfitted.
Families that traded old-style Chevrolet Astros for more accessible minivans are returning to the fold. Some auto
makers see a potential comeback for U.S. makers of European style vans for campers and outdoor enthusiasts, a
market that largely disappeared with the rise of minivans. Some work vans are even squeezing into suburban
driveways as the new family hauler.
Alan Feld, chief executive of Sportsmobile in Fresno, Calif., is expanding production so he can boost his custom
camper van sales to 450 a year from 350. He converts Nissan NVs, Sprinters and other vans into campers with
furniture, a galley and sleeping areas.
"I remember a time when you wouldn't even let your daughter near a van," Mr. Feld said. "It's good to see that
has changed."
Document J000000020150905eb950002d

Business News: UAW Video Heats Up Detroit Talks
Business News: UAW Video Heats Up Detroit Talks

By Jeff Bennett
593 words
5 September 2015
J
B3
English
The United Auto Workers union is turning up the heat on Ford Motor Co. as part of its campaign to win a pay
raise for workers during labor-contract negotiations.
On Thursday, the UAW's Ford negotiating team posted a YouTube video insisting it wants the nation's No. 2 auto
maker to pay up. The video's release, less than two weeks before the current four-year labor deal expires, is
unusual because union officials typically don't discuss bargaining demands during contract negotiations.
"This set of negotiations is different from the past two," said Tim Rowe, chairman of Local 2000 representing
workers at Ford's Ohio assembly plant in Avon Lake, Ohio, on the video. "This round of negotiations will not be
concessionary."
UAW officials, including President Dennis Williams, have said that wage increases are due after a near-decade
span during which senior workers haven't received a base-wage increase.
With U.S. auto sales running at a decade-high pace, and car makers' profits increasing amid brisk sales of light
trucks, the union has said it is time to spread the wealth and potentially restructure the pay scale so that newer
employees have a better chance of making more money. The current four-year contract covering 140,000
industry workers expires Sept. 14, and the UAW soon is expected to pick a target among the Detroit auto makers
to conclude a deal by the expiration date. The Ford video isn't an indication that Ford is its target this time.
In late August, UAW local offices across the country conducted strike authorization votes as bargaining tactics
should talks break down, and the union generally received strong approval.
Ford's average hourly U.S. labor cost, including benefits, is about $57 while Toyota Motor Corp.'s is $48 and
Nissan Motor Co. is $42, according to Ann Arbor, Mich.-based Center for Automotive Research. The rate at Fiat
Chrysler Automobiles NV, with a large percentage of entry-level staff, is $48. General Motors Co.'s cost is about
$55, according to the organization's most recent estimates published earlier this year.
Senior factory workers make about $28 an hour, while entry-level employees top out at about $19 an hour.
Health-care benefit costs can add between roughly $6 and $8 an hour, according to researcher CAR.
The Detroit Three for decades faced a larger gap in labor costs compared with foreign rivals. But concessionary
deals in several prior negotiations, including contract talks and bankruptcy deliberations, helped lower the rate by
addressing retiree health care, buying out tens of thousands of older workers and changing work rules.
The UAW's apparent unwillingness to authorize additional givebacks will likely pressure negotiators to find other
ways to trim labor costs. Mr. Williams, for instance, has been pushing for a restructuring of how worker health
care is purchased, encouraging the three companies to combine their employees and retirees into one
purchasing pool.
A UAW official had no comment on the video while Ford said it looks "forward to negotiating a fair and competitive
labor agreement that enables us to continue providing jobs and investment here in the U.S."
Worker reaction was mixed on a UAW-run Facebook page with some calling the video a waste of time and others
asking for the team to stand strong. One suggested the team bring a toothbrush to the negotiations so they can
stay all night.

Document J000000020150905eb9500023

Business News: Tesla Motors Seeks U.S. Help on China
Business News: Tesla Motors Seeks U.S. Help on China

By Mike Ramsey
820 words
29 August 2015
J
B4
English
Tesla Motors Inc. plans to press Obama administration officials to talk to Xi Jinping about making it easier for auto
makers to do business in China during the Chinese president's visit to the U.S. next month.
The issue has gained urgency for Tesla as several new electric-car startups in the U.S. have emerged with
Chinese financial backing. China prohibits foreign car makers from assembling vehicles in that market without a
Chinese partner, which can make it much more difficult to operate there.
All the global car companies, including General Motors Co. and Ford Motor Co., produce vehicles in China,
through joint ventures. Chinese car makers have yet to attempt to assemble vehicles with their brands in the U.S.,
but Tesla is concerned that they have a much easier road to travel. "The China-owned companies are not
expected to sell controlling stakes to American companies and are free from other trade hurdles that we face,"
Tesla spokesman Ricardo Reyes said.
"The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities,
such as much higher import duties in China compared to the United States, put American car companies at a
significant disadvantage," he said.
The White House didn't immediately offer comment.
China is pushing greater electric-vehicle use, and most major cities offer exemptions from high fees and a lottery
system that buyers of gasoline-fueled vehicles face. Still, Tesla struggled last year in its launch of sales in China,
and a recent devaluation of the yuan to the dollar makes it more difficult to make money importing vehicles from
its plant in California.
Meanwhile, new U.S.-based electric-car companies -- some with Chinese backing -- are expected to develop
vehicles for sale in the U.S. and China. They include Faraday Future Inc., Atieva Inc. and Fisker Automotive Inc.,
as well as Chinese tech firm Leshi Internet Information & Technology Corp.
Tesla also faces looming competition from some high-profile names, like Audi AG, which is developing an electric
sport-utility vehicle, and Apple Inc., which is working on an electric car.
Tesla's early success selling electric-vehicle has been unique. The Palo Alto, Calif.-based company founded by
Elon Musk is on track to sell at least 50,000 vehicles in 2015 and plans to launch a sport utility in September and
a cheaper model in 2017. While mired in red ink, its model sets the template for smaller ventures, including those
with Chinese backing.
Fisker Automotive, which is based in Southern California, has revived its hopes after China's Wanxiang Group
Corp. bought the failed hybrid-electric supercar maker out of bankruptcy in 2014. The company has secured a
manufacturing facility in Southern California and is planning to relaunch the brand in coming years.
Beijing-based Leshi Internet Information & Technology, or LeTV, has hired more than 100 engineers in the U.S.
from Tesla, Ford and others to build an electric vehicle. Earlier this month, the company unveiled plans for an
electric sports car called Le Supercar, slated for sale in China, the U.S. and other markets. The company says it
has teams in the U.S. and China working on the car.
Faraday Future, which was started in 2014, has drawn from Tesla's example. Like Tesla, which bears the name
of inventor Nikola Tesla, the California-based company is named after scientist Michael Faraday. In addition, Nick
Sampson, Faraday's "product architect," was an engineer instrumental in Tesla's development of its Model S.
Mr. Sampson said the company, which aims to sell a car by 2017 carrying a battery bigger than the one powering
the Model S, has "very ambitious" goals. "Because of [our] ability, capability and, yes, funding, we are confident
we can deliver," Mr. Sampson said in an email.
Tesla officials say they believe LeTV has provided funding for Faraday, though LeTV called the suggestion
"speculation."
Mr. Sampson declined to specifically comment on LeTV. Faraday, he said, is "a global company with a very
diverse funding strategy, working directly with organizations not just in the U.S., but Asia and Europe as well," he
wrote.
The company has reached out to auto-supply powerhouses like Michigan-based Delphi Automotive PLC, and to
Nvidia Corp., which sells computing technology to the auto industry.
LeTV and Beijing Automobile Industry Co. said last year they had jointly invested in Atieva. The Menlo Park,
Calif., company's website says it is creating "a breakthrough electric car in the heart of Silicon Valley."
Atieva has nearly a dozen former Tesla engineers and other professionals on staff, based on public profiles
posted on LinkedIn. Chief Executive Bernard Tse is a former board member and vice president at Tesla. He
declined to comment.
Document J000000020150829eb8t00028

Ford ponders resurrection of Ranger, Bronco in U.S. ; Carmaker won't comment on reports it will bring back popular pickup, SUV
MONEY
Ford ponders resurrection of Ranger, Bronco in U.S. ; Carmaker won't comment on reports it will bring
back popular pickup, SUV
Alisa Priddle; Nathan Bomey; USA TODAY
455 words
27 August 2015
USA Today
USAT
FINAL
B.3
English
Ford is considering re-entering the small pickup truck segment by bringing the Ranger back to the U.S. and may
also reintroduce the Bronco sport-utility vehicle, according to several reports.
Ford is weighing building the Ranger later this decade at the Michigan Assembly Plant near Detroit, The Detroit
News reported.
The company may revive the Bronco nearly two decades after the vehicle was phased out in the wake of the
infamous O.J. Simpson chase in a white Bronco on national TV, according to Bloomberg and Automotive News.
The automaker has declined to discuss the reports.
Potential production of the Ranger and Bronco may be a subject of negotiations between Ford and the United
Auto Workers. Hourly worker contracts expire in September and talks are ongoing.
The company has been without an offering in the small pickup category, in which the Ranger competes, as gas
prices contracted. General Motors in 2014 introduced new midsize pickup trucks, the Chevrolet Colorado and
GMC Canyon, and Toyota recently overhauled the Tacoma.
Ford discontinued the Ranger in 2011, throwing its weight in the pickup segment behind the larger F-series
lineup, still the most popular vehicle in the U.S.
If Ford brings the Ranger to the Michigan Assembly Plant, it would at least partially replace production of the
Focus compact car, Focus electric car, C-Max hybrid and C-Max Energi plug-in hybrid, which are likely moving to
Mexico plants.
The company has insisted it won't close the Wayne, Mich., plant, which employs about 4,500 workers, and that it
will build future, unidentified products there.
"We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue
with UAW leadership as part of the upcoming negotiations," Ford spokeswoman Kristina Adamski said in a
statement.
UAW spokesman Brian Rothenberg said he was not aware of talks involving the Ranger being produced at the
Michigan Assembly plant. The expectation is Ford will choose to make larger or more expensive vehicles in
Michigan with a higher profit margin while shifting production of lower-margin small cars south where labor costs
are lower.
"Despite Ford's initial doubts about GM introducing a lower- profit midsize truck to compete against its full size
trucks we know Ford is watching sales of the Canyon and Colorado very closely" said Karl Brauer, an analyst with
Kelley Blue Book. "Unless those GM trucks were rejected by the market everyone knew Ford would follow suit.
They weren't, and Ford is."
photo Colin Mileman for Ford for Ford

Document USAT000020150828eb8r0003y

Business News: Chinese Auto Sales Fell Again in July, Vexing Car Makers
Business News: Chinese Auto Sales Fell Again in July, Vexing Car Makers
676 words
12 August 2015
J
B3
English
China passenger-vehicle sales fell for a second consecutive month in July, registering a 6.6% year-over-year
decline that heightens concern about price cuts and excess inventory in the world's largest auto market.
The bulk of cars sold in China are built locally, so the global auto industry could avoid material losses tied to
Tuesday's yuan devaluation by China's central bank. Still, soft demand presents a hurdle for auto giants in North
America, Europe and Asia that have come to depend on the Chinese market for a big chunk of their profit.
Volkswagen AG, China's top auto maker by sales volume, said weakness in China dented second-quarter
earnings, offsetting a stronger Western European market. Rival BMW AG warned that a further softening in China
could crimp the company's outlook. General Motors Co. said that in China industry pricing -- the closest-watched
indicator of industry health -- will decline more than anticipated this year.
Long the fastest-growing major automobile market, China has stalled amid a slower economy, a government
crackdown on corruption and curbs on car ownership as cities aim to reduce congestion and pollution.
Combined sales of passenger and commercial vehicles in the country fell 7.1% in July, to about 1.5 million
vehicles, the government-backed China Association of Automobile Manufacturers said on Tuesday. Sales of
passenger cars slipped to 1.27 million vehicles, after falling 3.4% in June.
Many market participants remain optimistic concerning a rebound. At a conference in Michigan last week, a
senior analyst with Beijing-based State Information Center said growth will return in coming months, buoyed by
pent-up demand and a recovery of the stock market.
"The stock-market volatility has a bigger impact on car sales than the economic slowdown," said Yale Zhang,
head of Shanghai-based researcher Automotive Foresight. "Most people who piled into the stock market in the
second quarter are also the target of car makers."
A recent survey of China's more than 20,000 dealers by the China Automobile Dealers Association, a
government-backed trade group, showed that at the end of June dealers on average had inventories equal to
1.68 months' sales, virtually unchanged from 1.7 months in May and 1.67 months in April. In China, analysts
regard 1.5 months of sales on lots as the "alert level" at which dealers should begin to be concerned about high
inventory.
By contrast, dealers in more developed automotive markets like the U.S. can hold larger inventories mainly
because they profit by selling used cars, financing, service and insurance.
Large numbers of unsold cars at Chinese dealerships sparked a new round of price cuts last month, increasing
the likelihood that earnings from joint-venture operations will be clipped in the near term.
South Korea's Hyundai Motor Co. cut the price of two sport-utility vehicles in China by as much as 12% in
response to rising competition from Chinese brands; Nissan Motor Co. last week unveiled a new Murano SUV
with a smaller engine and a 34% lower price.
Most car makers reported weak China sales for July. GM's sales were down 4% from a year earlier, Ford Motor
Co.'s were off 6% and Nissan's fell 14%. Toyota Motor Corp. was an exception; its sales were up 24% due to
strong gains in compact sedans.
As the world's second-largest economy continues to sputter, China's central bank on Tuesday devalued the
country's currency against the U.S. dollar by nearly 2%, its biggest one-day decline in more than two decades.
"If the move is limited to just a few percent, it will have a minimal impact, even for the American auto makers, who
are most vulnerable," said Janet Lewis, an analyst at Macquarie Securities.
-- Rose Yu in Shanghai, Friedrich Geiger in Berlin, Eric Pfanner in Tokyo and In-Soo Nam in Seoul
Document J000000020150812eb8c0001k

Business News: Parts Shortage Slows F-150 --- Ford hires second supplier to provide steel frames to better meet delivery demands
Business News: Parts Shortage Slows F-150 --- Ford hires second supplier to provide steel frames to
better meet delivery demands
By Christina Rogers and Mike Ramsey
778 words
8 August 2015
J
B3
English
Ford Motor Co. has hired a second supplier to provide steel frames for its best-selling F-150 truck, hoping to
better meet delivery demands amid a parts shortage from its current supplier, according to people familiar with
the matter.
The Dearborn, Mich., auto maker is struggling to get as many F-150s on dealer lots as originally planned because
its supplier, Mexico-based Metalsa SA, is having trouble building enough frames to keep pace with production
needs, according to the people.
The frame shortage has been going on for months and continues to stifle production at Ford's two pickup plants at
a time when light-truck demand -- juiced by low gas prices -- is running at a 10-year high.
To fill the gap, Ford has tapped Livonia, Mich.-based supplier Tower International Inc. to build the additional
frames, which are expected to become available in October, people familiar with the plans say.
Meanwhile, the auto maker has been shipping frames to its factories by truck rather than rail to get them there
faster but at a higher cost, these people say.
With not enough frames, Ford has had to cancel planned overtime, and at times, temporarily halt the assembly
line during regular shift work as plant employees wait for more frame deliveries to arrive, the people say.
In a statement, Ford said it anticipates having full availability of the F-150 by the end of the third quarter.
"We are at full production now, we are building stock at dealers and we continue to roll out additional"
configurations, the company said. "As with all vehicle launches, we are working closely with our suppliers to meet
customer demand for the truck."
A Tower spokesman declined to comment but public filings show the parts supplier currently makes body
structures for the F-series truck. Tower also builds frames for Ford's Econoline van at its plant in Bellevue, Ohio --
a facility that is currently undergoing a major expansion.
Put on sale in late 2014 as a lighter, more fuel-efficient offering, the relatively long transition period it has taken to
move from steel bodies to aluminum has been closely watched by Wall Street because the F-150 drives a
substantial share of Ford's profit.
As Ford has worked to ramp up F-150 production, the tight inventories on the truck have dented market share
and clipped earnings, providing a dose of momentum for rivals General Motors Co. and Fiat Chrysler Automobiles
NV.
Ford's F-150 has been the industry's best seller since the 1970s. Long built with steel panels, the auto maker
shifted to aluminum for a redesigned 2015 version. It was a risky and costly move aimed at lightening the vehicle
significantly so it can meet stringent U.S. emissions standards.
The vehicle's frame is steel, the industry standard for trucks.
The F-150 is built at factories in Dearborn, Mich., and Kansas City, Mo.; a heavier duty version of the F-series
built in Louisville will move to aluminum body panels starting next year.

Aluminum presents its own manufacturing challenges for auto makers because it is more expensive than steel
and more difficult to stamp. But in this case, it is the steel frame that is causing the headache.
The F-150's steel frame was re-engineered for the 2015 makeover, and is about 60 pounds lighter than the old
one. It has a higher percentage of high-strength steel and is built with a new process that varies the thickness of
the metal used to reduce weight.
Still unclear is what exactly at Metalsa is causing the shortage. Metalsa officials couldn't be reached.
The frames are built by Metalsa at a factory in Elizabethtown, Ky. -- about 400 miles south of Detroit and 530
miles east of Kansas City. The shortage has become so acute that Ford has sent a team of "fixers" from advisory
firm KPMG to Metalsa's factory in Kentucky to ensure smoother operations, people familiar with the move say.
Despite the complications, Ford continues to churn out profits in North America, reporting a record quarterly profit
of $2.6 billion for the region last month, as the popularity of its new models has helped boost pricing and lower
discounts across the lineup.
The company is banking on healthier truck supplies to supercharge earnings in the second half of the year with
the company targeting operating margins of 8.5% to 9.5%.
Document J000000020150808eb880003k

Spiders wreak havoc on fuel lines ; Ford engineers hope new invention keeps pesky invader at bay
MONEY
Spiders wreak havoc on fuel lines ; Ford engineers hope new invention keeps pesky invader at bay
Nathan Bomey
Nathan Bomey, @NathanBomey, USA TODAY
520 words
5 August 2015
USA Today
USAT
FIRST
B.2
English
Ford engineers have morphed into exterminators -- and for good reason.
A common form of spider, it turns out, likes to nest under the hood in vehicles. That sounds harmless enough, but
it can cause big problems, including possible fuel tank cracks that can ignite vehicle fires.
"We're always working to improve and adapt to whatever the environment or the regulatory regime throws at us,"
Ford fuel systems engineer David Gimby said.
Ford has a solution: a new cylindrical "spider screen," which is being installed on all Ford vehicles globally starting
with the 2016 Focus RS.
The eight-legged offender in this case, often referred to as a yellow sac spider, is already thought to be
responsible for more bites to humans than any other spider, according to Michigan State University researchers.
Apparently it takes pleasure in wreaking havoc on cars, too. Ford found the yellow sac spider seeks out cavities
to build cocoons for laying eggs or taking shelter. In vehicles, that often leads it directly to a fuel vapor line.
When the arachnid spins a web, it can cause blockages that disrupt fuel vapor and then generate engine
damage. A strand of a yellow sac spider web is as strong as an equally thick strand of steel, according to Ford.
Darrell Ubick, a spider specialist at the California Academy of Sciences, said the yellow sac spider is "very
common" in houses.
"Their presence in the car is surprising, but not unexpected as the car engine area attracts many organisms, such
as mice," he said in an email. "I've heard of spiders causing similar problems in farm equipment by making their
retreats in tubular cavities."
It's a particularly virulent issue for some auto makers. In March 2014, Mazda recalled 42,000 Mazda6 vehicles
from the 2010-12 model years after discovering spiders could weave webs in a canister vent hose, causing an
"excessive amount of negative pressure" in a fuel tank, according to a document filed with the National Highway
Traffic Safety Administration.
In a worst-case scenario, that could cause the fuel tank to crack and ignite a fire, Mazda said at the time. Spiders
had caused cracks in at least nine Mazda6 vehicles before the Japanese automaker sought a fix, according to
another NHTSA document.
In 2013, Toyota recalled 802,769 vehicles after discovering spider webs could clog air conditioning parts and
cause pooled water to damage airbag modules, potentially causing inadvertent deployment.
The yellow sac spider inhabits every state except Hawaii, Gimby said, making it a common threat.
Gimby's team, which included Ford engineers William Euliss and Aram Sahota, recently developed an improved
spider screen based on technology the Dearborn, Mich.-based automaker first introduced in 2004.
In the hunt for a solution, Ford engineers unleashed the yellow sac spider on test vehicles.
"We needed to collect some spiders and give them a chance to occupy our vent lines and see what they did,"
Gimby said.
photo Ford
Document USAT000020150805eb850000z

July Vehicle Sales Jump 5.3%, Bolstered by S.U.V.s and Trucks

July Vehicle Sales Jump 5.3%, Bolstered by S.U.V.s and Trucks
By AARON M. KESSLER
963 words
4 August 2015
The New York Times
NYTF
2
English
The auto industry began the second half of the year with a jolt that totaled more than 1.5 million vehicles sold in
July, a 5.3 percent increase from the previous year.
The seasonally adjusted annual rate rose to a robust 17.55 million, up more than a million vehicles from 16.48
million a year ago, as growth continued to be led by sport utility vehicles and trucks, often at the expense of
traditional sedans.
General Motors and Fiat Chrysler posted overall increases in sales of about 6 percent compared with the
previous year, while sales at Ford rose 5 percent.
In particular, Americans are flocking to small crossover S.U.V.s -- built on comfortable car frames, with fuel
efficiency that can rival their passenger car counterparts, and with prices that put small S.U.V.s in reach of
consumers who traditionally were limited to cars.
''It's probably the easiest shift for someone who wants to trade up to an S.U.V. from a sedan,'' said Colin Langan,
an equity analyst with the investment bank UBS.
Crossovers of all sizes, as well as pickup trucks, also carry higher profit margins on average than cars, Mr.
Langan said, which has helped bolster automakers' recent strong earnings -- especially at the so-called Detroit
Three: G.M., Ford and Fiat Chrysler.
''It's had a double benefit for the Detroit Three, because not only are the margins higher, but they also reap the
rewards of higher market share because loyalty tends to be higher for these segments,'' he said.
Nationwide across all automakers in July, sales of S.U.V.s and trucks outpaced cars, rising nearly 13 percent to
more than 840,000 sold, according to the Autodata Corporation. By contrast, car sales nationwide dropped 3
percent, to about 670,000.
Jack Nerad, executive market analyst for Kelley Blue Book, said July's sales confirmed Americans' love affair with
''tall vehicles,'' with higher seating positions and more space. G.M.'s small Buick Encore crossover charged
forward for a 68 percent sales gain in July compared with last year. Its slightly larger sibling, the Enclave, was up
25 percent, while the Chevrolet Traverse posted a 32 percent gain.
S.U.V.s also powered Ford's gains in July, with nearly its entire lineup posting double-digit growth. The Ford
Explorer was up 23 percent, the Edge up 17 percent and the Escape up 10 percent.
At Fiat Chrysler, the story was similar, as the Jeep brand led the way with a 23 percent overall increase. The
company made gains despite a record fine from federal regulators last month for failing to properly address
numerous safety recalls, the most prominent involving a Jeep model.
Compact crossover S.U.V.s are selling quickly once they arrive at dealerships, according to data from the auto
research site Edmunds.com. Consumers are snapping them up after only 42 days, faster than nearly every other
category of vehicle. By contrast, subcompact cars languished for 94 days, compact cars for 63 days and large
cars for 82 days.

''The trucks and sport utilities of today are not what they were 10 years ago,'' said Michelle Krebs, a senior analyst
for AutoTrader.com. ''They're far more fuel efficient and carlike.''
The most truck-like S.U.V.s, the largest offerings, which are still built on more rigid truck frames, lost ground in
July. G.M., which dominates the segment, had its Yukon sales drop 14 percent, the Yukon XL fall 43 percent and
Chevrolet Suburban slip 17 percent. Even the high-end Cadillac Escalade struggled in July, dropping 32 percent.
Such vehicles are among the most profitable in G.M.'s lineup and have done well over the last year, though
Stephanie Brinley, senior analyst at IHS Automotive, warned that ''the appetite for full-size-pickup-based S.U.V.s
does seem to be declining.'' Sales of Ford's largest S.U.V., the Expedition, also fell in July.
But S.U.V.s and crossovers as a whole, across all sizes, continue to win over consumers and gain market share
from traditional cars. IHS Automotive data shows that such vehicles now compose more than a third of the entire
light vehicle market in the United States -- their highest share in at least six years.
Another bright spot for automakers last month was pickup trucks, whose sales continue to grow as the American
housing market recovers (pickups are popular with construction contractors), and consumers with older trucks
trade them in for new ones.
Ford's F-series trucks, vital to the company's overall performance, jumped nearly 5 percent in July -- the first
year-over-year growth since January. The redesigned F-150 pickup with a mostly aluminum body ran into
production delays this year, and Ford is counting on sales of the truck to increase in the late summer and early
fall as dealers get fully stocked up on the new vehicle.
Fiat Chrysler's Ram pickups struggled, however, posting essentially flat performance in July, up 1 percent.
Elsewhere around the industry, sales at Honda and Nissan both rose almost 8 percent for the month, Subaru was
up nearly 11 percent and Toyota rose slightly at under 1 percent. The Volkswagen Group posted 9 percent gains,
and Hyundai rose 6 percent.
An S.U.V. at a General Motors plant in Texas. Trucks and S.U.V.s have healthy profit margins. (PHOTOGRAPH
BY MIKE STONE/REUTERS); Nissan Rogue; Toyota Camry CHARTS: How the Industry Fared; How the
Automakers Fared; Most Popular Cars and Trucks (Source: MotorIntelligence.com)
Document NYTF000020150804eb840003d

Ford's Profits Jump 44%, Soaring Past Forecasts

Ford's Profits Jump 44%, Soaring Past Forecasts
By AARON M. KESSLER
809 words
29 July 2015
The New York Times
NYTF
3
English
Reversing a period of lackluster earnings, the Ford Motor Company on Tuesday reported robust profits, surging
44 percent in the second quarter compared with a year earlier.
The growth in net income, driven by record-setting profit in North America, helped propel Ford to after-tax
earnings of 47 cents a share, nearly 10 cents higher than Wall Street analysts had expected. The overall
automotive division's quarterly profits were the highest in 15 years.
The automaker, based in Dearborn, Mich., said that strong sales of sport utility vehicles and trucks helped power
the earnings -- a feat accomplished even as sales of Ford's F-150 pickup, one of the most popular vehicles in
America, have taken a hit as the company struggles to meet demand.
Ford's chief executive, Mark Fields, in a conference call on Tuesday, called it ''one of the strongest quarters in our
recent history.'' In the first quarter, earnings had declined over the previous year.
''We're now more confident than ever that we'll deliver a breakthrough year,'' said Mr. Fields, who took over the
top job last year.
Shares of Ford closed up nearly 2 percent.
Mr. Fields and Bob Shanks, Ford's chief financial officer, were peppered with questions about the new mostly
aluminum-bodied F-150, which required extensive retooling at two factories that resulted in production delays this
year. Sales of the F-series fell 9 percent last month in the United States, and market share for the trucks also fell
by five percentage points.
The executives said the F-150 was now being assembled at ''full production'' speed, and they promised that the
company would achieve ''normal'' levels of inventory on dealers' lots by the end of the third quarter.
Mr. Fields also responded to reports this month that some Ford dealers were offering discounts of more than
$10,000 on high-end versions of the aluminum F-150 in an attempt to lift sales volume.
''Incentives and rebates are a normal part of the competitive environment,'' Mr. Fields said, adding that some
dealers associations had decided to add their own discounts on top of Ford's own offerings. He said that supply,
not demand, was the more pressing issue in ramping up the F-150's sales -- a problem that would be fixed in the
third quarter.
''With Ford it always comes down to the F-150, which remains the automaker's lifeblood,'' said Karl Brauer, senior
analyst for Kelley Blue Book.
Mr. Brauer said that until the F-150's challenges were resolved, Ford's revenue, profits and market share ''will be
handicapped,'' holding back the truck's potential to be a huge moneymaker for the company.
Ford said on Tuesday that it predicted higher profits in the second half of the year compared with the first, partly
because the new F-150s were more accessible for consumers. It reaffirmed its estimate that its pretax profit for
2015 as a whole would end up between $8.5 billion and $9.5 billion, up from $6.3 billion in 2014.

The company, which reported a quarterly pretax profit of $2.4 billion, significantly improved its ability to turn each
dollar of sales into profit. That measure, known as operating margin, rose to 7.2 percent, compared with 6.6
percent in the quarter a year earlier. That helped Ford generate greater earnings even though its overall revenue
was essentially flat compared with a year ago.
Ford's North American revenue increased to $23.3 billion, from $21.2 billion in the quarter last year.
While the North American and Asian divisions performed well for the company, Ford continued to have trouble in
South America. Profits for the Middle East and Africa also fell, and Europe was essentially flat for the quarter.
Ford's strong performance was all the more striking because it about doubled the second-quarter profits
announced by General Motors last week.
Brian A. Johnson, an industry analyst with Barclays, said in a research note on Tuesday that despite Ford and
G.M. delivering strong quarters, investors' current view of automakers is ''quite soft, ranging from somewhere
between apathy and skepticism.''
''Unfortunately in this market, as we've seen with other stocks in our space, perception is reality,'' Mr. Johnson
wrote, adding that the second-quarter results simply might not be ''enough to overcome investor concern of a U.S.
peak and headwinds in China.''
Both companies, along with Fiat Chrysler, recently began negotiations with union officials at the United
Automobile Workers on a new contract to succeed the current agreement that expires in September.
Ford workers at a plant in Valencia, Spain. Ford's profit in Europe was flat in the quarter. (PHOTOGRAPH BY
DAVID RAMOS/GETTY IMAGES)
Document NYTF000020150729eb7t0004z

GM, Ford Flourish Out of Limelight
GM, Ford Flourish Out of Limelight

By Christina Rogers
1,101 words
29 July 2015
J
A1
English
A sharp earnings acceleration by the top U.S. auto makers through June is overshadowing Volkswagen AG's
sweet success in finally capturing the global sales crown from Toyota Motor Corp.
Rising U.S. demand for pickup trucks and sport-utility vehicles, spurred by lower gasoline prices, is propelling
domestic margins at General Motors Co. and Ford Motor Co. to levels more typical of German luxury car makers.
The wind is at Detroit's back after its contraction last decade. Where the U.S. companies once were more focused
on sales crowns, pumping out higher volumes at razor-thin margins, they now are flourishing by focusing on what
customers want to buy.
"It is about consistency," said Ford Chief Financial Officer Bob Shanks on Tuesday, following the company's
posting of a 44% increase in second-quarter profit. While the years since the financial crisis "haven't all been milk
and honey," Ford, like GM, has chosen to focus on the bottom line while bigger rivals chase sales crowns.
That focus on profit over volume will come in handy as the Chinese auto market, also a source of profits for GM
and Ford, slows further. Ford dialed back its projection for China sales on Tuesday, saying industry volumes at
best will be flat in 2015 after several years of breakneck growth. China has most benefited Volkswagen's climb to
the top while also keeping GM sales relatively close to its Japanese and German rivals.
"The reality is China is still the biggest market in the world, and in our view, it will continue to grow as we get to
the end of the decade," Ford's Mr. Shanks said. Ford has ramped up production in China in recently years and
now holds 4.6% share of sales in that country.
Volkswagen topped Toyota in first half sales, according to global figures released on Tuesday. Toyota said sales
including those of affiliates fell 1.5% through June to 5.02 million vehicles. Volkswagen earlier said it sold 5.04
million vehicles in the same period. General Motors was third in the period with sales of 4.9 million vehicles.
China's sales slowdown is fueling concern about a price war at the lower end of the market there. And it raises
the threat of overcapacity further spoiling profits in what has been an industry cash cow in recent years. But Ford
and GM have offset such worries by cranking out higher margin vehicles in North America and China.
Dearborn, Mich.-based Ford's near-term outlook is attractive mostly because of its U.S. business. A redesigned
F-150 pickup is at full production and interest rates remain favorable. Importantly, Mr. Shanks said "we expect
fuel prices to continue to be lower for longer."
Low gas prices provide the ideal backdrop for Ford and GM to pull off their strategies. Even though the pair
continue to lose U.S. market share, a spike in demand for heavier vehicles is leading to sales of higher-profit
vehicles, allowing the companies to back away from lower-margin sedan sales.
The two earned a collective $9 billion in North America in the latest quarter, or more than $3,000 a car sold,
leading to second-quarter operating margins in the region in excess of 10%.
"We note such margins are in line or materially above the leaders of premium auto manufacturing in Germany,"
Morgan Stanley auto analyst Adam Jonas said in a report on Tuesday. "Can it get better than this?"
History indicates it can get worse. A decade ago, as U.S. volumes were near historic highs, GM and Ford sold
25% more cars and trucks than the current level. But losses were mounting as excess capacity, high labor costs
and a reliance on discounts and sales to rental car fleets weighed on profit.
The Big Three, including then Daimler AG-owned Chrysler, were forced to restructure. The government-funded
bankruptcies of GM and Chrysler could have eliminated Chrysler had Fiat SpA not taken steps to forge a merger.
Fiat Chrysler Automobiles NV reports earnings on Thursday. While the company's margins lag far behind
domestic rivals, success in the U.S. market, mostly achieved on the backs of the Jeep brand and Ram trucks, is
financing the Italian-American auto maker's retooling as Chief Executive Sergio Marchionne hunts for a new
partner.
Domestic auto maker finances are strengthening as talks kick off with the United Auto Workers union over a new
labor contract. UAW officials aim to replace a contract expiring in mid-September with a more generous deal for
its members; domestic auto makers are likely to point to big North American profits as reason to stick to a
profit-sharing model instead of fixed salary increases.
By promising auto workers they can share in the earning's upside, GM, Ford and Fiat hope to keep fixed costs
low amid concerns that the U.S. market is nearing a cyclical peak.
Ford Chief Executive Mark Fields said even if sales growth in the U.S. stalls, underlying demand won't collapse.
"I really term it as a plateau," Mr. Fields said on Tuesday. "When you look at what's driving the market, it's really
about replacement demand."
Encouraged by sales of its new F-150 truck, Ford reconfirmed its full-year outlook, saying it expects operating
profits of between $8.5 billion and $9.5 billion. "We think we now see a path to get into the upper half" of an 8% to
9% margin range, Mr. Shanks said.
In its Asia Pacific region, Ford earned $192 million in the second quarter, up $33 million from a year earlier.
It posted a second-quarter loss of $14 million in Europe, a contrast to the pretax profit of $2.6 billion it reported in
North America.
Ford's performance was bolstered by record transaction prices on its new F-150 truck, which rose to $44,000
during the quarter, up $3,600 from the same year-ago period.
The auto maker earned $1.9 billion in net profit during the quarter, a 44% increase compared with the same
period a year ago. The auto maker's operating earnings of 47 cents a share solidly outpaced analyst expectations
even as it saw revenue decline slightly to $37.3 billion due to the negative impact of foreign exchange.
The performance cheered Ford executives.
"Can we collectively say wow?" Mr. Shanks enthused over the second-quarter results.
Document J000000020150729eb7t00030

Business News: GM, SAIC Set Plan to Share Design
Business News: GM, SAIC Set Plan to Share Design

By John D. Stoll
797 words
28 July 2015
J
B2
English
Corrections & Amplifications
General Motors Co. President Dan Ammann outlined an emerging-markets plan in a presentation Tuesday; Chief
Executive Mary Barra appeared at a related announcement on Wednesday. A Business News article Tuesday
incorrectly said that Ms. Barra would be presenting Tuesday.
(WSJ August 1, 2015)
(END)
General Motors Co. will work with a Chinese auto maker on a $5 billion initiative to overhaul how it creates cars
for developing markets, a move that represents the U.S. auto maker's first major development project in China to
address global markets.
The Detroit auto maker plans to work with SAIC Motor Corp., one of its Chinese joint-venture partners, to develop
a common blueprint, or architecture, that can be tailored for specific styles or regional markets. Their goal is the
same one rivals Volkswagen AG, Renault SA, Ford Motor Co. and Toyota Motor Corp. are spending billions of
dollars to achieve.
SAIC, a state-owned company that is a major car maker in China, is looking to become more viable on the global
stage. Having aligned with the biggest auto makers in the world, including Volkswagen, SAIC's multi-billion-dollar
joint venture with GM could help the Shanghai-based company finally create a car capable of appealing to a
broader set of car buyers.
China's Geely Automobile Holdings Ltd. also is expanding a joint venture with Volvo Car Corp. to design a
subcompact car that meets safety and quality standards in Western markets where Chinese brands have
struggled to gain a foothold.
At GM, the planned platform investment is equivalent to what the auto maker is spending on its current stock
buyback program, and to the money it has earmarked for updating its U.S. manufacturing operations through
2018.
The auto makers that first gets the emerging-markets concept right could impact the industry pecking order for
decades to come. The industry currently sells about 85 million vehicles a year around the world, the majority of
which are in China, Western Europe and the U.S.
The plan, scheduled to be disclosed on Tuesday by Chief Executive Mary Barra, comes as GM is spending about
$9 billion annually on capital expenditures. It has earmarked $14 billion to revive Cadillac and $16 billion to
maintain leadership in China.
GM President Dan Ammann said in an interview the Detroit auto maker primarily will sink its $5 billion
emerging-markets investment into operations in China, India, Brazil and Mexico. Its joint ventures in China -- the
world's largest market and where GM holds 14% market share -- will contribute additional investment beyond the
disclosed outlay, but Mr. Ammann didn't disclose the size of that additional commitment.
GM's plan calls for the single new platform to replace a cluttered network of vehicles it currently markets. Mr.
Ammann declined to say how many architectures will be consolidated, but he noted vehicles like the Chevrolet

Aveo will move to this program. In India, for instance, GM is now using six different underlying architectures -- a
model that the company admits is extremely inefficient.
If the effort succeeds, the $5 billion global vehicle project could be responsible for 2 million in annual vehicle
sales, Mr. Ammann said, or roughly 20% of its current volume. To ensure those sales are profitable, GM has to
confront the problem that small cars equipped with the latest safety gear, fuel-saving components and
technology, deliver far lower margins than the large sport-utility vehicles and pickups that GM sells in North
America.
GM and others expect developing markets in Southeast Asia and South America to account for a hefty share of
industry growth in coming years.
But the exercise is necessary if GM is going to achieve a decades long quest to simplify its sprawling business.
Ford has been consolidating its architectures since former chief executive Alan Mulally took the helm in 2006. The
Dearborn, Mich., auto maker now works off nine global vehicle platforms, down from 27 in 2007.
GM, in contrast, has 25 different vehicle architectures that it uses to build cars around the world, vastly more than
its goal of 15 by 2020 or four by 2025. GM has in the past set out to make global products, but those efforts have
been disrupted by bankruptcy or regional fiefs that demand ultra-tailored products for particular markets.
That team needs to figure out how to make one common family of products for markets as diverse as India, China
and Brazil. Chinese regulators are pushing for high-end vehicle advances in the near term, for example, while
Indian rule-makers are seen as very far behind, not requiring bags in many cases.
Document J000000020150728eb7s0002b

Stepping on a Slippery Slope
OP-ED COLUMNIST
Editorial Desk; SECTA
Stepping on a Slippery Slope
By JOE NOCERA
853 words
28 July 2015
The New York Times
NYTF
23
English
My son Nick, a podcast aficionado, suggested recently that I'd enjoy a podcast called ''StartUp,'' which tells
stories of companies that are just starting out. In its first season, the show's host, Alex Blumberg, and his new
business partner, Matt Lieber, train their microphones on their own company, Gimlet Media, which Blumberg, who
is also the chief executive, hopes to turn into a podcast juggernaut. The second season, in which Blumberg is
joined by a co-host, Lisa Chow, chronicles the highs and lows of a new dating app.
Nick was right. Blumberg, a co-creator of NPR's ''Planet Money,'' and Chow, formerly of NPR and WNYC, prove
to be first-rate storytellers, hardly a surprise given their backgrounds. What was a surprise were the commercials
spliced into each episode. ''StartUp's'' second season was sponsored by Ford Motor Company, the email
marketer MailChimp, and Personal Capital, a financial firm. But instead of running a traditional ad, the co-hosts
crafted little stories, often conducting on-air interviews with a company official.
In one fairly typical ad, Blumberg interviews Ford's ''general manager of the factory tour,'' who tells him about the
living plants that cover much of a big factory roof. She explains how all the plants help warm the factory in the
winter and cool it during the summer. After some banter, Blumberg finishes the ad with a gentle spoof of a
traditional advertising tag line. ''Ford,'' he intones. ''Making pickup trucks under a living roof.''
My first reaction was one of amusement and even admiration. The ads were clever, and their cleverness caused
me to remember them, which is what advertisers want.
My second reaction was something akin to horror. The ads reminded me that the great CBS journalist Mike
Wallace used to do commercials in the late 1950s for several cigarette brands that sponsored his interview show.
Wallace would take satisfying drags from a cigarette while touting its taste, its recessed filter, even the crushproof
box. There is a reason journalists have stopped serving as commercial pitchmen: It raises all kinds of potential,
and real, conflicts of interest. Could a journalist beholden to a sponsor ever report honestly about that sponsor if
the need arose? Would he or she go easy on other companies that might become sponsors -- or shy away from
controversies that might drive away advertisers?
My third reaction was confusion. As the Internet has eviscerated journalism's traditional business model, news
organizations have had to find new ways to generate revenue. The long sacrosanct barrier between the business
side and the news side is falling. Many companies with the highest journalistic standards are adopting so-called
native advertising techniques, which are meant to mimic the feel of the publication itself. (The New York Times's
native ads, called Paid Posts, do not mimic the paper.)
Martin Baron, the executive editor of The Washington Post, gave a speech a few months ago in which he said
that journalists needed to ''abandon the idea that the newsroom can labor in isolation from the business
operations.'' He added that ''advertisers are looking for innovative, measurable and successful ways to connect
with potential customers.'' He's right, of course.
And isn't that exactly what Blumberg and Chow are trying to do?
When I spoke to Blumberg about the ads, he acknowledged, with no hesitation, that ''we're still trying to figure it
out.'' In a recent Gimlet podcast devoted to Gimlet's advertising, he and his staff focused on an ad for Microsoft
Outlook, in which Lieber, his partner, explicitly endorsed the product, saying that he had converted five colleagues
to it. But the hosts of that podcast, called ''Reply All,'' ultimately felt uneasy about having participated in the ad,
and Gimlet decided to stop doing ads that were too ''endorse-y'' (their word). Blumberg also told me that part of
the reason he and Chow are so involved in creating the ads is that Gimlet is still a small company, and everybody
has to do everything. He envisioned a day when there would be a greater divide between business and editorial,
though a host would likely still be reading the ads.
By the end of our conversation I found myself giving Blumberg and his company the benefit of the doubt. But
maybe that's because I know his work from ''Planet Money,'' and he's built up capital in the trust bank. And I like
how transparent he and Gimlet are about the inherent problems that come with their kind of advertising. (A recent
Times story about podcast advertising also featured Gimlet.)
But I can't help it: It does have the feel of a slippery slope. ''The logical next step,'' said Rick Edmonds, media
business analyst at the Poynter Institute, ''will be to set up an in-house studio that will produce ads for advertisers.
And maybe ask the journalists to write the copy. I think the line is sliding.''
Gimlet's honorable intentions notwithstanding, I think he's right.
Document NYTF000020150728eb7s00062

Fancy Pickup Line: Ford Truck Runs $60,000 --- Detroit pushes eucalyptus wood trim and other luxury touches as buyers pay up for premium...
Fancy Pickup Line: Ford Truck Runs $60,000 --- Detroit pushes eucalyptus wood trim and other luxury
touches as buyers pay up for premium models
By Christina Rogers
987 words
28 July 2015
J
B1
English
Looking to test the upper limits of what U.S. customers will pay for a pickup truck, Ford Motor Co. later this year
will launch a new version of its best-selling F-150 with one of the highest price tags ever attached to its workhorse
truck.
With features including "fiddleback eucalyptus" wood trim, massaging seats and panoramic roofs, the Dearborn,
Mich., auto maker's coming F-150 Limited model will start about $60,000, a larger starting price than a Porsche
Cayenne sport-utility vehicle.
Industry experts say buyers for this class of uber-trucks tend to be blue-collar entrepreneurs who have the money
and desire to flaunt their rides. Some have traded in German luxury cars and want the same leather, electronics
and luxury appointments in a pickup, dealers say.
Overall, the share of $50,000 and up pickup trucks sold in the U.S. has more than doubled in the last five years,
climbing from 9% in 2010 to 22% this year, according to car-pricing research firm Kelley Blue Book.
Ford has seen its mix of $50,000-plus pickup sales increase to 30% in 2015, up from 13% five years ago, while at
Fiat Chrysler Automobiles NV, the mix is about 21%, up from 10% in 2010, according to KBB.
At General Motors Co., the No. 2 pickup seller with the Chevrolet brand, its share of pickups selling for more than
$50,000 has jumped from 6% in 2010 to 26% this year, the research firm estimates, a trend bolstered by the
popularity of its more premium GMC lineup.
"We really have a truck that is so versatile it is attracting the high-end luxury car buyer," said Doug Scott,
marketing manager for Ford's F-series business.
The average sales price of a F-series hit a record $44,000 in June, $3,600 higher than a year ago, and nearly half
of the vehicle's buyers opt for a higher-end version of the truck.
Some of Ford's truck pricing power can be attributed to a recent F-150 redesign that included a move to a
lighter-weight aluminum body. When new models are introduced, average sales prices typically increase. The
higher prices are particularly welcome because of the higher cost of building the trucks with aluminum.
Overall, Detroit auto makers are benefiting as customers respond to low gas prices and a growing economy by
buying larger and more expensive vehicles. GM and Fiat Chrysler are getting more of their profit from pricey
pickups and sport-utility vehicles. In part, demand for their bread-and butter sedans has weakened amid lower
gasoline prices and emerging market sales are slumping.
Pickup truck sales grew at about twice the rate of the overall industry in the first half of this year, rising 10%
through June, according to Autodata Corp. They now account for about 14% of all U.S. light-vehicle sales.
Overall, U.S. auto sales are projected to top 17 million in 2015, one of the best years in the industry's history. The
growth is accompanied by record high transaction prices and relatively modest discounts, indicating car
companies are in a much healthier position than they were when sales reached similar levels early last decade.
A fully-equipped Ram heavy-duty can run north of $70,000. The rush to add more luxury features to trucks won't
stop, said Bob Hegbloom, who runs Fiat Chrysler's Ram division, because customers "keep telling us 'we want

more in our trucks.' " This summer, Ram rolled out a new version of its highest priced truck, the Laramie Limited,
loading it up with richer features and adding $1,000 to the price tag. That model starts at about $51,000.
Monte Clair, a general sales manager at Mac Haik Ford in Houston, said some buyers are trading in luxury cars
for well-appointed pickup trucks. "They're getting the amenities they want in a luxury vehicle but they can stay
with a truck," Mr. Clair said. He recently had one customer trade in a 2012 Mercedes-Benz C63 AMG for 2015
F-150 Platinum, which had been Ford's most expensive truck at $52,000.
John Krafcik, a longtime auto executive now running online car buying firm TrueCar Inc., said Ford's move isn't
just a clever marketing tactic. "These are successful blue-collar entrepreneurs," he said. "There is a lot of social
status and manufacturers have found a way to tap into it."
TrueCar estimates more F-series sell at over $50,000 than any other vehicle on the market, a crown it stole from
Daimler AG's Mercedes-Benz E-Class in 2011. Fiat Chrysler's Ram is now No. 2 on that list.
Despite the high prices, Ford's truck sales have slid this year because dealers haven't been able to get enough of
the new models with one of Ford's two truck plants down earlier for retooling.
On the less expensive XLT version of its F-150, the auto maker recently began advertising discounts of up to
$7,050 on the 2015 model. Regionally, some dealers have been offering another $3,000 off on the new truck,
prompting some analysts and dealers to question whether demand for the new truck might be softer than the
company anticipates.
Ford officials say its promotions are typical of the truck business and are tied to dealers getting healthier supplies
of the 2015 model year F-150.
Through the first half of the year, Ford's spending on truck incentives fell about $700 a vehicle, according to
Autodata Corp., while it was down $9 for GM and up $95 for Fiat Chrysler.
Document J000000020150728eb7s0002e

Ads for Podcasts Test the Line Between Story and Sponsor

Ads for Podcasts Test the Line Between Story and Sponsor
By DINO GRANDONI
1,451 words
27 July 2015
The New York Times
NYTF
1
English
For the last several months, Lisa Chow, a reporter for and co-host of ''StartUp,'' a podcast about starting a
business, has been interviewing engineers at Ford Motor.
But Ms. Chow was not interviewing Ford employees for a news story. She was making an advertisement for Ford
to run on her podcast, between news segments.
The goal of the interviews, Ms. Chow said, is to record ''a funny moment, a revealing moment or a humanizing
moment'' -- like the one she had with Katie Allanson, a Ford engineer who helped make a weighted suit that
simulates the experience of old age.
In the interview, Ms. Allanson said about those who wore the suit: ''I had a couple people tell me, 'I've been really
hard on my mom.' That one really resonated with me as well, because my parents are getting older too.''
Podcasts -- audio stories that can be saved and played on a computer or smartphone -- have reached new levels
of popularity, as illustrated by the success last year of ''Serial,'' a story of a 16-year-old murder case that was
downloaded over 80 million times. New podcasts are popping up seemingly every week, and larger media brands
-- including BuzzFeed and The New Republic -- are also trying out the format.
The uptick in popularity has made podcasting a rare cause for optimism in serious journalism. Podcasting often
offers an in-depth form of reporting that advertisers want to pay for and that is attracting talent largely from radio.
Behind much of podcasting's growth, though, is the embrace of ads in which hosts gush over products or even do
reporting for advertising spots. That has led to a clash between those coming from public radio and those with a
commercial radio background, with some expressing concern that journalists, who rely on trust, are using their
position of confidence to push products.
The line between advertising and news has never been quite as sharp on commercial radio as on public radio.
Commercial D.J.s and hosts have endorsed advertisers' products since the medium's early days. But because of
Federal Communications Commission rules forbidding advertising on public radio, those journalists, who have
flocked to podcasts, stayed out of the endorsement business -- until the advent of stand-alone podcasts, which
are not regulated by the F.C.C.
''I'm utterly sympathetic to podcast hosts and entrepreneurs trying to fund their work,'' said Jay Allison, producer
of ''The Moth Radio Hour,'' a widely distributed radio show in which people tell true stories about themselves. ''I
confess, though, to feeling uncomfortable hearing public radio people in the role of pitch person for product, since
I'm counting on them for something else.''
So-called native advertising -- ads that echo the look or feel of journalism they accompany, like the one Ms. Chow
helped create for Ford -- has quickly gained currency at online news outlets. But native ads have perhaps no
more traction than in audio journalism. On dozens of podcasts, hosts and reporters are responsible for producing
news stories as well as advertisements.
''We try to make ads as compelling for the listener as the rest of the show,'' said Matt Lieber, a co-founder of
Gimlet Media, the company that produces ''StartUp.'' ''We go to Ford and say, 'What's the most interesting thing
about Ford?' And that's what we talk about in the podcast.''

The reliance on native ads has worked so far. For-profit podcast creators, which rely almost entirely on
advertising for revenue, keep popping up, and Gimlet says it is breaking even. Networks like Gimlet; Panoply,
from the online magazine Slate; and Midroll Media all started within the last three years. Last week, E. W. Scripps
bought Midroll for a price the companies would not disclose. National Public Radio says its revenue from
podcasting has tripled since 2013. Public Radio Exchange, another nonprofit podcast distributor, projects that
sponsorship revenue -- the majority of which comes from podcasts -- grew ninefold from 2013 to 2015.
In ads, hosts often discuss their own experiences using a product. In ''Theory of Everything,'' a general-interest
program on Public Radio Exchange, Benjamen Walker has talked about the virtues of mattresses made by
Casper and of an online history class he took on the Great Courses -- products he came to like after advertisers
gave them to him.
Advertisers are naturally attracted to being associated with well-liked hosts. ''When the host is personally reading
the ad and telling a story about the product in her own words, it lands with the audience in a different and more
authentic way than a traditional ad spot,'' said Mark DiCristina, marketing director at MailChimp, an email
marketing company that is one of the most prolific podcast advertisers.
Mr. Walker and other podcasters say they draw inspiration from a tradition outside journalism: commercial radio
hosts who are paid to endorse products on the air.
''That form of advertising is as old as radio itself,'' said Andy Bowers, the chief content officer at Panoply. ''I used
to love old reruns of Jack Benny as a kid. His show was brought to you by Jell-O.''
The difference here, some in the radio world say, is not so much what the ads sound like, but who is delivering
them.
''For serious journalists to be reading ads is a little problematic, I think, because the old firewall between editorial
and journalism is completely broken down,'' said Curtis Fox, an independent radio producer.
There has been opposition internally, with some podcast hosts resisting native ads. P. J. Vogt and Alex Goldman,
the hosts of ''Reply All,'' a technology program from Gimlet, recently asked if they could stop explicitly endorsing
products such as Microsoft Outlook. They said they would rather just talk about the experience of using them.
Their bosses obliged, and now the hosts instead discuss their personal experiences with products.
Those critics -- and some podcast hosts -- worry about a slippery slope. The F.C.C. has no oversight over
podcasts. The Federal Trade Commission, which regulates advertising, has warned publishers to clearly label
native ads but has not issued any guidelines.
That freedom has given organizations such as National Public Radio the chance to experiment with other ways of
identifying their supporters as well as the responsibility of creating guidelines for themselves.
''You won't hear overt promotion, such as endorsements, testimonials, specific product prices or calls to
purchase,'' Isabel Lara, an N.P.R. spokeswoman, said of the network's podcasts. ''But you may hear how you can
engage the sponsor or its products or services a little more directly than what the F.C.C. would allow.''
At some podcast networks, including at Gimlet and Midroll, the hosts are given veto power over who advertises
on their shows.
''It isn't a daily occurrence, but there isn't a week that goes by where we haven't had to turn down an advertiser,''
said Lex Friedman, who runs ad sales at Midroll.
Many podcasters say they also try to be clear with listeners about what is an ad and what is journalism,
separating them with music and disclaimers.
But the distinction hasn't always been clear to others recruited to help make the ads.
Last November, a Gimlet employee emailed Linda Sharps, a parenting blogger from Eugene, Ore., to ask if a
producer could interview her 9-year-old son about a website he had built with the online publishing platform
Squarespace.
Ms. Sharps eagerly said yes. Only when the interview aired did she learn it was for a Squarespace ad.

Feeling duped, she began posting on Twitter about the show's advertising policies. Alex Blumberg, a co-founder
of Gimlet and the host of ''StartUp,'' called Ms. Sharps and apologized, saying that it had been an error. Gimlet
eventually aired an episode of ''StartUp'' about the story.
Ms. Sharps later said she forgave Gimlet.
''My son was a little bummed at the time,'' Ms. Sharps said recently in an email. ''I think his reaction was
something like, 'I'm in an ad? But I hate ads! I skip them on YouTube all the time.' ''
Jay Allison, producer of ''The Moth Radio Hour,'' said even though he sympathized with podcasts' funding needs,
he was uncomfortable with the idea of people who worked in public radio being asked to help sell products.
(PHOTOGRAPH BY SHIHO FUKADA FOR THE NEW YORK TIMES) (B1); Matt Lieber, a co-founder of the
podcast network Gimlet Media, which produces ''StartUp,'' at the company's office in Brooklyn. (PHOTOGRAPH
BY RUTH FREMSON/THE NEW YORK TIMES) (B5)
Document NYTF000020150727eb7r0008d

Business News: New Lincoln Is Made in U.S.A. --- Auto maker adding next Continental flagship to Michigan factory that now builds Mustang
Business News: New Lincoln Is Made in U.S.A. --- Auto maker adding next Continental flagship to
Michigan factory that now builds Mustang
By Christina Rogers
580 words
16 July 2015
J
B6
English
Ford Motor Co. disclosed plans to build a coming flagship luxury car in Michigan, marking a win for U.S. auto
workers as talks on a new labor contract with the United Auto Workers union kick into gear this week.
John Fleming, the auto maker's global manufacturing chief, said the coming Lincoln Continental -- a car that is
intended to mark a more luxurious direction for the brand -- will be made at its Flat Rock, Mich., assembly plant.
The Flat Rock plant currently employs 3,100 workers building the Mustang sports car and Fusion midsize sedan.
The new Continental flagship, a top-of-the-line sedan that revives one of the brand's most recognizable
nameplates, goes on sale next year (likely as part of the 2017 model year) and is aimed at growing Lincoln's
presence in China, where big, cushy sedans with roomy back seats are in high demand.
Mr. Fleming, who revealed the location during an event on Wednesday in Dearborn, Mich., offered no other
specifics, other than to say that the vehicle has been well received. Ford unveiled a prototype of the car's design
this spring in New York. "I think it will do very, very well," Mr. Fleming said.
The Continental replaces the Lincoln MKS, which has been manufactured in Chicago.
His remarks follow Ford's announcement last week that it would move production of its Focus compact car and
C-Max hybrid from Michigan, likely to a factory outside the U.S.
Labor talks between Ford and the union begin next week and securing U.S. jobs for UAW-represented workers
will be a priority for the union because much new auto investments lately has flowed to Mexico, where labor costs
are cheaper. UAW officials said they were told by the company that Focus production would be moved from the
U.S. in 2018.
Because small cars earn lower margins than trucks and sport-utility vehicles, auto makers have struggled to build
them profitably in the U.S. Earlier this year, Ford said it was laying off 700 workers at a Wayne, Mich., plant. Low
gas prices and rising demand for roomier trucks and crossovers have sapped demand for small, fuel-efficient
vehicles. Ford already builds U.S.-sold Fiesta subcompacts in Mexico.
Mr. Fleming said the decision to relocate the Focus and C-Max wasn't tied to contract talks but rather
preparations for the next-generation models. "It's normal business," he said. "It's just that normal business
sometimes intersects with other things that are happening."
He declined to say where the Focus and C-Max would be built or what Ford might assemble next at the Michigan
factory. He said those moves will be discussed during negotiations.
UAW President Dennis Williams on Monday declined to comment specifically on the Focus and C-Max relocation,
saying he will wait until next week when the union officially kicks off labor talks with the No. 2 U.S. car maker.
General Motors Co. Chief Executive Mary Barra said earlier this week she sees no need to follow Ford's move
because she is confident the company can profitably build its small cars in the U.S. GM builds its Chevy Sonic
subcompact and Cruze compact in the Midwest.
Document J000000020150716eb7g0000g
G.M. Is First of Big 3 to Open Contract Talks With the U.A.W.

G.M. Is First of Big 3 to Open Contract Talks With the U.A.W.
By BILL VLASIC
1,077 words
14 July 2015
The New York Times
NYTF
2
English
DETROIT -- When American carmakers negotiated their existing contract with the United Auto Workers union four
years ago, the domestic auto industry was just recovering from a deep recession.
But conditions have vastly improved since then. Sales in the United States are roaring toward 17 million vehicles
this year and the bankruptcies and bailouts of General Motors and Chrysler are fading in the rearview mirror.
Instead of closing plants and cutting workers, G.M., Ford and the newly merged Fiat Chrysler have been adding
jobs, made possible by big profits on surging sales of pickup trucks and sport utility vehicles.
On Monday, G.M. became the first of the three Detroit automakers to open talks on a new contract with the union
to replace the current pact that expires in September.
And if the upbeat tone of the opening ceremony is any indication, this summer's discussions are all about keeping
the good times rolling.
''We are going to truly listen to each other and understand the issues we need to work through,'' said Mary Barra,
G.M.'s chief executive.
The president of the U.A.W., Dennis Williams, said the union was seeking wage increases and more job security,
and closing the gap between veteran workers earning $28 an hour and entry-level jobs that pay up to $19.
Mr. Williams, however, was unusually generous in his praise for G.M.'s comeback, and played down the notion
that the union was gearing up for a battle or even a strike against any of the three automakers.
''I am not afraid of confrontation, but I don't want one and our members don't want one,'' Mr. Williams said to the
cheers of union workers packing the ceremony at the sprawling G.M.-U.A.W. human resources center in Detroit.
Fiat Chrysler will open its talks with the union on Tuesday, and Ford Motor will follow next week. Together, the
three Detroit automakers employ about 138,000 blue-collar workers across the country -- about one-third of which
have been hired since 2011.
The new jobs have come at a price and entry-level workers have become increasingly vocal about the disparity in
pay with longtime union members. And while G.M. and Ford have distributed big profit-sharing checks to workers
in recent years, the union has not had an across-the-board wage increase in more than a decade.
''The real issue for all U.A.W. members is about sharing in the gains the companies have made,'' said Harley
Shaiken, a University of California, Berkeley, professor who has worked with the union in the past. ''And there is
considerable pressure to close the divide between legacy workers and the two-tier people.''
Still, industry executives note that U.A.W. wages and benefits are still higher than those of nonunion workers
employed by foreign carmakers like Volkswagen and Nissan in the United States.
Analysts suggest that the auto companies will be hard-pressed to avoid wage increases, even though higher
structural costs will take a toll on profits when vehicle sales inevitably cool off.

''They'll likely get a contract that not only doesn't address longer-term structural issues, but also results in mild
wage inflation,'' said Brian Johnson, an analyst with Barclays Capital.
The automakers are expected to push for reductions in health care costs, possibly by adjusting deductibles,
co-pays on doctors' visits and prescription medication coverage.
Mr. Williams has previously said he would consider pooling hourly employees into a health care plan with salaried
workers if that would save the corporations money.
But any concessions by the union on health care will most likely be offset by the U.A.W.'s demands for bigger
paychecks in the factories.
''We have stagnant wages,'' he said on Monday, adding that entry-level workers deserve a large increase. ''Some
of them are not part of the middle class the way they should be.''
The two-tier system itself has come under added scrutiny because of how different companies have taken
advantage of it.
G.M. and Fiat Chrysler have had unlimited freedom to hire lower-paid workers because of agreements struck by
the companies and the union with the Obama administration as part of their government bailouts.
Ford, which did not go bankrupt or require a bailout, is required by its U.A.W. contract to begin bumping new
workers up to the higher pay grade when lower-tier employees make up 25 percent of its overall work force.
G.M.'s percentage of lower-paid workers is about 20 percent. By contrast, more than 40 percent of Fiat Chrysler's
American employees are entry-level workers.
''I'm happy to have a job, but I wouldn't expect to be treated like less of a human being,'' said Darlene Rau, an
entry-level employee at Fiat Chrysler's assembly plant in Detroit. ''I don't make enough to pay all of my bills.''
Besides shrinking the wage gap in the United States, the union is also intent on preventing the automakers from
moving production of some vehicles to lower-wage nations. Last week, Ford said it would shift production of small
cars to Mexico from a Michigan factory.
''There is a very difficult balancing act ahead for both sides,'' Mr. Shaiken said. ''They both want a strong industry
and more jobs, but what is the cost going to be to get there?''
The positive vibe on Monday was different than at the same event in years past, when the ceremonial
handshakes between labor and management were often tense affairs.
Still, the tone of Monday's ceremony, unlike during previous events, had a sense of unity between two camps that
have often been adversaries. This time, Ms. Barra and her executives arrived in starched blue shirts that were
nearly identical to those worn by the union negotiators. And both the G.M. and union leaders emphasized that the
company and the U.A.W. had survived because they stuck together during the last recession.
''Many people counted us out,'' Mr. Williams said. ''But we came back.''
Mary Barra, G.M. chief, left, and Dennis Williams, U.A.W. president, with other G.M. officers at the start of talks
on Monday. (PHOTOGRAPH BY BILL PUGLIANO/GETTY IMAGES)
Document NYTF000020150714eb7e0003f

UAW, Detroit Talks Focus on Tiered Pay
UAW, Detroit Talks Focus on Tiered Pay

By Christina Rogers
1,086 words
13 July 2015
J
A1
English
Union officials and Detroit auto executives will begin contract talks Monday with a largely ceremonial photo-op
known as the "handshake" and a pledge not to speak publicly about the negotiations.
But behind the friendly gestures is a bitter divide over an eight-year-old wage structure that the United Auto
Workers argues has enriched General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles at the expense
of employees.
Under the so-called two-tier wage system -- widely cited by the industry as a reason U.S. auto makers have
added tens of thousands of factory jobs since 2011 -- new hires are paid a top wage of $19 an hour and
longer-tenured workers get $28 an hour. UAW President Dennis Williams says he will work to close the pay gap.
Though it hasn't done so yet this time, the UAW typically picks one of the Big Three auto makers to negotiate with
first to set a template for all three contracts ahead of a Sept. 14 expiration. While the auto makers each have
unique needs, most executives say this pattern bargaining makes sense because health care and wages still
demand a degree of uniformity.
Health-care packages are likely to be revised and profit-sharing agreements could be altered, say people familiar
with preparations for the negotiations. After nearly a decade without a factory-floor raise for veteran auto workers,
the UAW plans to argue that it is time for the companies to pay more.
Fiat Chrysler, the smallest and least profitable of Detroit's auto makers, could have the most to lose.
The end of the current contract triggers a promise made by GM and Fiat Chrysler to cap their share of entry-level
-- or Tier 2 -- workers at 25% of their hourly production staff by September 2015. Ford has a different deal with
the UAW, and has begun shifting lower-paid workers to the higher wage tier.
GM, with only 19% of its factory head count classified as Tier 2, wouldn't be immediately affected by the cap, but
it could be a major burden for Fiat Chrysler as the auto maker tries to find a merger partner.
At Fiat Chrysler, which has hired 15,000 hourly workers since its 2009 bankruptcy, 45% of hourly production
workers are earning the lower wage. As a result, the company's all-in hourly compensation -- or wages plus the
costs of health care, retirement and other employment benefits -- is about $47 an hour, according to the Center
for Automotive Research in Ann Arbor, Mich., compared with $55 an hour at GM and $57 at Ford.
Giving 20% of its workers raises this autumn would be costly for Fiat Chrysler, which employs nearly 36,000 auto
factory workers. CAR estimates the move would boost the company's labor costs by an average of about $5 an
hour per worker, representing a nearly $400 million annual cost increase.
The Treasury Department demanded the 25% cap as part of the auto maker's government-sponsored
bankruptcy, but a Fiat Chrysler spokeswoman said labor negotiators didn't sign the necessary paperwork in the
2011 contract, and so the deal setting the cap is no longer valid.
The UAW disagrees. The union told Fiat Chrysler's UAW workers in 2011, before they voted on the current
contract, that the auto maker planned to hold up its end of the bargain.
People familiar with Fiat Chrysler's negotiating strategy say the auto maker is looking to retool the compensation
systems altogether. If successful, the effort could diffuse the disagreement over the 25% cap. But, with the
company apparently on the block, getting the UAW to cooperate is expected to be difficult. Moreover, the
company's top negotiator in the 2011 talks, abruptly retired about a month before the new round of talks was to
begin.
"It makes you wonder if they're going to break up the company," said Brian Keller a 46-year-old worker at Fiat
Chrysler's parts-distribution center in Center Line, Mich. "We're pretty much in the dark."
Chairman John Elkann said last week that Fiat Chrysler isn't giving up on forging a partnership with GM, despite
being rebuffed twice in the past four years.
Fiat Chrysler Chief Executive Sergio Marchionne has said he doesn't see that a merger would affect the
workforce and that he isn't advocating any brand closures. But in recent months, Mr. Marchionne has disclosed a
number of steps that have fueled the union's concern. In addition to being vocal about a desire to tie up with GM,
he has delayed critical product programs -- including the next generation Jeep Grand Cherokee, a cash cow for
the company.
Mr. Williams, the UAW chief, has played down concerns about any merger involving Fiat Chrysler, but he said he
has assembled a team to assess the potential impact of such a deal on union members. "We're not going to
support anything that would hurt our members," Mr. Williams said.
Richard Bryce, an hourly worker at Fiat Chrysler's sport-utility-vehicle factory in Detroit, said Mr. Marchionne's
actions aren't easy to swallow at a time when Fiat Chrysler is racking up monthly sales gains, thanks to its SUVs
and trucks.
The company's pursuit of GM as a merger partner is particularly worrisome, Mr. Bryce said. "They would keep
Jeep and the minivan and possibly Ram, but there would be too many overlapping products."
Chrysler has had three different owners since 2007, including Daimler AG and Cerberus Capital Management,
and the ownership changes have hurt its relationship with hourly employees. Even before the latest round of
merger talk, workers appeared reluctant to approve the company's agenda.
Just 54% of the auto maker's production workers voted to ratify the current contract in 2011, a narrow majority.
Kristin Dziczek, director of CAR's industry and labor group, said Fiat Chrysler would be the mostly likely target if
the union were to strike. "There are contentious issues there, and the narrow ratification last time makes me
wonder if they can get to a deal that both sides like without a strike," she said.
Mr. Bryce, however, said Fiat Chrysler's pursuit of a merger has already rattled entry-level workers. "Instead of
'strike talk', now the concern is whether they should agree to anything offered to save their jobs."

Document J000000020150713eb7d0002h

China Stocks' Rough Ride For Ford, GM
Heard on the Street

China Stocks' Rough Ride For Ford, GM
By Charley Grant
332 words
13 July 2015
J
C6
English
Beijing's problems don't necessarily register all that much in Detroit. But global economic wobbles still add to
pressure on America's auto makers to deliver at home.
New passenger car sales in China fell 3.4% in June from a year earlier, according to data out Friday from the
China Association of Automobile Manufacturers. Excluding holiday weeks, the performance was the worst since
September 2012. Because China is an important source of profits for North America's auto makers, investors
should hope the drop turns out to be an aberration.
Both Ford Motor and General Motors reiterated the same day that they continue to expect results in China to
strengthen as the year progresses due to new product launches and increased capacity. Pretax profit from Ford's
Chinese joint ventures amounted to $360 million in the first quarter, or about a quarter of the company's total.
GM is even more exposed: Equity income from its Chinese partnerships amounted to 38% of first-quarter pretax
income.
China's sales decline comes at a soggy moment for the South American and European markets as well. Ford
showed a loss in both segments in the first quarter. And a South American recovery, at least, doesn't seem to be
in the cards. Brazil's new-car registrations were down 17% from a year earlier in June.
To a certain extent, this is all business as usual for a global auto manufacturer. But a dodgy world economy
raises the stakes for the U.S. market to keep humming. At an annualized rate of 16.98 million cars, June's auto
sales were the strongest in nine years.
That performance has kept Ford and GM shares from falling too precipitously in 2015. Equally, though, they aren't
likely to race higher without the global economy kicking into gear.
Document J000000020150713eb7d0001i

Ford to Shift Work Abroad --- Car maker to end U.S. production of Focus sedans as demand for small cars fades
Ford to Shift Work Abroad --- Car maker to end U.S. production of Focus sedans as demand for small
cars fades
846 words
10 July 2015
J
B1
English
The auto industry's attempt to build small cars profitably in the U.S. has hit a pothole.
Ford Motor Co. said a Michigan factory that assembles its small Ford Focus and C-Max wagon will end
production of those vehicles in 2018 in a new setback to efforts to create a market for small cars made in the U.S.
Production of the Focus will be moved outside the U.S.
The move could put pressure on the United Auto Workers union to temper demands for wage increases in
upcoming contract negotiations. Ford, General Motors Co. and Fiat Chrysler Automobiles NV, although profitable,
are struggling to keep pace with lower-cost Asian auto makers that now have the added advantage of weaker
currencies compared with the U.S. dollar.
Small cars like the Focus deliver far lower profit margins than the pickup trucks and sport-utility vehicles the Motor
City is best known for, but they are essential to helping car makers meet stringent fuel economy mandates.
Auto makers won concessions from the UAW before and after the financial crisis to dramatically lower labor
costs. Those agreements helped usher in a return of U.S. small car production. GM now makes the subcompact
Chevrolet Sonic in Lake Orion, Mich., and Ford its Focus in Wayne, Mich.
Ford's Michigan Assembly Plant, which employs 4,400 workers, builds gasoline, electric and hybrid versions of
the two cars. It previously built light trucks and SUVs there and the decision to shift to the smaller vehicles was
helped by gasoline that once cost $4 a gallon. Ford earlier had split production of the Focus between factories in
Michigan and Mexico.
In a statement, the nation's second-largest auto maker said it is "actively pursuing future vehicle alternatives" for
the Wayne facility. Its Focus is popular around the world and built at plants in Germany, Argentina, China,
Vietnam and Thailand. It is unclear where the next generation U.S. models will be built.
Ford Fiesta subcompact cars sold in the U.S. are built in Mexico, which is becoming a production hub for global
auto makers. Tens of billions of dollars in new production capacity is underway or planned in Mexico. Auto
makers hope to leverage the country's low labor costs and a patchwork of global trade deals that make exports
easier.
Toyota Motor Corp. is shifting production of its Corolla compact to Mexico in coming years after three decades of
building it for North American customers in Canada. Honda Motor Co. last year began shipping its compact Fit to
the U.S. from Mexico and Mazda Motor Corp. is now building its Mazda 3 and Mazda 2 small cars there.
The loss of Focus production move deals a blow to the Obama administration's attempt to encourage U.S. auto
makers to make more fuel efficient vehicles domestically. Government-backed programs, including billions of
dollars in Energy Department financing lent to Ford and Treasury Department bailout funds given to GM, helped
pave the way for more U.S. small car production.
But low gasoline prices have punctured U.S. demand for small cars and led many companies to run small-car
factories well below full capacity. An underused assembly plant burns large amounts of cash.
Ford received a $5.9 billion U.S. loan commitment to retool 11 factories in five states to deliver fuel-efficient
technologies. The loan was credited with creating or saving 33,000 jobs and covered hundreds of millions of

dollars' worth of work performed to convert the Wayne, Mich., plant from SUVs such as the Lincoln Navigator to
constructing small cars, electric vehicles and hybrids.
Earlier this year, Ford outlined plans to lay off 700 workers at the Wayne plant. GM and Fiat Chrysler also have
slowed small-car production at several plants with more buyers choosing small crossovers and compact SUVs.
Bill Johnson, a UAW official at Ford's Michigan Assembly Plant, said in a memo the outsourcing of the small car
line will be a central topic in coming negotiations, noting that the union's lead negotiator "has our back on this
issue."
The UAW enters negotiations with the Detroit Three aiming to win higher pay packages amid what has been a
trend of annual profit-sharing checks that auto makers prefer over fixed increases. As Detroit car makers' profits
increase, union members have grown increasingly discontent with a wage scheme that pays entry-level workers
about $19 an hour, or $9 less than workers hired before the financial crisis.
While the roughly $57-an-hour wage and benefit costs Ford spends per UAW worker is less than the $75 an hour
it was spending a decade ago, it is still between $8 and $20 an hour higher than Honda or Volkswagen AG,
according to Ann Arbor-based researcher Center for Auto Research.
Document J000000020150710eb7a00038

Law Journal: Car-Repair Notices Feed Suits --- Purported class actions quick to make use of service bulletins sent to dealers by auto makers
Law Journal: Car-Repair Notices Feed Suits --- Purported class actions quick to make use of service
bulletins sent to dealers by auto makers
By Joe Palazzolo
988 words
6 July 2015
J
B5
English
Class action lawyers are seizing on service bulletins as they look for new cases to bring against auto makers,
raising the risks for manufacturers when they notify dealers of possible vehicle problems.
The so-called technical service bulletins have surfaced in purported class action lawsuits accusing BMW AG of
leaky roofs; Honda Motor Co. of defective torque converters; Land Rover of tire alignment problems; Mazda
Motor Corp. of faulty engine valves; and Ford Motor Co. of spark plug issues; as well as in dozens of other cases
in recent years.
Auto makers have used the bulletins for decades to alert dealers to potential problems with their cars and trucks.
Plaintiffs' lawyers increasingly deploy them in class actions, in support of claims auto makers knowingly sold
defective products.
"They basically tell us what the manufacturer knew and when they knew it," said Joseph R. Santoli, a New Jersey
lawyer who represents customers in a class action against BMW.
The service bulletins have appeared in lawsuits for decades but are now commonplace, as plaintiffs' lawyers have
peeled away from personal injury work to focus on suits against auto makers, which are less expensive to pursue,
lawyers said.
Auto makers say the litigation hasn't altered their practices.
A spokeswoman for Jaguar Land Rover said, "We agree the plaintiff's bar uses Technical Service Bulletins as a
basis for class-action suits, but that does not change our practice to continue to provide clear technical guidance
to our retailers." The spokeswoman added that the tire-wear litigation was resolved in a settlement.
BMW, Honda, Mazda and Ford didn't respond to requests for comment.
Class actions involving motor vehicles settle for more money, on average, than those involving other industries. A
study of settlements from 2010 to 2013 by National Economic Research Associates found that the average
automotive class action netted $247 million. The majority of cases that survive auto makers' initial motion to
dismiss end up settling, according to defense lawyers.
The increase in class action claims has followed more aggressive policing of the industry by prosecutors and
regulators, industry experts said, including the continuing criminal investigation of General Motors Co. for an
ignition-switch defect that has been linked to more than 100 deaths. The company is also facing private lawsuits.
Two bulletins GM issued in 2005 and 2006 are central to the litigation, according to one of the lead lawyers for the
plaintiffs.
"We don't let litigation risk get in the way of vehicle quality, customer satisfaction or safety," said a spokesman for
GM. "From our standpoint, we have to completely put that in the background. If it's going to happen, it's going to
happen."
Last year, Japan's Toyota Motor Corp. agreed to pay $1.2 billion to settle a U.S. criminal investigation into its
disclosure of safety problems related to unintentional acceleration in some of its vehicles.
Toyota declined to comment for this article.

"[Auto makers] are being monitored in a way they weren't before by class lawyers and the National Highway
Traffic Safety Administration," said Sean Kane, president of Safety Research & Strategies Inc., a safety research
firm that has been critical of GM and Toyota.
As a result, auto makers have shown more of a willingness to issue recalls in lieu of technical service bulletins,
Mr. Kane said. Some 64 million vehicles were recalled in the U.S. in 2014, a record number, according to
government data.
The service bulletins are meant to notify dealers of problems that have been reported by drivers, mechanics and
others and to outline any necessary fixes. They can apply to minor problems like a faulty air conditioner or cup
holder but also to problems that can turn out to be bigger.
It isn't clear yet whether any vehicle issues aren't being announced in bulletins because of the increased risk of
legal exposure.
The National Highway Traffic Safety Administration posts free summaries of service bulletins on safercar.gov.
Some auto makers will release full bulletins upon request, and repair shops have access to them, but otherwise
the bulletins are available only for a fee from independent companies. The NHTSA didn't respond to requests for
comment.
For years, safety advocates have pressed federal regulators and the industry to make the bulletins easily
accessible to the public. But the industry has declined to make them widely available, saying the bulletins are
copyrighted and are technical communications that aren't aimed at the consumers.
Plaintiffs' lawyers said class actions have leveled the playing field for car buyers, who often learn of the service
bulletins after they make their purchase, if ever.
"The bedrock of consumer protection is consumer choice," said John Keefe, a New Jersey lawyer who represents
vehicle owners. "I don't think these service bulletins do anything in that regard to protect consumers."
At least one federal judge has questioned plaintiffs' lawyers use of service bulletins, in a 2011 ruling dismissing a
class action against BMW over an alleged burnt crayon odor in one of its best-selling models.
"The court is hesitant to view technical service bulletins, or similar advisories, as potential admissions of
fraudulent concealment of a defect," wrote U.S. Senior District Judge Dickinson R. Debevoise in New Jersey.
"Accepting these advisories as a basis for consumer fraud claims may discourage manufacturers from responding
to their customers in the first place."
Neal Walters, a New Jersey lawyer who represents auto makers, said: "Vehicles are complex bundles of parts. I
don't think anyone reasonably believes they will be perfect. . .It's unfair to penalize a product company because it
learned how the product may not be perfect after sale and takes steps to improve it."
Document J000000020150706eb760000a

GM down in June, but Ford, Chrysler sales rise
MONEY
GM down in June, but Ford, Chrysler sales rise
Chris Woodyard; Nathan; Bomey; Becca Smouse
Chris Woodyard, Nathan, Bomey and Becca Smouse, USA TODAY
421 words
2 July 2015
USA Today
USAT
FINAL
B.1
English
General Motors reported that its sales fell 3% in June compared to the same month last year, a drop due to
expected lower sales to rental car fleets. But Ford Motor saw sales rise 2%, and Fiat Chrysler reported a boost of
8%.
Foreign automakers also saw sales increases. Toyota was up 4%, Honda climbed 4.2% and Nissan was up a
whopping 13% despite small- car sales that continued to slump industry-wide amid low gas prices.
In a call with news reporters, Ford said if June's overall industry performance was maintained for the full year, the
auto industry would be on track for more than 17 million new vehicle sales for the year, a level not seen in the
past decade. Sales are up about 4% from a year ago.
The big increase is being seen in small SUVs, which have caught up to small-car sales with about 19% of the
market. Ford analyst Erich Merkle predictst SUV sales will reach 40% by the end of the decade, up from 32%, as
Millennials start families.
The average amount paid for a new vehicle was $31,948, up 1% from a year ago, TrueCar.com reports.
GM said it had a terrific month on the strength of sales to individual customers, which are the most profitable.
They were up 6.8% overall for the month. It was the best June for sales to individual customers since 2011, it
says.
The Chevrolet and GMC divisions led the increase. GM says its full-size pickups, Chevrolet Silverado and GMC
Sierra, were up 18% and 21% respectively.
Ford sales edged up slightly as the automaker enjoyed sales boosts from some of its newer products, such as
Mustang, Edge, Explorer and the F-150 pickup.
Fiat Chrysler, meanwhile, surged to its 63rd consecutive month of sales increases in the U.S.
************
June Sales Leaders
Top sellers, with U.S. sales, percentage change from month in 2014 and U.S. market share last month:
GM 259,353 -3% 17.6%
Ford 224,681 1.5% 15.2%
Toyota 209,912 4.1% 14.2%
FiatChrysler 185,035 8.2% 12.5%
Honda 134,397 4.2% 9.1%
Nissan 124,228 13.3% 8.4%

Hyundai 67,502 0.1% 4.6%
Kia 54,137 6.9% 3.7%
VW 49,003 6.7% 3.3%
SOURCE AUTODATA
Document USAT000020150702eb720000v

Chrysler Hits Retail Milestone, Tops Ford
Chrysler Hits Retail Milestone, Tops Ford

By Mike Ramsey and John D. Stoll
776 words
2 July 2015
J
B1
English
Fiat Chrysler Automobiles NV scored a victory in June, selling about 300 more light vehicles at dealers than its
larger rival Ford Motor Co. But winning was costly.
The No. 3 U.S. auto maker sold 146,151 vehicles on a retail basis, likely representing the first time it outpaced
Ford in the closely watched portion of the monthly sales that are sold to individual consumers at dealerships.
Overall, Ford solidly outpaced its smaller rival -- selling 224,681 vehicles overall compared with Fiat Chrysler's
185,035. But that difference was due to Ford selling 35% of its vehicles to fleet buyers such as commercial users,
governments and rental car companies.
Fiat Chrysler's milestone comes amid a 63-month string of collective sales increases for its four brands, helped
along by strong demand for its Jeep brand. Its ability to outpace Ford in June, however, was propped up by a
much deeper reliance on sales incentives.
According to researcher Autodata Corp., Fiat Chrysler spent an average of $3,382 in incentives on each vehicle
sold, compared with Ford's $2,595.
Auto makers have worked to dissuade analysts from putting too much stock in a single month's vehicle sales
trends. During any given month, Toyota Motor Corp.'s Toyota brand outsells General Motors Co.'s brands on a
retail basis, for instance, but GM manages to retain the industry's top spot year after year and its profitability is on
the rise despite its inability to consistently outpace its Japanese rival at dealerships.
General Motors, which said it pulled back from sales to rental fleets during the month, was alone in reporting an
overall decline as its June volume fell 3% to 259,353 vehicles.
At Ford, executives have routinely said their focus is on making money and not winning volume races via rebates
and discounts.
In the first six months, Ford spent an average of $2,736 on discounts, rebates and lease incentives, or 16.4% less
than the same period a year ago, said Autodata. That is lower than the $3,427 spent by GM and the $3,277 by
Fiat Chrysler, both of which have increased their spending. One of the reasons incentives are low is because
Ford's inventories are light, particularly as its highest-volume product, the F-150 pickup truck, is making an
abnormally long transition from a steel-bodied version to aluminum.
The strategy and lack of F-150s is costing Ford market share. Through June, Ford's 15.1% share of U.S. sales
was four-tenths of a point lower than the first half of 2014. Over that same period, GM, Toyota, Fiat Chrysler and
Nissan Motor Co. have essentially held share flat, or recorded an increase.
Ford says its volumes should pick up in the second half of 2015, and its profit margins will be fatter. In an
interview, Ernst & Young automotive analyst Anil Valsan said the ability of auto makers like Ford to hold sales
incentives in check while reporting higher volumes will be closely watched.
The wider U.S. market should provide a favorable backdrop for Ford's second-half ambition. In June, the overall
industry sold 1.48 million light vehicles, 3.9% higher than the same period in 2015 but 10% lower than May.
June's seasonally adjusted annual selling pace was 17.16 million vehicles, the first time it has topped 17 million
for two months in a row since 2005. That trend suggests the industry could hit 17.2 million in 2015, according to
the National Auto Dealers Association.

The strong start to the summer selling season is welcomed by an auto industry combating slowdowns in other
parts of the world. While India and Western European volumes are solid, growth has slowed in China while other
emerging markets -- notably Brazil and Russia -- are in a tailspin.
American car buyers have long been among the most valued in the world by auto makers, as their spending and
demand for bigger vehicles make sales more profitable. The high concentration of sales of trucks and SUVs amid
lower gasoline prices, combined with better capacity utilization and tighter inventory controls, has made the U.S.
market even more lucrative during the current boom.
Among gainers, Nissan reported a 13% increase, Toyota's sales rose 4.1% and Honda Motor Co.'s rose 4.2%, all
over the same month last year.
Volkswagen AG's said its VW brand sales rose 5.6%; its Audi luxury-car division rose 8.3%.
Document J000000020150702eb7200032

Business News: Asian Car Makers Out-Earn Detroit --- Weak profits threaten U.S. companies' ability to go toe-to-toe in tech and emissions...
Business News: Asian Car Makers Out-Earn Detroit --- Weak profits threaten U.S. companies' ability to go
toe-to-toe in tech and emissions battles
By John D. Stoll
796 words
24 June 2015
J
B3
English
U.S. auto makers' ability to finance costly technology and emissions requirements from earnings will be tested by
a broader group of strong competitors that for the first time include more profitable Indian and Chinese car
makers.
Top auto makers in China and India earned 37.5% more profit excluding preferred dividends in fiscal 2014 than
their U.S. counterparts, joining European and Japanese auto companies in out-earning the Detroit Three, said
AlixPartners LLP, a New York-based consulting firm with a global automotive practice. Its 2015 automotive
outlook, released on Tuesday, shows emerging Asian auto makers last year generated margins that were about
double those of General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV's Chrysler unit.
The emergence of Asian powerhouses -- notably India's Tata Motors Ltd. and China's SAIC Motor Corp. and
Great Wall Motor Co. -- represents the latest dent in Detroit's once-global dominance. Over the past 15 years,
U.S. auto makers went from delivering more than 60% of world-wide car-company profit to delivering about 17%,
the consulting firm said.
The trend raises questions about the global competitiveness of GM, Ford and Fiat Chrysler on the eve of labor
negotiations with the United Auto Workers union and amid an aggressive push by Fiat Chrysler Chief Executive
Sergio Marchionne for industry consolidation. The U.S. market is on pace for 17 million light-vehicle sales in
2015, the best year in more than a decade, but Detroit needs better returns to develop self-driving cars and
electric powertrains and to combat new entrants like Google Inc. and Tesla Motors Inc.
While U.S. sales sizzled in 2014, the year also had challenges that crimped the bottom line. Detroit auto makers
shouldered heavy vehicle-recall expenses.
"It points to a new world order," AlixPartners managing director Mark Wakefield said in an interview. He said car
companies need to make more money than they did when Detroit was dominant because "they need to invest in
technologies that would not have existed in the budget 10 or 20 years ago."
Many auto companies are racing to develop safer cars capable of driving down the road on their own, though the
products may not be economically viable for many years. In a recent presentation, Mr. Marchionne said top auto
makers spent over 100 billion euros ($114 billion) for product development in 2014 and expects that pace to
continue.
Fiat Chrysler's Mr. Marchionne is pushing GM and other auto makers to consider partnerships or a merger as a
way to more efficiently invest for the future. GM isn't interested in a deep tie-up, saying it is big enough to meet
the challenge and that existing partnerships -- including a joint-venture with China's SAIC -- are sufficient.
Still, Japanese auto makers such as Toyota Motor Corp., and Europe's luxury-car companies, including BMW AG,
deliver the bulk of industry's profit. As a result, non-U. S. auto companies are widely considered to be better able
to meet coming fuel economy regulations and succeed in a costly technology race, even though the American
auto market is among the largest and most lucrative.
Detroit has enjoyed a string of profitable years following the financial crisis of 2008 that pushed GM and Chrysler
into government-led restructurings. The roughly $78 billion in income earned between 2010 and 2014 is about
equal to the $82 billion between 1995 and 1999 -- a period AlixPartners dubs the Motor City's "Golden Age."

But U.S. auto makers bled cash in the decade leading to the bankruptcies, allowing Europe and Japan to race
ahead. During that Golden Age, Asian and European auto makers booked $48 billion in profit, or about half of
Detroit's earnings; that number grew to $329 billion in the 2010 through 2014 period.
By comparison, auto makers pulled in a collective $96 billion in profit globally last year, AlixPartners' Mr.
Wakefield estimates. About $11 billion of that was earned by the top 24 companies in China and India; Detroit's
auto makers collectively earned about $8.3 billion in 2014, or slightly more than the $8 billion that Tata, SAIC and
Great Wall collectively earned during that same period.
Sean McAlinden, chief economist at Ann Arbor, Mich.-based industry researcher Center for Automotive Research,
said U.S. auto makers "don't make enough money. We make chump change in terms of what we have to invest,"
allowing more profitable rivals to spend more and speed up their new-model development times.
Document J000000020150624eb6o0002f

Business News: Buyers Ding Chrysler Quality --- Italian-U.S. auto maker struggles in J.D. Power survey, as Ford and GM catch up with Japanese
Business News: Buyers Ding Chrysler Quality --- Italian-U.S. auto maker struggles in J.D. Power survey,
as Ford and GM catch up with Japanese
By John D. Stoll
760 words
18 June 2015
J
B3
English
Fiat Chrysler Automobiles NV brands were ranked at the bottom of an influential quality survey released
Wednesday, the latest sign that the Italian-U.S. auto maker is struggling to keep up with mainstream rivals at
home and abroad.
J.D. Power & Associates released its 2015 Initial Quality Study, saying brands that historically were seen as
quality laggards have gained considerable ground. South Korea's affiliated auto makers Kia Motors Corp. and
Hyundai Motor Inc., once occupying the industry's bottom rung, are now the best mass-market brands. General
Motors Co. and Ford Motor Co., meanwhile, have caught up with Japanese auto makers that once solidly
outpaced Detroit.
Three Fiat Chrysler brands -- Chrysler, Jeep and Fiat -- were among the bottom five in its survey, which J.D.
Power blamed on a range of "defect malfunctions." The firm's initial quality expert, Renee Stephens, said
Chrysler's relatively new 200 sedan, for instance, has a nine-speed transmission that attracted several
complaints, and many Fiat Chrysler products suffer from routine problems that could be addressed before leaving
the assembly plant, including unsatisfactory paint jobs or the way parts fit together.
The study, performed earlier this year, asked 84,000 new vehicle buyers to report things gone wrong over the first
three months of ownership. There are more than 200 potential defects on J.D. Power's list including a range of
technology glitches, and the average score for a brand in 2015 was 112 defects per 100 vehicles, an
improvement over 2014. While not the only industry quality study, the IQS has long been considered the most
influential.
Fiat, Chrysler and Jeep scored above 140 problems per 100, sharply higher than the 86 reported for Kia and 95
for Hyundai. Most mainstream brands, including Ford, Chevrolet, Toyota and Honda, scored above average this
year, although Ms. Stephens said the Japanese are slipping after years of dominance. Porsche AG is the best
performer overall with 80 problems per 100.
Fiat Chrysler hasn't fared well on the study in recent years, and the company noted in a statement that it notched
some improvements compared with the prior year. The latest scores come at a time when Chief Executive Sergio
Marchionne is looking for a buyer for the company, which has been routinely criticized by industry analysts and
competitors for underinvesting in its product portfolio.
Fiat Chrysler sales in the U.S. have grown in the six years since Chrysler was in bankruptcy and Mr. Marchionne
first started combining the No. 3 U.S. auto maker with Fiat, which he had been running for several years. Despite
dozens of consecutive months of sales gains, Mr. Marchionne says his company has less-than-stellar margins,
and the wider industry needs to consolidate if it hopes to thrive.
Mr. Marchionne has moved to repair quality problems. Last fall, Fiat Chrysler's U.S. quality chief Doug Betts left
the company, less than a day after the auto maker's brands landed at the bottom of the heap in Consumer
Reports' influential reliability study.
Fiat Chrysler holds about 12.5% U.S. market share through May, compared with Hyundai and Kia's combined
9%. Once small players in the U.S. auto industry, Hyundai and Kia have charted a slow and steady growth path
over a 15-year period in which a bevy of new products have appeared.

Ms. Stephens noted an important highlight of the study being that GM, Ford and the Japanese are all about equal
in initial quality, a sign that the billions of dollars spent by the two biggest U.S. auto makers' on improving
products has paid off. Still, she said the takeaway is the emergence of Kia and Hyundai cars, crossovers and
minivans as stars of a survey that South Korean auto makers long struggled in.
This marks the second straight year Hyundai has been a top performer. Ms. Stephens cited newly launched
products and a focus on technology as reasons Hyundai and Kia are leading other brands.
"This is a clear shift in the quality landscape," Ms. Stephens said. "For so long, Japanese brands have been
viewed by many as the gold standard in vehicle quality. While the Japanese auto makers continue to make
improvements, we're seeing other brands, most notably Korean makes, really accelerating the rate of
improvement."
Document J000000020150618eb6i0002g

A High-Tech Car, Undone by Technology
HISTORYSOURCE
Money and Business/Financial Desk; SECTBU
A High-Tech Car, Undone by Technology
By MICHAEL BESCHLOSS
1,342 words
7 June 2015
The New York Times
NYTF
4
English
The Ford Motor Company in the late 1950s gambled about $250 million (roughly $2.1 billion today) to create what
The New York Times called the ''first new brand name'' to be introduced by one of the Big Three car companies
(General Motors, Ford and Chrysler) since 1938. The car was the Edsel, a name that remains a synonym for a
failed product.
With so many foreign competitors crushed by the devastation of World War II, the mid-1950s economy of the
United States was soaring. In 1956, when President Dwight D. Eisenhower signed the Interstate Highway Act,
authorizing the creation of ultimately more than 45,000 miles of high-speed roads, some American auto
manufacturers must have been tempted to light their cigars with $100 bills.
Ford's president, Henry Ford II, the grandson of its founder, and his team were frustrated that upwardly mobile
Americans were trading up from lower-priced Fords to competitors' middle-priced cars because Ford's
higher-priced Lincolns and Mercurys seemed out of reach. Some Ford planners recommended marketing the new
car to ''the younger executive or professional family on its way up.'' Conceived to fill this gap in Ford's product
line, the Edsel was named for the soft-spoken only son of Ford's founder. Edsel had died at 49 of stomach cancer
in 1943, and company executives claimed that the new car was ''the kind of thing Edsel would have done and the
way he would have done it.''
But some family members were horrified to imagine the sainted Edsel's name ''spinning around on hubcaps.''
When one of Ford's public relations officials tried to mollify Edsel's indignant widow, Eleanor, she would not let
him in the door.
''E-Day,'' the car's release date, was planned for Sept. 4, 1957, after months of publicity showing mysterious,
shrouded cars with lines like ''The Edsel Is Coming.''
The introduction plan evinced nothing if not hubris. Although it was essentially a start-up, Ford's new Edsel
division was responsible for producing 18 different models with 90 possible color combinations, all of them to be
sold by more than 1,100 freshly appointed dealers, whom Ford had compelled to renounce other brands for the
privilege of selling the Edsel.
Adorned with gadgetry like Teletouch Drive -- which let drivers shift gears (''smoothly, surely, electrically'') by
pushing buttons at the center of the steering wheel -- the Edsel was promoted as an ''entirely new kind of car,'' but
many critics found its innovations superficial.
The signature oval grille of the Edsel was intended to pay homage to European luxury cars, but it turned out to
remind people of toilet seats, horse collars or, so some said, female genitalia.
The most costly Edsels (with a maximum price over $4,000, or about $34,000 today) overlapped with Ford's own
upscale Mercury product line. People could not figure out whether the Edsel was a midmarket or luxury
automobile.
The Edsel team was betting on the notion that American consumers would keep spending more and more for
flashier cars. But one month to the day after E-Day, the national mood abruptly shifted. The Soviet Union

launched the first artificial satellite, Sputnik, which seemed to endanger every American hamlet. Many Americans
insisted that money wasted on frivolous gimmicks should go instead to education, especially in math and science.
Exactly nine days after Sputnik -- the timing seemed like a bad practical joke -- Ford staged a live Sunday-night
TV spectacular on CBS, ''The Edsel Show,'' starring Bing Crosby, Frank Sinatra and Louis Armstrong, with what
was later called a ''surprise appearance'' by Bob Hope. Unable, even during this scripted hour, to avoid the
dreaded specter on anxious Americans' minds, Sinatra predicted that Hope, known for his morale-building visits
to the front lines, would someday be ''the first man to entertain the troops in outer space.'' Crosby shot back, ''The
first man to sputter on Sputnik!''
The Edsel faltered almost instantly. The car had quality problems -- Consumer Reports noted its ''tendency to
shake like jelly'' -- and, adding insult to Sputnik's injury, the economy was sinking into recession. In November
1957, the only Edsel dealer in Manhattan, Charles Kreisler, closed down his three-showroom franchise after two
months, explaining that ''sales were poor, and competition was stiff.''
The tumble continued as consumers flocked to thriftier compact cars like 1958's great automotive success, the
Rambler American, pride of the American Motors chief (and father of the 2012 Republican presidential nominee),
George Romney.
Some Ford executives insisted that the Edsel be allowed to evolve and find its market. Instead, Edsel's final units
-- a scaled-down version so different from the original as to be almost unrecognizable -- rolled off the assembly
line in November 1959. Henry Ford II reproached himself for having let his father's name become fodder for
ridicule.
The speed with which Ford Motor abandoned the Edsel was partly because of the company's general manager
for cars and trucks, Robert S. McNamara. Noting that sales of other medium-priced cars were shrinking fast,
McNamara had pegged the Edsel as a loser even before its release.
Holding a black belt in office politics, McNamara was also eager to distance himself from the embarrassing failure
he was sure lay ahead. According to Thomas E. Bonsall's book ''Disaster in Dearborn,'' when McNamara
attended a celebratory Edsel dinner dance, just before E-Day, he told Fairfax M. Cone, head of the advertising
agency handling the Edsel account, ''Of course, you realize you're going to have to let all of these people go,''
adding that he was planning to ''phase out'' the Edsel. (As defense secretary in the Johnson administration,
McNamara showed no similar tendency to cut losses when it came to American military escalation in Vietnam.)
Today, Ford or any other wise manufacturer would not dream of releasing a mass product without monumental
market research. But members of the mid-1950s Edsel team, evidently convinced that America's boom of that
time provided some kind of bulwark against disaster, gave short shrift to some of their own (primitive, by modern
standards) research findings -- which, for instance, warned against using the name Edsel (some people thought it
sounded like ''pretzel'' or ''hard sell'').
More damning, some of the Edsel's architects presumed that car buyers could be almost infinitely manipulated.
David Wallace, Ford's planning director for special projects market research, recalled to The New Yorker's John
Brooks in 1960 that when the Edsel was originally designed, ''we said to ourselves, 'Let's face it -- there is no
great difference between a $2,000 Chevrolet and a $6,000 Cadillac.' ''
Mr. Wallace went on, ''There's some irrational factor in people that makes them want one kind of car rather than
another -- something that has nothing to do with the mechanism at all, but with the car's personality, as the
customer imagines it.''
Even in hindsight, Mr. Wallace seems not to have learned the overwhelming lesson of the Edsel fiasco: While
consumers of the time may have been momentarily intrigued by the car's much ballyhooed ''personality,'' they
were shrewd enough, especially as Cold War and economic anxieties descended, to quickly see through Ford's
claims that the Edsel was something ''entirely new.''
The Upshot provides news, analysis and graphics about politics, policy and everyday life. Follow us on Facebook
and Twitter. Sign up for our newsletter.
Michael Beschloss, a presidential historian, is the author of nine books and a contributor to NBC News and ''PBS
NewsHour.'' Follow him on Twitter at @BeschlossDC.
The three sons of Edsel Ford at an event introducing the Edsel Citation convertible. The car brand's many models
were an utter failure with consumers, and Henry Ford II, right, then the president of Ford Motor, reproached

himself for allowing his father's name to become fodder for widespread ridicule. (PHOTOGRAPH BY
BETTMANN/CORBIS)
Document NYTF000020150607eb670006k

As Talks Near, UAW Steels for Strike
As Talks Near, UAW Steels for Strike

827 words
3 June 2015
J
B1
English
With about 100 days remaining on a four-year labor pact, United Auto Workers union locals are drawing up strike
contingency plans to prepare members for potentially contentious negotiations with Detroit auto makers now
awash in profits.
UAW officials -- representing about 140,000 General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles
employees -- next month will begin negotiating a new deal ahead of a Sept. 14 contract deadline. After years of
being barred from striking against GM and Fiat Chrysler as a condition of government-sponsored bankruptcy
bailouts, the UAW this year is no longer subject to that restriction -- leading some local officials to set up food
pantries and others to encourage its members to sock away money in case of a work stoppage.
Wage negotiations will be taking place as U.S. auto volumes are expected to pass 17 million vehicles this year,
potentially the best sales performance since 2001. Detroit car companies, on the ropes when the no-strike clause
was enacted, have recovered and have reported more than $73 billion in collective operating profit since the last
labor deal was signed.
Auto makers have countered strike talk with a show of support for U.S. workers. GM in recent weeks has pledged
billions of dollars in U.S. manufacturing commitments that will kick in over the span of the next labor contract. The
auto maker also has said it would add hundreds of jobs, helping the UAW fortify its ranks after big membership
declines a decade ago.
UAW workers, meanwhile, have been awarded lucrative profit-sharing bonuses, averaging $7,500 annually at
Ford and GM over the past four years. Still, members are overwhelmingly opposed to a compensation scheme in
domestic assembly plants that pays veteran workers $28 an hour while those hired after the U.S. financial crisis
earn $19 an hour.
The threat of a strike looms even though domestic car makers haven't had a contract-related walkout since a brief
GM strike in 2007. The UAW hasn't staged a prolonged strike against a Detroit auto maker since the late 1990s.
The Detroit Three are scheduling extra production this summer to stockpile popular trucks and sport-utility
vehicles, a strike-readiness move Detroit has employed ahead of past deadlines. At the same time, union leaders
in local offices are advising rank-and-file members to gear up for labor actions.
In an online notice published late last month for GM workers at a SUV plant in Arlington, Texas, UAW Local 276
President Johnny Pruitte said, "We are asking everyone to start putting money aside in case a strike is called."
Mr. Pruitte noted workers were "blessed to receive" a $9,000 profit-sharing check "six months prior to negotiations
since that puts us in an excellent position to protect our financial interest and realize the gains of true negotiating
strategy."
Scott Houldieson, vice president of UAW Local 551 at Ford's Chicago plant, said members have held four
strike-preparedness meetings so far this year, reflecting a practice at other locals. Members also are handing out
buttons that say, "I'm saving to strike for a better contract."
GM workers in Kansas City will stage a mid-June drive to fill a food pantry with nonperishables that "will be stored
at our union hall in case of a possible breakdown in contract talks."

In a posting on its website, Local 31 officials said "no one wants a strike, it is the last resort in the collective
bargaining process." The UAW last year raised membership dues for the first time in decades to fortify a strike
fund that equaled about $600 million at the end of 2014.
Jeff Wright, president of Ford's Kansas City Local 249, said members have discussed the possibility of a strike at
its monthly union meetings. But he described such preparations as routine in a contract year.
A UAW spokesman declined to comment on strike preparations. Ford, Fiat Chrysler and GM officials declined to
comment.
Official strike authorization votes will be sought from UAW members in August. UAW President Dennis Williams
has played down the willingness to hold a strike, saying it would amount to a "failure on both parties' part."
Nevertheless, "we're going to be prepared," he said.
Earlier this year, many local officials told top negotiators that workers are fed up with the two-tier pay system and
are willing to do what it takes to amend it. Some local officials have said Mr. Williams' negotiating team needs to
better reflect the angst in the union's public bargaining statements.
Car makers are opposed to seeing labor costs rise, according to people familiar with their positions. Even after
years of union concessions and cost cuts, total hourly compensation costs at Ford and GM are above Japanese
and German auto makers.
Document J000000020150603eb630003i

Business News: Ford's F-150 Production Curbed by Frame Shortfall
Business News: Ford's F-150 Production Curbed by Frame Shortfall

By Christina Rogers
366 words
2 June 2015
J
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English
Production of Ford Motor Co.'s top-selling F-150 pickup truck is being slowed by a shortage of frames, a setback
that could dent the company's near-term financial performance.
The Dearborn, Mich., auto maker has had to slow production of its new aluminum-bodied pickup because it hasn't
been able to get enough frames from a supplier, according to a person familiar with the matter.
While the two plants building the pickup are running normal shifts, at least one of those factories has had to
cancel overtime shifts that are routinely used as supplies of new versions of significant products are being
ramped up.
The development was first reported by trade publication Automotive News.
The publication said the shortage of frames affects another pickup-truck plant building heavier-duty use models.
It is unclear how many units of production are affected by the shortage. F-150 output is among Ford's single
biggest profit generators, and getting the redesigned truck up to full production since its December launch has
been closely watched by investors and analysts.
Deliveries of the truck were off 40% in the first quarter compared with the same period in 2014, costing Ford
about $1 billion in operating profit, or enough black ink to have lifted margins over 10%. Ford's first-quarter North
America operating margin was 6.7%.
Ford executives are hoping for a better second quarter, saying stock of the new truck will improve on dealership
lots. Ford Chief Financial Officer Bob Shanks said in April, as more of the new trucks become available, full-year
North American margins will grow as high as 9.5%.
Ford declined to comment on the specific frames shortage, but issued a statement saying it hopes to be at full
production at its F-150 plant in Kansas City this quarter. F-150 output is already at full production at a truck plant
in Dearborn. "As with all our vehicle launches, we are working closely with our suppliers to meet customer
demand for the truck," the company said.
Document J000000020150602eb620000x

Car Makers, UAW Consider New Tier of Hires --- Unskilled jobs handled by parts suppliers could be brought in-house; pay of $10-$15 an hour
Car Makers, UAW Consider New Tier of Hires --- Unskilled jobs handled by parts suppliers could be
brought in-house; pay of $10-$15 an hour
1,015 words
11 May 2015
J
B1
English
United Auto Workers officials are considering a plan to encourage the Detroit Three auto makers to add
thousands of jobs traditionally belonging to auto-parts suppliers, hoping to fuel the union's recent string of modest
membership increases.
The catch? The wages wouldn't be great.
UAW President Dennis Williams, gearing up for summer negotiations with General Motors Co., Ford Motor Co.
and Fiat Chrysler Automobiles NV, is under pressure to boost pay for 140,000 union-represented factory workers.
With the auto industry awash in profit, he wants to close the compensation gap between entry-level assembly-line
employees making $19 an hour and veteran workers earning $28 an hour.
At the same time Mr. Williams is expected to discuss allowing the auto makers to hire new blue-collar employees
at an even lower rate -- between $10 an hour and $15 an hour, according to people familiar with the matter.
These new workers would handle low-skilled jobs such as organizing auto parts in bins, and wouldn't assemble
vehicles.
"It's a mutual area of interest," UAW Secretary-Treasurer Gary Casteel said in a recent interview.
Auto makers say privately they are intrigued by the idea. In the near-term, GM, with an hourly U.S. workforce of
about 50,000, could be the biggest beneficiary, according to people involved in the coming negotiations. Bringing
more work in-house by hiring thousands of new and inexpensive workers could allow it to better control the
manufacturing process, shaving tens of millions of dollars off logistics costs and boosting vehicle quality by
catching potential problems earlier.
As for the 80-year-old union, its willingness to consider a lower pay scale reflects the depth of its interest in
bringing jobs under its wing that were outsourced to suppliers in leaner days. The UAW's membership today is far
below its peak of 1.5 million workers in 1979.
Though its ranks rose for a sixth consecutive year in 2014, the union's numbers have grown at a snail's pace
since the end of the financial crisis, even as the broader U.S. auto-making workforce has expanded.
The so-called insourcing would mostly affect employees of smaller, independent U.S.-based parts suppliers. Their
duties include sequencing parts so they flow as needed to auto makers' production lines.
Pulling those jobs into an assembly plant would allow the UAW to deal more directly with the auto makers when
issues arise, according to people familiar with the matter.
The plan would expand the UAW's membership rolls, which last year surpassed 400,000 for the first time since
2008. That goal, however, is being complicated by increased auto assembly in Mexico and a flood of imported
parts.
The UAW's Mr. Williams opposes creating another permanent tier of lower-paid workers. The union, in fact, wants
to restructure the existing two-tier wage structure for assembly-line jobs, which critics say essentially creates a
group of second-class employees.

Instead, in exchange for agreeing to a lower wage rate, the union wants auto makers to commit to hiring the
newly unionized workers for more lucrative assembly jobs as older workers retire and new production investments
bear fruit.
Still, membership growth at the expense of wages promises to be hard sell to the union's rank and file. "You can't
say this job isn't as important as this job, because every one of those jobs contributes to making a car," said Scott
Houldieson, vice president of UAW Local 551, which represents workers at Ford's Chicago Assembly plant.
The union's brass doesn't agree. "The issue here is different," because the lower-paid workers would work
separately from the assembly line, doing different work, a top union official said.
UAW leaders are encouraged by the fact that auto makers are operating their plants more efficiently, giving the
companies more control of the car-making process. For decades, Detroit scrambled to cut direct overhead to
better compete with Asian auto rivals. With labor costs down, they want to move more work back to the factory
floor.
"It was always a given that it was just better and cheaper to outsource, but that is not the case anymore," said
Ron Harbour, a manufacturing consultant at Oliver Wyman. "This is an opportunity for the Big Three and the UAW
to agree on something where they could both gain."
Ford estimates it could hire several hundred workers through the move, though officials at the Dearborn, Mich.,
auto maker said it wouldn't be a silver bullet for lowering the company's overall labor costs.
GM began a pilot program in 2009, after its government-orchestrated bankruptcy, that could serve as the
framework for negotiations.
The program, part of its Subsystems Manufacturing LLC unit, employs 500 union-represented workers at a
handful of Michigan and Maryland factories. Typically given few benefits and paid as little as $11 an hour, these
workers perform jobs such as assembling battery packs for Chevrolet Volts.
More of these jobs could be available as GM expands "kitting" to all its assembly plants in the next few years.
Kitting involves putting various components in a bin or on a cart that rides next to the car body as it moves down
the line.
UAW Local 652 President Mike Green sees even bigger potential. Outside GM's Cadillac assembly plant, he
pointed to a number of buildings owned by five independent part suppliers. Each company has UAW workers who
do similar jobs for GM.
"Why not take that work, bring it back under the GM umbrella and save millions of dollars? Look, at each building;
there is an American flag, a UAW flag and a [supplier's] corporate flag. All GM has to do is get rid of the company
and put up the GM flag."
Document J000000020150511eb5b0002d

Ford GT's smokin'-hot tech will waft down into lineup
MONEY
Ford GT's smokin'-hot tech will waft down into lineup
Marco della Cava
Marco della Cava, USA TODAY
722 words
1 May 2015
USA Today
USAT
FIRST
B.3
English
You might not have half a million dollars to buy the next Ford GT, but don't worry -- some of the supercar's key
technology will trickle down to more modestly priced Fords.
That was the message delivered by Ford CEO Mark Fields here Thursday at the company's growing Research
and Innovation Center.
In shedding light on the technical specs of the new Ford GT supercar, Fields ran down a list -- carbon fiber body
parts, in-car computer networks, active aerodynamics -- that seemed more akin with planes than cars.
"We are talking about a decade of technological innovations that have led to this car," say Fields.
The genesis of this new car is Ford's Ferrari-beating icon of the 1960s, the GT40 (40 referring to the height in
inches of the low- slung car). But while its true predecessor is the 2005 Ford GT, the leap from that fast but raw
machine to the model unveiled in January at the Detroit Auto Show is quantum.
The 2005 GT boasted one main bit of high-tech: anti-lock brakes. The new GT packs a dozen more features
including an adjustable suspension, engine- mapping adjustability and steering wheel-face mounted controls.
Fields says the car will go on sale in 2016, be priced in Lamborghini Aventador territory ($400,000) and only 250
will be made each year. "It will be exclusive," he says with a smile.
But its tech will not be. That's because the mission with any halo product is a technological trickle-down to other
models in the company's portfolio. To that end, insights into making cars more fuel-efficient without compromising
safety are being passed on to other Ford models, present and future.
The all-aluminum Ford F150 pick-up boasts an all-aluminum body that is instrumental in reducing weight by 700
pounds, while the company's prototype Fusion takes Ford's popular-in-Europe 1-liter EcoBoost engine with
weight-saving carbon fiber-based parts replacing aluminum.
While much of this tech has been developed by Ford engineers in Dearborn and other global outposts, there will
be a growing reliance on this four-month-old office, which is now 40 employees into its goal of 120 by the end of
the year.
One recent byproduct of staffers here -- whose backgrounds range from aerospace to cybersecurity -- is Ford's
soon-to-be-released Watch app, an extension of the existing MyFord Mobile app for electric vehicles. But a quick
tour of the lab revealed a particularly impressive room packed with virtual-reality equipment.
By donning a pair of VR goggles, Ford engineers are able to feel like they're sitting inside a full-scale model of a
car while at the same time stripping out layers of the virtual vehicle in order to optimize for driver dynamics.
"This technology helps us look at a vehicle from the point of view of our customers, way before the car even
becomes a reality," says Ford VR specialist Elizabeth Baron. "Tech really lets us create cars that anticipate
people's needs and uses."

While rival supercars from Ferrari ($1.4-million LaFerrari, 950 hp), Porsche ($850,000 918 Spyder, 850 hp) and
McLaren ($1.1 million P1, 900 hp) all have opted to extrude power from eight- or 12- cylinder gas-electric hybrid
engines, Ford is generating its 650-hp from a 3.5-liter twin-turbocharged EcoBoost six-cylinder power plant.
The benefit of going with the comparatively modest and physically smaller engine set-up is that it allowed Ford
GT designers to create a body design that bowed to aerodynamics.
Stare at the GT head-on and you notice an outrageously pinched- in waist and two massive flying buttresses over
the rear wheels that help channel cooling air to the engine while applying downforce to the chassis.
"We literally were allowed to shrink-wrap a design around this smaller engine," says Ford design director Chris
Svensson.
"The real point of all this is that the technology innovations don't stop here (with the Ford GT). It's an iterative loop
that eventually filters down to our other cars."
photo Marco della Cava, USA TODAY

Document USAT000020150501eb510000s

Income Falls for Ford, but Forecast Is Rosier

Income Falls for Ford, but Forecast Is Rosier
By THE ASSOCIATED PRESS
544 words
29 April 2015
The New York Times
NYTF
4
English
DEARBORN, Mich. -- Ford's net income fell in the first quarter, hurt by lower sales of popular vehicles like the
F-150 pickup and a stronger American dollar.
The automaker says the picture should improve as the year progresses, and it is still forecasting a full-year pretax
profit of $8.5 billion to $9.5 billion, up from $6.3 billion in 2014.
''We feel we are very much on track to that breakthrough year we talked about,'' the company's chief financial
officer, Robert L. Shanks, said on Tuesday.
Ford's net income fell 6.6 percent to $924 million in the January-March period, and first-quarter earnings were 23
cents per share. compared with 25 cents in the same quarter a year ago. The results fell short of Wall Street's
expectations. Analysts surveyed by FactSet had forecast earnings of 26 cents per share.
One reason for the miss was that analysts had expected a tax rate of 29 percent for the quarter, but Ford's actual
rate was 34 percent. That difference was worth about 2 cents per share, the company said.
Revenue fell by 5 percent, or $2 billion, to $33.9 billion. That fell short of forecasts of $34.3 billion.
Ford shares dropped 5 cents, to $15.86.
Mr. Shanks said 70 percent of the drop in revenue -- or around $1.4 billion -- was related to the strong United
States currency. The dollar has climbed 8 percent so far this year against the euro and other major currencies.
Last week, General Motors said that currency exchange had cost it $1.8 billion in first-quarter revenue.
Ford's global sales fell 1 percent to 1.6 million. Sales rose in Asia and Europe but were down in North America,
South America and the Middle East and Africa.
Ford said the release of the all-aluminum version of its F-150 pickup, which went on sale late last year, ended up
hurting North American sales because dealers did not yet have a full inventory. Two plants, in Michigan and
Missouri, make the F-150, but only the Michigan plant was fully operational in the first quarter. The Missouri plant
started making the new truck on March 13.
Mr. Shanks said F-150 sales were down 40 percent, or about 60,000 vehicles, for the quarter, and dealers were
not expected to have normal levels of trucks on their lots until the summer. Sales of the Ford Edge S.U.V. were
also down significantly -- about 15,000 vehicles -- as the company changed over to an updated model.
Ford raised its guidance for full-year North American margins to 8.5 to 9.5 percent, up from 8 to 9 percent.
The company is struggling to sell small cars in the United States, China and elsewhere; last week, it cut a shift at
the Michigan plant that makes the Focus because of weak sales.
While sales rose in Europe, particularly for commercial vehicles like the Transit van, revenue fell because of the
stronger dollar. Ford lost $185 million in Europe in the first quarter, a $9 million improvement from a year ago.
Document NYTF000020150429eb4t0004u

Business News: Ford, Honda Post Lower Earnings As Sales Slacken --- No. 2 U.S. auto maker hit by weakness abroad, switch of pickup truck...
Business News: Ford, Honda Post Lower Earnings As Sales Slacken --- No. 2 U.S. auto maker hit by
weakness abroad, switch of pickup truck; Honda pinched by dollar
By Christina Rogers
733 words
29 April 2015
J
B8
English
The magnitude of Ford Motor Co.'s reliance on its F-150 pickup trucks was on full display in the first quarter as
the No. 2 U.S. auto maker reported lower profit in its core North American market largely due to a lengthy factory
overhaul to produce a new truck model.
The Dearborn, Mich., auto maker's first-quarter profit in its home market slipped 10.6% from the year before, and
its North American operating margin narrowed to 6.7% of revenue. Although operating margin exceeded analyst
expectations, it was well below Ford's target level and behind the 8.8% operating margin posted by crosstown
rival General Motors Co. during the same three months.
Honda Motor Co. separately reported on Tuesday that its fiscal fourth-quarter profit plunged 43% as slower sales,
higher recall costs and strong dollar hit its bottom line. Honda's operating profit margin was 5.2%, far from its
target of 8% of revenue.
Honda booked 97.8 billion yen ($822 million) in net profit for the three months ended March on an 8% revenue
increase, to 3.35 trillion yen. The Japanese auto maker has been strained by its rapid production expansion in
recent years.
In the U.S., trucks and sport-utility vehicles are experiencing a resurgence amid low gasoline prices, helping
domestic auto makers offset the negative impacts of weak emerging market sales, a price war in Europe and
currency headwinds. Ford, long the U.S. leader in pickup truck sales, has lost sales and market share as its gears
up production of a new F-150 with a lighter weight aluminum body to boost fuel economy.
Ford said its F-150 deliveries were off 40% over a year earlier due to factory conversions. That left its other
vehicles, some of which are due for updates or are out of step with current consumer tastes, to carry a region that
has long delivered the bulk of Ford's global automotive profits. Chief Financial Officer Bob Shanks said the truck
shortage cost Ford about $1 billion in operating profit in the quarter, or enough black ink to have lifted margins
over 10% of sales.
As more of the new trucks become available, full-year North American margins will grow as high as 9.5%, Mr.
Shanks said. Updated versions of the Edge, Explorer and Lincoln SUVs should also lift the company's North
American performance this year.
Ford posted a $924 million net profit for its first quarter, a 7% decrease from the $989 million it booked in the
same year-ago period. Pretax profit of $1.4 billion was slightly below Wall Street expectations, with the miss
attributed to a higher-than-expected tax rate.
Shares were up 1% at $16.06 in 4 p.m. trading on Tuesday as investors considered its ability to remain healthy
while F-150 production is impaired a sign of better days ahead.
"Given the magnitude of changeover activity at the company, we believe results may be seen as a relief by the
market," Adam Jonas, an analyst with Morgan Stanley, said in an investor note. "A better-than-expected outcome
in [North America] with higher margin guidance should be a source of comfort to investors, despite concerns
overseas."
Automotive revenue fell 6% to $33.9 billion for the first quarter. Revenue declined in each of the company's five
regions amid the impact of a strong U.S. dollar and dismal conditions in South America. Weaker pricing in Europe

and Asia, where rising discounts and uneven economic growth remain a drag on the bottom line, are also hitting
Ford.
The performance shows how far the auto maker needs to travel if it hopes to live up to Chief Executive Mark
Fields's promise of a "breakthrough" year. Mr. Fields, a veteran Ford executive who took the helm last summer,
has forecast a pretax profit of between $8.5 billion and $9.5 billion for the entire year.
Fueling his optimism are new products coming during the final nine months of the year, and additional Chinese
production capacity in the second half.
---
Yoko Kubota contributed to this article.
Document J000000020150429eb4t0003c

Business News: Ford Targets Affluent With New Sedan
Business News: Ford Targets Affluent With New Sedan

By Carlos Tejada
331 words
20 April 2015
J
B4
English
SHANGHAI -- Ford Motor Co. on Saturday unveiled a new Taurus sedan aimed at affluent Chinese customers, in
its latest effort to stand out in a slowing and increasingly competitive market.
The Dearborn, Mich., auto maker made the Taurus the centerpiece of four vehicles it unveiled two days ahead of
the Shanghai auto show. Ford said it styled the new vehicle with business customers in mind, complete with
back-seat features including reclining seats and more legroom -- key features for a country where some car
owners prefer to be driven rather than drive themselves.
The product is aimed at the high end of the nonluxury market, said Trevor Worthington, Ford's vice president for
product development for Asia Pacific. He said the car's features were benchmarked against premium models.
"We have the space, the prestige, the daqi, that business customers are looking for," said Mr. Worthington, using
a Chinese term that means expansive or deluxe.
The new vehicles come as Ford, like other auto makers, looks for growth in an increasingly tough market. Ford's
first-quarter sales in China grew 9% compared with a year earlier to 296,825 vehicles -- strong numbers in other
markets but well below Ford's previous double-digit growth rates in China. March sales rose 1% to 104,842
vehicles. Other auto makers have also reported slower sales growth as China's rate of economic expansion slows
and new-car models enter the market.
Ford said the Taurus would be made along with the Ford Edge sport-utility vehicle at its new factory in the
Chinese city of Hangzhou.
The Taurus, with a 2.7-liter engine, was one of four models Ford showed Saturday as part of its expansion plans
for China.
Ford's main passenger-car partner in China is Chongqing Changan Automobile Co., with whom it makes cars
there under a joint venture.
Document J000000020150420eb4k00019

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Business News: Ford Aims to Raise Output From Mexico --- Auto maker advances investment push abroad

Why Ford's Stock Could Gain Speed ..............................................................................................................................7

Business News: China Gives GM a Lift As Europe Dings Ford ......................................................................................8

Ford profit triggers record $9,300 UAW worker checks ................................................................................................13

Strong U.S. Sales Lifted Profit at Ford in 2015 .............................................................................................................15

Business News: Ford's Margin Outlook Undercuts Strong Year ...................................................................................17

Autos Posted a Record Year? Sell! ...............................................................................................................................24

Autos: Ford to Pay Extra Dividend ................................................................................................................................26

Business News: SUVs Fuel U.S. Production Boom ......................................................................................................33

Business News: Business Watch ..................................................................................................................................36

Debt Market Revs As 2016 Gears Up ...........................................................................................................................39

WSJ.D Technology: Ford Accelerates Its Mobility Push ...............................................................................................41

No Longer Wallflowers, Carmakers Aim to Grab Spotlight at Electronics Show ...........................................................42

Auto Sales Explode, but Detroit Brands No Longer Dominate......................................................................................44

Business News: Ford, Google Pursue Auto Venture ....................................................................................................47

Ford Recalls 313,000 Cars to Fix Lights .......................................................................................................................50

Ford steers self-driving cars toward urbanites ..............................................................................................................57

U.S. Auto Sales Roll Toward a Record .........................................................................................................................58

AOL president Lord plans to leave company ................................................................................................................63

New Math for Detroit .....................................................................................................................................................68

Ford Joins Auto Makers in Dropping Takata Air Bags ..................................................................................................71

Business News: UAW Wraps Up Contract Talks With Ford, GM .................................................................................72

U.A.W. Contract With General Motors Is Ratified After Delay.......................................................................................75

Results of U.A.W. Vote Show Ford Pact Losing ...........................................................................................................79

Labor Pact With Ford Hits Snag ....................................................................................................................................81

Business News: Ford Acts To Bolster Tech Ties ..........................................................................................................87

UAW, Ford Reach Agreement.......................................................................................................................................88

A Tentative Deal for Ford Autoworkers .........................................................................................................................90

Fiat Chrysler to Challenge U.S. Rivals With an S.U.V. .................................................................................................92

Profit Surges for Ford, Propelled by F-150 Sales..........................................................................................................93

Business News: Ford's Record Net In U.S. Offsets Troubles Abroad...........................................................................94

GM-UAW Forge New Path ............................................................................................................................................96

For a Good Car Deal, Think Ford ..................................................................................................................................98

Business News: Fiat-UAW Deal Is No Blueprint .........................................................................................................102

What Trade-Deal Critics Are Missing ..........................................................................................................................103

Business News: Rival Car Makers See an Opening in Europe ...................................................................................105

UAW Aims to Salvage a Fiat Pact ...............................................................................................................................107

Business News: UAW President Faces Restive Members .........................................................................................110

Fiat Chrysler Union Contract Faces Hurdles ...............................................................................................................113

UAW, Fiat Chrysler reach a tentative agreement ........................................................................................................115

Right to Work Buffs Up The Rust Belt .........................................................................................................................117

Autoworkers' Union Reaches Tentative Deal With Fiat Chrysler ................................................................................119

Business News: GM and UAW Agree To Extend Contract .........................................................................................121

Ford Will Use More Of Alcoa's Aluminum ...................................................................................................................122

Sleek 'Euro Vans' Reignite U.S. Sales ........................................................................................................................126

Business News: UAW Video Heats Up Detroit Talks ..................................................................................................128

Business News: Tesla Motors Seeks U.S. Help on China ..........................................................................................130

Ford's Profits Jump 44%, Soaring Past Forecasts ......................................................................................................141

GM, Ford Flourish Out of Limelight .............................................................................................................................143

Business News: GM, SAIC Set Plan to Share Design ................................................................................................145

Stepping on a Slippery Slope ......................................................................................................................................147

UAW, Detroit Talks Focus on Tiered Pay....................................................................................................................158

China Stocks' Rough Ride For Ford, GM ....................................................................................................................161

GM down in June, but Ford, Chrysler sales rise .........................................................................................................166

Chrysler Hits Retail Milestone, Tops Ford ...................................................................................................................168

A High-Tech Car, Undone by Technology...................................................................................................................174

As Talks Near, UAW Steels for Strike .........................................................................................................................177

Business News: Ford's F-150 Production Curbed by Frame Shortfall ........................................................................179

Income Falls for Ford, but Forecast Is Rosier .............................................................................................................184

Business News: Ford Targets Affluent With New Sedan ............................................................................................187

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