Wednesday, July 29, 2015

State of the Union July 29, 2015

July 29, 2015 online at www.uawlocal2250.com

• There will be Education Committee meetings Thursday at the Union Hall at the following times: 6:45 am for 3rd shift; 1:00 pm for 2nd shift and 2:45 pm for 1st shift. Anyone interested in attending or becoming a member is welcome.

• There will be Civil Rights Committee meetings Monday, August 10 between the shifts in the cafeteria. Anyone interested in attending or becoming a member is welcome.

• You may have seen that there is a new website for GM hourly employees called the Hourly Communication Channel. You can access the website through a link on the menu on the right hand side of the Socrates home page. The link is titled “HCC System”. Not all features of the website are functional yet, but you can check your rings, your pay stub, use links for gm family first, check on and submit suggestions, and soon, apply for Saturday time off. The computers in the cafeteria as well as the walkup computers in body (W-27) and paint (CC40 and 42) will have links to the website. To access the site from home you will have to log onto My Socrates.

• GM announced pricing on the 2.8 liter diesel option for the Colorado and Canyon. It will cost an additional $3730 above a V6 engine. This is the lowest priced diesel option on any truck of any size. It will be available on Colorado crew cab LT and Z71 models only, making the entry price around $31,700. Fuel economy numbers have yet to be released, but chief truck engineer Jeff Luke has indicated that it will be 30+ mpg on the highway. Towing capacity will be 7700 lbs. “Simply put, there’s no other midsize truck that can do what Colorado can with its all-new Duramax diesel,” said Sandor Piszar, director of Chevrolet Truck Marketing. “Along with greater capability and efficiency, it expands the Colorado lineup to give customers more choices and the capability of exploring more possibilities on and off the road.” Said Scott Yackley, assistant chief engineer, “A diesel engine was part of the Colorado’s portfolio plan from the very beginning, meaning the chassis, suspension and other elements of its architecture were engineered to support its capability. That means there are no compromises with the Colorado diesel. It offers exceptional capability delivered with a confident feeling of control.”

• The “Baby Duramax” was also designed specifically for trucks and has undergone many of the same validation tests as the 6.6L Duramax, contributing to legendary Duramax durability and reliability. Pricing on the Canyon will begin around $33,200.

• After last week’s earnings announcement a lengthy conference call with several automotive analysts occurred. During that call one analyst asked CEO Mary Barra about negotiations with the UAW. Here is the dialogue: Ryan Brinkman (Analyst - JPMorgan):
Okay. And then just one last question. I know you are often limited in what you can say relative to labor negotiations, but I would just observe that it seems like you announced in 2Q a tremendous amount of investment in jobs and factories in the United States. And I couldn't help but notice that these were ahead of, rather than in conjunction with, the labor negotiations and sort of stood in contrast to Ford, which actually during the period of time that you were making these announcements, talked about moving small car production to Mexico.
So maybe you could just comment as to whether this is a reflection of your strong relationship with UAW that you don't need to tie these negotiations in conjunction -- these announcements in conjunction with the negotiations and that you do expect a good outcome with the partners that maintains or even enhances your competitiveness?
Mary Barra (CEO):
Again, I'm not going to comment on the specifics, but I think when you look at it, we are working with the UAW and having conversations on a daily and weekly basis. And so we are going to look at where we have capacity [announcement] expansion, new product investments to make, and we look at doing that at the right time. It's a continual cycle. I would say one of the takeaways is it's a continual discussion, but -- and I think we have improved the relationship and both parties work hard to do that. That is not to say that there is not issues that we have got to solve. We are actively working and doing that and using our creative and constructive problem-solving to look at the issues and find the right solution that is going to be good for the Company and help us improve our competitiveness, as well as be something that is good for the workforce. Because the UAW -- as you step back aside from the negotiations, we work jointly together on safety and I think our safety leadership represents that; the quality work we are doing. And we are taking that to the next level.
When you look at the scheming that we have done with our plants to be able to get more midsize trucks and every single full-size truck and SUV out, again that's doing that in partnership. So that is the fundamentals of the relationship. We'll work through the issues. Again, we are constantly talking so it's not as it may have been in the past that it's saving things up for the negotiation. But I don't want to under emphasize that we do have some important work to do and we are on it.

Tom Brune
UAW Communications Coordinator
Wentzville Assembly
636-327-2119

Friday, July 24, 2015

State of the Union July 24, 2015

· GM reported record North American earnings yesterday, which came in at $2.8 billion for the 2nd quarter. That brings year-to-date North American earnings to $5.0 billion. That would equal $5000 in profit sharing under the current formula, but as you all know, everything is on the table in this year’s contract negotiations. Chief Financial Officer Chuck Stevens said GM expects second-half pre-tax profits to be even stronger than in the first six months of the year.
One common number being reported by the media for overall profits is $1.2 billion. This number includes writedowns of $600 million for currency devaluation in Venezuela (that is the third huge charge related to operations in Venezuela and brings the total loss to almost $1.2 billion since the beginning of 2013), increased charges related to the victims compensation fund (now estimated to be $625 million) and a $300 million loss on reduced prices for rental vehicle resales. The other number you will see is $2.9 billion overall profit, which is before all special charges and taxes. Essentially, North America and China provide all the profit while Europe inches closer to break even and South America continues to struggle. North American market share rose slightly while global market share declined slightly. The second half of the year will see the launch of the redesigned Chevy Cruze and Malibu, both expected to generate up to $1500 more profit than the models they replace.

· Even though the Trans Pacific Partnership (TPP) trade agreement has yet to pass, evidence of its impact is already appearing. According to reports out of Japan, Mitsubishi is planning to close its lone US plant in Normal Illinois and move production of the Outlander SUV back to Japan. Kyle Young, vice president of UAW Local 2488, which represents the plant's workers, said the union's contract expires in August. "We haven't heard anything," he said in a phone interview. "We're supposed to have negotiations coming up" on a new contract. In the meantime, "it's business as usual here - we're pumping out cars." The Normal plant is the only Japanese-owned U.S. auto factory whose hourly workers are represented by the UAW. The company had no comment on the reports.

· From Car and Driver: Tougher federal fuel-economy standards are coming to heavy-duty pickups, full-size vans, and other large rigs, bringing with them big changes to the nation’s truck fleet. The new proposed standards—which are not yet set into law—call for big vans and medium-/heavy-duty pickups to slash their fuel consumption by a third between now and 2027. Averaged across GM, Fiat-Chrysler, Ford, Nissan, and Daimler, the EPA wants heavy-duty pickups and vans to reach a combined 16 mpg in 2027 versus 12 mpg in 2016, the first model year the “Phase 1″ rules go into effect. That’s a whopping 33 percent increase in efficiency. It won’t be achieved through a simple engine stop-start system. For example, a 2015 Chevrolet Express 2500 passenger van that gets 12 mpg combined today will need to reach 15 mpg combined for 2027. While the agency doesn’t officially mandate any specific technology, it’s all but requiring electrification on next-gen heavy-duty trucks and vans. As the EPA sees it, manufacturers need to install full-hybrid powertrains in at least eight percent of all heavy-duty pickups and vans by 2027.
The EPA explicitly asks GM to kill the Chevrolet Express/GMC Savana and “replace it with an as-yet-to-be-designed European-style van similar to its competitor’s products.” GM is in the worst spot on fuel efficiency, the agency says, since it relies on older V-8 vans, has not introduced significant weight reduction, and has not proposed smaller turbo sixes (although it should be noted that the aluminum-body F-150 EcoBoost V-6 returns close to the same mileage as a Silverado V-8). By 2021, the EPA estimates GM will have to add $770 of new fuel-saving tech to each heavy-duty pickup and van—or about triple what Ford, Fiat-Chrysler, and Nissan will need to spend based on their total sales.
While manufacturers can still sell plenty of underperforming trucks—remember, CAFE rules let manufacturers trade credits, in addition to applying excess credits to cover five model years ahead—there won’t be enough credits to trade without significant sales of higher-efficiency models elsewhere in the line. Fortunately, automakers can go a long way toward achieving the CAFE requirements by adopting fuel-saving tech they’re already using throughout the light-duty segment: eight-speed transmissions, variable valve timing, cylinder deactivation, turbocharging, reduced friction, low-rolling-resistance tires, axle disconnects, and replacing hydraulic and engine-driven accessories with electric ones, as well as good, old-fashioned aerodynamic refinements and weight reduction. The EPA wants to give brownie points to active aerodynamics, auto stop-start systems, solar panels to power the climate-control system, and LED lighting. None of this is impossible in the near term. The EPA recognizes that automakers haven’t traditionally updated heavy-duty models with the same frequency as their other products, and that current product-planning cycles do not incorporate these new proposals. After automakers submit their comments and the EPA finalizes the ruling, we’ll see what concessions were made.

Tom Brune
UAW Communications Coordinator
Wentzville Assembly
636-327-2119

Tuesday, July 21, 2015

State of the Union July 21, 2015

July 21, 2015 online at www.uawlocal2250.com

• From Chairman Mike Bullock: Local negotiations started on 7/13. Union Demands and Management Concerns were exchanged and reviewed. The Shop Committee will be meeting at the Main Table for some items and meeting in sub committees for items that may pertain to only individual departments. The Shop Committee has reached out via email and in person to all the committeeman for specific information in their respective areas. We are only as strong when negotiating when we, as your elected committee, work together to achieve the best local contract possible. Donnetta, Kelly and Wanda are visiting all the areas of the plant gathering jacket sizes for the joint UAW/GM “Colorado Truck of the Year” jackets. Once we have gone through all the departments, we will announce a make-up day back in each department for those missed the first time through. We will also have a make-up day in the cafeteria. As soon as those dates are confirmed we will announce.
Union and management have had numerous discussions about the parking lots. Topics discussed have ranged from illegal parking in aisles and illegal parking in handicap to foreign nameplate vehicle parking, GM vehicle parking, and contractor parking. There will be an announcement shortly on our decision.
The first Saturday of the Flex schedule starts this week. 95% of those that requested Saturday off were approved. Saturday 8/1 is currently being reviewed. The Saturday Flex schedule is a work in progress. The language in the agreement says “The level of traditional employee request for Saturday time off will also be reviewed on a quarterly basis and any necessary modifications will be made by mutual agreement”. The union is reviewing weekly the requests and denials. As of today, 143 Flex employees have been converted from Flex to temp. This is an ongoing process and Flex employees can sign up at any time. The first two Flex employees from the group hired on 5/11 were converted today.
The first 2016 Colorado and Canyon rolled off the line last week. We built 98,277 Colorado’s and Canyon’s in 2015. The build out for the van will be August 20th in body and August 21st in GA. The 2nd quarter GM earnings announcement will be Thursday. The 1st quarter earnings produced a $2.2 Billion dollar profit.

• Mark your calendars: The annual Women’s Committee Benefit Golf Tournament will be Sunday, September 20. It will be held at Country Lake golf course in Warrenton. It is a three person scramble with a 12 noon shotgun start. Cost is $210 per team/$70 per person. The first 3 places in 3 flights will be paid and there will be longest drive and closest to the pin contests along with a skin game. Food and beer will be served after the tournament. Proceeds will go to St. Joachim & Anne Care Services of St. Charles. Entry forms are available at the entrances.

• The awards keep rolling in for the pickups. First, the GMC Canyon received AutoPacific’s award for Best in Class Vehicle Satisfaction for the compact pickup segment. AutoPacific’s Vehicle Satisfaction Awards objectively measure owner satisfaction with 50 separate attributes ranging from interior comfort and styling to fuel economy and performance. “In many cases, an extremely satisfying vehicle is not the car or truck that has the best absolute build quality or the best safety rating,” says George Peterson, President of AutoPacific. “VSAs look at the big picture, which includes owners’ experiences with their vehicle’s quality and safety, but also goes deeper into the heart of the ownership experience.” An industry benchmark for measuring how satisfied an owner is with his/her new vehicle, VSAs are based on survey responses from over 66,000 owners of new 2015 model year cars and light trucks.
Next, the Chevrolet Colorado won standard pickup segment in the annual Strategic Vision Total Quality Index (TQI) study that not only measures problems, but also includes over 155 specific aspects of the customer's experience. It was the first domestic model to top the segment in more than a decade. “In 1997, only 15% of all car brands had less than a half-a-problem per vehicle, with a few ’delinquent' brands having more than two problems per vehicle. In 2015, 100% of all brands had less than half-a-problem on average per vehicle. This means that simply counting problems once had a place in history, but today, knowing what creates love and that which enhances the customer's perception of quality are key to determining what is best,” says Alexander Edwards, President of Strategic Vision. “When defining quality, we listen and measure everything the customer communicates and capture it in a calculation that is converted to a 1,000-point scale called the Total Quality Index score. It represents the future in understanding what motivates the customer,” continues Edwards. The Colorado scored 857. Second place went to the Canyon with a score of 844 and 3rd place went to the Honda Ridgeline, which scored 841. No pickups that scored below the segment average of 831 (we’re looking at you Tacoma and Frontier) were included in the rankings. GM had a total of 7 segment winners. Interestingly, the 2 largest automakers in the world, VW and Toyota had a combined…..zero winners. Strategic Vision bases its rankings on responses from 46,000 surveys.

Tom Brune
UAW Communications Coordinator
Wentzville Assembly
636-327-2119

Thursday, July 9, 2015

State of the Union July 9, 2015

July 9, 2015 online at www.uawlocal2250.com

• There will be a Civil Rights Committee meeting Monday, July 13 between shifts in the cafeteria.

• Mark your calendars: The annual Women’s Committee Benefit Golf Tournament will be Sunday, September 20. It will be held at Country Lake golf course in Warrenton. It is a three person scramble with a 12 noon shotgun start. Cost is $210 per team/$70 per person. The first 3 places in 3 flights will be paid and there will be longest drive and closest to the pin contests along with a skin game. Food and beer will be served after the tournament. Proceeds will go to St. Joachim & Anne Care Services of St. Charles. Entry forms are available at the entrances.

• Sales for both the van and the pickups continued on a healthy pace in June, although both product lines saw decreases compared to May. Here are the results for both segments:
  2015 2014 Change Share
Ford Transit 12134 --- --- 39.1%
GM 7815 12469 -37.3% 25.2%
Ford Econoline 4799 10135 -52.6% 15.5%
Mercedes Sprinter 2442 2201 +10.9% 7.9%
Ram ProMaster 2223 1131 +96.6% 7.20%
Nissan NV 1611 1226 +31.4% 5.2%
      Change Share
Toyota Tacoma 15959 12173 +31.1% 54.1%
Chevy Colorado 6558 --- ---- 22.2%
Nissan Frontier 4437 5722 -22.5% 15.0%
GMC Canyon 2532 --- ---- 8.6%

Field supplies continue to dwindle for the van. Overall supplies dropped 1300+ units to a new all-time low. As measured in days it now stands at 27, versus 30 at the end of May. A year ago supplies were 4400 units higher. Every version of the van decreased, with passenger vans now below 500 (for 3500 Chevy dealers). On the pickup side, Colorado supplies increased around 1150 units and days supply went from 10 to 17. Canyon supplies also inched up and now stand at 35 days.

• From AutoWeek: General Motors promised a diesel when it announced its return to the smaller pickup market, and a year after the Chevrolet Colorado and GMC Canyon re-launched as 2015 models, the engine is ready to go. GM’s new 2.8-liter Duramax will be available in the 2016 Colorado/Canyon by the end 2015, and it’s no boat anchor. With an aluminum cylinder head, forged steel rods and crank, 16.5:1 compression and common-rail direct injection operating at up to 29,000 psi, this truck-specific, 2.8-liter turbodiesel four generates 181 hp at 3,400 rpm, and 369 lb-ft of torque at 2,000. At least 330 lb-ft are available between 1,400 and 2,900 rpm. How far has mainstream automotive technology come in 30 years? The last diesel offered in a small U.S. Chevy truck—the 1985 S-10—was built by Isuzu. At 2.2 liters, it made 62 hp and 96 lb-ft. The contemporary Ford Ranger offered a diesel through 1987. That was a 2.3-liter turbo from Mitsubishi, and it generated 86 hp and a whopping 134 lb-ft. The 2.8-liter Duramax will be 50-state compliant with owner-added urea for exhaust after-treatment. It will be built in Rayong, Thailand, and shipped to the Colorado/Canyon assembly plant in Wentzville, Missouri. The diesel will be offered in Colorado and Canyon crew cabs, mid-trim and up, with two-or four-wheel-drive. Official ratings are pending, but GM expects the highest mileage in its smaller pickup line and a higher max tow-rating than the current upgrade 3.6-liter gasoline V6 (305-hp, 269 lb-ft). The company estimates a 10 percent take-rate for the 2.8L Duramax, but it’s protecting itself for higher demand, and it should. In full-size trucks, diesel sales have increased faster than pickup sales as a whole, and diesel customers tend to choose heavily optioned, high-sticker models.

• From USA Today: The rivalry between General Motors and Ford intensified on a key battlefront: the pickup truck wars. GM released a stinging Web commercial taking direct shots at Ford over the costs and speed of the Blue Oval automaker's pickup truck repairs. The Web hit — which may turn into a full-blown TV ad campaign — features NFL broadcast personality Howie Long interviewing an expert about the costs of fixing the aluminum-bodied Ford F-150 full-size pickup truck.
In the ad, GM claims it costs an average of $1,755 more and took an additional 34 days to fix the F-150 than its direct GM competitor, the Chevrolet Silverado, following a simulated low-speed accident. "So if I'm a guy that uses my truck for work, every day I don't have that truck, that costs me money," Long says. "In addition, you got higher repair bills. I'd be interested to know what happens to insurance costs. I got to tell you — all that certainly makes me think twice about an aluminum-bodied truck. Seems like you'd be taking a risk." In the 3-minute commercial, GM said it hired AMCI Testing to survey the differences in repair costs and time between the Silverado and F-150. The automaker said it tested four units of each vehicle.

• Along that same line, GM has another web video that has random individuals brought into a room that has 2 cages – one made from aluminum and one made from high strength steel. After checking out both cages they are asked which one they would seek refuge in if a grizzly bear tried to attack them. While they were contemplating, a door opens and through it ambles a huge grizzly bear. They quickly ran to the high strength steel cage and locked the door as the bear approached. The spot closes with the bear in the bed of a Silverado.

Tom Brune
UAW Communications Coordinator
Wentzville Assembly
636-327-2119

Thursday, July 2, 2015

State of the Union July 2, 2015

July 2, 2015 online at www.uawlocal2250.com

· Now that Congress has given fast track authority to the President, the next battleground lies with the actual up or down vote on the Trans Pacific Partnership (TPP) trade agreement. While the UAW continues to oppose this agreement, we at Wentzville Assembly should be particularly interested in seeing this agreement fail (and a similar agreement is in the works for the European Union). A big reason for our opposition is the proposed elimination of the so-called chicken tax. What is that, you say, and what do chickens have to do with building trucks?
This tax is a 25% tarrif applied to all imported light duty and work trucks. It was instituted in the early 1960s when some European countries placed stiff duties on imported poultry to stem the flood of cheap U.S.-produced chicken. President Lyndon Johnson fired back, imposing a 25 percent tariff on imported brandy, dextrin, potato starch and light trucks. Trucks were included to target Volkswagen, the only automaker importing pickups into the United States. The tax has been dropped on all the other commodities but it remains for trucks. While it hasn’t kept foreign brand trucks out of the US market, it has forced companies like Toyota to locate their truck manufacturing in the US, and later in Mexico and Canada as a result of NAFTA, the worst job-killing trade agreement of all time.
Our two products are somewhat unique in that there are many foreign versions of vans and midsize pickups. Just look at the Mercedes Sprinter. Currently these vans are assembled in Europe, disassembled into kits and then shipped to South Carolina, where they are reassembled into cargo vans – all to avoid the 25% tax. Recently Mercedes announced they will be building the entire van in the US. Would that have happened without the tax? The Ram Promaster is a clone of the European Fiat Ducato and built in Mexico. And the Ford Transit being built in Kansas City is the same as the European/global version. Would there have been a $1.5 billion investment in this state to build those vans minus the tax? GM has European vans similar to Transit and Promaster. Would they choose to import those instead of investing in the US?
Midsize pickups are an even better example how the elimination of this tax would potentially open the floodgates for imported pickups. While full size pickups are uniquely American, midsize pickups are built and sold in dozens of countries around the globe. Would VW start sending the Amarok stateside if the tax is eliminated? How about the global Ford Ranger, that is currently sold everywhere but the US? There’s also the Mitsubishi Triton and the Mazda BT-50. All of these could potentially wind up here. There is some good news. Most of the aforementioned pickups are built in Thailand, which is thankfully excluded from the TPP agreement. But that could be only temporary as Thailand has expressed an interest in joining at some point and the agreement as it is understood will allow for other countries to join.
As well, some if not all of these trucks would need some engineering work to pass US regulatory muster. Would that be enough of a deterrent to a company given the profits that pickups generate?
Finally, Obama administration trade negotiators have said the tariff would phase out on the longest possible timeline, as part of a bilateral U.S.-Japan side deal proceeding alongside the TPP talks, says Matt Blunt, the former Missouri governor who now runs the American Automotive Policy Council, a Washington trade group that represents Ford, Fiat Chrysler and General Motors on trade issues. Blunt said it's only fair because barriers in Japan other than tariffs have effectively kept U.S. automakers out of the country. "We believe it could take as many as 25 years to open up the Japanese market given that it's the most closed market in the developed world today," Blunt said. As the final vote gets closer we will keep you posted on any developments.
· Chevrolet, Buick, GMC and Cadillac dealers in the United States delivered 259,353 vehicles in June 2015. Retail deliveries climbed 7 percent year over year, and they were up more than the industry for the third month in a row. The drivers were stronger Cadillac sales, a 12 percent gain at GMC and a 9 percent increase at Chevrolet. Together, they helped make the month General Motors’ best June for retail deliveries since 2007 and its best June for retail market share since 2011. GM increased its sales to commercial customers, and state and local government fleets, as well. Rental deliveries, which tend to be less profitable than retail sales, were down 45 percent as a result of GM’s previously announced plan. Total fleet sales in June were down 29 percent year over year, or 21,366 units. GM’s total sales were down 3 percent.
“We just wrapped up the U.S. auto industry’s best six months in a decade, driven by strong demand for pickups and crossovers,” said Kurt McNeil, GM’s U.S. vice president of Sales Operations. “People feel good about their jobs and the direction the economy as a whole is taking, so the second half of the year should be strong too, and that’s especially good news for Chevrolet and GMC, brands that have very broad truck and crossover portfolios.”
Industry sales continue to exceed expectations. GM estimates that the seasonally adjusted annual selling rate (SAAR) for light vehicles in June was 17.3 million units.
During the first half of 2015, GM gained retail market share in both the crossover and truck segments, according to J.D. Power PIN estimates. GM’s crossover share is 12.6 percent, up 0.4 percentage points compared to a year ago. GM’s truck, van and SUV share is 38.9 percent, up 2.1 percentage points.
Most of the truck market share gain comes from the ongoing success of the Chevrolet Silverado and GMC Sierra full-size pickups, which were redesigned for the 2014 model year. Since calendar year 2013, GM’s retail share of the segment has grown 0.9 percentage points to 38 percent, according to PIN.
Market share and average transaction prices (ATPs) were particularly strong in the second quarter of 2015. According to PIN, GM’s retail share in the segment was up 2.8 points year over year to 40.2 percent. ATPs were up almost $1,000 per unit, and incentives were flat. Other highlights:
  • Pickup deliveries were up 33 percent. The Silverado was up 18 percent.
  • Colorado sales were 6,558 units, and it remains America’s fastest-selling pickup with a “days to turn” of 15 days. The truck had its best June sales since 2007.
  • GMC pickup deliveries were up 37 percent, with the Sierra up 21 percent. Deliveries of the new Canyon totaled 2,532 units.


Tom Brune
UAW Communications Coordinator
Wentzville Assembly
636-327-2119