Will it Blend - iPhone
Waste of a Phone or a Life?

A few weeks ago, I stumbled upon a series of videos on youtube called Will it Blend? Some smart marketers at a blender company called Blendtec decided to post videos of everything from a crowbar, to a stuffed animal, to a pile of glow sticks being pulverized in one of their blenders. If you cross the hype of the iPhone with the youtube fad that WIB had already become, and the Will it Blend iPhone edition has become ridiculously popular among bloggers with over 1.5 Google hits as of this writing. Just one version of the iPhone blending on Youtube.com has over 1.3 million views. Let's say, then that just 10 million people have spent a minute and half watching the iPhone blend. that's 28.5 person/years spent watching the iPhone blend. if the real total is 100 million people seeing the iPhone blend, then that's 285 years or about 3 and a half life times spent watching an iPhone blend. The worldwide web - it brings new meaning to life.

Watching the iPhone blend is a complete waste of time. The glowsticks, on the other hand, that was cool.

Fifth Third Mortgages Defy Gravity
Some ARMS go up but don't go down - Class Certified

There aren't very many lawyers in Indiana handling consumer cases, but two of the few, M. Scott Barrett, of Bloomington, and Constantine "Kim" Orfanos, of Indianapolis, have won a hard-fought battle to get a class certified in the case of a client with an adjustable rate mortgage (ARM) that went up but didn't come down.

When a big lender like Fifth Third "accidentally" fails to adjust a mortgage for falling interest rates, but has no problems tacking on rate increases, you gotta believe that it probably wasn't an accident; and you have to believe that it probably didn't happen to one customer. In the case of Grider vs. Fifth Third Bank, shortly after the lawsuit was filed in 2004, the bank admitted that it miscalculated the interest rate. While admitting an error, the company fought like the dickens any discovery motions that would prove that the imposition of a n unwarranted "floor" interest rate was unique to the named plaintiff, but the same time, the bank maintained that it was an isolated incident. (Hmm, what's wrong with this picture?) The plaintiff's attorneys fought for three years, and in April, they got an order certifying a class. (Grider vs. Fifth Third Bank, Case No. 49D07-0404-PL-000819, Marion Superior Court, Marion County, Indiana). In the three year fight, they were able to determine that 49-60 ARM loans improperly had a "floor" rate improperly set. The class definition includes prospective loans issued in Ohio and Kentucky. While that doesn't seem like many loans to a big company like Fifth Third, and it may be a small portion of their entire portfolio, it's potentially hundreds of thousands of dollars in extra interest being paid by the homeowners. It will be interesting to see what numbers come out of the Ohio and Kentucky loans. I'd also be interested to find out if there was a third party which designed the loan products and the software tracking the loans. If so, an "error" by a regional bank like Fifth Third might have been repeated by other lenders across the country.

However big or small this case turns out to be, congratulations to Scott and Kim, the lawyers, and to Mr. and Mrs. Grider, the clients. You've won a battle against the big boys, and not everybody can say that.

(Oh yeah, Kim Orfanos is a UAW-LSP alum. For fellow 3357 members who are concerned about life after the death of the unionized auto industry, this proves that there is hope for us all.)

Holy Cellulostic Biomass Batman

The utility of ethanol as a practical fuel is limited today because the corn and sugar cane used to produce the alcohol are prized as food and animal fodder, and it takes a lot of energy to process the alcohol and get it to market. The holy grail of alcohol production has been cellulostic alcohol, alcohol made from the stalks and stems of the source plants rather than the seeds, fruits & nuts. Though it's long been known that bacteria exist that can break down the roughage parts of plants, these bacteria have stubbornly resisted efficient cultivation.

Until now, that is, at least according to Honda. According to a press release reported at zdnet.com, Honda and its research partner, Research Institute of Innovative Technology for the Earth, or RITE, have come up with a breakthrough process allowing efficient production of alcohol from cellulose stock. Here's a quote:

Current technology for converting cellulosic biomass yielded impractically low levels of ethanol due to the interference of fermentation inhibitors with the function of microorganisms that convert sugar into alcohol. The fermentation inhibitors are formed primarily during the process of separating cellulose and hemicellulose from soft biomass.

The new process uses a microorganism developed by RITE that helps reduce such interference, enabling far more efficient ethanol production.

"This achievement solves the last remaining fundamental hurdle to ethanol production from soft biomass," Hideaki Yukawa, chief researcher at RITE's molecular microbiology and genetics lab, said during a news conference in Tokyo.

When this technology spreads, the Beverly Hillbillies can move back from Beverly Hills to the hills of Tennessee, put their knowledge of corn-squeezins to work, and get rich all over again.

Is Ford Selling Volvo?
Who's going to design future Fords?

Only Ford's hairdresser knows for sure if the the automaker is planning on selling the Volvo brand. Contradictory reports have been bantered about in the press over the weekend and spilling into today. Volvo is one of the few parts of Ford that is making money, $402 million in the first quarter of 2007 according to Forbes magazine. For has pledged most of its industrial assets to get working capital for its turn around plan, so tough decisions regarding asset sales may be inevitable. It's not clear how much cash would actually realize if it sold Volvo. According to Edmunds.com, Volvo was one of the assets that Ford pledged to get the working capital. The mortgagee would seem to have the upper hand in negotiations to remove the security interest over the Volvo assets.

Volvo is more than just a niche marketer of "boxy but good", safe European cars, Volvo engineering contributes to most of Ford's design. The Ford Five Hundred/ (new) Taurus and Freestyle ride on a Volvo platform. If you take away the Volvo-engineered cars, and the Mazda-derived cars including the Fusion/Milan/MKS and Focus, it doesn't leave much in the way of passenger cars, just the niche market Mustang and the ancient but vanishing Crown Vic. As much as Ford likes to complain about the cost and productivity of the UAW members, it seems that Ford is getting much less productivity out of its engineering employees. Other than the Mustang and its organ donor the Lincoln LS, I can't think of a single new-from-the-ground-up passenger car that Ford has engineered in the United States and introduced in the past 10 years. All those engineers can't be working on trucks, can they?

It's Confirmed - Delphi Dropping Legal Services

Thanks to Paul C., Ken W. and Steve B., I just received a copy of the UAW-DELPHI-GM Memorandum of Understanding Delphi Restructuring. Delphi is clearly dropping the UAW-Delphi Legal Services Plan effective October 1st. Here's the language in page 18 of the document:

3. Existing CHR/Legal Services
The Parties agree as follows:
a. As of October 1, 2007, all Delphi funding and participation in the
Legal Services Plan (Attachment I to the 2003 UAW-Delphi
National Agreement) and all programs associated with the UAWGM
Center for Human Resources (CHR) will be terminated.
Discussions about any joint programs to be continued, and the
method for their administration at the local level in the absence of
the CHR, will be a matter of Local Negotiations.

It couldn't get any clearer.

What are the odds of the FB3 (formerly big three) automakers dropping the legal services when their contracts come up in the fall? Who knows? I'd say the odds are against it, but not overwhelmingly so. Let's look at the timing precedent. The UAW ratified the Delphi deal at the end of June for an October 1 benefit end. That's a 4 month lead time. I would hope that we'd have at least that much lead time before a FB3 program termination.

FYI, if you are a UAW-LSP staff attorney in an office that primarily serves Delphi employees, please send me a private e-mail letting me know how the announced ending of legal services has affected your office. Let me know whether you want me to post your letter or not.

Walletboy Returns DRAFT


I just got back from a whirlwind two-week East Coast tour, playing including playing Walletboy on Broadway. The auto industry didn't sleep while I was away. I'll get to as much as I can before I fall asleep. I may have to add links later.


Delphi & UAW Agree to Cut Legal Services

The Delphi deal closed. The UAW agreed to give Delphi a two-tier wage structure, and the new contract eliminates legal services benefits. There are significant healthcare copays, and the pension plan is changed to a 401k. The Delphi contract imposes a new wage scale from $14.00 per hour for new hires to $18.50 for old hands. GM agreed to subsidize the wages of holdovers for up to 3 years. Still, within three years, through plant closings and attrition, the UAW presence at Delphi is expected to be cut by about 7/8, from 17,000 UAW workers now to 2306 in 2012.

In fact, Delphi intends to only keep open four UAW plants: Kokomo, Indiana; Lockport, New York, Rochester, New York, and Grand Rapids, Michigan. I'm still trying to get confirmation whether elimination of the legal services benefit is part of the new contrac,t but even if the legal services benefit is retained, the closing of Delphi plants will likely mean the closure of several UAW-LSP offices, and a shuffle in others as seniority rights result in bumping.

Allison, GM's Aim was True
GM sells Allison Division to Private Equity firms.

On June 28, General Motors announced that it was selling its Allison Division to a private equity consortium lead by Carlyle Group and Onex Corp. The Allison division had its roots in racing Indy Cars. By the end of the 1920s, Allison was big with the military in making things that go. In recent years, medium and heavy duty truck transmissions as well as tank transmissions have been Allison's main forte. The Allison operations in Indianapolis that employ 3,400 will go to the buyers. GM will keep the part of Allison that makes hybrid truck transmissions in Baltimore, Maryland. GM will receive $5.4 billion in the deal, but it will lose another of its profitable enterprises. (Source (among others) Businessweek


Cerburus & Chrysler Deal appears to be Final

All of the international government approvals of DCX's agreement to sell Chrysler Division to Cerberus Financial appear to have gone through. A third quarter closing will make the deal official. Until then, all Chrysler product plans and personnel plans appear to be in limbo.

Bankrupt Supplier Dana Corp is setting up a deal to transfer retiree healthcare obligations to the UAW.



GM June Sales plung 21% - New products aren't helping much.

General Motors announced that its sales dropped 21% in June 2007 compared to June 2006. GM may try to sugar coat these figures, saying that sales in 2006 were inflated by loss-leading sales incentives. Robert Farago, author of the GM Deathwatch at thetruthaboutcars.com isn't buying it, pointing out that sales plunged also compared to May 2007, and comparative sales of its import-brand rivals posted double-digit increases. GM's market share is now down to 21%. Toyota's is up to 16.9%.

GM has touted several new models as its saviours. Unfortunately, these models are looking to have very short legs in the sales race. The most important models, the half-ton pick-up trucks, haven't improved GM's truck sales overall, in fact, they trail last year's pace by more than 20%. Saturn benefited the most by new products, with the Aura and the Outlook. Believe it or not, the Outlook actually received a glowing report by noted-GM hater, Consumer Reports.

What's coming up in the GM pipeline for 2008? Answer: not much. Or, should I say not much in the way of volume sellers. There's the new Saturn Vue that is already starting to hit the dealers. It's a direct competitor in the already overcrowded two-row sport CUV market. The new Cadillac CTS looks to be promising, but the segment is small, and there are lots of excellent competitors. In the family sedan market, Chevrolet gets a new Malibu. the problem is that the 2008 Malibu is a platform-mate of the Aura and Pontiac G6. The Aura and G6 aren't bad vehicles, but they haven't had enough of the right stuff to keep GM from augering in.

What do the competitors have? First and foremost, Honda will have a brand new Accord. Toyota has a new Highlander that has GM's new crossovers in its crosshairs. Hyundai is refreshing its two-year-old Sonata. Also, word-of-mouth has been building about Hyundai's crossovers. Mazda will be showing a new Mazda6, though it's not clear to me whether it will make a fall introduction. Ford's Taurus (formerly Five Hundred) should finally have the guts to take sales away from GM's larger sedans.

E-85 Bargain? Environmental Savior?

Edmunds.com ran a head-to-head test of E-85 ethanol and gasoline and came to some interesting conclusions. They drove a flex-fuel Chevrolet Tahoe from Los Angeles to Las Vegas and back first on E-85 (85% ethanol) and then on conventional gasoline. The Tahoe averaged 18.3 mpg on the gasoline and 13.5 mpg on the E-85. The gasoline cost $3.42 per gallon, and the E-85 cost $3.09. In summary, it cost 22% more to drive the Tahoe on E-85 than on gasoline. When figuring carbon emissions, it was a statistical tie.

If, as some critics claim, there is more carbon dioxide emitted refining and delivering ethanol than gasoline, then gasoline is actually the cleaner fuel.

What about performance? The Tahoe was a half second quicker 0-60 on gasoline. In theory, the vehicle should be faster on the E-85 due to the higher octane in the E-85, the engine can run at a higher compression before knocking. However, to realize the benefits of the higher octane, the engine has to be tuned for it. Clearly the Tahoe is not tuned for optimal performance under E-85.

Delphi Deal Closer, Closer, Closer . ..

Yesterday, I reported that a deal between Delphi and the UAW could come very soon. the latest word is that the Union wants to have the deal in front of the members for a vote before the regular July 1 two-week shutdown.

Sicko Review Link

David Corn of The Nation gives Michael Moore's new film, Sicko, a thumbs up rating. Link is here. The film starts in selective release this Friday and opens nationally next Friday.

Three Rows, No Waiting

At a friend's request, I put together a comparison of three 3-row crossover SUVs that we can drive to work, the Ford Taurus X (formerly the Freestyle), the Chrysler Pacifica, and the Saturn Outlook. This time last year, there wasn't a single domestic 3-row crossover with a 250 (or more) horsepower engine, 6-speed automatic transmission and real world 20+ highway MPG, by summer's end (when the Ford is available), there will be 5 including the Outlook's sisters, the Buick Enclave and GMC Acadia. Any of these would be a good replacement for a gas-guzzling full-sized SUV.

Delphi Settlement Pending?

It looks like the UAW may be getting ready to clear the deck in preparation of fall's bargaining season with the automakers. According to the Detroit News, there are only about 4,000 UAW workers left at Delphi. The reported deal would include cash-payouts for these workers in exchange for accepting lower hourly wages in the range of $14-18 per hour. This hourly range is higher than the figures that Delphi chief Steve (pomatus of bankruptcy) Miller tried to mandate at the outset of the bankruptcy.

More than 12,000 Delphi workers took a buyout last year; and most were replaced with new workers hired in at a "second tier" $14.00/hr. wage rate. General Motors has disclosed that it expects to absorb $7 billion in costs related to the Delphi plan. General Motors has taken an accounting charge for this cost.

If the deal goes through, it looks like all the parties involved can look back and said they did the best they could. The UAW fought a rear-guard action, preserving wages for its workers for the better part of 2 years, giving just about everybody a chunk of cash to at least partially make up for a diminished stream of wages. General Motors took a big hit but avoided a disasterous shutdown that would likely have meant the end of the company. Delphi itself will have a wage structure that makes it more competitive on the global scene.