Posts By: John Horner

By on August 31, 2009
Ford has a gushing press release out on the US’ first month of Transit Connect sales; and a booming small business economic sector! You know things are a bit dicey when a survey saying “9 percent of small business owners plan to hire additional staff within the next three months” gets its own big bold bullet point. That nine percent planning to hire means that the other 91% plan to either hold pat or let employees go. Ouch, those are bad numbers.
By on August 28, 2009

The typically boosterish San Antonio Business Journal sees nothing but blue skies and green lights ahead as the decades long move of manufacturing jobs out of California and into Texas continues  with the announcement that the Tacoma is moving into the brand spanking new San Antonio factory. San Antonio has been busy not building very many Tundras, so locals there are thrilled at the prospect of feasting on NUMMI’s loss. “Year to date through July, Toyota says it sold 42,419 Tundras — down 52.6 percent from the same seven-month period in 2008. The news isn’t much better for the Tacoma, a smaller truck. During the first seven months of this year, Toyota sold 65,713 Tacomas. It sold 95,732 Tacomas during the same selling period in 2008.” Toyota will have to spend an estimated $100 million tooling up San Antonio to build Tacomas, but the combined volume of Tundras and Tacomas still will not fill the San Antonio factory unless something dramatic happens to increase Toyota’s truck sales.
By on July 7, 2009

Bloomberg reports on Toyota’s pickle vis-à-vis Fremont, California-based NUMMI. New GM is leaving its NUMMI ownership share in the hands of Old GM. Thus, Old GM and Toyota together own NUMMI in a 50/50 joint venture. Old GM will be selling off its moribund assets over a period of a year or more as the long slow process of liquidating the discards and paying creditors pennies on the dollar plays out. (Old GM is looking like an economic stimulus program for a small band of lawyers, accountants and realtors.)

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By on June 29, 2009

Ford is jumping on the recently-signed Car Allowance Rebate System (a.k.a. Cash for Clunkers) to lure customers into the showroom. Ford’s home page includes a highlighted link to the “Recycle Your Ride” program. A prospective Ford buyer can enter details about their current vehicle into a drop-down menu system and quickly see if it qualifies for scrappage. They can also discover which Ford models earn the $4500 or $3500 federal voucher against the crusher candidate. So far the Dodge, Chevrolet, Honda and Nissan websites have nothing. Toyota and Volkswagen both offer primitive informational pages, but nothing to match the sophistication of Ford’s effort. You would think the government-owned auto companies would be all over the government-run incentive program. But no. And get this: KBB’s man tells the New York Times that the consumers might be better off without the vouchers . . .

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By on June 16, 2009
This morning the AP has the news you already knew about, but a few more details have emerged. First up, the now obligatory government backing, this time in the form of a $600 million loan from the European Investment Bank, guaranteed of course by the Swedish government. That explains why minuscule Koenigsegg picked up Saab for free. It’s all about being Swedish. “With a full-time staff of 45, Koenigsegg makes around a dozen cars a year, customized for every buyer.” Wow, talk about a micro-niche. But fear not, Saab has an innovative strategy for competing going forward. More about that in a moment.
By on June 11, 2009

BusinessWeek has an interesting piece on Marchionne’s speed dating interview technique. “Chrysler executives say that Marchionne has taken what for them seemed an unorthodox approach to sorting out the talent pool he inherited. He did fast, 15- or 20-minute interviews with more than 100 executives, often asking what they thought of their superiors, what their strengths and weaknesses were, as well as what they thought of certain peers. ‘The questions were very blunt,’ said one staff executive. ‘It was a drill the likes of which I had never been through before.'” No signs of analysis paralysis here.
By on June 9, 2009

After a short, suspense filled couple of laps under the yellow, the US Supreme Court has dropped the green flag on the Chrysler-Fiat deal. The New York Times sums up the court’s view that “the Indiana funds ‘have not carried the burden’ of proving that the Supreme Court needed to intervene.”  Also, earlier today, the Chrysler dealer slaughter was also given the go ahead when Judge Gonzalez approved that aspect of the deal. So, that pretty much closes this chapter of the saga. The deal is going down as planned by Fiat and the US Treasury. Now the really hard part begins.

By on June 3, 2009

Although Judge Gonzalez has so far given Chrysler-Fiat just about everything it has asked for, approval of the dealer cull still isn’t a done deal. The AP reports that: “U.S. Judge Arthur Gonzalez will hear arguments Thursday on the Auburn Hills, Mich.-based automaker’s motion to eliminate the franchises. Chrysler executives are also expected to testify. The motion was expected to be heard Wednesday.” In parallel actions, the Senate is holding hearing today on the very same issue. Again from the AP : “Lawmakers contend the dealership closings will put thousands of people out of work and offer few savings to GM or Chrysler, which have received billions in federal aid as they attempt to restructure and return to profitability.”

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By on May 25, 2009

The grand poobahs at the PTFOA are Wall Street bankers and political insiders. None of them have built or run real businesses designing, marketing, selling and supporting high priced consumer products. Everything they think they know they learned from books and lectures, not from actually doing stuff. The old story goes: “When your only tool is a hammer, every problem looks like a nail.” To the Wall Street types, slash and burn is the hammer they know. Even President Hope has taken to using their favorite phrase “Lean and Mean.” Surely we need lean, productive companies, but who needs mean?

By on March 17, 2009

Credit reporting agency TransUnion has released its analysis of the US’ auto loan situation and finds that, unsurprisingly, things have deteriorated. “The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) edged upward between the third and fourth quarter of 2008 from 0.80 percent to 0.86 percent. Year-over-year the delinquency rate increased 8.86 percent in the fourth quarter.” That works out to about one out of 116 auto loans being delinquent. “Delinquencies were highest in Mississippi, at 1.62 percent, followed by California, at 1.46 percent, and Louisiana, at 1.37 percent. The states with the lowest auto loan delinquency rates were Alaska, at 0.19 percent, North Dakota, at 0.34 percent and Wyoming, at 0.41 percent.” Oddly enough, these delinquency rates by state only roughly track unemployment rates.

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By on March 11, 2009

Senator Corker must be so proud of himself. He held Ford’s feet to the fire . . . oh, no, wait, Ford didn’t bother with that meeting. Anyway, today Ford is crowing [via AP] that its revised UAW contract gets close enough to wage parity with the transplants to call it a done deal. Which is kind of strange, because Ford’s accounting puts the all-in costs under the newest deal at $55/hour compared to the $48-$49 number people toss around for the transplants. Hmmm, maybe I’ll try that kind of “close enough” math when I pay my bills. Ford’s spin-meisters could have pointed out that nobody outside the transplants really knows what they are paying, but they didn’t. Absent a published union contract, all we can do is guess.

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By on March 11, 2009

The boss men at Legacy Ford Lincoln Mercury Toyota of Scottsbluff, Nebraska, have arranged a personal economic stimulus program; by running off with 81 cars and trucks valued at over $2.5 million (before or after rebates?). Lacking a “Tales from the Dark Side” section, the AP put the story out as auto industry news. The missing Fords were trucked away on Saturday but the Toyotas had to wait their turn until Monday. By Wednesday, some of the missing vehicles already started popping up at auctions in Utah and Arizona. Floorplan banker Toyota Financial said: “If the dealer and the cars go missing there’s an issue.” Ya think? “Arrest warrants had been issued for owner Allen Patch, controller Rachel Fait and general manager Rick Covello, who are wanted on suspicion of theft.” Up until now, none of these clowns had an arrest record. Oddly enough, Legacy so far remains open for business. Personally I wouldn’t leave my ride there for service unless I wanted it to disappear. Meanwhile, rumors of a movie deal starring Robin Williams, Chevy Chase and Al Pacino run rampant.

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