GLG News by Tire Experts: Automotive Industry Consultants

Kevin BoyleConsultantKEVIN L BOYLE

Commodity chemicals won't see the same "break"

March 4, 2008

Analysis of:Fourth-Quarter Specialty Chemical Results Vary By Sector | www.chemweek.com

Specialty chemical are not as sensitive to underlying raw material costs as commodities.  In addition, the structure of specialties softens the price volatility.  Commodity chemicals will not enjoy these kinds of results as energy prices increase, a recession looms, and increasing global capacity dampens export prices.

James "Jim" RippyFormer Senior Vice President of OperationsCONTINENTAL TIRE THE AMERICAS, LLC.

They will never get it!

December 27, 2007

Analysis of:With Detroit Downbeat on 2008, Its Suppliers are singing The Blues | www.nytimes.com

GM will never change until the top leadership is gone. They still operate in the mode of Jack Smith and Ignatio Lopes. A look at their performance over the past decade would convince anyone that their failed strategies do not work and will never work without significant changes starting with top leadership. Any coach with the won-loss record of GM would have been fired and sent to the minors long ago. Think about it! Who should be held accountable for declining market share and abysmal profitability if not the very top guy and the top guy in purchasing?  The "tooth fairy" did not cause such poor performance. This company needs new leadership.

James "Jim" RippyFormer Senior Vice President of OperationsCONTINENTAL TIRE THE AMERICAS, LLC.

Better but not good enough ?

November 7, 2007

Analysis of:Goodyear Reports Record Third Quarter Results | www.aftermarketnews.com

Good year has made significant progress sine the days of Gibara,but they are losing ground to both Michelin and Bridgestone. They do not have the efficiency levels of Bridgestone or the technology of Michelin. Their capital investment in new processes is approximately half that of the top two. They are sure to fall behind in plant efficiency. The move to remove retiree health care from their books and to the United Steelworkers is a small band-aid on their legacy cost. They will have to invest more in plant effeciency or be left in a distant third place.

James "Jim" RippyFormer Senior Vice President of OperationsCONTINENTAL TIRE THE AMERICAS, LLC.

GM Purchasing never changes

October 10, 2007

Analysis of:GM looks to substitute materials to reduce costs: Purchasing VP calls price increases "scary" and outlines upcoming plans | www.purchasing.com

GM continues their attempts to restore profitability from the "hides" of their suppliers. Their purchasing department over the years has been a true deterrent to their success. Their recent statements are reminders of the Jack Smith and Ignatio Lopez era. Some of the supplier executives will remember the teams that GM would send to their factories supposedly to assist in improving the suppliers efficiency and reducing the price to GM. What a farce! They should have been visiting their top suppliers to learn how to be more efficient at GM. These programs only covered up the lack of leadership and management capability at GM. They have never learned how to partner with their suppliers to reduce cost for mutual success. They continue to use fear in their supplier relationships. Statements that commodity prices are scary and material substitutions are being considered by GM purchasing only re-inforces that their methods are stuck in a time-warp just like their performance of the past

John RussoProfessorYOUNGSTOWN STATE UNIVERSITY INC

Multilateral negotiation over the GM VEBA

September 20, 2007

Analysis of:UAW Fund Could Be Powerhouse | online.wsj.com

Don't forget this is a multilateral negotiations that includes capital markets. Given the size of the VEBA, all parties may be unwilling to accept the risks.

John RussoProfessorYOUNGSTOWN STATE UNIVERSITY INC

UAW wages

September 18, 2007

Analysis of:UAW, US Automakers must close labor cost gap to survive | www.freep.com

The media often overstates the wages of autoworkers by using figures that that the OEMs provide.  Autoworker wages may even be lower today due to changes in staffing and the OEMs Special Attrition Programs

John RussoProfessorYOUNGSTOWN STATE UNIVERSITY INC

The Impact of Local UAW Negotiations on National Bargaining

September 6, 2007

Analysis of:Automotive news | www.autonews.com

Implications The UAW (International) negotiations with Ford, Chrysler and General Motors (OEMs) are in the final stages, but already there are signs of significant changes in the collective bargaining agreements that will make US automakers more competitive at the shop floor level. In part, this is due to changes in bargaining strategy by the UAW to allow local union bargaining to shape negotiations at the national level.

James "Jim" RippyFormer Senior Vice President of OperationsCONTINENTAL TIRE THE AMERICAS, LLC.

They just don't get it!

August 31, 2007

Analysis of:Ford, GM propose health care fund to union | www.autonews.com

Any agreement on health care funding is only a short term fix. We are the only developed nation in the world that does not supply universal health care to their citizens. Health care cost's have doubled in the past decade with relatively tame overall inflation. We need universal care with a single payer system. There is no justifiable reason for the increases in health care cost to such astromomical levels. This factor affects the ability of the auto maker's to compete with contries that provide health care as a birthright, ratheer than a service. Not only does our system continue to drive manufacturing off-shore, it is morally wrong to have 50 million people without health care access. We have thousands of people who die each year for lack of access to quality health care. Rather than negotitiation to fund a broken system, we need to jointly ask our politicians why we cannot have a system like France, Germany, Canada, United Kingdom, Sweden etc. We are ranked 37th in health care.

Kevin BoyleConsultantKEVIN L BOYLE

Familiarity breeds contempt? No. Opportunity costs.

July 26, 2007

Analysis of:Economics 101: Oil Rises on Supply Questions | www.forbes.com

The price of oil has not yet impinged on the cost of not using it.  It remain economically efficient.  As inflation sets in, however, there will be less and less incremental budget to be spent on energy.  This will likely fuel inflation and hurt demand.

Brian SextonRetail Consultant AutoTech LLC

CarMax (KMX) Loosened Credit Requirements Will Have Negligible Impact

June 21, 2007

Analysis of:CarMax May Take Bad Turn On Tighter Customer Financing | www.forbes.com

An RBC Capital Markets analyst suggested that CarMax weakened credit standards helped the company chart its prior year impressive sales growth and that they might negatively impact current sales performance. Further, it was suggested that sale prices may be on the decline due to a reduced average selling price on loans securitized by CarMax Auto Finance (CAF). These assumptions are questionable.

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