Auto sales down sharply again in October - Nov. 3, 2008. NEW YORK (CNNMoney.com) -- Tight credit and worried consumers resulted in the weakest pace of U.S. auto sales in 25 years. Although gas prices fell significantly during the course of the month, they weren't enough to lure buyers back to dealer showrooms. Auto executives complained about the worst environment for sales since the severe recession in the early 1980's, if not longer. Mark LaNeve, the General Motors vice president in charge of sales in North America, said that when adjusted for population growth, October represents the worst month for U.S. auto sales overall since the end of World War II.
According to preliminary figures from industry sales tracker Autodata, the seasonally-adjusted annual sales rate plunged to 10.6 million, the worst reading since February 1983. By way of comparison, this figure was 16 million a year ago and 12.5 million in September this year. But the CEO of auto industry sales tracker Edmunds.com said there is some hope that October may be as bad as it gets.
Failure of Big Three could cost 3 million jobs, CAR says - Nov. 5, 2008. NEW YORK (CNNMoney.com) -- With auto sales at the weakest pace in 25 years and a government bailout far from certain, job losses in the struggling industry could potentially get much worse. If the Big Three carmakers were to cut U.S. operations by 50%, 2.5 million jobs could be lost in 2009, according to a study released Wednesday.
The Center for Automotive Research reported that the total employment impact includes nearly 250,000 jobs lost at the automakers and nearly 800,000 at suppliers. In addition, the organization estimates another 1.4 million job losses outside the industry, such as those caused when stores go out of business in communities hit by plant closings. In economic terms, cutting operations in half would reduce personal income by more than $125.1 billion in the first year, and $275.7 billion over three years, the center said.
Such a decline in personal income would cost the government tax dollars -- $49.9 billion in 2009 and more than $108.1 billion over three years. How Detroit Went Bottom-Up. In the spring of 2005, David Stockman at last reaped the reward of the monopolist. Stockman, who once served as Ronald Reagan's budget director, spent two decades on Wall Street preparing for this moment. After stints at Salomon Brothers and the Blackstone Group, Stockman in 1999 set up his own private investment fund, Heartland Industrial Partners. He then used Heartland to shape a set of companies -- mainly in the automotive sector -- each dedicated to dominating a particular group of production activities.
Of all Stockman's efforts, his most audacious centered on a firm named Collins & Aikman. Stockman used C&A as a vehicle to buy up small producers of interior components like dashboards and seats, and he swiftly captured a position supplying parts to more than 90 percent of all cars built in America. Although the acquisition spree left C&A saddled with debt, Stockman was so pleased with C&A's prospects that in 2003 he assumed control as chief executive officer. Advertisement PinIt. Bailout debate: How the Big 3 came apart and how to fix them - Nov. 17, 2008. NEW YORK (CNNMoney.com) -- Why is the U.S. auto industry in such a precarious position? That question - and answers to it - will animate the debate this week over whether Washington should extend a lifeline to the Big Three.
(For more, read Auto bailout: Showdown in Washington.) There are extreme answers at both ends. Some observers cite labor contracts that prevent layoffs and guarantee high-cost health care coverage that can continue for decades after workers leave the company. Others say the companies are the victims of executives who over produced gas-guzzling SUVs and pickups and ignored the fuel-saving technologies of their Japanese rivals. Either way, it's easy to see why so many people are troubled at the prospect of rewarding the automakers' management and workers with billions of taxpayer dollars. Why they are in this mess Years of market share losses by the Big Three are a major part of the problem. For years, pickups and SUVs brought strong sales and high profit margins. Cookies are Not Accepted - New York Times. Detroit at the White House: Trump meets with Big Three auto CEOs - Jan. 23, 2017.
In opening remarks to the press, Trump claimed he was already "bringing manufacturing back to the United States big league. " He didn't talk about his threats to impose tariffs and border taxes on goods brought in from Mexico. Instead, he talked about incentives that would get automakers to build here, such as reduced corporate tax rates. The CEOs stayed at the meeting about an hour. Ford CEO Mark Fields praised the new administration as they left. "As an industry we're excited about working together with the president and his administration on tax policies, on regulation and on trade to really create a renaissance in American manufacturing," he said. He specifically praised Trump's decision to pull out of the TPP trade deal, which Fields said did not do enough to address currency manipulation, a major concern for U.S. automakers. But the auto industry is concerned about Trump's threat to impose a 35% tax on imports from Mexico to the United States.
A new Detroit: Can the Motor City come back? ONE of this week's big American news stories was the release of new Census data for the state of Michigan, which revealed that the city of Detroit underwent a stunning population decline between 2000 and 2010. Detroit shrank by 25% during the decade, and its population fell to its lowest level since 1910—before the era of Big Three dominance. The city seems to be locked in a death spiral. But could there be a light on the horizon? Bloomberg reports: Auto industry executives are trying to make Silicon Valley engineers feel at home in Detroit. With a burgeoning number of technology job openings to fill, they're scouring Internet companies for workers, wining and dining applicants, and seeking promising students at schools such as Stanford University. “We have a whole slew of job postings out there currently,” said Doug VanDagens, director of Ford's connected service solutions, who has been trying to lure engineers to the automaker to design software.
Well, there are a few points to make. The rise and fall of Detroit: A timeline. Sign Up for Our free email newsletters On Thursday, Detroit made history — and not in a good way. The heart of the U.S. auto industry and home to the Detroit Tigers, Eminem and the White Stripes, Motown, and (maybe) Jimmy Hoffa's body became the largest city ever to file for bankruptcy. In many ways, this financial crisis is 60 years in the making. As the Motor City faces an uncertain future, here's a look back at some key dates in the long, storied past of one of America's great cities: July 24, 1701Antoine de La Mothe Cadillac establishes a French settlement, Fort Ponchartrain du Détroit (the strait), along with 100 French soldiers and an equal number of Algonquins. 1760Britain wins the city from the French. 1796U.S. forces capture Detroit from the British.
Feb. 1, 1802Detroit becomes a chartered city, covering about 20 acres. 1827Detroit adopts its forward-looking city motto: Speramus Meliora; Resurget Cineribus (We hope for better days; it shall rise from the ashes). 1899Ransom E. What Role Did The Auto Industry Play In Detroit's Decline? Cookies are Not Accepted - New York Times. “The auto industry supports one of every 10 jobs in the United States,” Gov. Jennifer M. Granholm of Michigan wrote in a CNN.com plea for a bailout of Detroit’s Big Three. The day before, she told “The Early Show” on CBS that “this industry supports one in 10 jobs in the country,” adding, “If this industry is allowed to fail, there will be a ripple effect throughout the nation.” Many others have used the same statistic. That’s a scary figure. The Detroit Bankruptcy. The Detroit Bankruptcy The City of Detroit’s bankruptcy was driven by a severe decline in revenues (and, importantly, not an increase in obligations to fund pensions). Depopulation and long-term unemployment caused Detroit’s property and income tax revenues to plummet.
The state of Michigan exacerbated the problems by slashing revenue it shared with the city. The city’s overall expenses have declined over the last five years, although its financial expenses have increased. In addition, Wall Street sold risky financial instruments to the city, which now threaten the resolution of this crisis. To return Detroit to long-term fiscal health, the city must increase revenue and extract itself from the financial transactions that threaten to drain its budget even further. The Shortfall Detroit’s emergency manager, Kevyn Orr, asserts that the city is bankrupt because it has $18 billion in long-term debt. Cash flow crisis. Total outstanding debt. Revenue Tax revenue. State revenue sharing. Expenses.