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Technology Stocks : American Automobile Industry: Can it survive? -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (372)	3/18/2011 7:42:26 AM
From: robert b furman	1 Recommendation Respond to of 431

I always thought Buick had the correct image "tag line" when they described themselves as "America's premium motorcar". Factually Buick's Lesabre was the first American built car to achieve less than one defect per every 100 vehicles built / JD powers.In the mid 90's they maintained that quality status for over 10 years - sustantial. At my dealership they continued to market and price their cars as if Lexus was the competition - it was a tragic error that cost 50% of their market share.They continued to price themselves out of the market and as their models aged they dropped the best selling high volume vehicles:i.e. Roadmaster,Lesabre Park Avenue. I to this day, mourn the insane pricing policy that led to the loss of a classy two door luxury coupe rich in tradition the Riviera. Several years later Lexus complemented the car, by copying it with their coupe entry that strikingly looks like the last rendition of the Riviera. If you have a lot of money and want to flaunt it, buy a Cadillac or Mercedes. If you want a really nice car that gives you much better quality throughout the entire vehicle buy a Buick ,Lincoln,or BMW. I categorize Lincoln in the lower group as IMO they have some proving to do. That being said they are being aimed at the Cadillac,MB group. Bob

To: stockman_scott who wrote (372)	4/15/2011 10:58:49 PM
From: Glenn Petersen	1 Recommendation Respond to of 431

Japanese Carmakers’ Struggles Could Put Customers in Rivals’ Showrooms By NICK BUNKLEY New York Times April 15, 2011 DETROIT — Facing shortages of some auto parts and dwindling supplies of popular cars later this spring and summer, Japanese automakers hope shoppers looking for a new car will compromise on color or extra features. But if anyone set on a blue sedan with heated seats and a sunroof or a black crossover with a navigation system and an iPod dock is out of luck at one dealership, there is a good chance the competitor across the street could have a perfect match with a different logo on the grille. “The inventory levels are going to be fairly tight for the Japanese through the summer,” Brian A. Johnson, an analyst with Barclays Capital, said on Friday. “If someone wakes up in a panic to get a smaller car, they may not find it at the Toyota lot and may go over to the Ford or Hyundai lot instead.” Ford, General Motors and Hyundai will gain the most market share this year, while the Japanese manufacturers will see their piece of the market shrink, Mr. Johnson predicted. The shift is partly a result of the aftermath of the March 11 earthquake and tsunami that struck Japan, as well as momentum that had already been building in the market. Declining loyalty rates and improved offerings by the Detroit and Korean automakers mean consumers are more likely than ever to simply look elsewhere if one company runs out of a model in a particular combination. Toyota said on Friday that its Japanese plants would run at only half their capacity at least until June 3, and company executives have warned dealers to prepare for tight inventories in the months ahead. Toyota, Nissan and Subaru are halting work at their North American plants for several days this month to conserve supplies of parts made in Japan, and Honda has shortened shifts at many of its North American plants. Recent forecasts by UBS Securities and the J. P. Morgan investment bank said vehicle production in Japan would not return to pre-earthquake levels until October at the earliest. In the second quarter, global production by the Japanese automakers is expected to be anywhere from 25 to 50 percent below normal. So far, sales have been largely unaffected because of the cushion that dealer inventories provide. But Barclays projects that Toyota will have only 15 days’ worth of inventory at the end of June, a reduction of about three-fourths from what the industry considers ideal. “It is a tragedy, and I wouldn’t wish that on anyone,” Howard Gammage, the general sales manager of Maguire Chevrolet in Bordentown, N.J., said of the difficulties Japanese automakers are experiencing. “But it is an opportunity for G.M. dealers to bring more people into the showrooms to take a look at what we have to offer.” Meanwhile, analysts are generally sticking with earlier projections that sales in the United States will top 13 million vehicles this year, up from 11.6 million in 2010. The Detroit automakers have run into small problems — G.M. and Ford each shut a single American plant for one week, and a Japanese-made paint pigment used by Ford and Chrysler might not be available for months — but analysts expect their production to take a minimal hit. Hyundai is even less vulnerable. A spokesman for Hyundai Motor America, Christopher Hosford, said the company got only about 1 percent of its parts from plants in Japan and those were outside the main disaster area. Hyundai dealers now expect business this summer to be even better than it initially thought, though they worry whether the company can produce enough vehicles to meet demand as sales head toward a record high for the second consecutive year. “If people need a car, they’re not necessarily going to have all the choices they would have had previously,” said George Glassman, a Hyundai dealer in Southfield, Mich. “The crisis in Japan is affecting all manufacturers, but clearly it will have a much greater impact on those that rely as heavily on Japanese parts as Toyota and Honda.” The research firm IHS Automotive has identified Hyundai and the German carmaker BMW as being among the most insulated from Japanese part shortages. BMW competes heavily with Toyota’s Lexus brand, which imports nearly every model from Japan. A spokesman for BMW North America, Tom Kowaleski, said that the percentage of Japanese parts in its cars was “very, very small” and that operations had been unaffected so far. The looming shortages of some Japanese models have caused transaction prices across the industry to rise, with the steepest increases on vehicles like the Toyota Prius, which is made in Japan and was in high demand because of the surge in gasoline prices. In fact, many of the Japanese automakers’ smallest, most fuel-efficient vehicles are imported from Japan, meaning consumers may look to similar models from G.M. and Ford instead. In further good news for Detroit, the rising prices caused by tight supplies could more than offset the lower margins typically generated by small cars, Mr. Johnson, the Barclays analyst, said. “This won’t be a summer of crazy deal-making,” he said. tinyurl.com

To: stockman_scott who wrote (372)	4/19/2011 11:13:46 PM
From: Glenn Petersen	Read Replies (2) \| Respond to of 431

U.S. Hurries to Sell GM Stake By SHARON TERLEP Wall Street Journal APRIL 19, 2011 The U.S. government plans to sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker's stock, people familiar with the matter said. A sale within the next several months would almost certainly mean U.S. taxpayers will take a loss on their $50 billion rescue of the Detroit auto maker in 2009. To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece. GM closed off 27 cents a share at $29.97 in 4 p.m. trading Monday on the New York Stock Exchange, hitting a new low since its $33-a-share November initial public offering. "Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May," a Treasury spokesperson said. "At that point, we will consider all of our options, based on our twin goals of protecting taxpayers' interests and exiting as soon as practicable." Shares have been hurt by rising fuel prices, industry production disruptions and management turnover. At Monday's price, and taking into account shares sold during the IPO, taxpayers would lose more than $11 billion on the rescue if the government dumped the rest of its stake now. Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year's end, avoiding a potentially controversial sale in the 2012 presidential election year. GM also would like an early exit in large part because it faces tight restrictions on executive pay as long as the U.S. government is a part owner. GM's successful $23.1 billion IPO in November reduced the U.S. government's stake in GM to 26.5% from 61%. As a condition of the IPO, the Treasury isn't able to sell additional holdings before May 22. At the time of the IPO, Treasury officials and banks underwriting the deal believed the price would climb through the winter, enabling the government to sell most or all of its remaining stake within weeks of the lifting of the sales restriction at a narrower loss to taxpayers, the people familiar said. Shares have fallen by recent events that have undermined investor confidence in GM. Those include the rise in gas prices, which hurt sales of big, highly profitable trucks. Wall Street also is fretting over recent management moves such as the unexpected departure of Chief Financial Officer Chris Liddell. Investors also were spooked by GM's sales-incentive blitz in January and February, which could temper the auto maker's first-quarter earnings. GM is expected to report next month that it made money in the first quarter and generated cash from operations, people familiar with the matter said. The size and form of a summer share offering is under discussion at Treasury. A final decision hasn't been made by Treasury Secretary Timothy Geithner, who would need to sign off on a big sale. If GM shares dive, Treasury could decide to hold off longer. Unlike in the IPO, when the government, banks and GM worked closely together on the deal, the government has more leeway to decide how to proceed because GM has already gone public. GM share price could become further depressed after investors holding bonds of the now-bankrupt "old-GM" receive warrants and stock for existing GM shares. That will happen April 21. Treasury officials haven't contacted GM about a target date for the sale, a person familiar with the matter said. A sale in May is unlikely because Treasury would need time to put together a deal once the May share sales restriction lifts. July is unlikely because investors would likely want to see results from GM's quarter ending June 30. That leaves the months of June, August and September as the prime targets for an offering. Write to Sharon Terlep at sharon.terlep@wsj.com tinyurl.com