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    1. Member Uber Wagon's Avatar
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      08-14-2019 01:30 PM #1


      (Reuters) - The top two U.S. automakers are preparing for a possible economic downturn, the companies said on Tuesday, as an ongoing trade war between Washington and Beijing fuels fears of a global recession.

      Tit-for-tat tariffs have increased raw material costs for the global auto industry, which is already dealing with weak demand in both China and the United States.

      Ford Motor Co (F.N) has a cash buffer of $20 billion for a potential downturn event, Ford North American Chief Financial Officer Matt Fields said at a J.P. Morgan Conference in New York.

      Deferring non-essential capital expenditure and considering a shift to lower-priced vehicles are among the few things GM will look at as part of its “downturn planning” to save costs.

      Ford said it was “proactively” evaluating its future moves, as it works with economists to model the severity of a possible recession.

      Fear of a recession has dominated trading on Wall Street this year and spurred a bout of extreme volatility following President Donald Trump’s announcement of a new round of tariffs on Aug. 1.
      https://www.reuters.com/article/us-u...-idUSKCN1V31RO



      The top two U.S. automakers are preparing for a possible economic downturn, the companies said on Tuesday, as an ongoing trade war between Washington and Beijing fuels fears of a global recession.

      Tit-for-tat tariffs have increased raw material costs for the global auto industry, which is already dealing with weak demand in both China and the United States.
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      Ford Motor Co has a cash buffer of $20 billion for a potential downturn event, Ford North American Chief Financial Officer Matt Fields said at a J.P. Morgan Conference in New York.

      General Motors has $18 billion in cash, with the potential to pay two years worth of dividends, the company's finance head, Dhivya Suryadevara, said at the conference.

      On the same day, responding to pressure from businesses and growing fears that a trade war is threatening the U.S. economy, the Trump administration said it was delaying most of the import taxes it planned to impose on Chinese goods and is dropping some others.

      The announcement Tuesday from the Office of the U.S. Trade Representative was greeted with relief on Wall Street and by retailers who have grown fearful that the new tariffs would wreck holiday sales.

      The administration says it still plans to proceed with 10% tariffs on about $300 billion in Chinese imports — extending its import taxes to just about everything China ships to the United States in a dispute over Beijing’s strong-arm trade policies.

      But under pressure from retailers and other businesses, President Donald Trump’s trade office said it would delay until Dec. 15 the tariffs on nearly 60% of the imports that had been set to absorb the new taxes starting Sept. 1. Among the products that will benefit from the 3½-month reprieve are such popular consumer goods as cellphones, laptops, video game consoles, some toys, computer monitors, shoes and clothing.

      The administration is also removing other items from the tariff list entirely, based on what it called “health, safety, national security and other factors.”

      Separately, China’s Ministry of Commerce reported that top Chinese negotiators had spoken by phone with their U.S. counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and planned to talk again in two weeks.

      The news sent the Dow Jones Industrial Average soaring more than 400 points in mid-afternoon trading. Shares of Apple, Mattel and shoe brand Steve Madden, which stand to benefit from the delayed tariffs, led the rally.

      GM has modeled both moderate and severe downturn scenarios similar to 2008-2009 to get a sense of how it might affect profitability and cash flow at the No.1 U.S. car manufacturer, its CFO Suryadevara said.

      "It's something that we continually keep watching and updating to make sure that we're all set for when the downturn does come," Suryadevara said, adding that company does not see an imminent downturn.

      Deferring non-essential capital expenditure and considering a shift to lower-priced vehicles are among the few things GM will look at as part of its "downturn planning" to save costs.

      Ford said it was "proactively" evaluating its future moves, as it works with economists to model the severity of a possible recession.

      Fear of a recession has dominated trading on Wall Street this year and spurred a bout of extreme volatility following President Donald Trump's announcement of a new round of tariffs on Aug. 1.
      https://www.autoblog.com/2019/08/13/...omic-downturn/
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    3. Member atomicalex's Avatar
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      08-14-2019 01:43 PM #2
      Seven million vehicles.

      I said it.
      たくさんとうふ、よ Where did all these damn Toyotas come from?
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    4. Senior Member chucchinchilla's Avatar
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      08-14-2019 01:49 PM #3
      Regardless of economic situations there are simply too many auto manufacturers and too many cars out there. The heard needs to be thinned. In either case, I take comfort in knowing Camaros are built by people wearing Duck Dynasty shirts and camo baseball hats.
      Quote Originally Posted by [email protected] View Post
      This forum is more and more of an embarrassment every day...

    5. Member Lifelong Obsession's Avatar
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      08-14-2019 01:51 PM #4
      "Shift to lower-priced vehicles"...you mean just after GM and Ford kill off their lower-priced cars?

    6. Member GLI Dan's Avatar
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      08-14-2019 02:13 PM #5
      Quote Originally Posted by Lifelong Obsession View Post
      "Shift to lower-priced vehicles"...you mean just after GM and Ford kill off their lower-priced cars?
      It's easier to market and sell a lower priced vehicle that is "new" than one that already exists and a consumer expects discounts on.
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    7. Member Lifelong Obsession's Avatar
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      08-14-2019 02:18 PM #6
      Quote Originally Posted by GLI Dan View Post
      It's easier to market and sell a lower priced vehicle that is "new" than one that already exists and a consumer expects discounts on.
      Does GM actually have any lower-priced cars in the pipeline, though? At least Ford could still bring the Focus "Active" to US-Spec (as they planned to do originally).

    8. Senior Member Lwize's Avatar
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      08-14-2019 02:23 PM #7
      Seems like the US recession has begun today.
      I reject geometry.

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      08-14-2019 03:04 PM #8
      Quote Originally Posted by Lwize View Post
      Seems like the US recession has begun today.
      Based on what? We're still up a good bit ytd, and over the last drop from May.

      People need to calm down.

    10. Senior Member bzcat's Avatar
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      08-14-2019 03:13 PM #9
      I bet Ford and GM will be glad when this administration's govern by chaos theory reign is over.

    11. Member Mike!'s Avatar
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      08-14-2019 03:34 PM #10
      Quote Originally Posted by emanon View Post
      Based on what? We're still up a good bit ytd, and over the last drop from May.

      People need to calm down.
      A stock market index isn't the economy.

      But I agree we need to calm down. I understand Ford and GM being cautious in the face of a sales plateau. At the same time, at this rate the next recession is going to be caused by people fearing the next recession and be accordantly shallow and short-lived.

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      08-14-2019 03:36 PM #11
      Quote Originally Posted by Lifelong Obsession View Post
      "Shift to lower-priced vehicles"...you mean just after GM and Ford kill off their lower-priced cars?
      They just stopped SELLING them in the US. Ford and GM still make and sell millions of little cars all over the world. They can bring them back if needed.
      Last edited by E365; 08-14-2019 at 05:39 PM.

    13. Senior Member bzcat's Avatar
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      08-14-2019 03:37 PM #12
      Quote Originally Posted by Mike! View Post
      A stock market index isn't the economy.

      But I agree we need to calm down. I understand Ford and GM being cautious in the face of a sales plateau. At the same time, at this rate the next recession is going to be caused by people fearing the next recession and be accordantly shallow and short-lived.
      The bone yield has been inverted for nearly 6 months now. The recession is coming if not already here. We won't know if we are in a recession until we are about 2 quarters into one. But all the leading economic indicators are bad or trending bad, and the nonsensical trade "policy" agenda doesn't help.
      Last edited by bzcat; 08-14-2019 at 03:39 PM.

    14. Member Mike!'s Avatar
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      08-14-2019 04:35 PM #13
      Quote Originally Posted by bzcat View Post
      The bone yield has been inverted for nearly 6 months now. The recession is coming if not already here. We won't know if we are in a recession until we are about 2 quarters into one. But all the leading economic indicators are bad or trending bad, and the nonsensical trade "policy" agenda doesn't help.
      Yes the bond yield is inverted. Yes it's been over 10 years since the last recession and one is due.

      Rate of growth has been slowing but that doesn't mean growth is negative right now, especially after there was just a monetary policy rate cut. GDP growth was 2.1% last quarter (annualized).
      https://www.cnbc.com/2019/07/26/us-g...rter-2019.html
      https://www.bea.gov/news/2019/gross-...-annual-update

      Certainly, yes, trade policies haven't been helping things but "it could already be here!" is jumping the gun a bit.

    15. 08-14-2019 04:44 PM #14
      Quote Originally Posted by atomicalex View Post
      Seven million vehicles.

      I said it.
      In place of 17-ish million in the last couple of years? (US auto and light duty truck total)

      I have little doubt that there is going to be a downturn, but I don't think it's going to drop below the 2009 recession/depression minimum and below the minimum of the last several decades.

    16. Senior Member Lwize's Avatar
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      08-14-2019 05:25 PM #15
      Quote Originally Posted by bzcat View Post
      The bone yield...
      Bones make the best broth.
      I reject geometry.

    17. Senior Member bzcat's Avatar
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      08-14-2019 06:44 PM #16
      Quote Originally Posted by Mike! View Post
      Yes the bond yield is inverted. Yes it's been over 10 years since the last recession and one is due.

      Rate of growth has been slowing but that doesn't mean growth is negative right now, especially after there was just a monetary policy rate cut. GDP growth was 2.1% last quarter (annualized).
      https://www.cnbc.com/2019/07/26/us-g...rter-2019.html
      https://www.bea.gov/news/2019/gross-...-annual-update

      Certainly, yes, trade policies haven't been helping things but "it could already be here!" is jumping the gun a bit.
      It's almost certain the GDP growth did not hit 2% in Q2 of 2019. In February, BEA reported a 2.6% growth in the Q4 of 2018 but revised it in July to a 1.1% growth - in another word the economy barely grew in Q4 of 2018. Most economists now expect 2019 Q1 and Q2 growth to be similarly adjusted downward when BEA reports again on 8/29 - if growth rate sees similar revision as Q4, it will mean it is officially below 1% growth.
      Last edited by bzcat; 08-14-2019 at 06:47 PM.

    18. 08-14-2019 06:57 PM #17
      Quote Originally Posted by E365 View Post
      “Trade wars are good, and easy to win”
      Considering the current situation in China with their own economy floundering badly, and the massive revolt occurring in Hong Kong
      I agree with you, the President only has to wait a little longer, he's being very smart not making many comments on China either,
      let your enemy hang themselves with their own rope so to speak.

    19. Geriatric Member spockcat's Avatar
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      08-14-2019 07:01 PM #18
      Quote Originally Posted by bzcat View Post
      It's almost certain the GDP growth did not hit 2% in Q2 of 2019. In February, BEA reported a 2.6% growth in the Q4 of 2018 but revised it in July to a 1.1% growth - in another word the economy barely grew in Q4 of 2018. Most economists now expect 2019 Q1 and Q2 growth to be similarly adjusted downward when BEA reports again on 8/29 - if growth rate sees similar revision as Q4, it will mean it is officially below 1% growth.
      But what about the biggest tax cut ever that was rocket fuel for the economy?

    20. Member Crispyfritter's Avatar
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      08-14-2019 07:08 PM #19
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    21. 08-14-2019 07:12 PM #20
      Some of the experts say we've never been out of the recession since it happened back in 2008. That probably holds true to the
      main street consumer.

    22. 08-14-2019 07:17 PM #21
      Quote Originally Posted by chucchinchilla View Post
      Regardless of economic situations there are simply too many auto manufacturers and too many cars out there. The heard needs to be thinned. In either case, I take comfort in knowing Camaros are built by people wearing Duck Dynasty shirts and camo baseball hats.
      "the heard"?
      Quote Originally Posted by seanmcd72
      You are like the new Nightshift1983 of this forum dude. Just keep your fingers off the keyboard unless you have something valuable to say

    23. 08-14-2019 07:19 PM #22
      Quote Originally Posted by bzcat View Post
      The bone yield has been inverted for nearly 6 months now.
      Is that from an internal presentation at Pornhub?
      Quote Originally Posted by seanmcd72
      You are like the new Nightshift1983 of this forum dude. Just keep your fingers off the keyboard unless you have something valuable to say

    24. Member NailsInOurBacks's Avatar
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      08-14-2019 07:41 PM #23
      Quote Originally Posted by chucchinchilla View Post
      Regardless of economic situations there are simply too many auto manufacturers and too many cars out there. The heard needs to be thinned. In either case, I take comfort in knowing Camaros are built by people wearing Duck Dynasty shirts and camo baseball hats.
      Nissan is doing its part. The whole industry is down, isn't it? I saw Honda had a negative quarter. I wouldn't be worried about the yield flip - the 10 year has been upside for what... 6 months? Fed is gonna keep cutting rates. I think we still won't see something (correction) until 2020 - 2021. AS I'VE BEEN CRYSTAL BALLING FOR YEARS NOW.


      I saw the pic and thought "s***, I need to get a Camaro" for that exact reason. Just like when the line worker fore-armed the hood of the Viper into place, nothing makes me prouder. And I'm not being sarcastic here. I dig the yankee ingenuity and freedom to wear/express themselves however they want! No sterility here, let those 6-figure line workers do the dew.
      Last edited by NailsInOurBacks; 08-14-2019 at 07:53 PM.

    25. Senior Member AZGolf's Avatar
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      08-14-2019 07:44 PM #24
      Quote Originally Posted by chucchinchilla View Post
      Regardless of economic situations there are simply too many auto manufacturers and too many cars out there. The heard needs to be thinned. In either case, I take comfort in knowing Camaros are built by people wearing Duck Dynasty shirts and camo baseball hats.
      When people in the midwest talk about how much they are frustrated by the way that Californians hate their very existence, your post is why.

    26. I need new ones NeverEnoughCars's Avatar
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      08-14-2019 07:56 PM #25
      Quote Originally Posted by AZGolf View Post
      When people in the midwest talk about how much they are frustrated by the way that Californians hate their very existence, your post is why.
      It is okay. The midwest will slowly be taken over by the coastal elite. As tech companies realize they can get cheap housing and low taxes by moving into the central US more and more areas will improve.
      Quote Originally Posted by Turbio! View Post
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