Auto Industry

January is turning into another good month for auto sales, according to auto information company Edmunds.com. Looking at about three weeks of data, Edmunds projects that January auto sales will rise about 14.5% from the same month a year ago to a little more than 1 million vehicles. On a seasonal basis, that represents a healthy sales pace of 15.3 million vehicles.  "January's numbers reiterate the energy and optimism that filled the air last week at the North American International Auto Show in Detroit.

Question: I am a Ford Motor Co. shareholder. Can my shares continue their upswing? Answer: Prospects are good, but there are challenges: The auto industry is cyclical, meeting higher fuel standards will be expensive, and labor will look to gain from the company's improved fortunes. And despite improved quality and a more upscale image, the seller of Ford and Lincoln brands still must combat the belief held by some Americans that foreign vehicles are superior. Ford was the only major U.S. carmaker to avoid a federal bailout and Chapter 11, despite losing $30 billion from 2006 through 2008.

Facing a cascade of slipping economic signs that could endanger his reelection, President Obama sought to shift attention to a decision he made early in his term that appears to be paying off: bailing out the auto industry. Obama's appearance Friday at a Chrysler plant in this politically important state showed how few economic stories he can highlight. New figures Friday showed unemployment rose to 9.1%, the second straight month that the jobless rate climbed. Speculation grew that the economy might slip into another recession, which would hurt families nationwide just as the 2012 campaign begins.

Unexpectedly good news about the government's auto industry bailout has bolstered the case for comprehensive federal regulations for the financial system, President Obama said in his weekly address Saturday. Obama, facing public unease over unprecedented government interventions in the economy, noted that the Treasury Department found that the bailout of General Motors Corp. and Chrysler Group "will end up costing taxpayers a fraction of what was originally feared," because those companies have performed far better than expected after getting federal help.

Donald Nauss' "Gas Engine Is Not About to Go" [Jan. 11] says it all as to why the ancient fossil fuel thumper-pumper has not long ago become extinct: The auto industry and the oil industry are using it to prop each other up--to hell with all this wild talk about clean air. It is we, the consumers, who must make them get off the pot. Stop buying new cars powered by fossil fuels. Fix up our old models. When the auto industry sees its sales figures drop, you can bet it will bring out hydrogen fuel cells and other nonpolluting power plants faster than you can say, "Fill 'er up."

Chrysler Corp.'s rare shutdown of every U.S. auto assembly plant for all of last week shows the bleak state of the auto industry, and analysts said Monday that it may get worse. "There are some severe capacity problems right now," said analyst Harley Shaiken, labor professor at the University of California, San Diego. "I think we will clearly see more shutdowns."

This country's automobile industry, already booming thanks to free-trade pacts with the U.S. and Canada, can expect another big boost from the historic trade agreement signed last week with the European Union. It will mean even more Mexican-built cars streaming into the U.S., on top of the hundreds of thousands of Volkswagen Beetles, Dodge Rams, Plymouth Neons, Chevy Cavaliers and other models already shipped north of the border each year.

Despite opposition from the auto industry, state air-quality regulators should not back down on imposition of their revolutionary zero-emissions vehicle mandate, a new California Air Resources Board staff report suggests. The 174-page report, issued Tuesday, makes no formal recommendation to the air board but does reject auto makers' insistence that there is no market for the electric vehicles that now constitute the ZEV fleet.

Mexican car production is back in full swing, consumers are snapping up new models as never before and Toyota Motor Co. is about to break ground on its first Mexican auto factory, a $100-million show of confidence. So why is the Mexican car industry nervous? Declining worker productivity, the strong peso and the failure of President Vicente Fox to push through tax, energy and labor reforms certainly are causes for worry.

More than 30,000 auto workers, nearly all of them at General Motors Corp. plants, will have next week off as the auto industry wrestles with a recession. GM, Ford Motor Co. and Chrysler Corp. said Friday that they plan to close all or parts of a dozen assembly plants the week of Dec. 10. The closures stem from slow dealer orders. The week of Dec. 17, the last before the industry's traditional shutdown between the Christmas and New Year's holidays, is expected to be worse.