Ford takes Detroit rail station back to autonomous future

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A drawing of what the main hall will look like after Ford’s revamp in its founding city. (AP)
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Bill Ford at Michigan Central Station. (AP)
Updated 18 June 2018
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Ford takes Detroit rail station back to autonomous future

  • The executive chairman of Ford Motor Co. and great-grandson of founder Henry Ford envisions the future of the carmaker’s foray into self-driving vehicles.
  • The company has said it aims to have a self-driving vehicle on the market by 2021.

DETROIT, US: Bill Ford looks past the tons of paint, plaster and steel needed to remake Detroit’s blighted Michigan Central train station and sees more than just an iconic building in desperate need of a makeover.

The executive chairman of Ford Motor Co. and great-grandson of founder Henry Ford envisions the future of the carmaker’s foray into self-driving vehicles.

Ford Motor Co. is embarking on a four-year renovation of the 105-year-old depot and 17-story office tower just west of downtown. The massive project is expected to increase the automaker’s footprint in the city where the company was founded, provide space for electric and autonomous vehicle testing and research, and spur investment in the surrounding neighborhood.

Ford will be reclaiming a derelict 20th century landmark, but it also will be using some iconic Motor City real estate to embark on a 21st century venture.

“This had to make business sense for us,” Bill Ford told The Associated Press on Thursday. “We couldn’t just do this as a philanthropic endeavor. It really will become a statement for us and a great recruiting tool for the kind of talent we’re going to need to win in the autonomous vehicle war.”

The company has said it aims to have a self-driving vehicle on the market by 2021.

The building’s sale was announced last week. The company will announce details of the renovation and its plans Tuesday.

Bill Ford declined to say how much it cost to buy the 500,000-square-foot (46,450-square-meter) building from Manuel “Matty” Moroun or how much the carmaker expects to spend fixing it up. A 2004 plan to convert the train station into Detroit’s police headquarters was expected to cost more than $100 million.

The money for Ford’s project is coming from a pool set aside in 2016 to update the automaker’s headquarters in nearby Dearborn, though the company will also seek tax breaks and other incentives.

“We had to make sure that this could fit into our existing budget, and thankfully it did,” Bill Ford said.

The train station, which opened in 1913,  was the hub for rail transportation in Detroit for decades. Travelers and visitors marveled at its robust columns that stretched to an ornately tiled ceiling. But as passenger rail travel waned with easier road and air travel, the last train left Michigan Central in 1988.

Scrappers stripped metal from the vacant building and the thousands of broken windows allowed the elements to damage the walls, floors and ceilings, depressing the property’s value.

Along the way, Detroit slid toward fiscal collapse. The population has dropped by more than one million people since the 1950s. Tens of thousands of homes were abandoned even before the city tumbled into and out of bankruptcy several years ago.

The aging, hulking and empty Michigan Central exemplified Detroit’s plight.

“It always really bothered me whenever you’d see a national story about the decay of Detroit, photos of the train station often were used,” Bill Ford said, as he sat in the depot’s cavernous passenger waiting room.

“Then I started to think: ‘What if we could buy it, rehab it and not just make it a beautiful building — which we’re going to do — but make it something more?’” he said. “Make it really part of the reinvention of transportation for the future.”

The rehabbed office tower will have room for about 5,000 workers, at least half of whom will be Ford’s. Restaurants, coffee shops, taverns and retail will fill the depot.

“My vision is this becomes a gathering spot for people who want to meet family or friends and grab a cup of coffee or quick lunch or dinner and then go off and do something else in Detroit,” Ford added. “I want them to feel that this is going to be a really wonderful spot to be in, and that they will get excited about coming here.”


Asia’s refining profits slump as Mideast exports surge

Updated 23 February 2019
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Asia’s refining profits slump as Mideast exports surge

  • Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India
  • However, overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs

SINGAPORE: Asia’s biggest oil consumers are flooding the region with fuel as refining output is exceeding consumption amid a slowdown in demand growth, pressuring industry profits.
Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India.
Yet overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs.
Compounding the supply overhang, fuel exports from the Middle East, which BP data shows added more than 1 million barrels per day (bpd) of refining capacity from 2013 to 2017, have doubled since 2014 to around 55 million tons, according to Refinitiv.
Car sales in China, the world’s second-biggest oil user, fell for the first time on record last year, and early 2019 sales also remain weak, suggesting a slowdown in gasoline demand.
For diesel, China National Petroleum Corp. in January said that it expected demand to fall by 1.1 percent in 2019. That would be China’s first annual demand decline for a major fuel since its industrial ascent started in 1990.
The surge in fuel exports combined with a 25 percent jump in crude oil prices so far this year has collapsed Singapore refinery margins, the Asian benchmark, from more than $11 per barrel in mid-2017 to just over $2.
Combine the slumping margins with labor costs and taxes and many Asian refineries now struggle to make money.
The squeezed margins have pummelled the stocks of most major Asian petroleum companies, such as Japan’s refiners JXTG Holdings Inc. or Idemitsu Kosan, South Korea’s top oil processor SK Innovation, Asia’s top oil refiner China Petroleum & Chemical Corp. and Indian Oil Corp., with some companies dropping by about 40 percent over the past year. Jeff Brown, president of energy consultancy FGE, said the surge in exports and resulting oversupply were a “big problem” for the industry.
“The pressure on refinery margins is a case of death by a thousand cuts ... Refinery upgrades throughout the region are bumping up against softening demand growth,” he said.
The profit slump follows a surge in fuel exports from China, India, Japan, South Korea and Taiwan. Refinitiv shipping data shows fuel exports from those countries have risen threefold since 2014, to a record of around 15 million tons in January.
The biggest jump in exports has come from China, where refiners are selling off record amounts of excess fuel into Asia.
“There is a risk for Asian market turmoil if (China’s fuel) export capacity remains at the current level or grows further,” said Noriaki Sakai, chief executive officer at Idemitsu Kosan during a news conference last week.
But Japanese and South Korean fuel exports have also risen as demand at home falls amid mature industry and a shrinking population. Japan’s 2019 oil demand will drop by 0.1 percent from 2018, while South Korea’s will remain flat, according to forecasts from Energy Aspects.
In Japan, oil imports have been falling steadily for years, yet its refiners produce more fuel than its industry can absorb. The situation is similar in South Korea, the world’s fifth-biggest refiner by capacity, according to data from BP.
Cho Sang-bum, an official at the Korea Petroleum Association, which represents South Korean refiners, said the surging exports had “triggered a gasoline glut.”
That glut caused negative gasoline margins in January.