South Korean LG Chem will finally begin commercial battery production at its Holland , Michigan, in July, Reuters says. The batteries will initially help power GM’s Volt.

Three years ago, at a groundbreaking ceremony for an LG Chem Battery plant in Holland, Michigan, President Obama promised that this and other pants will be “a boost to the economy in the entire region.” The plant made headlines for doing nothing.

The mantra before, during, and after the bailout was (and still is) that without the bailout, gadzillions of jobs would have vanished, the American car industry would have been wiped out, wheels would have come off the arsenal of democracy, and the sky would have fallen into Lake St. Clair. Of course, that’s nonsense. There are more than enough other carmakers in America. They would have received the sales, and added the jobs. They would have been mostly non-union jobs though.

The truth is, without the bailout, the UAW would have vanished, and with it millions of Democratic votes.

Lower gas prices and a turn-around in the housing market rekindled America’s love for the pickup, resulting in 2,000 new jobs at Ford’s Kansas City Assembly Plant.

Chevrolet’s Celta, Prisma and Onix models will be in short supply when workers General Motors’ Gravataí plant in southern Brazil go on strike for higher pay and shorter hours. Workers of the plant’s first and third shifts already approved the strike, Reuters says, the second shift is expected to follow suit today.

Unions reached a last minute deal with Opel: Plant closures and layoffs are off the table through 2016. This according to information given by works council chief Walter Einenkel to the usually reliable Westdeutsche Allgemeine Zeitung.

Down to the wire, and nothing: German unions had set Opel a deadline until today to come to an agreement about the future of Opel. The unions had offered to forgo a 4.3 percent pay hike and waive future pay raises if Opel extends a moratorium on plant closures through 2016. Today’s deadline passed without an agreement, Reuters says.

As expected, Ford is closing an UK plant. Unexpectedly, Ford is closing another one right with it, bringing EU plant closings to three in two days. Ford is closing its Ford Transit plant in Southampton, and it is closing the stamping plant in Dagenham with it, says Automobilwoche [sub].

Ford is expected to announce the closure of its van factory in Southampton, England, Reuters says. British shop stewards have been summoned to an emergency meeting at Ford’s European headquarters in Basildon, Essex, today.

Europe’s car crisis found 4,300 new victims: As expected, union representatives at Ford’s Genk plant in Belgium were told this morning that the plant will be closed. 4,300 workers will be out of a job.

GM is not the only U.S. automaker that wants to close a plant in Europe, and Ford is thinking about more than the end of the road for Alan Mulally. German press, from the industry magazine Automobil Produktion to the German edition of the Wall Street Journal are talking about Ford shuttering its plant in Genk, Belgium.

New panic at GM’s European Opel dependence: Opel needs to shed 30 percent of its workers. This is the supposed target of a “secret strategy” that has been agreed between Opel and GM, says BILD, Europe’s largest circulation newspaper under the headline “One out of three jobs imperiled!”

Based on an anonymous inside source, BILD writes about a three-step phased plan:

GM’s troubled German daughter will close its main factory in Rüsselsheim and its component plant in Kaiserslautern for a total of four weeks in response to a drop in demand for cars in Europe.

Nissan unveiled is 2013 Pathfinder in suburban Detroit and in downtown Manhattan’s Meatpacking District (just two blocks away from the PATH train, get it?) The fashionably rugged, but far from off-roadish locales were carefully chosen:

This makes Hugo Chavez happy: GM wants to more than double its production in the Caribbean worker’s paradise of Venezuela. At least that’s what Chavez told Reuters:

“Asked to provide journalists with the details, Venezuela’s Industry Minister Ricardo Menendez said GM planned to increase its production of cars in the country to 120,000 units per year, up from almost 50,000 now.”

The minister claims that GM furthermore plans to use Venezuela as a production and export hub for auto parts, to be used in Venezuela “and for export to neighboring Brazil and the Caribbean.” We would know a Caribbean island that needs parts badly.

Chatty Chavez added that Renault also is interested in building cars had also expressed an interest in building cars in the oil-rich nation.

P.S.: I hereby apply for tghe post as Venzuelan Propaganda Minister. Free sample: “Venezuela – We put the car in the Caribbean”

While France’s new leftist government mulls a new “drive French” plan and makes threatening gestures in the direction of French car makers that dare to do something about overcapacity, in an odd change of events it is a Japanese company that will prevent a much anticipated plant closure at PSA Peugeot Citroen.

Brazilians are unhappy with GM. GM is cutting capacity and jobs at a Brazilian plant. This made the Brazilian government unhappy, because it had cut taxes on domestically made cars, in exchange for manufacturers maintaining the size of their workforce. It also made unions unhappy. They voiced their displeasure on Monday by going on strike, Reuters says.

Australians are unhappy with Ford. In January, Ford received more than A$34 million ($35 million) from Australian state and federal governments to guarantee local production until 2016. Today, Reuters reports that Ford will cut 440 jobs, or about 15 percent of its Australian workforce.

At home, GM is at peace with the unions, benefits of having the UAW as a major shareholder. Abroad, GM Europe has been in a low intensity conflict with the European unions that oppose cuts at Opel. Now, a labor conflict flares up in an unexpected part of the world: Korea.

After a round of psychological warfare with targeted leaks, GM seems to be ready to attack the overcapacity at lossmaking Opel in earnest – eventually. The German government reportedly has been informed that Opel wants to close Bochum. Jobs will be exported to low cost countries such as Poland, Russia, China, India, Mexico and Brazil. Cars will be imported even from China.

In a surprise attack, the UAW has taken the first formal steps to unionize Volkswagen’s U.S. factory in Chattanooga. In what Reuters calls “an escalation of its effort to establish a foothold outside the Detroit automakers,” the UAW started passing out authorization cards for workers to sign. According to U.S. labor laws, the union needs signatures from at least 30 percent of the workers of a plant before a representation election can go ahead. The UAW’s timing could not have been worse.

For the second time this year, Volkswagen is increasing headcount at its Chattanooga plant. After hiring 200 new workers in January, Volkswagen now created an additional 800 new jobs.

The line at Volkswagen’s Chattanooga plant will run a little faster. It will produce 35 cars instead of 31 per hour. That also produces new jobs. In an emailed statement, VWoA announced today that 200 new permanent jobs will be created at its Tennessee plant.

While Honda and Mazda are just getting their respective footholds in Mexico (the two automakers are opening up respective assembly plants in Mexico), Nissan has had a long presence south of the border, building cars at its Augascalientes, Mexico plant for decades.

When we heard from Reuters about GM’s possible plan to shift production from its South Korean former Daewoo plants to Europe, we didn’t think that would be highly appreciated in South Korea. After duly reporting that there could be a deal afoot to mollify the German and European steelworkers union with jobs taken away from South Korea, we opined: Let’s see what the militant South Korean unions have to say about that.”

We did not have to wait long. The unions in South Korea already threaten war, and when they say war, they mean war.

When thinking about creating cost efficiencies, moving jobs to Asia usually comes to mind. GM has a different plan to bring profitability back to its hemorrhaging Opel unit. GM is considering bringing Chevrolet production from its Korean plants to Europe. In exchange for delivering jobs, GM expects concessions from the unions that would clear the way for a major cost-cutting operation necessary to stop the bleeding and to save the German patient from otherwise certain death. This is at the heart of a detailed report just filed by Reuters correspondents Christiaan Hetzner in Frankfurt and Ben Klayman in Detroit.

Ever since Steve Girsky an his “merry band of hatchet men” touched down in Rüsselsheim, Bertel has been warning that GM’s European division was about to embark on a serious cutting binge. But our worst fears, namely that Opel could go away entirely, have yet to be realized. Instead it seems that self-destructive mutilation will be attempted first, in order to stem the gushing red ink at Opel where at least €1b in losses are expected next year. Automotive News Europe [sub] reports that the first round of cuts will hit Opel’s Internationalen Technischen Entwicklungszentrum (ITEZ, “International Technical Development Center), as an IG Metall union document foresees some 1,420 product development position cuts (from a staff of some 6,000).

At the beginning of this year, the United Auto Workers pledged that it would launch a campaign to organize the foreign-owned, non-union “transplant” factories in the US, threatening to tar uncooperative automakers as “human right abusers.” The campaign initially lost steam, but the UAW stuck to its pledge, re-iterating on several occasions that it would organize “at least one” transplant factory by the end of 2011. With one month left to accomplish that goal and no signs of progress in sight, the UAW has officially called off that goal. In fact, the UAW now hopes to simply pick an automaker to target by the end of 2011. Spokeswoman Michelle Martin tells Bloomberg

At this point, our hope is to make a decision about who we’re going to target by the end of the year. But obviously, we won’t have the organizing campaign completed by the end of the year.

This is not too surprising, considering the UAW announced last week that it would be focusing on dealership pickets initially rather than factory organizing. And sure enough, the first dealership picket has begun, targeting Hyundai dealerships. And yet, says Martin

This has nothing to do with the domestic organizing campaign. Hyundai is not the target.

Huh? If the UAW is not committing to organizing Hyundai’s assembly workers, why picket Hyundai dealerships?

As the world struggles to come to grips with economic uncertainty, Bertel has been reporting that Japanese automakers are abandoning their homeland for lower-cost production centers overseas. Now, with economic turmoil shifting to Europe, it seems that Fiat could possibly be preparing for a pullback from Italy. Two basic factors are driving Fiat towards reconsidering its global manufacturing footprint: first, its struggles in the European market where margins are slim and dropping, second, its battles with Italian unions. Though Marchionne’s latest comments are ambiguous at best, some see these factors pushing the Italian automaker away from the market that gave it birth.

With a tough negotiating session with its traditional employers now complete, the United Auto Workers are turning their focus back to the year’s primary goal: organizing the transplant factories. 2011 was supposed to be the year in which the UAW took down “at least one” foreign-owned auto plant, with the union’s boss even going as far as to say

If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW

But as we found, the UAW is not welcome in the South, where most of the transplant factories are found. And with Honda, Hyundai, Toyota and VW all rejecting the UAW’s advances in some form or another, the union’s options are fairly limited. So instead of taking on the factories directly, the UAW is bringing back a questionable tactic from the days when it was misleadingly bashing Toyota for “abandoning” the NUMMI factory: they are taking the fight to dealerships.

PSA Peugeot Citroen is planning an Opel-sized thinning of its French workforce, Reuters says, citing comments of Jean-Pierre Mercier, union representative at Peugeot’s factory in the Paris suburb of Seine-Saint Denis. The union claims that PSA wants cut 5,000 jobs. And guess who’s to blame?

In a newsletter to members of Local 598, an editor revealed an interesting wrinkle in the recently-ratified contract negotiations, writing

With the option of strike off the table and the government still a part of our negotiations (literally sitting in the room with us ‘observing’ our talks), I don’t believe any better agreement could have been reached,

But now, reports Bloomberg [via Automotive News [sub]], local shop committee person Dana Rrouse insists that there was not actually a government official present at union negotiations. He tells the news service

That was a misprint. I didn’t get to proofread it. It went out and then I said ‘Where did you get that from?’ I mean, I talked about us still being under government, but nothing as far as they were sitting there.

The government still owns a large portion of GM’s stock, but it too says it was not involved with negotiations with the UAW. Which is probably the right position to be taking: with so much acrimony generated by the latest round of negotiations, there are few reasons to be associated with them. Still, it’s strange that such an explosive “misprint” should have made its way into a union newsletter. Even if the government were not involved in the slightest, as it insists it was, there’s clearly a perception among UAW members that the government remains a consistent presence in the auto industry.

From his dream of a UAW-represented VW plant in Tennessee ( ha!) to his desire for a seat on the boards of the Detroit automakers ( double ha!), UAW President Bob King has a way of idealizing the German unions. And no wonder: while the UAW spent decades fostering a radical sense of entitlement, German works councils entwined themselves with their respective employers, earning places of power among the world’s largest automakers. But unions are a delicate balancing act in every country and culture, and even Germany’s unions, widely hailed as the example for the industry, can run into trouble.

Last time it was Volkswagen’s powerhouse works council, which erupted in a scandal over VW-funded sex tourism (with free Viagra and shopping trips for the wives!) back in 2005. With Opel’s union boss, Klaus Franz, becoming caught up in his own (slightly less lurid) scandal, GM’s acknowledgment that more cuts could be coming for Opel could prove just as explosive for the German works council model.

Despite UAW President Bob King’s insistence that the UAW is not riven with divisions, Chrysler’s latest union contract is inflaming intra-union conflict, as the Detroit News reports that the Autoworker’s Caravan splinter group is protesting the union’s decision to approve a contract despite being rejected by Chrysler’s skilled trade workers. According to Autoworkers Caravan’s Alex Wassell,

We voted down the tentative agreement. But they used a procedural loophole to ratify it. We think it’s a very bad agreement and a very bad precedent, and we’re going to do everything we can to overturn it.

Watch UAW President Bob King on New Contracts: Top Priority Was Creating Jobs on PBS. See more from PBS NewsHour.

Though UAW boss Bob King has said that organizing transplant factories is a life-or-death struggle for the union, but the real make-or-break issue this year was the contract negotiations with the Detroit Automakers. And though King roundly denies that a rift has been formed in his union over two-tier wages, the facts simply don’t back that position up. In the last contract to be ratified (with Chrysler) for example, only 54.8% of the union approved the deal… hardly the “overwhelming support” that King claims. Moreover, 55.6% of the skilled-trades workers at Chrysler rejected the contract, according to the Detroit Free Press. King’s narrative of experienced workers “demanding” higher wages for the Tier Two brothers “in the greatest spirit of solidarity” just doesn’t hold up to scrutiny.

From our source “JH” comes a curious tale, and one perhaps completely un-reported in the US auto media: Fisker’s controversial, possibly US-funded Karma assembly center had ground to a halt, with “about 400” uncompleted Karmas sitting outside. It turns out that the UAW isn’t the only group of union workers out there who are willing to strike. Were they killing the golden goose, or just asking for a fair share of the egg?

The Chevrolet Volt may be beating cars like the Jaguar XF and the Lincoln MKT in the sales race, but GM won’t come close to building 120,000 of the plug-ins next year as the Department of Energy was expecting. Today GM confirmed to Automotive News [sub] that it will make 60,000 Volts next year… and it will do so while remaining on a single shift. GM had previously planned to add a second shift at the Det-Ham plant late this fall, but is putting that off until midway through next year, when production of the ’13 Malibu begins there. Until then, The General is adding 300 workers to the 10-hour, four-days-per-week single shift, a move the company says

will significantly reduce costs, and has no impact on the plant’s ability to make 60,000 Volts and Amperas (the European version of the Volt) in 2012.

Think 60,000 units is still more Volt than America will buy? Well, you’re right so far, but 15,000 of those will be exported to Europe, so GM only has to sell 45,000 US-market Volts next year. Although considering the Volt won’t crack 10,000 units this year, that’s still some strong projected growth. And as usual, the union local President sums up the situation with more candor than any executive would:

The sooner the better, but I guess demand will dictate when that happens. Hopefully we’ll get a third shift someday, too.

Considering the United Auto Workers’ VEBA fund is still Chrysler’s second-largest shareholder, CEO Sergio Marchionne is taking an amazingly hard line with the union. With a GM deal long done, and Ford’s deal moving towards approval, Chrysler is the last automaker on the UAW’s to-do list… and Marchionne tells Bloomberg he’s up for a fight if necessary, saying

I sincerely hope that we don’t have to get to arbitration. But if necessary, Chrysler will go there. We and GM are completely different

Marchionne is reportedly pushing the UAW for a number of tough concessions, including a mere $3,500 signing bonus (compared to $5k at GM and a reported $6k at Ford), and the elimination of a planned 2015 cap on entry-level “Tier Two” workers (at 25%). And though both of these are tough asks, he’s using UAW boss Bob King’s concept of union internationalism as a cudgel against the UAW, playing Italian unions off their American counterparts. And as a result, he could earn Chrysler a favored place among America’s unionized autoworkers.

The prospect of a Chinese auto industry growing at insane speed thanks to a booming market and resiliently low wages has long kept auto industry execs up at night, most notably inspiring Sergio Marchionne’s acquisition of Chrysler. But basic economic principles dictate that you can have a high rate of growth or low wages… but not both. Growth inevitably drives inflation, which drives up wages, which in turn slows growth. And according to a report in the Wall Street Journal [sub], that dynamic is already taking hold.

Jae-Man Noh, head of Hyundai’s joint-venture operations in China, said average manufacturing-worker wages in China—about 27,000 yuan ($4,200) a year per worker in 2009—are likely to double by 2015 from current levels.

Auto makers are expected to be affected as much as other industries by the trend, if not more, Mr. Noh said, adding that wage costs for many foreign auto manufacturers already have doubled in less than a decade. He said that a rival foreign auto maker that Hyundai has researched has seen worker wages in China rise to 49,000 yuan a year per worker in 2010, up from 24,500 yuan a year in 2003.

“We need to let go of our perception that the Chinese market is a low-cost production base,” Mr. Noh told a group of reporters at Hyundai’s office in Beijing. He didn’t offer specifics on Hyundai’s wage costs in China.

Though the Obama Administration has announced the broad outlines of its 2017-2025 CAFE standard, the final rule wasn’t supposed to be released until the end of this week… and now, according to Reuters, it is delaying that release until mid-November. According to Reuters

The administration would, with a short delay, remain on track to meet its deadline for issuing final rules next July, five years before they take effect. That timeline gives the industry room to plan its vehicle mix and make any production or technology changes…

But sources familiar with the matter said the work is complex and time consuming. Regulators, they said, are purposely moving slower than anticipated to ensure that industry, environmental and consumer issues likely to be raised during a lengthy public comment period are addressed ahead of time.

Regulators also want to make sure the proposal can clear the White House budget office, which reviews proposed regulations, in a timely fashion.

But even as regulators work to anticipate criticisms of the new standard, more criticisms are materializing. From the mitigating impact of loopholes added late in the process to the regulation’s effect on jobs, the CAFE criticisms are stacking up.

The Detroit News‘s David Shepardson has a way of being on hand with a microphone whenever GM CEO Dan Akerson lets loose with a memorable line, and today he has Akerson telling a Bloomberg News Forum that the green star of the American auto turnaround, the Chevy Volt, could be built in China within a few years. Said Akerson

We’re going to export into China for probably a year or two and see if it gets a take … if customers set the right usage patterns. If it does, we may manufacture it there.

Freshly minted college graduates usually aren’t the best credit risk – especially in today’s unpermissive environment when it comes to jobs. BMW thinks otherwise and declared that a good student needs a bimmer for graduation. On credit. Real credit. No more phony college credits. This is the real thing!

In yesterday’s coverage of the new UAW-GM contract, I wrote

What’s not yet clear is whether entry-level “Tier Two” workers, who make half what their “Tier One” brothers make, got a raise. Though it’s clear that GM and the UAW worked to avoid major increases to fixed costs by concentrating on jobs and profit-sharing bonus checks, the NYT confirms that the union was asking for some kind of entry-level raise. Given that no outlet is confirming any such Tier Two raise, though, it seems as though the UAW’s culture of seniority-over-solidarity has won out.

I was wrong. The Detroit News‘s Christina Rogers reports that GM will

give entry-level workers a $2-$3 an hour increase. Those so-called tier two employees, who are paid $14-$16 an hour, will be boosted to $16-$19 an hour.

Good for you, UAW. Thank you for proving me wrong. But the sooner the union shares the burden of the “new normal” equally across its entire membership, the better. This is a step in the right direction, but as long as some brothers are more equal than others, it’s going to be tough to talk transplant workers into what still amounts to a seniority pyramid scheme.

As predicted, the hand-wringing over Sergio Marchionne’s letter to Bob King was not enough to derail the basic motivations for the UAW to reach new deals with the automakers. Last night the union agreed to a tentative agreement with GM, its pattern target for this, the first round of negotiations since the bailout. That agreement must be approved by the union rank-and-file, but if ratified, Reuters reports that it includes

• The re-opening of the idled Spring Hill, TN plant to build an unspecified “new product”
• $5,000 signing bonuses (at a cost to GM of $245m)
• According to the NYT, “significant improvements to health care benefits” are also part of the deal
• According to AN [sub], the union “successfully fought back efforts to make major changes — and weaken — our retirement plan.”

Employees of Saab will soon collect unemployment benefits from the Swedish government instead from Victor Muller. They can find solace in the fact that they are not alone. It looks like former media darling and wunderkind BYD is hitting the skids.

Except here, people are not kept around for months doing nothing . They are fired. This is China, not socialist Sweden. According to Chinacartimes, BYD announced that it will cut up to 1,800 members of staff, including underemployed 1,000 members of its sales team.

Today’s resignation of Chrysler’s chairman and two other government-assigned directors was hardly a surprise, as now-Chairman and CEO Sergio Marchionne had signaled that changes were coming in the wake of Chrysler’s “payback” of government loans. In fact, Rebecca Lindland of IHS Automotive predicted that chairman Robert Kidder, as well as the other two departing directors would be the ones leaving, telling the Freep

Three of the five Chrysler board members who are government appointees — Kidder, Stuart Scott and George Gosbee — are members of investment advisory firms.

“Now, you kind of need to have people that have distinctive automotive industry experience verses financial expertise,” Lindland said.

But Lindland was only half-right. She picked the departing directors perfectly, but Marchionne didn’t replace them with even a hint of “distinctive automotive industry experience.” But not being a dyed-in-the-wool “automotive guy” himself, he apparently had some slightly different qualifications in mind…

The original car czar is headed back at General Motors, as the company announced today that it was officially retaining former Vice Chairman Bob Lutz as a Senior Advisor. The General’s press release notes

Lutz will be available to executives on a part-time consultancy basis effective immediately. He brings a wealth of experience built over the course of more than 40 years in the industry, including two stints at GM. He has also been a senior executive at Ford, Chrysler, BMW and was CEO of Exide Batteries.

Lutz has been providing advice to GM executives informally since retiring from the company in 2010.

I spent nearly three hours with Lutz last week, and he never mentioned a possible return to GM. He did, however, discuss his entire career, his experiences at Chrysler and GM, his product development philosophy and much, much more. You can read all about it starting on Tuesday, when we begin to publish content based on our interview.

Bloomberg reports that Fiat is considering moving production of planned Alfa/Jeep-branded compact CUVs from its Italian Mirafiori plant to the US, as a rising Euro forces tough production choices. Production of some 280,000 units per year were planned to start at Mirafiori in late 2012, but Fiat may now build an as-yet unannounced subcompact there instead. According to Bloomberg’s reporting, Fiat/Chrysler CEO Sergio

Marchionne, while confirming his commitment to invest at the Turin facility, told Piedmont Region President Roberto Cota Aug. 29 that he may change the production plans for the plant.

“Fiat is evaluating which model it will build at Mirafiori,” Cota said after meeting the CEO.

Saab has already warned its workers that paychecks due tomorrow could be delayed until “committed” funds from investors arrive, but Bloomberg reports that the warning may not be enough. According to the report

Any delay in the August payments will prompt the unions immediately to start a process aimed at ensuring state coverage of wages in the event of the carmaker’s failure, officials from the IF Metall and Unionen labor groups said. The unions, after gaining employees’ backing, would first file payment requests with Saab. If salaries remain unpaid in seven days, the unions may then ask a district court to declare Saab bankrupt.

That could put Saab into bankruptcy in as little as two weeks. Saab’s long nightmare seems to be drawing to a close.

Toyota closed the last chapters of the book on NUMMI, wrote a check for $6 million, and put the book to where it will collect the dust of history. According to Reuters, Toyota reached a $6 million settlement with former NUMMI workers.

The suit was brought by workers on medical leave when NUMMI was shut down in March 2010. It’s not that they had gone empty-handed. After GM had pulled out of NUMMI in June 2009 and left Toyota holding the bag, Toyota announced plans to pull out by March 2010. Toyota had negotiated a $281 million settlement-agreement with the UAW-represented workers, while GM was whistling Dixie.

At the time it was clear that some union brothers were more equal than others.

With debt collectors closing in on all sides, Saab’s shaky PR took another hit today as the Swedish media repotred that members of the board of Swedish Automobile (SWAN), Saab’s parent company, received pay increases of some 633 percent over 2010. Thelocal.se reports that

New chairman of the board, Hans Hugenholtz, received a raise of 633 percent, from 147,150 kronor (about $23k) to 611,163 kronor (about $950k). Others also had their pay increased significantly.

Though the amounts are relatively small, and the dwindling ranks of unquestioning Saab supporters argue that the compensation is low compared to the Dutch average (SWAN is incorporated in The Netherlands), this is just the latest PR disaster to hit the struggling automaker. One Saab employee sums up the mood:

It feels like everyone is out to grab what they can get.

And no wonder they feel that way. Not only did worker paychecks arrive late, but Sweden’s national debt office has begun foreclosing on the first of its outstanding claims… and the initial amount (about $58k) could have been covered by the chairman’s pay increase alone. Sending the message that board compensation is more important than staying out of insolvency has to be some of the worst PR imaginable. Still, some will defend Saab no matter what…

Around the time of the founding of the United States, the Mexican state of Guanajuato became home to of the one of the biggest silver mines in the world, which produced as much as 2/3rds of the world’s supply of silver at its peak. Today it’s not precious metal that’s driving Guanajuato’s booming economy, but cars, as the world’s automakers flock to Central Mexico. Between 2005 and 2008, GM, Ford and Michelin dumped $1.8b into production in the state, and the expansion is still picking up steam. In the last year, Volkswagen invested $800m in engine production capacity in Silao, Pirelli built a $210m facility and Mazda just revealed it would build a new compact car plant there in June. Toyota is said to be the next to set up shop in Guanajuato, but for the moment Honda is the latest automaker to announce new operations in Guanajuato, as Automotive News [sub] reports the Japanese automaker will spend $800m on an assembly plant there. Honda, which is fleeing a strong yen which has battered Japanese exports, will start building 200k subcompacts per year in 2014. Clearly Guanajuato’s got it’s automotive mojo flowing… but are the days of new Japanese transplant factories in the US over? Is it only a matter of time before the coyotes start smuggling Detroiters into Silao, Celaya, and the Puerto Interior??

Good news for Opel workers: They could all get Chevys, and GM CEO Dan Akerson won’t sell them down the river, to China, to Korea, or god forbid to Wolfsburg. “We would never give Opel away. Opel contributes to our global size and is not for sale, end of discussion,” Akerson told Germany’s Financial Times Deutschland. An unambiguous statement. Opel workers would have loved to hear it a bit earlier. But better late than Hyundai.

Akerson had more news. Some good. Some, well, you decide …

Japan’s automakers face a problem not seen for a long time: Unfilled job openings. “Automakers and other manufacturers are struggling to fill positions at their domestic factories as they ramp up output to make up for production lost since the March 11 disaster,” says The Nikkei [sub].

From the “sidelines” of the MBS conference in Traverse City Michigan, Wards Auto reports that Fiat-Chrysler CEO Sergio Marchionne is not keen on giving the UAW a board seat. UAW President Bob King has been pushing for VW Works Council-style representation on the Chrysler board, but as Marchionne explains

The best intervention that the unions or labor or organized labor can bring to the party is a support for the choice of the right leader to lead the organization… I understand Bob. I understand what he’s saying (but) we have to be very careful that we don’t exaggerate the value of co-determination

Co-determination gives rise to two decision-making bodies. The executive board makes decisions. And the unions sit on supervisory boards, one of which is the choice of the CEO. The most fundamental and difficult decision that a board makes is the choice of a CEO. If you make the right choice, issues with labor unions will not arise

Considering the UAW VEBA trust fund is the single minority shareholder in his company, Marchionne is admirably and typically frank in dismissing his union boss’s ambition. And since Marchionne doesn’t intend on retiring before 2015, his answer might as well have been “why do you need a board seat, when you have me?” But there’s another aspect to his argument that reveals that Bob King might have already doomed the union’s chances at a board seat.

Despite the fact that no transplant automaker has admitted to being in direct talks with the UAW, union boss Bob King told the Center for Automotive Research’s Management Briefing Seminar [via Reuters]

The vast majority of the assemblers here in the United States have at least agreed to confidential discussions. We’ve had productive discussions. The last thing we want is confrontation.

So, the issue isn’t that the transplants are all responding to the UAW’s overtures like Honda, which has said

Honda has had no dialogue with the UAW and has no interest in a discussion with them.

No, talks are happening with the “vast majority” of transplants… they just happen to be secret talks (which, at least in the case of VW, appear to be going nowhere). That in itself is strange, considering the UAW’s previous, highly-public approach to naming and shaming non-union transplant manufacturers. More likely: secret talks keep the union from losing face and the transplants from looking like “human rights abusers.” My how things change fast…

SvD.se reports that Paul Akerlund, Saab’s former IF Metall (one of Sweden’s largest trade unions) representative and now Trollhättan Municipal Council Chairman, has called for the resignation of Saab CEO Victor Muller, saying

I do not think Victor Muller is a good president. He is an owner and a contractor, but he has not sufficient knowledge about how to manage production and development

And Akerlund is no city government busybody, but a longtime company insider who has been influential in Saab’s post-GM life. Having shepherded Saab through the challenges of the past two years, this is another grim sign that Saab is about to succumb to the realities that have dominated TTAC’s Saab coverage for years now. A commentary in SvD, titled “ Thank Muller for Painful Bankruptcy” sums up the somber mood in Sweden:

[Saab] has been on artificial respiration for nearly two years. It is down now, and from all indications we can only conclude that the whole process was a painfully protracted bankruptcy. And we have only one person to thank for it.

Remember Hybrid-Kinetic Motors, the hugely ambitious venture by former Brilliance Chairman Yung Yeung that was supposed to build 300k physics-defying hybrids per year at a brand-new $1.5b Alabama factory (with the modest goal of producing a million vehicles per year by 2018)? H-K Motors was never taken very seriously here at TTAC, and despite appearing to be a visa scam, the firm signed a $500m design deal with Italdesign/Giugiaro, and was reportedly working with a German engineering firm… and Alabama’s Baldwin County sure took the firm seriously. Unfortunately, al.com reports that

In 2009, Chinese company HK Motors had taken notice of the megasite and announced plans to build a $4.36 billion green energy automobile manufacturing plant that would employ 4,000 workers.

Under a plan unveiled two years ago, the Pasadena, Calif.-based subsidiary of Hybrid Kinetic Group Ltd., of Hong Kong, would start production in Baldwin County in 2013. The cars built there would run mainly on compressed natural gas, backed up by electric batteries and a small gasoline tank.

The company announced that it expected to build 300,000 vehicles each year at the outset, with production increasing to 1 million by 2018 by 5,000 local employees. The company purchased a battery manufacturer and other component businesses in subsequent months.

But local officials said last month they would be marketing the site to other companies with HK Motors apparently unable to secure financing for the venture.

I’m sure nobody’s surprised by this at all… after all, I never found anyone who believed a word of the Hybrid Kinetic mumbo-jumbo. But what reminded me of the H-K fiasco, and what led to me to find that it had officially abandoned Baldwin County (after it shouldered $70k in surveying costs, no less) was news that a hybrid van manufacturer is setting up shop in St Louis, which has lost Ford and Chrysler plants. What reminded me of the H-K situation? “Emerald Automotive Limited,” which is promising 600 UAW-represented jobs and gas- and diesel-electric delivery van production by the end of next year, doesn’t have a freaking website. That’s never a good sign…

[UPDATE: Fiat press release outlining the complete new management structure added]

The awaited consolidation of Fiat and Chrysler operations is complete, reports Bloomberg, and CEO Sergio Marchionne is taking the North American job for himself. Joining Marchionne at the top of the company’s new regionally-based divisions, are Gianni Coda, former head of purchasing at Fiat and now the boss of European, African and Middle East operation; Cledorvino Belini, erstwhile head of Fiat in Brazil is now in charge of all of South America; Michael Manley, previously boss of the Jeep brand, will be leading the firm’s effort Asia. These four regional bosses will be part of a 22-member “group executive council” which will manage all of Fiat and Chrysler’s operations. The details of the council’s makeup still haven’t been released, but the big news is well encapsulated by a quote from Gianluca Spina, chairman of the business school at Polytechnic University of Milan.

Marchionne’s decision to keep the role of overseeing the business in North America shows that the center of gravity of the combined entity will be in the U.S… The integration process is going extremely fast, as is Marchionne’s style.

One of the many defining differences between this year’s contract negotiations between the Detroit automakers and the UAW is a new possible concession on the table: boardroom representation for the union. Inspired by the German system of works councils and union representation on supervisory boards, UAW President Bob King told Bloomberg that

If I had a magic wand, I’d take the German law and put it in the U.S… Workers should have representation on the board

But, in a thoughtful editorial, the Detroit News’s Daniel Howes warns that board representation may be more of a challenge to the union than a benefit. Howes notes

The UAW’s pursuit of board-room seats, to the extent it becomes a key demand in this post-implosion bargaining season, is fraught with potential complications. Among them is the cultural misperception that what is deeply embedded in Germany’s corporate reality is easily transferrable to 21st-century industrial America.