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Post by southsidesignmaker on Sept 29, 2010 11:33:35 GMT -6
Doc,
When you mention the "shared services" action which is happening as we speak, would that not bring the eventual demise to the US middle class. If this were (is) to happen, who will be left to pick up the economic pieces. Will 10% unemployment with another 8% -10% of our working population chronically unemployed be the norm?
When mega retailers like Stallmart exclaim that the average American savings is $3,000 annually, one can only wonder how much of this is because of products and services are redirected out of country.
The unemployed now receive almost 2 years of unemployment compensation. These transfer payments can do nothing positive in the long run.
With unemployment in our area especially among younger workers at high levels, our family's buying habits include using the services of American workers whenever possible. We have followed through at the business level by seeking out American vendors and manufacturers whenever possible.
This year we have been able to redistribute the purchase of $85,000 in sign supplies, and $16,000 in automotive supplies to American suppliers only. We have stopped using suppliers such as Dell as much of the call centers are outsourced to third world nations. Our art department is subcontracted to a US company. At present this has added cost of approx 5.5%.
We have advertised to many of our clients that in light of "record or near record" USA trade imbalances along with high local unemployment the added cost was well worth the added investment in our local and regional economies. An interesting side point is that many of our clients have been encouraged by our recommitment to "in country" purchasing. Our sales are up 16% year to date.
On a personal note I feel that many large multinational companies have a very narrow scope when it comes to the customer base they serve. I would say that many are run with a management style of "Go the Path of Least Resistance". I have found this type of policy to be the norm but we have elected to go with a much more balanced approach both in business and on a personal level.
So far we are encouraged with the results. I do however have long term concerns as the supply channels for many of our products are being overrun by "far east" product. Product that quality is no longer an issue.
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Post by southsidesignmaker on Sept 29, 2010 11:45:27 GMT -6
GM prepares to shut Indianapolis plant after workers reject concessions David Barkholz Automotive News -- September 28, 2010 - 12:12 pm ET General Motors Co. has started the wind-down of its Indianapolis stamping plant after UAW-represented workers yesterday overwhelmingly rejected a proposed 50 percent pay cut that was sought by a potential new owner of the plant. GM spokeswoman Kim Carpenter said GM has ended its search for a potential buyer. “We are disappointed that UAW Local 23 was not able to ratify the proposed labor agreement,” Carpenter said in an e-mail. “As previously announced, we will continue steps to wind down the facility, which will cease production in mid-2011 and close by December 2011.” Gregory Clark, UAW Local 23 shop chairman, said last week that the cuts were too deep and the plant's 650 workers would take their chances transferring to another GM plant should jobs open. He said about one-third of the hourly work force is eligible to retire. Clark was critical of the intervention by the UAW International into the issue. In May, the workers overwhelmingly said they did not want to initiate concession talks with the potential new owner, stamper J.D. Norman Industries. Despite that, the UAW International picked up negotiations and tried to sell the workers on the merits of the new contract. The vote yesterday was 457 no to 96 voting in favor. The contract proposed to cut production wages from $28 an hour to $14 an hour. A 14-an-hour wage equates to straight-time annual compensation of less than $30,000. The proposed contract also contained a “buydown” provision that would have paid workers a total of $25,000 over two years to compensate them partially for the wage and benefit cuts. Clark said the massive plant makes large stampings, such as hoods, doors and fenders, for several GM cars. Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20100928/OEM/100929849/1424#ixzz10wP6DVCP______________________________________________________________________________ I would bet that a third will retire, a third will be working at Stallmart ($9.00 per hour with little if any benefits), and a third will collect GM unemployment benefits along with the 2 years of gov. unemployment benefits. One can only wonder where the newest stamping plant is located, Mexico, Korea, China ? Sounds like another 400 US employed folks soon to go from middle class to gov. class. |
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Post by doctorwho on Sept 29, 2010 14:22:17 GMT -6
GM prepares to shut Indianapolis plant after workers reject concessions David Barkholz Automotive News -- September 28, 2010 - 12:12 pm ET General Motors Co. has started the wind-down of its Indianapolis stamping plant after UAW-represented workers yesterday overwhelmingly rejected a proposed 50 percent pay cut that was sought by a potential new owner of the plant. GM spokeswoman Kim Carpenter said GM has ended its search for a potential buyer. “We are disappointed that UAW Local 23 was not able to ratify the proposed labor agreement,” Carpenter said in an e-mail. “As previously announced, we will continue steps to wind down the facility, which will cease production in mid-2011 and close by December 2011.” Gregory Clark, UAW Local 23 shop chairman, said last week that the cuts were too deep and the plant's 650 workers would take their chances transferring to another GM plant should jobs open. He said about one-third of the hourly work force is eligible to retire. Clark was critical of the intervention by the UAW International into the issue. In May, the workers overwhelmingly said they did not want to initiate concession talks with the potential new owner, stamper J.D. Norman Industries. Despite that, the UAW International picked up negotiations and tried to sell the workers on the merits of the new contract. The vote yesterday was 457 no to 96 voting in favor. The contract proposed to cut production wages from $28 an hour to $14 an hour. A 14-an-hour wage equates to straight-time annual compensation of less than $30,000. The proposed contract also contained a “buydown” provision that would have paid workers a total of $25,000 over two years to compensate them partially for the wage and benefit cuts. Clark said the massive plant makes large stampings, such as hoods, doors and fenders, for several GM cars. Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20100928/OEM/100929849/1424#ixzz10wP6DVCP______________________________________________________________________________ I would bet that a third will retire, a third will be working at Stallmart ($9.00 per hour with little if any benefits), and a third will collect GM unemployment benefits along with the 2 years of gov. unemployment benefits. One can only wonder where the newest stamping plant is located, Mexico, Korea, China ? Sounds like another 400 US employed folks soon to go from middle class to gov. class. I wondered where new plant also but this time the plant is not being replaced - is part of 'Old GM' under the brankruptcy filing and is part of the downsizing of GM as a manufacturer...is not going to be part of the 'New GM'- I saw a quote in a Detroit newspapaer from a UAW rep saying what part of NO does GM not understand about wage concessions ? I guess now maybe what part of "no longer viable' does he not understand ? Why not take the wage concessions, and the $25K they were going to get while looking for another job ? Nope- it's their way or the highway...now they will likely follow the path you suggest. the gravy train is ending.. |
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Post by doctorwho on Sept 29, 2010 14:36:07 GMT -6
Doc, When you mention the "shared services" action which is happening as we speak, would that not bring the eventual demise to the US middle class. If this were (is) to happen, who will be left to pick up the economic pieces. Will 10% unemployment with another 8% -10% of our working population chronically unemployed be the norm? When mega retailers like Stallmart exclaim that the average American savings is $3,000 annually, one can only wonder how much of this is because of products and services are redirected out of country. The unemployed now receive almost 2 years of unemployment compensation. These transfer payments can do nothing positive in the long run. With unemployment in our area especially among younger workers at high levels, our family's buying habits include using the services of American workers whenever possible. We have followed through at the business level by seeking out American vendors and manufacturers whenever possible. This year we have been able to redistribute the purchase of $85,000 in sign supplies, and $16,000 in automotive supplies to American suppliers only. We have stopped using suppliers such as Dell as much of the call centers are outsourced to third world nations. Our art department is subcontracted to a US company. At present this has added cost of approx 5.5%. We have advertised to many of our clients that in light of "record or near record" USA trade imbalances along with high local unemployment the added cost was well worth the added investment in our local and regional economies. An interesting side point is that many of our clients have been encouraged by our recommitment to "in country" purchasing. Our sales are up 16% year to date. On a personal note I feel that many large multinational companies have a very narrow scope when it comes to the customer base they serve. I would say that many are run with a management style of "Go the Path of Least Resistance". I have found this type of policy to be the norm but we have elected to go with a much more balanced approach both in business and on a personal level. So far we are encouraged with the results. I do however have long term concerns as the supply channels for many of our products are being overrun by "far east" product. Product that quality is no longer an issue. "Doc, When you mention the "shared services" action which is happening as we speak, would that not bring the eventual demise to the US middle class. If this were (is) to happen, who will be left to pick up the economic pieces. Will 10% unemployment with another 8% -10% of our working population chronically unemployed be the norm" yes indeed it will-- and you'd be surprised to learn how long this has been in the works- although Shared Services as a term did not start to be used here in the US until the mid to late 90's- I did my Grad school research on Shared Services and was the theme as I started Phd work. It has been in the UK since the early 80's and the end result is a huge class of formerly middle class white collar workers - having their jobs go to low cost 'vendors' ( but not the way most know vendors today as supplements to corporate workforces) - who will employ mainly part time workers with no benefits, and mostly in low cost provider countries( think SE Asia and Brazil ). Simplistic Explanation and also as I have seen it play out first hand) First you offshore the work to a country where an educated workforce is plentiful but wages are minimalistic compared to the US. You set up the structure very lean, very few layers of management..basically 2 classes of workers only. Still on the corporate payroll for whatever period it takes to train the workers, harmonize any customer sat or potential customer sat issues - and stop things like large turnover rates which are common in many of the places where the 'centers' are set up. Once solidified you 'sell' that division/center etc. to a 3rd party and but back their services ( which you trained them for) through ever lower negotiated contracts -- hence lopping those people off the payroll of the corporate giants, and the cost strictly becomes overhead- cost of doing business. Usually withheld is support to the major customer of those corporations ( a small % of companies but bigger % of business) - as well as support to US government entities ( GSA guidelines take care of this) - for the remaining workers- you work them to death ..freeze salaries and tell them they're lucky to have jobs. this is not one corporate giant but virtually all-- in order to keep profit margins in line with competitors.. it is a bleak scenario and I'll spare you the synopsis I reached for the 'retired' workforce of 2040....other than to say that we'll be glad we lived now. I remember when I wrote it ( an expanded version was presented at a national OD meeting) and some people told me what a negative view I had of what was happening -- of 'globalization' -- that was over 15 years ago and now most of what I foresaw is today reality...I wish I was wrong for our future generations sake. |
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Post by doctorwho on Sept 29, 2010 14:40:29 GMT -6
Doc, When you mention the "shared services" action which is happening as we speak, would that not bring the eventual demise to the US middle class. If this were (is) to happen, who will be left to pick up the economic pieces. Will 10% unemployment with another 8% -10% of our working population chronically unemployed be the norm? When mega retailers like Stallmart exclaim that the average American savings is $3,000 annually, one can only wonder how much of this is because of products and services are redirected out of country. The unemployed now receive almost 2 years of unemployment compensation. These transfer payments can do nothing positive in the long run. With unemployment in our area especially among younger workers at high levels, our family's buying habits include using the services of American workers whenever possible. We have followed through at the business level by seeking out American vendors and manufacturers whenever possible. This year we have been able to redistribute the purchase of $85,000 in sign supplies, and $16,000 in automotive supplies to American suppliers only. We have stopped using suppliers such as Dell as much of the call centers are outsourced to third world nations. Our art department is subcontracted to a US company. At present this has added cost of approx 5.5%. We have advertised to many of our clients that in light of "record or near record" USA trade imbalances along with high local unemployment the added cost was well worth the added investment in our local and regional economies. An interesting side point is that many of our clients have been encouraged by our recommitment to "in country" purchasing. Our sales are up 16% year to date. On a personal note I feel that many large multinational companies have a very narrow scope when it comes to the customer base they serve. I would say that many are run with a management style of "Go the Path of Least Resistance". I have found this type of policy to be the norm but we have elected to go with a much more balanced approach both in business and on a personal level. So far we are encouraged with the results. I do however have long term concerns as the supply channels for many of our products are being overrun by "far east" product. Product that quality is no longer an issue. "We have stopped using suppliers such as Dell as much of the call centers are outsourced to third world nations." call centers were the most visible tip of the proverbial iceberg SSSM.... they ( like us and many others ) also moved order entry, some accounts receivables, backlog and shipping ( supply chain ) , accounting and financial analysts etc to those former 3rd world countries to the tune of over 10,000,000 jobs starting the last 2 years of the Clinton presidency and through Bush and continuing today..it knows no political bounds. It's one of the dirtiest little secrets in this country, except for those affected. My favorite are the large amount of customer sat type jobs moved to Canada because they'sound like us'-- I always chuckle as a lost job is a lost job - whether it goes to Bangalore or Montreal. I could speak on this topic endlessly - as it is unfortunately within the realm of my expertise. |
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Post by southsidesignmaker on Sept 29, 2010 18:15:24 GMT -6
Doc,
So let me get this right. I am feeling all warm and fuzzy because our small company is working hard to purchase American Mfg goods and services. In the mean time there is a very good chance that these same firms have outsourced the "back end office work" to a up and coming third world nations.
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Post by macrockett on Sept 29, 2010 21:19:19 GMT -6
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Post by doctorwho on Sept 29, 2010 23:02:08 GMT -6
Doc, So let me get this right. I am feeling all warm and fuzzy because our small company is working hard to purchase American Mfg goods and services. In the mean time there is a very good chance that these same firms have outsourced the "back end office work" to a up and coming third world nations. would actually be hard to name one that hasn't - at least to some extent. The smaller the US manufacturer you buy from the better chance they have not done it yet because it is really an economy of scale venture. However as the actual Shared Services companies get set up- smaller businesses can buy their 'services' from them as well-- all thanks to the major corporations who trained them and in reality set the 'cost' for these services. In fact one major corporation that shall remain nameless here ( guess who) reportedly sought to patent their offshoring system that maximizes government subsidies while sending jobs overseas! The patent request was withdrawn- and claimed to be a mistake. tip of the iceberg: Some of the major countries/districts that provide such services are India (Full Spectrum Services), Mexico ( Full Spectrum Services), Ukraine (Programming and R&D), Bolivia (Web & Software Programming, Game Development, IT Support, Network Solutions, Offshore Outsourcing Service), Brazil (Web & Software Programming, Game Development, IT Support, Network Solutions, Offshore Outsourcing Service), Argentina (Full Spectrum Services), Indonesia (Programming, R&D, IT Support, Data Entry, Customer Support), China (Programming, Data Entry, Customer Support, F&A), Philippines ( Customer Support, IT Support, Programming, Animation, Transcription), Russia (Programming and R&D), Pakistan (Full Spectrum Services), Panama (Programming, Customer Support), Nepal (Programming, Customer Support), Bangladesh (Web & Software Programming, Game Development, IT Support, Network Solutions, Offshore Outsourcing Service), Bulgaria (Programming and R&D), Belarus (Programming, R&D), Romania (Programming and IT), the Philippines (Programming, R&D, Data Entry and Customer Support, Egypt (Customer Support and Programming), Malaysia (Customer Support and R&D), Mauritius (ITO and BPO) and many others. other major players Slovakia, Spain, Vietnam look for disproportionate % of revenues generated in US vs % of employees that are US. ask HR Block if your tax return being done here or in Bangalore ? you might be surprised. ask your local hospital who is reading your x-ray and where is that person located ? again you'd likely be surprised send in on on-line order for supplies - ask the company who is preparing the billing and tracking shipment- I can tell you a lot of that in Brazil and SE Asia and all of those 10M + jobs are producing ZERO FICA $$ I applaud you for what you are trying to do SSSM., but the answer to your question sadly is likely yes. Ask those suppliers where their supply chain support is located, where is the cash application location, where is the bill being generated from, ..... you won't like many of the answers..others you talk to may not know or may just avoid answering all together |
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Post by southsidesignmaker on Sept 30, 2010 6:34:24 GMT -6
More mortgage distress in the air Price slide likely to continue as shadow inventory comes to light By Mary Ellen Podmolik, Tribune reporter www.chicagotribune.com/business/ct-biz-0930-distressed-properties-20100930,0,2570939.story September 30, 2010 Several years after the foreclosure crisis hit the Chicago area, a quiet new storm of homeowner troubles is on the horizon. New data suggest that the number of homes taken back by lenders represents only a small percentage of the distressed residential real estate out there. There are many more homeowners struggling to make their monthly payments. In the eight-county Chicago area, 19 percent of mortgages — representing nearly 1 in 5 residential properties with a loan — are delinquent by at least one month, helping create an inventory of almost 204,000 homes at risk of reverting back to lenders, according to data provided to the Chicago Tribune by John Burns Real Estate Consulting in Irvine, Calif. That "shadow inventory," as experts define distressed homes not yet put up for sale, is the largest in absolute terms for any metropolitan area in the country. Based on its calculations, the firm believes that 80 percent of those homeowners eventually will lose their property, either through foreclosure or a short sale, in which the lender permits the home to be sold for less than the value of the loan. These numbers are troubling for the economy because they reflect the deep problems many families are facing. But there is a significant spillover effect for all homeowners: Many of these houses eventually will go on the market, sold as distressed properties that will impact the value of all homes in their neighborhood. Register with Chicago Tribune and receive free newsletters and alerts >> Distressed sales, which are expected to account for 41 percent of activity nationally this year, should peak at 45 percent of all sales completed next year, according to Burns Real Estate Consulting. In September, 45 percent of single-family home and condo sales tracked by the Chicago Association of Realtors were foreclosures and short sales. For Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties, the shadow inventory number translates to 22 months of distressed housing supply. The combined shadow inventory for Lake County and Kenosha County, Wis., where the delinquency rate is 18.4 percent, is more than 22,000 homes, or a 23-month supply. "A fifth of people (in the Chicago area) aren't paying their mortgage," said Wayne Yamano, a vice president at John Burns. "Next year is when you're going to have the most competition in the market and the proportion of distressed sales will be the highest." An analysis of mortgage delinquencies in the Chicago area compiled for the Tribune by research firm CoreLogic demonstrates that the housing crisis is far from over. It shows that in many communities, less than 1 percent of homes in a given ZIP code were bank-owned at the end of June. Add in properties where the mortgage payments are at least 90 days past due and considered seriously delinquent and the percentage of affected properties grew by five-, ten- or twentyfold in some communities. Some snapshots: •In Evanston's 60202 ZIP code, for example, only 0.55 percent of homes were foreclosed upon and reclaimed by lenders in June. However, almost 7 percent of mortgages were at least 90 days delinquent, putting the future of those homes at risk. •In Chicago's 60611 ZIP code, part of Chicago's affluent Streeterville and Gold Coast neighborhood, only 0.52 percent of properties were bank-owned in June, but 5.31 percent of homeowners hadn't paid their mortgages for 90 days. •In Montgomery in June, less than 1 percent of properties were bank-owned, but almost 13 percent of mortgages were seriously delinquent. Overall in Illinois, the drumbeat of foreclosures has continued. In August, according to RealtyTrac, foreclosure proceedings were initiated on 6,912 homes; 5,412 homes went to court-ordered foreclosure sale; and 4,484 homes were taken back by lenders. One in every 314 homes with a mortgage received some sort of foreclosure filing in Illinois in August. Local governments are concerned about the increases and their impact, but they say they have struggled to keep track of the growing numbers. Some municipal governments, Lansing among the most recent of them, have enacted vacant property ordinances to hold property owners, whether individuals or banks, responsible for a home's upkeep. Others try to keep tabs on foreclosures by tracking court filings and talking with local real estate agents. But in an era of strapped budgets, communities don't have the financial resources to track foreclosures already in their neighborhoods, much less the future ones that may occur. The village of Lincolnwood this year has logged the most property maintenance complaints in at least seven years, as residents call about vacant homes in their neighborhoods with high grass, broken windows and unattached gutters. The village tries to keep up with the complaints and file liens against property owners, but it is in the third year of a hiring freeze and has eliminated positions. In June, 6.43 percent of mortgages in Lincolnwood were in foreclosure and another 7.3 percent were at least 90 days past due, according to CoreLogic's data. "We don't have the mechanism in place to actively track it," said village administrator Timothy Wiberg. "We hope we've hit rock bottom, but we don't know with any clarity what's going to happen." There is little doubt that more homeowners will lose their homes next year as foreclosure prevention efforts meet with limited success and an unemployment rate near 10 percent puts pressure on new homeowners. Earlier this month, the Treasury Department reported that only 33 percent of the 1.3 million trial payment plans begun under the federal government's Home Affordable Modification Program had been converted into permanent mortgage modifications. Meanwhile the number of modifications that were made permanent in August was down almost 27 percent from July. "Modifications have delayed distressed homes from coming onto the market," Yamano said. "We think most modifications are going to fail, and the (government-sponsored enterprises) are starting to ramp up foreclosure starts." During the year's second quarter, foreclosure starts of Fannie Mae- and Freddie Mac-backed mortgages increased 12 percent nationally, while completed foreclosure sales and other sales increased 15 percent. Short sales and deeds-in-lieu of foreclosure, two loss-mitigation efforts encouraged by the government because they cause less harm to a borrower's credit score, rose 27 percent during the second quarter, according to the Federal Housing Finance Agency. "You're seeing more product come into the marketplace, absolutely," said Mabel Guzman, president-elect of the Chicago Association of Realtors. "They want to get the product moved." In DuPage County, where community groups are trying to educate borrowers on their options, the DuPage Homeownership Center sees 15 to 30 new faces each week at group orientation sessions designed for struggling homeowners. "I think there are people right now hanging in limbo because servicers are dealing with (loan modification) backlogs," said Dru Bergman, the center's executive director. "I get a sense that there's still a lot clogged in the pipeline." Some real estate agents say they're seeing an increase in the number of financially strapped homeowners interested in listing their home as a short sale. They're also fielding questions from traditional sellers who held their homes off the market this year with the expectation that their home will fetch a better price in 2011. "I'm not sure that's going to happen," said Mary Ann Manna, an agent at American National Real Estate in West Chicago. "I know what's out there and I know the pipeline is pretty full, and banks aren't even putting all the properties they have on (the market). This is not over." mepodmolik@tribune.com |
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Post by southsidesignmaker on Sept 30, 2010 6:37:11 GMT -6
"I'm not sure that's going to happen," said Mary Ann Manna, an agent at American National Real Estate in West Chicago. "I know what's out there and I know the pipeline is pretty full, and banks aren't even putting all the properties they have on (the market). This is not over."
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It seems pretty obvious what will happen in the short term, prices will continue to drop in many market areas. If unemployment stays high the price pressure will continue into the 3-5 year range.
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Post by doctorwho on Sept 30, 2010 6:44:14 GMT -6
"I'm not sure that's going to happen," said Mary Ann Manna, an agent at American National Real Estate in West Chicago. "I know what's out there and I know the pipeline is pretty full, and banks aren't even putting all the properties they have on (the market). This is not over." _________________________________________________________________________________ It seems pretty obvious what will happen in the short term, prices will continue to drop in many market areas. If unemployment stays high the price pressure will continue into the 3-5 year range. I believe this to be true..for those of us looking to sell in the next 2-3 years it is discouraging to pay into a depreciating asset..tough calls out there right now. |
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Post by asmodeus on Sept 30, 2010 14:00:42 GMT -6
People forget that economics is often a zero-sum game, yet in listening to our idiotic "leaders," one might think otherwise. Falling home prices are a GOOD thing for half of the population--namely, buyers. How many qualified young people have been priced out of the market in recent years?
Government has no business promoting home ownership. Let the market go where it wants.
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Post by macrockett on Sept 30, 2010 22:30:26 GMT -6
People forget that economics is often a zero-sum game, yet in listening to our idiotic "leaders," one might think otherwise. Falling home prices are a GOOD thing for half of the population--namely, buyers. How many qualified young people have been priced out of the market in recent years? Government has no business promoting home ownership. Let the market go where it wants. Agree with you. Worse though was the push during both the Clinton and Bush administrations to promote home ownership. That emphasis pushed home ownership from the mid to high 60% level. That created millions of homeowners who couldn't afford what they were buying and now leaves the country to digest an inventory of millions of homes that never should have been made and sold (in the time frame they were made and to the people they were sold), as well as the financial crisis it brought on the country as a whole. Modified this post to include this video: www.cnbc.com/id/15840232?video=1603065272&play=1While capitalism isn't perfect, the basic tenet of free markets and contracts has no equal imo. Picking winners and losers or adjusting mortgage principal is a system/solution that will ultimately be very destructive to our society, imo. |
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Post by asmodeus on Oct 1, 2010 11:46:17 GMT -6
Plus, one of the unexpected effects of high home ownership is higher unemployment -- people who own are reluctant (or unable) to sell in order to move to where the jobs are.
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Post by southsidesignmaker on Oct 4, 2010 7:31:54 GMT -6
Sept. sales: Smile, don't sing Industry's painfully slow revival cracks 12 million SAAR Amy Wilson Automotive News -- October 4, 2010 - 12:01 am ET It's not quite time to sing "Happy Days are Here Again." But in September, the U.S. auto industry posted its best monthly sales rate in 13 months. The industry sold 959,049 light vehicles in September -- a year-to-year jump of 29 percent -- for a seasonally adjusted annual rate of 12.2 million, as calculated by the Automotive News Data Center. Last September, inventories were depleted in the aftermath of the federal government's cash-for-clunkers incentive program. Other than August 2009, when the clunkers program inflated the sales rate to 13.7 million, this September was the first month since September 2008 that the sales rate has surpassed 12 million. The rate in September 2008 also was 12.2 million. "It's a solid month, another step in a stable, somewhat painful recovery," said analyst Jesse Toprak of TrueCar.com. "This may be a healthier way to recover." George Pipas, Ford Motor Co.'s lead sales analyst, said September capped the fourth straight quarter of modest recovery in the sales rate. And modest improvement is just fine at this point, Pipas said. It may keep industry players from falling back into the bad habits -- overproduction and massive incentives -- that led to disaster for so many when U.S. auto sales tanked. "We're happy with what we're getting," Pipas said. "We're not going to waste a lot of time wishing that things would go quicker." Among the gainers last month: -- Ford Motor's sales jumped 40 percent to 160,375. With strong sales of pickups and new vehicles such as the Fiesta subcompact, Ford narrowed its gap behind General Motors Co. and solidified its lead over Toyota Motor Sales for the year. It now looks as if Ford will maintain the No. 2 spot for all of 2010, said Edmunds.com analyst Ivan Drury. Ford has sold 1.5 million vehicles through September vs. 1.3 million for Toyota. "It would be very difficult for them to fall down and allow Toyota to get that No. 2 spot again," Drury said. -- GM's sales rose just 11 percent in September to 173,031, including its four discontinued brands. Sales at GM's four core brands -- Chevrolet, Buick, Cadillac and GMC -- rose 22 percent. Retail sales of the core brands jumped 39 percent. Big pickups contributed significantly to the automaker's retail and overall sales improvements in September, said Don Johnson, GM vice president of U.S. sales operations. -- At Toyota Motor Sales, sales rose 17 percent for September to 147,162. It was a good month, but after a strong start, the pace was erratic, said Bob Carter, Toyota Division general manager. "Sales were so strong during Labor Day that it felt like 2006 again," Carter said. "But by the end of the month, the pace had slowed to a more typical 2010 level." -- Chrysler Group posted the biggest year-over-year increase of any manufacturer for the month, rising 61 percent to 100,077. "Chrysler is benefiting from stable gas prices and the highly visible launch of the redesigned Grand Cherokee," said Edmund's Drury. "As long as consumers are not worried about high fuel costs, Chrysler should be able to maintain a decent sales pace, since 71 percent of Chrysler sales are trucks." Of the large manufacturers, the biggest gainers for the month were Chrysler, Hyundai Motor America and Ford. The smallest increases came from GM and Toyota. Nissan and Honda were in the middle of the pack. With three months to go, Toyota's Carter and other manufacturers reiterated their earlier forecasts that 2010 sales would come in around 11.5 million vehicles. But after the roller-coaster ride of the past two-plus years, auto executives have learned not to count on anything. "That's a tough one to call," said Timothy Colbeck, senior vice president of sales at Subaru of America, which posted a 47 percent increase for September. "Every time you think you're starting to see momentum build, it seems like something sets us back a little bit." And while some economic indicators are improving, others remain troubled. "We're hopeful that the fourth quarter will log a good SAAR," said Ellen Hughes-Cromwick, Ford's chief economist. "But as you know, we have this so-called troika of challenges out there on jobs, housing and credit." David Barkholz, Ryan Beene and Jesse Snyder contributed to this report Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20101004/RETAIL01/310049963/1401#ixzz11Oe8QUoj |
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