Hello and thank you for visiting on this wonderful July, 9 2009. First big news of the day: GM is set to exit bankruptcy court. Apparently (and frankly, as expected) the company is now largely owned by the U.S. government. As this is a developing topic, I will have much better details next week so please check back. This is bound to get/remain ugly.

In other news, the Wall Street Journal recently released a report speculating the passage of a new Department of Transportation bill in congress. This was as of July 2^nd. This transportation bill, which was being introduced by House Democrats, is reportedly just in its beginning stages so there is bound to be plenty of development in this story. This bill would cost 450 billion dollar over the next 6 years (yes, yes, I know) if passed. What would this bill do you ask?

Included in the bill would be several initiatives to reduce oil consumption in the U.S.  This is reportedly in an effort to stimulate economic growth (and not for the purpose of conservation, that is way down the list of important things in this country at the moment it would appear).  Additionally, this bill would consolidate the number of Transportation Department programs used to disperse federal tax money to state programs (to under 6). This would be a positive thing as it would allow local agencies to give more specific attention to where the money is going exactly (which could wind up saving us tax money in the end). For some this is just another example of our big spending habits, which they believe will get us further and further into this mess we’ve created. To an extent, I agree.

That’s all for this week. Next week is sure to bring some excitement.

Happy July 4th.. err.. two days late. I hope you enjoyed your holiday as much as I know I did. It is the month of July, which can only mean one thing: a progress report of the first half of the year is in order. June offered the auto industry something special (according to analysts anyway). Last month was the month that those in know expected for the auto industry to break through the 10,000,000 dollar barrier and prove to the nation that we are finally seeing a long overdue recovery in auto sells.. Well, um.. to put it lightly that didn’t happen. In fact, overall auto sells fell from 9.9 million in May to 9.5 million in June. While this is not necessarily good news we can at least take solace in the fact that doom and gloom political pundits making predictions at the beginning of the year of our impending GREAT DEPRESSION BY JUNE were wrong. (something I always love to see)

So the entire industry fell a little lower but there has to be a silver lining! There is, and it is measured by the rate of failure. Ford had something to celebrate (sort of). While the entire industry was losing profit margins in the American market, they only fell 11%! The good news for them? Everybody else fell more, giving them a 3 point increase in overall market share: they now control 18% of the market. That means that Ford (a company that by many opinions should have failed like many of their models do years ago) has outsold Toyota in the first 6 months of this year to become the 2nd place automaker only to be outsold by GM! Toyota is not the only company losing ground in the American market though… Nissan has fallen out of the big 6! Who took their place: Hyundai. This marks the first time (EVER) that the 6 best selling automakers in the U.S. have not been based in the U.S. and Japan alone. One more shift that I find to be interesting and then I’ll leave you to your exciting life.. in the luxury category. Lexus has been outsold in the U.S. market by none other than the German automaker B.M.W. This must be exciting news for them, many (myself included) really didn’t think that luxury brands would survive in this GREAT DEPRESSION we are now going through.. And we thought they had it rough in the 1930’s…

Well hey there. As we enter the last week of June/ first week of July more changes to the auto industry are coming down the wire. As of yesterday, 6 of the biggest automakers have announced plans to cease production of all diesel-running vehicles in the US by 2010. What does this mean for the future of diesel; anybody’s guess at this point. This may be a hot button issue in regards to saving money on gas because diesel engines can get up to 30% higher gas mileage than a standard fuel vehicle. The issue that the auto companies are facing is the price of Diesel engines. On average many components of a diesel engine can drive the retail price of the vehicle up as much as $8,000, something auto companies aren’t willing to place any bets on (and who can blame them in this market). So far GM, Ford, and Chrysler as well as Japan’s Honda, Toyota, and Nissan are the companies I am talking about here. This is of course excluding German automakers such as BMW, Audi, Mercedes, and Volkswagen, all of whom are still producing diesel fueled engines in the US market. What we have yet to see is if they will follow in the example of these other 6 companies. Something I wonder, does this move away from diesel pave the way for the massive onset of the electric car? I guess we’ll be able to tell by next year.

In other news, the Italian automaker Fiat (which bought out Chrysler earlier this year) has announced plans to begin reintroducing themselves into the American market by 2011. Specific plans are at this point nothing more than speculation; I wager that we will hear much more on this in the coming months.

Finally I’d like to end today’s article on a positive note (something I so rarely get to do). Do you remember the American Recovery and Reinvestment Act (ARRA)? This was one of the first moves of the Obama administration in an effort to combat unemployment and stimulate the economy when it was signed into law on February 17. This agency has released a progress report regarding the release of funds into the economy. You can check out the specifics here www.recovery.gov . As far as the Department of Transportation: the agency is claiming that the massive infrastructure overhaul that was promised in campaign season last year, is being delivered upon with up to 50 percent of the highway reconstruction funds having been allocated within the first 150 days. This is very good news for the economy as it will definitely combat unemployment in a big way. You can read more about this on the DOT blog at http://fastlane.dot.gov .

Awesome news today! Today marks the first time that GM has started test drives for the pre-production Chevy Volt extended range electric car. This comes just one day after the company announced that by October, GM will have 4,000 less salaried executives and other employees (probably taking the advice of smart people for a change). While the real deal won’t be available for you to purchase until late next year, It is pretty much safe to say that the day of the electric car has finally come… well, sort of. The Lithium Ion battery has actually not yet been proven to work in a high-volume hybrid car, but this is something that they’ll work out in time for the big release next year (hopefully). GM says that they plan to build around 80 prototypes of the vehicle to use for testing throughout the next year. We will actually have affordable electric cars on the road in a year’s time. Am I the only one that’s excited about this? I’ll include a picture c/o GM at the end of the article.

In a follow up to an article I wrote last week concerning the Cash for Guzzlers bill under consideration in congress: The bill passed through both the House and the Senate. As of 4:30 yesterday President Obama signed the bill into law. This voucher program will go into effect next month (5 days) and will provide assistance to any owner of a gas-guzzler wishing to purchase a more fuel-efficient car. Any person that is interested in acquiring one of these vouchers (and believe it or not, these aren’t limited to just drivers of SUV’s and large trucks) can access a brand new government website www.cars.gov to find out if they are eligible.

That’s all for this week. It’ll get better, it has to.

Apparently there is this argument that big SUV’s and big trucks are a major profit maker, especially for the big 3 in Detroit. Now I will be the first to admit that earlier in the decade this was an absolute truth. Somewhere around 2003, everything was about bigger and better. While it was true 6 years ago, time tends to change everything. This has obviously in these past couple of years proven to be false due to the economic downturn and almost entire halt of the lucrative Big Truck market. Increasing concern for the environment, and to be quite honest, practicality in regards to the price of gasoline has driven this argument into obscurity. However, if there was any doubt in your mind about this, there was a study released from the University of Michigan Transportation Research Institute that basically confirms what I just said. They insist that the Detroit 3 would be more likely in increase their profits, and less likely to lose money if they geared their production to meet fuel efficiency standards that far exceed future government regulations. This isn’t a new concept: the idea of making a prediction based on a trend, and making decisions that will bring success in the future. Honestly, I can’t say whether or not these auto companies have made the necessary changes (only time will tell us I suppose), but it does force me to beg the question, Why didn’t they respond to people’s warning that this economic downturn would occur years ago? The study also sheds light on this by adding that for these companies to become viable again in the future, they are advised to replace existing management teams. Sounds smart to me, replace the people who refused to listen to THEIR OWN researchers for THREE DECADES.

In other news today, Japan is seeing a restructuring of its major auto companies’ leadership. Toyota announced today that the current president is stepping down and being replaced by the grandson of the company’s founder. Toyota claims that the company will strive to remain economically viable in the future by weeding out production of oversized cars, and focusing on their production of smaller more fuel efficient vehicles. Sound familiar?

On top of Toyota’s announcement, the ONLY Japanese automaker to actually post profit during this recession, Honda, has announced that they are replacing THEIR president. It just goes to show, if you are a higher-up in the auto industry, don’t count on the success of your company to be an indicator of the safety of your job. (ouch.) That’s all for now..

Here’s another interesting piece of auto industry news I happened across today. You may be familiar with a piece of legislation that has been discussed for a few months now and was voted on by the House of Representatives yesterday. This legislation is nicknamed “Cash for Guzzlers” and entails pretty much what you would expect given the title. This bill would allocate 1 billion dollars to a voucher system for car owners who wish to trade in “gas guzzlers” for a smaller, more fuel-efficient vehicle. Each owner would be eligible to receive 4500 dollars towards their purchase of the new vehicle. A novel idea, I mean, I think this would be a nice way to stimulate the populous: encouraging them to simultaneously buy an American vehicle and reduce their carbon footprint (which regardless of whether or not you like Al Gore, actually is an important issue).

Some lawmakers are calling this legislation just another attempt to bail out the auto industry. Bailoutbailoutbailout. Maybe the government is giving to much money to failing businesses, I’m not here to make any judgments Regardless of this squabbling, the bail.. I mean bill passed the House by just 24 votes and now moves into the Senate where it will probably die a painful and public death. This voucher system (if passed) would be in effect until November of this year.

In other news, a new car manufacturer called V-Vehicle will soon be opening its doors in Louisiana. This is just the latest from the Louisiana Economic Development team, and should do wonders for the (approximately) 1400 people it will employ. This company is another step in the right direction, as they will specialize in the production of high gas mileage vehicles. It’s got to worth something, I mean.. T. Boone Pickens attached his name to it as one of the chief investors. That guy is so much fun.

That’s all for this week. Wish me a happy birthday! (tomorrow)

I recently read a story about a Florida couple who arranged to have their vehicle shipped to them from their summer home in New York. They chose an auto shipping company based out of Fort Lauderdale for the service. Now with a situation like this the transport job was supposed to be complete in a matter of days: a week at the most. Six weeks later this couple found themselves scratching their heads wondering why their car had not yet been delivered. So what were they to do in this situation? They called the company.

This turned out to be a fruitful as CBS’s Matlock 2020 (which if you’ve never heard of is essentially Matlock set in the year 2020… if failed, as did this metaphor). With the company turning a blind eye to them over the phone, the natural next step would be to go to them in person to see what happened to their car. They sent their daughter who was told that their car was sitting on a transporter (those large trucks that carry around 6 vehicles at a time) and that it would be delivered in the next 4 days. With this information, they sat at home and held their breath. This hope didn’t last long, as predictably the car still didn’t come.

After 6 weeks of no car, they sent their daughter back down to the lot. The company continued to swear up and down that they didn’t have her parent’s car… this was until the young woman spotted the car sitting on their lot. It was right there the whole time!

You will be happy to hear that the FMCSA has revoked this business’ license to transport cars. Don’t let this story shun you from having your car transported. It turns out this company had received 20 – 30 complaints about the same basic problem before finally being shut down.

As everybody knows by now, GM, the nation’s largest auto manufacturers effectively bit the dust on Monday. It is a little astounding to me how we have a special name for a large business failing (filing for chapter 11 sounds like bureaucratic jargon for the end of a work day). They announced that they would be filing for chapter 11 bankruptcy last week, though honestly I think we would all be denying ourselves the truth if we say that we haven’t seen this coming for a long time now. So what does this mean for the company and its vast network of employees?

GM is painting as a chance for reinvention. They are describing this epic failure on taxpayer dollars as a chance to revitalize their failing business model to keep themselves competitive in a global market. So far, this bankruptcy does not mean massive layoffs (other than the ones that have already occurred) or cessation of operation (don’t worry, you can still buy American.. if you want to). So are we led to believe that a massive financial loss will do nothing but revitalize their company? Not exactly. One of the first places we will see a gradual change is in dealerships. Their North American Vice President of Sales and Marketing Mark LaNeve says that dealerships will begin to disappear immediately. He goes on further to state that the company will make every effort to let the customer know when their local dealership will be going under, so really this will just be a slight inconvenience.

So what exactly is this NEW GM supposed to look like? To begin with they are going to be producing fewer brands (depth in specificity rather than wide breadth of production), fewer models (the same idea), and fewer dealers (they will be better placed, better supported). So, I understand that they are doing things – making changes that will make them a more viable company in the future. My question is, why does GM feel the need to paint this chapter 11 filing as a success? Everybody knows that is not the case (that’s not an opinion, I think).

In my last post, I discussed the last report on the trend of the auto transport industryThis week, why don’t we take a look at our transportation czar. In the auto transport industry many aspects of the business are contingent upon decisions made by this person. Decisions such as which projects in the transportation sector receive funding, or rather, which projects are most important and are thus worthy of receiving funding. This is an important person for our industry, so lets go ahead and put a face behind the name.

Our current Secretary of Transportation is Ray LaHood. On January 24, he was nominated by president Obama for the position after serving as a representative of Illinois for 14 years. As Obama’s first republican nomination, many have seen his appointment as a mere ploy to demonstrate his bipartisanship. I say this because at the time of his nomination, he served on none of the house committees involving transportation (though he had before in years past). It is the opinion of some that he does not wield much influence in regards to the transportation decisions, many believe that this influence belongs to James Oberstar who chairs the House Transportation and Infrastructure Committee (though this can be argued both ways, I don’t feel the need to go into it). Nevertheless this position is an important one. After all, LaHood leads an agency that oversees 55,000 employees, and a 70 billion dollar budget.

Summer is finally here which means quite a few things. Energy prices rise every summer without fail. With this gasoline prices rise (as they do every summer). What does this mean for the auto transport industry? A rise in students being out of school, people who we can affectionately refer to as snowbirds, and an overall rise in summer travelers means that the demand for auto transport will rise as well. How do we deal with these two changes with regards to the auto transport industry?

Now I think it’s important to point out that this rise in gas prices is not that terrible in comparison to the fiasco that was gasoline prices last year. However this is a rise we must consider. Is it cost efficient to continue transporting cars by means of private transport companies. Considering the options, I believe it is cost effective. It just seems to me to be much easier to go to a small transport service that will give you more personalized attention.  All of this bodes quite well for an auto transport company and the consumer. It seems to me that with relatively lower cost in actual shipping that a profit margin can be easily found while simultaneously giving good news to these people who want to have their cars shipped to a desired location.