It looks like the party is over. After doling out over two billion of American tax payers money, the aftermath has hit the dealer show rooms. The buying and spending was quite spirited in July and August when the program was in full force, but without the government backed incentive, the American public is not spending anymore.
Clunker Fallout
The big three have shown considerable drops in numbers after the buying frenzy. General Motors showed the biggest dip in sales posting a 45 percent downturn after the end of the clunkers program. Chrysler was right behind them with a 42 percent loss. Ford Motor Company, the fittest of all, showed a modest six percent drop in sales. The big winners from this program appear to be the Japanese corporations doing business here. They accounted for more than 50 percent of overall sales from the clunker program. Overall numbers show not quite five million fewer units were sold in September than in August.
General Motors, Ford, and Toyota reps are optimistic though. The slump was expected and the sales will start to rise in the near future. Fourth quarter numbers might start out slow, but the overall outlook of annual sales is expected to be better than in the previous three years. All manufacturers are expecting annual sales to be anywhere from the low nine millions to upwards of eleven million units sold this year, depending on which manufacturer is talking. Economic expansion and consumer confidence are two areas the experts are keeping a close eye on. All are hopeful that with the rise in these two areas, sales, not only in the auto industry, but across the board will continue to climb.
The windfall from all of this is in the recycling and metal industries. With all the clunkers that were traded in, these sectors have jumped into high gear. This should have a ripple effect in the economy, as the scrap metal and other materials are recycled into other new products. Freight hauling companies are hopeful that this means that the demand for products will rise, and more freight will be hauled across the country. A good economic indicator is how many tractor trailers are moving loads across the country. More and more are being spotted on the roads everyday.
Several big questions come to mind. Did the cash for clunker program jump start an ailing industry? Or did this just shift demand from the future to the right here, right now? Many union employees were recalled back to the assembly line as the automakers inventory was depleted. Will these recently called back workers stay on the assembly line? Or is another big slump on the horizon? And lastly, who was the big winner from this program? If judging from the numbers, it appears that the Japanese auto makers were the real victors, here. Detroit will have to come up with different ways to once again instill consumer confidence in them. Maybe, just maybe, this is the big awakening.
Posted in: Auto Industry News, The Economy, U.S. Automaker News.
The health risks associated with workers in the automotive industry were highlighted by a recent asbestos-related case in the United Kingdom. The recent case comes after a suit involving Kelvin Parker, a former installer of insulation and suspended ceilings at the Longbridge manufacturing plant.
Parker, 54, was originally diagnosed with mesothelioma in August 2007 and passed away on November 19, 2008. His family continued to pursue legal action against the company to blame for his asbestos exposure.
The primary cause of mesothelioma is exposure to asbestos. Mesothelioma is a rare cancer that typically develops in the lining of the lungs, heart or abdomen. In most cases, the victims are unaware of their condition until symptoms arise and the cancer has already reached the latest stages of development, leaving the patient with a poor prognosis.
The newest case involves another man who was formerly employed at the Longbridge site in Birmingham, England during the early 1960s.
This employee is seeking compensation for developing malignant mesothelioma and is looking for witnesses who may have worked at the site at the same time. The man’s lawyer said, “We have got a client who was exposed to asbestos dust and we are looking for witnesses. But this issue isn’t one that’s particular to one person. There could be hundreds of other people who are at risk.”
Asbestos has been utilized for decades by the automotive industry in products like brake pads and linings, clutch facings, valves and gaskets. Vehicles manufactured today are still built with asbestos brakes and clutches, just in smaller quantities than older parts.
Microscopic asbestos fibers that have been disturbed have the potential to remain in the air for a long period of time. The long duration of airborne asbestos fibers not only creates an immediate hazard, but increases the risk of workers inhaling the toxic particles even several days afterward.
Automotive mechanics are one of the main occupations still affected by asbestos exposure. Working on cars that contain older parts creates a constant risk and protective gear is rarely worn to prevent exposure.
Posted in: Auto Industry News.
In another effort to grant aid to the already struggling U.S. auto economy, Congress overwhelmingly approved government funding for green vehicle research. The approval of additional funding comes on the heels of another proposal that would increase fuel economy by 4.3 percent starting with model year 2012. New fuel requirements are estimated to cost the auto industry 60 billion over the span of four years.
The green vehicle research bill is sponsored mainly by Rep. Gary Peters, a democratic leader in Michigan. According to Peters, the bill would lead to “faster development” of advanced technologies. The bill swept through the house with a vote of 312-114, and it is now set to go to the Senate. 2.9 billion over the next five years with a 550 million start in October is up 200 million per year for the next five years. Allocation of the funds will go to the Energy Department which researches and develops battery, hydrogen fuel cell, hybrid and electric vehicles, and other engine management systems.
According to Peters, intense global competition will determine who will build the cars and trucks of the future, and if this new technology is developed and produced here in the United States it will create new American jobs. Peters also said that with strong bipartisan support, this bill could be fully funded this year.
In other news, President Barack Obama imposed a 35 percent tariff on imported Chinese tires. The levy came after Obama heard arguments from the United Steelworkers Union that imported tires were pushing American workers out of jobs. Hankook Tire Company, who has a market share of one quarter of the passenger car tire market, dropped 8.8 percent on the Seoul trading market. China’s Ministry of Commerce “strongly opposes” the tariff, and claims the United States violated specific rules of the World Trading Organization. China has responded by investigating U.S. poultry and auto parts, and say they are willing to work with the Obama administration and avoid a potential trade war.
An up and down week for the United States auto industry. The introduction of more government funding into the green vehicle sector, and a near miss of a trade war with China. It’s a bumpy ride, but at least it seems to be headed in the right direction.
Posted in: Alternative & Green Vehicles, Auto Industry News.
Tagged: auto industry news · green · green research bill
