Is Detroit’s Comeback Over? Carmakers Lose Market Share Gains

Last year, everyone in the auto industry was chuffed about Detroit’s comeback.

American Landscape, by Sheeler

The carmakers were enjoying a healthy rebound from the bankruptcies at General Motors and Chrysler. And for a while, at least, Chrysler outsold Toyota to make the Detroit Three the Big Three again.

But this year, Detroit’s market share has been slipping, and that has ramifications all across the Midwest.

In fact, the auto companies have fallen back to the market share level they held in 2009, as GM and Chrysler were struggling. In a piece for Forbes.com, I look at what happened to the Detroit companies during the first quarter.

Basically, there are three issues:  Continue reading “Is Detroit’s Comeback Over? Carmakers Lose Market Share Gains”

Hey, Consumers: You’re Paying Record Prices For Many Cars And Trucks

The auto industry reported strong sales in March, and for some auto companies, the news was even better.

Buyers at General Motors, Chrysler, Nissan and Hyundai paid record amounts for new vehicles during May, according to True Car.com, which tracks statistics about buying habits.

True Car bases its calculations on transaction prices: the final amount people pay, after incentives, bargaining and trade-ins. The numbers include the whole range of vehicles that the companies sell, such as  cars, sport utilities, pickups, and minivans.

Transaction prices are way up since the beginning of 2010. Take a look at this chart by Meg Cramer of Changing Gears, which shows the industry average and what consumers at major carmakers are paying.

Continue reading “Hey, Consumers: You’re Paying Record Prices For Many Cars And Trucks”

Midwest Memo: Big Profits For Ford, Heading Down The Rabbit Hole In Wisconsin

Party like it’s 1998 Ford is reporting its highest annual earnings in over a decade. The Wall Street Journal says the auto industry’s profits are part of its new math: sell fewer cars, make more money (subscription required).

Curiouser and curiouser Keeping track of Wisconsin politics gets more complicated by the day. While the Wisconsin Government Accountability Board is still busy counting recall petitions against Gov. Scott Walker, the Milwaukee Journal Sentinel reports that two of the governor’s former aids have been charged with illegal campaigning. The charges are part of an ongoing “John Doe” investigation of Walker’s staff during his time in county government. Despite the investigation and the recall threat, Walker’s poll numbers are rising.

Meanwhile, in actual economic news, the Wisconsin Assembly voted to ease the way for a proposed Iron ore mine in the state’s northern region. Republicans say it will create jobs. Democrats say the changes could lead to environmental harm.

190 Acres of transformation In Cuyahoga County, Ohio, a 190-acre industrial site represents, in microcosm, the changes facing the Midwest. Officials in the town of Beachwood are hoping to rezone the property as the industrial sector declines and other sectors grow. Officials say they want to see the property used for health care, retail and residential investment.

Obama talks higher ed President Obama will be in Ann Arbor, Mich. today to talk about his ideas for higher education funding.

All Eyes In Detroit Are On The Auto Show

Media previews for the North American International Auto Show kicked off this week, with plenty of panache and swagger.

Carmakers are rolling out dozens of new models at the show, ranging from Cadillac and Chevrolet, to Ford and Lincoln, and German automaker BMW.

Japan’s two struggling giants, Honda and Toyota, hope to make a comeback in 2012 after dismal results in 2011.

The auto show always features splashy introductions. Here’s a look at the new Ford Fusion from our friends at Michigan Radio.

Are you visiting the show? Do you some favorites?

With Twin Cities Assembly Plant Now Closed, St. Paul Ponders Future Of Shuttered Site

Employees crowded around, took photos and cheered as the last Ford Ranger pickup truck rolled off the assembly line Friday in St. Paul,  Minn.

At least one worker was bewildered by the reaction.

Photo by Slobodan Stojkovic via Flickr.

“I could not understand why there were cheering for the last vehicle,” Mike Montie, who worked at the Twin Cities Assembly Plant for 28 years, told the Associated Press. “You cheer for the first one, not the last one. I was like, ‘What the hell?’ I didn’t want it to end, you know?”

He was one of 800 employees who lost their jobs when the Twin Cities Assembly Plant closed Friday. The plant, located along the banks of the Mississippi River, has produced more than 6 million cars during an 86-year history. But sales of the Ranger have slackened since the 1990s, and Ford decided to concentrate on larger, more profitable pickups.

A multimillion dollar cleanup of the 122-acre site will begin early next year.

Local officials are hopeful the site can be repurposed. According to the St. Paul Star Tribune, locals are considering a lot of possibilities, including a green manufacturing complex, a densely populated transit village, a park, an office campus and a middle-class neighborhood.

Continue reading “With Twin Cities Assembly Plant Now Closed, St. Paul Ponders Future Of Shuttered Site”

Ford, Chrysler And General Motors All In The News Today

Today’s news cycle has prominently featured the U.S. auto industry. Here’s a quick roundup of three stories about Detroit’s Big Three making news this afternoon:

Photo by Slobodan Stojkovic via Flickr.

1. Ford Reinstating Dividends. Ford will reinstate its quarterly dividends in 2012, the company announced Thursday. “We have made tremendous progress in reducing debt and generating consistent positive earns and cash flow,” Bill Ford, executive chairman, said in a statement. Ford will pay five cents per share to holders of Class B and common stock as of Jan. 31, 2012. Payments will be made on March 1. Ford had suspended its dividend payments more than five years ago, as the company grappled with the recession. Now, it has posted 10 consecutive profitable quarters, according to the Los Angeles Times.

2. GM Chief Shakes Up Detroit. For generations, executives at the Big Three adhered to a code of conformity and predictability. More recently, that culture has been shaken up by outsiders. None are having a more dramatic impact than General Motors CEO Dan Akerson, according to Bill Vlasic of The New York Times, who profiles the senior executive today. Vlasic examines Akerson’s handling of the recent federal investigation into the Chevrolet Volt plug-in hybrid. By offering to buy back Volts from concerned owners, Akerson adopted an “aggressive – and potentially risky – strategy,” said one analyst. Akerson saw the company’s reponse to the crisis as a potential defining moment, Vlasic writes.

3. Detroit Comeback Featured In Time. The comeback of the American auto industry has reached the front page of Time Magazine. The lead story of an issue that hits newsstands tomorrow examines the resurgence of a domestic industry that faced extinction only three years ago. Specifically, the weekly news mag looks at Chrysler and the role of CEO Sergio Marchionne in boosting sales 23 percent in October 2011 year over year. The headline: “How America Started Selling Cars Again.”

 

Auto Industry Expected To Add 150,000 Jobs By 2015, Including Many In Michigan

LIVONIA, Mich. – A recovering U.S. auto industry should add more than 150,000 new jobs by 2015, and most of them will be located in hard-hit Michigan.

Analysts from the Center for Automotive Research in Ann Arbor said Tuesday that gains sales and market share, as well as savings reaped from recently concluded UAW contract negotiations, will allow Detroit’s automakers to expand their workforces.  The Big Three are projected to add approximately 30,000 new jobs over the next three years.

American Landscape, by Sheeler

But that’s a relatively small share of the overall projected industry growth. Suppliers are expected to account for the bulk of the increase across the country. Estimates say the auto industry employs 590,000 today and will employ 756,800 in 2015, a 28.2 percent increase. That year, sales of light vehicles are expected to hit 15.5 million units.

“They’re going to grow,” said Kristin Dziczek, assistant research director at CAR. “They’re going to have to.”

Managing that growth is trickier than it may appear. Automakers are fearful that suppliers have promised more capacity than they can actually deliver as demand grows. Many suppliers have been reluctant to ratchet up operations in case the boom never arrives.

Continue reading “Auto Industry Expected To Add 150,000 Jobs By 2015, Including Many In Michigan”

Mitt Romney’s Version of the Auto Bailout: Not Exactly How It Happened

Rick Perry’s stumble in Wednesday night’s Republican presidential candidates debate caught a lot of attention inside the Beltway. But Mitt Romney’s characterization of the auto bailout has also touched nerves — especially because parts of it seem to be wrong.

Romney’s opposition to the bailout is well-known, and in fact, Republican candidates by and large think it was a bad idea.

Asked about the auto bailout during a discussion of the economy last night, Romney said, “Whether it was by President Bush or President Obama, it was the wrong way to go.”

He went on, “We have capital markets. It works in the U.S.”

In reality, banks had refused to provide Chrysler and General Motors with the kind of financing the companies would have needed to restructure. Congress also refused to approve a bailout package. That was why the government stepped in to finance and speed the companies through Chapter 11.

Ford, which did not seek federal assistance, had borrowed billions of dollars from financial institutions before the financial crisis. But it do so by mortgaging virtually the entire company, including its blue oval logo. Continue reading “Mitt Romney’s Version of the Auto Bailout: Not Exactly How It Happened”

Ford Seeks Recovery From Slow Start, Expanded Sales In China

With 1.3 billion people within its borders, China holds the largest car market in the world. Ford would like to build its market share there.

Ford only ranks as the ninth-largest company there, in terms of auto sales. The company is formulating a new strategy to make up for what they see as a slow start in China.

In the first of a three-part series that reviews Michigan Gov. Rick Snyder’s trade mission to Asia, our partner station Michigan Radio examines the possibilities for Detroit’s Big Three in potential Chinese auto sales, even as car sales have slowed.

For Ford, that means bringing 15 new models to market in the next five years, and investing hundreds of millions in plans and dealerships.

Here’s the first part of the Michigan Radio series. Keep an eye out for part two tomorrow.

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Midwest Memo: Big Three Report Higher Sales, Toyota Will Export U.S.-Built Siena, Pittsburgh Woos New Residents

Three stories making news across the Midwest today:

1. Big Three sales rise. Detroit automakers posted gains in annual sales Tuesday, although some leaps were not as large as anticipated. Chrysler showed the most significant improvement. Sales of its light vehicles rose 27 percent in October, year over year. Ford sales rose 6 percent overall and General Motors increased 1.7 percent, under expectations of a 5-to-7-percent increase. According to the Detroit Free Press, sales of the 2012 Ford Focus were largely unchanged over the year, but sales fell below the model’s chief competitor, the Chevrolet Cruze.

2. Pittsburgh seeks incoming residents. Upon winning $100,000, reality-show contestant Matt Kennedy Gould once dissed Disney World and proudly declared, “I’m going to Pittsburgh!” He’ll have some company. A promotional arm of the city is offering a $100,000 prize in a contest that aims to woo potential Pittsburgh residents. Officials seek what they call “experienced dreamers,” a euphemism for people 45 and older who are seeking a fresh start in a new city to “realize their dreams.” In New York City, the contest has some appeal. The blog Brokelyn notes, Pittsburgh boasts an unemployment rate below the national average and “the beer is really cheap.”

3. Toyota will export Siena. For the first time, Toyota will begin exporting the Siena from its U.S. assembly plant in Princeton, Ind. Shipments to South Korea are scheduled to begin in November. “We hope to continue boosting exports from our North American operations,” said Yoshimi Inaba, president of Toyota’s North American operations. In a written release, the company said it has exported several models of U.S.-made vehicles since 1988, and that overall, those exports increased 30 percent in 2010 to approximately 100,000 units. Sienna exports to South Korea are forecast at 600 annual units.