While America Slept. Wednesday, December 17, 2008

D2.8 may get unexpected break – strength from weakness: The money-losing automakers made at least some money in some foreign markets. However, the recent strength of the greenback wasn’t in their favor. In July, a profit of one Euro translated into a $1.6. But what counts is when the books are closed, and that usually happens at year end. The recent strength of the dollar made foreign profits look less juicy. In October, that one Euro profit was worth only $1.23 – ever since, the Euro bounced around in the $1.25 to $1.29 range, which worried CFOs with foreign profits to no end. In the last few days, a miracle happed: The dollar got weaker. In the last few days, the Euro shot up into the $1.40 range, and it may even climb some more. With a little luck, and some end of year central bank machinations, a profit of one Euro could translate into a $1.50 by year’s end. Which will look quite good in the books. The bad news: If you have foreign losses, it will have just the opposite effect.

Nissan cuts output: Nissan wanted to make 1.38m units worldwide in their 2008 fiscal year, which ends in March 2009. That plan is no more: Nissan will end the year with 230,000 units less, a reduction of approximately 17 percent, the Nikkei (sub) reports today. Nissan will also eliminate “all nonpermanent positions” by March, becoming the first major Japanese automaker to ever do so. Starting in January, assembly work will be suspended for several days a month at two factories in Japan. Production speeds will be slowed. By March, all temporary workers will be gone. Any further layoffs, and the (in Japan) sacrosanct permanent workforce will be affected.

Union troubles ahead in Japan: Both sides of the Japanese fence are beginning to talk tough in preparation for the spring 2009 wage negotiations. Japan’s largest labor organization plans to demand an increase in base pay for the first time since 2001, the Nikkei (sub) says. On the employer side, the Japan Business Federation, or Nippon Keidanren, recommends that corporate leaders emphasize job protection over raises in contract negotiations with unions this coming spring.

Honda nixes Acura in Japan: Honda abandoned plans to sell its luxury Acura brand in Japan. They will also postpone or curtail domestic capital spending, The Nikkei (sub) writes. At a press conference today, Honda guided their operating profit for the business year to March to 180 billion yen ($2b), down 81 percent from last year, Reuters reports. Honda had pushed back the Acura line’s Japanese debut before, from 2008 to 2010. With the domestic auto market in tatters, and frugality replacing luxury, Honda now abandoned the Japanese Acura altogether. Saves them money needed for a fancy sales network.

Honda to develop the un-Fit: At today’s press conference in Tokyo, Honda announced that they are developing an entry-level car below the Fit model. The car should be ready in two to three years to and is targeted at emerging economies, such as India, Reuters says.

Toyota cuts output in India: Even in formerly red-hot India, Toyota reduces December production by 20 percent, The Nikkei (sub) reports. Toyota rolled out a fully redesigned Corolla in India this past September, but the automaker’s Indian sales still suffered year-on-year drops in October and November. “Consumers are still finding it tough to get loans,” a local Toyota official says. Sound familiar? Suzuki, which controls nearly 50 percent of the Indian auto market, has kept output at the same level as last year by expanding exports from India.

Gee, Geely: Despite the gloom and doom, China’s Geely says it will meet its annual sales target this year. Next year, they are planning for a lot more. Geely spokesman Chen Fangmin said to Gasgoo that Geely will have its capacity and sales increase by 25 percent above and jobs grow by 5 percent in 2009 compared to this year. Geely is hiring.

Opel can’t make enough Insignias: Opel’s new Insignia is flying out of the doors. The Opel factory in Rüsselsheim had to run extra shifts to keep up with the demand, das Autohaus reports. The car was launched in Germany on November 22, and a few weeks later, Opel had more than 10K orders on their books. Now how about that. Opel will now launch the car in their other European markets. The priorities are on the UK, Italy, Russia and France.

Losing their shirts: Artists’ models in Paris stripped naked Monday, braving freezing temperatures to protest against a ban on tips and to demand better pay and recognition. More than 20 male and female models, some posing nude while others were draped in a colorful array of shawls, sheets and fur coats, took part in the protest that had the backing of two of France’s biggest labor unions, Reuters reports. It is not true that CEOs of Detroit automakers will perform the same stunt in DC to demonstrate that they lost their shirts.