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February 22nd, 2010
12:02 PM ET

CNN Fact Check: Canadian health care drawing automakers north?

Granholm: overstated the break that manufacturers get in countries with universal health care.

Granholm: overstated the break that manufacturers get in countries with universal health care.

Matt Smith
CNN

Arguing for the need for a sweeping overhaul of the U.S. health-care system, Michigan Gov. Jennifer Granholm said Sunday the high cost of health insurance is driving jobs in her state's automotive plants north
across the border to Canada.

Speaking on "Fox News Sunday," Granholm, a Democrat, said every car built in the United States "has $1,600 worth of health care cost embedded in it, whereas other countries - and they're our competitors - don't have that cost.'

"Those auto companies weren't going there because of regulation, or taxes or anything, they were going there because there's a partnership on the part of the Canadian government with health care," Granholm said. "Now, we don't want to create that exact same system, but I can tell you that other countries are providing health care for their businesses so they can compete globally. "

Fact Check: Does Canada's health system save auto manufacturers $1,600 a car?

- Granholm cited a widely circulated figure often attributed to General Motors. A CNN report in 2008 found that the costs of the health plans negotiated with GM's unions added about $1,600 to the cost of a vehicle.

- Canadian industrial recruiters do cite the country's government-paid health insurance as a plus in attracting industry. A brochure put out by Ontario's provincial Ministry of Economic Development and Trade touts it as a "clear advantage" in core operating costs for companies located there.

- But is the score $1,600 to nothing? There's a big gap, but health care in other countries not cost-free. Ontario officials say the cost of employee health benefits for companies there is about half what their U.S.-based counterparts would pay. And the comparable figure for Japanese automaker Toyota's plants back home, where the government requires companies to provide health coverage to employees, is about is about $200.

Bottom Line:

The figure Granholm cited for U.S. automakers matches up with other published estimates. But her comments appear to overstate the break that manufacturers get in countries with universal health care.

Got something that needs checking? Email us at factcheck@cnn.com


Filed under: auto bailout • Health Care
January 29th, 2010
08:58 PM ET

Cash for Clunkers: The gift that keeps on taking

Catherine Lutz and Anne Lutz Fernandez
Special to AC360°

Toyota’s decision to halt production and recall popular models with a sticky accelerator problem has received tremendous media coverage, although this has almost exclusively been focused on the potential impact of this crisis on the company’s profitability rather than on the safety of its customers.

Other industry stories, like those about Ford’s return to profitability and about the sparkling new, and in some cases greener, vehicles on display at this month’s Detroit and Washington Auto Shows have been taken as signposts of the sector’s coming recovery.

While a recent NBC/Wall Street Journal poll showed that 65 percent of the public is unhappy about the government bailout of the car companies (even higher than the 60 percent who dislike the bank bailouts), there remains a continuing conflation, among policy makers and the public at large, of what’s good for the auto industry and what’s good for American consumers.

FULL POST

January 6th, 2010
01:54 PM ET

Financial Dispatch: New year… same old issues

Andrew Torgan
CNN Financial News Producer

The jobs picture is at least a little brighter today as two reports say the pace of job losses eased in December.

Payroll-processor ADP said private-sector employers cut 84,000 jobs last month, the fewest since March 2008. It was the ninth straight month that job losses narrowed from the previous month.

In a separate report, outplacement firm Challenger, Gray & Christmas said that 45,094 job cuts were announced in December, 10% less than November's 50,349 cuts. It was the lowest total since December 2007, when 44,416 cuts were announced.

All this comes ahead of Friday’s official employment report for December from the Labor Dept. Estimates there are all over the map, and experts are forecasting everything from a loss of 25,000 jobs, to our first job gains since December of 2007.

From job losses to billion-dollar government bailouts…

GMAC, the troubled finance company that just last week received its third government bailout, said Tuesday it expects to post a record fourth-quarter loss of $5 billion.

FULL POST


Filed under: Andrew Torgan • auto bailout • Economy • Finance • Wall St.
December 30th, 2009
06:29 PM ET

Financial Dispatch: Another bailout before the ball drops

GMAC Financial Services will get a new $3.8 billion bailout from the Treasury.

GMAC Financial Services will get a new $3.8 billion bailout from the Treasury.

Andrew Torgan
CNN Financial News Producer

Just when it seemed like all the government bailouts were over and done with for 2009, we’ve got word that GMAC Financial Services is getting a third round of bailout money from the Treasury Dept.

The troubled auto and mortgage lender will collect $3.8 billion of additional aid on top of the nearly $13.5 billion already received since December 2008, the Treasury said in a statement late today.

The fresh lifeline is intended to return Detroit-based GMAC to profitability in the first quarter of 2010 and will likely allow GMAC to avoid placing its home lending unit, Residential Capital, into bankruptcy.

This new infusion will also increase the Treasury's stake in GMAC from 35% to 56%, and the government will have the right to appoint two additional directors to the company's board.

As the federal government shovels out billions of dollars, state and local tax revenues fell nearly 7% in the third quarter of 2009 from a year ago. That’s according to a report from the Census Bureau that highlights just how hard the recession has hit states’ coffers.

Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged nearly 12% to about $58 billion. Combined, sales taxes and income taxes make up roughly half of state and local tax revenues.

FULL POST


Filed under: Andrew Torgan • auto bailout • Bailout Turmoil • Economy
October 7th, 2009
03:44 PM ET

Financial Dispatch: Gold on record-setting run

Andrew Torgan
CNN Financial News Producer

Gold continues to push higher into record territory amid concerns about a weak U.S. dollar, inflation and technical-based buying by large investment funds.

The December contract for gold rose $4.70 to settle at a fresh all-time high of $1,044.40 an ounce today. Earlier in the session, it traded as high as $1,048.20, topping Tuesday's intraday mark by $3 an ounce.

Gold, which is up 17% so far this year, has been supported recently by concerns about the dollar and bets that inflation will rise over the long term as the economy recovers and stimulus measures will have to be reversed.

Analysts expect the rally to continue and say gold could push past $1,050 this week and top $1,100 in the near future.

Sources: Administration considering safety net measures

Amid nervousness about states' economies and a growing unemployment rate, the Obama Administration is considering a series of measures aimed at putting many Americans back to work before the 2010 midterm elections, sources close to the process told CNN.

FULL POST


Filed under: Andrew Torgan • auto bailout • Economy • Finance • Technology
September 15th, 2009
12:35 PM ET

Financial Dispatch: Clunkers Retail Boost

Gene Bloch
Managing Editor
CNN New York

We kick off this morning with one of those “green shoots” in the economy: better than expected retail sales; they surged 2.7 percent in August, as the Cash for Clunkers program provided a lift to auto sales. But even without auto sales and auto parts in the mix, retail sales rose a respectable 1.1 percent.

On the less positive side, wholesale inflation as measured by the Producer Price Index surged 1.7 percent last month. Most of that increase however was due to a surge in energy prices. If you strip out food & energy costs, the PPI’s “core rate” edged up just 0.2 percent.

President Obama is talking about the economy today as he addresses GM workers at a GM plant in Ohio; he then travels to Pittsburgh to address an AFL-CIO convention, before making his way to a fundraiser for Sen. Arlen Specter in Philly. Fed Chief Ben Bernanke today is out talking economy as well, going farther than before in saying the recession is “very likely over.” Of course, we know that only the National Bureau of Economic Research can conclude when recessions begin and end. And it doesn’t happen until after the fact.

FULL POST


Filed under: auto bailout • Economy • Finance • Wall St.
June 19th, 2009
11:56 AM ET

Detroit, Pimp My Ride

David Gewirtz | BIO
AC360° Contributor
Editor-in-Chief, ZATZ Publishing

I've been thinking a lot about Chrysler and GM lately. This isn't quite as ripped-from-the-headlines as it might sound, because I often think of cars. I'm what you might call a "car guy".

Car guys fall into all sorts of sub-categories, but mine is the one where the middle-aged guy who really couldn't fix a car to save his life finds himself dreaming of building a hotrod. Yes, I'm over 40 and I like things that loudly go vroooooom.

One thing us car guys like to do is plan the future for all of our favorite car companies. It's kind of like we used to do when we were little boys in school, drawing pictures of cars with crayons, adding an air scoop in the front, and maybe some flames coming out of the exhaust.

Except, most of us mid-life car guys have given up the crayons and either taken up the online forum or hold court around a Weber grill - and the closest we ever really get to flame jobs is cooking the oh-so-well-done burger that Dad always likes.

FULL POST

June 10th, 2009
11:35 AM ET

If this used station wagon’s a rockin', don’t come a knockin'

Jack Gray
AC360° Producer/Writer

There’s nothing like a hot ride. And my first car was nothing like a hot ride. A 1987 Chevrolet Celebrity station wagon. Baby blue with a generous array of leathery rust spots, it was the vehicular love child of an obese Smurf and Dog the Bounty Hunter.

The car was a gift from my grandfather, for whom it had served the dual purpose of smoking lounge and elderly chick magnet. As with most things – especially his changeover from a black toupee to a white one – my grandfather had impeccable timing, giving me the car at the height of my high school insecurity. Because nothing makes a 16-year-old more self-confident than a battered station wagon manufactured in the previous decade.

That said, I’ve never been one to look a gift horse in the mouth, or toupee. So I accepted the car just as I had accepted puberty, with profuse gratitude and quiet shame. And to my surprise, even though I would have preferred something red and Italian, The Celeb – as my friends and I called it – would come to serve me well. It was clean, the engine started on cold mornings and the brakes – unless I needed to stop – worked great.

FULL POST

June 4th, 2009
11:24 PM ET

$20 million in bonuses for Chrysler execs?

Justine Redman and Joe Johns
AC360º Producer and Correspondent

Grilled at a Senate hearing Wednesday, the President of Chrysler couldn't answer a question about whether 15 Chrysler employees stand to get $20 million in bonuses.  Keeping them honest, we want to know the answer too. Please send us your confidential tips to AC360KTH@CNN.com

Here is an excerpt from a Senate committee hearing yesterday on GM and Chrysler plans to close dealerships, and how to protect dealers and consumers:

SENATOR MCCASKILL: This is a difficult question, Mr. Press, but I looked and I have - we've gotten some information that came to us back channel about the DIP budget, and this is the debtor in possession budget in the bankruptcy. And it talks about the budget for the old company. And what troubles me in there, there's an acknowledgement that there may be up to 15 employees of old Chrysler working on this bankruptcy and there is a pool in this budget of up to $20 million for bonuses.

I can't imagine what kind of kick in the gut that would be if we were to learn in the next two weeks that some of the old Chrysler folks - which are getting paid their salaries, which they should, you guys are doing hard work.

FULL POST


Filed under: 360° Radar • auto bailout • Joe Johns • Justine Redman
June 2nd, 2009
05:13 PM ET

A phoenix rising from GM's ashes

Phaedra Ellis-Lamkins
CEO, Green For All

Yesterday morning, an icon of American industry announced its failure – and 21,000 American workers woke up without jobs.

General Motors filed for bankruptcy and will shut down nine U.S. plants.

At a time when the United States economy is already hemorrhaging jobs, the failure of an established industry giant leaves us to confront hard questions – What went wrong? And what is the future of American industry?

What went wrong?

GM doubly undermined the U.S. economy – killing jobs for American workers by taking manufacturing overseas and running the company into the ground by failing to remain competitive with foreign auto companies.

The company repeatedly rejected improving the environmental and safety standards of its vehicles and shipped thousands of American jobs overseas. Meanwhile, Japanese and German cars improved their gas mileage and safety – and foreign auto industries took off.

FULL POST


Filed under: 360° Radar • auto bailout • Economy • Environmental issues
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