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AUTOS' COMMENT & OPINIONS WORLDWIDE
Detroit is running low on optimism
* USA - Ford, DaimlerChrysler face tough day in credit arena
San Francisco CAL,USA -MarketWatch, by Simona Covel -Sep 15, 2006: -- The credit community cast a wary eye toward the automotive sector Friday, as Ford Motor Co.'s latest restructuring plans met with skepticism and a ratings agency knocked healthier DaimlerChrysler AG rating a notch closer to dreaded junk status... Ford, for its part, announced expansions to its ongoing restructuring plan - but ratings agencies and analysts deemed the cuts too little. DaimlerChrysler - in recent years considered the most stable of the Detroit-linked auto makers - was chastised by ratings agencies after executives slashed the company's profit outlook due to troubles in the U.S. Chrysler unit... Though investor sentiment in the auto sector has improved in recent months, Friday's events served as a reminder that in North America, auto makers remain under relentless pressure from high gas prices, labor costs and a shift in consumer tastes away from larger, higher profit-margin trucks and sport utility vehicles... The General Motors Corp. front was quiet, an ongoing period of calm for Detroit's largest auto company, which is undergoing its own attempt at a renaissance... Moody's Investors Service knocked DaimlerChrysler a notch to Baa1 - which gives the company two more rungs until it hits speculative grade. The new lower rating is on review for yet another cut, Moody's said... Rival ratings agency Standard & Poor's, which rates DaimlerChrysler a notch lower than Moody's new level also offered warnings. S&P analysts noted they've "been skeptical of Chrysler's long-range prospects for a long time," revising the parent company's outlook to stable, from positive... Fitch, which affirmed its ratings of the company at triple-B-plus, struck a more upbeat note, saying "good performance of the group's other divisions... mitigate somewhat the deterioration at Chrysler"...
* USA - Detroit Flails in Latest Effort to Reinvent Itself
Detroit,Mich,USA -The New York Times (NY,USA), by Micheline Maynard -Sept 16, 2006: -- Despite insisting all this year that they had solutions to their financial struggles well in hand, both the Ford Motor Company and the Chrysler Group conceded Friday that the steps they had taken were not working and that more bad news was coming in one of the deepest auto industry crises in Detroit’s history... Ford, which has held second place behind G.M. for 70 years, admitted for the first time that it would inevitably be ceding that spot to Toyota because of slumping sales and its decision Friday to close more factories and cut thousands of additional jobs. It also said it did not expect to make a profit in North America until 2009... At the same time, the Chrysler Group, also pummeled by the decline in sales of big sport utility vehicles and pickup trucks, said it would report a loss for this summer of $1.5 billion, more than double what it had originally anticipated... Its parent, DaimlerChrysler, also signaled that it did not see how to build a subcompact car profitably in North America, forcing it to turn to China or another Asian carmaker to help build one overseas... For its part, G.M., which is cutting 30,000 jobs and closing nearly a dozen plants, is set to decide within a month whether it wanted to link with a Japanese and a French auto company, a prospect that has rattled union members as well as state officials where G.M. employees live and work...
* USA - Business as usual is dead in Detroit
Detroit,Mich,USA -The Detroit Free Press, by Daniel Howes -16 Sept 2006: -- Detroit's way of doing business received its death sentence Friday, a generation later than it should have... If there's a message in Ford Motor Co.'s accelerated restructuring, painful and speedy as it is likely to be over the next year, it's that the Dearborn automaker existed in a fantasy world rooted in another century. There, market share was more important than profitability, capital was routinely destroyed and the Detroit way thumbed its collective nose at accepted business practices... Only in Detroit do they pay people not to work... "We really knew this was coming," said David Cole, president of the Center for Automotive Research in Ann Arbor. "None of it was a surprise. What's unfortunate is you can't get people to react without a crisis."... With so much bad news coming from Detroit these days, the overwhelming temptation is to conclude that the only future in the American auto industry is one of decline... But that's not true -- certainly not for Detroit's foreign-owned rivals and it doesn't need to be for Detroit, either... "One of the messages here," Cole said, "is you've got a crisis. Use it well."...
posted by Unknown @ 11:15 AM
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