Category Archives: news analysis

Airlines Profitable as Passenger Fees Continue to Rise

As part of their third-quarter revenue, the airlines collected almost a billion dollars – $898 million – in baggage fees and $603 million from reservation change fees from July to September 2011. Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are reported in a different category with other items and cannot be identified separately. Continue reading

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Unemployment Unchanged in February as Politicians Blather

Alan B. Krueger – Chairman of the Council of Economic Advisers and an employee of President Obama – said, “Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression. It is critical that we continue the economic policies that are helping us dig our way out of the deep hole that was caused by the recession that began at the end of 2007, including measures to help the sectors that were most severely harmed by the bubble economy that misdirected investment and created too few durable jobs.”

Critics said only the fact that Krueger issued the statement electronically prevented his nose from growing longer while delivering it. Continue reading

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EPA Says Fuel Economy at Record High, CO2 at Record Low

One giant caveat here: The EPA window sticker rating is not the same as the EPA CAFE rating used by automakers. As a general rule window sticker ratings are 25% lower than the numbers used for CAFE compliance. Moreover, the sticker ratings have been adjusted downward in recent years after drivers complained they were too optimistic. Continue reading

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DOE Nixes Carbon Motors Loan in Midst of Taxpayer Subsidy Storm

How you view this depends on what you think of the role of government should be – if any- in nurturing the U.S. economy and promoting energy independence, among other thorny issues. Herewith, two, admittedly simplified interpretations:

– a needed correction after the ‘green jobs’ that were supposed to be established by such subsidies were revealed as just the latest lies from politicians;
or
– simply the squealing of corporate pigs when feeding at the taxpayer trough was stopped

And there remains another real issue about whether there is much – if any – thinking behind the proper role of vast government subsidies, but don’t look for that debate in the sound-bite campaign now under way. Continue reading

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Ford China Sales Up 28% in February, But Down 15% YTD

The new Focus, built at Changon 2 is the first of 15 new or revised models due from Ford China by 2015. If the downward sales trend continues, Ford Motor will be in financial trouble because three additional new manufacturing facilities are scheduled to open by the end of 2013. Continue reading

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Will Rising Gasoline Prices Hurt New or Used Car Sales?

What this means for the recovering U.S. vehicle market is unclear. New vehicle sales have been slowly rising but are still far below pre-Great Recession rates. What is clear is that this is bad news for drivers and energy consumers, is that global liquid fuels consumption is at historically high levels. Continue reading

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Ford, Lincoln Change Touch Screens after Quality Ratings Dive

While Ford keeps claiming its customers want electronic features such as MyFord Touch, saying 56% of them rate the technology as an “important” part of the buying decision, its quality and customer satisfaction ratings by users as measured from independent sources have plummeted during the three years since introduction. Continue reading

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Volt Production Halted. Workers Laid Off for Five Weeks

The announcement of the setback to employees came Thursday after GM released February sales results that showed 1,023 Volts were sold in the U.S. GM has sold 1,626 Volts so far this year. Earlier in the day, a Chevrolet sales executive claimed that Volt sales would pick up now that it is approved for California HOV lanes and tax credits as a plug-in hybrid. Continue reading

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Only Nissan of Japanese Big Three Grows with Overall Auto Market in February. Toyota and Honda Lag Industry Slightly

Nissan North America reported record February U.S. sales of 106,731 units versus 92,370 units a year earlier, making for an increase of 15.5% over last February’s record total. Toyota Motor Sales moved 159,423 vehicles in February for a 12.4% increase in volume. American Honda reported February 2012 monthly new-vehicle sales of 110,157, an increase of almost 13%.

Since the overall light vehicle sales market grew by 16%, only Nissan actually kept pace with the slow recovery in auto sales that saw the best February since 2008, although Nissan also has the highest incentives in the group. Economic indicators – from consumer confidence to the stock and job markets, are showing the best results in four years. This is good news for automakers since sales are off to their strongest start industry-wide since 2008 at a strong seasonally adjusted annual selling rate or SAAR of 13.3 million light vehicles.

The difference among the Japanese Big Three was more pronounced in the higher-margin luxury segment. As usual, Lexus easily led the way with almost 17,000 luxury cars and trucks, followed by Acura at 11,000 and Infiniti at 9,000 vehicles. Continue reading

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GM Buys 7% of PSA Peugeot Citroën to Share Parts, Vehicles

PSA already has partnerships with Ford on diesel engines, and Toyota, BMW, and Mitsubishi on components and engines. A previous GM venture started in Europe with Fiat in 2000 failed in 2005 when GM spent $2 billion to buy its way out of a put option in the deal that allowed Fiat to sell its automotive company to GM for market value. Globally, alliances have had mixed results at automakers. Continue reading

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Fisker Automotive Makes Tom LaSorda CEO

Nevertheless, the future of Fisker is not clear. In 2010, the U.S. Energy Department awarded Fisker $529 million in loans as part of an effort to help development of so-called advanced-technology vehicles. Part of the loan was for redeveloping a closed General Motors plant in Wilmington, Delaware – home state of vice president Joe Biden – to build a small electric car, code named Nina – that has yet to appear. Fisker said that about one-third of the total loan amount – $190 million – has been drawn, mostly for Karma design and development. Continue reading

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GM Annual Report Says No Dividend is Planned for Common

Even though GM common stock traded as high as $39.48 a share – arguably irrational exuberance by small investors after what now appears to be a high IPO price of $33 in November of 2010 – the financial condition of the GM is not strong enough to distribute money to common shareholders. This affirmation comes even though GM posted a record $9.1 billion profits in 2011. Continue reading

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Toyota Prius Plug-In Gets California and Federal Subsidies

Prius Plug-in is Toyota’s first application using a lithium-ion battery pack, which it claims increases its overall fuel economy and has charging times of only 2.5 to 3 hours using a standard 120-volt outlet or 1.5 hours using 240v, which would cost at least $1,000 for a home installation.

The largest Japanese automaker, and hybrid technology leader, resisted using lithium ion batteries for years. However, political and marketing pressure, as well as government regulations favoring the controversial technology, has forced Toyota to embrace the plug-in concept, which is years or more from practical use unless you use the new “green math” to justify its steep price. Continue reading

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Ex HP Exec to Head GM’s Global Information Technology

The latest senior executive change follows the appointment last week of insider Jon Lauckner, 54, as vice president and chief technology officer. Both appointments are crucial to GM’s ongoing recovery. Less obvious to automotive media, though, is the importance of IT in a global corporation of GM’s size and complexity. Continue reading

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Chevrolet Volt EVs on Way to California. Volts now Qualify For HOV Lanes and a $1,500 State Taxpayer Subsidy

Chevrolet Volts with a ‘Low Emissions Package,’ which is standard for California Volts, began shipping from the General Motors Detroit-Hamtramck plant this week and will begin arriving at the more than 140 Chevrolet dealerships in California before the end of … Continue reading

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