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Inside this issue
December Likely to Bring Record Spending on New Cars
Black Friday Lifts U.S. Auto Sales In November But Market Could Hit Plateau
Revved Up for Detroit Auto Show? Fun Starts Jan. 12
Editorial: The People Problem
Chrysler Group Reduces Interest Rate on Term Loan
GM Robo-Glove to Meat Hook Smooth Human-Machine Teamwork
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Top Stories
December Likely to Bring Record Spending on New Cars

With millions of dollars of television commercials airing this month and millions more in incentive money on the table, automakers are expected to end the year with a bang, sales expected to be up at least 4% from December 2012 – with the industry anticipating all-time record consumer spending. While new-vehicle sales started off slowly in December, they are expected to finish strong at the end of the month, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.  That would be good news for industry planners worried about a recent bulge in dealer inventories that’s already led several manufacturers to trim back production. Consumers in the U.S. are expected to spend more than $34 billion on new vehicles in December, a historic high for the month.
Source: The Detroit Bureau

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Black Friday Lifts U.S. Auto Sales In November But Market Could Hit Plateau

It has been a very strong year for the U.S. auto industry. Sales are up 8.4% through the eleven months of the year. In November, the total automotive sales in the U.S. jumped 8.9% to 1.25 million units, helped by heavy promotions on Black Friday. The 11-month data for 2013 suggests that the annual sales should touch 15.5 million units, which is not very far off from 2006′s figure. As a result, sales in the upcoming year should naturally slow down. Moreover, with the Fed announcing its decision reduce the stimulus, there could be a further rise in the Treasury rates. The 10-year bond yields are already up 70 to 80 basis points since the start of the year. Higher Treasury rates will tend to push up the auto loan rates as well, which could deter some of the potential buyers and consequently lower the overall vehicle demand.
Source: The NASDAQ OMX Group, Inc.

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Revved Up for Detroit Auto Show? Fun Starts Jan. 12

The 2014 North American International Auto Show will include 40 news conferences over two days from manufacturers ranging from the industry giants to upstart Tesla Motors. Automakers will begin showing their wares Sunday, Jan. 12, on the eve of the media days that start at 7:30 a.m. Monday, Jan. 13, with the presentation of the North American Car and Truck of the Year awards. General Motors will host an event that Sunday night to reveal the new GMC Canyon, a midsize pickup. On Monday morning, Ford is expected to reveal an all-new Ford F-150 pickup. Chrysler is expected to reveal an all-new Chrysler 200 midsize sedan. But one of the biggest stars of the show could be Tesla Motors, which has a news conference scheduled for Tuesday, Jan. 14. Tesla CEO Elon Musk, whose Silicon Valley electric car venture has seen its stock surge more than 400% this year, before retreating in recent weeks, may attend the show.
Source: Detroit Free Press


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Editorial: The People Problem

The auto industry needs to face the long-range problem of recruiting fresh blood. There's no better time to tackle the problem than now. Five years post-crisis, the industry has had a solid recovery. Companies have had several good years to rebuild their financial reserves. There are documented shortages of engineers and product developers, skilled tradesmen and tool and die makers. The situation will get worse before it improves. The recession cut so deep that the entire auto work force was depleted of good workers, especially young ones. And it lasted so long that many laid-off auto workers found work in other industries and now are reluctant to return. Some companies are making headway. They are hiring co-op students, partnering with schools and trade unions and creating internal mentoring programs. Each company should examine its own long-term needs. If executives need help, there are champions in each sector, such as the Original Equipment Suppliers Association for parts makers and the National Automobile Dealers Association for dealers.
Source: Automotive News

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Chrysler Group Reduces Interest Rate on Term Loan

Chrysler Group LLC announced Dec. 23 that it has taken advantage of favorable market conditions to reduce the interest rate on its $2.9 billion term loan. Under current market conditions, this action reduces the annual interest cost for the term loan by approximately $22 million. The term loan maintains a maturity date of May 24, 2017.
Source: Chrysler Group LLC

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GM Robo-Glove to Meat Hook Smooth Human-Machine Teamwork

After years of walling off robots to ensure safety, some companies are finding ways to put them alongside people, with lightweight materials and new sensors enabling engineers to build machines that can be employees’ partners or even worn on the job. “Typically we would put up these big gates to keep people and robotics separated,” said Scott Whybrew, director for global manufacturing engineering vehicle systems at General Motors Co. “Human-safe robotics, though, gives us the ability for robots to work side-by-side with the operators.” People-friendly machines hold the potential to propel a global robot market estimated at $8.7 billion in 2012. BMW is testing models that could someday collaborate with workers, while GM is developing its “robo-glove” to give employees a more-muscular grip. Google Inc., with eight acquisitions in the past year, is also signaling its interest in robotics.
Source: Bloomberg

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Quotable
"The budget deal in Washington is helping fuel a higher level of optimism for the economy and auto sales in 2014."

    -- Jeff Schuster, senior vice president of forecasting at LMC Automotive, The Detroit Bureau, Dec. 23
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