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Transportation RSS FeedsToned down festivities - Is your firm celebrating marking the end of another year (a tough one, to put it mildly) and saying thanks to the staff with a Christmas party this year? The state of the industry means that many firms are understandably cancelling the annual corporate festivities or toning them down. We might all go down the pub and have a few drinks before the annual break, but that's about it. I can't resist sharing this though, about party shenanigans involving politicians in Australia. They certainly sound like lively shindigs down there. Aussies mull breath-test before voting...Feed Source: www.just-auto.com A big week for the Big 3 - This week is a pretty big week for the Detroit 3. That may be an understatement. They are fighting for their lives and have to present plans to convince lawmakers in Washington that they are a reasonable bet for loans that are pretty much the only alternative, in GM's case certainly, to filing for Chapter 11.
It is perhaps just worth remembering that the present liquidity crisis has been provoked by a collapsed market. Detroit was moving in the right direction, but now finds it has to run simply to stand still. Fairly or not, this crisis has brought all the underlying issues surrounding Detroit's long-run competitive status at home (where the financial losses are concentrated) to the surface. There is, now, nowhere to hide, no fudged deal to be done.
After the poor reception they got a few weeks ago, the CEOs have some ground to make up. Not arriving in corporate jets will be a start, at least, in terms of the message sent out about attitude.
More importantly... Volvo - who's buying? - So, Volvo Cars is up for 'strategic review' over at Ford, all options to be looked at. Yep, as was the case with Jaguar Land Rover. It might sell, if it can find a buyer. The language being used is very like that we heard before in the JLR case, isn't it?
Here's a thought. Let's say Ford has looked into it and decided that while it would very much like some cash, it is less keen to completely dump another prestige brand that plays well globally. In fact, it would really rather keep it and can see that making it profitable again is achievable - at least when the market turns around. The problem for Dearborn is cash, right now.
Who would buy it now, though? Ford was lucky to pack JLR off to Tata before the global automotive market dived. A buyer now from the emerging markets looks unlikely. An established European firm? Er, hang on, they're all hunkering down, concentrating on existing operating costs and not exactly looking to add a l... Retail crisis - As the car market plummets in Britain the retail side is already taking a severe battering with dealers and dealer groups going under and retrenching massively. Industry business models will be coming under greater scrutiny - and rightly so. Where is the added value and how is it distributed in terms of the value chain between manufacturer and final customer? At the dealer/aftermarket service end of things, it's looking pretty grim, as this article illustrates. Trouble is, are the car manufacturers in a frame of mind to sympathise with retailers?New car sales - the uneasy truth... Sales off a cliff but not in freefall - Edmunds estimates that US light vehicle sales this month will be well down on November of last year - they could be 30% down. While that's obviously not a cheering statistic, the trend with respect to October is more important than comparing with last year, given where we are after October's sales crash and what's going on in the market. By the sound of things, underlying demand (measured by the SAAR) hasn't fallen still further - though incentives have likely been generously deployed.
The market is perhaps bouncing along on the bottom in the US. It's not cause for outright celebration, but at least the downward sales trend - on a seasonally adjusted and annualised basis - has been checked (for now).US: Light vehicle market holds steady in Nov... Saturday Night Live does Detroit - You may already have heard that the NBC Saturday Night Live team lampooned the Detroit 3 CEOs following their performance in Washington last week. The satirical TV slot homed in on their travelling arrangements and also an apparent lack of a plan. The cheap shots at the product are a bit worrying given the strides taken to improve quality - proven in independent industry surveys.
So, SNL is being a little unfair and still getting laughs - that's perhaps a reminder of how long it takes to change perceptions, even if the product is really better.
Mind you, the three CEOs did rather set themselves up for a pummelling by arriving in private jets and not having some sort of roughly sketched out plan/scenarios beforehand.
If you want to see the clip, YouTube have taken it down now due to 'copyright issues'. It was there yesterday, but isn't today. Has someone taken offence and called in the lawy... Scrapping incentives? - I guess there may well be some people in Detroit who will have to shorten their Thanksgiving break later this week. There's a need for a report on the way forward before any 'bridging loans' bailout assistance is forthcoming. Washington lawmakers have made it pretty clear that they will not throw good money after bad. That report from the Detroit 3 (or should that be 2.5?) needs to be pretty compelling.
On this side of the pond, similar themes are being played out as companies note that volume and cash flow projections for next year look worse than they did a few weeks ago. And European subsidiaries of US automakers have the additional worry of what may happen if the parent's umbilical cord is abruptly severed. In Britain, Honda announced last week that it will shut its UK plant for two months. No redundancies are planned, yet. That's a firm that has been doing relatively well but is suddenly finding a hole in its revenues due to lower demand in Europe. At least... Toyota iQ on YouTube - I received an email from Toyota today about how spiffing and innovative the new iQ small car is. I dare say it is a commendable little car and some clever engineering has gone into maximising interior space and minimising footprint. I found myself clicking on various links and before I knew it I was on YouTube. A couple of the video clips were well worth a viewing. Specifically, there's a parking agility one that must have taken some working and is extremely well executed. And then there's something utterly bonkers involving an iQ and some very brave people suspended on the side of a building. Utterly bonkers, but strangely captivating. I know, simple things please simple minds.
... Cheap British currency - Us Brits are beginning to notice that trips across the Channel seem a little bit more expensive due to the weak Pound. And it's the same story if you head across the Atlantic (we're now at $1.48 per £). The consensus appears to be that sterling is a currency that is, relatively speaking, on a bit of a slide. But it is at least, mainly, good news for manufacturing exporters. Jaguar Land Rover may be tapping up the government for a bit of bridging loan assistance, but at least it will find profitability per unit sold in the US is up. It's just a pity that the US market has collapsed ... Driving and gaming - I guess we've all heard the standard tips on how to save fuel and help save the planet by now. It's things like keeping your tyres at the correct pressure and not allowing passengers or dogs to hang out of the windows or doing anything that detracts from lowest possible weight and most efficient aerodynamics. And there's also driving style. I think we all know what that one is all about, too - low revs, feet off the brakes, easy on the accelerator pedal.
And in practice, how are you doing? Do you check the fuel consumption occasionally?
There are some interesting developments going on with systems that can tell you how you are doing and present data in a way that engages. Honda has come up with something for the Insight hybrid that is almost turning eco-driving into a skill-based game. It could be a way to teach people that is way ahead of a manual.
On a similar theme... Sounded good at the time - Remember that Chrysler incentive that involved guaranteeing customers' gas at US$2.99 a gallon for three years? When the price was nudging $5 a gallon it sounded like a good offer. The pump price is now just over $2 rendering the relevant card useless. It will swing the other way again, but probably not for a while. Ironic though, to think of that handful of Jeep and Dodge customers actually hoping for the price of oil to go up.Sounded Good at the Time: The $2.99 Gas Card... Get a plan - It sounds like an eminently sensible step. Before you get the bailout, can we please see some sort of plan of what you are planning to do with the cash and how you intend to make your businesses viable? Yep, that's sensible and the least taxpayers deserve.
These will be the most important reports these companies have worked on, period. And there will have to be some serious work done to get something credible ready by early December. As ever, it's a shame that things have to get to a survival threatening level before minds are properly focussed on what's gone wrong and putting it right. But this could be (ought to be, even) a defining moment if the analysis of the situation and what needs to be done are really up to scratch. US: Congress wants auto industry plan... Surreal times? - That was a little out of left-field, eh? Was it a clever PR stunt yesterday by SolarWorld to say that it is planning a bid for Opel's German facilities or is it really serious? Before we all laugh it off as a cheeky stunt, let's just reflect on how desperate for cash certain companies are. GM is to sell a 3% stake in Suzuki to raise a bit over $200m. SolarWorld is talking about a billion euros for four factories, the products produced (royalties and rights would surely be negotiable) and Russlesheim's R&D (more tricky, but might be a way to share). Mad?GERMANY: SolarWorld AG 'planning to submit Opel offer to GM'... Detroit deadlock - I was just catching up on the latest news. Asian stock markets have followed the Dow Jones downwards, there's still political deadlock in Washington over the Detroit bailout and worries have intensified over the recessionary outlook for 2009.
It would seem that the markets have taken fright partly because of the deadlock over the US auto industry and are considering the implications for the US economy if no 'bailout' is forthcoming.
I reckon it will be, but politicians want to give the leaders of the Big 3 (or Big 2.5) a bit of a public going over first.
It's almost painful to watch as Wagoner/Mulally/Nardelli put up a united front and are subject to some fairly predictable barbs. It was inevitable though.
They may well have to offer their heads up, but I'm not sure that would be the right thing to happen. Wagoner was actually doing the right things before the rug was pulled by the financial crisis and the GM recovery plan was ... HuffPost item - There's a good point made below by Pieter van Rosmalen about the impact of exchange rates on published profitability figures. What exactly is the underlying picture at GM in Europe? Hmm. I guess that could cut the other way in other examples where profits are exaggerated. One for the accountants.
A blogger at the Huffington Post, Diane Tucker, has been in touch to refer me to an interview with Peter DeLorenzo (the sometimes provocative and very readable Auto Extremist blogger). It's quite a neat summary of the (for want of a better term) pro-Detroit line.Journalist to GOP: You're 100 Percent Wrong About U.S. Automakers... The new game in town: 'What If?' - The turmoil in Detroit is now causing bigger waves to ripple elsewhere. And it's not just, 'We want a fat soft loan like wot they got' which was the rather crude, if brutally honest, message that recently came out of the European automakers' trade association ACEA.
I spent a bit of time yesterday on the phone with a journalist in Brazil and his questions were the same as many doing the rounds this week in Brussels, Berlin, Stockholm and I dare say plenty of other places across the globe. They boil down to this: what if? What if GM or Ford really goes down? What happens to the local factory that makes GM/Ford cars?
I was having another conversation with someone recently about Delphi. It's still in Chapter 11, but I was told you wouldn't know it to talk to the European Delphi people who haven't really been much affected. And, the Delphi Euro-people maintain, it's actually been a positive thing for their business in the round. Maybe.
... Tough calls - The downbeat news just keeps on coming. It seems relentless at the moment, but we are at that stage in the cycle when everyone is reassessing the demand outlook for next year and adjusting operations accordingly. Economies are on the way down, so good news will be in short supply, few looking ahead to the recovery phase at this point. The storm's still blowing in. And there's the underlying elephant in the room which is the whole credit situation and how quickly we'll have a return to credit being more available.
While the spotlight is very much on Detroit, it's perhaps worth noting that Europe isn't looking too pretty either. Renault's Patrick Pelata has said he sees a 20% decline next year. Gulp. That's perhaps a measure of how far people are taking their market forecasts down right now. It's downward revisions all round.
But, if the credit situation is gradually 'resolved' in the first half of next year the outlook might star... RTE news - A young lady who works at the Irish national broadcaster RTE on their newsdesk called me the other day. Would I care to be interviewed in a programme slot about the problems facing Detroit? Er, yes, I guess I could, I said. I've a face for radio and I was assuming that was what we were talking about, RTE being based, I also assumed (correctly), in Dublin. The great thing about radio interviews is you can do them down the phone or, these days, on high quality Skype, disruption to daily routine kept to a minimum. I've done loads on BBC World Service radio over the years.
The RTE lady asked very nicely and I was on my cell at the BMW thing (see below posting). I said yes and that was that. It turned out to be TV. It's not that I don't like doing TV stuff - I do, actually - but you normally have to physically get yourself to a studio and that's a slight hassle whichever way you look at it. If you're wondering, do t... Cars that last - Here's a thought. There's a vibe around that is changing the way consumers behave across the board. Even if you are not directly impacted by harder economic times, you may start to behave differently, feel that you should be cautious with your spending 'just in case'. And lots of people are eschewing conspicuous consumption; you, perhaps, are being carried along on that tide a little, even if you are unaware of it.
It might mean shopping for bargains online, a renewed enthusiasm for camping holidays, buying groceries at Lidl or hanging on to your car a little longer before replacing it. And if you do hang on to your car, you may be very pleasantly surprised that not much goes wrong with it. They're well built these days. In fact, the whole financial merry-go-round that involves finding the money to spend on an expensive asset that rapidly loses value might be called increasingly into question.
That thought was brought into focus while thinking... BMW 7 - I'm out to a drive event for the new BMW 7 Series tomorrow. That's some vehicle to be going to the market with right now. It looks a lot like the old one, the Bangle dial turned down a tad. Is iDrive easier to use? I hope so. But however good the car is, I wonder what the volume outlook for it looks like. The UK market could be tricky, along with some others, company directors and the like feeling the pinch and tightening belts.
But BMW has managed to make it lighter, greener and still more powerful than the one it replaces. That's not a bad achievement is it? What say you Mercedes?GOLDING'S TALK: The man who sewed together the new 7 Series... Copyright © 2008, Sat Live On Pc. All Rights Reserved. |