A Sea of Unwanted Imports
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A Sea of Unwanted Imports
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http://www.businessweek.com/globalbi...119_275356.htm
Published: November 18, 2008
LONG BEACH, Calif. — Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.
For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.
“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.”
LONG BEACH, Calif. — Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.
For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.
“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.”
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From: CNY
The Big 3 execs should be using the fact that ALL manufacturers are having problems selling to help build their case.
It's not just them. It's all of them.
And some of it (probably a lot of it) can be traced to the credit market. If banks were loaning, people would be buying.
Another part is the general slowdown of the economy. People aren't spending right now. Not just on domestic vehicles, but on everything. Look at all the earnings reports from this week.
Lastly, it has been suggested by more than one person, that maybe nobody needs a new car right now. They've sold so many cars the past 6-8 years, everybody that can buy a new car probably has a relatively new car (or cars) in their driveway.
The Big 3 execs need to stress these things when making their case. The problems they're having are not exclusively theirs. It's affecting all of them (as evidenced by the above picture, the leasing of lot space, and the double digit sales declines of the imports).
It's not just them. It's all of them.
And some of it (probably a lot of it) can be traced to the credit market. If banks were loaning, people would be buying.
Another part is the general slowdown of the economy. People aren't spending right now. Not just on domestic vehicles, but on everything. Look at all the earnings reports from this week.
Lastly, it has been suggested by more than one person, that maybe nobody needs a new car right now. They've sold so many cars the past 6-8 years, everybody that can buy a new car probably has a relatively new car (or cars) in their driveway.
The Big 3 execs need to stress these things when making their case. The problems they're having are not exclusively theirs. It's affecting all of them (as evidenced by the above picture, the leasing of lot space, and the double digit sales declines of the imports).
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From: Oakland, California
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The economy is finally feeling the hangover that comes from a near 10 year drunk of easy credit and excessive consumerism...it had to catch up eventually and it needs to run it's course...when you do stupid things, pain is often the result and buying $40K trucks with no money down, a spotty credit history and an annual salary of (maybe) $50K is just plain stupid.
None of that is really any of the automaker's fault (although they participated) but the entire economy is feeling the result.
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I'd say the last thing the country need is a return to easy credit adn banks are loaning to those who have good credit histories...a lot of people just aren't buying new cars which is very typical when in a recession (you have to buy food, you don't need a new car very often and especially if you are worried about your job).
The economy is finally feeling the hangover that comes from a near 10 year drunk of easy credit and excessive consumerism...it had to catch up eventually and it needs to run it's course...when you do stupid things, pain is often the result and buying $40K trucks with no money down, a spotty credit history and an annual salary of (maybe) $50K is just plain stupid.
None of that is really any of the automaker's fault (although they participated) but the entire economy is feeling the result.
The economy is finally feeling the hangover that comes from a near 10 year drunk of easy credit and excessive consumerism...it had to catch up eventually and it needs to run it's course...when you do stupid things, pain is often the result and buying $40K trucks with no money down, a spotty credit history and an annual salary of (maybe) $50K is just plain stupid.
None of that is really any of the automaker's fault (although they participated) but the entire economy is feeling the result.
It looks like we found something we both agree on.
I'll further add that the car companies should have never set their yearly sales estimates at 17 million units. That was a bubble (probably caused by easy credit, as you mentioned) and not sustainable. But I can't say I blame them. What other company wouldn't take advantage of a bubble if they could. Where they failed was to recognize that the bubble had to burst and not positioning themselves for that burst.
Like Wagoner said yesterday, better to figure and plan for lower numbers and then have to scramble to raise production rather than the other way around.
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You think it's cheaper to cross the Atlantic, go down the eastern seaboard of North America, go through the canal then up the west coast of Central America to the Port of LA and then likely truck vehicles from there throughout the country...that as compared to using Charleston or Miami or NY or Norfolk and shipping by truck or rail from there?
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You think it's cheaper to cross the Atlantic, go down the eastern seaboard of North America, go through the canal then up the west coast of Central America to the Port of LA and then likely truck vehicles from there throughout the country...that as compared to using Charleston or Miami or NY or Norfolk and shipping by truck or rail from there?
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I've driven by those ports and seen pics like this first hand. If they are dumb enough to keep shipping unsold and unwanted vehicles this far into the economic downturn then when they run out of room just drop them in the bay.
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From: Sandy VJJville
Why do you say that? 
We get shipments of BMW's fairly regularly at the Port of Charleston. They come in on a Wallenius Wilhelmsen ship. 
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From: Michigan's left coast
You think it's cheaper to cross the Atlantic, go down the eastern seaboard of North America, go through the canal then up the west coast of Central America to the Port of LA and then likely truck vehicles from there throughout the country...that as compared to using Charleston or Miami or NY or Norfolk and shipping by truck or rail from there?
With regards to the macro issues revealed by the article, the car industry is about to go through tougher times than most people realize. Damn few people buy cars because they really "need" a new vehicle. That's going to become obvious rather soon.
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From: Cleveland, OH
I agree. I think we have come to that point and the realization makes sense. Cars today are built better and last longer. It's great for the consumer but counterproductive to the Big three business models.
The sale of cars is what the Big three need to survive and that one life line is destroyed as the consumer knows better than to overextend there finances again. They probably already did it on there home, existing car or there kids crazy priced college education.
