Monday October 27 2008

Resources

Indian Tata and Leyland Trim Monthly Truck, Bus Output by Thousands

NEW DELHI -- Tata Motors Ltd. and Ashok Leyland Ltd., India's top two commercial-vehicle makers by sales, respectively, have cut production amid high borrowing costs and slower demand for their trucks and buses.

The auto industry here is suffering in the twin grip of the global credit crunch and still-lofty fuel prices. India is Asia's third-biggest market for commercial and passenger vehicles.

MEMA Sends Letter Addressing US CBP Uniform Rules of Origin

On October 23, the Motor & Equipment Manufacturers Association sent a letter to the Office of International Trade at U.S. Customs and Border Protection (CBP) that addressed the industry’s concerns with agency’s Notice of Proposed Rulemaking on Uniform Rules of Origin for Imported Merchandise. Specifically, the letter raised the “monumental financial and administrative burden” that would be involved with tracking the origins of components of finished automotive parts. The comments also addressed the difficulty of attaining a standard of reasonable care and the special concerns of parts remanufacturers. MEMA is requesting that the agency withdraw the proposed rule until the World Trade Organization adopts a multilateral approach relating to country of origin rules and until any impacts are fully evaluated. Click here to view the public docket. For more information, please contact Leigh Merino.

China Predicts falling Prices on Iron Ore Due to Surplus on World Market

China's steel industry expects a surplus of iron ore and falling prices in the global market next year, as the global economic crisis slows economic growth and orders from steel makers, Bloomberg reported. "It's clear where iron ore prices will be going," said Liang Shuhe, deputy director of foreign trade at the Ministry of Commerce, at a conference in Qingdao. "Iron ore demand may drop next year with falling demand for steel." Shan Shanghua, secretary general of the China Iron & Steel Association, speaking at the same conference, said all Chinese steel makers are unprofitable this month, and it may take two months to return to a profit. Shan added that 40 percent of steel makers around Tangshan, an industrial city in Hebei province, had closed.

Young Named CEO of Thyssenkrupp Crankshaft Co.

DANVILLE, Ill. – ThyssenKrupp Crankshaft Co. has named Norman Young as its new chief executive officer.

Young joins Thyssenkrupp following a 20-year career in the automotive industry, working in the operations, sales, marketing and service sectors. Most recently vice president of North American sales and global service operations for Delphi Product and Service Solutions, Young also served as president of Delphi’s Integrated Service Solutions and as vice president of global aftermarket sales and service for SPX Corp.

US Chamber of Commerce Irks Democrats with GOP Push

WASHINGTON -- The nation's largest business lobby, the U.S. Chamber of Commerce, has raised ire among Democratic leaders for pouring millions of dollars into an advertising push to prevent the party from winning dominance in the Senate next year.

The Chamber says it has raised enough money this year from corporations to spend about $35 million on the election, double its budget for House and Senate races in the 2006 election. The group is supporting pro-business candidates, almost exclusively Republicans in contested Senate races.

Fleets: View of Advanced Safety Technology Must Change Before Use Grows

NEW ORLEANS — Fleet executives said that despite the benefits of using safety technology, attitudes within the industry need to change in order to have wider acceptance.

“Clearly, there is a big expense up front, but done right, it can become an investment,” Chris Lofgren, president of Schneider National Inc., said during a panel discussion here at American Trucking Associations’ Management Conference & Exhibition.

BENDIX SIGNS AGREEMENT TO ACQUIRE SMARTIRE BUSINESS

ELYRIA, Ohio – October 26, 2008 – Bendix Commercial Vehicle Systems LLC, a North American affiliate of Munich, Germany-based Knorr-Bremse AG, has announced its plans to acquire the business and related assets of SmarTire Systems Inc. for an undisclosed amount. Based in Vancouver, British Columbia, SmarTire is a leading developer and marketer of advanced tire-monitoring solutions, plus wireless sensing and control systems for commercial vehicles.

The transaction terms are expected to be finalized during the fourth quarter of 2008 and are subject to corporate approvals from both entities. When finalized, Bendix plans to incorporate the SmarTire business into its existing electronics business unit, which also includes leading technologies such as the Bendix ESP Electronic Stability Program and Bendix Adaptive Cruise Control (ACC).

US Federal Reserve Executive to Present at Heavy Duty Dialogue ’09

Research Triangle Park, N.C. – Heavy Duty Dialogue ’09, with the theme of The Commercial Vehicle Industry in Transition, features a domestic and global economic overview by William Strauss, senior economist and economic advisor for the Federal Reserve Bank of Chicago. Mr. Strauss will focus his presentation on economic indicators and metrics; such as monetary policy, credit markets, risk, inflation, and commodity pricing, and their connection to the US commercial vehicle industry. Also included in Mr. Strauss’s presentation are economic assessments for North America, Europe, Asia and Latin America economic markets for 2009 and beyond.

USA/Canada Economy: The Economist Intelligence Unit 's November Assumptions

The outlook for the US economy has weakened significantly since our last forecast. The US probably contracted in the third quarter, as the industrial output index of the Federal Reserve (the central bank) fell by nearly 4 percent between June and September. Our forecast for real GDP growth for 2008 as a whole remains deceptively mild, at 1.6 percent, but this is flattered by a strong performance in the first two quarters, particularly from export demand. For 2009, we expect a contraction in the first half and a fall for the year as a whole. The damage caused by falling property prices on the financial sector has spread to other asset classes, and the resulting crisis in financial markets, which reached another crescendo in early October, will exacerbate the impact of tightening credit on already weak domestic demand.

China: Key Developments From The Economist Intelligence Unit

Outlook For 2009-10

Efforts to move economic growth on to a more socially and environmentally sustainable path, which are championed by the president, Hu Jintao, will guide government policy in 2009-10.

Accountability will improve within the ruling Chinese Communist Party, but wider reforms to increase democracy will not occur. The campaign against official corruption will continue. Land reforms will be passed in 2009.

Ethnic tensions will remain high, especially in Xinjiang and Tibet, but unrest in these regions will not threaten national political stability.

Thousands of Chinese Factories Close

Thousands of Chinese factories have shuttered in the past year." Among the factors are "an export-killing global slowdown" and "rising materials costs that have squeezed profit margins," as well as "a deliberate Chinese government campaign to regulate sweatshop factories out of business."

Some analysts have argued "that China needs to keep annual economic growth of eight percent or nine percent to absorb the 24 million people entering the labor force every year or risk social instability." Current predictions peg China's growth at eight or nine percent in 2009. China also faces "collapsing home prices," which are expected to further hamper growth.

China’s Baotou Bei Ben Heavy-Duty Truck Co. Sells 29,000 Units YTD

BEIJING, (Xinhua) – Chinese truck maker Baotou Bei Ben Heavy-Duty Truck Co., Ltd sold 20,916 trucks in the first nine months this year, which represents a growth of 62.8 percent year on year and 87 percent of its annual sales target.

The company's truck output in the period reached 20,081 units, surging 52.2 percent from the same period of 2007, according to the manufacturer.

Public Workshop to Discuss California HD Vehicle Air Quality Loan Program

MEMA Government Affairs Office, Washington D.C.

In Oct. 2007, Gov. Schwarzenegger signed Assembly Bill 118 (Chapter 750, Statutes of 2007) into law. AB 118 created two new incentive programs with potential funding for heavy-duty vehicles – the Alternative and Renewable Fuels and Advanced Technology Program to be administered by the California Energy Commission, and the Air Quality Improvement Program (AQIP) to be administered by ARB. The 2008-2009 FY State budget includes a one-time appropriation of approximately $48 million from the AQIP fund to implement a heavy-duty vehicle air quality loan program to assist on-road fleets affected by the ARB’s proposed In-Use Truck and Bus Regulation and the proposed Heavy-Duty Vehicle Greenhouse Gas Emission Reduction Measure. These two regulatory proposals are currently scheduled for Board consideration in December 2008.

MEMA Letter to the Editor; The Washington Post

To the Editor:

I read with interest the October 22 article entitled “Lifeline for Automakers Dangles Just Out of Reach.” As the president of the Motor & Equipment Manufacturers Association (MEMA), the largest trade association representing motor vehicle parts suppliers, I wanted to call to your attention an important point that the article only briefly mentioned. We agree that the loan program would be a lifeline to the automotive industry; however, standing behind the automakers are hundreds of thousands of supplier jobs, and ensuring that these loans are promptly and fairly distributed is absolutely critical to our industry.

Fleets Find Higher Costs, Uncertain Life Cycles with Commercial Vehicles

Six years after the first generation of Environmental Protection Agency-compliant diesel engines was introduced, fleet operators said there is little doubt the cleaner-burning engines cost more to maintain and operate.

Less clear is how long the engines will last, which is a key factor in determining residual value and equipment trade-in cycles, fleet executives and industry analysts said.

Paccar Profit Holds Steady, but Slowing is Ahead

Truck manufacturer Paccar Inc. reported third-quarter profits Tuesday roughly equivalent to a year ago, but it also warned that the European market that has provided a cushion for a North American downturn is itself showing signs of weakness.

Shares of Paccar dropped on the warnings that fourth-quarter and 2009 results will be hurt by lower demand and truck production, as well as third-quarter results that fell short of analyst estimates. Paccar's stock closed at $26.82 a share, down $3.15, in trading Tuesday following the release of the earnings report. Tuesday's close was a 52-week low closing price for Paccar, which in the past year has finished as high as $57.51.

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