AUTOMAKERS' CRISIS: Stimulus Package * USA - Obama team weighs up to $850 billion economic jolt

Washington,DC,USA –Yahoo News/Associated Press By JIM KUHNHENN -18 Dec 2008: -- President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, possibly $850 billion over two years, in his first test of legislative give and take with Congress... Obama's economic advisers are assembling a recovery plan and reaching out to members of Congress and their staffs. Obama aides cautioned that they have not settled on a specific grand total. But they noted that economists from across the political spectrum have recommended spending similar or even larger amounts to jolt the worsening economy... Obama is promoting a recovery plan that would feature spending on roads and other infrastructure projects, making government buildings energy-efficient, building and renovating schools and adopting environmentally friendly technologies...


* Automakers: Not much more time - Chrysler, Ford idle factories; GM delays new plant

Detroit,Mich,USA -Yahoo News/AP Auto, by Tom Krisher –17 Dec 2008: -- Chrysler is closing all its North American manufacturing plants for at least a month, the starkest move yet taken by U.S. automakers as they anxiously await word about government loans... The shutdown comes as The Wall Street Journal reported Thursday that Chrysler has restarted talks with General Motors about combining the two ailing automakers... Chrysler, GM and Ford have been taking dramatic steps as they struggle to survive the recession and U.S. sales have dipped to their slowest rate in 26 years. Chrysler and General Motors fear they might not have enough money to pay their bills in a matter of weeks... Attempting to cut costs, GM was halting construction of a plant tied to one of its most important projects, the Volt. Ford also said it will shut down 10 plants for an extra week in January because of sluggish sales... Chrysler said Wednesday it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19 at all 30 of its factories due to slumping sales... (AP – In this Sept. 12, 2008 file photo, assembly line robots weld the front cab of Chrysler's new 2009 Dodge) - (Play: Video KVUE-TV Austin,TX,USA)


COMMENT * Automotive industry crisis - the implications for logistics suppliers

USA -Transport Intelligence (London,UK), by Thomas Cullen -15 Dec 2008: -- ... Beyond banking, few sectors have been hit as hard by the global financial/economic crash as the car industry. Such has been the size and the speed of decline in the sector that it has been difficult to keep pace with the fall in sales... So what will be the implications for automotive logistics suppliers? If there is actually going to be a significant level of consolidation then there will be significant repercussions for certain players. For example, Ryder has enormous business with GM in the US. A failure of GM would result in a huge portion of Ryder's contract logistics business disappearing. That is also true for Penske, a key supplier for Ford in North America. However, for many such companies the compensation will be more business with other customers. For example, Toyota is also a large automotive customer for Ryder − and Toyota will be a major beneficiary of any collapse amongst the US 'big three'... Such examples are seen elsewhere around the world. Few major logistics companies are dependent on just one vehicle manufacturer. Within Japan and Western Europe there are examples of logistics companies built around just one vehicle manufacturer, for example Gefco in France, but that is owned by PSA Peugeot Citroen... Oddly, the beneficiaries are easier to identify. Volkswagen Group is emerging as a winner out of the present turmoil and it does a lot of business with German logistics services providers such as DB Schenker and Schnellecke Group. Yet Volkswagen also has a strong policy of diversifying its logistics supplier base so any expansion, for example into the US, is likely to use other more local providers... One effect of more centralisation in the automotive sector might be a decline in the extent of logistics outsourcing. Toyota, for example, owns much of its own logistics infrastructure, including finished vehicle logistics services in the US and a shipping line... One word of caution, though. The automotive sector is a past master of relieving governments of their money. Manufacturers have enormous political influence, not least through trade unions such as the United Auto Workers in the US. In countries such as Germany, France, Italy and Japan, car production is seen as iconic, not just to the economy but to national identity. States such as Sweden, Spain and even China are likely to consider subsidies in order to avoid the effects of assembly plant closures in the regions concerned... Consolidation in the automotive sector is very likely. Just do not think it will be quick or straightforward...