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January 26th, 2010
02:57 PM ET

Financial Dispatch: Ford, GM hiring workers

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Andrew Torgan
CNN Financial News Producer

There are small glimmers of hope in the American auto industry. Ford Motor says it will hire 1,200 workers in Illinois as part of a $400 million plan to ramp up production of next year's Explorer SUV.

The automaker says it expects to fill the full-time jobs at its Chicago Assembly and Chicago Stamping plants by the end of the year.

The expansion comes as Detroit’s automakers look to recover from a dramatic plunge in sales, which fell to a 27-year low last year. But these new workers will probably not make as much as they would have in previous years.

Under union contracts signed in 2007, the U.S. automakers are able to pay newly-hired employees significantly less than their veteran factory workers. The contracts also allow automakers to give reduced health care and pension benefits to new hires.

Separately, General Motors says it intends to become the first major automaker to design and manufacture electric motors for cars in the United States - adding jobs in the process.

The first of GM’s electric motors will be used in the next generation of the company's rear-wheel-drive hybrid vehicles such as the Chevrolet Tahoe hybrid SUV beginning in 2013.

GM says it will in invest nearly $250 million in electric motor and electric drive manufacturing facilities in the U.S., and will add “a couple of hundred” jobs to build the motors.

GM also reached an agreement today to sell its Saab brand to Dutch sports car maker Spyker.

Spyker reportedly agreed to pay $74 million in cash and $326 million in preferred shares in the new company that would emerge from the deal, to be called Saab Spyker Automobiles.

Spyker, which was founded in 2000, makes exotic sports cars that typically cost more than $200,000. Only 250 have ever been sold.

Saab is one of four brands, along with Hummer, Saturn and Pontiac, that GM is dropping as it attempts to restructure itself since emerging from bankruptcy last June.

A deal to sell Saturn to the Penske Automotive Group fell through, but a deal has been signed to sell Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery Co. - although that deal is on hold pending approval by the Chinese government.

No attempt was ever made to sell Pontiac.

A one-two punch to the housing market… home prices fell in November for the first time in seven months.

The S&P/Case-Shiller 20-city Home Price Index recorded a decline of 0.2% from October. Prices were down 5.3% compared with 12 months ago. The loss was unexpectedly large. Experts had forecast that prices would be off by only 5% compared with last November.

This follows news Monday that sales of existing homes fell nearly 17% in December.

Four markets covered by the index - Charlotte, Las Vegas, Seattle and Tampa - hit their lowest index levels in four years. Any gains they recorded in recent months have been erased.

The five markets that showed month-over-month gains were led by Phoenix, where prices rose 1.1%. Thirteen markets had declines, with Chicago being the biggest loser at 1.1% down. Miami and Dallas showed no change.

Keep in mind though that November is a weak time of year for home sales, so this might not necessarily be a sign of what’s to come.

Okay New York Jets fans, with Sunday’s loss and all the Monday-morning quarterbacking now in the squarely in the rearview mirror, it’s time to focus on the positive… it’s going to be a good year on Wall Street, at least according to the “Super Bowl” indicator.

Here's how it works: If a team that had its roots in the National Football League wins, the Dow Jones Industrial Average should go up. If a team from the upstart American Football League wins, stocks should go down.

Both the Indianapolis Colts and the New Orleans Saints have roots in the NFL.

In the 43 years that the Super Bowl has been played, the indicator has been correct more than 80% of the time.

Of course, it’s also been wrong eight times - often spectacularly so. The New York Giants' win in 2008 over the New England Patriots was supposed to bring about a bull run for stocks. Instead the Dow crashed 33.8% that year as the credit markets and banking sector imploded.

Follow the money… on Twitter: @AndrewTorganCNN


Filed under: Andrew Torgan • Economy • Housing Market
soundoff (One Response)
  1. Andrea Gillett

    Anderson Cooper and Dr. Sanjay Gupta you guys are awesome. I commend both of you. You are what real reporters should be, realistic and compassionate, wish some fakes would take a lesson from you guys. You are beautiful people. My last thought, if there's anyway you can let the world know President Obama is not GOD, he's a jeanie in a bottle nor he doesn't own a wand please let them know. Let them know to be realistic Obama is a man he's not a miracle worker and can't seriously expect him to fix this country in one year. Also when you get a chance I'm inviting you guys to Belize with me. Take care

    January 26, 2010 at 3:27 pm |