Who knows, maybe this thing is really starting to turn around

[texorama]

New York Times article on the auto industry as a bright spot in the economy and its promising, if not uniformly positive, prospects:

http://www.nytimes.com/2010/08/14/bu...14auto.html?hp

[Patrick]

It is quite possible but people are fearing the double dip more than anything. The good thing is that the Big 3 shed a lot of fat.

[1KielsonDrive]

Starting to turn around? What evidence is there of a turnaround other than radio, teevee, internet talking heads and demican politician's self-serving rhetoric. You have to have an upswing to have a downswing. Any evidence of an upswing in the real world? I mean, other than a couple hundred thousand, part-time, census jobs? They're all laid off once again and not likely going back to previous good paying, middle class, jobs. I've yet to hear anyone I know say they've gotten another job, unless it's part time and at a greatly diminished pay rate. While politicians enjoy their pay, benefits, power lunches, medical coverage, vacations, fact-finding trips, golf outings and campaign treasure chests, we're out here in no-no land trying to figure out how to pay our bills, save our homes and hang around long enough to acquire some ObamaCare, or collect Social Security, which the politicians might be rid of, soon enough.

[Lowell]

Skipper's rule rules.

[EMG]

God willing, the REAL turnaround will begin in November. If not, there is absolutely ZERO hope for this country.

[detroitbob]

I hear Cheney doesn't have a pulse anymore, does that rule him out for coordinating the REAL turnaround or....?

[texorama]

Original post and article meant not as a comment on Obama, or Dick Cheney, or even the general economy, but merely on the relative position and promise of the Detroit automakers. It's true they haven't yet made a dent in unemployment, but all of a sudden there are signs from various quarters that Michigan seems to have better prospects. I just spent a month in Indonesia, during which time I saw a grand total of one American car. Nowhere to go but up. For the first time there's a consensus beyond Detroit, or at least the makings of one, that the vehicles coming from here are genuinely competitive and are being built at a reasonable cost.

[fryar]

Original post and article meant not as a comment on Obama, or Dick Cheney, or even the general economy, but merely on the relative position and promise of the Detroit automakers. It's true they haven't yet made a dent in unemployment, but all of a sudden there are signs from various quarters that Michigan seems to have better prospects. I just spent a month in Indonesia, during which time I saw a grand total of one American car. Nowhere to go but up. For the first time there's a consensus beyond Detroit, or at least the makings of one, that the vehicles coming from here are genuinely competitive and are being built at a reasonable cost.

Texorama, I agree with you 100%. That article is reason for optimism about the future of the US automakers, not the economy as a whole. I remember looking for what turned out to be your thread when that article first appeared.

Also, a couple of days ago, I saw on the MSN.com home page my ie goes to by default that the Detroit-Dearborn-Livonia whatever-the-census-calls-a-megacity is predicted to have an uptick in real estate prices.

Of course that's not a bullish economy in and of itself, and Skipper's rule does apply [[1KD, are you Skipper? For some reason I think you might be). But the press the Big Three are getting seems to be improving.

[detroitbob]

What amazes me is the significant numbers of politico types opposed assistance to the auto companies and the effects of the result would have been devastating to not only the region but to the national base as well. I remember a fellow named Paul who was the Time Magazine bureau chief in Detroit back during the dark days of Chrysler and the Washington hearings. Upon returning from DC he told me that the Govt was going to assist Chrysler with the hopes that they would last 5 years and at the best hope slowly wind down and when they went out of business the region and the nation could absorb the loss to the economy as it would have been a slowed down process. I wish I could have afforded to buy 5,000.00 of Chrysler stock back then....selling high, of course. I have bought Ford in the last year and done quite well.

Now that, at least at this point, the companies appear to be on the upturn and the Fed's stand to recoup the investment, those same opponents are still saying the assistance was wrong and the positives are being ignored by the same politico types.

[1KielsonDrive]

Skipper's rule rules.

The problem with your comments Lowell, is I don't ever know if you're making them supportively or sarcastically. I guess I'll find out soon enough.

[Cincinnati_Kid]

It's still too early to tell. Just because they've turned a profit or two doesn't mean they're out of the woods yet. Winter is slowly approaching and everyone and their mama knows, nobody buys cars during the winter months.

[1KielsonDrive]

C'mon folks, look around you. Does this look like there's any kind of a turnaround? You've got all of these talking heads, professors, politicians and corporate executives saying all of this. W/T/F do they know? It's all abstract to them. They might have a couple less weeks of sabbatical this year. They may have Bumscratch Caterers do their parties instead of Zingerman's. They may have to wait one more year for a new, lease, automobile. They're not worrying about paying their mortgage. Their not worrying about medical coverage. They're not worrying about Social Security. Once it hits the airwaves/internet, it's all been sanitized and polished for political ends.

[DC48080]

Please enlighten those of us who are uninformed. What is Skipper's rule?

[Jimaz]

Skipper's rule meant something like "I'll believe it when I see it." I think he was a former forumer. I'm going on memory here.

I keep hearing that much of the stimulus money was accepted by large banks and corporations with the intent that they would bear the burden of distributing it to smaller organizations via small business loans and employment but they've reneged on that plan and have instead chosen to retain all that taxpayer cash for themselves.

If that is indeed the case, it's yet another more extreme example of trickle-down failure. [[Or rather success if its true intent were to feed the ravenous appetite of the parasitic saboteurs in power.)

Others were advocating that the stimulus money be instead directed toward a "bottom kill" -- toward those who couldn't survive without actually injecting the funds into the greater economy.

Go figure.

I sure hope it's turning around but one thing's predictable: fiddles will be played while Rome burns.

[mwilbert]

People seem to be talking about different things here.

If you are talking about a turnaround in employment, it is quite small and possibly just random fluctuation. There are a lot of people who have lost jobs who are going to have trouble finding any new job, much less an equivalent one. On the other hand, if you are talking about a turnaround in the businesses of GM and Ford, that is fairly obvious. If there has been a turnaround at Chrysler it is less obvious.

[EMG]

Jerry Flint of Forbes is less than perfectly optimistic:

http://www.forbes.com/forbes/2010/04...at-driver.html

Detroit's Long Road
Jerry Flint, 03.25.10, 12:20 PM EDT
Forbes Magazine dated April 12, 2010

The U.S. auto industry isn't dead, but it isn't back, either. Americans still disdain Detroit's cars. They'd rather have a Camry than a Malibu.

The cover of April's Motor Trend magazine informs us that "Buick Is Back." That followed by a few weeks the front page of Barron's declaring that "GM Is Back." My investment advisor, AllianceBernstein [[ AB - news - people ), brags at its annual meeting that it's buying Ford. Toyota's troubles, of course, will send traffic to Ford and General Motors showrooms.

If only it were that easy for Detroit to recover lost ground. The loss of confidence in Detroit's vehicles among American car buyers is deep and persistent. GM and Ford--and maybe Chrysler--are improving. But they have a long way to go. It's too early to declare "mission accomplished" or even to say they are "back."

GM had 19.9% of the car and light truck market last year, Ford 16.1% and Chrysler 8.9%. The problem is that most of those sales were pickup trucks and larger sport utilities. Because of the government push on fuel economy, sales of these will decline over the next decade as sales of cars rise.

But Americans disdain Detroit's cars. GM sold only 945,000 cars last year, or 46% of its car-truck total. Ford sold 637,000, 38% of its total. Chrysler sold 247,000, accounting for 27% of sales.

Detroit is also heavily dependent on bulk sales to rent-a-car and other commercial buyers. Probably 30% of Detroit's sales go to such fleets. So it's quite possible that GM sold fewer cars to retail customers than Honda did in 2009. Ford retail car sales are getting down into Nissan territory.

Are there signs that Americans are more likely to buy Detroit? The benefit from the Toyota recall merely interrupts a steady decline in market share at GM that has been going on for decades. Ford has been nudging up in share, with help from the fact that it stayed out of bankruptcy and didn't ask for a government bailout. But Ford's share is still less than the 18.6% it was five years ago.

Make, if you want, a model-by-model comparison. The pride of the GM car operation is the Chevy Malibu, a family-size sedan. It's a good car, but it's outsold by the comparable Toyota Camry better than 2-to-1 and by the Honda Accord by almost 2-to-1. Ford's comparable model, the Fusion, trails the foreign competition by almost as much as the Malibu. Both Malibu and Fusion are outsold by the Nissan Altima.

In the next size down, Ford's Focus has just three-fifths the sales enjoyed by the Honda Civic. The GM entry, the Cobalt, gets two-fifths of the Civic's sales. Chrysler's bestselling car, the Dodge Charger, was outsold last year 2-to-1 by the Hyundai Sonata.

When it comes to pickup trucks, the Detroit three run circles around Nissan and even Toyota. But those cars!

Yes, the Detroit companies are trying to mend their car reputations. Quality is up at Ford and GM, according to reports from Consumer Reports andJ.D. Power and Associates. This year Ford and later GM will have new North American-built small cars, smaller than anything built here now. They should easily outsell imported cars.

In the next size up, Ford has a sleek Focus coming at year-end and GM has a new Cruze [[which gets 40mpg highway) to replace the old Cobalt. Both are likely to close the gap with those Honda Civics and Toyota Corollas but not eliminate it. There are some new Buick cars coming, too, including the LaCrosse sedan and the smaller Regal sedan, which is coming later this year.

Chrysler is just hanging on until new vehicles built with Fiat's help arrive--but that's a few years off. Another issue is that the gains GM makes with its improved cars can't be expected to match the losses from shutting Pontiac and Saturn.

Maybe Detroit will receive a big bonanza from Toyota's safety nightmare. The Japanese giant is bound to lose some sales, but it's difficult to predict how many.

There's also no denying that the financials are better. Labor costs are down and the financial obligations of GM and Chrysler are shrunken--no bonds to repay, no stock dividends to worry about. Bank accounts are filled with bailout money. That's all to the good, but it doesn't replace the need to sell lots more cars.

The recent shakeup at GM shows clearly that the new leaders are impatient with sales. At Cadillac executives were pushed out, and the sales leaders at all the lines now report to the president of North American operations.

The best we can say is that Detroit, at least GM and Ford, is no longer hanging by its fingernails. They aren't back yet.

The woods are lovely, dark and deep, but these guys still have miles to go before they sleep. Miles to go.

Jerry Flint, a former Forbes Senior Editor, has covered the automobile industry since 1958. Visit his homepage at www.forbes.com/flint.

[1KielsonDrive]

People seem to be talking about different things here.

If you are talking about a turnaround in employment, it is quite small and possibly just random fluctuation. There are a lot of people who have lost jobs who are going to have trouble finding any new job, much less an equivalent one. On the other hand, if you are talking about a turnaround in the businesses of GM and Ford, that is fairly obvious. If there has been a turnaround at Chrysler it is less obvious.

Good points. Thanks for the clarification.

[1KielsonDrive]

Skipper's Rule #1: Don't believe it until you see it and it's been there for a few years.

[papillonaquatique]

C'mon folks, look around you. Does this look like there's any kind of a turnaround? You've got all of these talking heads, professors, politicians and corporate executives saying all of this. W/T/F do they know?

None of them saw the fall comming either apparently. However I would like to believe that a turnaround is on the way. Nothing wrong with having hope in times like these.

[rb336]

They're all laid off once again and not likely going back to previous good paying, middle class, jobs.

Of course the decline in middle-class jobs is almost exactly mirrored by the decline of unions and the rise in corporatism [[read that as Il Duce's definition of fascism) since the Reagan Era, down through his accolytes, including reagan-light Clinton. By By good-paying jobs for the average person, hello bloated wallets for the fat cats who are driving this country off a cliff

[JBMcB]

You've got all of these talking heads, professors, politicians and corporate executives saying all of this. W/T/F do they know?

Well, they have access to gross economic information, labor statistics, production rates, and large sets of data on economic activity. Also, for many of them, it's their job to analyze this stuff.

So, that's what they know.

[1KielsonDrive]

None of them saw the fall comming either apparently. However I would like to believe that a turnaround is on the way. Nothing wrong with having hope in times like these.

Agreed. But I like to temper my hope and 'faith', so to speak, with reality, and the facts as they are on the ground. I'm an almost eternal optimist, contrary to whatever Lowell may say. He likes to paint himself as the 'cup half-full' guy [[his term).