Auto sales declines show signs of steadying
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DETROIT - U.S. car and truck sales showed
signs of stabilizing in June after a year of sharp declines, but every
major automaker e xcept Honda Motor Co. reported lower sales than in
May. Still,
year-over-year declines last month slowed for four of the six major
carmakers, with Ford Motor Co. reporting the smallest drop in a year at
10.7 percent when compared with June of 2008.
Even
Chrysler, which emerged from bankruptcy protection early in June, saw
its year-over-year sales decline shrink, and analysts say that's among
the signs that an auto industry slump that began with $4 per gallon
gasoline last summer could be leveling off.
"It is unlikely things will get any worse,"
said Jesse Toprak, executive director of industry analysis for the auto
Web site Edmunds.com. Factors
such as a slowly improving economy and government incentives of up to
$4,500 to trade in inefficient clunkers for new vehicles could lead to
modest improvements in the second half of the year, he said.
And
while Chrysler's sales results were dismal, the figures were roughly in
line with analyst estimates and reflect a company that is in a major
transition following bankruptcy protection and new focus on more fuel
efficient vehicles.
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No funding for GM after July 10, official says
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 NEW YORK - A senior member of President Barack
Obama's auto task force testified Wednesday that the U.S. government
will not continue to fund General Motors Corp.'s operations if the
automaker doesn't get approval to sell its assets to a new company
within the next 10 days. "We
have no intention to further fund this company if the sale order is not
entered by July 10," Harry Wilson, one of the Treasury Department
officials overseeing GM's restructuring, said while being
cross-examined by an attorney for a group of GM bondholders opposing
the sale.
The
No. 1 U.S. automaker's government-backed plan for a quick exit from
Chapter 11 hinges on the sale plan, which would allow it to leave
behind many of the costs and liabilities that have made the company
unprofitable in the past.
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Is the government's 'Cash for Clunkers' plan right for every driver? Nope.
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 t may end up being great for the environment. It will certainly make some car dealers very happy. But that Cash for Clunkers bill just signed by President Obama may not be the sweet deal that consumers were awaiting.
True,
the new program offers to pay $3,500 or $4,500 for old, gas-guzzling
cars and trucks that are traded in for new, more efficient vehicles.
Add that cash to the new-car sales-tax deduction that was in February's
stimulus bill, and it looks like the government is making a car deal
you can't refuse. But while the government's plan may benefit some
buyers, it's not for everyone. "A lot of people will be disappointed,"
says Philip Reid of Edmunds.com, a car research Web site. "This is not
like winning the lottery."
One reason: embedded in
the program's fine print are several rules that will disqualify a large
segment of drivers when the two-month plan is expected to kick off near
the end of July. Cash for Clunkers works like this: cars getting less
than 18 miles per gallon (combined city/highway), owned, registered and
insured for at least a year, and from 1984 model years and later can be
traded in for new cars. The dealer pays the owner $3,500 (if the new
car gets between 4 and 10 more miles per gallon) or $4,500 (if the new
car gets 10 or more miles per gallon.) The dealer then is required to
scrap the car so that it doesn't end up back on the streets. The dealer
is then reembursed by the federal government.
This
makes the $4,500 federal guarantee a ceiling on the trade-in, not a
floor. Dealers are not going to offer extra money on trade-ins that
they can't resell. And that renders the Cash for Clunkers program a bad
deal for anyone with an old car or truck that's worth more than $4,500.
(There's a useful list of every car make, model and year that both
qualifies for the program and is likely to be worth less than $4,500 at
Edmonds.com.)
Analysts expect that most of the vehicles that will actually be traded
in under the program will be trucks, which have slightly different
rules. The complete details are available at a new government Web site
set up for the program at cars.gov, and in a chart at the Web site of the National Automotive Dealers Association.
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Chrysler Financial to cut 9 percent of workers
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DETROIT - Chrysler's former financial arm said
Tuesday that it will reduce its work force by 9 percent, or more than
300  employees, as it restructures operations after losing its preferred
lender status with the automaker.GMAC
Financial Services is now Chrysler's leading lender for financing
Chrysler vehicle purchases and dealer inventories, a move prompted by
President Barack Obama's auto task force.
From
the beginning of the 2008 fourth quarter, Farmington Hills, Mich.-based
Chrysler Financial - which is separate from Chrysler Group - provided
loans for about 62 percent of Chrysler dealers and about 50 percent of
its customers. Privately held Chrysler Financial is owned by Cerberus
Capital Management.
The company said Chrysler's switch to GMAC,
tight capital markets and a continued decline in auto sales have hurt
the company's business portfolio, leading to the work force reductions,
said the company in a statement.Chrysler
Financial employs about 3,400 people. The cuts will occur at the
company's headquarters and eight business centers. A customer service
center in Overland Park, Kan., will close Aug. 31. The company's retail
credit acquisition activities will be consolidated into a business
center in Auburn Hills, Mich.
"While
these were difficult decisions to make, they are necessary in light of
our declining portfolio," said Chrysler Financial Chairman and CEO Tom
Gilman, in a written statement. "We have made every effort to limit the
number of job losses and to ensure the affected employees are treated
fairly."
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The office on wheels
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Recognizing that its commercial vehicle
customers are as increasingly reliant on communications and information
 technology as much as cubicle-bound desk jockeys, Ford has developed a
suite of technologies and applications aimed at mobile commercial
customers it's calling "Work Solutions."
These technologies
include a theft-proof built-in computer - no more stolen or dropped
laptops - and tools for tracking, well, tools, as well as for tracking
a truck itself and securing equipment in the beds of pickups to reduce
the chance it will be stolen. Work Solutions is a $2,815-add-on cost
for pickups, but can be less if buyers pick and choose among the
features.
"Ford Work Solutions takes productivity to a new
level by bringing the office to the job site in an integrated, seamless
way ... with a strong network of industry-leading partners," said John
Felice, Ford's general marketing manager.
Ford has
partnered with DeWalt, Garmin, Master Lock, Microlise, Sprint,
Magnetti-Marelli and Microsoft to deliver Work Solutions capabilities.
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)
Work
Solutions' gadgets are available on Ford's F-150 light-duty pickups,
Super Duty pickups and the upcoming Transit Connect commercial minivan,
and some of the components will be available for dealer installation in
trucks customers already own.
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Ford: 'We're not slipping back'
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 DEARBORN, Mich. - Ford's top sales analyst said Monday U.S. auto sales
may have stopped their month to month declines in June and could be
down less than 30 percent for the first time since September of last
year.Automakers,
which are due to report June sales in the U.S. on Wednesday, have seen
sales fall 37 percent over the first five months of the year.
As
bad as it sounds, a decline of less than 30 percent could be a welcome
relief, as automakers and suppliers have trimmed production and other
costs to adjust to lower consumer sales.
"The important takeaway is that we're not
going backward, we're not slipping back," said Ford's George Pipas
during a sales preview talk with reporters. "It suggests the worst is
behind us, not just the economy, but we may have seen the low point for
the year."He said
June sales for Ford Motor Co. were "good" compared with the overall
industry. The Dearborn-based automaker could see the a year-over-year
decline of 10 to 20 percent, which could be the lowest among all major
automakers, Pipas said.
"This will be our lowest decline of this year," he said.
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In order to succeed, your desire for success should be greater than your fear of failure.
Bill Cosby
Sincerely,
Frank Kimbrough
Franks Automobile Shipping & Transport
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