Archive for the ‘profits’ Category

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.

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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.”


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.

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Bernanke warns of possible recession

April 2, 2008
By JEANNINE AVERSA, AP Economics Writer 

WASHINGTON – Federal Reserve Chairman Ben Bernanke warned Wednesday the economy may shrink over the first half of this year and that “a recession is possible.” Yet, he didn’t offer any assurances of further interest rate cuts.

US Federal Reserve Bank Board Chairman Ben Bernanke responds ...
US Federal Reserve Bank Board Chairman Ben Bernanke responds to questions during a joint congressional hearing on the country’s economic outlook on Capitol Hill in Washington, April 2, 2008.REUTERS/Jonathan Ernst (UNITED STATES)

Bernanke’s testimony to the Joint Economic Committee was a much more pessimistic assessment of the economy’s immediate prospects amid a trio of crises — housing, credit and financial.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Still, Bernanke said that he expects more economic growth in the second half of this year and into 2009, helped by the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed’s aggressive reductions to a key interest rate. Nevertheless, the chairman acknowledged uncertainty about the Fed’s next steps, notwithstanding the mounting economic woes.

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Quantum founder: Leap into China stocks; Teach Kids Chinese

December 17, 2007

“The very best advice of any kind that I can give you is to teach your children or your grandchildren Chinese,” Jim Rogers writes in A Bull in China. “It is going to be the most important language of their lifetimes.”

Q: The language that spells success?

A: Chinese.

Take it from Jim Rogers, a hugely successful investor, who has studied China ever since he traveled there 23 years ago.

Rogers, co-founder of Quantum Fund, is a plainspoken investor who amassed a fortune through shrewd foreign investing in publicly traded companies and commodities.

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China may be losing its edge, survey says

December 14, 2007

SHANGHAI, China (AP) — China may be losing its competitive advantage, mainly because of rising costs, according to a survey of companies compiled by the American Chamber of Commerce in Shanghai.

Rampant product piracy was another persistent problem highlighted in a report released Friday that was based on a survey of the group’s 1,600 corporate members.

“Some companies mentioned plans to move offshore to India or Vietnam,” said Norwell Coquillard, president of Cargill Investments China, an investment holding company of agribusiness giant Cargill Inc.

Still, he noted that most companies with operations in China were still planning to expand capacity on the Chinese mainland, often while moving factories and offices inland to smaller cities where costs are lower.

For many U.S. and other foreign companies, finding, paying for and retaining good employees remains the biggest challenge, the report said.

“More investment has come in and stretched the supply of talent,” said Stephanie Liu, human resources director in the Asia Pacific for Armstrong World Industries, a maker of flooring and building products. “There’s no sign of easing in the short term,” she said.

Meanwhile, a new labor law, due to take effect next year, has increased uncertainties over hiring and firing practices.

The Labor Contract Law, which takes effect Jan. 1, gives employees who have worked at a company for more than 10 years the right to sign contracts protecting them from being fired without a legitimate reason.

Some companies worry that the law might restore the “iron rice bowl” of lifetime employment practiced by China’s state sector during the era of central planning that followed the 1949 communist revolution, said Kent Kedl, general manager of the consulting firm Technomic Asia.

But Kedl said most U.S. companies had little to fear because their employment policies were general in line with international standards, unlike those of smaller local companies that often dismiss workers en masse to avoid paying bonuses, among other things.

“We don’t foresee a huge impact here,” he said.

U.S. economic slide hurts Asia

The report also said that the recent spate of product recalls of products ranging from tires to toothpaste due to safety and quality concerns is prompting U.S. businesses to become much more vigilant over how their products are made.

Virtually all the companies surveyed were raising standards, stepping up inspections and requiring more detailed specifications, though few said they would stop using products or materials made in China.

Problems with piracy of technology and products remained more or less unchanged from earlier surveys. Such problems are a perennial headache for both domestic and foreign companies operating in China: U.S. businesses say they lose billions of dollars each year due to the lack of effective enforcement of copyrights, patents and trademarks.

Despite the difficulties of doing business in China’s unpredictable, fast changing markets, most companies said they were profitable in 2007 and that their profitability improved.

“Business performance and financial results show many firms are realizing the market potential that China has long promised U.S. companies,” the report said. To top of page