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Inside this issue
Chrysler Profit Jumps 22% to $619 Million
The Global Market Beckons, But Where?
Toyota Holding Off on Adding Capacity in U.S.
Pay, Training Gap Seen in Auto Industry
Fearful Gen X, Gen Y Hold Back Auto Sales -- And U.S. Economy
Nissan Exec Wants Faster Customer Satisfaction Feedback
Army Officers Can Be the New Captains of This Industry
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Top Stories
Chrysler Profit Jumps 22% to $619 Million

Auto maker cites rising demand for trucks, sport-utility vehicles

Chrysler Group LLC's second-quarter income rose 22% to $619 million, bolstered by rising demand for the company's pickup trucks and sport-utility vehicles and further underscoring its importance to Italian parent Fiat SpA. Chrysler's results come as Fiat shareholders weigh whether to go along with a planned reorganization of the parent company or cash out their shares. On Friday, Fiat shareholders voted to approve the reorganization, which via a merger would create a new Dutch-incorporated holding company, Fiat Chrysler Automobiles NV, that would become Chrysler's parent. But those investors now have the opportunity to cash out their shares at a predetermined price of €7.72 ($10.33). If enough decide to sell back their shares and Fiat's payout exceeds $500 million, the merger is off.
Source: The Wall Street Journal

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The Global Market Beckons, But Where?

The auto industry will have to side-step social unrest and political obstacles to take advantage of a coming decade of overseas growth opportunity, says GM's chief economist. That includes risky markets in Africa, economic troubles in Argentina and political uncertainty in Russia and Venezuela, warns GM chief economist Mustafa Mohatarem. Forecasters believe that consumers around the world are on track to buy 100 million new vehicles a year by the end of this decade -- up from about 85 million last year. But figuring out where those additional 15 million sales are waiting is a tough guess, Mohatarem told an audience [Wednesday] at the 2014 Management Briefing Seminars.
Source: Automotive News
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Toyota Holding Off on Adding Capacity in U.S.

Improving its productivity to utilize existing machine capacity is Toyota's “first priority” in North American manufacturing, a top company official says

In the last decade, Toyota seemingly announced a new North American vehicle-assembly plant every few months. But it has been six years since the automaker's last revealed plans for a new facility, in Blue Springs, MS, for production of the Corolla. Two years ago, Toyota said it would expand its Georgetown, KY, plant in 2015 for the Lexus ES, but with just a 50,000-unit dedicated line. Much like rival Hyundai, Toyota is trying to do more with its existing manufacturing footprint.
Source: WardsAuto

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Pay, Training Gap Seen in Auto Industry

The auto industry does not pay enough or train new employees enough. While corporate leaders lament what they see as a skills gap, Kristin Dziczek, director of the Industry and Labor Group of the Center for Automotive Research, has another theory about the difficulty manufacturers have in recruiting and retaining skilled workers. Pay has largely flat-lined since 2006, Dziczek said Tuesday at the Management Briefing Seminars near Traverse City. According to the Association for Talent Development, companies were spending only 1% more on employees in 2012 than they did in 2006. Over that same period, the average hours of training per employee has fallen 14%. Companies often say they are too busy to train their own staff and bring in outside parties to do it. With the industry recovering and many jobs going unfilled, companies that don't invest in their employees won't keep them or attract new talent.
Source: Detroit Free Press
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Fearful Gen X, Gen Y Hold Back Auto Sales -- And U.S. Economy

Look no further than the relationship between the booming auto industry and reluctant young buyers for reasons why the stock market and many economists remain unconvinced that the U.S. economy finally is on track to sustainable growth, despite the 4-percent rise in second-quarter GDP and  breathless predictions in the news media. Two analysts explained at this week’s industry briefings in Traverse City, Mich., that financial constraints and pessimism among Generation X and Generation Y are still holding back car sales from doing much better, and even from doing well enough perhaps to put the entire U.S. economy back over the hump.
Source: Forbes
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Nissan Exec Wants Faster Customer Satisfaction Feedback

Nissan will attempt to speed up feedback from car shoppers and move beyond widely accepted customer-satisfaction practices. “At Nissan we're going to be killing customer satisfaction,” Fred Diaz, Nissan senior vice president of U.S. sales & marketing and operations, said [Wednesday] at the 2014 Management Briefing Seminars. “We're working to provide dealers immediate, actionable feedback from the customer on a real-time basis, Diaz told the audience. “And when I say a real-time basis, I mean while the customers are still in the store, or the very next day or within hours of them leaving the store.
Source: Automotive News
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Army Officers Can Be the New Captains of This Industry
By Jonathan Hendershott

Budget cuts forced the layoffs of more than 1,100 Army captains last month. Further cutbacks are expected to shrink the Army from its current 520,000 troops to 440,000 by 2017, the smallest size since before World War II. The departure of these officers, and the intellectual capital they have accrued, is a tremendous loss to the nation's defense. But the Army's loss can be corporate employers' gain — as long as firms, especially those in the financial sector, understand and appreciate the skill sets that young officers bring with them.

With multiple deployments to Iraq and Afghanistan, the junior officer corps has made tremendous contributions to the war effort because of their ability to respond quickly to constantly changing battle conditions. Given great autonomy for decision-making and follow-through, these soldiers' experiences have enabled them to help create and deploy ever-evolving doctrine on counter-insurgency operations — demonstrating their ability to solve complex problems both on and off the battlefield.

The skill set that successful military commanders have acquired is exactly what is demanded of compliance officers in today's strict regulatory environment. The 2010 Dodd-Frank law, coupled with the continuation of the Sarbanes-Oxley Act of 2002, have made accurate risk assessment a top priority. These stressful jobs in corporate compliance review are not for the timid. U.S. Deputy Attorney General James Cole recently warned corporate compliance officers that "if they fail to cooperate with the government in any investigations there will be real consequences," according to the Wall Street Journal.

Attention to detail, risk management, and an uncompromising adherence to making informed, data-driven decisions have characterized the careers of successful commanders for more than a decade. These qualities will help them head off weighty compliance issues such as data reporting errors, which can result in severe restrictions on these institutions' activities and diminish their ability to survive.
Source: American Banker

Former U.S. Army Capt. Jonathan Hendershott (West Point, 2007) served in Iraq with the 101st Airborne Division and as a company commander in Ft. Hood, Texas. He currently works as a business management consultant in New York City.
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