CRANBROOK OF CRANBROOK
s s e L t s o C s r Ca Kimberley Motor Village
Your East Kootenay Automotive Dealers Thursday, January 10, 2013 • Reaching readers throughout the East Kootenay • FREE
DL#5248 DL#6340
TH E
AT
BIG DEAL EVENT All remaining New 2012 Vehicles PRICED THOUSANDS BELOW DEALER INVOICE!!!
ONLY 31 TO CHOOSE FROM!!! 2012 Dodge Journey 4 cyl, automatic, power windows and locks, air conditioning, cruise control, ENTER ‘N’ GO keyless.
Only $
104ly
Bi-Wk
†
Was $22,745 NOW ONLY
17,495*
$
Stk# T12388
2012 Ram 1500 Q/Cab Sport 5.7L, V8 Hemi, 6 speed automatic, leather interior, remote start, heated seats and steering wheel, sunroof, navigation, backup camera, trailer brake control plus much more!!!
Was $51,590 NOW ONLY $
35,495
*
Only $
207ly
Bi-Wk
∆
Stk# T12379
ONCE THESE VEHICLES HAVE GONE THEY WILL NOT BE REPLACED! * Plus tax. † Payments are plus tax, based on a 96 month term @4.49%. Total paid $21,748.48 plus tax, on approved credit. ∆ Payments are plus tax, based on a 96 month term @4.49%. Total paid $43,232.80 plus tax, on approved credit.
www.cranbrookdodge.com TOLL FREE 1-888-259-7039
1725 CRANBROOK ST N CRANBROOK BC V1C 3S9 DL#30708
Phone: (250) 426-6614 • Fax (250) 426-5200
PAGE 2
AUTOMOTION
THURSDAY, JANUARY 10, 2013
Redesigned Escape nets fun, spacious crossover
before. The new Escape employs active grille shutters in some models that reduce drag ``caused by air travelling through the radiator’’ when closed, says Ford. Fuel economy has been given a boost by the employment of two new turbocharged EcoBoost engines in addition to a 2.5-litre, 168- horsepower, inline four that is available only in the base model. The first EcoBoost is a 1.6-litre engine cranking out 173 hp on regular fuel and 178 hp on premium gas. The other EcoBoost is a 2.0- litre powerplant generating 231 hp on regular gas and 240 hp on premium. All engines are mated to a sixspeed automatic transmission. The 1.6 is the engine in the Escape SE tester.
The SE is one of four available Escape models and provides a perfect balance of luxury and economy. Standard features include heated cloth driver and front passenger seats, 17-inch alloy wheels, SYNC voice-activated communications and entertainment system, a six-speaker sound system with Sirius Satellite radio, fog lamps and a 110-volt power outlet. The tester includes an optional equipment package that includes dual electronic climate control, black side rails and roof rack crossbars, a tonneau cover and cargo management system. Price is a mere $31,949. Standard features on this white unit include a tilt/telescoping steering wheel with redundant audio controls and speed-sensi-
tive volume control, remote keyless entry, tire pressure monitoring system, compass, four-wheel antilock disc brakes, traction control and stability control. The gauge and instrument layout is modern with a 4.2-inch LCD display providing a variety of useful information including average fuel economy which can be accessed quickly from the steering wheel. It also has an 8.2-inch LCD touch screen that can be used to change radio stations or do other chores. SYNC is user-friendly and intuitive with a short learning curve. The tester also has MyKey which lets the owner program separate keys for other drivers that will enforce limits on functions including speed and vol-
ume – perfect for keeping young drivers on a short leash. For drivers who have concerns about a smallish 1.6-litre engine, trust me when I say this EcoBoost is all the motor the Escape needs. With 184 lb. ft. of torque at foot, the Escape romps from a start. At cruising speeds, the Escape is quiet and serene with the engine clearly not under any stress. In passing situations, the Escape pulls like it was powered by a V8. The seating position in the Escape – in fact, the driver’s seat, for that matter – is second to none with a good view and easy reach of all controls. The seats are made for all-day comfort and with five settings, the seat heaters will take a bite out of the coldest winter day. Frisky on the highway, exceptionally maneouvrable around town, the new Escape is a crossover that is going to attract legions of new fans. For those who want stuff like a hands-free power liftgate, accessible by puttng a foot under the rear bumper, more expensive Escapes are also available. Features such as blindspot monitoring and active park assist that backs up the Escape for the driver, certainly have value and will attract shoppers. A cross-traffic alert lets drivers know about nearby traffic when backing out of a parking spot, handy for the mall. Buyers who appreciate quality sound can also choose in some models a 10-speaker Sony audio system that cranks out 355 watts. Regardless of the model, the Escape offers buyers a fun, spacious and accommodating crossover for adventures near and far.
leader, the electric Ford Focus sedan, can go 122 kilometres on a charge. The Spark EV will also be cheaper than most of its electric rivals, GM says. Exact pricing hasn’t been revealed, but the car will start for less than $25,000 in the U.S. when a $7,500 federal tax credit is factored in. The electric Nissan Leaf starts at $27,700 with the tax credit. Like all electrics, though, the Spark is much pricier than its gasoline-powered equivalent. The gas-operated Spark starts at $12,245. Here are more details on everything from styling to power: UNDER THE HOOD: The Spark EV is powered by an elec-
tric motor and a 20 kWh lithium ion battery. It gets 130 horsepower and can go from zero to 96 kph in less than 8 seconds, which is several seconds faster than the gas-powered Spark. GM says the Spark EV is the first all-electric vehicle in North America to offer SAE Combo DC Fast Charge capability, which can charge the battery to 80 per cent of capacity in about 20 minutes. It can also be fully recharged in seven hours using a standard 240-volt outlet, or longer using a 120-volt outlet. INSIDE: Though it’s a mini-car, it has lots of big-car touches, like leather seats and GM’s OnStar safety system. The Spark EV will
have a smartphone-based infotainment system that gives drivers access to navigation and music apps like Pandora. Drivers with a compatible iPhone can link up their phones and perform tasks – like sending email or texts – by talking to Apple’s Siri. The car also has 10 air bags and electronic stability control, which helps keep it steady despite its small frame. OUTSIDE: The five-door hatchback is tiny, at 367.5 centimetres long. That’s about 12.5 centimetres longer than a Fiat 500. It comes in lime green and other unusual hues. CHEERS: GM customers will now have an all-electric option
that costs less than its chief rivals. The EV could also increase buyers’ interest in the gasoline version of the Spark, which went on sale in the summer. JEERS: Demand for electric cars has been anemic so far. GM and other automakers have fallen significantly short of EV sales targets, especially as gas prices have fallen. Electrics remain expensive, and drivers are concerned about getting stranded too far from a charging station. While the Spark is great for city drivers who need to fit into tight parking spaces, those drivers may not have garages or other spots to charge up their cars at night.
Al Beeber Lethbridge Herald
If change is good, a total redesign should be even better in the automotive world. In the case of Ford’s Escape compact crossover, a complete makeover has transformed a competent crossover into something magnificent. Gone is the boxy yesterday shape of the old Escape, in is a sleek and sexy aerodynamic design with a resemblance to the redesigned Focus. Riding on a wheelbase 2.8 inches longer than the old Escape with a total length increase of 3.4 inches, the 2013 Escape is also 1.3 inches wider. And while the interior doesn’t look or feel any bigger than the old model, the Escape’s dimensions are still generous for its class with 34.3 cubic feet of cargo space behind the rear split folding bench seat and 67.8 cubic feet with that bench folded. Legroom in the back row for three adult-sized passengers – who will sit comfortably there – is a generous 36.8 inches with plenty of space to slide feet under the front seats. While the exterior looks sporty, the interior pays homage to modern technology and environmental awareness. Many recycled materials are used inside, including the carpet which is made of fibres from recycled plastic bottles. Seat cushions and head restraints use polyurethane foam made from the oils of plant seeds such as soybeans. Environmental awareness is also showcased outside the Escape which Ford says is 10 per cent more aerodynamic than
2013 Ford Escape
GM says all electric version of Chevy Spark will have better range than rivals and cost less Dee-Ann Durbin Associated Press
DETROIT – General Motors is giving its Chevrolet Spark a jolt of electricity. An all-electric version of the mini-car will debut this week at the Los Angeles Auto Show. It goes on sale this summer in California, Oregon, Canada and South Korea, where it’s made. Other markets will follow. Unlike the Chevrolet Volt sedan, which can run in all-electric mode but also has a backup gas engine, the Spark EV is a pure electric car. GM won’t say how far the car will go on a charge, but says it will be a top performer among the small number of EVs available. The current
AUTOMOTION
THURSDAY, JANUARY 10, 2013 PAGE 3
Confidence is key when driving in winter Harsh winter conditions can be challenging for drivers in locations often affected by snow and icy weather. To make sure your vehicle is prepared for the winter months, here are some simple tips to help you drive safely to your destination and not end up on the side of the road: Traction is Key: Now is not the time to ignore your tires. Many vehicles need superior performing winter tires for optimum traction to navigate with confidence. For example, enthusiasts tell us that the Goodyear Ultra Grip family of tires
covers the winter driving needs of virtually every consumer. This line leverages innovative technology to provide the most reliable traction in challenging conditions. Winter driving experts such as the ILR Winter Driving School, located in Mount Albert, Ontario, choose the Ultra Grip Ice WRT tires for superior performance in these conditions. Feel the Pressure: As temperatures change, so does tire pressure. Tires should be inflated to the vehicle manufacturer recommendations printed on a placard
on the driver’s side door jamb or in the glove box, and should be checked at least monthly. Take the Lead Out of Your Foot: Remember, just because you have superior traction doesn’t mean you can speed in snowy and icy conditions. When approaching intersections, stop signs, turns or any area where you have to decelerate, take your foot off the gas, apply the brakes gently and give yourself a cushion in case the road is slippery. More information is available at local retailers or online at www.goodyear.ca. In winter, brake slowly, giving yourself a cushion in case the road is slippery.
Investment fund for auto sector gets five year extension Canadian Press
Ottawa has renewed the $250 million investment fund that puts cash aside for car companies and their suppliers, part of a five-year plan to help keep the auto manufacturing industry thriving in Canada. Prime Minister Stephen Harper, speaking at the Ford plant in Oakville, Ont. on Friday, said the Automotive Innovation Fund has helped Canada’s auto sector become more innovative, agile and competitive. The fund, established in the 2008 federal budget, requires companies to invest their own money to access government cash, which must be paid back in full. Only large-scale research and development projects valued at more than $75 million are considered. Ford, Canadian auto parts maker Magna International and Toyota Motor Manufacturing Canada are among the companies that have drawn money from the fund for projects. The five-year renewal to the innovation fund comes after a controversial government bailout of the auto industry – including billions to help General Motors
and Chrysler get through court-supervised restructurings. Ontario has seen traditional Detroit Three carmakers – GM, Ford and Chrysler – cut tens
of thousands of jobs in the last decade as their parent companies restructured in the United States. In 2011, Ford closed its St. Thomas, Ont.,
2013 Jetta
LEASE FROM
$168 $0
PER MONTH FOR 36 MONTHS*
while investing in plants in the U.S. The federal and Ontario governments contributed $10.6 billion to the U.S. government’s bailout of General Motors during the recession.
2013 Tiguan
1.9 % APR
LEASE FROM
$298
PER MONTH FOR 48 MONTHS*
1.9 % APR
DOWN PAYMENT
Small prices. Big news. Dealer Name Arrow Motors 2034 Cranbrook Cranbrook, BC V1C 3T1 Dealer Address – Street, (XXX) N., XXX-XXXX
250-489-4327 • Toll Free 1-877-689-4327 www.arrowvw.ca DL#5467
vw.ca
*Limited time lease offer available through Volkswagen Finance, on approved credit, based on a new and unregistered 2013 Jetta 2.0L / 2013 Tiguan 2.0T base model with 5-speed/6-speed manual transmission. $1,395/$1,610 freight and PDI included in monthly payment. 36/48-month term at 1.9% APR. $0/$2,858 down payment or equivalent trade-in, $220/$350 security deposit, and $100 air conditioning levy, if applicable, due at lease inception. Total lease obligation: $6,048/$17,162. 48,000/64,000 kilometre allowance; charge of $0.15 per km for excess kilometres. PPSA fee, license, insurance, registration, any dealer or other charges, options and applicable taxes are extra. Dealer may lease for less. Dealer order/trade may be necessary. 2013 Jetta Highline 2.5L as shown is $25,985. 2013 Tiguan Comfortline 2.0T with Sport Package as shown is $35,085. Some features may be optional on some models and available at additional cost. Offers end January 31, 2013 and are subject to change or cancellation without notice. Visit vw.ca or your Volkswagen dealer for details. Vehicles may not be exactly as shown. “Volkswagen”, the Volkswagen logo, “Das Auto & Design”, “Jetta” and “Tiguan” are registered trademarks of Volkswagen AG. © 2013 Volkswagen Canada.
AUTOMOTION
THURSDAY, JANUARY 10, 2013
AUTOMOTION
THURSDAY, JANUARY 10, 2013 PAGE 5
Cars COST LESS in Kimberley Two Award Winning, Independent Dealerships Working Together to SAVE YOU MONEY!
Thank You
N
0
%
Melody Motors would like to thank everyone for making 2012 a wonderful year. All the best in 2013.
2013 is starting out with unbelievable savings on used vehicles.
rice
NEW P
5 $30,99 .......... ,995 95 ........ 9 , . $33 1 3 $ ............ .... .. .. .. .. .. .. .. .. .. .. .... .... ............ ............ 16,495 ............ 5,005 .. 3 $ ........ $ ............ .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .... ...... ...... ............ ............ ............ ............ ............ 20,495 8,995 .. 1 ...... $ ............ ............ $ .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ...... ...... ...... ........ ............ ............ ............ ............ 4,995 ............ ............ 3A ...... ,995 .... 3 # 0101 .... $1 ............ ............ 2 .. .. tk $ .. A .. S .. 1 .. .. .. 1 .. t .. e .. 6 .. .... ...... ........ por Stk# 15 ............ ............ Vehicl ............ ............ ............ 4,995 Rav4 S Bauer 1 995 ...... , a $ e ............ ............ 5 t i .. .. .. .. .. 1 .. o d .. .. .. $ .. .. .. y d .. . .. .. .. .. o .... .... .... ...... on E ............ ............ 5 ............ ............ 2011 T ............ ............ ............ pediti 95 .......... x ............ 8 ............ , ............ $16,99 .. B E .. .. 5 B .. .. 2 .. 1 .. d 1 .. .. $ 5 .. r .. 1 .. .......... .. .... o # .. .. .. .. .. .. .. .. tk .. F .. .. .. S .. .. .. .. .. .. .. .. .... .... .... SE 513A.. 2010 ............ ............ ............ 12,995 ............ ............ D Stk# 00 Fusion 8,995 .. W 1 d A $ ........ $ ............ ............ r .. . .. .. .. .. .. .. o d .. .. .. .. .. .. .. .. e F .. .. .. .. ...... ...... ........ .......... mit 2010 ............ ............ ............ ............ ............ 12,9956/11/12 11:06 AM 26137_R0_EmployeePricingAdblock_7.3x3.indd dge Li 1 4152A .......................... 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.......... ............
Financing $ and Rebates up to 7 000 up to 72 months
,
on all new 2013 Chevrolet Silverado 1500s and GMC Sierra 1500s
That adds up to Big Savings!!! Earn up to
3,000
2013 Silverado
KIMBERLEY
Dan McConnell Sales Consultant
Daniel Powell
Sales Consultant
Alan King
Business Manager
BONUS AIR MILES REWARD MILES
HWY 95A
316 AVE
PAGE 4
2013 Sierra
r a e ew Y
.... 45 ...... ...... rew 2008 ............ tk# NN ............ ............ ............ ............ F150 C 6,995 .. inum S 1 t d ............ ............ $ .. r .. a .. .. .. l .. o .. .. .. .. .. P .. .. .. F ...... ...... ...... rew ............ ............ ............ 2012 12A...... ............ ............ 150 C F ............ ............ tk# 113 d .. .. S r .. .. .. .. o .. .. T .. .. .... .... XL ............ ............ 2009 F ............ ............ 50 S/C 1 F ............ ............ .. .. .. .. d .. .. r .. A .. 2 o ........ # 1591 813A .. 2008 F Stk# 02 triot Stk a D P W p A e e dred 2008 J e Hun v i F d or 2007 F
N y p Hap
For more used vehicle inventory, please visit us online at www.melodymotorsltd.com.
KIMBERLEY MOTOR VILLAGE “It’s a short drive to big savings!” HOURS OF OPERATION: 8-6 Monday - Friday 8:30 - 5 - Saturday
12
JUST MINUTES FROM CRANBROOK!
Kimberley 427-4895 Cranbrook 489-2525 Toll Free 1-800-388-1156 E-mail: chaletgm@shawlink.ca 1142 - 304th St., Kimberley, B.C. V1A 3E1 DL No. 6340 CHALET CHEV-OLDS LTD. CHECK US OUT AT www.chaletgm.com
12 MIN. TO CRANBROOK
Why Buy Anywhere Else? 250-427-4224 • Toll Free 888-703-2211 Sales: M-F 8-5:30 / SAT 9-5 Parts & Service: M-F 7:30-5
DL#5248
Jim Chale
Kelly Brooks
Browse Our ENTIRE Vehicle Inventory @ www.melodymotorsltd.com
Gardner Fraser
John Kadman
AUTOMOTION
THURSDAY, JANUARY 10, 2013
AUTOMOTION
THURSDAY, JANUARY 10, 2013 PAGE 5
Cars COST LESS in Kimberley Two Award Winning, Independent Dealerships Working Together to SAVE YOU MONEY!
Thank You
N
0
%
Melody Motors would like to thank everyone for making 2012 a wonderful year. All the best in 2013.
2013 is starting out with unbelievable savings on used vehicles.
rice
NEW P
5 $30,99 .......... ,995 95 ........ 9 , . $33 1 3 $ ............ .... .. .. .. .. .. .. .. .. .. .. .... .... ............ ............ 16,495 ............ 5,005 .. 3 $ ........ $ ............ .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .... ...... ...... ............ ............ ............ ............ ............ 20,495 8,995 .. 1 ...... $ ............ ............ $ .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ...... ...... ...... ........ ............ ............ ............ ............ 4,995 ............ ............ 3A ...... ,995 .... 3 # 0101 .... $1 ............ ............ 2 .. .. tk $ .. A .. S .. 1 .. .. .. 1 .. t .. e .. 6 .. .... ...... ........ por Stk# 15 ............ ............ Vehicl ............ ............ ............ 4,995 Rav4 S Bauer 1 995 ...... , a $ e ............ ............ 5 t i .. .. .. .. .. 1 .. o d .. .. .. $ .. .. .. y d .. . .. .. .. .. o .... .... .... ...... on E ............ ............ 5 ............ ............ 2011 T ............ ............ ............ pediti 95 .......... x ............ 8 ............ , ............ $16,99 .. B E .. .. 5 B .. .. 2 .. 1 .. d 1 .. .. $ 5 .. r .. 1 .. .......... .. .... o # .. .. .. .. .. .. .. .. tk .. F .. .. .. S .. .. .. .. .. .. .. .. .... .... .... SE 513A.. 2010 ............ ............ ............ 12,995 ............ ............ D Stk# 00 Fusion 8,995 .. W 1 d A $ ........ $ ............ ............ r .. . .. .. .. .. .. .. o d .. .. .. .. .. .. .. .. e F .. .. .. .. ...... ...... ........ .......... mit 2010 ............ ............ ............ ............ ............ 12,9956/11/12 11:06 AM 26137_R0_EmployeePricingAdblock_7.3x3.indd dge Li 1 4152A .......................... E 6,495 .. 1 d ...... $ ............ ............ $ .. .. .. r .. .. .. .. .. .. .. o .. .. .. .. A .. .. .. .. ...... ...... Stk# ........ ........ ............ ............ 2008 F ............ ............ 7,995 ............ ............ ustang 2A ........ ,995 .... M 0 ............ .... $2 ............ 1 .. d .. # 0421 .. .. $ .. .. r .. tk .. . .. .. S .. .. .. o .. .. .. .. .. .... .... ...... EX ............ OAC ............ ............ ............ COLOuRs: PRODuCTiOn: 2007 F 412A .... ............4C ccord ............ 9,995 95 .......... A 9Mario none DATE i , a Stk# 17LiVE: ............ ............ 2 ...... $ .. .. d .. 3 4 .. .. .. $ .. n x .. . .. .. Pariselli o 4 .. ............ .... .... .. .. .. .. DOCKET # FOC RET A26137 .. H t .. .. .. .. .. .. .. .. a .. .. .. .. 7 i .. .. .. .. .. .. .... r 5 .. .. .. .. .. .. .. a .. .. .. .. 9 .. .. .. .. .. 200 L .. .. .. 9 .. 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Success of tiny Chevrolet Sonic embodies Detroit’s improbable four-year revival Tom Krisher and Dee-Ann Durbin Associated Press
The downward spiral The collapse of the industry in 2008 that nearly put GM and Chrysler out of business and cost Ford billions of dollars came from a perfect storm that included the Great Recession, expensive gasoline and the financial meltdown that dried up funding for car loans.
2013 Chevrolet Sonic hatchback
But the automakers’ problems were years in the making. They had business models that couldn’t generate enough cash to cover expenses. They had too many factories making too many cars and trucks. They sold too many vehicles at discounts or even steep losses just to move them out of showrooms to make room for more. And their workers earned more in wages and benefits than Japanese competitors. Even when autoworkers were laid off, companies couldn’t get them off their books. Union-mandated “jobs banks’’ forced automakers to keep paying workers whose plants had been shut down. They got paid to sit in rooms and do crossword puzzles. Years of losses caused the three U.S. automakers to rack up $200 billion in debt, about half the liabilities that are now strangling Greece. GM alone lost $82 billion in the four years before bankruptcy. All three companies had to pay escalating health care costs for workers and a staggering half-million retirees – a number about equal to the population of Portland, Ore. At GM, medical costs for workers and retirees added $1,500 to the price of a car. An increasingly bad situation turned worse during the 2001 recession, which was followed by rising gas prices that lasted for most of the decade. Then came the 2008 financial meltdown. As GM and Chrysler careened toward bankruptcy, President Bush stepped in, loaning $17.4 billion to GM and Chrysler just before he left office. But auto sales remained in a free fall, plummeting to a 30-year low of 10.4 million by the end of 2009. At the Orion (pronounced OHR’ee-uhn) plant, the recession had slowed sales of the midsized Pontiac G6 and Chevrolet Malibu cars that were made there. In February 2009, the company eliminated a shift and laid off 400 workers. The outlook darkened even more when GM announced it would dump the Pontiac brand. Since the G6 made up half of Orion’s production, workers feared the plant was
doomed. It didn’t take long for issues inside the plant to ripple outside to the surrounding concrete industrial parks. Dozens of auto-parts companies laid off workers. At Casey’s Chicken, a barbecue joint in a nearby strip mall, a healthy side business catering GM birthday and retirement parties dried up. About that time, Orion Township’s chief executive, Matt Gibb, got a call from Ed Montgomery, President Obama’s auto-recovery czar, telling him the plant was on a secret list of GM factories to be closed. The factory was the township’s largest employer and taxpayer. About a third of its 35,000 residents work for GM, Chrysler or parts suppliers. As Gibb watched the local economy unravel, he was haunted by a documentary he had seen about Janesville, Wis., where another GM plant had closed, leaving behind empty industrial parks and ball fields overgrown with weeds. Anguish and another chance GM, meanwhile, was drowning, even with emergency loans from the government. On June 1, 2009, it became the largest American industrial company ever to file for Chapter 11 bankruptcy protection. It had just $2 billion in cash and $172.8 billion in liabilities. The bankruptcy wiped out GM’s debts, allowed it to shed 21,000 jobs, dump 2,600 dealers and close factories, including Orion. “It was like somebody just took the heart out of you,’’ recalled Mike Dunn, the chief United Auto Workers union bargainer at Orion. Worries spun through his head. He had to support six kids, including two in college. He was nearing retirement after 28 years at GM, and his pension was in jeopardy. But as he walked toward the plant floor, his immediate concern was what to say to workers. “You can’t let the people know you’re devastated and scared for your life,’’ he said. “I had to tell my people to stay positive and good things would happen.’’
Negotiating a future There was another obstacle. GM and the UAW had to figure out how to cut labour costs at the plant. For decades, the UAW and automakers fought openly as the companies tried to reduce costs and the union demanded pay increases. The UAW would strike, or threaten to, and the companies would cave in. By 2007, GM was paying $1,400 more per vehicle for labour than nonunion Toyota. See CAN IT LAST?, Page 7
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DETROIT – When the word reached the Orion Assembly Plant, it spread along the serpentine assembly line like news of a death or natural disaster: General Motors, the biggest automaker in the world, had filed for bankruptcy protection. On that grim day in 2009, Chevrolet and Pontiac sedans kept rolling down the line. And 1,700 worried workers stayed at their stations even as GM announced it would close the plant in a desperate bid to survive. “The unknown was the scariest part,’’ recalled Gerald Lang, who had worked at Orion for two years installing dashboards and doors. There was something else that the workers didn’t know: They were witnessing the opening act of one of the greatest recovery stories in American business. Nearly four years later, Chevrolets are still moving down the assembly line under the plant’s 82-acre roof. Lang and his co-workers now build the Sonic, the bestselling subcompact car in the nation. It’s a vehicle no one thought could be made profitably in the U.S., by a company that few people thought would last. But GM has not only survived, it has earned $16 billion in profits in the past three years. And the industry is on track to make this year its best year since 2007. Detroit’s improbable comeback is the work of many: President George W. Bush, who authorized the first bailout loans; President Barack Obama, who made more loans; workers who took lower wages and focused more on quality to compete with foreign rivals; and executives and designers who developed better cars amid the financial maelstrom happening around them. To be sure, there were victims: shareholders, auto-parts makers and other suppliers who went out of business, as well as taxpayers who will never get all their money back. But there is no denying that American carmakers have made a remarkable recovery. Nearly 790,000 people now have jobs building cars, trucks and parts, up 27 per cent from the dark days of 2009. The story of the Sonic shows how the industry, along with a community in a downtrodden state, got there.
As lawyers for GM and its creditors fought in court over scraps of the company, Orion’s second chance emerged. In exchange for its $50 billion bailout, the government got a 60 per cent stake in the company and GM agreed to build a tiny car known as the Sonic at one of the U.S. plants it was closing. Small-car production had long been relegated to other countries where wages weren’t as high. But GM couldn’t take government money and build a small car overseas. For folks in Orion like Dunn and Pat Sweeney, the local union president, the mission was clear: Get the Sonic. First, they met with Michigan Gov. Jennifer Granholm and other state officials, who promised GM a $779 million, 20-year tax credit. Gibb spent all spring organizing petition drives and thinking of ways to cut the plant’s costs. So when an army of GM lawyers and tax experts showed up at his office, he was ready with a generous package of tax incentives. The township also promised a new $4.5 million water-storage tower and pledged to buy water at off-peak hours so GM could get lower rates. The tax abatement cost the township and its schools about $780,000 per year, but Gibb said it was worth it to save the plant’s roughly 3,600 jobs. If the plant closed, he estimated that half of the area’s commercial properties would be vacant within two years. Plus, the township was competing with Janesville and Spring Hill, Tenn., which had a newer factory than Orion. At the end of June, GM made up its mind: The Orion factory would get the small car. But there was a catch. The plant had to shut down for more than a year to be revamped – a closure that would further threaten businesses in a fragile economy. Dunn watched as workers removed the plant’s equipment, knowing GM could pull out of the deal at any time. “You could see from one end to the other,’’ he said. “There was nothing in there but cement and pillars.’’
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AUTOMOTION
THURSDAY, JANUARY 10, 2013 PAGE 7
Detroit revival: Can the comeback last? Continued from Page 6
That same year, both sides agreed to a historic compromise on labour costs. They established a two-tier wage system that would pay new employees around $14 an hour, or half the hourly wage of older workers. Worker pay and pensions were frozen. Union trusts funded by the company and workers would take over retiree health care costs. Union President Bob King said each worker gave up at least $7,000 during the four-year contract. But GM still couldn’t make money building the Sonic at Orion without an immediate influx of lower-wage workers. So the UAW and GM went beyond the national agreement and came up with an unprecedented solution. More lower-wage workers could be hired at Orion than any other plant in the country. Forty per cent would be paid the lower wage, as opposed to a maximum of 25 per cent at other factories. “We all sort of wanted to do something that was very radical that would test those relationships and also test our ability to be really competitive here,’’ said Mark Reuss, GM’s North America president. Union leaders Sweeney and Dunn accepted the deal in October 2010, figuring it was better to have lower-paying jobs than none at all. They were vilified by some workers. “People like to complain, but I think deep down inside, they realize what we had to do and why we did it and how everybody’s truly benefiting,’’ Dunn said. “It’s better than having the doors closed and wondering where your next paycheque is coming from.’’ After the wage deal, GM started moving equipment into Orion. But there were still no
workers to support the restaurants and shops surrounding the plant. By early 2010, some of the small businesses around Casey’s Chicken had started to close. Engineers who had been laid off by nearby parts suppliers came in asking to work for owner Casey Barnard for $8 an hour. Meanwhile, plant workers were struggling. Unemployment benefits and a subsidy from GM that provided up to 70 per cent of their pay began to run out. Some took jobs at other GM plants in Ohio or Missouri, where they bunked with fellow workers in crowded apartments or trailers and commuted home on weekends. At the UAW hall, meetings had standing-room only crowds of 500 and lasted for hours. Workers stepped up to the microphone asking for help because their homes were being foreclosed and their cars repossessed. Workers started trickling back to the plant in November 2010. But it wasn’t enough for Casey’s Chicken. After 14 years, the restaurant closed in the fall of 2011. Barnard is now working at a vacuum store a few doors from his former restaurant. The comeback begins Early in 2010, Americans began returning to car dealerships as the economy improved. Sales were nowhere near pre-recession levels, but they were enough for GM to celebrate its first quarterly profit in three years. As a dreadful winter ended, GM delivered on its promise to invest at Orion. Crates of robot arms, carts and conveyor parts arrived, filling the vast open space that had frightened Dunn just a few months earlier. By midyear, Lang, the assembly line worker, got an offer from GM to move 160 miles away to Lordstown, Ohio, to
work on the Chevrolet Cruze. By then, it was clear Orion would reopen to build the Sonic, and there were hopes of getting another car, the compact Buick Verano. Lang and his wife had saved some money and decided to stay in Michigan, foregoing GM pay and benefits until he was called back to work at his home plant. By summer of 2011, he was back on the job testing the assembly line. Gradually, all the older workers who wanted to return to the plant were hired back at the same pay as when they left. New workers were added at the lower wage, adding up to 1,800 on two shifts. The first Sonic, a white hatchback, rolled out of the Orion factory in August 2011. Sonic boom Even when their company was in bankruptcy, GM engineers and designers across the world never stopped working on the Sonic, a new mini car that would take on the Honda Fit and Toyota Yaris. The Sonic was part of a wave of small cars from Detroit that came with aggressive styling, better handling and more amenities like leather seats and navigation systems. At GM’s expansive technical centre, 30 miles south of Orion, the Sonic emerged with hatchback and four-door versions. It came in eight colours, including bright orange, and it got up to 40 mpg on the highway. The car hit showrooms with a sticker price of just under $14,000 – $1,300 less than the Fit. A year later, the tiny Chevy was the bestselling subcompact in the country. Last year, GM sold more than 81,000 Sonics. Hyundai’s Accent finished second at 61,000. GM is confident the Sonic will soon turn a profit, largely because workers at Orion keep
finding ways to cut costs. Earlier this year, a team in the body shop suggested a small fix in the plant’s machinery. It ensures that the car’s frame fits together correctly every time and reduces the amount of steel going to the scrap heap, saving money. “We recognize that we’ve got to work together as partners, because we’re going to succeed or fail together,’’ Orion Plant Manager Steve Brock said. Even the wage differences don’t seem to be a big source of friction. Tammy Ballard, who makes the lower wage that is now $16.66 per hour, said workers don’t ask each other about pay. She left an auto-parts company for greater job security at GM. Two months after the plant reopened, Obama and South Korean President Lee Myung-bak visited to celebrate a new free trade agreement. It was a little over 27 years since President Ronald Reagan had spoken at the plant’s dedication. Obama trumpeted his familiar campaign theme about saving thousands of jobs. By the time Obama visited, GM had reported its sixth straight quarterly profit and repaid some of its government loans in cash and with a public stock offering. The government still owns 19 per cent of the company and is still roughly $22 billion in the hole on its $49.5 billion bailout of GM. To the smaller companies near the Orion plant, GM’s survival was huge relief. A p p l i e d Manufacturing Technologies, which programs Orion’s robots, made it through the downturn by diversifying into the food processing, glass and solar energy businesses. GM is still its largest customer. “The turnaround is shocking, how fast and strong it is,’’ said A p p l i e d
Manufacturing founder Mike Jacobs.
decisions without taking everything to the top. The government also is getting out of GM’s business, which should help sales. Late last year, GM bought back 200 million of the government’s shares. That leaves taxpayers holding 300 million shares, which the Treasury plans to sell by early 2014. Detroit could still stumble. GM’s inventory is high and its U.S. sales aren’t keeping pace with growth in the overall market. The industry is so competitive that cars can quickly get stale if companies don’t invest in them. Growth could be hindered by the lack of available engineering talent or a lack of parts suppliers, many of whom closed during the recession. But for now, new Chevrolets keep coming off the assembly line at Orion. As she turned back to her station, Ballard took stock of the progress: “I think we’re rolling along like is expected of us.’’
plants,’’ said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, Mich. Detroit is finally doing many things right. GM, Ford and Chrysler are all building vehicles like the Sonic that can be sold globally, saving billions that used to be spent developing cars for individual markets. Because they are no longer overproducing cars and trucks, they can command higher prices. And they’re no longer blindly chasing market share as they did in the early 2000s, when GM executives wore buttons that said “29’’ because their goal was to grab 29 per cent of U.S. sales. It didn’t work. GM currently is making money with about 18 per cent of the market. U.S. auto sales rose 13 per cent last year to 14.5 million, the best in five years. Reuss, GM’s North American president, said the company is less bureaucratic. Employees can make
Can it last? Detroit has seen many booms and busts in a century of auto making. There were 41 car companies in the city in 1913. Almost all failed or were consolidated into the Big Three. Chrysler nearly went bankrupt in 1980 before being rescued by the government. Sales ebb and flow with the economy, gas prices and even the weather. But industry experts say things have changed. The reforms Detroit undertook make it less prone to financial disaster. Car companies have closed plants, laid off workers and sold or closed entire brands. GM now has 12 U.S. assembly plants and 101,000 employees in North America. A decade ago, it had 22 plants and 202,000 employees. “You literally can’t do as many bad things because of the smaller workforce and the smaller portfolio of
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