Category Archives: news analysis

Chrysler Group Posts Q2 2012 Net Profit of $436 million. Modifed Profit $755 million

Posted on 30 July 2012 by Ken Zino

Actual net income or profit was $436 million, an $806 million improvement from the $370 million net loss in the Q2 last year that included a $551 million charge for repayment of Chrysler’s Canadian and U.S. taxpayer subsidized loans. The loans allowed a bankruptcy restructuring in 2009 that ultimately saved thousands upon thousands of jobs at Chrysler and its suppliers. Combined with taxpayer money pumped into General Motors, Ford and Nissan, under various stimulus actions, the bailouts or subsidized loans saved the U.S. auto industry. Continue reading →

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Lexus Debuts New LS Flagship Sedan Tonight in San Francisco

Posted on 30 July 2012 by Ken Zino

The original Lexus full-size sedan – the 1990 model LS 400 – caught the Germans by surprise with its combination of high quality, silky smooth ride, and a price that undercut competing Mercedes-Benz and BMW sedans by $10,000 or more.

Initially dismissed by the Europeans, the success of Lexus ultimately forced improvements in quality and a lowering of prices by Audi, BMW, and Mercedes-Benz. The Japanese brand’s success has also prompted an expanding list of joint ventures with BMW. Continue reading →

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GM Marketing Head Ewanick Resigns as GM Lags in Sales Growth

Posted on 30 July 2012 by Ken Zino

In an unusual Sunday statement, General Motors tersely said yesterday that Global Chief Marketing Officer Joel Ewanick resigned, effective immediately. The resignation comes just days before GM will release Q2 financial results, which will be negatively impacted by product launch and marketing costs, as well as the ongoing struggles of Opel, which is mired in the Eurozone crisis. Continue reading →

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Ford Motor Q2 Profit Plummets $1.4 Billion as Europe, South American and Asia Continue to Hurt Earnings and Shareholders

Posted on 27 July 2012 by Ken Zino

Ford Motor Company [NYSE: F] posted its 12th consecutive quarterly pre-tax operating profit this week based almost entirely on North American results. Weak to frankly disastrous performances in Ford’s global operations saw Q2 income drop to $1 billion, or 26 cents per share, a decrease of $1.4 billion from Q2 2011. Continue reading →

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Unintended Acceleration on 730,000 Ford Escape, Mazda Tribute SUVs under NHTSA Scrutiny in New Preliminary Investigation

Posted on 18 July 2012 by Ken Zino

The Center for Auto Safety had petitioned NHTSA last week to open defect investigations on the V6 Ford Escape and Mazda Tribute models equipped with cruise control. NHTSA opened its own investigation instead, in a move that was required given the seriousness of the allegations that were about to become public.

In a defensive bureaucratic move, NHTSA also denied a CAS request for potentially embarrassing public hearings about the safety agency’s, as well as Ford Motor’s and Mazda’s lack of corrective action thus far. To make matters more complicated and potentially more image damaging for all involved, it is possible that an earlier safety recall resulted in more unintended acceleration accidents on the models involved. Continue reading →

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Honda Indiana Plant to Increase Capacity and Add Civic Hybrid

Posted on 18 July 2012 by Ken Zino

Honda announced at the Automotive Press Association in Detroit that it is investing $40 million to increase annual capacity by 50,000 units to 250,000 vehicles at its Indiana plant. The strong Japanese Yen continues to be a good development for autoworkers as all Japanese firms are shifting production out of Japan. Continue reading →

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EU Passenger Car and Commercial Vehicles Sales Down Again

Posted on 17 July 2012 by Ken Zino

Thus far the European auto industry has done little to reduce its capacity, which is now widely discordant with constantly falling demand. GM is planning to close its Opel Zafira plant in Bochum, Germany after the run-out of the current Zafira in 2015, but that is not enough to return Opel to profitability after decades of losses totaling hundreds of billions dollars. Opel employs 20,800 people across Germany and more than 40,000 across Europe. The head of GM Europe was ousted earlier this month over the continuing losses and the lack of progress. Continue reading →

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NHTSA Prompted Latest Lexus Recall after Web Complaints

Posted on 17 July 2012 by Ken Zino

The latest Lexus floor mat recall is the result of ongoing complaints filed by owners on the National Highway Traffic Safety Administration’s website. It took another NHTSA inquiry to Toyota back in May to prompt Toyota to action. With virtually instant feedback available at the world’s largest auto safety agency, automakers are increasingly under pressure to fix defects and institute recalls within five business days. NHTSA confirmed this summary in a statement that said in part, “NHTSA requested that Toyota conduct an immediate recall of model year 2010 Lexus RX 350 and RX 450 H vehicles for a serious safety issue involving potential pedal entrapment by the floor mat.” So NHTSA asked Toyota once again to conduct a recall. NHTSA is also requesting additional documentation from Toyota and is considering opening another investigation into whether Toyota met its obligation to notify the agency and conduct a recall in a timely manner.
Continue reading →

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Ford India Expands Chennai Engine Plant

Posted on 17 July 2012 by Ken Zino

Ford India today announced it has completed the expansion of its Chennai engine plant, increasing annual engine production capacity 36% to 340,000. The additional capacity of 80,000 diesel engines helps meet increasing demand for diesel powertrains in India as well as export markets. The expansion, which Ford hopes will be ongoing, led to the hiring of 200 employees. Continue reading →

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Ford Europe Sales Plummet in June

Posted on 13 July 2012 by Ken Zino

Ford Europe sales in June dropped 16.1% to 100,400 units, with a declining market share of 7%, as the Eurozone crisis continues unabated. In a statement, Ford said that it would not match “heavy competitive discounting” by its already loss making European operations. Continue reading →

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PSA Peugeot Citroën to Reorganize, Close Aulnay Plant

Posted on 13 July 2012 by Ken Zino

Philippe Varin, Chairman of the PSA Peugeot Citroën Managing Board has told the works council that the loss-making French automaker will close the Citroën C3Aulnay plant in 2014, and trim production at Rennes, which makes the Peugeot 508 and Citroën C5 and C6. More than 4,400 jobs are affected. Work in other plants could absorb 1,500 of the displaced workers in the local Paris area. The company will also pursue voluntary separations of its corporate workforce. Continue reading →

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EU Pols Say Tough New CO2 Limits Will Create Auto Jobs

Posted on 12 July 2012 by Ken Zino

As part of the proposal adopted yesterday by the European Commission to limit drastically CO2 emissions from cars and light commercial vehicles, there were claims made that it makes economic sense. Continue reading →

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More Jobs to Asia as Private Equity Owned Stant Buys Pyongsan

Posted on 12 July 2012 by Ken Zino

H.I.G. Capital, a private equity firm that owns Stant Corporation, says Stant has acquired a majority interest in Pyongsan-FT. The new manufacturing company will be renamed Stant Korea Corporation. The JV will produce fuel filler tubes in South Korea for the Korean and Asian markets. Continue reading →

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Ford Motor Company Declares $0.05 Q3 Dividend

Posted on 12 July 2012 by Ken Zino

The move comes as Ford shares are trading just above $9 a share, down from a 52 week high of $13.44. On an annualized basis, this represents a return of about 2%, which makes Ford look like a relative bargain in a market awash in Federal Reserve printed dollars and, as a result, record low interest rates for speculators and borrowers. Continue reading →

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Used Vehicle Sales Decline in June, But Franchise Sales Grow

Posted on 11 July 2012 by Ken Zino

The U.S. auto sales industry sold 4,382,519 used vehicles in June, down 2.48% compared to a year ago. This contrasts to new vehicle sales of 1.3 million cars and light trucks, which once again begs the question if new vehicle prices are too high and driving people out of the market? About 80% of U.S. workers commute to work in a car or truck. Continue reading →

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