NADA Headlines - 07/01/2013 (Plain Text Version)
Auto dealers employed an average of 55 workers with an annual payroll of $2.9 million in 2012
As the U.S. economy gains momentum and auto sales increase, employment at franchised new-car dealerships continued to rise, up 3.2% last year, says the National Automobile Dealers Association in its latest state-of-the-industry report. In 2012, total employment at new-car dealerships increased to 963,400 employees, up from 933,500, according to NADA Data 2013, a report on dealership sales and financial trends. The average number of employees per dealership rose from 53 to 55 last year. There was also a net increase of 95 franchised dealerships, bringing the total to 17,635 at the end of 2012. New-car dealerships had an annual average payroll of $2.9 million in 2012, up 12% from the previous year. The total payroll for all U.S. new-car dealerships was $51.6 billion, up 12.6%. Average weekly earnings of employees at U.S. new-car dealerships last year was $1,030, up 9.1% from the previous year.
U.S. car dealers like Don Kerstetter have every reason to be happy these days as the industry is partying like it's 2007 -- facing demand not seen since before a recession that drove General Motors and Chrysler into bankruptcy. The owner of Classic Chevrolet Sugar Land outside Houston is on pace for another month of new-car sales above 200, driven by demand for the full-sized pickup trucks that Texans love. "The month has been good," he boasted. "It's picked up over the last week or so in particular. Credit's generally good in our area." Kerstetter is not alone as U.S. auto industry sales in June are expected to rise as much as 8 percent and reach their strongest monthly pace since before the recession that forced the two U.S. automakers to seek bankruptcy protection in 2009. In May, U.S. auto sales rose more than expected as construction workers and oil drillers bought more pickups to meet growing demand for their services, a trend major automakers expect to continue through the rest of the year. Most analysts expect a sales pace in June of between 15.5 million and 15.7 million, the high end of which would mark the strongest number since December 2007. The industry is scheduled to report June sales on Tuesday, supplying an early indicator of the U.S. economy's health.
Big Japanese manufacturers turned optimistic for the first time since September 2011, indicating confidence in Prime Minister Shinzo Abe's reflationary policies even after stock market volatility. The quarterly Tankan index for large manufacturers rose to plus four in June from minus eight in March, the Bank of Japan said in Tokyo today. A positive figure means optimists outnumber pessimists. The median estimate of 22 economists surveyed by Bloomberg News was for a plus three reading. Large companies from all industries plan to increase capital spending 5.5 percent in this fiscal year as the government looks to promote business investment. Japan's economy is strengthening, with data last week showing factory output rose the most since December 2011, retail sales climbed and core consumer prices ended a six-month slide. Abe's task now is to put the world's third-largest economy on a sustainable recovery path and spur private sector activity and wage growth. “Companies are becoming pretty confident about the economy's outlook,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo.
By Keith Crain
Last month, General Motors said it will stop publicly disclosing monthly North American production numbers and will eliminate regional production reports. You can't help but wonder what's going on at GM. GM Vice Chairman Steve Girsky spent decades as an automotive analyst on Wall Street before joining the automaker. More than anyone, he understands the importance and value of production numbers for companies and governments that measure the automobile industry's economic vitality. Girsky knows that industry analysts and economists, as well as GM's suppliers, rely on the data. The data get folded into numerous economic indicators, including ones published by the Federal Reserve. They are a benchmark for industry insiders to forecast GM's future production. This is the same company that last month celebrated its return to the Standard & Poor's 500 index. Surely, GM also wants to return to the Dow Jones Industrial Average someday. The decision to stop publicly disclosing monthly vehicle production numbers is not the way to convince investors and analysts that GM's statistics are legitimate. GM executives must see something in their numbers that makes them nervous. Perhaps they would rather not have the public scrutiny. If this was something that one of the many industry trade organizations was recommending -- with a plausible explanation -- then perhaps it would be worth discussing. But that's not the case. GM appears to be afraid that its production numbers will come up short, particularly when compared with historical figures or GM's global competitors.
Founder's great-great grandchildren join the business; 'There are no guarantees,' Says Bill Ford Jr.
Calvin Ford, 29, knew as a child where he would probably wind up working as an adult. But he took his time getting there. He spent his first few years after college in jobs in the Northeast and in Asheville, N.C. Then his wife landed a job in Denver. It so happened that Ford Motor Co. had an open job there. He applied, went through a standard new employee hiring process in Dearborn, Mich., and since January 2012 has been a zone sales manager based in Denver, working with Ford dealers in Wyoming and Idaho. "I always knew that if I went to work at Ford, it was going to be my career," says Calvin Ford, a great-great grandson of the company's founder. Calvin Ford is one of seven descendants of Henry Ford now working at the car company that bears the family name. Most are just starting their careers but a cousin, Bill Ford Jr., has been chairman since 1999 and Calvin's father has spent 39 years at the company.