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November 11, 2009

HSBC underlying profits up sharply, U.S. bad debts dip

Filed under: economics — Tags: , , — Gogo @ 6:18 pm

Europe’s biggest bank HSBC Holdings Plc said its underlying third-quarter profits were significantly ahead of a year ago and losses on U.S. consumer loans had shown their first fall in three years.

The news sent HSBC stock up over 4 percent to their highest in just over a year. At 0910 GMT (4:10 a.m. EST), the shares were up 3.4 percent at 715.7p.

In a trading statement on Tuesday which lacked detailed figures on its quarterly results, HSBC said its investment banking arm had maintained its record performance in the quarter, following bumper performances by rivals including Britain’s Barclays.

It said margins for the Global Banking and Markets arm were not as good in the quarter as they were in the exceptional first half, which benefitted from pent-up demand after the crisis hit at the end of 2008, but said margins were very good compared with previous years, including 2006 and 2007.

In the United States, which has been the focus of market concern, HSBC said loan impairment allowances for its consumer finance business declined, representing the first quarterly fall since the start of 2006 and their lowest level for over a year.

But the bank cautioned it was still too soon to call a turn in U.S. consumer impairments, which hit around $3 billion in the third quarter, though there were positive signs.

“Consensus forecasts (for unemployment, house prices) are moving down from some of the more pessimistic figures bad credit payday advance… if these things all play out, those would be reflective of turning points. But I don’t think anyone is confident to call those yet,” Finance Director Douglas Flint told reporters.

Overall loan impairment charges and other credit risk provisions declined in the quarter and were at their lowest quarterly level since the second quarter of 2008.

“I believe the biggest jolt has now passed through the global economy,” said HSBC Chief Executive Michael Geoghegan. “The world will likely see a two-speed recovery,” he said, adding that emerging markets are likely to drive the recovery.

The bank said on a reported basis, including losses on the fair value of its own debt, third-quarter profits were lower than a year ago. The bank said it had seen a further tightening of credit spreads in October, resulting in an additional reduction in the gain from fair-value movements in its own debt.

HSBC also said its U.S. business would announce the sale of its U.S. vehicle loan servicing operations and $1 billion in vehicle loans to Santander’s U.S. operations.

(Editing by David Holmes)

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October 29, 2009

Ford picks Geely for Volvo cars bid

Filed under: economics — Tags: , , — Gogo @ 3:18 pm

Ford Motor Co named Zhejiang Geely Holding Group as preferred bidder for its loss-making Swedish unit Volvo in what could lead to the biggest overseas acquisition by China’s fast-growing auto sector.

Ford and privately owned Geely did not disclose a possible sale price for Volvo but media reports have put it closer to $2 billion than the $6.45 billion Ford paid for Volvo in 1999.

The announcement moves the long-running sale, which began in December, closer to a conclusion. Intellectual property concerns, which last week threatened to derail any deal with Geely, may have been overcome.

But it could be months before a final agreement. Ford named Tata Motors as preferred bidder for Jaguar and Land Rover, its other top-end European brands, in January 2008 and reached a final accord in March of that year.

Ford said it will engage in “detailed and focused” negotiations with Geely, but there was no specific timeline to conclude negotiations. Ford will not retain a stake.

This sale is complicated because Volvo is closely woven into Ford’s wider operations, undertaking much of the group’s safety work, for example, and Ford said it would continue cooperating with Volvo.

Ford Chief Financial Officer Lewis Booth told a news conference at Volvo’s Gothenburg head office that Ford and Volvo needed to make sure the deal contained “appropriate safeguards” and Geely had to undertake more due diligence payday advances.

But he said; “We believe that (Geely) have the potential to be a very good owner of Volvo … they take the heritage of Volvo and the brand of Volvo very seriously indeed.”

ENSHRINE INDEPENDENCE

Hangzhou-based Geely said its proposal, financed by Chinese banks, would “enshrine management independence” at Volvo while allowing the Swedish carmaker to source components and tap into sales networks in China.

Volvo would keep existing production and research and development facilities, union agreements and dealer networks, Geely said in a statement on Wednesday.

A Volvo union leader said he was unfamiliar with Geely and had asked to speak to its representatives as soon as possible.

Earlier, Geely had faced competition from rivals including a U.S.-led group including former Ford director Michael Dingman, dubbed the Crown consortium, and Beijing Automotive Industry Holding Corp (BAIC), sources familiar with the matter have said.

Geely is not the only Chinese automaker reaching overseas: the smaller Tenzhong aims to close that deal to buy General Motors’s Hummer brand by early 2010.

Frankfurt-traded Ford shares stood 1.2 percent lower by 1251 GMT, at 4.96 euros a share, outperforming a 4.3 percent drop in the automaking sector. 

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October 22, 2009

Yahoo triples profit, beats expectations

Filed under: economics — Tags: , , — Gogo @ 9:20 pm

Yahoo Inc beat Wall Street’s profit and sales expectations as spending by advertisers showed signs of life in the third quarter and as months of cost-cutting and restructuring boosted the Internet company’s bottom line.

Shares of Yahoo, the top U.S. seller of online display ads but a distant No. 2 to Google Inc in search, jumped 5 percent after the results, which analysts said boded well for the fourth quarter, when ad spending should improve further.

Yahoo’s revenue from display advertising was much better than expected, said RBC Capital Markets analyst Ross Sandler, citing the 2 percent sequential increase in U.S. display ad sales.

“That basically says that large Fortune 500 advertisers who want high-quality, premium inventory are going back to Yahoo more in the third quarter than they were in the first or second,” he said.

Yahoo’s net profit more than tripled year-over-year, though a big chunk of the upside came from the sale of its stake in Chinese Web site alibaba.com.

Yahoo has undergone significant restructuring since Chief Executive Carol Bartz took over in January. It said in April it would lay off 5 percent of its workforce, or about 675 jobs, and it also pulled the plug on underperforming properties.

Yahoo also signed a 10-year Web search partnership with Microsoft Corp to challenge Google, a pact that U.S. and European antitrust regulators are evaluating.

Chief Financial Officer Tim Morse said on a conference call that the company still believes the deal will close in early 2010, and that they can make significant progress on integration in one or two major markets next year 24 hour payday loan.

Morse, who began as Yahoo CFO in July and handled Tuesday’s earnings conference call on his own due to Bartz’ having “come down with something” — which he characterized as not serious — said large advertisers began to spend again in the third quarter.

“I’m not going to predict when the growth rebounds, but I feel good that things are no longer on the downward trend.”

Excluding traffic acquisition costs that Yahoo shares with partners, net revenue was $1.13 billion in the third quarter, close to the average analyst forecast of $1.12 billion. That compared with net revenue of $1.14 billion in the June quarter and $1.33 billion in the year-earlier period.

RISING TIDE LIFTS ALL YAHOO BOATS?

Some analysts said the improvement that Yahoo experienced was a reflection of a brightening overall economic climate as much as anything else.

“Most of the benefit that they are seeing is because the economy is improving — a rising tide — not because of all the changes they’ve made,” said JMP Securities analyst Sameet Sinha.

Net income was $187.8 million, or 13 cents a share, in the third quarter, up from $54.3 million, or 4 cents per share, in the year-earlier quarter. Analysts were looking for 7 cents per share, according to Thomson Reuters I/B/E/S. 

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September 1, 2009

GM executives woo auto dealers, buyers

Filed under: economics, money — Tags: , , — Gogo @ 5:51 am

When General Motors executives stopped in St. Louis last fall to meet with auto dealers, the economy was entering a free fall.

"We were right in the middle of the meltdown when we were out doing this. We just didn’t know it," said Mark LaNeve, GM vice president for sales. "I mean we thought it was a bad couple of weeks. And as it turned out, the vehicle market was collapsing, the stock market was collapsing, the banking sector (too)."

Last week, LaNeve, CEO Fritz Henderson and other GM executives met with Midwestern auto dealers in downtown St. Louis for the first time since emerging from bankruptcy last month. The automaker is going forward with fewer brands, fewer vehicle "nameplates" and, ultimately, fewer dealerships.

The launch of the nine-city dealer tour comes at a pivotal time for the American automaker. The deep recession has hurt auto sales, and consumers have been lukewarm to some of its vehicle brands.

Henderson called last week’s meeting a good opportunity to reconnect with GM dealers and get people "charged up about winning in the marketplace." To do so, the new, smaller GM has to win back the hearts and minds of U.S. consumers, he added.

"For those people who own our vehicles today, and are happy with them, we want to make sure we make them even happier," Henderson said after the meeting. "And for those that don’t want to consider us, we want to compete and get back on their consideration list."

Several area dealers were upbeat about what they heard and the prospects for the future. The fact that Henderson attended this year’s meeting was further evidence that "they mean business; that they’re serious," said attendee Greg Flotte, general manager of Don Brown Chevrolet in St. Louis.

Flotte said there already had been some signs that it wasn’t business as usual at the new GM. When the federal government was slow to reimburse dealers on Cash for Clunkers rebates, GM came up within 48 hours with a loan program to help dealers who had not been paid.

"That would not have happened under the old General Motors," Flotte said. "To have that happen that quickly and take action that was effective was something that I was very, very impressed with."

General Motors plans to put more marketing muscle behind fewer vehicle models within its core brands — Chevrolet, Buick, Cadillac and GMC, LaNeve said. "We’re going to very aggressively get our story told. That’ll kind of start in September."

Dealers said they welcomed that focused approach to advertising.

LaNeve said reducing the number of dealerships proved "an enormously emotional, painful process." The company plans to shed about 1,200 dealers nationwide under its reorganization, but GM officials would not disclose how many are in the St. Louis region or elsewhere.

It also plans to sell off Hummer, Saturn and Saab, and discontinue the Pontiac brand.

"So we’ll have a 24, 25 percent reduction in the overall number of dealers, which we did to strengthen the dealers," he said. "We’ve got to have dealers that can compete."

The weakened economy has hurt demand for GM’s full-size GMC Savana and Chevrolet Express vans built at the company’s Wentzville plant, where GM eliminated one of two production shifts. But Henderson said that the van remained an important product and that Wentzville was "the only place where we build that van."

One analyst said GM’s campaign for the hearts and minds of consumers, dealers and auto enthusiasts was not unlike a political campaign.

"A lot of it, at the end of the day, is to get votes," said Erich Merkle, president of Autoconomy in Grand Rapids, Mich. "GM wants to be elected. They want to be perceived as a cutting-edge, high-quality company."

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August 14, 2009

U.S. retail sales unexpectedly fall 0.1 percent in July

Filed under: economics — Tags: , — Gogo @ 2:18 am

Sales at U.S. retailers unexpectedly fell in July from June, a government report showed on Thursday, casting a shadow over an anticipated rebound in consumer spending in the third quarter.

The Commerce Department said total retail sales edged down 0.1 percent from increasing a revised 0.8 percent in June. Sales in June were initially reported to have risen 0.6 percent.

Analysts polled by Reuters had forecast retail sales rising 0.7 percent in July, expecting a boost from the government’s “cash for clunkers” program, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models.

Excluding motor vehicles and parts, sales fell 0 quick cash.6 percent in July after rising 0.5 percent the prior month. Analysts had expected a 0.1 percent gain in sales excluding autos.

Gasoline station sales fell 2.1 percent in July, reflecting a retreat in gasoline prices during the month, after surging 6.3 percent in June. Excluding gasoline, retail sales nudged up 0.1 percent. Sales of building materials were down 2.1 percent in July after falling 0.6 percent in June.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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August 3, 2009

Caveat emptor: Your credit limit, rate may have changed

Filed under: economics — Tags: , — Gogo @ 7:42 am

Don’t be surprised to hear about changes to your credit card’s spending limit or interest rate.

I’ve had a few complaints from customers of Sears, American Express and Capital One – all U.S.-owned companies that may be more affected by the credit crisis than Canadian card issuers.

V.P. (I’m using initials for privacy) had a shock when he checked his Sears MasterCard account online.

The credit limit, formerly $10,000, had been reduced to $500.

Chase Canada, which bought Sears’ credit card arm in 2005, said credit limits are reviewed on a regular basis.

"Chase is continuously evaluating whether our customers’ credit lines are appropriate for their needs and will make adjustments accordingly," spokeswoman Gail Hurdis said.

C.M. had a similar experience with her Sears credit card, whose limit was cut to $500 from $9,500.

"I currently have a zero balance on that account," she says.

"I think I was targeted because I was late with a payment of $34.74."

C.M. had moved last May, which resulted in her Sears bill being dropped off at a neighbour’s house. It was caught in transition before the change of address kicked in.

She forgot about the $34.74 balance, which she cleared up shortly after the payment deadline.

"As a careful and responsible lender, we constantly evaluate the risks and costs of funding credit card loans," Chase spokeswoman Laura Rossi said.

"We may lower lines for customers who are showing signs of increased risk or inactivity."

To which CM replied: "In my case, their cost of funding credit card loans has been basically zero for the past few years. Maybe that’s their issue – nothing to gain?"

A.V. has an American Express card with no preset spending limit. But the balance must be paid in full each month cash advances.

After charging $3,663 to her Amex card last April, she got several calls about her spending.

"No preset spending limit doesn’t mean unlimited spending," said Jolene Price, an American Express Canada spokeswoman.

"We suggest to our charge card members that they contact us if they are planning to spend significantly out of pattern.

"In Mrs. V.’s case, her spending patterns changed, and as a responsible lender, American Express followed up to ensure that she could support the increased level of spending."

After more discussion with her lender, AV. told me she will cancel the card and get a partial refund of her annual fees.

Finally, S.H. has a Capital One credit card with an interest rate of prime plus 0.9 per cent. He told me that the rate is going up sixfold.

Capital One will be ending its low prime plus 0.9 per cent rate because of the higher cost of doing business in Canada, spokeswoman Laurel Ostfield said.

"We are switching some of our customers to our best available product (5.99 per cent annual percentage rate, fixed for three years), which is very competitive in the marketplace."

This week, Capital One started notifying customers that the new rate will show up on their October statements.

By Sept. 4, cardholders will have to decide whether to accept the new rate or reject it.

If they reject it, they will have to stop charging new purchases to their cards.

But they can pay off their current balances under the existing terms for as long as they like – as long as they make their minimum payments – until their balances reach zero.

"Then their account will be closed automatically," Ostfield said.

eroseman@thestar.ca

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August 1, 2009

earn0731 head here

Filed under: economics, news — Tags: , , — Gogo @ 10:24 pm

Avon Products Inc. said second-quarter profit fell 65 percent.

Profit slid to $82.9 million, or 19 cents per share, from $235.6 million, or 55 cents, a year ago. Revenue fell 10 percent.

Bankrate Inc. reported its second-quarter profit was cut in half. Income was $1.9 million, or 10 cents per share, down from $4.1 million, or 21 cents, a year ago. Revenue fell 23 percent.

Brink’s Co. said second-quarter profit plunged 58 percent to $20.3 million, or 44 cents per share, compared with $48.7 million, or $1.05, a year earlier. Revenue in the quarter fell to $751.9 million.
Build-A-Bear Workshop Inc., the Overland-based seller of customized stuffed animals, said its second-quarter loss widened as the recession took a bite out of consumer spending. The net loss was $6 million, or 32 cents a share, compared with a loss of $4.8 million, or 25 cents, a year ago. Sales fell 13 percent to $82.4 million. (Jeff Tomich)

Colgate-Palmolive said second-quarter profit rose 14 percent, largely on price increases. Colgate earned $561.6 million, or $1.07 per share, up from the $493.8 million, or 92 cents, a year earlier. Revenue was down 5.5 percent.

Dow Chemical Co. posted a second-quarter loss on charges related to the buyout of a smaller rival. Dow lost $486 million, or 47 cents per share, compared with $762 million, or 81 cents, a year ago. Revenue fell 31 percent.

Eastman Kodak Co. lost $189 million in the second quarter, its third consecutive quarterly deficit. The per-share loss was 70 cents, compared with profit of $495 million, or $1.62, a year earlier. Sales plunged 29 percent.

Goodyear Tire & Rubber reported a $221 million loss in the second quarter. The tire maker lost 92 cents per share on sales of $3.9 billion. Last year, Goodyear earned $75 million, or 31 cents per share, on sales of $5.2 billion.

International Paper Co. reported a 40 percent drop in second-quarter profit but said the worst appears to be over. Income totaled $136 million, or 32 cents per share, compared with $227 million, or 54 cents, a year ago. Sales edged down to $5.8 billion.

Kellogg Co. reported second-quarter profit that beat expectations. Profit rose 13 percent to $353 million, or 92 cents per share, from $312 million, or 82 cents a year ago cash advances. Revenue fell 3 percent to $3.23 billion.

MasterCard Inc. booked a profit of nearly $350 million during the second quarter, exceeding expectations. The company earned $348.9 million, or $2.67 per share, compared with a loss of $746.7 million, or $5.70, a year ago. Revenue climbed 3 percent.

MetLife Inc. lost $1.43 billion in the second quarter amid a huge spike in investment losses. The per-share loss was $1.74, marking the second quarterly loss in a row, compared with income of $915 million, or $1.26, a year earlier. Revenue dropped 31 percent.

Motorola Inc. posted an unexpected profit for the second quarter. It earned $26 million, or 1 cent per share, up from $4 million, or break-even per share, a year ago. Sales fell 32 percent.

Newell Rubbermaid Inc. said second-quarter earnings rose 14 percent. The company earned $105.7 million, or 38 cents per share, compared with $92.5 million, or 33 cents, a year ago. Sales fell nearly 18 percent.

Reliv International Inc., the Chesterfield-based maker of nutritional supplements, reported lower second-quarter profit and sales. Income dropped to $410,000, or three cents a share, from $569,000, or four cents. Sales fell to $20.1 million from $24 million. However, the company said new distributor enrollments rose 6.2 percent in the quarter.

Walt Disney Co.’s third-quarter profit fell as slow sales pushed its movie studio into the red while the weakening TV ad market stabilized. Income sank to $954 million, or 51 cents per share, from $1.28 billion, or 66 cents, a year ago. Revenue fell 7 percent.

Waste Management said second-quarter profit dropped. It totaled $247 million, or 50 cents per share, down 22 percent from last year. Revenue fell 15 percent.

YRC Worldwide posted a huge second-quarter loss as customers defected and the recession continued to depress demand. The company posted a loss of $309 million, or $5.20 per share, compared with a profit of $35.8 million, or 62 cents, a year ago. Revenue sank 45 percent.

From staff and wire reports

Source

July 25, 2009

Kellwood completes crucial bond swap offer

Filed under: economics, news — Tags: , — Gogo @ 7:36 pm

Kellwood Co., a leading apparel maker based in Town and Country, said Thursday it has completed a crucial bond exchange that had appeared to unravel earlier this month.

The deal to exchange new senior secured notes due in 2014 for existing senior notes that matured July 15 betters Kellwood’s financial standing, the company said. Objections this month by Deutsche Bank, Kellwood’s biggest bondholder, had threatened to derail the agreement between the company and the other bondholders to exchange $140 million in bonds.

The Wall Street Journal reported two weeks ago that Kellwood faced the possibility of bankruptcy if the exchange offer failed.

"I am very pleased that Deutsche Bank and the other bondholders accepted Kellwood’s exchange offer," said Michael W. Kramer, Kellwood’s president and chief executive. "The conclusion of this transaction not only creates a better deal for our bondholders, the exchange into new notes with a maturity in 2014 strengthens our financial position."

Kramer said the agreement assures Kellwood, the maker of Phat Farm, Sag Harbor and other clothing brands, "full access to our $175 million credit facility life insurance."

Kellwood was a publicly traded company until February 2008, when it was purchased for $542 million by Sun Capital Partners, a private equity fund based in Boca Raton, Fla. Kellwood employs about 2,000 people, including 175 executives and other workers in St. Louis.

Once primarily known for Sag Harbor and other moderately priced labels, Kellwood has been restructuring to cut costs and build its higher-priced clothing business.

The company raised cash in November by sellling its Gerber Childrenswear and Hanna Andersson businesses to an affiliate of Sun Capital for $179 million. Kellwood said at the time it would use about $145 million from the spinoff sale to pay down debt.

Source

July 16, 2009

Average Canadian house price rises

Filed under: economics, term — Tags: , , — Gogo @ 2:09 am

John Cocomile can’t seem to walk a few steps before his BlackBerry starts to buzz. It’s another client trying to close on a home purchase.

"It has been like this for the last couple months," says Cocomile, a mortgage broker and owner of popular website greedymortgage.com. "Real estate agents are normally on holiday in the summer, so everyone expected things to slow down. But, good gosh, stuff is really selling out there."

He’s right. Canadian existing homes sales soared in June, up 17.9 per cent year over year to 54,416 units, according to the Canadian Real Estate Association in a report released yesterday

The national average sale price also reached new heights on a monthly basis, climbing 3.6 per cent year over year to $326,613.

On a quarterly basis, sales in the second quarter were up 1.4 per cent, marking the first year-over-year increase in such activity since 2007.

The solid numbers beat consensus estimates by analysts and took some market watchers by surprise.

"Canada’s housing market looks to have managed the equivalent of the great escape from the clutches of a lengthy, painful downturn," said BMO Capital Markets economist Doug Porter. "The rapid fire rebound in Canada’s housing market is the most astonishing economic development of 2009."

Cocomile said a jump in five-year mortgage rates in June also may have been a contributing factor to the boom. Posted rates at some banks went from 3.79 per cent to 4.49 per cent last month.

"You have a situation now where people are saying: `If I don’t buy with my locked-in rates, then I’m going to have to pay more later if I don’t get something now’," Cocomile said. "It becomes a bit of a false boom because people are encouraged to buy earlier than later."

That mini-bump in demand, combined with less inventory, has put pressure on prices even though Canada is officially in recession fast cash loans.

"It has certainly lasted longer than I anticipated and prices have been more stable than I anticipated," said CREA chief economist Gregory Klump. "We are seeing some snapback as buyers who were sitting on the fence jump into the market."

However, analysts warned that the months ahead could be more volatile as the effects of the recession linger.

"Only a rocket goes straight up forever. There will undoubtedly be some turbulence ahead," Klump said.

"Further gains will be much tougher to come by, particularly with the job market suffering," BMO’s Porter warned.

The Canadian Real Estate Association has forecast a 5.2 per cent average price decrease by the end of 2009 compared with 2008. But, based on improving conditions, the association now expects sales transactions in the second half will exceed the first half.

Analysts also expect pressure on prices to ease as more listings come onto the market in the second half.

Listings were down sharply in June, with just 4.2 months of inventory on the market so buyers had fewer choices.

This is the lowest level since August 2007, and below the peak of 12.8 months in January.

The months-of-inventory figure is the time it would take to sell homes listed at the current rate of sales activity.

Although average prices are up, demand in the more expensive markets in the country such as Toronto and Vancouver was a contributing factor in skewing the numbers higher.

"The strong rebound in sales activity is skewing prices upward nationally and in some provinces. Just as a sharp decline in activity in these markets skewed the average price lower in 2008," the association said.

Source

July 1, 2009

Family legacy ends with plant closings

Filed under: economics, money — Tags: , , — Gogo @ 5:42 am

It began 41 years ago when a meandering drive through then-rural south St. Louis County landed Orville Roy at the Chrysler assembly plant in Fenton.

Recently discharged from the Marine Corps, Roy decided to fill out an application. A job offer came two days later and, with it, a legacy was born.

Eventually, three of Orville Roy’s sons, a daughter-in-law and a grandson, Michael Roy Jr., would follow him through the Fenton plant gates.

"It’s been our living, our livelihood," said Michael Roy Sr., 48, Orville’s son.

No more.

On July 10, Michael Roy Jr. and 600 other Chrysler workers will punch their time cards and go down in history as the final shift at a location that has turned out the automaker’s products for a half-century.

"There’s no middle class anymore," said Michael Roy Sr., forced to retire from Chrysler in December due to medical problems. "The middle class is gone."

That may be an overstatement from a former worker angered and betrayed by what he sees as the failure of the United Auto Workers and Chrysler to protect local production jobs now outsourced to Mexico and Canada.

But it still rings true for families, like the Roys, who have come to view assembly line positions at Ford, General Motors and Chrysler as a birthright.

Multigeneration families employed by and loyal to a single car manufacturer have long been "part and parcel of the automobile business," said Michael Smith, director of the Walter Reuther Library at Wayne State University and an expert on the labor movement. "That’s why the auto crisis is so devastating."

Matthew Diemer, an assistant professor of counseling at Michigan State University, said it may be premature to declare the "death" of a tradition of children following parents and grandparents into blue-collar manufacturing jobs.

"But maybe," he allows, "what we’re seeing is the death knell."

COMPLICATED OPTIONS

The bell tolled for the Roy family on April 30, the day Chrysler announced it was laying off what remained of Fenton’s Dodge Ram pickup truck work force. (The company halted minivan production at the Fenton location last year.)

After work that afternoon, 24-year-old Michael Roy Jr. and his mother, Cheryl Roy, repaired to a local tavern to consider a series of complicated options.

In mid-May, Cheryl Roy, made her up her mind. An autoworker for 14 years, she rejected a possible transfer to a Chrysler facility in either Illinois or Michigan and took a company buyout.

Cheryl is collecting severance benefits, searching for a job and staying at the family home in Arnold to care for her husband, Michael Sr., who retired following diagnosis of amyotrophic lateral sclerosis — Lou Gehrig’s disease.

Also looking for work, Michael Roy Jr. wonders what the future holds for a young man who aspired to retrace the footsteps of his grandfather and father.

"I’m good with my hands," he said. "And if you’re good with your hands, what can you do now?"

The official answer: Move from the production of goods and services dependent on nonrenewable resources to the production of environmentally sustainable commodities. Manufacturing the blades used in power-generating wind turbines is a commonly cited example.

State and national leaders across the nation, including Missouri Gov. Jay Nixon, contend that so-called "green jobs" represent the next wave of American manufacturing.

Michael Jr. knows that getting a foothold in the clean energy work force means going back to school. A few credits shy of an associate’s degree, he walked away from his education to accept an offer of a part-time Chrysler job that he saw as a stepping stone to full-time employment personal loans.

Strapped by declining income as he helps tend to his father, Michael cannot afford, in terms of either time or money, to return to his studies at Jefferson Community College.

Smith agrees that Michael’s best hope rests in furthering his education,

A former autoworker himself, Smith laments that the days when a union membership card served as a portal to a middle class lifestyle are slowly disappearing.

"The jobs that dad and grandpa had, that didn’t require anything more than a high school education, are no longer around," Smith said. "Even auto working is not just about putting on hubcaps anymore. It’s a lot more sophisticated."

ITS OWN REWARD

That was not the case when Orville Roy, now 80, began working his way through various administrative departments, including payroll, in 1968.

"In the old days, if you knew somebody and you wanted to get hired, all you had to do was ask for a recommendation," he said.

All the better if that acquaintance happened to be a blood relative.

Putting aside their disappointment that jobs once performed in Fenton are now held by workers in Canada and Mexico, Michael Sr. and Cheryl Roy acknowledge their family of six has done all right by the nation’s No. 3 domestic automaker.

"We have four kids that wanted to play sports and take dance classes and do all sorts of things," said Cheryl. "Somebody had to pay for it."

Until Cheryl went to work in the pickup plant in 1995, that somebody was her husband, who had started as a "floater" in the chassis department 11 years before.

"I worked on the line, and that was punishment," said Michael Sr.

"I’ve shoved in engines, I’ve thrown tires and I’ve thrown bumpers," said Michael Sr., lapsing into autoworker jargon to describe the tasks he performed at Fenton. The "punishment" of the line, though, had its own reward: By the time Michael Sr. retired late last year, he was earning $29.95 an hour, plus the heralded UAW benefit package.

There was also the intangible benefit, Michael Jr. noted, of spotting a Dodge Ram on the road and thinking, "I made that truck."

TUG OF TRADITION

Michael Jr. never matched his father’s salary.

Nor, because his tenure paralleled Chrysler’s shrinking market share, was Michael Jr. ever offered a full-time position at the plant.

Michael Jr. can lay claim, however, to a dubious distinction: He worked both the last day and night shift to produce a minivan at the South Plant and, later, was assigned to the last North Plant night shift to build a pickup.

Michael Jr. was circumspect last week as he reflected on the irony of a callback has placed him on a shift that will soon assemble the final Chrysler product ever built in Fenton.

"It’s frustrating," Michael Jr. said. "But (unlike his dad and grandfather) I haven’t put my whole life into it."

Resolved that the time has come for him to move forward, the son of Michael Roy Sr. and grandson of Orville Roy nonetheless feels the tug of the tradition that began on a long ago leisurely drive that wound up, improbably, at a car factory.

"I was kind of hoping," Michael Jr. said wistfully, "that my grandkids would work there."

Source

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