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Archive for February, 2009

Auto Industry Sales Keep Sliding in February

Preliminary numbers suggest downturn continuing.

by on Feb.26, 2009

Sales slump continues, J.D. Power cutting annual forecast by 1 million.

Sales slump continues, J.D. Power cutting annual forecast by 1 million.

The President may be asking Americans to focus on the future, but the present isn’t looking very good, if the latest forecast from J.D. Power and Associates is any indication. The California-based market research firm is cutting its 2009 new car sales forecast by 1 million, with preliminary data showing the downturn is continuing in February.

For the first 22 days of this, the shortest month, new vehicle sales were off a hefty 38 percent, compared with a year ago, reported Power. Working those numbers out on an annualized basis, and it would come to an anemic 9.1 million vehicles, barely half the industry’s total during the early part of this decade.

That is a slight improvement from what Power saw during January, however, the firm notes. But even so, the light vehicle sales forecast contains little, if anything, to celebrate. Using data provided by 10,000 dealerships across the U.S., JDPA predicts that 2009 sales will come in at a weak 10.4 million, about a million below its earliest forecast.

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Sales Dive Globally as General Motors Loses $31 Billion in 2008

CEO Wagoner says restructuring will accelerate.

by on Feb.26, 2009

Even China ran in the red for GM in 2008.

Even China ran in the red for GM in 2008.

General Motors Corp. sales collapsed not only in the U.S., but around the world during the fourth quarter, according to the company’s latest financial report, which included a $31 billion loss for 2008, and a $9.6 billion loss in the fourth quarter.

Chairman and CEO Rick Wagoner says it “was an extremely difficult year for the U.S. and global auto markets, especially the second half. These conditions created a very challenging environment for GM and other automakers, and led us to take further aggressive and difficult measures to restructure our business.”

Wagoner expects “these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions. At the same time, we are continuing our commitment to exciting, fuel-efficient cars and trucks, and the leadership in advanced propulsion technology.”

GM is technically bankrupt without the $22.5 billion in additional funds requested from the U.S. Treasury. And even if it receives the additional money, the collapse of its international operations and unfunded pension obligations could still sink it. (more…)

Auto Makers’ Manufacturing Quality and Productivity are not the Problems!

Decades of Washington’s policies favor off-shore makers says global expert. All of U.S. manufacturing is eroding as a result.

by on Feb.25, 2009

In 1981 Harbour became the "most hated man in Detroit" for his Treasury Department  Report that said Toyota had a 30% cost advantage in car production.

Harbour was the "most hated man in Detroit" for concluding Toyota had a 30% production cost advantage.

Does America want to be a manufacturing nation or not? If you ask James Harbour, a leading analyst and founder of The Harbour Report on auto productivity, the answer is clearly “no.” Decades of U.S. Congressional and Presidential economic policies have decimated not only auto manufacturing but other industries as well, he says. That’s because the cumulative effect of promoting imports of manufactured goods from countries that restrict access to their own markets crippled U.S. makers.

“How in the hell did Ford, Chrysler and General Motors go from the top of the heap to the bottom?” the plain-speaking Harbour asked members of the Automotive Press Association in Detroit today. He was promoting his just published book, Factory Man. In it he presents the views of an assembly line worker turned manufacturing executive for Chrysler and Ford, and then as government consultant and private entrepreneur, starting in the post-war boom years and continuing up to today. Harbour co-authored this conversational book with James Higgins, an award-winning automotive reporter, columnist and editor, who covered the industry at The Detroit News.

After 60 years getting his “hands dirty” on auto and pharmaceutical production lines, Harbour is in no mood for Washington posturing during discussions about car company restructurings. “The folks there think a machine is something to rig an election,” he says.

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Obama Commitment Challenges Auto Makers

Speech outlines a hopeful and potentially helpful agenda.

by on Feb.25, 2009

Is Obama’s auto vision a mere academic dream or actually production possible?

Is Obama’s auto vision a mere academic dream or actually production possible?

In what some observers are calling this year’s real “state of the union,” President Barak Obama challenged Congress and the country to join in a national recovery effort. While he covered many areas as he ranged from criticizing the nation for short-term thinking to trying to inspire a collective effort, several of the president’s points bear on the auto industry. One of these was indeed a finger directly pointed at auto makers, or at least some of them.

“As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our auto makers to the brink,” the president says. While noting that government should not “protect [auto makers] from their own bad practices,” Obama commits his administration to “the goal of a re-tooled, re-imagined auto industry that can compete and win.”

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You Thought YOUR Dealer Had Excess Inventory?

Photos of the world’s unsold cars of the world stockpiled.

by on Feb.25, 2009

Thousands of dealers could soon close their doors

Thousands of dealers could soon close their doors.

The automotive business stinks. Thousands of jobs lost with more cuts to come. Factories closing almost daily. People hurting. Benefits cut or eliminated. Dealers dropping retail flies. Hubris, excess, arrogance and denial in the executive suites — and in Congress. And on and on and on.

But nothing, nothing can graphically show the terrible auto crisis like these horrific photos of unsold, stockpiled cars around the world.
Click here for photos

America “Cannot Walk Away” From Auto Industry

President’s speech signals a new direction.

by on Feb.25, 2009

"The nation cannot walk away" from the auto industry.

"The nation cannot walk away" from an auto industry "millions of jobs depend on."

“The nation that invented the automobile cannot walk away from it,” declared President Barack Obama, during a speech to the joint houses of Congress, Tuesday night.

The 52-minute address, effectively the new President’s first State of the Union, covered a broad range of topics, from the nation’s economic crisis, to the war in Iraq, from health care to education. But a fair share of the President’s comments were devoted to the ailing American auto industry and the energy policies that could shape the future of transportation.

Noting that “millions of jobs depend on it,” President Obama said that, “We are committed to the goal of a retooled, reimagined auto industry that can compete and win.” That was undoubtedly good news to Detroit’s troubled Big Three automakers. But other comments were also aimed at chastening the executives who oversaw the domestic industry’s desperate slide.

“As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink,” said the President. “We should not, and will not, protect them from their own bad practices.”

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Sneak Peek: Aston Martin DBS Volante

Fusing open-top motorizing with a luxury sports car.

by on Feb.25, 2009

Aston Martin DBS Volante -- could more surprises be in store at Geneva?

Aston Martin DBS Volante -- could more surprises be in store at Geneva?

The upcoming Geneva Motor Show is likely to be a busy event for Aston Martin, the former Ford Motor Co. division that is expected to mark its independence with the introduction of several critical new products. For now, the company, owned primarily by Kuwaiti investors, is only talking about one hot new product: the DBS Volante.

Think of it as the ultimate fusion of a high-line luxury sports car and a cabriolet, the company suggests. “The DBS Volante delivers the utmost relaxed driving experience with the hood up or down,” says Dr. Ulrich Bez, the British maker’s CEO. “It combines engineering excellence with design perfection.”

That electrically-operated fabric top will drop in a mere 14 seconds – and can be operated at speeds up to 30 miles per hour, stowing away under an automatic tonneau cover.

On paper, at least, the 2+2 DBS Volante is a four-seater. But in practical terms, even your kids would likely get cranky sitting in those “occasional” back seats for more than a short drive.

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Finally, A Car Czar of Sorts

The Obama administration’s latest appointee supported Hillary Clinton’s presidential campaign.

by on Feb.24, 2009

 Steven Rattner, committee czar, has money and political savvy, but no experience in vehicle manufacturing.

Steven Rattner, committee czar, has money and political savvy, but no experience in auto making.

The co-founder of a private equity group with long-standing political ties to the Democratic party is joining the U.S. Treasury Department to head the team that will recommend whether or not Chrysler and General Motors should continue to receive government loans or be liquidated.

Steven Rattner is now Counselor to the Secretary of the Treasury and no longer Managing Principal of Quadrangle Group, a private investment firm he co-founded. Quadrangle has more than $6 billion of assets under management, and invests in media and communications companies.

Rattner will advise Secretary Timothy Geithner regarding “a variety of economic and financial matters” and “will lead the team” advising Secretary Geithner and National Economic Council Director Lawrence Summers on the automobile sector.

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Chrysler and General Motors Again Deny Bankruptcy Rumors

Both companies continue to search for more cash from public or private sources. Chinese auto makers are one possible source.

by on Feb.24, 2009

If a Chrysler-Fiat link looks to be a hard sell to U.S. taxpayers, wait until the Chinese come calling.

If a Chrysler-Fiat link looks to be a hard sell to U.S. taxpayers, wait until the Chinese come calling.

With a dismal financial earnings report due this week from General Motors and an equally dismal sales report due next week, speculation that GM and Chrysler are being pushed towards bankruptcy continues to circulate in Washington, Detroit and New York.

GM officials continue to insist that the automaker isn’t going to file for bankruptcy protection.

“We have considered all the options, but still believe an out-of-court process is the least risky and least expensive,” says Tom Wilkinson. GM did force its Swedish subsidiary Saab to file for bankruptcy last week and is pressuring governments from South Korea to Germany to Canada for more cash.

Chrysler LLC officials have also once again denied the automaker was preparing to file for bankruptcy at the behest of the Obama administration’s automotive task force.

“Sorry I can’t comment on the speculation. The issue in question is best left to Treasury to comment on,” says Chrysler spokeswoman Shawn Morgan. “We were asked as part of the February 17 submission to look at all scenarios.”

“As we’ve outlined, if the requisite concessions are not achieved by the government’s March 31 funding deadline, management believes the only alternative would be to immediately plan for an orderly wind down of all operations through a court-supervised liquidation. This is clearly not an alternative Chrysler would prefer,” Morgan says.

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The Washington Department of Hypocrisy

Politicians continue to exempt themselves from their own regulations of taxpayers. Pelosi flies on a private jet to Italy.

by on Feb.24, 2009

Senator Kerry is shocked, shocked at business travel and entertainment expenses and wants to curtail them.

Senator Kerry is shocked at business travel and entertainment expenses and wants to curtail them.

Last week as General Motors and Chrysler were submitting their latest recovery proposals to the U.S. Treasurer Department, Congressional leaders who excoriated Detroit-based executives for their management abilities and business practices continued using your tax dollars to pay for non-commercial jets. It is a striking, but by no means only, example of Washington “ethics” at work. Congress in the midst of the global financial collapse continues to do what it wants and not what it says you or companies should do.

Consider Nancy Pelosi, the Democratic Speaker of the House, who issued the following statement following a meeting at the Vatican with his Holiness, Pope Benedict XVI: “It is with great joy that my husband, Paul, and I met with his Holiness, Pope Benedict XVI today. In our conversation, I had the opportunity to praise the Church’s leadership in fighting poverty, hunger, and global warming, as well as the Holy Father’s dedication to religious freedom and his upcoming trip and message to Israel. I was proud to show his Holiness a photograph of my family’s Papal visit in the 1950s, as well as a recent picture of our children and grandchildren.”

So Pelosi was in Rome as Detroit and the economy were burning. And how did Pelosi get to Rome? Why aboard an Air Force jet.

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