Word: downturning
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Dates: during 1980-1989
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Inventories of unsold cars have swollen to 1.8 million vehicles. At current sales levels, that is a 75-day supply, well above what is considered healthy, and Detroit is finally acknowledging the sharp downturn in demand and cutting production plans for the rest of the year. Output at General Motors assembly plants in the third quarter will be the lowest of any July-September period in 19 years, Chrysler's the smallest in a decade. While none of the automakers are scheduling long-term shutdowns, many workers are being idled for the first time since the last recession. Ford, which...
...downturn is at least partly the result of selling so many cars in the past few years. "The fleet is quite young, the warranties are longer, and the quality is better. People don't feel a pressing need for new cars," says Arvid Jouppi, who follows the industry for Keane Securities in Detroit. The boom has flooded the market with used cars, which are now selling at a steep discount, making them a more attractive alternative to new models. A two-year- old Ford Tempo, for example, sells for $3,500 less than...
Since the downturn began, Japanese manufacturers have made even greater inroads than in healthy times. Honda, Toyota, Nissan and Mazda posted higher sales and gains in U.S. market share in the first half of 1989, largely at the expense of European imports, Chrysler and GM. Of the Big Three, only Ford managed to raise its market share, because its sales slump has been smaller than that of its rivals...
...words sounded like those of a business leader lecturing the U.S. central bank about the dangers of letting the economy slump too far: "It is prudent for the Federal Reserve to recognize the risk that such softness ((in the economy)) conceivably could accumulate and deepen, resulting in a substantial downturn in activity." Yet the statement came from Fed Chairman Alan Greenspan, who went public with a surprisingly frank assessment last week that, at least for the moment, a recession has replaced inflation as the leading threat to the U.S. economy. In his midyear report to Congress, Greenspan confirmed that since...
...contrast with 1988, when the binge in corporate buyouts helped offset the defection of millions of small investors, the latest downturn reflected weakness in virtually every phase of Wall Street's business. With merger mania dampened by high interest rates and fears of a political backlash against debt-laden megadeals, the value of announced corporate acquisitions fell to $76 billion in the first quarter of 1989, down 58% from the comparable period last year. At the same time, intense competition has driven down the commission on stock trades to as little as 4 cents a share, vs. about 8 cents...