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Did GM miscalculate when after Katrina SUV sales took a dive, in the wake of higher gas prices in the summer of 2005. Instead of gving it thought and thinking about various possible scenarios in the future GM moved up the introduction of a new SUV models program and invested $175 million in updating the the Janesville Wisconsin SUV plant that was turning out 200,000 SUV's a year. And the unions also wanted to hang onto the SUV program and included product guarantees for several of GM's SUV plants, including a new line of SUV's for Janesville to come out in 2012. Each SUV made $10,000 to $15,000 per vehicle whereas passenger cars did not make money. Why? How? Considering that Honda was making profits selling passenger cars and so was Toyota, and Honda stuck to making better cars, and the Germans and the Japanese were not putting all their eggs in one basket. Something strange was going on, kind of a cosy trap for the Detroit automakers.

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Chryslers plans to trim the product line to eliminate models that compete with other Chrysler models in the same product segment. To look at new models that made small changes over previous models during the late stages of Daimler's efforts to turnaround Chrysler, the Sebring and the Avenger, the Jeep Grand Cherokee, Dodge Durango and the Jeep Commander, for example. The Sebring may be eliminated or redone seriously. Models like the midsize SUV JZ are eliminated. Slower selling models that eat up resources nevertheless like the Pacifica wagon, Dodge Magnum wagon and the PT Cruiser convertible also may be eliinated in this review by Jim Press and Nardelli, formerly of Toyota and GE respectively. Also being addresssed is the shrinking of Chrysler dealerships and the elimination of certain models may help in this process of trimming the dealership network and refocussing it on a newer product line.

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One place where work and capacity is growing in the dismal auto environment is in 4 cylinder engines as Honda expands capacity at it Anna, Ohio engine plant to produce more steel parts.

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GM with the Malibu and Ford with the Taurus are trying to get back into the midsized car market dominated by Honda's Accord and Toyota Camry and the Nissan Altima. These cars constituted about 20% of the market and passenger cars will soon surpass sales of SUV's and pickup trucks. Honda is packing more into its redesigned 2008 Accord which has 268 hp V6 engine and over 119 cubic feet of passenger and cargo space to give more space to customers. Each redesign has seen more features on the Accord. Detroit will have a tough time against these models from Honda and Toyota.

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Hona's hybrid technology is lighter and more suited to lighter vehicles compared to Toyota's hybrid and may offer better gas mileage. It will also cost less because Honda is trying to reduce the cost differential between the hybrid and the gasoline car to less than $2000 according to Mr Kato who heads R&D at Honda. Its new compact hybrid that its introducing in the US, European and Japanese markets next year will retail for around $18,000, or about $3000 less than the Prius. So the new Honda hybrid will have advantages and Honda hopes to sell 200,000 of these compact hybrids and in doing so also present itself as an environmentally friendly company. At the same time Toyota will not be standing still as its new revamped Prius will come out in 2010.

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Response to criticism of car companie about poor fuel eficiency.

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Interview with Honda CEO Takeo Fukui. In June Honda will rollout a new hydrogenpowered fuel cell vehicle called the FCX Clarity. Its powered with electricity produced by combining hydrogen and oxygen in batterylike fuel cells. Honda will have this vehicle available for lease this summer in California and aims to deliver about 200 of these cars by 2010. Fukui's attitude is refreshing when compared to that of other automakers when answering a question by John Murphy of the WSJ about why try to build a hydrogen car when the stations to power the cars do not exist yet. He tells Murphy if you asked were there any gas stations when Henry Ford came up with the Model T, there weren't any, lets build the cars first and the infrastructure will follow. And Honda is working on the technology that will make it possible to charge hydrogen into fuel-cell vehicles at home . He sees it happening first in California and some other states, and in Japan and Europe. And he sees it taking about 10 years to get some sort of infrastructure in place. Considering the long term nature of the demand side with the gradual inclusion of billions of people in China and India as well as Brazil and Russia into the world economy as well as people in other developing countries this is a solution that takes patient and focused development of technology which Honda is setting out to do. He does not see a safety issue in use of hydrogen vehicles as he is confident Honda can develop the expertise to handle the safety issue for hydrogen. What is his thinking on green vehicles? What happened to the Insight the first hybrid car that Honda introduced? The Insight was never intended to be a mass seller, only to establish Honda's record as having the best record in fuel efficiency. What is Honda doing in this area. Honda does see a problem in this area. Toyota he says developed a green image largely on the back of one car the Prius. Honda will come up in 2009 with a dedicated hybrid vehicle to match the Prius. And Honda is setting the bar high for this Honda hybrid, saying that his feeling that this model will have to overwhelm and overtake the Prius. He goes on to say that this is key for us. Honda he says will take on the challenge and compete with Toyota with its products, its technology, and its racing spirit. This gasoline-electric hybrid will be introduced early next year in the USA, Japan, and Europe, and it will be the first of 4 hybrid models Honda will introduce by 2015. Regarding price the company says it will be "affordable". Honda's goal is to sell 500,000 hybrid vehicles a year. Toyota aims to sell 1 million hybrid vehicles early in the next decade and is working on developing its own hydrogen fuel-cell vehicle. Is Honda developing electric cars? Takeo Fukui thinks the practical feasibility of the electric vehicle is very limited. The two biggest issues in his view being driving distance and recharging time. The FCX Clarity can be recharged in one minute, compared to the several hours for an electric vehicle. In his view the electric vehicles will be uselful only for restricted applications like golf carts. Nissan and General Motors are planning to launch electric vehicles. What is Honda's environmental strategy? Honda being a smaller company has to focus its resources wisely with strategic choices. His focus is on the hybrid as the core product, and after that comes fuel cell and clean diesel as the core products to tackle fuel eficiency and CO2 issues. Takeo has spent more than a decade on Honda's racing teams. He drives a CR-V and enjoys driving up and down the mountains, does not race but does get on Honda's test track once or twice a year. And what has he learned from all the years in racing. When he was fully engaged in the motorcycle racing teams he says the pressure was very high and if they did not do well they got bashed by managers and the media. And actually the results were disappointing for years and the teams kept losing. For hime the series of difficulties and challenges was something that he feels everyone should experience because in some ways he acquired wisdom and creativity to get through these experiences. This is some thing Honda and Fukui will need as they try to develop their own hybrid to take the lead from Toyota and come up with industry leading technology in tackling fuel efficiency and CO2 issues. His own approach to management? Two things he always keeps in mind are take time to keep up good communication with associates at work, and testing Honda's own products with his own hands. What does he think about the auto industry in 2008, is it a turning point? He says it has becom clear in 2008 that a company has to have the technology to deal with carborn dioxide and fuel efficiency issues. And its clear that smaller vehicles are more attractive than larger vehicles. And its possible he says that we may go back from automobiles to motorcycles. In fact in India Honda is promoting motorcycles in a big way, while Tata is developing the Nano for mass market, so Takeo is talking about something that Honda sees happening in some places. ...

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A new family sedan will come out of a new manufacturing plant VW has built in Chattanooga, Tennessee, in 2011. The plant will turn out a new version of the Passat to compete with the Toyota Camry and the Honda Accord. Production capacity will be 150,000 A new Beetle will also be introduced. This is the first time VW has built a car specifically designed for the U.S.. During its previous efforts in the 80's VW used European designs and transferred them to the U.S. Its plans are to sell 400,000 VW's in the U.S. by 2013. VW sold 213,000 cars in the U.S. in 2009, so this means doubling sales in 4 years. At it height VW sold 577,000 cars in 1970, but this was before the Japanese and the Koreans entered the market in a significant way, and now the potential is there for Chinese and Indian imports at the low end of the price scale. Another factor making this goal difficult to achieve is the smaller car market and lower economic growth. By 1992, sales had dropped to 49,000, after the boxier replacement to the bug- in its Rabbit and Golf models- never took off. The new Beetle's introduction in 1998 improved sales, which reached 356,000 in 2001, and then declined as a result of too few new models, declining quality and a weakening dollar. There is a feeling among VW's American dealers, that VW's European headquarters staff is not giving the US the priority it deserves. The revolving door change in CEO's for the US operations, has only reinforced this impression. Mr Browning of GM's European operations replaced Jaccoby recently. Jaccoby joined Volvo as its new CEO. Steps taken to address these issues are to revamp the Jetta model for American customer preferences, and advertising that appeals to price conscious customers with the line: "Great for the price of good." Another innovative effort is an ad strategy that tries to capture Hispanics in the US market, with ads on Spanish language television networks. A sign of how much German management is involved in the detail of the new Jetta, is the discussion at the management board level about whether the new model should have American style cup holders. This meant pushing the brake two inches forward towards the driver, a decision that was made to do so after some deliberation at the management board. This will lead to intense competition in the US market, with Asian, European and US manufacturers all vying for the same price conscious customers....

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After an initial period of a year Japanese companies are now making the move to pull back some of the production shifted overseas with the yen at 80 to the dollar. Canon made 40% of its product overseas in 2009 before the shift to 60% by 2013. Now it is shifting production back home to reach 40% overseas production. Other consumer electronics companies Panasonic, Sharp, Daikin, are shifting production back to Japan. This is similiar to the shift back to the U.S. of products made overseas as costs have risen in China and other Asian countries. The sharp swing in exchange rates is accelerating the trend. Auto companies Subaru, Toyota, Nissan, Honda are continuing plans to manufacture close to customers in the U.S. Shorter product cycles make it possible to shift production for electronics companies compared to longer product cycles at auto companies. Murata Manufacturing will continue to make smartphone parts close to its customers in China, lifting production overseas from 14% to 30%. As a result exports have increased in Nov. 2014 by 10.8% from the prior year and imports up 2.2%, according to the Finance Ministry....

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At a meeting of GM engineers and Continental- which manufactured the Cobalt's diagnostic modules on May 15, 2009- the faulty ignition switch defect was confirmed by repeated verification of data from many car crashes. No evidence shows this was shared with senior managers. GM filed for bankruptcy in June 2009, two weeks later, and this could be the reason as the situation could be chaotic in managerial ranks. It was tnot until Oct 29, 2013, when GM officials met with the supplier Delphi that the issue comes up again. Records for the meeting showed clearly the defective switches were made at a Delphi plant from 2004 to late 2006. A part change had led to the defective switch. It is the period between 2009 to 2013 that GM has no answer for, as public opinion increasingly looks to GM for answers on why it took so long to make the recall. At Toyota the footdragging in managerial ranks caused the problems for the recall. At GM the problem simply disappeared at the lower levels as the company went through a bankruptcy and emerged from bankruptcy under new management....

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Chrysler will have $1 billion in free cash flow each year in 2013 and 2014, down from an earlier estimate of $1 billion in 2013 and $3 billion in 2014. This is because Chrysler needs to increase spending to replace aging models. Even with the higher spending Chrysler will not be able to meet its original goal of 8 new or redesigned vehicles in 2013, including one midsize, one subcompact and two small Jeeps. Some will arrive in 2015-2016. Fiat will not give a dividend so that it can conserve cash to pay for buying the remaining 41% of Chrysler it does not own. Fiat's losses in Europe limit cash flow and under the agreement for the stake in Chrysler it does not not have access to Chrysler cash flow to finance increases in research and development of small car technologies used by Chrysler. Chrysler's margins are smaller than other automakers because of higher incentive costs. It increased market share in the U.S. market in 2012 from 10.7% to 11.4%. Ford and GM experienced declines in market share after a resurgence of Toyota and Honda and efforts to preserve margins....

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Expensive new fuel saving technology investments at BMW to meet new pollution control standards in Europe (130 grams per kilometer) and boost fuel efficiency in the US. This year only 40% of its cars will meet 140 grams per kilometer. With a production total of 1.4 million cars BMW faces sizable investments with smaller car volume than the likes of Toyota and Honda. R&D costs have climbed 22% in first half 2007 to 1.5 billion euros. BMW has agreements to jointly develop some of the new technology with Daimler and GM on hybrid gasoline-electric drive cars. Its developing a new 3 liter diesel engine for the US market that cleaner and fuel efficient. BMW plans also to boost advertising budgets to promote itself as a fuel efficient carmaker conscious of the environment, See related article. It plans to expand in India China and Russia to get a share of the expanding markets there. BMW's second quarter profit fell 23% on a 7% gain in revenues underlying the additional investments BMW faces. CEO Reithofer wants to increase profits to above last years 3.75 billion euros. ...

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Carlos Ghosn of Nissan Renault is under criticism for trying to manage two companies at the same time and fills positions for head of North American operations, and the CFO position at Nissan. Still there is skepticism that Ghosn may be trying to do too much himself. Is Ghosn underestimating the intense competition inthe American market as the Detroit manufacturers gear up and Toyota, Honda and the Koreans and Germans also push ahead. The international market and the market in Chiona and India also is very competitive. In Europe Renault is losing market share already and Toyota and Fiat are increasing market share. Renault's sales are down 9% for the first half and its model lineup is aging.just as Fiat is coming up with new models.

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Deborah Wahl Meyer takes up the position of chief marketing officer for Chrysler, she is a former Ford and Toyota manager who tried new things to promote the Lexus brand. Expect imaginative and new ideas from Ms Wahl.

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The market shares of Hyundai, Kia, and VW have received a boost as the Detroit carmakers struggle. Kia and Hyundai have moved their market share from 5 in 2008 to 7.3% today, up by 2.3%. Hyundai had difficulty getting brand name recognition for quality and performance in prior years, but it has persevered. KIa and yundai spend more on incentives, $3200 in 2009 compared to $2000 in 2008 to attract first time buyers. To take into account the economc conditions Hyundai was the first to come up with the Hyundai Assurance Plan, which allows buywers who finance their purchase to return the cars if they lose their jobs. Once these buyers try the Korea cars the ope is that they will see that the quality is on par with the Americans and the Japannese for a lower price, or even exceeds them. The Korean carmakers have worked hard on improving quality. In 2009 Hyundai won the North American Car of the Year award at the Detroit Auto Show for the Genesis luxury car. VW is also gaining market share this year. VW's market share is up to 2% from 1.5% in 2008. Aggressive marketing of the Jetta has moved its sales by 8.3% in May. Some of this market share is coming from Japanese carmakers....

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Sebarros of the WSJ takes a closer look at the key words used by U.S. president Trump in rallies in city after city during the 2016 election campaign and in the months before the Congressional elections in 2018. Analysis by the WSJ counted the unique two word phrases, how often Trump highlighted topics, the content of audience respones in 48 post election rally speeches through Oct 27.  In 2018 the words "tax cuts,"fake news," and "health care," appeared more often than in 2017 after the Republican party's win in passing a tax cut. Other phrases used frequently were "law enforcement," "North Korea," and "Supreme Court" after the win in nominating Judge Kavanaugh. The use of the 2 word phrases are carefully done. The words "fake news" were not used during sensitive periods such as when pipe bombs were mailed to government offices, yet resumed few weeks later. His own name is the seventh most used word, even for someone such as Mr. Trump, showing that behind the impromptu remarks there is a carefully worded effort to steer voters in a particular direction with carefully developed appeals. Another example is when the Dow Jones averages were reaching new highs in September and October Mr. Trump highlighted the stock market growth, and then when volatility increased by November said much less on this topic. Graphs by Jessica Wang provide a good look at how frequently and in what manner Mr. Trump has continued his unique campaigning style before the 2018 Congressional elections, with two word appeals to already receptive audiences. The audience participation is a singular feature and the words "U.S.A." were used in 85% of the rallies with "Build that Wall" at 65% as the next most frequent.  Much of it is repetitive in city after city and the WSJ analysis shows that the major television networks including Fox News are not covering the speeches from beginning to end as they did before, only C-Span public network does. To receptive audiences in carefully scripted surroundings, including larger ones such as the Toyota Center Houston, where larger numbers of supporters worried about immigration, health care, trade, and other issues can come together, president Trump has rallied core supporters with this kind of appeal. ...

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Rising surplus up 53% in June over a year earlier to $10.2 billion and how it will affect trade relations with the US. How does this affect trade tensions and hoe Toyota acts build in japan vs. build here in the USA.

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Dana gets a number of experienced executives from Toyota, GM and Chrysler to serve on its board, Convis, Devine and York. Devine former Chief Financial officer for GM may become the new Chairman at Dana as it emerges from bankruptcy this month.

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For Ford Motor Company 2007, 2008 and part of 2009 should see negative cash flow of $17 billion. Already in the first 9 months of 2006 Ford had $6 billion in losses. About 23 billion in financing arranged to meet these financial cash flow needs to restructure N. American business and finance an entirely new product line and production systems. This includes the largest ever leveraged loan for Wall Street, $17.5 to $18.5 billion, according to Reuters Loan Pricing Corp. Leveraged loans carry an interest rate 1.50 percentage points above the London Interbank Offered Rate (LIBOR) and are loans to non-investment grade borrowers or unrated borrowers. Ford now carries a high yield or "junk" credit rating. To secure the loans Ford pledged all its N. American assets including its logo as collateral. This is the largest such arrangement for an American company in modern business history showing the depths to which the company has plunged. Fitch lowered Ford's ratings to B- from B. Ford is rapidly losing market share to rivals such as Toyota Motor. About 38,000 workers or close to half its factory workers have accepted buyouts or early retirement packages. Ford will shut down 7 assembly plants in 2010....

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The Chinese car market is changing fast, with domestic brands making up a larger share of the local market. In 2000 these domestic brands made up 18% of total sales, whereas in 2010 forecasts show this to be about 32%, with the share increasing in future years. In a rapidly growing market this did not make much difference, but with the market growth moderating to 7-8% in the next ten years from the heady 33% of recent years, the foreign brands such as GM and VW will not see the growth of recent years. J.D. Powers projects passenger vehicle sales in China at 19.2 million by 2017, with Chinese brands taking 45% of the share, in one scenario. Under this scenario foreign brands like GM and VW would see sales growth of only 5% in the next 7 years. The foreign brands are not allowed to own more than 50% of local operations. And their partners are making their own domestic brands. If Japan is a useful example, China's automobile companies will like Nisssan, Toyota, and Honda, proceed to penetrate global markets and become a dominant player in their local market. This has implications for GM, VW and Daimler....