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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (28660)	4/27/2005 3:05:13 PM
From: TH	Read Replies (1) \| Respond to of 116555

Mish, See the story I just posted on Lear. Shocking decline in profits for one of Michigan's largest employers. I have many friends at Lear, and they all say the same thing; there is no margin left, and the OEM's is refusing cost relief. As I have posted before, that OEM position only stands until all the suppliers start to balk as a group. "A more sinister idea is they wnt to keep GM alive to prevent REAL competition from China and South Korea maybe?" A very interesting idea, and perfectly in tune with the long range planning of the Asians. There is no question that this idea has great merit, but the time frame for when China, or other emerging Asian automaker, actually has product ready for a given segment is still 3-5 years away. By the end of the decade many expect that China will have a couple of solid vehicles in the lower-end segment. I do not have any better answer to your question, as this is an area that I am just an observer. A bigger short term threat might be exports from transplants based in China. VW is making big plans and tooling up China now. It will be interesting to see if a massive wave of nationalism emerges in the next 1-5 years, and this actually helps GM and Ford recapture some lost share. Of course this is in part a pipe-dream, but at some point the dollar decline will impact imports to the point where the quality benefit of the import is negated by cost. There are million other facets to this position of course, but awareness by J6P of trade imbalance impacts will be paramount to making the turn back. To get the "message" to the American masses, it will have to be distilled down to some patriotic message of winning the new (terrorist) economic war. I think rust colored ribbons will be best for this one. GT TH