EoW May 2008

T ransat lant ic Cable

said on 10 th March that the auto maker did not plan to intervene in the dispute between the parts supplier and the United Automobile Workers, its labour union. Nearly 42,000 GM employees, about half the manufacturing work force, had been affected by the strike, the company said on its website 10 th March. By that point, 11 GM plants in Michigan, Indiana, Ohio, Missouri, and Ontario (Canada) had been idled; an assembly plant in Wisconsin was running on shortened shifts; and 17 factories had stopped making some transmissions, engines, sheet metal, and other parts. The strike had not yet affected sales because GM had a three- to five-month supply of pickup trucks and large sport utility vehicles for sale at the end of February. Analysts had expected GM, over the course of this year, to temporarily shut the factories that build those products. The strike offered a variation on the usual theme. American Axle, which was spun off from GM in 1994, said it needed the UAW to accept steep concessions on wages and benefits – to keep production in the United States. The 71,000 employees of Chrysler Corp will be on “mandatory vacation” for two weeks in July when all operations across the country are shut down, the company said 13 th March. As noted by Ken Bensinger of the Los Angeles Times , the forced break “is drastic, though for Chrysler perhaps not surprising considering its financial straits.” After losing $1.6 billion last year, the Auburn Hills, Michigan auto maker announced a number of cost-cutting measures. But these may not be enough. Mr Bensinger wrote, “Unless Chrysler figures out how to increase sales and build cars and trucks that people want, the 83-year-old company’s prospects will be dim.” Dennis Virag, president of the Automotive Consulting Group in Ann Arbor, Michigan, went further, telling the Times : “Chrysler is in a tailspin. “In two or three years, there may not be a stand-alone Chrysler company any more.” Chrysler is No 4 in US sales volume, behind General Motors, Toyota, and Ford. After nine years under the direction of Daimler, the German maker of luxury vehicles, Chrysler was acquired in August 2007 by Cerberus Capital Management in a highly leveraged, $7.5-billion deal. Hopes rose for a turnaround. But slumping credit markets, together with continuing problems of overproduction, excess inventory, and a dealer network far too large for Chrysler’s market share, blighted those hopes. Struggling Chrysler sets a two-week shutdown for July

Canada exports nickel, machinery, and mechanical appliances ❈ ❈ to EFTA, which together with the European Union forms the European Economic Area. As measured by gross domestic product per capita, Canada’s four EFTA trading partners are among the 10 richest countries in the world. The accord was signed on 28 th January during the World Economic Forum at Davos, Switzerland. The city of Chicago has launched a public-private partnership ❈ ❈ – the Chicago China Development Corporation, with an office in Shanghai – to stimulate Chinese investment in Chicago and aid Chicago-based companies in China. Run by former diplomat John C Thomson, it is only one of a number of civic initiatives prompted by Mayor Richard M Daley’s conviction that “[in] such a global economy, any city that stands still, loses.” The burst of civic activity includes a Chicago ambassador to China; Chinese and Arabic – and, soon, Russian – language classes in the public schools; and a public art project on climate change that saturated downtown with globe sculptures. As reported in the Washington Post (4 th February), the Chicago Chamber of Commerce and city leaders invoked the need for global-city status as a reason for a nearly $300 million increase in taxes and fees proposed by Mr Daley last October. Microsoft chairman Bill Gates on 12 ❈ ❈ th March visited Washington yet again to deliver a scolding about America’s outdated restrictions on immigration. He told the House Committee on Science and Technology that the failure of Congress to pass high-skilled immigration reform has forced many US firms, Microsoft among them, to locate staff “in countries that welcome skilled foreign workers to do work that could otherwise have been done in the United States.” Mr Gates is particularly interested in getting Congress to raise the cap of 65,000 H-1B visas – nonimmigrant visas that allow employers to hire foreigners with specific skills. The current limits, he said, have led to a “serious disruption” in the flow of science, technology, and engineering graduates to American companies. The Microsoft founder told the lawmakers that, if they were to increase the number of H-1B visas available to American companies, employment of US nationals would likely grow, as well. He said, “Microsoft has found that, for every H-1B hire we make, we add on average four additional employees to support [that job] in various capacities.”

Automotive

General Motors has inventory enough to withstand parts-maker strike

A strike at American Axle and Manufacturing that began on 26 th February had, two weeks later, slowed or stopped production at 29 General Motors plants; but a GM executive

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EuroWire – May 2008