So long, Government Motors!
Citing better-than-expected sales and traffic at dealerships, Ford Motor Co. said Monday it plans to increase third-quarter production by 25,000 units, marking the automaker’s second production hike in recent weeks.
Ford spokesman Mark Truby said that will bring total quarterly production to 485,000 units, a year-over-year increase of 16 percent or 67,000 units. Last month the company said it would raise third-quarter production by 42,000 units.
The boost affects all models of Ford, Lincoln, Mercury vehicles, with more emphasis being placed on Mustangs, pickup trucks and the Ford Focus compact car, Truby said.
“We had pretty well lowered production in recent quarters to meet demand,” Truby said. “Now as we’re seeing market share increases and showroom activity, we’re ramping up production to meet that demand.”
The increase comes as Ford’s top sales analyst, George Pipas, said the company’s June sales were “good” compared with the overall industry. The Dearborn, Mich.-based automaker could see a year-over-year decline of 10 to 20 percent, which could be the lowest among all major automakers, he said.
“This will be our lowest decline of this year,” Pipas added.
Automakers, which are due to report June U.S. sales on Wednesday, have seen sales fall 37 percent over the first five months of the year. Pipas said U.S. auto sales may have halted their month-to-month declines in June and could be down less than 30 percent for the first time since September of last year.
As bad as it sounds, a decline of less than 30 percent could be a welcome relief, as automakers and suppliers have trimmed production and other costs to adjust to lower consumer sales.
“The important takeaway is that we’re not going backward, we’re not slipping back,” said Pipas during a sales preview talk with reporters. “It suggests the worst is behind us, not just the economy, but we may have seen the low point for the year.”
Pipas said individual regions of the country are showing sales improvements compared with June 2008, another sign that the auto market has bottomed out and is recovering. While sales in the Great Lakes states are improving, they’re still slow in California and Florida, two areas hit hard by the decline in the housing market, Pipas said.
Pipas joined other industry analysts in predicting that June sales could surpass a 10 million seasonally-adjusted annual selling rate for the first time this year.
Last week J.D. Power and Associates predicted that automakers would sell 914,400 vehicles in June, 26 percent less than in June of last year and 1 percent lower than the 924,064 sold in May.
Pipas said May typically is a stronger sales month than June, but he was unsure if this June would surpass May figures.
He said federal “cash for clunkers” legislation recently signed into law could boost sales later in the year, and noted that consumer confidence is improving, suggesting that the worst is over with the economy and auto sales.
Shares for Ford rose 3 percent, or 17 cents, to close Monday at $5.78.
No red (blood) for green!
On Dec. 12, 1974, my grandparents were driving home when a vehicle traveling 50 miles per hour hit them. On March 17, 2002, I was driving home when a vehicle driving traveling 50 miles per hour hit me.
My grandparents were killed instantly. I lived. My grandparents were driving an AMC Gremlin. I was driving a Dodge 3500 diesel dually pickup truck.
AMC is now out of business. Dodge Trucks are still selling well. The free market decided that we didn’t need AMC Gremlins.
I still drive a Dodge dually. We factor in safety versus miles per gallon on every automobile purchase that my wife and I make. Devo could not have said it better: “Freedom of Choice…It’s what you want!” Freedom to choose is a basic American right. Life, Liberty and the Pursuit of Happiness are guaranteed to me and 299,999,999 other Americans by the Constitution.
Mr. President, I did not give you nor the Federal Government permission to use my tax dollars to bailout Chrysler or GM. Neither did any of my friends. We did not have a choice in that matter.
We all knew that GM and Chrysler were headed for bankruptcy. So be it. It would be a hit to the American economy. Yep. Let’s take the hit and move on. I believe President Obama, that you knew that GM and Chrysler were headed to bankruptcy as well, but by giving them our money first, you were able to seize control of the American auto industry. In one fell swoop, you became the head of GM and Chrysler. You turned the United Auto Workers Union into GM and Chrysler owners. You nailed the coffin shut on Ford, the one manufacturer who turned down your money (…our money). How is Ford going to negotiate wages with a union that is now also their competitor?
Mr. President, you have created an army of Czars that are answerable only to you. Our Constitution says that only Congress has the power to create taxes and they are answerable to the people. Not only does our new car Czar not answer to Congress, he won’t even go on Neil Cavuto. Where is the transparency, Mr. President?
But I digress. Your administration has already strong-armed the auto industry into accepting mileage compliances for their new vehicles. Michael Moore is giddy with the fact that the US Government now owns 60% of GM. He wants you to end the auto industry as we know it. According to him, GM should only produce bullet trains, buses and hybrids. If the two of you have your way, Americans will no longer be able to purchase a GMC SUV or a big Dodge truck.
Our family car is a General Motors Hummer H2. I am sure you are familiar with the brand and model; you just sold them to China. China may not want our debt, but they will still take our SUVs.
It is fairly common for us to get cut off and then flipped the finger by eco-saints whenever we drive into the city. Several times we only narrowly avoided a serious freeway accident. Quite often, Mr. President, these cars have bumper stickers with your name on them. These self-righteous “Earth Savers” feel completely justified in their actions as they curse at my children and me because they are only offending and risking the lives of people who are riding in a “planet killer.” The fact that we heat our house with reclaimed wood, run almost 100% of our ranch on solar power, grow our own fruits and vegetables, and for the three weeks out of the year when our dirt road washes out, the only way in or out of our ranch is in a 4×4 Hummer or it’s equivalent, never enters into their sanctimonious consciousness.
I see this same kind of prejudice in your speeches and your actions Mr. President. I see this same arrogance as you steer our nation away from free enterprise and into the arms of the Central Planning Committee.
Last week, my wife was rear-ended by a driver who never even hit his brakes. His truck slammed into my wife at 50 miles per hour.
I thank God that the Germans put good steel in their vehicles and know a little something about engineering. If my wife had been driving an AMC Gremlin, she would probably be dead now.
Soon my children will be driving and buying cars of their own. Mr. President, will you allow them to have freedom of choice or will you doom them to take their chances in a 21st century AMC Gremlin?
Pass this on. This was an editorial written by Jim Jackson who is from Elkins Fordland (a Ford Dealer) in Elkins, WV.
Intermountain Letter to the Editor- Elkins Fordland
Editor:
As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes. The fate of our nation’s economic survival is in the hands of some congressmen who are completely out of touch and act without knowledge of an industry that affects almost every person in our nation. The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of millions of viewers. Senator Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the 70s, 80s and 90s. You and the uninformed journalists and senators that hold onto myths that are not relevant in today’s world.
When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world’s No.1 automaker beating Toyota by 3,000 units. When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers? Did you realize Big Three’s gas guzzlers include the 33 mpg Malibu that beats the Accord. And for ‘09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford’s Focus beats the Corolla and Chevy’s Cobalt beats the Civic.
When you ask how many times are we going to bail them out you must be referring to 1980. The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid. When you criticize the Big Three for building so many pickups, surely you’ve noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie. Perhaps it bothers you that for 31 straight years Ford’s F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new ‘09 F-150 you ll agree this won’t change soon. Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda? Between 2005 and 2007, Ford alone has invested more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.
It’s 2008 and the quality of the vehicles coming out of Detroit is once again the best in the world. Perhaps Senator Shelby isn’t really that blind. Maybe he realizes the quality shift to American. Maybe it’s the fact that his state of Alabama has given so much to land factories from Honda, Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Senator Shelby’s disdain for government subsidies is very hypocritical. In the early ‘90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan the Big Three is requesting will be paid back, Alabama’s $180,000-plus per job was pure incentive. Senator Shelby, not only are you out of touch, you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.
After 9/11, the Detroit Three and Harley-Davidson gave $40 million-plus emergency vehicles to the recovery efforts. What was given to the 9/11 relief effort by the Asian and European Auto Manufactures? $0. Nada. Zip! We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently. While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise. While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost. Although many UAW concessions begin in 2010, many lawmakers think it’s not enough.
Some point the blame to corporate management. I would like to speak of Ford Motor Company. The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser. Thank you Alan Mulally and the best auto company management team in the business.
The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem. AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess. So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country’s largest industry, there is obviously opposition. But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?
As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity. However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacturer would cost retirees their health care and retirements. Chances are GM would recover from Chapter 11 with a better business plan with much less expense. So who foots the bill if GM or all three go Chapter 11? All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse than a loan with the intent of repayment. So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is definitely better for the taxpayers and the economy of our country.
So I’ll end where I began on the quality of the products of Detroit. Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question. Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation’s jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way. Can you tell me, have you driven a Ford lately?
Jim Jackson, Elkins Fordland
Fox News speaks with Elkins Fordland owner Jim Jackson about the “Auto bailout”.