Stop(s) Making Sense

Stop Making Sense...a great movie and great songs by Talking Heads.

One would expect that oil prices are negatively correlated with auto sales. Oil prices at the pump have gone from $4.30 a few months ago (in Chicago suburbs) to $1.57, down 63%. Such a massive drop within the space of nine months should result in massive increases in auto sales.......

But, this is the new reality, or the new paradigm per Alan G. and Ben B.

Chrysler will close all 30 of its manufacturing plants for a month, starting Friday, to conserve cash and match production to slowing demand, the Detroit automaker announced on Wednesday.
Ford announced it will shut down 10 of its North American assembly plants for an extra week in January due to the slumping U.S. auto market. Spokeswoman Angie Kozleski said the normal two-week holiday shutdown will be extended to Jan. 12 at all operating assembly plants except those in Claycomo, Mo., near Kansas City and the Dearborn, Mich., truck plant.

Honda Motor Co. now expects 185 billion yen ($2.06 billion) in group net profit for the fiscal year ending March 31, 2009 -- less than a third of the 600 billion yen it earned last fiscal year. Honda's worldwide vehicle sales in 2008 are expected to reach 3.77 million units, almost unchanged from 2007. Sales are plunging in the U.S. and other regions, with even previously healthy emerging markets getting battered in recent months, according to Honda. Underlining the tough times ahead, Honda President Fukui refused to set a vehicles sales target for 2009 -- an unusual move for Honda. To take responsibility for the faltering results, Honda directors will take a 10 percent pay cut and further bonus reductions are likely, he said. Earlier this month, Honda said it was pulling out of the glamorous but expensive Formula One racing to save costs and focus on its core car business. Fukui said Honda will focus on green technology, especially hybrid vehicles and small cars, to prepare for recovery in the long run. The company also trimmed annual investment spending by 60 billion yen ($674 million) to about 650 billion yen ($7.3 billion) to cut costs during hard times, including scrapping plans to introduce the Acura luxury line in Japan by 2010. Plans to develop a successor to the NSX sportscar were also canceled.Honda had already said it was cutting 760 temporary workers in Japan, or nearly 18 percent of its Japan temporary work force of 4,300. On Wednesday, Honda said another 450 temporary workers in Japan will be reduced through February.The plunging dollar, meanwhile, spells more trouble for Japan's automakers. For every yen the dollar declines, Honda loses about 18 billion yen ($200 million) in operating profit. In trading Wednesday, the dollar fell as low as 88.15 yen.To cope with sluggish sales worldwide, Fukui said Honda will halt expansion in Japan as well as abroad, including Turkey and India. With its plans to cut 78,000 vehicles, Nissan Motor Co. has now production by 225,000 vehicles over the last year, 16 percent of its initial production forecast for 1.398 million vehicles for the fiscal year.Toyota is also reducing production. In a key setback, Toyota said earlier this week that it's delaying indefinitely the start of production at its plant in Blue Springs, Mississippi. The plant had been scheduled to begin in 2010, marking the first time the gas-electric Prius hybrid would be built outside of Japan and China.
(All reports culled from AP releases)