Economics

[doctorwho]

Oct 4, 2010 7:31:54 GMT -6 southsidesignmaker said:

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

"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."

Wow, I guess $3.00+ is no longer consdered high-- resetting the benchmark once again

[gekfromthefarnorth]

Oct 4, 2010 8:27:22 GMT -6 doctorwho said:

Oct 4, 2010 7:31:54 GMT -6 southsidesignmaker said:

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

"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."

Wow, I guess $3.00+ is no longer consdered high-- resetting the benchmark once again

I think that the commodity is about right priced given its history.

Note: I have a plot of the price that I have paid for per gallon of gas in my van/yukon over the years Oct 2000 to present. I tried to attach a pdf plot but was unsuccessful. If someone could help I will share.

[Arch]

Just host it somewhere and post the URL to it. google for free file hosting if you don't already have a place... plenty to choose from.

[gekfromthefarnorth]

Try This link: www.datafilehost.com/download-f931bde0.html

[doctorwho]

Oct 4, 2010 9:43:08 GMT -6 gekfromthefarnorth said:

Oct 4, 2010 8:27:22 GMT -6 doctorwho said:

"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."

Wow, I guess $3.00+ is no longer consdered high-- resetting the benchmark once again

I think that the commodity is about right priced given its history.

Note: I have a plot of the price that I have paid for per gallon of gas in my van/yukon over the years Oct 2000 to present. I tried to attach a pdf plot but was unsuccessful. If someone could help I will share.

Isn't that what re-setting the bar results are supposed to accomplish? After viewing close to $/gallon, $3 gallon looks very good. The question is this, with record profits in the industry, is that an indicator that the end product is right priced for the consumer or the producer- as opposed to somewhere in between ? -just one view on it

compared to WW prices it might be fine- but have to be careful with those kinds of comparisons as there are so many factors involved that differ

[gekfromthefarnorth]

Obviously its somewhere in between. (my guess)

Crude has a very small inherent price in that you look and if you find oil you are "rich" your cost is equipment, labor, research, etc. Now getting gas to your car from crude requires transportation, refining, equipment, labor, taxes, etc. ALL of these prices have risen over the years and thus you would expect the price to rise each and every year. This generally hasn't happened and thus we may have lowered some costs.

Clearly taxes have not gone up to support roads and regulate the industry in a way that we all would like allow for road projects (and forcing environmentally responsible behavior) in a timely fashion without stimulus which I "think" takes money from our children's children.
www.taxfoundation.org/research/show/1054.html

[doctorwho]

Oct 4, 2010 11:19:29 GMT -6 gekfromthefarnorth said:

Obviously its somewhere in between. (my guess)

Crude has a very small inherent price in that you look and if you find oil you are "rich" your cost is equipment, labor, research, etc. Now getting gas to your car from crude requires transportation, refining, equipment, labor, taxes, etc. ALL of these prices have risen over the years and thus you would expect the price to rise each and every year. This generally hasn't happened and thus we may have lowered some costs.

Clearly taxes have not gone up to support roads and regulate the industry in a way that we all would like allow for road projects (and forcing environmentally responsible behavior) in a timely fashion without stimulus which I "think" takes money from our children's children.
www.taxfoundation.org/research/show/1054.html

I do believe we have and continue to steal our children's future. Pretty much a forgone conclusion that the world our children will live in - will find them less 'well off' than their parents.
Plenty of reasons including; off-shoring 12M+ white collar jobs to 'low cost' countries, lack of career paths in companies today, education that lags severly behinbd the world now - especially in reading and while some point to increasing ACT scores- the 'readiness for college ' score remains just slightly above 50%, traditional pension plans for government, public and some union workers that are unsustainable on any actuarial table, and underfunded Social security plan, a health care plan that threatens corp contribution to health care and may lead to 100% governmental control as well as being totally unaffordable ( although noble) , and infrastructure that is sorely in need of major attention...it's not a pretty picture

[southsidesignmaker]

GM has new UAW accord to make Aveo profitably in U.S., labor boss says
David Barkholz
Automotive News -- October 4, 2010 - 4:23 pm ET


DETROIT -- The UAW has negotiated a landmark local labor agreement with General Motors Co. that should allow the automaker for the first time to produce a subcompact car profitably in the United States.

The agreement calls for just 60 percent of all hourly workers at GM's assembly plant in Orion Township, Mich. -- where the Chevrolet Aveo will go into production next year -- to receive traditional production wages of $28 an hour with full benefits, said Mike Dunn, shop chairman for UAW Local 5960.

The other 40 percent will receive a so-called Tier 2 wage equal to roughly half that of so-called legacy workers.

Effectively, that means about 900 of the 1,200 to 1,500 workers on layoff at the plant will be able to return at full wages and benefits, Dunn said. The remaining workers on layoff will have the option of coming back with Tier 2 wages and full benefits or seeking a transfer to another GM plant, he said.

GM built mid-sized cars at the Orion plant until last fall, when it was idled to retool for the Aveo.

The wage agreement is expected to reduce GM's labor costs enough that the automaker can make a profit on the small car, Dunn said.

“It's an integral part of the plan,” he said.

GM and UAW officials reached a final agreement late last week, and plant workers were briefed on the plan Sunday.

GM spokeswoman Kimberly Carpenter confirmed today that an agreement is in place but would not talk about the details.

"GM has worked closely with the UAW to create new and innovative contractual language that will allow this facility to be flexible and lean -- essential elements in this highly competitive small-car market segment," Carpenter said in a statement.

Change in cost structure

Traditionally, subcompacts have been assembled outside of the United States using lower-wage workers because companies could not build them in this country and sell them at a profit.

Ford Motor Co., for example, is manufacturing its new Ford Fiesta subcompact in Mexico for the North American market.

Detroit's automakers have had limited success hiring Tier 2 workers at U.S. plants, even though UAW contracts negotiated in 2007 and again in 2009 gave them the right to do so. Under those recent pacts, up to 20 percent of an automaker's hourly work force could be subject to the lower-cost Tier 2 wage scale.

But because of the sharp decline in industry sales, along with numerous plant closings, Detroit automakers have been unable to hire new workers at lower wages. At the same time, many longtime UAW workers have been reluctant to retire or accept voluntary buyouts to create additional openings.

Unusual circumstances

But the Orion plant has been a special case. The UAW's 2009 amended contract with GM just before bankruptcy called for “innovative labor agreement provisions” that would allow GM to make a small car profitably in the United States.

Workers at Orion Township will not have an opportunity to ratify the new agreement, Dunn said. They effectively agreed to the terms when the majority of UAW-represented workers ratified the 2009 GM contract that contained the general language related to a small car, he said.

The Aveo is scheduled to begin production in 2011 as a 2012 model, Carpenter said. GM produces the current generation of the Aveo in South Korea, she said. GM will begin producing the new Aveo in early 2011 before Orion Township gets the global car later in the year.


You can reach David Barkholz at [e-mail].


Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20101004/OEM01/101009947/1261#ixzz11RPgI6CG



_________________________________________________________________________________________



Yes the union assembly line worker was once part of the burgeoning middle class. Now we can feel confident that many "on the assembly line" will start at around 35k a year plus bennies, I wonder how many newly minted college grads will be signing up.

It won't be long now until the starting wages for educators will look down right appealing.... College loans and all!!!

At least the cars will be produced "in country", a real plus as many Americans will only be able to afford this economically priced vehicle.

[EagleDad]

Oct 4, 2010 18:59:22 GMT -6 southsidesignmaker said:

The UAW has negotiated a landmark local labor agreement with General Motors Co. that should allow the automaker for the first time to produce a subcompact car profitably in the United States.

Anyone remember the Chevette (or for that matter the Citation).

While profitable, a quality vehicle they were not.

[doctorwho]

Oct 4, 2010 19:28:58 GMT -6 EagleDad said:

Oct 4, 2010 18:59:22 GMT -6 southsidesignmaker said:

The UAW has negotiated a landmark local labor agreement with General Motors Co. that should allow the automaker for the first time to produce a subcompact car profitably in the United States.

Anyone remember the Chevette (or for that matter the Citation).

While profitable, a quality vehicle they were not.

I remember both - they were quite the crapfest mobiles..-right there with Chrysler K cars., Ford Pinto, Mercury Comet.and they wonder how they lost the auto market- geez

[doctorwho]

Oct 4, 2010 18:59:22 GMT -6 southsidesignmaker said:

GM has new UAW accord to make Aveo profitably in U.S., labor boss says
David Barkholz
Automotive News -- October 4, 2010 - 4:23 pm ET


DETROIT -- The UAW has negotiated a landmark local labor agreement with General Motors Co. that should allow the automaker for the first time to produce a subcompact car profitably in the United States.

The agreement calls for just 60 percent of all hourly workers at GM's assembly plant in Orion Township, Mich. -- where the Chevrolet Aveo will go into production next year -- to receive traditional production wages of $28 an hour with full benefits, said Mike Dunn, shop chairman for UAW Local 5960.

The other 40 percent will receive a so-called Tier 2 wage equal to roughly half that of so-called legacy workers.

Effectively, that means about 900 of the 1,200 to 1,500 workers on layoff at the plant will be able to return at full wages and benefits, Dunn said. The remaining workers on layoff will have the option of coming back with Tier 2 wages and full benefits or seeking a transfer to another GM plant, he said.

GM built mid-sized cars at the Orion plant until last fall, when it was idled to retool for the Aveo.

The wage agreement is expected to reduce GM's labor costs enough that the automaker can make a profit on the small car, Dunn said.

“It's an integral part of the plan,” he said.

GM and UAW officials reached a final agreement late last week, and plant workers were briefed on the plan Sunday.

GM spokeswoman Kimberly Carpenter confirmed today that an agreement is in place but would not talk about the details.

"GM has worked closely with the UAW to create new and innovative contractual language that will allow this facility to be flexible and lean -- essential elements in this highly competitive small-car market segment," Carpenter said in a statement.

Change in cost structure

Traditionally, subcompacts have been assembled outside of the United States using lower-wage workers because companies could not build them in this country and sell them at a profit.

Ford Motor Co., for example, is manufacturing its new Ford Fiesta subcompact in Mexico for the North American market.

Detroit's automakers have had limited success hiring Tier 2 workers at U.S. plants, even though UAW contracts negotiated in 2007 and again in 2009 gave them the right to do so. Under those recent pacts, up to 20 percent of an automaker's hourly work force could be subject to the lower-cost Tier 2 wage scale.

But because of the sharp decline in industry sales, along with numerous plant closings, Detroit automakers have been unable to hire new workers at lower wages. At the same time, many longtime UAW workers have been reluctant to retire or accept voluntary buyouts to create additional openings.

Unusual circumstances

But the Orion plant has been a special case. The UAW's 2009 amended contract with GM just before bankruptcy called for “innovative labor agreement provisions” that would allow GM to make a small car profitably in the United States.

Workers at Orion Township will not have an opportunity to ratify the new agreement, Dunn said. They effectively agreed to the terms when the majority of UAW-represented workers ratified the 2009 GM contract that contained the general language related to a small car, he said.

The Aveo is scheduled to begin production in 2011 as a 2012 model, Carpenter said. GM produces the current generation of the Aveo in South Korea, she said. GM will begin producing the new Aveo in early 2011 before Orion Township gets the global car later in the year.


You can reach David Barkholz at [e-mail].


Read more: www.autonews.com/apps/pbcs.dll/article?AID=/20101004/OEM01/101009947/1261#ixzz11RPgI6CG



_________________________________________________________________________________________



Yes the union assembly line worker was once part of the burgeoning middle class. Now we can feel confident that many "on the assembly line" will start at around 35k a year plus bennies, I wonder how many newly minted college grads will be signing up.

It won't be long now until the starting wages for educators will look down right appealing.... College loans and all!!!

At least the cars will be produced "in country", a real plus as many Americans will only be able to afford this economically priced vehicle.

iyt is a re-setting that was long overdue/ When you have assembly line workers with 30 years making more than GP doc's-- the world is upside down..
I applaud the union officials here for looking for a solution ( as opposed to the idiot group in Indy) -

Not only are they more jobs here now- the residual jobs in that town- barbers/restaurants etc also benefit..

[Arch]

It was nicknames the sh!t-Vette for a reason.

[macrockett]

Oct 4, 2010 18:59:22 GMT -6 southsidesignmaker said:

Yes the union assembly line worker was once part of the burgeoning middle class. Now we can feel confident that many "on the assembly line" will start at around 35k a year plus bennies, I wonder how many newly minted college grads will be signing up.

It won't be long now until the starting wages for educators will look down right appealing.... College loans and all!!!

At least the cars will be produced "in country", a real plus as many Americans will only be able to afford this economically priced vehicle.

I thought you were the PMA guy SSSM, what gives?

[macrockett]

What is the outcome of the Fed printing money to create asset inflation at the same time wages are stagnating or declining?

[southsidesignmaker]

Mac,

The outcome of asset inflation is higher taxes of course. From real estate tax to gasoline and "sin taxes" if assets / consumer items increase in price... the taxes associated also go up.

As for the change of heart regarding being a "PMA guy", the fact is that after watching the domestic auto industry implode over the last 5 years, it has become obvious that the "rank and file" employees will be the ones that loss the most.

It is hard to believe that GM will be making a real attempt to mfg. vehicles in country.... upon closer examination all one has to do is look at the plant location of engine, transmission, and drive train plants.

My thoughts are there will be some politicians, management and union officials touting this new plant.... when in reality most parts for the vehicle will be outsourced to third world "cheap labor" locations.