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Reflections on the world of business

December 13, 2009
By LARRY RINGLER Tribune Chronicle

This 'n that from the world of business:

In one of those ''Duh!'' decisions, General Motors Corp. last week announced that it's moving away from rebates and other financial incentives to sell vehicles.

Newly named marketing chief Susan Docherty said the automaker instead will adjust production to market demand, which means making vehicles people actually are willing to pay for without being, for lack of a better word, bribed.

If they stick to it - we've heard this talk before - the heat will be on GM, and by extension the Lordstown Complex, to make the Chevrolet Cruze premium compact car ''all it can be'' when production starts in early August.

Odds are the workers will be ready, willing and able. The onus will be on GM to nail the design, engineering, efficiency of assembly and marketing that will make the car a winner. The entire Mahoning Valley is depending on it.

With apologies to movie great Mel Brooks, sometimes it's not so good to be the king.

GM discovered that when it lost its focus on the consumer and spent too much time counting pennies - and their bonuses.

After knocking GM off the world's automaking throne, Japan's Toyota Motor Corp. is feeling the weight of the crown.

The company is facing a recall of nearly 4 million vehicles for what it claims is a floor mat problem that jams the gas pedal, putting the vehicle in a Nascar-type speed surge. Some experts think it could be something other than the floor mats, but the result is a major headache for the company.

Speaking of mats, maybe the Cleveland Browns know what they're doing by being perennial doormats.

Steelmaker Severstal North America Inc. may not be making workers and area officials happy with the continued shutdown of its Warren mill, but people in Mississippi had reason to beam last week.

The company has repaid a $10 million loan to the state four years early.

Severstal got the loan to help it build a $600 million minimill in Columbus, which employs 450 nonunion workers. Meanwhile, nearly 1,000 Warren United Steelworkers members have been idle for nearly a year or longer due to the weak economy.

A wrinkle in the picture was the company's announcement earlier this month that it will boost prices for all new noncontract orders Jan. 1 to cover higher raw material and other input costs.

Dow Jones reported Severstal will tack $26 onto the price per 100 pounds of weight for hot-rolled band steel for orders delivered in January. The price will increase by $27.50 for February deliveries.

Will a price hike hurt the company's sales even more during this soft patch, or does the company see faint signs of strength that make it believe the hikes won't matter? And when, oh, when will we see trucks carrying steel coils coming out of the Warren mill? Time will tell.



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