Word: auto
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Reuther, who began to worry about rising health-care costs as far back as the 1950s, feared that the auto companies would one day not be able to meet their obligations. That that day is here is one reason the UAW made yet another concession. It reached an agreement with Ford to change the way the company contributes to the retiree health-care fund administered by the UAW. Instead of cash, Ford now has the option of issuing stock to fund up to 50% of the Voluntary Employee Beneficiary Association, or VEBA. It means that the health of UAW members...
While the U.S. has been debating how to bail out GM and Chrysler during the worst auto industry slump in decades, China has been scrambling to come up with its own rescue plan for its ailing carmakers. But unlike Washington, which is providing billions of dollars to prop up the balance sheets of the Detroit giants, China is taking a different route: it's trying to get consumers to buy more cars through a sales tax break and targeted subsidies for rural buyers...
...whether or not people want to buy cars," says Ben Simpfendorfer, chief China economist for the Royal Bank of Scotland. "What's unusual about this cycle is that China faces the same problems as everywhere else in the world. The big question is how to spur consumer spending. Strong auto sales will help China, just like they'll help America or Europe...
...overall car in January were down 14% compared with the same period a year ago (U.S. sales fell 37%). The government has targeted a 10% expansion this year. But Michael Dunne, a Shanghai-based analyst with research firm JD Power, estimates that based on January figures, the mainland's auto market this year will shrink for the first time in 20 years...
...Beijing has signaled that it intends to use this slowdown to consolidate the country's sprawling auto industry. China has more than 100 carmakers. Chinese media outlets are reporting that the government hopes to reduce 14 major carmakers to 10 this year. At the same time Beijing's economic planners would like to contain the industry's production capacity, which expanded greatly in recent boom years. "So far China has gotten away with that growth," says Dunne, but the slowdown puts "unprecedented pressure on weaker makers. Everybody looked good when you were growing...