Archive for the ‘Cars’ Category

U.S. Industry, Economy: No sympathy for Detroit at a Kia plant in Georgia

November 29, 2008
The residents of this town are learning to enjoy Korean barbecue, and are wary of bailing out American automakers. ‘The foreign cars took the lead, and they deserve it,’ says one.
By Richard Fausset
The Los Angeles Times
Reporting from West Point, Ga. — This attractive old mill town along the Chattahoochee River, with its brick downtown and streets of cozy, unpretentious homes, could be the backdrop for a patriotic American car commercial — lacking only the plaintive croak of a Bob Seger or John Mellencamp.

But America’s Big Three automakers, which are teetering at a financial abyss, shouldn’t expect much sympathy here.

Read the rest:
http://www.latimes.com/news/nationworld/
nation/la-na-newdetroit29-2008nov29,0,
3633459.story

Mitt Romney Says: Let Detroit Go Bankrupt

November 19, 2008

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

Published by The New York Times
November 19, 2008

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

Read the rest:
http://www.nytimes.com/2008/11/19/opinion/
19romney.html?_r=1&hp

Sign Of The Economic and American Industry Times: New Cars Go On Sale, Cancelled in Same Month

November 15, 2008

“There have been significant market changes from the time we started to put hybrids in these vehicles until the time we decided to close the plant early.”

By Eddie Alterman
The New York Times
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HYBRID versions of the Chrysler Aspen and Dodge Durango seem likely to secure a spot in automotive history: the two vehicles fell under the executioner’s ax in the same month they went on sale.

 
2008 Dodge Durango

2008 Dodge Durango

The hybrid S.U.V.’s became available at dealerships in early October. But on Oct. 23, Chrysler announced that at the end of the year it would close the Delaware plant where they are built.

Production of the hybrid models began on Aug. 22. Even if production continues until Dec. 31, the Aspen and Durango hybrids are almost certainly the shortest-lived new models from a major manufacturer in modern times.

One of the shortest previous model runs was for the Lincoln Blackwood, a luxury pickup that failed to excite buyers in 2001-2.

A Chrysler spokesman, Ed Saenz, said last week that 400 of the hybrid S.U.V.’s had already been built; this suggests that total production may not exceed 800.

The Durango and Aspen hybrids, which are 2009 models, use the two-mode gas-electric powertrain that was jointly developed by General Motors, BMW and DaimlerChrysler.

G.M. was first to market with the technology and is now offering two-mode versions of the Chevy Tahoe, GMC Yukon and Cadillac Escalade; it also plans two-mode versions of the Saturn Vue crossover and full-size pickups.

Since Daimler and Chrysler have split, both parts have claimed the technology; Mercedes-Benz plans a two-mode S.U.V. called the ML450 BlueHybrid to go on sale in fall 2009.

The two-mode system packaged a suite of fuel-efficient technologies in one powertrain. Along with engine cylinders that shut down when not needed, there are two motor-generators in the transmission that provide electric propulsion when electronic sensors see fit.

Chrysler Aspen Hybrid, on sale since October, is already on borrowed time.

Read the rest:
http://www.nytimes.com/2008/11/16/automobiles/16ASPEN.
html?_r=1&hp&oref=slogin

A Lemon of a Bailout

November 14, 2008

When you get gemons, “make lemonaide” the saying goes.  But when spending taxpayer billions for a fiscal and economic recovery plan or “bailout” that almost nobody likes, a lemon can get in the way….

By Charles Krauthammer
The Washington Post
Friday, November 14, 2008; Page A19

Finally, the outlines of a coherent debate on the federal bailout. This comes as welcome relief from a campaign season that gave us the House Republicans’ know-nothing rejectionism, John McCain‘s mindless railing against “greed and corruption,” and Barack Obama‘s detached enunciation of vacuous bailout “principles” that allowed him to be all things to all people.

Now clarity is emerging. The fault line is the auto industry bailout. The Democrats are pushing hard for it. The White House is resisting.

Underlying the policy differences is a philosophical divide. The Bush administration sees the $700 billion rescue as an emergency measure to save the financial sector on the grounds that finance is a utility. No government would let the electric companies go under and leave the country without power. By the same token, government must save the financial sector lest credit dry up and strangle the rest of the economy.

Treasury Secretary Henry Paulson is willing to stretch the meaning of “bank” by extending protection to such entities as American Express. But fundamentally, he sees government as saving institutions that deal in money, not other stuff.

Democrats have a larger canvas, with government intervening in other sectors of the economy to prevent the cascade effect of mass unemployment leading to more mortgage defaults and business failures (as consumer spending plummets), in turn dragging down more businesses and financial institutions, producing more unemployment, etc. — the death spiral of the 1930s.

Read the rest:
 http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/13
/AR2008111303348.html?hpid=opinionsbox1

Some Say Let GM Fail; Others Want Bailout

November 13, 2008

Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.

By Micheline Maynard
The New york Times

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.

GM logo

Although G.M.’s labor contracts would be at risk of termination in a bankruptcy, setting up a potential confrontation with its unions, the company says its pension obligations are largely financed for its 479,000 retirees and their spouses.

Shareholders have already lost much of the equity that would disappear in a bankruptcy case. Shares of G.M. rose 16 cents Wednesday, to $3.08, but they have fallen 90.5 percent over the last 12 months, amid sharply lower auto sales and fears about G.M.’s future.

And as companies in industries like airlines, steel and retailing have shown, bankruptcy can offer a fresh start with a more competitive cost structure to preserve a future for the workers who remain.

Read the rest:
http://www.nytimes.com/2008/11/13/business/economy/
13bankruptcy.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=122
6563419-OfENoXGxQchEfFahO5kKpg

Global Economy: Weak Japanese Yen May Boost Car Sales from Thailand?

November 9, 2008

Thailand’s car exports have room to grow next year by replacing shipments from Japan as it battles yen appreciation, according to Fukujiro Yamabe, president of the Japanese Chamber of Commerce (JCC) in Bangkok. Mr Yamabe, who is also the president of Mitsubishi Co (Thailand), said automobile exports are expected grow slowly in 2009 after strong progress the past decade, as purchasing power drops in all overseas destinations.

A logo of Mitsubishi Motors Corp is displayed at its headquarters ... 
Logo of Mitsubishi Motors Corp is displayed at its headquarters in Tokyo.REUTERS/Yuriko Nakao(JAPAN)

By Nareerat Wiriyapong
Bangkok Post

”Thailand, however, has some advantages in terms of production costs compared to other countries, especially Japan. Car exports will have consecutive growth for sure next year but not as big as in 2008 as export markets slow down,” he said. ”[However] the Thai exchange rate is competitive when compared to Japanese yen, so there is a good chance that Thai exports could replace those shipped from Japan.”

Domestic vehicle sales should grow at a slower pace next year. Despite the weakening economy, vehicle demand in Thailand is healthy compared to other countries, he said.

Japanese companies are also suffering from the credit crunch and have to reduce their investments. Toyota cut its net profit forecast by 24% from estimates three months ago to $6 billion.

Almost every company is reviewing its investments, he said.

Mr Yamabe said Mitsubishi Motor was also considering reviewing its investment plan in the eco-car project in Thailand. ”But I don’t think the project will change.”

Mr Yamabe forecast total car production in Thailand would fall 18% to 1.2 million units next year on pressure from the global financial crisis decreasing domestic and overseas demand.

Read the rest:
http://www.bangkokpost.com/101108_
Business/10Nov2008_biz49.php

GM reports $2.5B 3Q loss, says it’s running out of money, suspends Chrysler takeover talks

November 7, 2008

General Motors Corp. said Friday it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009 if the U.S. economic slump continues and it doesn’t get government aid.
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By TOM KRISHER and JEFF KAROUB, AP Business Writers
From The Associated Press

GM also said it has suspended talks to acquire Chrysler. While it didn’t specifically name the automaker, GM said it was setting aside considerations for a “strategic acquisition.”

“While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges and, accordingly, considerations of such a transaction as a near-term priority have been set aside,” the company’s said in a statement.

The automaker said its cash burn for the quarter accelerated to $6.9 billion, and government aid will be “essential” because of the slow economy and credit crisis.

The GM logo hangs over an unsold 2009 Acadia sports-utility ... 

Above: The GM logo hangs over an unsold 2009 Acadia sports-utility vehicle on the lot at a GMC Truck dealership in the south Denver suburb of Littleton, Colo., on Sunday, Oct. 12, 2008. General Motors Corp. on Friday, Nov. 7, 2008 said it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009. GM also said it has suspended talks to acquire Chrysler, and said its cash burn for the quarter accelerated to $6.9 billion due to a severe U.S. auto sales slump.(AP Photo/David Zalubowski)

Read the rest:
http://news.yahoo.com/s/ap/20081107/ap_on_bi_ge/earns_gm;_ylt=
AsQnG1GHOpiokSxdWMm4QZys0NUE

Euphoria of Obama’s Election Victory Fades Fast: Markets Down 10%; Toyota Says Auto Crisis “Unprecedented”

November 6, 2008

Toyota Motor slashed its profit forecast Thursday, warning the global auto industry faces an “unprecedented” crisis as Asian stocks tumbled on fears the US is sinking deeper towards recession.

The Japanese giant became the latest automaker to reveal plunging profits due to the financial crisis, following on the heels of BMW, Nissan and Honda.

From Breitbart

The headquarters of German luxury carmaker BMW are pictured ... 

Toyota , vying with General Motors for the title of the world’s top automaker, cut its annual profit forecast by more than half after a terrible year so far.

It now expects a 68 percent plunge in net profit to 550 billion yen (5.6 billion dollars) — the first drop in nine years.

“The financial crisis is negatively impacting the real economy worldwide, and the automotive markets, especially in developed countries, are contracting rapidly,” Toyota executive vice president Mitsuo Kinoshita said.

“This is an unprecedented situation.”

Elsewhere in the transport sector, European aircraft manufacturer Airbus warned it expects a sharp reduction in new orders in 2009 as the global economy slows.

Airbus A380.jpg

Amid the gloomy news, Asian stock markets fell heavily. Japan’s Nikkei stock index plunged 6.53 percent even before the Toyota warning, which came after the close of trade.

The drop wiped out gains seen a day earlier on hopes that US president-elect Barack Obama will get to work on fixing the world’s largest economy in the face of the worst financial crisis in decades.

“Now that the event is over, investors are sobering up and looking at the economic gloom,” said Mizuho Investors Securities broker Masatoshi Sato.

Seoul ended with a loss of 7.6 percent while Sydney shed 4.3 percent. Hong Kong shares were down 6.4 percent at midday.

The sharp falls came after the Dow Jones index slid 5.05 percent on Wall Street on Wednesday as investors braced for a gloomy economic ride after the euphoria of Obama’s election victory faded.

Read the rest:
http://www.breitbart.com/article.php?id=081106082217.v53hc2v7&show_article=1

Recession rears ugly head, global auto sales shrink

November 4, 2008

“We’re in a recession. It’s as simple as that ….The question is how long or deep is it going to be?”

By Patrick Fitzgibbons, Reuters
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Corporate results and outlooks darkened on Monday, and automotive companies from Japan to Italy to Detroit said October sales were the weakest in about 20 years as economies weakened and consumer credit dried up.

While government officials have gone out of their way to avoid the use of the much-dreaded “R” word (recession) in describing the current economic straits, a number of prominent officials acknowledged the severity of the crisis on Monday.

U.S. vehicle sales plunged in October, with General Motors Co down 45 percent, Ford Motor Co off 30 percent and Toyota Motor Co down 23 percent.

Mark LaNeve, GM’s North American sales chief, said the collapse in the U.S. market was linked to the “unprecedented credit crunch that is dramatically impacting the entire U.S. economy — from the housing market to big and small companies to banks to family run businesses.”

Adjusted for U.S. population changes, GM said, October’s sales figures made it the weakest month for the battered auto industry since the end of World War II.

New car sales also fell across Europe — down 40 percent in Spain and 19 percent in Italy.

The European Commission said the 15-nation euro zone was in a technical recession and economic growth would come to a virtual standstill next year, and called for coordinated action to prevent further collapse.

Also in Europe, more banks warned of more big writedowns and sharp profit falls, prompting lenders to tap government funds or seek state rescues.

And in the United States, factory activity contracted sharply in October, falling to its lowest point in 26 years, according one widely watched index.

“Pretty grim. It means we’re in a recession. It’s as simple as that …a pretty solid manufacturing recession,” said Robert Macintosh, chief economist at Eaton Vance Corp. “The question is how long or deep is it going to be?”

Read the rest:
http://news.yahoo.com/s/nm/20081103/bs_nm/us_financial6

Auto sales ‘unsustainably weak’; GM’s fall 45 pct.

November 3, 2008

General Motors’ October U.S. sales plunged 45 percent, and Ford’s and Chrysler’s weren’t far behind, as low consumer confidence and tight credit combined to bring the industry’s sales to an “unsustainably weak level” that is the worst in 25 years.

GM logo

Automakers sold 838,156 vehicles in October, 32 percent fewer than the same month last year and the worst performance since January 1991, according to Autodata Corp. and Ward’s AutoInfoBank. The seasonally adjusted annual sales rate of 10.6 million vehicles was the lowest since February 1983.

“It’s really an unsustainably weak level for all manufacturers,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis. “This is clearly a severe, severe recession for the U.S. automotive industry and something we really can’t sustain.”

By TOM KRISHER and BREE FOWLER, AP Auto Writers

The annual sales rate in October 2007 was 16.1 million.

Chrysler’s sales tumbled 35 percent and Ford’s dropped 30 percent. Toyota’s sales fell 23 percent despite its zero-percent financing offer, and Nissan and Honda posted 33 percent and 25 percent declines, respectively.

Overall, General Motors Corp. sold 168,719 vehicles in October, while Ford Motor Co., including its Volvo brand, sold 132,278 light vehicles and Chrysler LLC’s sales totaled 94,530 units.

If GM’s sales were adjusted for population growth, October would be the worst month of the post-World War II era, DiGiovanni said.

“Clearly we’re in a very dire situation,” he said. Detroit-based GM said its light truck sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.

Read the rest:
http://news.yahoo.com/s/ap/20081103/ap_on_bi_ge/
auto_sales;_ylt=An1EW1LWe4Mcq4Rr2BeuHFWs0NUE