Better Than You Thought: Dynamite December

2013 Chevy Spark

Let's end 2012 with a pleasant surprise. December should turn out to be a dynamite sales month for the auto industry. Cars are moving. Trucks are rumbling. New sets of keys are being pressed into the hands of proud owners at a rate we thought we would never see again just a year ago.

Next year should be just as good, if not a little better. What could go wrong? What if the industry can't keep up with demand?

We will get to that in a few paragraphs. First, the good news...

With annual year-end clearance events in full swing, new-car sales are expected to surpass 1.35 million units in December, pushing the industry's closely followed seasonally adjusted annual rate (SAAR) to 15.2 million units, according to Kelley Blue Book, www.kbb.com, the leading provider of new and used car information. 

After a strong November and December, the final sales tally for 2012 should approach 14.5 million units overall.  This tally would amount to a more than 13 percent year-over-year increase and the third consecutive year of double-digit auto sales gains.  While incremental sales growth will continue in 2013, Kelley Blue Book does not expect to see a fourth consecutive year of double-digit sales gains.

With employment and consumer confidence expected to improve only modestly next year, Kelley Blue Book expects sales growth will come at a slower pace from this point forward.  While modest economic growth will help keep sales stable in 2013, Kelley Blue Book expects to see as many as 250,000 to 300,000 additional sales from consumers who will arrive at the end of their lease term next year. 

Although most signs point to additional sales growth in 2013, Kelley Blue Book will keep a close eye on the 'Fiscal Cliff' discussion, as a tax increase for middle-income households could slow sales growth through next year and beyond.

So, what could go wrong besides the Fiscal Cliff? How about this? The industry is not ready. I am not talking about the OEMs. I am talking about the supply chain that GM, Ford, Chrysler, Toyota and the rest depend on.

More on that will be published in Restore the Roar, a series of e-books that will be out early in 2012. For now, take a look at the sample chapters that I have posted at www.rodkackley.com

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Last Chance Mile: The Reinvention of an American Community is available now wherever books are sold including Amazon, Barnes & Noble and Abbott Press.

Special autographed editions are also on the shelves of Schuler Books & Music in Grand Rapids and Kentwood, Michigan and are also available by clicking the Buy Now button on this page.

Restoring The Roar: Ford Expansions

Ford Motor Company (NYSE: F) is spending more than $773 million on new equipment and capacity expansions across six manufacturing facilities in southeast Michigan as it delivers on a commitment to invest $6.2 billion in U.S. plants by 2015.

The investments in Michigan will create 2,350 new hourly jobs and allow the company to retain an additional 3,240 hourly jobs. The 2,350 new positions are part of the 12,000 hourly jobs that Ford is adding across the U.S. by 2015.

"Even as we wrap up an incredibly busy year of capacity expansions and product launches, we are continuing to look to the future,"  said Jim Tetreault, Ford vice president of North America Manufacturing. "These investments, many of which are already under way, will ensure our southeast Michigan manufacturing facilities can support our aggressive growth plans."

Expansion work at several plants started earlier this year to increase Ford's capacity to provide transmissions and axles to support growing demand for fuel efficient vehicles and F-Series pickup trucks.

In addition, over the next six months Ford will bring a new stamping press on line at Michigan Assembly Plant; install equipment for four new stamping presses at Dearborn Stamping Plant; and finish expansion work at Flat Rock Assembly Plant to produce the new Fusion next year.

Specifically, Ford is making investments at the following locations:

* Michigan Assembly Plant - $59.4 million for stamping press line expansion

* Dearborn Stamping Plant - $305 million for plant modernization, new press lines, scrap conveyor system and other machinery and equipment

* Flat Rock Assembly - $161 million for machinery and equipment to assemble the new Ford Fusion and as an additional production facility

* Sterling Axle Plant - $86 million for machinery and equipment investment to meet axle demand increase and future model changes

* Van Dyke Transmission - $87.7 million for machinery and equipment investment to meet capacity expansions for 6F35 and 6F50 transmissions

* Livonia Transmission - $74.7 million for machinery and equipment investment for transmission expansion and test equipment 

I will have more stories of the reinvention of manufacturing in Michigan in the Restore The Roar series of e-books that will be published in early 2013. The latest information on that will be available on this blog or at www.rodkackley.com.

 

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 Last Chance Mile: The Reinvention of an American Community is available now wherever books are sold including Schuler Books & Music in downtown Grand Rapids, Michigan and on 28th Street in Kentwood.

Hardcover, soft cover and e-book editions are also available from your favorite online retailers. Or you can simply click the Buy Now button at the top of this page for an autographed hard cover edition.

For free sample chapters of Last Chance Mile,  please go to www.rodkackley.com/

 

Whirlpool Gets Fed Support

The reinvention of manufacturing is a constant battle. Here is evidence of U.S. government support for American manufacturing, from Whirlpool Corp. in Benton Harbor, Michigan.

The U.S. Department of Commerce (DOC) took an important step Dec. 19, 2012 toward leveling the playing field for U.S. manufacturers as it gave its final ruling in a case involving imports of large residential washers from South Korea and Mexico. The DOC concluded that foreign manufacturers, including LG and Samsung, are dumping large residential washers into the U.S. market, violating U.S. and international trade laws.

The ruling was in response to a petition filed by Whirlpool Corporation (NYSE: WHR) in December 2011 to promote a fair and open global trading system, to provide U.S. consumers with greater choice and to reinforce its ability to continue to innovate and invest in the United States.

"This decision is an important victory for our 22,000 dedicated U.S. employees, the consumers we serve and the U.S. appliance industry," said Marc Bitzer, President, Whirlpool North America Region. "Whirlpool has made substantial investments to increase production here in the United States and to fuel innovation that creates superior products for consumers. On a level playing field, we are confident that Whirlpool will continue to produce leading innovative products demonstrating the vitality of American manufacturing."

In a separate case, the DOC also ruled that unlawful subsidies were provided on the same products from South Korea. The DOC determined countervailing duty margins of 72.30 percent for Daewoo and 1.85 percent for Samsung.

As part of the company's strategic commitment to invest in U.S. manufacturing to supply the U.S. market, Whirlpool Corp. has made significant investments at its Clyde, Ohio, plant where it manufactures large residential washers. As a result of these investments, Whirlpool Corp. now manufacturers all of its large residential washers for the U.S. market in Clyde, Ohio.

Next Steps:

 The U.S. International Trade Commission (ITC) is expected to vote in mid-January 2013regarding injury to the domestic industry caused by the dumped and subsidized imports

Final orders are expected to be published with the issuance of final affirmative determinations from the DOC and the ITC.

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Last Chance Mile: The Reinvention of an American Community is available wherever books are sold, like Schuler Books & Music in downtown Grand Rapids, Michigan and on 28th Street in Kentwood, Michigan.

It is also available online from www.rodkackley.com where you will find links to your favorite online retailers to order in hardcover, soft cover or e-book formats. Or you can simply click on the Buy Now button to order your autographed hard cover copy.

 

 

 

Good News, Bad News For Office Furniture

 

Herman Miller Inc. reported net sales in the Zeeland company’s second quarter of $441.8 million; a decrease of 0.9% from the same quarter last fiscal year. New orders in the second quarter of $475.8 million were 8.1% higher than the prior year. Sequentially, net sales in the quarter decreased 1.8% from the first quarter of this fiscal year, while orders were up 5.3% over the same period.

Brian Walker, Chief Executive Officer, stated, "While the quarter's sales came in below our expectations, we see progress and momentum in our strategy, evidenced by solid growth in consolidated orders and backlog,” CEO Brian Walker said in a statement issued along with the second-quarter earnings report.

“A combination of factors contributed to lower than anticipated sales in the quarter, including long-leadtime orders, disruption caused by the East Coast storm, and further weakening of demand in Europe,” he also said. “However, we're encouraged by the increased order activity reported by each of our segments and by the particular strength of our key growth initiatives."

Let’s flashback to 11 months ago, when Crain’s reported that the air was leaking out of the West Michigan office furniture industry’s ball that was bouncing higher in 2011. As Walker said in his earnings statement, new orders are there, the air is being pumped back in, but still the ball…for now…is laying flat on the floor.

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Steelcase Inc. reported third quarter revenue of $727.2 million and net income of $23.6 million, or $0.19 per share. Excluding restructuring costs, adjusted earnings were $0.22 per share. Revenue and earnings per share were in-line with company estimates. Steelcase reported $719.4 million of revenue and earnings of $0.17 per share in the third quarter of the prior year, including restructuring costs of approximately $0.02 per share.

 Organic revenue growth in the third quarter was 1 percent after adjusting for $8.2 million of unfavorable currency translation effects and a favorable impact of $6.0 million from recent dealer acquisitions. The Americas posted 3 percent organic growth over the prior year while EMEA experienced a 1 percent organic decline. Revenue continued to include a higher mix of project business from some of the company's largest corporate customers as compared to prior year.

 "We were pleased that the Americas expanded their adjusted operating margin by 110 basis points in the third quarter compared to the prior year, despite modest revenue growth," said James P. Hackett, president and CEO. "While growth rates have moderated, we expect the fourth quarter will mark the twelfth consecutive quarter of organic revenue growth in the Americas."

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Last Chance Mile: The Reinvention of an American Community is available wherever books are sold.