Thursday, October 29, 2009

Financial Times: VW records profit despite slide in demand

October 29 2009 10:40 AM GMT
VW records profit despite slide in demand
By James Wilson in Frankfurt
Europe's biggest carmaker succeeds in generating a second successive profit – in spite of the slump in demand in most of the world's vehicle markets

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- Kenyatta Lovett

Tuesday, October 27, 2009

(BN) Electric-Car Makers Use U.S. Taxpayer Cash to Enter Market `Full of Risks'

Bloomberg News, sent from my iPhone.

Electric-Car Companies Grab U.S. Cash to Blunt Risks

Oct. 27 (Bloomberg) -- Electric-car makers ranging from Ford Motor Co. to California startups are using $11 billion in taxpayer funds to supply a market that doesn't yet exist.

Fisker Automotive Inc., backed by a $528.7 million U.S. loan, said today it will join the rush to the assembly line by buying a closed Delaware plant from the former General Motors Corp. for $18 million. It will spend $175 million to refurbish and retool the factory to build plug-in hybrid cars.

"The cars built here are truly going to be the cars of the future," Vice President Joe Biden said at the announcement in Wilmington, Delaware. "It's important that we take the lead in this new technology," Biden added.

Obama administration aid to spur demand for more fuel- efficient autos is luring companies including General Motors Co. and Nissan Motor Co. into the electric-car push. The result may be a supply of new vehicles that outstrips demand, said Michael Omotoso, a senior manager for J.D. Power & Associates in Troy, Michigan.

"The U.S. government is saying we'll have 1 million electric vehicles on the road by 2015; we're saying it will take three to five years longer," Omotoso said. "Realistically, manufacturers could be selling 80,000 to 100,000 by 2015."

Investors betting on acceptance of electric autos include Kleiner Perkins Caufield & Byers, the venture-capital firm that employs former Vice President Al Gore and is backing Fisker.

Government Capital

"A huge amount of private capital is on the sideline, so a new locus for funding right now is the U.S. government," said Ray Lane, a managing partner at Kleiner Perkins who works on the firm's alternative energy investments. "The Department of Energy has stepped into the role of private capital, at least temporarily."

There are about 50 alternative vehicle ventures competing for capital right now and 40 of them will probably fail because they "never got scale," Lane said. Of the surviving 10, perhaps two will remain independent companies while the rest are acquired for their brand or technology, he said.

Former Treasury Secretary Henry Paulson is advising Santa Monica, California-based Coda Automotive, which seeks to import China-built electric sedans in 2010. He also is a Coda investor.

While Coda isn't requesting U.S. aid, Ford, Nissan and Irvine, California-based Fisker are among the companies approved for Energy Department loans and grants to build autos that meet President Barack Obama's goal of cutting tailpipe emissions and easing dependence on oil imports.

New Field

Making passenger vehicles that run on a charge from a household outlet is such a new field that global output this year may total only a few thousand autos. Obama seeks to have 1 million on the road within six years.

"Hybrids are still less than 3 percent of the market, and that's a relatively proven technology," said Rebecca Lindland, an IHS Global Insight Inc. forecaster in Lexington, Massachusetts. "Modern-day electric cars are still chock full of risks."

U.S. auto sales averaged 16.8 million this decade through 2007. PricewaterhouseCoopers LLP projected in an Oct. 19 report that global electric-vehicle output might reach 700,000 by 2015.

The idle so-called Boxwood plant, which was never part of the post-bankruptcy GM, will be used to build as many as 100,000 hybrids annually.

"This is a major step toward establishing America as a leader of advanced vehicle technology," Henrik Fisker, the company's chief executive officer, told more than 1,000 people gathered at the plant for the announcement. "We can lead the world again in car manufacturing."

Union Shop

Fisker has committed to making the plant "a union shop, so we are expecting union wages," said Kerry Kryspin, a trustee of UAW Local 435, which represents workers at the facility. The average autoworker made about $28 per hour at the plant before it closed last year, he said.

Automakers worldwide will introduce 42 plug-in and electric models from 2009 to 2012, according to an estimate from PricewaterhouseCoopers. The autos include new entrants from Ford and Detroit-based GM, which championed full-size pickups and sport-utility vehicles in the 1990s.

Nissan is making the biggest electric-vehicle commitment. It is targeting its $1.6 billion government loan to build as many as 150,000 battery-powered Leaf hatchbacks annually and produce lithium-ion battery packs in Smyrna, Tennessee.

"We think that we are the only full-line maker that's offering an electric vehicle as a mass-market vehicle," said Fred Standish, a spokesman for its U.S. unit. "We don't issue sales forecasts. We don't know where this market will be."

Tesla, Too

Ford, whose approval for $5.9 billion in federal aid makes it the largest such recipient, plans an electric version of its Transit van next year, an all-electric Focus sedan in 2011 and a plug-in hybrid in 2012. Some of the money for Dearborn, Michigan-based Ford is going to improved gasoline engines.

Tesla Motors Inc., which began delivering $109,000 Roadster electric sports cars last year, was approved for $465 million in Energy Department funds to help finance a battery plant and a factory to make the Model S electric sedan.

GM has said it will build as many as 60,000 Chevrolet Volt plug-in electric cars annually after sales begin in November 2010, while Toyota City, Japan-based Toyota Motor Corp. plans to build a plug-in model for fleet customers by next year and for retail buyers in 2012.

Electric cars may make up 10 percent of global demand by 2020, Nissan Chief Executive Officer Carlos Ghosn said on Aug. 2 at the company's new headquarters in Yokohama, Japan. IHS Global Insight estimates the total may reach 18 percent by 2030.

Fuel Prices

Fuel prices will be pivotal, according to the Center for Automotive Research in Ann Arbor, Michigan.

With gasoline at $6 a gallon, U.S. sales of plug-in vehicles may reach 518,000 by 2015, the center projected, based on a survey of executives at vehicle powertrain companies. At $2.50 a gallon, the total may be only 169,400. The U.S. retail average was $2.67 a gallon on Oct. 25.

Since June, the Energy Department has awarded $8.5 billion in loans to Ford, Nissan, Tesla and Fisker for development and production of advanced vehicles, and $2.4 billion in grants to set up lithium-ion battery factories in the U.S.

"Consumers aren't pulling on demand for electric vehicles," said Lindland, the IHS Global Insight forecaster. "Instead regulation and policy is pushing these vehicles into the market."

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at Alan Ohnsman in Los Angeles at

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Inside a Cellphone Radiation Testing Lab |

I wanted to share this article from with you:

Inside a Cellphone Radiation Testing Lab
Is radiation from cellphones dangerous or not? As consumers become increasingly glued to their phones, researchers, environmental organizations and cellphone industry groups debate this question. So far, the answer is elusive. But you can find out how much radiation your head is absorbing from any given phone. In the United States, the Federal Communications Commission sets the [...]

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- Kenyatta Lovett

Saturday, October 24, 2009

Why Brand & When It Matters?

Many of you may wonder why I spend so much time dealing with the financial markets, when my overall focus is on marketing and branding. Well unlike most advertising, marketing, and branding professionals, I believe branding/marketing efforts can be quantified in a meaningful way that give insight and direction to the overall direction of an organization. I just finished a book about marketing metrics that successfully ties in marketing metrics to analyzing corporate financial data. I learned that effective branding can't explain a quarterly earning report, but it can explain yearly performance. This particular clip from CNBC (Squawk Box) has a few ironies embedded in it. Before I get to the topic of discussion, I would like for your to notice two things.

If you notice on the screen of the video clip, you'll see that Fed Chairman Bernanke has been muted in the background to hear information about XBox sales. It appears that talk about bank capital, financial instruments, and interest rates have taken a backseat to products and people - at least for a little while.

Another interesting part of the video was the question about XBox sales being higher than normal. My position has been for a few years that we as a society are moving to a glocal economy - yes I spelled that right. Video On-Demand, Home Entertainment, and anything related to low-cost/low-travel will be embraced by the majority of this society. Oh yes, we will still get our party on, but in a way different than expected. It's what the markets are calling the 'New Normal', which used to be just plain normal until everyone needed a 3000 sq ft loft, plus a vacation home.

But the point of my discussion actually happens at the end of the clip when there is a brief credit given to the strength of brands. Why should you brand, and when does it matter? It's a question every senior manager of an organization should be asking at the big meeting. For those linear thinkers, branding happens at three points during the purchase decision process - before it ever happens, the final selection/choice, and after it's over. The rest can be attributed to the 4 P's of marketing. The most important part of incremental sales for a company will always be the final selection/choice point. The most important part of growth for an organization is after the process when individual recommendations occur. However, none of this may happen if there is no branding before the need occurs.

So, to answer the question "Why Brand?", the answer is simply if your product or service is being reviewed with comparable products or services, the selection will favor the familiar, if the 4 P's don't vary much. Thus, all things given equal, I'm buying an Oldsmobile like the rest of my family. Oh wait, the 4 P's took care of that even happening. Okay, I'll go with a Blackberry since all my co-workers are bragging on them. You get my point, the social/psychological aspect constitutes the tie-breaker in a close race.

On to the other question, "When Does It Matter?". It matters in times like these where money is spent more conservative than the market would expect. Thus, more logic is being applied by the consumer, and every company is working on, at the very least, three of the p's (price, product, and promotion). At this point, who doesn't have a 2 Meals for $20 deal? The average consumer will only find value in this proposition if the company is perceptually valued above the promotion either through their food (products) or service (products). My point being, if you haven't started a comprehensive branding effort, it's too late for this tight market, because it matters NOW. What is your value proposition? Are you valued beyond your promotion? Is your price premium above 1? Are you placed in a marketing channel that gives you an advantage? Can your product make the necessary adjustments to meet the requirements of the consumer? These are important questions that you need to have answers for to go beyond survival to prosperity.

Friday, October 23, 2009

Wall Street Compensation

In the midst of layoffs, outsourcing, and other cost-saving measures
related to human capital, what does this say about how everyday people
are valued? I am confused.;jsessionid=7D129A362AEEA906F779DEAE3BA0760C.liveapp18j

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Thursday, October 22, 2009

ERP System Success

Please take this poll for me.

Charitable Giving Poll

Please take a look at these numbers from a LinkedIn Poll.

AARP Video

This is totally corny. I mean corny. Future Lab tried to explain it a little, but I'm not sure the point was made successfully. It is reminding me of the skits on Reno 911. Don't get me wrong, I think this is a worthy topic, but the approach is, well, you know.

Are any of you out there currently marketing to the senior crowd successfully? If so, please share your stories.

Sunday, October 18, 2009

Financial Times: China launches own Nasdaq

October 18 2009 5:55 PM GMT
China launches own Nasdaq
By Patti Waldmeir in Shanghai
China will this week launch its long-awaited Nasdaq-style stock market with 28 companies lined up to list on the new exchange, including China's first listed film company

Read the full article at:

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- Kenyatta Lovett

Tripod Mounted Laptop Stand For Photographers and Mobile Workers |

I wanted to share this article from with you:

Tripod Mounted Laptop Stand For Photographers and Mobile Workers
The Laptop Deck from Tallyn's is an oversized tripod head and flat panel onto which you can fix a laptop, or a really, really big camera. It has a ball-and socket head and is adjustable to fit computers of up to 17" in size, and at $85 is dirt cheap in comparison to most photographic kit. [...]

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- Kenyatta Lovett

Saturday, October 17, 2009

Chattanooga is Making Moves

This is the reason why I think Chattanooga is making power moves in Tennessee. It all starts with small business and culture. Check it out.

(BN) GM Should Reconsider Opel Bids Amid Questions Over Germany's Aid, EU Says

Bloomberg News, sent from my iPhone.

GM Should Reconsider Earlier Bids for Opel, EU Says

Oct. 17 (Bloomberg) -- General Motors Co. should be allowed to reconsider all bids for its Adam Opel GmbH unit after German aid policies pushed the U.S. carmaker to choose Magna International Inc. as the buyer, the European Union said.

Germany's offer of 4.5 billion euros ($6.9 billion) in state loans and guarantees for Opel's sale must be available to all suitors to meet antitrust rules, the EU said yesterday in a statement outlining a letter that European Competition Commissioner Neelie Kroes sent to Economy Minister Karl Theodor zu Guttenberg. Authorities should inform GM and the trust that owns Opel that the aid is available to any buyer, the EU said.

Guttenberg said today that Germany will work to assuage EU concerns and that the sale is likely to proceed. Chancellor Angela Merkel's government chose Magna, Canada's biggest auto- parts maker, and Russian partner OAO Sberbank as Opel's preferred bidder in May, saying they wanted to preserve jobs. GM agreed in September to sell the unit to Magna, turning down a bid from Brussels-based investment company RHJ International SA.

"If there are misunderstandings that need to be cleared up, we will do that," Guttenberg told reporters in Berlin. "I'm confident this will happen in the coming days. Answers will be given, and they'll be the right answers."

A preliminary EU inquiry showed "significant indications" that Germany improperly favored Aurora, Ontario-based Magna over other suitors for Opel, Kroes said in her letter. "A precondition for the aid would be incompatible" with EU rules that seek to limit state involvement in industries, she said.

Karin Kirchner, a spokeswoman in Zurich for GM's European operations, declined to comment today.

Politicians' Favor

Opel, which has its headquarters in the Frankfurt suburb of Ruesselsheim, received an initial 1.5 billion euros in emergency loans from Germany as Detroit-based GM sought Chapter 11 bankruptcy protection in the U.S. in early June. A number of German politicians, including Roland Koch, prime minister of Opel's home state of Hesse and a member of Merkel's Christian Democratic Union party, said in May that they favored Magna.

A trust of executives and politicians from Germany and the U.S. now controls a 65 percent stake in Opel, with GM owning the other 35 percent. The trust chose Magna in September on GM's recommendation. RHJ had been the only other contender after GM negotiators and government aides agreed in July to stop looking at a bid from Beijing Automotive Industry Holding Co.

"GM and the Opel trust should be given the opportunity to reconsider the outcome of the bidding process on the basis of firm written assurances by the German authorities that the aid would be available, irrespective of the choice of investor or plan," Kroes said.

No Interest

RHJ, which agreed on Oct. 15 to buy Commerzbank AG's Kleinwort Benson private-bank unit in the U.K., isn't interested in reviving a bid for Opel, said Arnaud Denis, a spokesman.

"We are not considering it," Denis said. "This isn't in the cards."

Edda Graf, a spokeswoman based at Magna's European headquarters in Oberwaltersdorf, Austria, declined to comment when contacted by Bloomberg News today.

Other contenders for the Opel stake have found alternative automotive investments. Fiat SpA, Italy's biggest manufacturer, was already buying a stake in Auburn Hills, Michigan-based Chrysler LLC when it submitted a non-cash offer for Opel that included factories and other assets from its own car operations.

Fiat said repeatedly after Magna was named preferred bidder in May that it wouldn't improve on the proposal. Chief Executive Sergio Marchionne said in September that Fiat is "completely closed" to any further interest in Opel as his company develops strategy for ties to Chrysler. The Turin-based manufacturer declined to comment further today.

Saab Auto's Disposal

Beijing Automotive, China's fastest-growing automaker, is now a suitor for Saab Automobile AB, another European division that GM is selling. The company joined a group in September that's bidding for the unprofitable Trollhaettan, Sweden-based brand. Partners include sports-car manufacturer Koenigsegg Auto and entrepreneurs Augie Fabela II and Baard Eker.

Saab's sale depends in part on a 400 million-euro technology-development loan from the European Investment Bank, the EU's lending arm. The EIB's board will discuss Saab's application on Oct. 21.

Magna and Sberbank, Russia's biggest lender, are close to completing an agreement to buy a 55 percent stake in Opel, three people familiar with the situation said on Oct. 15. GM's holding in Opel would remain at 35 percent, while the unit's employees would receive a 10 percent stake.

GM, which emerged from bankruptcy in July, is concluding discussions on the Opel disposal's legal details with Magna and Sberbank, while the Canadian manufacturer is in talks with the division's unions across Europe on cutting labor costs.

Germany has said it doesn't need EU clearance for the loans it's providing, arguing that state help for rescuing companies during economic crises is exempted by the regulations.

"I have a lot of understanding for the EU Commission's approach," Guttenberg said today. Asked whether Opel's sale to Magna will unravel, he said, "I don't believe so." Guttenberg said he forwarded Kroes's letter to GM and Opel's trust.

Rainer Bruederle, deputy leader of Germany's Free Democratic Party and a contender to become economy minister in Merkel's new coalition, told reporters today that Opel's sale is likely to succeed in the face of the concerns voiced by the EU. He added that the FDP's criticisms about the bidding process "weren't wrong."

To contact the reporter on this story: Tony Czuczka in Berlin at .

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- Kenyatta Lovett

Saturday, October 03, 2009


Nashville's Global Village

An international event held at centennial park.