TCC'S DAILY EDITION: Mar. 24, 2003
I am sure many of you remember those words from your school days. They were written in the dark days of Valley Forge. Our crisis isn’t as terrible but still, as I write this, our army is on the march. I don’t know what will happen. Our enemy, Saddam Hussein, may be overthrown or he may flee. But the waiting that held our collective breaths until now has produced a kind of crisis in our country. The nation is divided, the economy struggles, the stock market falls, gasoline prices climb. No, it isn’t Valley Forge, nothing like it. But it is a crisis and important to us all.
Flint: The Crisis Cometh (3/24/2003)
Is war the only thing Detroit should fear?
GAS PRICES STABLE AT ONSET OF WAR
Gasoline prices remained stable as U.S. troops rolled into Iraq to oust Saddam Hussein, easing fears that the start of the war would lead to a big jump in oil prices. The swift seizure of the enormous oil fields in southern Iraq by U.S. Marines, Navy Seals and British Commandos apparently thwarted Hussein's plans to sabotage the fields, which contain about 60 percent of Iraq's proven reserves. Sabotage would have sent oil prices soaring and hammered the global economy; while some wells were ignited, most of the key Iraqi fields were seized intact, according to U.S. and British military commanders. The price of U.S. light crude oil futures fell almost 25 percent to $28.61 a barrel, topping off a roughly 25-percent slide since last week, a sign that was good news for refiners.
Gas Prices Stable in War (3/24/2003)
After record highs in the U.S. market, the beginning of conflict doesn’t shock the world market.
AUTO SALES TO DROP?
Auto sales are on track in March for a 15.25 million annualized selling rate, says one survey by J.D. Power and Associates, the lowest monthly rate in four years. But even if the bombs stop falling in Baghdad this week and Saddam Hussein is escorted away with a raincoat over his head, it could be months before consumers are feeling game enough to flock back to the showrooms. Should the conflict become protracted, the sales rate could plummet to 13 million or 14 million units, predicts Walter McManus, executive director of global forecasting at the J.D. Power & Associates market research group. "If the war drags on and if it takes a long time to get to Baghdad, then the uncertainty people are feeling can create a recession," said McManus. "If the war is over quickly and successful, then the industry can recover and sales could be at an even higher rate."
Auto Stocks Fare Well in War (3/24/2003)
War is hell for auto sales, but not stocks so far.
BUSH ADMIN STUDIES CAFE CHANGE
From the department of “be careful what you wish for,” the Bush Administration is seriously looking at a wholesale change to the current Corporate Average Fuel Economy (CAFE) law that would rate vehicles’ fuel economy based on several classes of weight rather than one car standard and one light truck standard. A new system would do away with the so-called “harmonic averaging” to determine CAFE, which takes into account sales volume of vehicles of different weights, so that automakers, for example, are incented to sell very small, light cars to make up for the heavier ones consumers “really” want.
Bush May Up-End CAFE (3/24/2003)
Will tomorrow’s light trucks get the same green break as the heaviest cars?
ANWR DRILLING DOWNED IN DC
The U.S. environmental movement demonstrated its clout last week by turning back the Bush administration's effort to open the Arctic National Wildlife Refuge (ANWR) to oil drilling. The vote came literally only hours before the start of a new war in the Persian Gulf and underscored the inability of the U.S. to reach any kind of consensus on an energy policy that might cut the U.S. dependence on imported oil. In the vote on ANWR, environmentalists successfully argued additional oil from Alaska would not eliminate U.S. dependence on foreign oil and would destroy one of last truly wild places in North America.