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How currency exchange rates are creating shifts in production from Europe into the US and further accelerating the changes in the automotive landscape. Now more German factories are planned by the likes of VW and BMW and their suppliers, and near their production bases in southern states which are non-unionized labor. BMW figures currency swings cost it about $900 million in earnings in 2006 due to the stronger euro. Both BMW and Mercedes see the stronger euro as a long term thing and are planning investments in the US based on this. BMW is expanding its Spartanburg , NC facility. In addition to the X3 SUV it will make the X5 and X6 SUVs there. And product from here will be exported back to Europe and other countries in addition to the US market. Mercedes had already expanded in Vance, Alabama before the pronounced currency swing for the euro. The Korean car makers Hyundai and Kia are facing similiar situation because of the stronger won. The weaker yen is creating a revert back to production in Japan in the case of Toyota and a halt to expansion in the USA, see the article on this recently. ...

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The renewal of America requires new leadership at the helm of America's institutions for higher learning when men's enrollment in college education is endangered as reported in WSJ. This WSJ report shows presidents choosing to retire at Dartmouth, NYU, Columbia, U Penn, MIT. Lee Bollinger is 75, he started at Columbia as president in 2002. He helped raise $13 billion and expanded the 13 acre Manhattanville campus. Yet what does it say for so many college presidents when during the period when they raised vast sums of money and during the last 2 decades college education is harder and harder to afford for ordinary Americans? During the pandemic WSJ reports in 2021 even show that American men are having a hard time paying for college education and rates of enrollment are dropping for men to alarming levels. Never before in America's history has it been said that American men are becoming endangered for higher education. One rarely hears college presidents talk about these social issues that are top and center for ordinary Americans. It is not just Columbia or what are called Ivy League institutions, most of the leading colleges in America have forgotten why they are here in the first place and what made America what it was and again can be, a land of opportunity for all. It is time for anew generation of leaders in American higher education to dedicate themselves to this task - so that we hold these rights to be self-evident, to renew America in the face of many challenges and set a model for the free world. ...

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Critics say China uses debt trap diplomacy in Africa through its infrastructure investment projects. Silja Frohlich of DW.com speaks to Eric Olander of the non-partisan China Africa Project to make an assessment of what is happening. Olander says Africa is facing a demographic change of immense proportions with about a billion people that are being added by 2025. For African leaders what are their options- do they build the infrastructure that would lead to the industrialization that creates jobs for all these people, even as they use their children's future to borrow vast sums of money. Global and private markets would charge 7 times the interest that the Chinese are charging, says Olander. China has built roads, railways, bridges, hospitals, and other infrastructure for which there was not enough financing from other countries. Since the Belt and Road Initiative was launched 5 years ago it has built four new railways- the Mombasa-Nairobi railway, Addis Ababa-Djibouti (759 kms), Abuja- Kaduna (186 kms) and Angola's Benguela railway (1866 kms). China has also helped Africa to develop its options with alternative sources of investment helping it negotiate new investments from different sources as Kenya and Uganda are doing today.  At the conference in 2019 in Beijing President Xi offered cancellation of interest till 2018 for loans to Ethiopia. A new effort to introduce transparency and improve terms and offer debt forgiveness is underway to change China's image for investment in Africa. Olander sees China making a solid contribution over the past 10 years funded by Chinese money. ...

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Most people are not aware that EU had 10% tariff on US car imports into the European Union over many decades. US tariff was only 2.5%. The US tariff of 15% on EU car imports into the US in 2025 comes after EU recalcitrance for decades in lowering its tariffs on US car imports.  German carmakers have prepared for the higher tariff and EU car stocks were up as this is a lower tariff than the initial tariff of 25%. German car makers export luxury cars with higher margins which offers some offset as well as increasing efficiency in car making so that only a small part of this will be passed on to the US car buyer. An offset to the US car buyer is in the One Big Beautiful Act of 2025 which lets car buyers deduct the interest costs of leasing a car. The result is that US car industry will have the advantage it has long been deprived of and American car buyers will not be affected in the way the media has presented, or not at all. Over time German car industry will also do well with its access to the growing American market. Germany will lower its tariff on US car imports to 2.5% from 10% which makes it profitable for BMW and Mercedes to make SUV's in the US to export to Germany and EU, making this a win-win for US and EU. ...

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Over 60% of GM revenues in North America come from larger vehicles and SUV's. This is the situation as oil prices are rising and change is sweeping across the Middle East. Another problem is overcapacity in the auto industry. The overinvestment is highlighted by the recent decision of Geely to invest $10 billion in Volvo to double production to 800,000 units over 5 years. The car industry can produce 94 million cars the Economist magazine estimates, and demand worldwide is only 64 million. One estimate shows production capacity could reach 40 million in China by 2015!

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Japan is not seriously affected by the slowdown in growth in China. Sales in China of Toyota, Uniqlo, and other companies are increasing. Japan's exports to China increased by 8.3% in May 2013 over the prior year. Toyota expects China sales to grow by 7% in 2013, compared to a decline of 4.9% in 2012. There is high demand for SUV's. Nissan and Honda expect sales increases in 2013 of 6% and 25%. Komatsu sales are recovering because of infrastructure projects in rural areas of China. Bank of Japan Governor Kuroda says the bank will monitor China closely, particularly the shadow banking system.

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GM's plan for the current crisis in sales with sharp drop in sales of trucks and SUV's is to cut costs in many areas, 20% in salaried expenses, cut dividend payments, and cut development expenditures, and other moves that will cut $10 billion in costs.It will make competing with the Japanese and the Germans and Koreans difficult, and difficult to hold onto market share it currently holds as it will spread the limited resources over the many existing brands. Henderson says it cost $2 billion to close Oldsmobile with no return so GM will continue with all the brands in its lineup.

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All the danger signs are flashing red says Prof. Simon Johnson of MIT's Sloan School of Management, as Citigroup stock loses 26% on November 20, 2008 and 50% of the stock's value in just 4 days. The fear is that Citigroup faces still bigger losses as home mortgages, credit card loans, commercial real estate debt all deteriorate further in a deep economic downturn, and that Citigroup will need large sums of additional capital from the government. There is similiar to the Detroit auto industry executives and public opinion a big gap in how Wall Street investors and Citigroup executives see the company's situation.

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U.S. auto sales including cars and light trucks reached 17.5 million in 2015, a 5.7% increase over 2014. Larger vehicles including pickup tucks and SUV's account for about half of all auto sales in 2015, with gas prices below $2.00 a gallon in Jan 2016 in most parts of the U.S. The average transaction price was up to $34,428, according to Kelley Blue Book. Auto incentives were up to $3063 per vehicle compared to $2809 ten years earlier, according to Kelley Blue Book. Analysts say automakers will reduce margins to subsidize zero interest loans in 2016 to increase sales. Lower sales are forecast after 2017 as the market will have caught up with much of the pent up demand by then. A plus for the automakers is the lower cost of steel and other material costs, and the better cost structures after bankruptcy, and renegotiated lower union pay scales. Additional plus is new management at U.S. automakers and at Toyota, and the technological advances this management is pushing, including fuel efficiency. Ride sharing, and other services developed by Google, are seen as disrupting the traditional car model to a limited extent. Countering this new development are millenials who are accounting for a quarter of Toyota sales in the last quarter of 2015, according to a Toyota executive....

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Labour party leader Corbyn reflects on his years as leader, the 2019 election, his effort to get Britain to spend more money to fix social wrongs made worse through austerity programs of the last decade. He tells BBC's Laura Kuenssberg, that he was denounced in the election for advocating spending more money  than Britain could afford. He sees himself and Labor vindicated in its proposals for spending vast sums, to invest in the state, as this is what the Tories are now doing under Johnson. He sees Britain as ill-prepared for the coronavirus pandemic after ten years of austerity. The result of the Labour party election will be announced on April 4, a contest between Sir Keir Starmer, Rebecca Long Bailey, and Lisa Nandy. Mr. Corbyn is resigning after Labour's defeat in the 2019 election. He says the divisions over Brexit which led to a vote at Labour's conference to negotiate a new deal with EU and put it to another referendum, clearly did not win the election. Reflecting he says he did his best with an expanded level of membership for Labour party, and shifting the party to an interventionist economic policy that was anti-austerity investment led economy. He made his share of mistakes says Corbyn, as he was just human. And urged new Labour party leaders to spend time listening to people in all parts of the country, and recognize the strengths and good in the people.  ...

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GM stock was trading on the New York Stock Exchange at $29.97 on April 18, 2011. It has dropped from the $33 a share IPO in November 2010. To breakeven the U.S. government would have to sell its stake in GM at $53 a share. The government is planning to sell its stake in GM this summer according to informed sources. At the current price this would mean the government would take a loss of $11 billion. The IPO in November reduced the government's stake from 61% to 26.5%. Higher gas prices have reduced sales of trucks and SUV's and the sales incentives in January and February 2011 are expected to reduce earnings.

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With a loss of $8.7 billion in the second quarter of 2008 Ford now moves to transform its production operations to make small carslike the Focus, and the Fiesta and to smaller cars in general converting existing truck and SUV plants to make cars. It will not be till early 2010 that therse new cars some of them from Europe where Ford has success with making a decent profit on smaller cars and has a number of models that are popular there.

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By shifting production of the Santa Fe SUV model to Kia's West Point, Georgia, plant- which makes the Kia Sorrento- Hyundai plans to free up 100,000 units capacity at it newly opened Montgomery, Alabama, plant. This freed up capacity will be used to meet increasing demand for Hyundai's Sonata sedans. Hyundai owns 34% of Kia Motors. The West Point plant was built to produce 300,000 units and uses the same components for the Santa Fe that it uses for the Sorrento.

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Today GM announced that it is eliminating lifetime health coverage for about 100,000 white collar salaried retirees, as it is rapidly running out of cash to run operations. Also white collar salaries of current employees will be cut by 20 percent and the $1 a share dividend eliminated. This with other savings will save $1.5 billion annually GM estimates. Union contracts prevent this from taking effect for former factory workers even as the company is truly running out of cash. In paying the lifetime costs of hospital stays, surgeries, expensive drugs for retirees GM spends$4.6 billion in 2007 on health care for its one million employees and retirees and their dependents. This is larger that GM's entire active work force and a big reason GM has got into trouble. It also skewed management decisions in the wrong way. Management let it affect their strategy in the marketplace, they continued to run the company by emphasizing sales volume with frequent sales and discounting in the belief that the size was needed to support all these retirees goldplated medical care, care which does not exist in other industries and companies, even when GM coud least afford it. By carefully shutting down plants earlier as demand for some of its cars and vehicles was shrinking, and closing down some brands, GM could have focussed its efforts on the areas including smaller passenger cars and midsized cars and other models which were gaining popularity, and shifting ahead of the curve out of pickups and large SUV's in the face of higher gas prices. Its the collapse of the pickup and SUV market that exaggerated the impact even in October 2008, instead of the about 30% decline that the industry faced and GM faced in its cars, GM's dramatic drop in pickups and SUV's gave it an overall loss of 45% October 2008 over same month 2007. Without this aberrration of health care benefits from a previous growth era and a dominant GM - an anachronism in the present when GM was in decline and health care costs had mushroomed and company health care benefits cut back in industry after industry- and without the intransigence of the unions and the failure of management to build credibility, share the pain and convince the unions in good faith that this was unsustainable, GM could have had a much better shot of developing a strategy for renewal. Instead it sealed GM's fate, along with lack of foresight in taking decisive action to shift to higher fuel efficiency cars early in the curve, and closing unneeded plants and brands to focus on this task. In the end the gold plated benefits which were terminated today are lost for salaried retirees, and sooner or later the same is likely to happen inside or outside bankruptcy for union workers. Union workers who might then say what the salaried retirees are saying now, that if the company goes out of business, they would lose everything anyway, and could not blame GM for cutting them off. If only they had understood this earlier and accepted these facts, and if only managment had built the credibility and shared the pain so that company's interests came above union or management interests, as they should be for a company to grow or renew itself and grow. In the end union workers in the auto industry were living beyond their means, just as consumers in the USA were living beyond their means, and the outsized executive compensation also a kind of grab from another era. Renewal starts with getting a grip on reality, and reality slipped away from their hands....

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"To Invest (at home), To Align (with allies), To Compete (with the world)" sums up the approach of president Biden with China. It also sums up the approach at home and overseas. Biden senior adviser, Jake Sullivan at Council of Foreign Relations sets out the framework and path for managing US-China relations into the future for many decades. Here at the Council of Foreign Relations he shows how- through careful study of the relationship's history, the changes in the relationship, and where it is today in 2024. Having participated in previous administrations Jake understood how it has evolved, where mistakes were made by both China and the US, where misperceptions took hold and need for clarification, for action. The old Strategic Dialogue followed by Paulsen under Bush 2000-2008 allowed the relationship to be guided by business interests, -without any clear strategy or idea where it was going except maximizing interests of business on both sides- was continued by Kerry under Obama 2008-2016. Sullivan, Blinken and Biden have built a Strategic Economic Cooperation Framework that has clear goals on the American side and goals on the Chinese side, and work between the two presidents and their cabinet ministers. Trump 2016-2020 rejected the earlier Strategic Dialogue but was not able to set up a sound framework that would guide future relations for decades. Sullivan helped set up a new framework around three principles- To Invest, To Align, and To Compete.   Here he describes how the plan to invest trillions in infrastructure in the US was part of this plan's principle To Invest. On Align it was to derisk not decouple by reducing the excessive concentration of supply chains in China, that was revealed as a problem in the pandemic years. Building up manufacturing at home and in India, Vietnam and Japan. Align also was to have allies Japan, South Korea and India to be aligned with the US policy. It also meant that all three countries would follow the same framework for their economies To Invest, To Align, To Compete.  By combining the strengths of the 2 largest economic centers Seoul/Tokyo with New Delhi/Sydney in Indo-Pacific the leveraging effect of US strength could be felt to support its position. And third to compete on level field so that America retained control of its technologies and implementing exports controls. And sharing this in  open communication with China that the US was protecting its technology and interests the way China has done in the past for its interests. The benefit of open communication even where there are differences had the advantage of not turning this into open rhetoric that damaged relations as had happened under previous administrations. Wang Yi on China's side having seen and approached it with careful study and reflection had similar goals to stabilize and put the relationship on a sound footing. Sullivan met extensively with Wang Yi in meetings in several locations around the world. Ministers Yellen, Raimondo, Blinken, Kerry, were sent to China for extensive discussions as part of this strategy in 2023 leading to remarkable change in the mood and confidence in US- China relations after tumult in 2016-2020 and uncertainty in previous administrations. Much credit goes to president Biden and Jake Sullivan, Anthony Blinken, and also to Wang Yi and Jinping in no way diminishing their own initiative, so that for the first time in decades the US China relationship is now on a stable footing. Both countries faced common challenges around counter narcotics, around climate change, and other issues. These are being addressed. Competition is managed carefully and no rhetoric is taking place so that the largest two economies and about 1.7 billion in US and China and 2 billion people who are allies in India/Indonesia/Vietnam/ Korea/Japan living on the same planet earth can have economic and other cooperation  with different cultures, economic structures and systems of government. The result of such a framework also gives the basis for cooperation with America's allies to invest in Africa and Latin America and in the people of these two continents as another level of alignment and investment for a safer better world. ...

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Toyota's goal is to remain the preeminent automobile manufacturer in emerging markets and the IMV is part of its strategy for achieving this goal. The IMV series for emerging markets, with one million in manufacturing capacity coming off a single platform to lower costs, is designed to meet local needs from a price standpoint and rough road conditions. Sales of one million off of a single platform is an achievement only Toyota will have achieved. A minivan, a sport utility vehicle and 3 pickup trucks are all made from a single chassis, with localized production since 2004. The IMV series is expected to account for 10% of the 9.58 vehicle sales goal for 2012. CEO Akio Toyoda plans to increases sales in emerging markets to 50% of total sales by 2015, up from 40% in 2011. IMV vehicles are made in 11 emerging market countries- in Argentina, India, South Africa and Thailand, and are sold as the Hilux pickup, the Fortuner SUV, and the Innova minivan. Over the years Toyota has transferred more of the design and development to emerging market countries to meet local preferences and reduce the effects of a strong yen, leaving only core components to be designed and manufactured in Japan. As it recovers from supply disruptions due to floods in Thailand and the tsunami in Japan, Toyota is planning on sales of 9.58 million in 2012, a steep climb of 21% from the 7.95 million sold in 2011....

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The University of Michigan Transportation Research Institute said the average fuel economy of all new passenger vehicles purchased in January 2012 was 23 miles per gallon, up 0.8 or 4% from December 2011. This includes cars, light trucks, minivans, and SUV's. Professors Sivak and Schoettle of the Institute also released a U.S. Eco-Driving Index, or EDI, which estimates average monthly emissions of individual U.S. drivers for Nov. 2011 at 0.86- this is down 14% from October 2007. The need to reduce reliance on imported oil for the U.S., Europe, China and India, the high price of oil, and the need to reduce automobile emissions to improve air quality, make improvements in average fuel economy and emissions per driver absolutely critical.

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The neglect of Saturn as GM moved to emphasize SUV sales, with no new models for five years and the folding of Saturn in to the small car group and expected to compete for scarce resources with other brands including the Buicks, the Hummers and the Pontiacs. Saturns were doing what they intended to do getting buyers of imports shifting to American models but lack of investment and attention and steady perseverance over time led to its potential never being realized. This may be one of the many errrors of GM executives and its board.

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Mercedes Benz is pushing sales of its newly designed small cars as part of a strategy to attract younger buyers. A retooled, sleek version of the B Class compact is part of this strategy. The average age of U.S. Mercedes buyers is 53 years, compared to 49 years for Audi and BMW. Smaller cars are also part of the strategy to meet the new fuel economy standards in the U.S. and Europe. Mercedes is investing $1.9 billion in a new Hungarian plant and expanded German capacity to build smaller cars and SUV's. Sales of the smaller size A and B class Mercedes cars increased slightly by 1.4% to 222,400 in 2010. This compares with increase in overall sales volume up by 12% to 1.26 million cars in 2010.

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To gauge economic progress and improvement in living standards, instead of GNP alone look at number of indicators. Look at healthcare and education, cleaner skies and cleaner air, water and land. This is what areport commissioned by President Sarkozy of France, done by Siglitz and Amartya Sen, esentially emphasizes. And be careful when you see more cars and gasoline and more driving drive up GDP numbers and growth because this may actually work in the wrong direction, and have unusual negative effects as the SUV buildup and later collapse led to destroying companies and jobs in Michigan and the midwestern USA.

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Sales of automobiles are shifting from trucks and SUV's to cars in the USA and overall sales are seeing large declines. How is Europe faring in this regard? Spain's car manufacturer's association Anfac said car registrations in June 2008 dropped by 31% from June 2007. Spain' GDP showed a decline to 2.7% in 1st quarter 2008 compared to 3.5% in 4th quarter 2007. In Italy car registrations dropped 19.5% in June from a year earlier. In France car registrations went up by 2.1% in June from provisional figures. Auto sales in Japan dropped 3.6% in June according to the Japan Automobile dealer's Association.

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Marchionne's major achievement is the genuine integration of Fiat's operations with Chrysler's operations using the strengths of both parts of the operation. Daimler showed little interest in doing this and the result was a failure of the merger between Daimler and Chrysler. Another aspect is the use of Fiat's Alfa Romeo and Maserati models to build new Chrysler vehicles. The new Dodge Dart which gives 40 miles per gallon and which gives Chrysler entry into the small car market, is based on the chassis and technology of Fiat's Alfa Romeo brand. Another vehicle of this type is the Maserati Kubang, an affluent buyer SUV based on the Jeep Grand Cherokee.