June 5, 2007

ISM’s May Non-Manufacturing Report: Expansion Rolling On

Filed under: Business Moves,Economy — Tom @ 10:15 am

The Institute for Supply Management’s Manufacturing Report that came out Friday came in at 55.0, up from April’s 54.7. Any reading about 50 indicates expansion. With the exception of two months with readings between 49 and 50 (Nov. 2006 and Jan. 2007), the index has been above 50 for the last 48 months.

The Non-Manufacturing Report on Business, which covers the 86% of the economy other than manufacturing, was just released at 10 AM today. It came in with a reading of 59.7, zipping upwards nicely from 56 the previous month, and thumping a Bloomberg forecast by 72 economists of 55.8 (in fact, the result was outside the 53.0-58.5 range of all of the individual predictions). This report has come in showing and above-50 reading of expansion for the past 50 consecutive months.

In sum: 14% of the economy is doing just fine, and 86% of the economy is seriously rocking.

Worth asking, not answerable: Third- and fourth-quarter GDP growth was hampered by inventory reductions, yet overall production per the ISM reports has continued to expand. Once producers have reduced inventories all they conceivably can, aren’t they going to have to ramp up production even more during the second quarter to keep up with steady demand?

Here’s a clue that the answer is “yes”: The May report shows that the Inventories element of the Non-Manufacturing Index shot up from 52 in April to 61, along with an indication that Inventories are “Growing Faster.”

May Vehicle Sales Update: Everyone But Ford Was Up (Plus: Ford Least Productive)

Ford’s protracted sales slump continued in May, while every other major automaker showed gains:

DETROIT — Toyota Motor Corp.’s U.S. vehicle sales jumped 14.1 percent in May to its best monthly level ever and General Motors Corp.’s sales rose 9.7 percent, helping boost industry sales 5 percent, as both automakers credited in part the appeal of their more fuel-efficient offerings amid high gas prices.

For the second month this year, Toyota outsold Ford Motor Co., which saw sales fall 6.9 percent as it continued to cut low-profit sales to rental companies. Nissan Motor Co.’s sales gained 7.4 percent, DaimlerChrysler AG’s sales rose 3.9 percent and American Honda Motor Co. rose 2.5 percent.

Even factoring in the change in sales to rental companies, the article goes on to say that Ford’s retail sales were still down 3%.

As he did last month, George Pipas of Ford tried an advance PR stunt that fizzled, but left less-than-close observers thinking that the company might be doing better than it really is:

George Pipas, Ford’s top sales analyst, earlier this week had predicted that his company’s retail sales to individual buyers would show a year-over-year monthly increase for the first time since October 2006. But he said Friday that sales during the Memorial Day holiday weekend didn’t rise to his expectations.

It’s more than a little hard to believe that on May 29 (earlier last week) Pipas didn’t know what the Memorial Day weekend sales were going to be. After all, we knew May’s monthly sales totals by late afternoon on June 1, i.e., the very next day.

The fact remains, even after all of the possible dissembling, that everyone showed gains except the folks in Dearborn. They, along with a willfully blind business press, still don’t want to believe that the American Family Association’s boycott over the company’s aggressive support of homosexual advocacy groups and publications matters — even though it has reached 710,000 participants, continues to grow, and is likely influencing the vehicle purchasing decisions of 15 million or more adults.

And while it spends company resources on “corporate social responsibility” and political advocacy, how is Ford doing on improving its business basics? Not good enough; in fact, the company remains in the productivity basement (bold is mine):

(in 2006) It took Toyota 29.93 labor hours to build components and assemble each vehicle.

Nissan Motor Co., 2005’s most productive company, finished second at 29.97 hours, but Harbour Consulting had to estimate that figure because Nissan would not provide 2006 data.

Honda Motor Co. finished third at 31.63 hours, followed by General Motors Corp. at 32.36 and DaimlerChrysler AG at 32.9, Harbour reported. Ford Motor Co. finished last at 35.1 hours, but that was nearly a 2 percent improvement over 2005’s 35.8 hours.Harbour Consulting President Ron Harbour said the difference between the most and least productive companies last year was 5.17 hours, more than two hours better than the 7.33-hour gap in 2005. Yet the gap still is equal to about $300 per vehicle in favor of Toyota, the study said.

The productivity gain came because Toyota’s performance declined while the Detroit Three continued to improve.

That 5-hour gap is made worse by Ford’s still-certainly-higher wages and benefits. Maybe if there was less emphasis on “Corporate Social Responsibility” and political correctness, that gap would be narrower.

How “socially responsible” is it to go out of business, or even to deliberately take desperately needed resources away from producing better cars more efficiently?

As to the press — It has somehow managed to cover many other less significant boycotts, as a Google News Search on “boycott company” (without quotes) from May 5 to June 4, done at 1:30 p.m on June 4, shows (items had to be found by going through many pages of the results):

  • This boycott in Canada over one offensive sign in a Tim Horton’s store made news.
  • Here’s news from England of a boycott of retailer Tesco over a drivers’ strike: “Livingston MP Jim Devine has urged shoppers to boycott Tesco stores to show solidarity with the striking drivers.”
  • Editor & Publisher noted a couple of weeks ago that the Toledo Blade and its unions settled, with the unions ending the boycott of the paper they had called for during their job actions.
  • Here’s one about a boycott over animal extracts being included in Mars UK chocolate bars.
  • And of course, the one-day US gas boycott that went nowhere got tons of coverage, including here.

Yet the only media coverage of the Ford boycott I could find was an opinion column at this Detroit alternative paper, whose author didn’t disclose how many petition signers AFA has, and a dismissive post at one of the New York Times’ blogs (may require free registration) that accused AFA of “dubious assertions.” The Time’s blog entry, dated May 18, had an assertion that wasn’t “dubious,” but rather “plain wrong,” saying that AFA claimed 650,000 boycott supporters at the time, when by early May AFA already had nearly 700,000 petition signers.

Business reality check: What if only 100,000 potential car buyers in the past 12 months who would have bought a Ford vehicle decided not to because of the AFA boycott? That figure is not at all unreasonable — While that’s a hefty 14% of those who have signed the petition, it’s less than 1% of the 15 million adults in the combined spheres of influence of the AFA (over 3 million members alone; add spouses, relatives, and close friends to that number) and the forty-plus other organizations who have signed on to the boycott.

100,000 vehicles at a probably low-end average selling price of $20,000 each would be $2 billion in lost sales. The impact could arguably be much greater, because:

  • The average selling price I cited is likely higher.
  • AFA boycott participants, who are often members of large families, would seem more likely to be buyers of higher-ticket, higher-profit minivans, SUVs, and crossover vehicles.
  • The number of potential buyers who might otherwise have bought a Ford could be well over 100,000.

As Ford continues to turn in the worst sales performance among all major car makers month after month for almost every month in the past year, how irresponsible is it that Old Media isn’t exploring whether the AFA’s economic boycott is taking some kind of toll on the company?

Cross-posted at NewsBusters.org.

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UPDATE, June 8: Congrats to Ford (really) on achieving the highest overall quality rating of any carmaker. If consumers have noticed the quality before JD Power did, that makes the company’s sales decline even tougher to explain without taking AFA’s boycott into account.

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Selected Previous Posts:
- May 2 — April Vehicle Sales: Ford in Deep Denial Over AFA Boycott, with Old Media’s Help
- April 22 — Old Media Does Ford No Favors by Ignoring the American Family Association Boycott
- Jan. 26, 2007 — At Ford, Sounding Like a Broken Record — About a Broken Record
- Dec. 3, 2006 — When Is Ford Going to Have Its ‘Wal-Mart Moment’?
- July 24 — Somebody at Ford Had Better Look Into This

Positivity: Paramedic Revives Newborn after Successful Search

Filed under: Positivity — Tom @ 5:57 am

From Chicago:

Dramatic baby rescue
June 1, 2007

They checked hampers, even the microwave and the freezer.

As minutes ticked by like hours, the five firefighters and two paramedics couldn’t find any trace of a baby believed to have been delivered not long ago in the West Side three-flat.

“You play hide-and-seek as a child but you never think it would be like this,” said one of the paramedics, Angelo Tsokolas. “I just kept thinking, where can you hide a baby?”

Finally, 15 minutes into the Wednesday night search, firefighter Christopher Tolbert opened yet another closet, tossed clothes aside and started going through plastic bags. He picked up a knotted black trash bag, ripped it open and caught a glimpse of an umbilical cord.

“I was shocked to see that, and I turned it over to the paramedics.”

Paramedic Gregg Bagdade immediately reached into the bag and saw a baby boy, purple but warm, lying on a towel.

Bagdade laid the baby on the bed and saw he wasn’t breathing. So he scooped the boy up and, while walking downstairs to the ambulance, breathed into the baby’s mouth until the boy opened his dark brown eyes and began to turn pink and cry.

“I was pretty confident once we turned him over that he would make it,” said Bagdade, who has an 11-month-old son.

“The baby opened his eyes, peeked around, and that’s when I noticed that he had a good head of dark hair,” Tsokolas added.

The baby was whisked to a hospital, where officials said he was doing fine Thursday night.

Bagdade said his colleagues “do miraculous things every day. This is just one such thing.”

Go here for the rest of the story.