TCC's Daily Edition: 9/20/01

September 20, 2001

AUTO SUMMIT YIELDS NUMEROUS IDEAS
An unprecedented summit meeting Wednesday drew nearly two dozen auto industry, labor and government officials together at GM’s Hamtramck Assembly Plant. The leaders took aim at declining auto sales and overall concerns about the economy. U.S. Commerce Secretary Don Evans and Labor Sec. Elaine Chao brought no concrete proposals a la those aimed at saving the airline industry. And automotive leaders said they had no plans to ask for a specific bail-out of their own. But they outlined several steps the government could take, including moves to ensure a steady flow of loans now threatened by the potential downgrading of Big 3 debt. The automakers also asked federal authorities to continue speeding up border crossings to allow timely parts deliveries to production facilities. Longer-term, the summit participants agreed that a rash of plant closings could trigger a collapse in consumer confidence, leading to further production cuts. Dieter Zetsche, CEO of DaimlerChrysler’s U.S.-based Chrysler Group, asserted "We clearly don’t intend to overreact." But Ford Chairman Bill Ford warned you can’t "drive production into the face of low consumer demand." Read all about it.
Big 3 Meet with Big Feds by TCC Team (9/17/2001)

 

BIG 3 CREDIT RATINGS IN JEOPARDY
Standard & Poor’s is reporting that weak sales and a deterioration of consumer confidence that stands to follow last week’s terrorist attacks on New York and Washington D.C. are pushing Detroit’s automakers’ credit ratings onto shaky ground. The Wall Street firm put DaimlerChrysler on "CreditWatch," a sort of warning probation that implies that a company’s credit rating stands in danger of being lowered in the near future. General Motors and Ford Motor Company have been on CreditWatch status since mid-August.
Earnings Watch on at GM, Ford by Joseph Szczesny (8/20/2001)

 

TOYOTA REAFFIRMS CONFIDENCE IN U.S. BUYERS
In a robust show of confidence in the resilience of the American character, Toyota Motor Corporation said that it saw no need to revise its North American business plans even in the face of the horrific terrorist assaults on the United States. "In the short term, there will be a decline in consumption, a short-term shock," allowed Toyota Chairman Hiroshi Okuda. But then Okuda went on to say that the effect would be limited and that he expected the economy to pick up again early next year.

 

GM ANNOUNCES 0% FINANCING STARTING TODAY
In a move slated to inspire consumers and boost slumping sales, General Motors Corporation has announced a program of no-interest vehicle loans through its finance arm, GMAC. The 0.0-percent loans are available on select terms and classes (see below). The program starts today, September 20, and will last until the end of October. All current cash and lease incentives will remain in effect, but only as alternatives to the no-interest loans, rather than as added inducements. Here are the details:
For 2001 GM Cars:
36-mo.= 0.0%, 48-mo.= 0.0%, 60-mo. = 0.0%
For 2001 GM Trucks:
36-mo.= 0.0%, 48-mo.= 0.9%, 60-mo.= 2.9%
For 2002 GM Cars:
36-mo.= 0.0%, 48-mo.= 0.9%, 60-mo. = 2.9%
For 2002 GM Trucks:
36-mo.= 0.0%, 48-mo.= 2.9%, 60-mo.= 4.9%

 

TOYOTA PONDERS LOW-COST VEHICLES FOR DEVELOPING MARKETS
The word on the street is that Toyota Motor Corporation of Japan is looking closely at the world’s emerging automotive markets and preparing ultra-affordable vehicles that will be suited to these developing countries in the coming years. Latin American and Asian countries make up the bulk of Toyota’s intended targets for these vehicles. On the boards and in the wings at Toyota are a low-cost sport-utility vehicle and a compact car propelled by a small-displacement diesel engine.
Incentives on the Rise – Again by Joseph Szczesny (5/14/2001)

 

HONDA’S HOME-MARKET GOAL: A MILLION VEHICLES A YEAR
Honda Motor Company Ltd, Japan’s third biggest automaker, has a lofty sales goal for its domestic market: one million vehicle transactions for the business year beginning March 2004 and ending March 2005. Currently, Honda’s homegrown sales for the current March-to-March period are on track to reach a record 830,000 vehicles—impressive, but still a long way from the magic million figure. To help move the sales targets along, the company is spending around $425.4 million to increase the number of Honda showrooms in Japan from 2,300 to more than 2,500 by March of 2004.

 

NADA NOT PLAYING BALL WITH THE NFL
The president of the National Automotive Dealers Association (NADA) has told the National Football League to punt. The NFL wanted NADA to reschedule its annual convention—taking place in New Orleans next February 2-5—so that the league could extend its season another week, playing Super Bowl XXXVI in New Orleans on February 2nd. With 24,000 NADA conventioneers already coming, the town was booked, so NFL commissioner Paul Tagliabue asked NADA President Phillip Brady to reschedule. And Brady answered: Can’t do it. "We would love to be able to accommodate them," said NADA spokesman David Hyatt, "but we have a lot of things already in motion. It just isn’t possible." Hyatt cited the "500-plus" contracts already signed for the convention and the fact that many of the dealers have already booked their travel plans.

 

 

FACTOIDS:
One Out of Every 75 Odos is Loco
Vehicle mileage is a key factor in most vehicle purchases. It often determines consumer interest in a given vehicle and also is a major indication of price. However, according to Experian Automotive's National Vehicle Database, approximately one in 75 vehicle odometers does not reflect actual miles, has suspicious mileage or is broken.

 

 

FROM THE SOURCE:

From PR Newswire North Carolina law enforcement officers ticketed 4,170 drivers and passengers for failure to use seat belts and/or child safety seats during the third and final week of the fall "Click It or Ticket" campaign . . . BorgWarner Inc. is continuing its stock buyback program. "We are purchasing our stock during this period of instability because we remain confident about our future growth prospects," said John F. Fiedler, Chairman and Chief Executive Officer . . . EastGroup Properties is developing a 170,000 square foot facility to be leased by Tower Automotive in Canton, Mississippi. The $9 million facility will support Nissan North America's new assembly plant in Canton . . . Event marketing agency, The George P. Johnson Company, has acquired Designtroupe of Sydney, Australia, market leaders in the Asia-Pacific event

 

 

THE TICKER:

Autoliv (ALV), Closed 15.95, down 0.20

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ArvinMeritor (ARM), Closed 14.19, down 0.11

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American Axle (AXL), Closed 11.70, down 0.95

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Ballard Power Systems (BLDP), Closed 14.41, down 0.14

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Dana (DCN), Closed 14.35, down 1.02

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DaimlerChrysler (DCX), Closed 31.16, down 1.52

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Donnelly (DON), Closed 14.17, down 0.48

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Delphi Automotive (DPH), Closed 10.59, down 0.90

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Eaton (ETN), Closed 61.91, down 1.13

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Ford (F), Closed 16.43, down 0.50

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General Motors (GM), Closed 43.38, down 0.63

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Gentex (GNTX), Closed 21.45, up 1.62

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Goodyear (GT), Closed 19.27, down 0.54

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Johnson Controls (JCI), Closed 59.76, down 0.98

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Lear (LEA), Closed 25.14, down 1.42

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Magna International (MGA), Closed 47.20, down 0.37

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Nissan (NSANY), Closed 8.79, up 0.04

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Toyota (TM), Closed 53.00, down 1.50

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TRW (TRW), Closed 29.90, down 1.90

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Visteon (VC), Closed 12.25, down 1.37

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