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rffrydr
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 Posted: Fri Feb 08, 2008 8:54 am Post subject: |
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Remember the "truck" depreciation clause early Bush? Accelerated depreciation in yesterday's Fiscal Stimulus for small business will allow car write-off over the year.
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rffrydr
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rffrydr
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| Posted: Tue Feb 12, 2008 8:00 am Post subject: |
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No change here:
| Quote: | | But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter. |
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rffrydr
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rffrydr
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rffrydr
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| Posted: Thu Mar 13, 2008 8:43 am Post subject: |
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Stock almost cut in half since labor-pact euphoria. That's a recession price.
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rffrydr
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rffrydr
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| Posted: Sat Mar 29, 2008 7:34 am Post subject: |
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Nothing burns money like an automaker in a recession. Yet the world is not in recession and the autos are priced like it is. Does the old cycle break? This guy is buying next week:
| Quote: | Welcome to the inaugural edition of The Week Ahead. I'm sure that normally you rely on other sources to see a compiled list of all the important releases for the upcoming trading week. This column endeavors to pull out a few key items and put the forecasts into some kind of context.
The Detroit Bounceback
We've been witnessing the steady decline of the industrial base since I was in eighth grade (1978 for those keeping score). But the falling dollar could prove to be a long-awaited elixir. Simply put, it is becoming notably cheaper to build products in Youngstown than in Munich or Marseilles.
That's why I'd be a buyer of auto stocks next week -- soon after the monthly auto-sales figures are released on Tuesday, April 1. The numbers are likely to be weak, as the U.S. consumer remains on the sidelines.
But in coming weeks and months, look for a string of positive headlines in the sector that should herald a renaissance in Detroit and elsewhere.
Volkswagen ditched its U.S. plants 15-20 years ago, citing the then-strong dollar. The German automaker now appears set to announce plans to start producing cars again in the U.S. Jochem Heizmann, head of VW's production, has said that 80% of the content in the cars would also be domestically produced, according to autoblog.com.
VW has admitted that the Passat should be about $4,000 cheaper, but being built in Europe, that simply isn't going to happen. All told, the company hopes to build 250,000 cars annually, though some of those vehicles may be for other VW brands, such as Audi, SEAT and Skoda.
In a similar vein, BMW has announced plans to boost its manufacturing capacity in South Carolina, while trimming German production. If Daimler's inexpensive SmartCar proves to be a success on our shores, then U.S. production is likely inevitable.
But the real game changer for the industry will come when Ford (F - commentary - Cramer's Take) and GM (GM - commentary - Cramer's Take) announce plans to start exporting more cars from the U.S. to Europe. Ford, for its part, is moving to global platforms in order to more easily shift production between markets.
Ford has stated that it needs a stronger presence in the economy segment of the market. Simply put, Ford cannot build the upcoming Fiesta in Europe and export it to the U.S. That would be a surefire recipe to lose money on every car they sell. Instead, look for American-made Fiestas to land on the streets of Liverpool and Lisbon.
Of course, auto suppliers such as Visteon (VC - commentary - Cramer's Take) and Johnson Controls (JCI - commentary - Cramer's Take) will get a commensurate boost.
Rising incomes in the industrial belt could also strengthen sales trends at mid-priced retailers, such as Christopher & Banks and casual-dining stocks such as Darden's (DRI - commentary - Cramer's Take) or Brinker Int'l (EAT - commentary - Cramer's Take). My colleague Scott Rothbort has written an outstanding primer on this space, which is very attractively-priced right now.
Of course, many will argue that the dollar's strength is ephemeral, and the euro will crash to earth once interest rate trends in the U.S. and Europe start to change direction. I'm not so sure. After all, as long as Uncle Sam is running budget deficits, the dollar will remain under pressure.
Others will argue that the U.S. will never be as cheap as China, and manufacturing erosion is bound to continue. Well, the Chinese yuan is finally starting to strengthen -- a trend that is likely to continue if China ceases to wash all of its dollar earnings. Soon enough, the added logistical costs of exporting around the world will meaningfully offset the relative currency advantages that China holds (A controversial opinion, to be sure).
Much of the potential manufacturing renaissance will hinge on November's presidential elections. Both Democratic candidates appear inclined to support legislation that gives favorable tax treatment to the creation of U.S. jobs. Senator McCain's stance on the matter is less clear, but he'd be hard-pressed to veto any legislation that is deemed favorable U.S. workers..... |
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rffrydr
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HenryTo
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| Posted: Tue Apr 08, 2008 2:25 am Post subject: |
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The unthinkable just a year ago: Detroit now exporting vehicles to China, Europe, and Latin America.
http://online.wsj.com/article/SB120761191252596525.html?mod=hps_us_whats_news
| Quote: | Last year's landmark labor deals and the weak dollar are breathing new life into U.S. auto plants, leading Detroit's auto makers to plan sizable exports of U.S.-made vehicles to markets around the world.
General Motors Corp. is looking to export U.S.-made vehicles to Europe as well as to China and Latin American markets such as Brazil, company executives confirmed. Chrysler LLC, primarily spurred by exchange rates, has already started shifting production from Europe to the U.S. to take advantage of lower costs and available plant capacity. Ford Motor Co. is considering ramping up exports if it can bring labor costs down, people familiar with the matter said.
For years the U.S. has been one of the most expensive places in the world to make cars. But the new contracts with the United Auto Workers union signed last fall significantly improve the global competitive position of Big Three plants. The weaker dollar, which makes production in the U.S. less expensive, is also helping to turn the economics of domestic production upside down.
"Combined with the weak dollar, we've got a contract that puts ourselves in a great position to ship products to other countries and do it making a profit," said Mike Herron, a UAW official at GM's assembly plant in Spring Hill, Tenn., who is involved in negotiations with the company.
Detroit's improved competitive position has sparked concern among foreign manufacturers, which do not use unionized U.S. workers. Toyota Motor Corp. is now pushing to lower labor costs in the U.S., say people familiar with the matter.
Later this year, GM will begin shipping the Buick Enclave, a seven-passenger crossover sport-utility vehicle made in Lansing, Mich., to China, where the Buick brand is a big seller. GM hopes eventually to export as many as 25,000 Enclaves a year to China, said Dee Allen, a GM spokesman.
GM is making plans to sell the Chevrolet Malibu, a sedan made in Kansas and Michigan, and possibly other U.S.-made passenger cars in Brazil and other Latin American markets, GM executives have said. |
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rffrydr
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rffrydr
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HenryTo
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| Posted: Sat Apr 19, 2008 12:12 am Post subject: |
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Symptoms of "Dutch Disease" appearing in Canada, starting with the Canadian auto manufacturing sector, not surpisingly.
| Quote: | "We've already told General Motors that we don't agree with their numbers, but we're also not going to be pitted against the transplants," CAW President Buzz Hargrove said, referring to the Japanese plants in the United States.
"We don't represent the transplants and we're not going to compete with them in terms of their cost structure," Hargrove said. |
If they are not willing to compete on cost structure, how else are they going to compete? With their products?
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GM Canada seeks big cuts to labor costs: source
Fri Apr 18, 2008 1:54pm EDT
By John McCrank
TORONTO (Reuters) - General Motors of Canada (GM.N: Quote, Profile, Research) will be seeking big changes to labor practices when it starts contract talks with its main union later this year, according to an industry source with access to a company document.
The source, who asked not to be identified, said the automaker is seeking to eliminate what it says is a $30-an-hour labor cost disadvantage versus non-unionized U.S. plants operated by Japanese-based competitors,
Possible changes include the establishment of a two-tier wage system like that recently introduced in GM's U.S. plants, as well as the use of more temporary workers, less paid time off, and an end to retiree health benefits and cost of living protection for workers and pensioners.
GM Canada did not return calls seeking comment.
The Canadian Auto Workers union, which represents around 15,000 GM Canada workers, has said it will not allow a two-tier wage system like the one the United Auto Workers in the United States agreed to last year, and it would strike if pressed on the issue. Under the two-tier plan, new employees are hired at wages that are about half the regular union rates.
"We've already told General Motors that we don't agree with their numbers, but we're also not going to be pitted against the transplants," CAW President Buzz Hargrove said, referring to the Japanese plants in the United States.
"We don't represent the transplants and we're not going to compete with them in terms of their cost structure," Hargrove said.
GM's tough position comes as it and the rest of the Big Three Detroit-based automakers -- Chrysler and Ford Motor Co (F.N: Quote, Profile, Research) -- prepare for contract talks with the CAW in July. The union's current contract expires September 17.
The strong Canadian dollar has made imported parts from the United States cheaper, but has made Canadian wage rates less competitive. Labor costs make up around 7 or 8 percent of the cost of manufacturing a car.
Hargrove acknowledged that Canadian labor costs are higher than those in unionized Big Three plants in the United States. But he said stronger productivity in Canada narrows the gap.
The CAW says it has a strike fund of $70 million, enough to cover a six-month walkout at GM.
The last CAW strike at a Big Three plant was in 1996 at GM, and it lasted three months.
GM Canada operates a car plant and a truck plant in Oshawa, Ontario, an engine and transmission plant in St. Catharines, Ontario, and a transmission plant in Windsor, Ontario.
(Reporting by John McCrank; editing by Rob Wilson) |
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rffrydr
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rffrydr
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