Government must help people left jobless by Ford delaying third shift: NDP
21 hours ago

TORONTO — Ford Canada is "playing Russian roulette" with the lives of 350 would-be employees who learned just days before they were to start work that they wouldn't have jobs after all, the NDP's economic development critic said Monday.

Paul Miller said he's "disgusted" with Ford and wants the Ontario government to help workers who were supposed to start work on Monday, only to be notified last week that Ford was delaying the start of a third shift at its plant in Oakville, Ont.

Many of the 350 people affected left other jobs to take positions at Ford, said Miller, who called the company's treatment of its new hires "unacceptable."

"They're playing Russian roulette with these people's lives," he told a news conference at the Ontario legislature.

"It's not fair, it's morally wrong and this government should be responsible for pushing forward and pushing the other companies to follow through."

Miller called on the province to put in place a contingency plan to help people affected by Ontario's struggling manufacturing sector.

More vehicle models need to be brought into Ontario for manufacturing, which would create further jobs through retrofitting work and operating the facilities, he added.

The new Ford hires have already gone through tests, job interviews and medical exams.

One of them, Ben Stanley, said he left his previous job to take on a position with Ford after he was "wooed" by the company. Now, he said, he can't go back to his previous job and he doesn't know what he'll do to support his wife and children.

"Three days notice is just totally ridiculous," Stanley said. "It's 350 people with families, mortgages."

Brenda Austin has eight years experience working in the auto manufacturing industry and left a higher paying job to go to Ford, where the long-term potential for earning was better.

She said she cried all day last Tuesday after receiving the phone call telling her she wouldn't be starting a new job on Monday.

"I am the only income in my house - I have no benefits now, I have no job," Austin said. "I have no idea how we're going to survive this."

July 28, 2008

Fuel Subsidies Overseas Take a Toll on U.S.

By KEITH BRADSHER

JAKARTA, Indonesia — To understand why fuel prices in the United States have soared over the last year, it helps to talk to the captain of a battered wooden freighter here.

He pays just $2.30 a gallon for diesel, the same price Indonesian motorists pay for regular gasoline. His vessel burns diesel by the barrel, so when the government prepared for a limited price increase this spring, he took to the streets to protest.

"If the government increases the price of fuel any more, my business will collapse totally," said the boat captain, Sinar, who like many Indonesians uses only one name.

From Mexico to India to China, governments fearful of inflation and street protests are heavily subsidizing energy prices, particularly for diesel fuel. But the subsidies — estimated at $40 billion this year in China alone — are also removing much of the incentive to conserve fuel.

The oil company BP, known for thorough statistical analysis of energy markets, estimates that countries with subsidies accounted for 96 percent of the world's increase in oil use last year — growth that has helped drive prices to record levels.

In most countries that do not subsidize fuel, high prices have caused oil demand to stagnate or fall, as economic theory says they should. But in countries with subsidies, demand is still rising steeply, threatening to outstrip the growth in global supplies.

President Bush warned about the effects of subsidies on July 15. "I am discouraged by the fact that some nations subsidize the purchases of product, like gasoline, which, therefore, means that demand may not be causing the market to adjust as rapidly as we'd like," he said.

Indeed, the biggest question hanging over global oil markets these days may be how much longer countries can keep paying the high cost of subsidizing their consumers. If enough countries start passing the true cost of oil through to their citizens, many economists believe, demand growth will slow, bringing the oil market into better balance and lowering prices — although the long-term economic rise of China and other populous countries makes it unlikely that gasoline prices will plunge back to the levels of several years ago.

China raised gasoline and diesel prices on June 21, though still keeping them below world levels. World oil prices plunged more than $4 a barrel within minutes on the expectation that Chinese demand would slow.

In Indonesia, the government spends six times as much on energy subsidies as it does on agricultural investments, even as rice prices have skyrocketed this year.

Many countries, like India, have raised oil prices considerably in recent months, only to watch world prices climb even further, pushing up the cost of subsidies once again. China's estimated $40 billion in subsidies this year is up from $22 billion last year, mainly for this reason, although consumption has also risen, with Chinese buying 18 percent more cars in the first half of this year than in the period a year earlier.

Political pressures and inflation concerns continue to prevent many countries — particularly in Asia, where inflation has become an acute problem — from ending subsidies and letting domestic prices bounce up and down.

"You talk about subsidies, you're not only talking about the economy, you're talking about politics," said Purnomo Yusgiantoro, Indonesia's minister of energy and mineral resources. He ruled out further price increases this year beyond one in May that raised the price of diesel and regular gasoline to $2.30 a gallon.

Nobuo Tanaka, executive director of the International Energy Agency, said that subsidies were clearly a big factor contributing to the mismatch in supply and demand that has helped push up world oil prices. "We think the price mechanism is not working enough to make consumers more efficient," he said.

Indonesia spends more on fuel subsidies, $20 billion this year, than any country except China. Some economists estimate that fuel use in Indonesia would fall by as much as a fifth if the government were to eliminate subsidies entirely.

Malaysia's government incited public anger on June 4 when it raised gasoline prices by 40 percent. The prime minister, Abdullah Ahmad Badawi, announced the following week that he would retire, although he has since said that he will not do so until 2010.

Before adjusting the prices, Malaysia was spending 7.5 percent of its entire economic output on fuel subsidies, a greater share than any other nation. Indonesia follows with 4 percent.

Coming elections in Indonesia and India make further subsidy reductions less likely in both countries. And big oil exporters like Saudi Arabia have so much revenue right now that they can easily afford to subsidize fast-growing domestic demand.

Chinese fuel policy is the hardest to predict: the country's leaders are struggling to reduce inflation and are not expected to take any action on fuel until after the Olympics, at the earliest. But they are also campaigning for greater energy efficiency and less reliance on fuel imports.

Many in Asia bridle at being told to reduce oil use, particularly by the United States, a country of sport-utility vehicles and big houses.

"What about the energy consumption in the United States? Isn't it one of the highest in the world?" said Irvan Saefurrohman, a student activist in Jakarta who organized a fuel-price demonstration in May that turned violent as protesters threw rocks at police and set cars on fire.

Making matters worse, Asia's own oil production has barely risen over the last decade.

Indonesia, with extensive oil fields that made it a top target for Japanese conquest during World War II, became a net oil importer in 2004. Output from its aging fields has fallen almost 40 percent since 1995, and the country plans to withdraw from OPEC at the end of this year.

So Asian nations increasingly compete with the West to import oil from the Mideast and Africa.

In Asia, subsidies have been particularly prevalent for diesel, although many countries subsidize gasoline as well. The subsidies have been an important reason diesel prices have climbed almost twice as quickly as gasoline prices have over the last year in the United States.

Many governments see diesel as more important because truckers and ship captains need it to distribute goods; if diesel prices rise, consumer prices often follow. Diesel is essentially the same fuel as heating oil, so high diesel prices mean high prices for heating oil. Spiraling prices already have some in the Northeast United States worried about how families will afford to heat their homes this winter.

To be sure, subsidies are not the only cause of high crude oil prices. Strong global economic growth, particularly in Asia, is requiring a lot of energy. Political tensions between the United States and Iran and market psychology have played a role.

Additional factors have contributed to strong demand for diesel in particular. European automakers have been shifting toward the production of more cars with diesel engines, which typically get more miles to the gallon than gasoline-powered cars — although the cost advantage of burning diesel is disappearing with higher prices.

When Vietnam reduced fuel subsidies on July 21, it raised domestic gasoline prices by 31 percent, to $4.22 a gallon for 92-octane fuel. But Vietnam increased diesel prices by only 14.3 percent, to $3.54 a gallon.

The fast-growing demand in China is skewed toward diesel as well. Automakers are on track to sell half as many gas-powered cars in China this year as in the United States. But in China they already sell at least 50 percent more medium- and heavy-duty trucks, the workhorses of a manufacturing economy. Virtually all of those run on diesel.

The cheapest fuel per gallon in many Asian countries is not diesel but kerosene, commonly used for cooking by the very poor. In India, for example, the government subsidizes kerosene so heavily that it sells for just 97 cents a gallon, compared with $5 a gallon in the United States.

While the subsidies encourage greater consumption, eliminating them is not easy. "If you reduce the subsidy for kerosene, people are likely to forage in the forests for fuel, and environmentally that is very bad," said Ifzal Ali, the chief economist of the Asian Development Bank.

Kerosene is similar to jet fuel, so strong Asian demand has helped push up costs for airlines.

Some spending on subsidies is simply wasted: Mr. Yusgiantoro, the Indonesian official, said that fishing boats take drums of subsidized diesel out to sea for resale to foreign fishing vessels. But a lot of subsidies are delaying what could otherwise be a slowing of economic activity.

Mr. Sinar, the freighter captain, said that his vessel hauls cement to outlying islands with limited cement production of their own. Higher diesel costs would make it much costlier to move the cement, which would force builders to accept the prices of their local cement producers and probably cause a construction slowdown.

The nearly 30 percent increase in prices for low-octane gasoline, which Indonesia put in place in May, has already prompted some less affluent families to drive less. Subrata, a 34-year-old who sells gasoline in glass bottles to local motorcyclists in Karawang, Indonesia, said that the increase had halved his sales — and that plenty of motorists were upset.

If the price rises further, he said, "people will not buy it and it will be a heavy blow for the lower classes."

Copyright 2008 The New York Times Company

China's Cars, Accelerating A Global Demand for Fuel

By Ariana Eunjung Cha
Washington Post Foreign Service
Monday, July 28, 2008; A01

SONGJIANG, China -- Nodding his head to the disco music blaring out of his car's nine speakers, Zhang Linsen swings the shiny, black Hummer H2 out of his company's gates and on to the spacious four-lane road.

Running a hand over his closely shaved head, Zhang scans the expanse of high-end suburban offices and villas that a decade ago was just another patch of farmland outside of Shanghai. To his left is a royal blue sedan with a couple and a baby, in front of him a lone young woman being chauffeured in a van.

"In China, size matters," says Zhang, the 44-year-old founder of a media and graphic design company. "People want to have a car that shows off their status in society. No one wants to buy small."

Zhang grasps the wheels of his Hummer, called "hanma" or "fierce horse" in Chinese, and hits the accelerator.

Car ownership in China is exploding, and it's not only cars but also sport-utility vehicles, pickup trucks and other gas-guzzling rides. Elsewhere in the world, the popularity of these vehicles has tumbled as the cost of oil has soared. But in China, the number of SUVs sold rose 43 percent in May compared with the previous year, and full-size sedans were up 15 percent. Indeed, China's demand for gas is much of the reason for the dramatic run-up in global oil prices.

China alone accounts for about 40 percent of the world's recent increase in demand for oil, burning through twice as much now as it did a decade ago. Fifteen years ago, there were almost no private cars in the country. By the end of last year, the number had reached 15.2 million.

There are now more Buicks -- the venerable, boat-like American luxury car of years past -- sold in China than in the United States. Demand for Hummers has been so strong that starting this year, Chinese consumers can buy a similar military-style vehicle called the Predator at more than 25 new dealerships.

Yet strong demand for oil isn't limited to China and its automobiles. Ever since an investment group led by a New York lawyer and a New Haven, Conn., banker came up with the notion of using Pennsylvania oil for lighting in the 1880s, petroleum has been an essential component of the industrial age. It fuels ships, planes and cars, and goes into road asphalt, home heating fuel, lubricants, plastics and petrochemicals.

The United States is the world's single largest consumer of oil, burning through more than 20 million barrels per day last year. This year, U.S. usage is on track to decline the most in 25 years, the result of high fuel prices and a sluggish economy. Still, about one of every eight barrels of oil produced worldwide ultimately ends up in the fuel tank of an American car or truck.

Demand in many developing countries, in the meantime, is accelerating because of the spread of middle-class lifestyles and populist policies that subsidize fuel to keep it cheap.

India's government, for example, will spend $24.5 billion this year on oil subsidies. And that's after subsidies were scaled back in June, triggering riots over the cost of diesel, which fuels most of the country's vehicles, and other oil products. "The hike in fuel prices last month has done little to damp soaring diesel demand," said Seema Desai, an analyst at the Eurasia Group. Indians are paying about $3.60 a gallon for diesel, far below market rates, and demand is still growing at an annual rate of more than 20 percent.

Oil-producing countries are even more generous to their residents. In Venezuela, gasoline costs 12 cents a gallon. In Iran, it costs 41 cents. In Saudi Arabia, it costs 47 cents; in Russia, $3.90.

All this growth is more than offsetting the conservation measures taken in the United States, Europe and other industrialized nations. This year, the combined consumption of China, India, Russia and the Middle East will increase 4.4 percent and for the first time exceed that of the United States, according to the International Energy Agency.

For energy planners in the industrialized world, this is a cruel irony, coming after a concerted effort by consumers and lawmakers to steer consumption downward. If China continues to increase its use of oil at the average pace of 6 to 7 percent a year, as it has since 1990, it will consume as much as the United States in more than 20 years.

But China bristles at criticism of its growing oil use, noting that per capita it will remain a small fraction of U.S. consumption for decades to come. Moreover, industrialized nations all relied on heavy petroleum use as they developed. Why should we be penalized, the Chinese ask, for coming late to the game?

* * *

While a number of factors contribute to China's surging demand, including rapid industrial development and hoarding by the government to ensure adequate supplies for this summer's Olympic Games in Beijing, it is autos that are having the biggest impact.

Yet despite this dizzying increase in passenger cars, less than 4 percent of the country's 1.3 billion people have already bought one. That's where the United States was in 1915.

"The entire energy market of the world is being affected by this country already. Can you imagine when we get to 50 people out of every 1,000 in China owning cars?" asked Friedhelm Engler, design director for General Motors and Shanghai Automotive Industry's joint-venture engineering and design lab in China.

For the previous generation, owning a car was the province of a privileged few -- those in government, heads of state-owned companies and others in positions of power.

But starting in 2000, China began to aggressively promote consumption to balance its export-driven, white-hot economy. Zeng Peiyan, who was then director of the national planning committee, created a list of things average citizens should be encouraged to buy. At the top of that list was cars.

Beijing has simplified procedures for buying cars, cut sales taxes and improved the availability of bank loans. It encouraged local governments to build more parking areas. It banned bicycles on some larger streets. And it laid thousands of miles of gleaming, multi-lane superhighways around the country.

In the meantime, gas has been kept artificially cheap. Even after subsidies were partly lifted last month, a gallon of gas in China costs only $3.40, well below market prices.

Some Chinese cities actually promote bigger, fancier cars to help foster the image of a more "wenming," or civilized, modern society.

The northern port city of Dalian; the Hunan provincial capital, Changsha; Shenzhen, across the border from Hong Kong; and many other cities ban cars with engines smaller than 1 liter from entering their downtowns on the grounds that those cars are old and dirty. Some other municipalities ban smaller cars from expressways, claiming the cars are so small they may endanger their owners when going at high speed. Other local governments single out owners of small cars for special charges -- "traffic capacity expansion" or "road and bridge maintenance" fees -- that can run $150 to $1,500.

In 2006, when China released its most recent "five-year plan," a national road map of priorities, a newly environmentally conscious central government began to encourage local governments to remove any disincentives for consumers to buy and for manufacturers to produce small cars. But legislation that would require local governments to revise their old practices is still pending, and change has been slow.

* * *

The impact of China's official car polices is perhaps most evident in the manufacturing center of Dongguan, a maze of motorways and parking lots close to the country's southern border in the heart of the Pearl River Delta. For every 1,000 residents in Dongguan, 520 have cars -- the highest rate in the nation and nearly 15 times the average.

Spread out over 952 square miles of industrial parks and housing complexes, Dongguan may be the closest thing to a Washington-style suburb in China. With no local subway system, a shortage of taxis and buses with limited routes, Dongguan's 7 million inhabitants often have no way of getting around without a car.

To help residents purchase cars, the government has offered numerous financial incentives. In 2007, the city worked with local banks to allow consumers to put zero down and get a car loan. Civil servants receive generous subsidies for using their own cars for official business, which prompted a rush on automobile purchases by local government workers. Dongguan also ordered operators of parking garages to cap their monthly charges at half the market price in neighboring cities.

All this has been good news for Feng Jiangming, 28, who owns a small business that sells nails, screws, ball bearings and other hardware to stores. Earlier this month in Dongguan, Feng was at the Zhicheng car dealership shopping for a new car to supplement the one he has had for five years.

In 1998 at the age of 17, Feng arrived here from Hunan Province to try his luck as a laborer at the many export-oriented factories that were opening. He remembers that the area was dotted with small villages and that the dirt streets were packed with bicycles. Back then, he said, no one he knew had a car. These days, few of his friends don't.

Feng ran his fingers along the shiny four-door, brown Buick Excelle sedan in front of him and nodded at the roughly $22,000 sticker price. He inspected the sunroof, extra-large headlights, all-leather interior.

When he first heard about the increase in fuel prices in China, Feng said he gave the idea of a smaller car a few seconds of thought -- and ruled it out. "If you want to go golfing or fishing, it's not very convenient," he said.

Salesman Xie Bin elaborated: "A small car is for people with money problems or if they want it as an extra car to give to their wives, daughters or girlfriends to go buy food."

As recently as a few years ago, automakers were betting that the future of the Chinese car market was in small vehicles that could easily maneuver the narrow alleyways of its ancient cities. Then they discovered a quirk in Chinese consumers' tastes.

Many car owners, even those who are lower middle-class, want to appear wealthy enough to have a chauffeured automobile. That means extra room for the owners in the rear. As a result, even big cars in China tend to be a third of a foot or more longer than their American counterparts.

This helps explain why roomy cars, such as the Volkswagen Santana -- a family sedan based on the Passat that is the country's top-selling car -- the Audi A6, Honda Odyssey and various Buick models are doing so well in China.

In China, the roomy Buick is associated with Sun Yat-sen, the father of the modern Chinese state, and Zhou Enlai, one China's most respected leaders. Both used to ride around in classic black Buicks. Buick's advertisements in China these days add a modern twist, depicting two tall businessmen in suits giving each other high-fives as if they have just closed a sweet business deal.

* * *

Another factor driving the sale of bigger cars in China is the rapid emergence of suburbs. Many of these satellite cities are romanticized versions of how the Chinese imagine the United States and other Western countries, rich with spacious villas and two-car garages, big-box chain stores, strip malls and office parks.

Zhai Yongping, an energy specialist with the Asian Development Bank, fears the Chinese are buying into the American lifestyle: "big houses, big air conditioning, big roads." Compared with the breakneck pace of road construction, public transit has developed slowly.

To encourage the Chinese to go green, General Motors, which has ranked first for passenger car sales in China in each of the past three years, is preparing to market hybrid vehicles or cars that run on alternative fuels.

But Zhang doesn't expect Chinese consumers to change their car-buying habits. "Fuel economy is probably the last thing Chinese look for," Zhang said as he drove around the Shanghai suburbs in his Hummer. He said he wasn't worried about filling up the tank even after the government trimmed oil subsidies last month, raising gas prices about 18 percent.

Zhang bought the Hummer in 2006, on special order from the United States. It cost him $220,000, including hefty shipping and import fees. "It feels like a man's car," he said.

Last month, he and two friends set up a Web site announcing the formation of a Hummer club in Shanghai. Some 20 other owners e-mailed him within days. They included several other businessmen but also coal mine bosses from inland provinces and three women in their 30s who are friends and purchased identical Hummer H3s.

Zhang said he and other club members were talking about organizing off-road trips, perhaps to the mountainous parts of Sichuan Province to help with reconstruction efforts in areas hard hit by the recent earthquake. For now, however, Zhang said he's happy just using his car to visit friends, cruising along at 17 miles per gallon on China's ever-growing network of highways.

Staff writer Steven Mufson in Washington and researchers Wu Meng and Crissie Ding contributed to this report.

Beijing restricts car use to fight pollution

FREE PRESS NEWS SERVICES • July 21, 2008

BEIJING -- With the Olympics less than three weeks away, Beijing began restricting car use and limiting factory emissions Sunday in a final effort to clear its smog-choked skies.

Under the 2-month plan, half of the capital's 3.3 million cars will be removed from streets on alternate days, depending on whether the license plate ends in an odd or even number.

Poor air quality is a major concern for the Aug. 8-24 games, already causing a few athletes to pull out.

Authorities forecast that the restrictions, along with a major expansion of the subway system that began over the weekend and measures to close polluting factories, would help clear smog over Beijing in time for the games.

Some foreign experts said, however, that air pollution is too intense to clear so easily. In a 4-day test last August, pollution experts noted a slight improvement in air quality.

Beijing residents have gone car-crazy. About 1,200 new vehicles are added each day, slowing transit on the five concentric ring roads to a stop-and-start crawl at peak hours.

The $3.2-billion expansion of the city's subway system lengthened its routes to 125 miles, a 40% expansion. One of the three new lines carries passengers from the airport to a downtown hub in 20 minutes.

The three new lines will carry an additional 850,000 passengers a day, the official Xinhua news agency said.

The car restrictions will require some 4 million additional passenger journeys each day to be made by public bus, subway, bicycle or taxi, burdening the public transit system. Xinhua quoted Zhou Zhengyu, a city transportation official, as saying 2,000 additional public buses would run during the two-month period.

In addition to the traffic plan, chemical plants, power stations and foundries had to cut emissions by 30% beginning Sunday. Dust-spewing construction in the city was to stop entirely.

Ford Shrink-Wrap their Fiesta Factory

 

Germany

: 17 July 2008 : Ford has wrapped part of its Cologne Fiesta plant with approximately 3,000 metres of specially designed mesh to celebrate the redesigned line's start of production.

The design was created in the UK and made using the sole press in the country that is capable of producing it.

It took six workers eight days of around-the-clock work to give the industrial block its multi-colour make-over.

The banner weighs in at a massive 1.5 tonnes and needs 25 tonnes of water ballast to hold it in place. It was tested by thunderstorms and heavy rain as it was put up.

Ford claims that pilots approaching the German city now point the factory out to their passengers.

GERMANY: Ford Fiesta steps on to global stage

Germany : 11 July 2008 : After numerous all-but-production-ready 'concepts' displayed at motorshows as far flung as Geneva, Detroit and China, Ford has finally taken the wraps off the production Fiesta developed in Europe - its new Global car.

Three- and five-door versions will come off European assembly lines this summer and "regionally-tailored" models will go on sale in Asia, South Africa, Australia and the Americas (North and South) by 2010.

First impressions are of a very attractive, well-specified and equipped little car that should give North American dealers, currently weighed down by stocks of unwanted large SUVs and trucks, something fuel-efficient to sell to customers who might otherwise cross the road for a Toyota Prius or Honda Fit, or even a GM Saturn Astra - a model consumer writers deemed a little pricey (that pesky euro) but little changed from its original Opel form and good to drive on US roads.

European buyers will get the Fiesta with a choice of four petrol and two diesel engines, a variety of transmissions, half a dozen trim packs and adequate standard equipment (eg range-wide power mirrors) and options (keyless entry, start button, automatic projector headlamps, automatic windscreen wipers, 3.5 inch display screen and cruise control).

Electric power steering is fitted and two new engines include an ultra-low CO2 'ECOnetic' version with target emissions of only 99 g/km and a top-line 120PS 1.6-litre 'Duratec Ti-VCT'.

Over 55% of the body structure made is of high-strength steel and the shell is about 40kg lighter.

The standard knee airbag is the first in a Ford small car - and there are also head-and-thorax side airbags, and optional safety curtains. The new model also has EasyFuel capless refueling.

European sales start in October. (based on an article in 'just-auto')

Reviews : UK Sunday Mirror : 13

July 2008 : "I can safely say this is Ford's best and most audacious Fiesta ever, a genuine Min

i-chaser gunning for a young and sophisticated buyer, bigger inside yet the same on the outside. It's also 40kg lighter than its predecessor and bristling with Ford's kinetic design cues.
Kicking off at just £8,695, the bold new Fiesta will be in perfect tune with its times, with sub-120g/km CO2 engines, and even 48mpg from the sporty Zetec S version, which is good for 60 in a smudge over nine seconds.
Next year we'll see the ECOnetic version, which returns an astonishing 73mpg and produces just 99g/km CO2. I look at this new Fiesta and I see absolute proof that the Blue Oval has turned the corner.
Ford have now got it dead right." (Quentin Willson)