A.M. Executive Briefing - Dec. 8
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GM to Cut 1Q Production
Auto haulers are getting more bad news as General Motors (GM) joins the growing list of automakers curbing production. Bloomberg reported late Thursday that GM plans to cut first quarter production by 14% from a year earlier. The automaker says the cuts are due to slow light truck and car sales.The company will produce just over 1.3 million cars in the first quarter, compared to 2.82 million during the same period in 2000, Bloomberg said.
GM did not say if whether it will idle any factories. Transport Topics
Daimler To Ask Suppliers to Cut Costs
Beginning Jan. 1, car and truck maker DaimlerChrysler (DCX) will ask suppliers for its Chrysler division to reduce prices by 5%, the Associated Press reported. Following this, the company plans to ask for an additional 15% cut in the next two years.The company said that cost reduction is needed to cope with a difficult business situation. The wire service noted that this year's car and truck sales are slower than last year.
Other automakers have also requested their suppliers to lower prices, the story said. Transport Topics
Diesel Fuel Deadline May Soften; GOP Drops Ergonomics Challenge
The Clinton administration is wrestling with the possibility of phasing in clean diesel fuel, and announcement could come from the Environmental Protection Agency next week, the Associated Press reported Friday.An administration official told the news service that provisions to phase in the availability of the new fuel might prevail, instead of EPA's desire to have the fuel at every diesel pump nationwide by the summer of 2006.
Meanwhile, Republicans are giving up on adding language to a budget bill that would overturn the ergonomics regulations recently published by the Occupational Safety and Health Administration, the Wall Street Journal reported Friday. Republicans abandoned the ban in an effort to end the budget stalemate, the paper said. Transport Topics
U.S. Jobs Report Confirms Economic Slowdown
Friday's report on U.S. employment by the Labor Department confirmed that the economic slowdown continued in November, as the jobless rate edged up and the number of new payroll jobs was less than analysts had expected, Bloomberg reported.That is a mixed message for the trucking industry. On the one hand, it suggests that freight shipment activity may remain weak. However, the report adds to ideas that the Federal Reserve has room to cut interest rates soon, and that would help truck companies that are carrying debt on their equipment.
The jobs report is one of the most important monthly economic indicators, and lays the basis for various other economic gauges to be reported later. Financial markets rallied on the report because of its implications for easing the U.S. money supply.
November's jobless rose to 4% from 3.9% in October, which had been a 30-year low. Payroll employment rose by 94,000 while analysts had looked for a 135,000 increase.
Manufacturing employment has changed little in the two months, and Bloomberg noted that the overall number of hours worked by the U.S. labor force fell for the first time since August.
Part of the slow growth involves the vehicle production industry, Bloomberg pointed out. DaimlerChrysler (DCX) idled three plants last week, while Ford (F) temporarily closed one plant, affecting a total of 15,200 workers.
Even retailers may be affected by the slowing economy, the wire service said, as Meryvn's department store is considering to scrap plans to hire 10,000 temporary workers for the holiday season. Transport Topics
Trucking Veteran Rose Named New CEO of BNSF
Matthew Rose, who has a trucking background, has been promoted to chief executive officer of Burlington Northern Santa Fe. (BNI) Rose succeeds Robert D. Krebs, who will remain on as the railroad's chairman.Rose had been serving as the company's chief operating officer as well as president.
Rose told the Associated Press he plans to boost BNSF's intermodal business. Rose also said that he wants to increase revenue to keep up with capital spending needs. In 1999, BNSF had sales of $9.1 billion. However it spends about $2 billion a year on capital projects, the news service said.
Before entering the railroad industry, Rose held several positions at Schneider National, the nation's largest truckload carrier.
The Fort Worth,Texas-based railroad owns 33,500 route miles of track covering 28 states and two Canadian provinces. Transport Topics
Mich. Bill to Ease Tax for Canadian Truckers
Michigan's House of Representatives passed a bill this week allowing Canadian carriers to isolate their revenues when paying state business taxes, the Canadian News Wire reported. With this tax break, Canadian trucking companies would reduce their tax liability by 66%.Michigan and Ontario are major trading partners, with 50% of Michigan exports going to Ontario, the wire service noted. Trucks carry 80% of these exports.
Michigan Governor George Engler is expected to sign the bill, the story said. Transport Topics
Expectations of UN-Iraq Settlement Pushes Oil Prices Down
Crude oil prices fell early Friday as traders expected Iraq and the United Nations to announce a settlement, Bloomberg reported.The two parties have been disputing over prices for oil exports, causing Iraq to halt oil exports since Dec. 1. They reportedly came to an agreement late Thursday, but this had yet to be confirmed.
Crude oil prices in London fell 21 cents to $27.26 per barrel, while prices in New York dropped 60 cents to $28.75 per barrel. Transport Topics
Canada's New-Home Starts Slide More Than Expected
Housing starts in Canada fell 5.5%, which is more than analysts expected, Bloomberg reported Friday. Fewer new homes could take a bite out of trucking shipments to and from the country as demand for construction materials and equipment decline.Economists expected construction of new homes to drop only 3%. However, the article said that only 155,8000 units were built compared to 164,900 in October.
The United States and Canada are major trading partners, contributing to a huge trucking market between the two countries. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Bell & Howell Joins Big 3 in Parts Exchange
- Swift to Pay $450,000 in Wage Bias Case
- Corning to Expand N.C. Fiber Optics Plant
- Shell Cuts Fuel Prices in Britain as Price War Begins
- Clinton Proposes Changes in Air Traffic Control
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