Lienert's predictions for 2006

[Northstar]

From Forbes

Dan Lienert On Autos
12.29.05

The Big Trend
2006 will be the year American automakers borrow a page from the airline industry and break their social contract with unionized workers. In order for the American auto industry to survive, manufacturers will have to cripple their unions, just as Northwest Airlines did. Delphi Chairman Steve Miller has already demoralized his unionized workers; in 2006 he will force the UAW to abandon a decades-old tradition of gold-plated wages and benefits for its workers. Following suit, General Motors, Ford Motor and Chrysler will begin to chip away at the power of their union workers, too.

The Unconventional Wisdom
People keep waiting for American automakers to decrease their dependence on sales incentives in favor of better supply-and-demand management. After all, adjusting production instead of offering sweetheart deals is what works for the Japanese. But instead, in 2006 the Japanese will behave more like Americans than the Americans will behave like Japanese. Companies such as Toyota Motor will increase incentive spending. Declining truck and SUV sales are affecting all automakers, and the Japanese have laid some eggs in the truck market--e.g., the Subaru Baja and Honda Motor Ridgeline. Because trucks account for such an enormous percentage of sales, truck-based incentive spending will increase overall Japanese incentive spending in 2006.

The Misplaced Assumption
People will continue, incorrectly, to blame declining SUV sales on gas prices, when gas prices will stay below $3 per gallon. Everybody seems to forget the change in the tax code that prevented tens of millions of entrepreneurs from writing off SUV purchases against their companies’ taxable income. Congress has played as big a role as oil prices--perhaps a bigger one--in the decline of SUV sales.

The Watch List
-- Hyundai and Kia: Sales will continue to go up, more upscale customers will come to the brands, and Toyota will continue to fear the Koreans more than any other competitors.

-- Honda: Sales trends may indicate Honda does not have the same seeming infallibility as Toyota. The company’s new Civic will sell well, but vehicles such as its Element and CR-V SUVs will go down in sales.

-- Perennial death watch: Isuzu, Mitsubishi and Buick.

The Bold Prediction
A Chinese automaker will announce a joint venture for North America with a partner such as Subaru, Isuzu or Mitsubishi. Or a Chinese automaker will buy a well-established but troubled company such as Mitsubishi.

[Ghost Dog]

Delphi Chairman Steve Miller has already demoralized his unionized workers

I have'nt see that. It is'nt the union Miller's ####ing. It's GM.