WOW!

The stress level has been up significantly for the last 48 hours or so. Mainly due to work demands. If I could summarize the level of activity and the emotion tied to it I would use the classic quote from Dr. Egon Spengler (Ghostbuster)

Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.

On the positive side I’ve been managing it quite well – or I feel that I have been. Who knows, I may be off, but still.

Chicago Bears…

Roughly a week ago I stated my thoughts on the massive loss to the Cincinnati Bengals, and let’s face it, it was a blowout. The victory of the Cleveland Browns was UGLY. Sure, it was a win… against the Browns… but the level of play just goes to show how poor the team is right now.

One problem seen was how vulnerable Jay Cutler is. Being sacked 4 times in a game is going to really take a toll and goes to highlights weaknesses of the offensive line. You can best your bottom dollar other teams are paying attention to this.

Offensively the Bears could not convert. They only managed 2 touchdowns in 7 trips to the red zone. Going up against teams like Minnesota or Philadelphia will not be pleasant if this continues to be the track record.

From a defense perspective the team played well. While far from stellar, the efforts of the defensive squad should provide a confidence boost after the Bengals massacre.

Ford…

Did you see that Ford posted a $1 billion profit for the 3rd quarter?

Impressive.

While I would be willing to guess a portion of the results are due to the Cash for Clunkers it is a very positive sign in the face of GM and Chrysler.

Let’s not flick off a judge…

A bit of advice for someone who is going infront of a judge – don’t flick him or her off.

Kane Kellett, 24, landed in jail for six months after he raised his right hand, middle finger extended, before Judge G. Martin Zopp in McHenry County Court

Yea, good call on that one.

Looks like Ford may have finally found a buyer for Volvo.  Surprise, surprise!  It’s a company out of China.

Ford Motor Co. narrowed talks on the sale of its Volvo Car unit to one bidder, a consortium led by China’s Zhejiang Geely Holding Group Co.

Ford will be holding more “detailed and focused negotiations with Geely,” having chosen the Chinese company as the “preferred bidder,” the U.S. carmaker said in a statement today.

Ford is asking $2B for the brand, roughly 1/3 of what they paid for it.  With the Volvo platform totally integrated into Ford’s product line, it will be very interesting to see how such a sale would play out.  Also, would there be any anti-trust issues facing the deal.

Chinese companies are really picking up assets during this fire sale, aren’t they?

I was wondering when someone was going to point out that the small banks (or companies) that did not get bail-outs can not compete against those that obtained government funding.

Ironically, it is the FDIC head that points this out:

Community banks are coming under intense pressure from a crumbling commercial real estate market, a weak economy — and lop-sided competition with banking goliaths deemed too big to fail, FDIC Chairman Sheila Bair said Monday.

…

‘Too big to fail’ has become worse,” Bair told USA TODAY. “It’s become explicit when it was implicit before. It creates competitive disparities between large and small institutions, because everybody knows small institutions can fail. So it’s more expensive for them to raise capital and secure funding.”

When will “too big to fail” end?

Does the fact that FDIC Chairman Sheila Bair says “too big to fail” must end act as a warning to anyone?

Another perspective on the bail-out subject – Will other industries experience the same results?  Will Ford be able to, ultimately, compete against a government backed GM?

I’m not so sure what to make of this. Ford, Nissan and Tesla Motors are rumored to be in line for government loans in order to develop “green” technology.

Dozens of auto companies, suppliers and battery makers have sought a total of $38 billion from the loan program. Ford has asked to receive $5 billion in loans by 2011, but it was unclear how much money the automaker would receive. Nissan has applied for an undisclosed amount of assistance, while Tesla has sought $450 million.

..

The loans were designed to help the auto manufacturers meet new fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40 percent increase over current standards.

While they are not “bail out” loans I still feel a bit odd about this, especially since Ford had been pushing the whole “we don’t need loans” concept since last fall. It’s the “little engine that could” feeling. I want them to make it and even though this loan isn’t a bail out, per se, the fact they went to the bar for a drink is a wee bit disappointing to me.

This is exactly what I expect to see with a number of automotive suppliers in the next several months.

Auto parts supplier Visteon Corp. said Thursday it — along with some of its U.S. units — has filed for Chapter 11 bankruptcy protection, as the company struggles with reduced demand from automakers amid plans for extended plant shutdowns this summer.

Just a bit of history on Visteon – this company found independence from Ford back in 2000 but has struggled along the way. With worldwide sales of roughly 8.7 billion the company depended on Ford, GM, Chrysler, Nissan and Hyundai for the majority of their sales. Obviously, with none of those companies putting out stellar performances, Visteon was going to take a hit.

Roughly 30,000 people will be impacted by this bankruptcy but it is unclear how they will be impacted? Will it be in the form of cuts? Will the company assets be sold off? All we know is the company has roughly 5 billion in debt and liabilities that will need to be addressed.

Looking at the economy, why would anyone want to buy a new (or a “new to you” car) at this point?

Here are the negatives facing consumers:

• Decreasing consumer confidence
• Unknown job market and employment situation
• Unavailable credit for even what would normally be considered “healthy” consumers
• The fate of automotive makers – why buy from someone who may no longer be in business

On the positive side:

• Potential tax credits for individuals who purchase
• Automotive makers are providing unprecedented discounts
• Dealers are heavy on inventory and want to move product

Let us say one does want to buy a car, does that mean new or used? We should first take a step back and determine how long you intend on keeping the car. Keeping in mind that the days of easy credit may long be past, and the car buying experience may be once in ever 10 years rather than once in every three, a buyer should put a lot of thought into this decision. If that is the case remains to be seen, but it would not hurt to plan in such a manner.

Scenario #1: New

You want a new car. Great! Now it is time to start asking some questions about what the car will do for you… More specifically:

• What do you want in the car?
• How do you expect your lifestyle to change in the next 5 to 10 years?
• How many miles do you drive every year?
• Do you plan on moving, and would there be dealers in that area?
• How much do you want to spend on yearly maintenance?

Now that you’ve determined what is important in your new vehicle, and because you expect this purchase to last for some time, you should focus on the companies that expect to be around to support your auto. Immediately cut any car company that you don’t believe will be around in 10 years. That means GM and Chrysler. That already our a lot of fat for you – including Hummer, Pontiac, Saab, Saturn, Dodge and Jeep – along with a whole other range of cars. This allows you to focus on the automakers that are expected to survive – Toyota, Honda, VW, Ford* – when starting your research.

Head over to JDPower, Edmunds, Motortrend, Lemonfree.com and caranddriver.com to see what vehicles fit your needs. Chances are you will find a number of automotive critic reviews, individual reviews and enough safety information to make your head spin. Once you’ve determined your vehicle, get the invoice information from one of the sites you did your research from and start pounding the pavement. Go to a number of dealships, get a number of quotes and play the system. You need to remember that they need you more than you need them. Leverage that fact and press for a deal.

Scenario #2: Used

So you’ve decided a used car is what you need. Perfect!

Notice that I had originally asked why how long you plan on keeping this car? If you’ve made the decision that a used will fit your needs or budget, just simply be aware of potential lifespan issues you may face down the road. A 5 year old car may look good now but it may mean you will have to purchase a new car in 5 to 7 years as well.

I would suggest the initial steps to finding the car of your choice would be the same as researching for a new vehicle. Depending on the age of the car you are looking at, you may have a significant advantage in the amount of research available to you. By now the recall information, known mechanical issues, and detailed user satisfaction information is available all over the net. You can find dedicated user forums that specialize in your choice, pop by enthusiast websites or find a social networking site that can provide you with information.

Now start looking for inventory. Check Cars.com to see the number of matches you can find, check the Kelley Blue Book price listing, and start pounding the pavement and negotiating with the dealships.

But how are you going to pay for this?

Chances are you do not have a huge stack of cash just burning a hole in your pocket. If that is the case, you will need to arrange financing for your purchase. While it is true dealerships have the ability to provide financing, you may get a better deal by looking around.

Here are a few resources to check out:

• Capital One
• Bankrate
• E-Loan

Just remember..

Make sure you take advantage of the information on the internet and remember that you are in control. There is no rush, nor is there a need to rush. Find what works for you and take advantage of the current environment if you can.

*I say Ford because they appear to be rather strong – comparatively speaking – to GM and Chrysler.

Google Latitude

A number of weeks ago Google announced their “Google Latitude”, an application one can load on their smart phone in order to let others know your location, and I was all excited to share with the world just how little I travel in any given day.  Sure, people have issues with the privacy issues (are you being tracked, what have you) but I think it’s quite cool.  

Today I received an invitation from a close friend, so I decided to get off my bum and install the application on my phone.  Yea, too bad the iPhone version isn’t ready.  The application is in development, but still… I feel a bit left out.  

It’s that time for Car sales numbers…

No one had expected the car sales numbers to be positive but the pain automakers are facing continues to grow.  Look at how badly the sales results are off:

• GM: 53%
• Ford: 48%
• Chrysler: 44%
• Toyota: 40%
• Honda: 38%
• Nissan: 37%

Obviously the import automakers are also hurting, but I still don’t understand how GM and Chrysler can make the case that the government should help them survive.  Capital needs grew beyond the original forecast which lead to GM to ask for an additional $16.6 Billion from Uncle Sam, it makes me wonder how much more cash we can throw at this problem before the people of this nation say enough is enough.

Update: 3/3/09 11:23PM update

Most agree that the economy is in the tank, and we all know auto sales are total crap, so let me ask you this question.  With the launch of the 2009/2010 models, why would the car companies raise their prices?  Saying “inflation” in the largest period of deflation in recent memory won’t work.

Also, why doesn’t GM just kill off Opel, Saab, Hummer and Saturn? Saturn has never turned a profit for the company.  NEVER. Why keep the company alive if it cannot survive as stand alone business?  

I’m looking forward to Thursday when the GM Bondholders meet with the Govn’t auto taskforce…

I understand there is a significant cost behind the architecture, infrastructure and deployment a network the size that Comcast has developed, but one would think that the company would also be able to successfully run the network once in place, wouldn’t you?

Whenever the weather changes, be it a drop in temperature, rain, or significant wind, the Internet service provided by Comcast either slows down noticeably or all together stops.  When one calls the support center, most times, they have no clue as to a) any issue or b) how to help you.

I’m not saying they are evil, as others do, but come on! For $55 a month I would expect better service…

Tim Geithner and his inspiring confidence

During the Senate nomination of Tim Geithner, David Axelrod called on individuals to look past Geithner’s tax errors because Tim “inspires great confidence” and Rahm Emanuel called Geithner “the right man for the job.” 

Well, take a look what happens when the right man for the job, who inspires great confidence, speaks:

Obviously, that reflects the confidence of Wallst. 

Ford and GM see the car market stabilizing

Maybe my observation from two weeks ago was right after all…  I made the comment that I noticed a number of “new” cars on the road.  Well, a number of cars that had temporary license plates.  Despite having horrific sales in January, Ford and GM now say the automotive market is showing signs of stabilization.

Jim Farley, Ford Motor Co.’s global marketing chief, said Wednesday that seasonally adjusted retail sales demand has held steady for the past four months. Meanwhile, the country’s used car market has come “roaring back” since January.

“That shows me that credit’s available,” Farley said after a Ford presentation at the Chicago Auto Show. “When we’re seeing the kind of growth in the used car market that we’ve seen in the last six weeks, that is a really important milestone for the bottoming out of the industry.”

While new cars are not moving, it looks like the used car market MAY be picking up a bit.

was just an anomaly – Ford Motors just announced January 2009 sales figures that are down 40% over January 2008 figures. For the month of January, the company only sold 93,060 light vehicles (cars, not trucks)…

This kind of makes me wonder how long Ford will be able to say they are not in need of Government funding in order to survive.

UPDATE: GM Sales down 49% in January

From the “Captain Obvious” news headlines, December automotive sales where pathetic for just about all automakers.  I think everyone had expected the numbers to be bad, much in the same way the December retail number that will come out this week will be miserable, but how longer can the auto industry keep afloat while putting up sales number like this:

Toyota – 35% decline
Honda – 35% decline
Chrysler – 53% decline
Ford – 32% decline
Nissan – 31% decline
GM – 31% decline
Daimer – 24% decline
VW – 14% decline
BMW – 36% decline

The two scary number out of the pack came from GM and Chrysler.  

First, General Motors sold the fewest vehicles in a year since 1959. Think about that for a moment…  GM sold more cars 50 years ago – when there was NO MAJOR interstate highway system yet built.  (for the record, most highways were completed between 1960 and 1990)  So, General motors was selling more cars when there were less roads and less people in the United States than today.

The second number, the one that really caught the attention of market analysts, was the 53% decline Chrysler posted.  Ouch!   What could have been the cause for such a drastic decline in their sales?  Did customers expect the company to go bankrupt and stay away from their products, much like the company expected? Was it due to product line – simple lack of demand? Was their some other unknown that the market should be paying attention to?

There was a bit of positive of news – Subaru said its where sales higher in 2008 on strong demand for Forester and Impreza models, which allowed the company to be the only automaker to post a year-over-year sales increase.

As I’ve been saying for months now, it will get a lot worse before it gets better. I believe the news out of Chrysler now puts them 1st in line to go under.