Auto

We’ve been hearing for weeks about gas prices rising around the country. 

The national average reached $3.909 today according to AAA’s Daily Fuel Gauge Report.

Michigan, with an average of $4.116, is more than 20 cents higher than the national average.

When we tweeted the new state and national gas prices on Wednesday, one of our Twitter friends asked why Michigan's average was higher.

The answer may be a combination of state taxes and delivery costs.

U.S. Treasury Secretary Timothy Geithner says the government will almost certainly lose money on its investment in the domestic auto industry.

But Geithner told business leaders in Detroit today  that making a profit was never the objective. He says the aim of the Troubled Asset Relief Program – or TARP – was twofold:

"One is to get these companies back in private hands as quickly as we can, it makes no sense for the government to be in there a day longer than is necessary, but we also want to recover as much of the taxpayers’ money as possible."

Geithner says, on the whole, he expects the TARP investments in all sectors – including banking and insurance – will yield a profit.

Three big corporations in Michigan released their first quarter results today and according to the numbers, business is booming.

Dow Chemical exceeds expectations (Midland, Michigan)

The company says "sales rose 20% to $14.7 billion versus the year-ago period, with double-digit increases in all operating segments and all geographic areas."

As Andrew Dodson of Booth-Mid Michigan pointed out, analysts had expected Dow to achieve $13.8 billion in sales.

Dow's earnings before interest, taxes, depreciation and amortization (a measure of a company's operating cash flow) went up more than $600 million to $2.4 billion, "the second highest quarter in the Company's history," according to Dow.

CMS Energy reports net income of $135 million (Jackson, Michigan)

CMS Energy's principal business is Consumers Energy. The Jackson-based company's reported income of $135 million translates into $0.52 per share, for the first quarter of 2011. That's compared to a net income of $85 million, or $0.34 per share, for the same quarter last year.

From the company's press release:

The first quarter results reflect colder than normal winter temperatures that boosted natural gas and electric sales at the company’s Michigan utility, Consumers Energy. Those sales increases partially were offset by costs the utility incurred in restoring service to electric customers after a series of unusually severe winter storms.

Penske Automotive has strong quarter (Bloomfield Hills, Michigan)

Penske Automotive Group Chairman, Roger Penske, said, "our first quarter results exceeded my expectations. I am particularly pleased with the same-store retail revenue growth generated in all lines of our business.

From Businesswire:

[Penske] reported a 51.7% increase in first quarter income from continuing operations attributable to common shareholders to $36.4 million, which compares to income from continuing operations attributable to common shareholders of $24.0 million in the first quarter last year. Earnings per share from continuing operations attributable to common shareholders increased 50.0% to $0.39 per share from $0.26 per share in the first quarter last year. Total revenue in the first quarter increased 15.3% to $2.9 billion, including an 11.6% increase in same-store retail revenues, due in large part to increases in new and used retail vehicle unit sales.

Just ahead of a visit from U.S. Treasury Secretary Timothy Geithner, Chrysler says it intends to pay back the government loans it received by the end of June. Geithner was one of the main architects of the government bailouts for Chrysler and GM.

From the Detroit News:

Chrysler Group LLC today confirmed its intention to repay its $7.4 billion in loans to the U.S. and Canadian governments by the end of June, as long as market and other conditions remain conducive.

In a statement prior to CEO Sergio Marchionne hosting a visit from U.S. Treasury Secretary Timothy Geithner later today, Chrysler said it plans to repay its government loans with a new term loan facility and newly issued debt securities that will be sold to institutional investors in a private offering.

The Detroit Free Press reports Chrysler wants to pay back the debts because the interest rates on the government loans are high:
 

Marchionne has said he wants to refinance Chrysler’s debt because the interest rate is higher than commercial market rates. The effective interest on the borrowings from the U.S. is as high as 14% and as much as 20% on the Canadian debt.

In order to find investors, the Detroit News reports that senior executives will head out on a "road show" to court financial institutions. They report the automaker is currently working with Morgan Stanley, Goldman Sachs, Citigroup Inc. and Bank of America Corp.

U.S. Treasury Secretary Timothy Geithner will visit Michigan today. He'll make an appearance at the Detroit Economic Club. Geithner will speak with Detroit's political, business and community leaders about the economy, the Associated Press reports. From the AP:

Geithner's appearance Thursday afternoon is part of the Detroit Economic Club's 2010-11 meeting season.

President Barack Obama swore Geithner in as the 75th treasury secretary in January 2009. He was deeply involved in the negotiations that led to billions of dollars in government loans being given to General Motors and Chrysler.

Detroit and Michigan have suffered as much as any city or state economically over the past few years. Thousands of workers have been laid off as businesses have been forced to close or downsize.

Michigan retailers say 4 dollar a gallon gasoline is taking a bite out of their business.  The latest survey by the Michigan Retailers Association says state businesses saw a marked decline in sales in March, as gasoline prices started to soar.    Michigan retail sales slumped to their lowest level since last July. 

Tom Scott is with the association.  

2011 is off to a good start for Whirlpool.  The Benton Harbor appliance maker reported its net earnings rose in the first quarter.   Whirlpool reports its net earnings for the first three months of 2011 clocked in at $169 million, up from $164 million in the first quarter of 2010.  Total sales increased 3% to $4.4 billion.  

First-quarter operating profit totaled $228 million compared with $241 million in the prior year.  On an adjusted basis, first quarter 2011 operating profit(2) totaled $221 million compared to $287 million in 2010.  Results were favorably impacted by cost reduction and productivity initiatives, increased monetization of certain tax credits, and higher unit volume.  These favorable factors were offset by lower product price/mix and higher material and oil-related costs. 

Jeff Fettig is Whirlpool's CEO.  

"Our first quarter results reflect our ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation....We recently announced a 16% dividend increase, reflective of the success of our brand value creation strategy and our strong financial position.  We remain committed to attracting and retaining consumers to our brands, providing excellent service and value to our trade customers and consumers while driving lower costs and higher quality across our global operations."