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Clearing the Cliff: Automakers See Boom Ahead

Profits likely to reach record – even though sales will fall short of past highs.

by on Jan.02, 2013

Sign on the dotted line...dealers are seeing a steady increase in traffic, a trend expected to continue in 2013.

The last-minute Congressional compromise that kept the country from going off the so-called fiscal cliff is good news for the U.S. economy and great news for the auto industry, for as the old adage goes: when the economy catches cold the auto industry gets pneumonia.

The resolution in Washington sidestepped some key issues that must yet be worked out in the coming months. But barring some later hitch that generates a new crisis, most industry analysts and insiders are confident that the U.S. car market is finally back on track after its worst downturn since the Great Depression.

A new study by R.L. Polk is forecasting new vehicle registrations will reach 15.3 million in the U.S. this year and “We see it getting into the 16 million range by 2015,” Tom Libby, Polk’s lead analyst for North American forecasting, tells

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That would be a roughly 50% increase in 2013 from the bottom of the automotive market collapse during the depths of the downturn, and a 6% to 7% rise from the anticipated final sales numbers for 2012 – which are likely to reach near 14.5 million when year-end figures are reported by the industry tomorrow.


Autoworkers Plan Auto Show Protest

Disgruntled workers want bigger share of industry turnaround.

by on Jan.04, 2011

UAW activists want the newly-resilient Detroit automakers to share some of their wealth.

Disgruntled auto workers are planning to demonstrate outside the North American International Auto Show again this year just as United Auto Workers President Bob King is scheduled to launch a charm offensive the union’s top brass hope will coax workers from non-union plants into joining the UAW.

The demonstration is set for January 9, the day before the Detroit Auto Show’s official press days.

The disgruntled workers are demanding greater militancy from King and the rest of the union leadership, which has committed to finding a way to compromise with executives at General Motors, Ford and Chrysler as well as other automakers.  The UAW has made numerous concessions since 2007, when the last round of domestic contract negotiations took place – and the protests will argue that workers now deserve some of those concession back in light of the profits being rolled up by Detroit’s Big Three.

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Automakers, on the other hand will be under pressure to protect their new profits in order to pay off debt and to satisfy investors, looking for their own share of the carmakers income.

The contrast on display at the auto show is very likely to shape the union’s approach to the negotiations with the domestic carmakers later this year. King is expected to ask for a larger share of company profits in an effort to appease his critics inside the union.