Reuters:   Honda (NYSE:HMC) expanded its recall by 440,000 as more Toyota (NYSE:TM) models were probed.

Reuters:   ArcelorMittal sees a slow improvement in steel production in Q1.

Reuters:   IMG aid for Greece may be unavoidable.

Reuters:   BHP Billiton (NYSE:BHP) beat numbers and was cautious about China.

Reuters:   Investors are questioning the size of Morgan Stanley (NYSE:MS) pay packages.

Reuters:   Disney (NYSE:DIS) numbers beat forecasts.

Reuters:   Google (NASDAQ:GOOG) expanded Gmail to compete with Facebook and MySpace.

Reuters:   Paulson and Buffett said the US needs tough medicine to recover.

WSJ:   Germany and other EU nations may offer loan guarantees for Greece.

WSJ:    AMR (NYSE:AMR) is ramping up its service to challenge Delta (NYSE:DAL).

WSJ:   Baidu (NASDAQ:BIDU) profits jumped.

WSJ:   Steel and mining companies are expected in be helped by rising metal costs.

WSJ:   Large European airlines are trying to tap export credits for loan guarantees.

WSJ:   GM set a new turnaround plan for Opel.

WSJ:   Viacom (NYSE:VIA) and RealNetworks (NASDAQ:RNWK) will spin off the Rhapsody music service.

WSJ:   Increases in dividends are lagging the recovery.

WSJ:   Coke’s (NYSE:KO) growth rests on its growth overseas.

NYT:   The Fed will reveal its strategy in increase interest rates.

NYT:   China exports rose 21% in January as imports were up 86%.

NYT:   Opel will invest $15 billion to restructure the company.

FT:   S&P warned Citigroup (NYSE:C) and Bank of America (NYSE:BAC) on their credit ratings.

FT:   The head of Disney (NYSE:DIS) talked about the potential of the Apple (NASDAQ:AAPL) iPad.

Bloomberg:   Default swaps are signaling a rebound for GMAC.

Douglas A. McIntyre

Markets in Asia were higher.

The Nikkei rose .3% to 9,964. Recall news pushed Honda (NYSE:HMC) down but Toyota (NYSE:TM) rose.

The Hang Seng rose .7% to 19,922. China Life (NYSE:LFC) rose.

The Shanghai Composite was up 1.1% to 2,982.

At the open, the FTSE was up .4% to 5,130. The Dax rose .7% to 5,539. The CAC 40 was up .6% to 3,634.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Toyota Prius Crash Test

The Wall Street Journal is reporting that today Honda (HMC) is widening its 2008 airbag recall to include over 826,000 Honda and Acura vehicles.  The vehicles affected are model years 2001-2002, and cross the broad spectrum of vehicles sold by the company.  Add this to the well publicised woes that are currently plaguing Toyota (TM), and one could easily ask the question: What has happened to legendary Japanese reliability?

In the eyes of the general public, the main selling point for both these manufacturers is their reliability.  Ask a Honda or Toyota owner about how long they expect their vehicle to remain on the road, and most likely their answer will run in the hundreds of thousands of miles. High profile recalls, especially involving a critical part of the car, can damage a carmakers reputation for years.  Ask any of the American automakers.  Just from looking at this timeline (from Time magazine), one can see that in the last decade the Big Three Detroiters accounted for 5 of 7 large recalls.  Their reputation for reliability took a hammering during this time, and their sales suffered greatly.  It would not be a stretch to say that this was one of the main reasons for the recently abysmal performance of Ford, GM, and Chrysler.

However, the Japanese recalls present a fantastic opportunity for these three companies to realign themselves with the idea of a quality product.  They have already been making massive strides.  GM brand Cadillac came third in the JD Power Initial Quality Study for 2009, Ford was 9th and Chrysler was 10th.  All companies handsomely beat the market average.  And from crisis comes opportunity. Chrysler has created offers and discounts for people who trade in Toyota vehicles.

So as an investor, is this “crisis” actionable? Long term Toyota shareholders should be furious at the company’s management. Their response to the recall was lackluster at best, damaging at worst, and the stock has lost about 23% of its value.  The drop seems to have stabilized as “knife-catchers” try to time the bottom, but more pain could be ahead during the Senate hearings.  My advise is to hold.  For Honda shareholders, I would actually recommend selling.  The stock has held up well during the Toyotapocalypse, but the valuation is a bit high and this new news could set off a round of fear-induced selling.  Since Ford (F) is the only tradable component of the (Not-So) Big Three, we shall discuss them, and I think they present an interesting opportunity.  Certainly there is a lot of optimism built into the stock, but it holds a lower PE than Honda and Ford is absolutely the strongest of the Americans.  I’m not sure I can overwhelmingly suggest a buy, but it is certainly worth buying on any dips.

-AH

Disclosure: Long HMC, Proud owner of several (non-recalled!) Hondas, Long the market.

Japan has two large car companies known throughout the world for quality, workmanship, value, and fuel efficiency. Each took several decades to establish its brand in the US. Each burnished its brand by the launch of hybrids which brought in a new generation of eco-conscious car buyers.

Toyota (TM), the larger of the pair, has ruined it reputation, perhaps forever. It has recalled nearly eight million of several of its most popular models from around the world. Almost immediately after, it recalled over 400,000 versions of its 2010 Prius hybrid for brakes problems.

Honda (HMC), the smaller firm, today recalled 378,758 vehicles in the US for possible airbag problems. The models include certain 2001 and 2002 Accord, Civic, Odyssey, CR-V, and selected 2002 Acura TLs. Honda recalled  440,000 cars in July for airbag related issues. Honda said it was aware of 12 individual incidents due to the flaws.

In a statement given to the AP, Honda said “we have concluded that we cannot be completely certain that the driver’s air bag inflator in the vehicles being added to this recall at this time will perform as designed.”

The news is likely to damage Honda’s sales in the US and probably elsewhere. Toyota’s American sales fell 16% in January even though its recall problems were not disclosed until after mid-month. Industry experts expect that Toyota’s sales will be down by a larger margin in February. The world’s No.1 car company has put aside $2 billion to cover the costs of the recalls and projected lost sales.

It was only yesterday that Honda’s CFO said, “If customers start to harbor doubts about [quality and safety], that would be problem for the whole industry.” It was only a matter of 24 hours for Honda to become a part of the growing problem.

As the number of recalls mounts, car buyers will naturally be concerned about the safety standards of the entire industry. Many drivers will be tempted to keep the vehicles that they have, however old. An old, safe car is better than a dangerous new one.

Douglas A. McIntyre

Moonbattery: Genius President Mispronounces Corpsman
Genius President Mispronounces “Corpsman”. Posted by Gregory of Yardale at February 4, 2010 12:16 PM. Real Clear Politics has the video. And it wasnt a one-time slip-up. He repeated the error twice. …

FREEDOM EDEN: Obama Mispronounces Corpsman (Video)
How could this brilliant orator make such a glaring error? I wonder if FDR or Lincoln could pronounce “corpsman” properly. Im guessing they could. Will the Leftists mock Obama for his butchered English? Im certain they wont. …

Weasel Zippers: Video: Obama Calls Navy Corpsman a Corpse-man…
I wonder if he can pronounce jackass properly?… VIDEO: Obama Mispronounces “Corpsman” At Prayer Breakfast (Real Clear Politics) ZIP.

The Captains Journal Honoring the Navy Corpsman
Every Marine infantryman and parent or spouse of a Marine infantryman knows the value of a Navy Corpsman and the high esteem in which they are held by the Marines. They are technically in the Navy (while the Marines are only part of the…

Wicked Funny Stuff: Corpsman
I say Corpsman–He says Corpsman! I say Idiot–He says Corpsman! I say dumb as a stump–He says Corpsman! I say identity crisis–He says Corpsman! I say double DUH–He says Corpsman! I say where is that hope and change? …

Obama Reads Corpsman As Corpse-Man | The Hill Street Blahg
Commander-in-Chief Comrade Obama cant even pronounce corpsman correctly. He thinks theyre corpse-man. What a maroon this elitist Harvard grad is. Obama is.

GruntDoc Blog Archive RealClearPolitics Video Obama…
RealClearPolitics Video Obama Mispronounces Corpsman At Prayer Breakfast. And, I dont care. Yes, he mispronounced a word I think he should have known, or asked about. He didnt, and thats just one of many things I wish hed done…

Obama teleprompter blues Reads Word Corpsman as Corpse Man…
This video shows Obama speaking at the National Prayer Breakfast and was talking about a Navy Corpsman who assisted the suffering people of Haiti. Obama pronounced it Corpse Man twice. …

Obama Refers To Navy Corpsman As A Corpse-man The Daley Gator
Obama Refers To Navy Corpsman As A Corpse-man. February 4, 2010 Leave a Comment. Click on the image below for video footage of Obamas most recent douchbaggery. Possibly related posts: (automatically generated) …

Is it fair to call Obama a skid mark for mispronouncing corpsman as “corpseman”?
Apparently I was a CORPSE-MAN all those years. I’m glad I have a brilliant, Harvard educated Commander-in-Chief now to set me straight…..Obama is quite the most brilliant person to ever become president ain’t he?????

As a proud, former member of the US Navy, I was a corpsman<Kor-man> Imagine my surprise when I found out that?
where he pronounced the word “corpsman” as “corpse man”…and he said it twice. For those who thought President Bush was a dummy because he mispronounced “nuclear”, will you be consistent and realize that Obama is a dummy too? He also thinks there are 57 states. Or do you only hammer Republicans for mispronunciations?

I heard an Obama speech today……?
Will the national news media jump all over the President for not being able to correctly pronounce the word corpsman in a speech today?Bush got slammed for “nuclear” and other words, will the NY Times, CNN, Washington Post jump on this?

What is a Corpse-man?
Can’t even say “corpsman” properly?
http://www. realclearpolitics. com/video/2010/02/04/obama_mispronounces_corpsman_at_prayer_breakfast. htmlMr. President, it’s pronounced “core-man” not ‘corpse-man”just saying, as the leader of our corpsmen, you’d think he’d know how to pronounce it.

Is it a sad day in America when our Commander-In-Chief?
http://www. realclearpolitics. com/video/2Looks like he lacks in his ability to read simple English from his teleprompter. I am still trying to figure out what george Bush has to do with Obama’s inability to read…So spot on.. You think because you’re the son of a veteran that it some how gives you some sort of relevance? Who claimed to be a hero here? all I see is you trying to wear your father’s uniform. The oath i took says nothing about liking or disagreeing with the president. How about you know what you are talking about before you make yourself look like such an ignorant tool.

If Obama is so smart, why did he mispronounce the word “corpsman” twice today at the prayer breakfast?
Much to my disappointment I read the following “A licensed physician or dentist licensed or graduate of medical or dental school in any country is not eligible for this rating.” Is this true, I want to get all of my schooling (including dental) out of the way and join the Navy to be a corpsman. At first I didn’t see why not…I want to do this to be a part of the special operations community…

Can I be a Navy Corpsman even if as a civilian I graduated from dental school?
I know you have to be an HM to go SARC. I just want to ask if an HMDA can apply for SARC?If not can i cross rate form HMDA to HM after bootcamp?

Recon Corpsman question?
Can i apply to be a SARC if my rate is HMDA(Hospital Corpsman Dental Assistant)?I really want to be a HM so i can be a SARC, but there is no opening, they gave me HMDA and Im shipping out next month.

Recon Corpsman requirements question?
I am in Hospital Corpsman School in the Navy and I am 2months pregnant. I’m one month away from graduating and I have heard 2 different scenarios of how this could go. I get to repick my orders since I lost my C-school and my career counselor told me that I would still be able to transfer to my next duty station if I’m under 20weeks but I also heard that they can keep me here for up to 2yrs (9 months plus 1yr). Can anyone help me come to a conclusion on that? Is that true?

Could the Navy keep me on a training command base for 2yrs because of pregnancy?
I was wondering what would be the best way to pack the care package for him, because he’s a Corpsman and he already carries a shitload of things. Also any idea of what kinds of food can be made with hot water?
Thank you,

A Hospital Corpsman (HM) is frequently the only medical care-giver available in many fleet or Marine units on extended deployment. Hospital Corpsmen serve as enlisted medical specialists for the United States Navy and the United States Marine Corps. The Hospital Corpsman works in a wide variety of capacities and locations, including shore establishments such as naval hospitals and clinics, aboard ships, as the primary medical caregivers for sailors while underway. Hospital Corpsman perform duties as assistants in the prevention and treatment of disease and injury and assist health care professionals in providing medical care to Navy people and their families. They may function as clinical or specialty technicians, medical administrative personnel and health care providers at medical treatment facilities. They also serve as battlefield corpsmen with the Marine Corps, rendering emergency medical treatment to include initial treatment in a combat environment. Qualified hospital corpsmen may be assigned the responsibility of independent duty aboard ships and submarines; Fleet Marine Force, Special Forces and Seabee units, and at isolated duty stations where no medical officer is available.

The colloquial form of address for a Hospital Corpsman is “Doc”. In the U. S. Marine Corps, this term is generally used as a sign of respect.

Prior to the establishment of the Hospital Corps, enlisted medical support in the Navy was limited in scope. In the Continental Navy and the early U. S. Navy, medical assistants were assigned at random out of the ship’s company. Their primary duties were to keep the irons hot and buckets of sand at the ready for the operating area. It was commonplace during battle for the surgeons to conduct amputations and the irons were used to close the cuts and the sand was to keep the surgeon from slipping on the bloody deck. They were commonly referred to as Loblolly Boy, a term borrowed from the British Royal Navy, and a reference to the daily ration of porridge fed to the sick. The nickname was in common use for so many years that it was finally officially recognized by the Navy Regulations of 1814. In coming decades, the title of the enlisted medical assistant would change several times – from Loblolly Boy, to Nurse (1861), and finally to Bayman (1876). A senior enlisted medical rate, Surgeon’s Steward, was introduced in 1841 and remained through the Civil War. Following the war, the title Surgeon’s Steward was abolished in favor of Apothecary, a position requiring completion of a course in pharmacy.

Still, there existed pressure to reform the enlisted component of the Navy’s medical department – medicine as a science was advancing rapidly, foreign navies had begun training medically skilled sailors, and even the U. S. Army had established an enlisted Hospital Corps in 1887. Navy Surgeon General J. R Tyron and subordinate physicians lobbied the Navy administration to take action. With the Spanish-American War looming, Congress passed a bill authorizing establishment of the U. S. Navy Hospital Corps, signed into law by President William McKinley on 17 June 1898. Three rates were created therein Hospital Apprentice, Hospital Apprentice First Class (a petty officer third class), and Hospital Steward, which was a chief petty officer.

A revision in 1916 established a new rate structure. With the introduction of a second junior rate there were now Hospital Apprentice Second Class (HA2c) and Hospital Apprentice First Class (HA1c). The rating title for petty officers was established as Pharmacist’s Mate (PhM), following the pattern of some of the Navy’s other ratings (boatswain’s mate, gunner’s mate, etc.). Pharmacist’s Mate Third Class (PhM3c), Second Class (PhM2c), and First Class (PhM1c) were now the petty officers, and Chief Pharmacist’s Mate (CPhM) was the CPO. This structure that would remain in place until 1947.

During World War I, hospital corpsmen served throughout the fleet, earning particular distinction on the Western Front with the Marine Corps. A total of 684 personal awards were awarded to hospital corpsmen in the war, including 2 Medals of Honor, 55 Navy Crosses, and 237 Silver Stars.

In World War II, hospital corpsmen hit the beach with Marines in every battle in the Pacific. Joe Rosenthal’s iconic photo of the flag-raising on Iwo Jima, captured during that battle’s early days, depicts Pharmacist’s Mate Second Class John Bradley among the group of Marines on Mt. Suribachi that day. They also served on thousands of ships and submarines. Notably, three unassisted emergency appendectomies were performed by hospital corpsmen serving undersea and beyond hope of medical evacuation. The Hospital Corps has the distinction of being the only corps in the U. S. Navy to be singled out in a famous speech by Secretary of the Navy James Forrestal after the conclusion of the war.[1]

Following the war, the Hospital Corps changed its rating title to the generic term it had used all alongHospital Corpsman. The rates of hospital corpsman third class (HM3), second class (HM2), and first class (HM1), and chief hospital corpsman (HMC) were supplemented by senior chief hospital corpsman (HMCS) and master chief hospital corpsman (HMCM) in 1958.

Hospital corpsmen continued to serve at sea and ashore, and accompanied Marine units into battle during the Korean and Vietnam wars. Fifteen hospital corpsmen were counted among the dead following the bombing of the Marine barracks in Beirut in 1983. Today, hospital corpsmen are serving in the Iraq and Afghanistan wars.

Prior to selection to the Command Master Chief program, the 11th MCPON, Joe R. Campa, was a Hospital Corpsman.

Because of the need for Hospital Corpsmen in a vast array of foreign, domestic, and shipboard duty stations, as well as with United States Marine Corps units, the Hospital Corps is the largest rating in the United States Navy.

The basic training for Hospital Corpsmen is Naval Hospital Corps School, located in Great Lakes, IL, one of the Navy’s “A” schools (primary rating training). Upon graduation, the Hospital Corpsman is given the Navy Enlisted Classification (NEC) code of HM-0000, or “quad-zero” in common usage. NECs are analogous to MOS in the United States Army and Marine Corps, or AFSC in the Air Force. There are primary NECs, and secondary NECs. For example, a Hospital Corpsman who completes Field Medical Training Battalion (FMTB) and earns the NEC HM-8404, moves that NEC to primary and has a secondary NEC of HM-0000. If that Hospital Corpsman attends a “C” School, then the NEC earned at the “C” School becomes their primary and HM-8404 becomes the secondary. Some Hospital Corpsmen go on to receive more specialized training in roles such as Medical Laboratory Technician, Radiology Technician, Aviation/Aerospace Medicine Specialist, Pharmacy Technician, Operating Room Technician, etcetera. This advanced education is done through “C” schools, which confer additional NECs. Additionally, Hospital Corpsmen E-5 and up may attend “B” school, qualifying for independent duty in surface ships and submarines, with diving teams, and Fleet Marine Force Recon teams, as well as at remote shore installations. In addition to advanced medical training, these Hospital Corpsmen receive qualification in sanitation and public health.

Of note is Field Medical Training Battalion (FMTB), with locations at Camp Pendleton and Camp Johnson, where sailors bound for service with USMC operating forces earn the NEC HM-8404, Field Medical Service Technician. FMTB provides specialized training in advanced emergency medicine and the fundamentals of Marine Corps life, while emphasizing physical conditioning, small arms familiarity, and basic battlefield tactics. As of 2001, this rigorous training is seven weeks long. Training for the Fleet Marine Force (FMF) familiarizes Navy Corpsmen with the Marines. A bond and mutual respect is often formed between Marines and their assigned Hospital Corpsmen, earning respect apart from their Navy shipmates. FMF Hospital Corpsmen wear the uniforms of the Marine Corps while on duty with the Marine Corps. If not, they wear the Navy’s new working uniforms. It has been proposed that all male Hospital Corpsmen be required to attend Field Medical Training Battalion (FMTB).

Hospital Corpsmen can further specialize, becoming a Special Amphibious Reconnaissance Corpsman, or SARC. They are usually found in both the FMF Recon and Marine Division Recon and MARSOC units. They are trained and skilled in combat, including combatant swimming, opened/closed circuit scuba diving, military free-fall and amphibious operations. They act as advisers regarding health and injury prevention, and treat illnesses from decompression sickness as well as other conditions requiring hyperbaric treatment.

Hospital Corpsmen who have received the warfare designator of Enlisted Fleet Marine Force Warfare Specialist are highly trained members of the Hospital Corps who specialize in all aspects of working with the United States Marine Corps operating forces. Attainment of this designation is highly prized among all Corpsmen. The Enlisted Fleet Marine Force Warfare designation for Hospital Corpsmen is the only US Navy warfare device awarded solely by a US Marine Corps General Officer. This awarding authority cannot be delegated to US Navy Officers. However, obtaining the title of “FMF” is a rigorous procedure and not every Hospital Corpsman who has been with a Marine Corps unit will wear the FMF warfare device. U. S. Navy officers in the medical community(Medical Corps (Doctor), Nurse Corps, Dental Corps) can earn and wear the officer equivalent to this insignia. Additionally Religious Program Specialists can earn and wear an FMF warfare device.

Be they assigned to hospital ships, reservist installations, recruiter offices, or Marine Corps combat units, the rating of Hospital Corpsman is the most decorated in the United States Navy with 22 Medals of Honor, 174 Navy Crosses, 31 Distinguished Service Medals, 946 Silver Stars, and 1,582 Bronze Stars. There have been 20 naval ships that have been named after hospital corpsmen.

“I solemnly pledge myself before God and these witnesses to practice faithfully all of my duties as a member of the Hospital Corps. I hold the care of the sick and injured to be a privilege and a sacred trust and will assist the Medical Officer with loyalty and honesty. I will not knowingly permit harm to come to any patient. I will not partake of nor administer any unauthorized medication. I will hold all personal matters pertaining to the private lives of patients in strict confidence. I dedicate my heart, mind and strength to the work before me. I shall do all within my power to show in myself an example of all that is honorable and good throughout my naval career.”

Grant me, oh Lord, for the coming events;Enough knowledge to cope and some plain common sense. Be at our side on those nightly patrols;And be merciful judging our vulnerable souls. Make my hands steady and as sure as a rock;when the others go down with a wound or in shock. Let me be close, when they bleed in the mud;With a tourniquet handy to save precious blood. Here in the jungle, the enemy near;Even the corpsman can’t offer much lightness and cheer. Just help me, oh Lord, to save lives when I can;Because even out there is merit in man. If It’s Your will, make casualties light;And don’t let any die in the murderous night. These are my friends I’m trying to save;They are frightened at times, but You know they are brave. Let me not fail when they need so much;But to help me serve with a compassionate touch. Lord, I’m no heromy job is to heal;And I want You to know Just how helpless I feel. Bring us back safely to camp with dawn; For too many of us are already gone. Lord bless my friends If that’s part of your plan; And go with us tonight, when we go out again.”

I’m the one called “Doc” I shall not walk in your footsteps, but I will walk by your side. I shall not walk in your image, I’ve earned my own title of pride. We’ve answered the call together, on sea and foreign land. When the cry for help was given, I’ve been there right at hand. Whether I am on the ocean or in the jungle wearing greens, Giving aid to my fellow man, be it Sailors or Marines. So the next time you see a corpsman and you think of calling him “squid,” think of the job he’s doing as those before him did. And if you ever have to go out there and your life is on the block, Look at the one right next to you… I’m the one called “Doc.” Harry D. Penny, Jr. HMC(AC)USN Copyright 1975

Reference: Dictionary of American Naval Fighting Ships

PhM2/c John Bradley, USN, a Hospital Corpsman, was one of the six men who photographed by Joe Rosenthal raising the second United States flag on Iwo Jima during World War II. He is the only one whose face is visible.

During World War II, the United States Maritime Service created a Hospital Corps similar to the Navy’s and sent pursers through this Hospital Corpsman training, to serve in a combined administrative and medical role on civilian tankers, freighters, and oilers. Prior to this, there were no competent trained personnel to perform first aid aboard these vessels. The Purser-Corpsman was trained in anatomy, physiology, pharmacy, clinical laboratory, hygiene and sanitation, emergency treatment, first aid, and nursing. They were taught how to administer injections, treat compound fractures, administer blood plasma, and suture wounds.

The Maritime Services Hospital Corps School was founded at the Sheepshead Bay training station on December 7, 1942. Surgeon S. S. Heilwell (R), United States Uniformed Public Health Service, was placed in charge of training. The course was taught over four months, with a 12 week period of didactic classroom experience and four weeks of practical experience at a Marine hospital. The original class of 331 students resulted in 239 graduates on March 12, 1943, but demand saw an increase in the class to 600 students, to cycle in 50 student classes starting on a weekly basis. Training stations were instructed to provide careful scrutiny by examining boards for all candidates. Pursers on sea duty started arriving at the station on August 10, 1943. By January 1, 1944, there were 600 Purser-Corpsmen at sea, with 1,324 graduates in the Maritime Service.

Selection required an above average mark on the General Classification Test and definite interest in both administration and health care. A survey reveals that the men have an IQ average of 130 and two years of college. Pursers entering the hospital school are given ratings according to the length of time they have spent at sea. Those serving less than six months are given chief petty officer ratings and those with more than six months at sea receive ensign ratings. Of the 50 men who enter the school each week, 30 are pursers and 20 were apprentice seaman.

A-B C D-F G-H I-K L M N-O P Q-R S T-V W-Z

Toyota (TM) has recalled over seven million cars worldwide which includes eight of it most popular vehicles. The company is also faced with investigations about trouble with brakes on its 2010 Prius hybrid.  French carmaker PSA Peugeot Citroen is recalling 97,000 small vehicles that share Toyota’s pedal system.

Ford  (F) announced that is offering a customer satisfaction program to update the software of the regenerative brake system of some 2010-model Ford Fusion and Mercury Milan hybrids.  The Ford Fusion hybrid was the  2010 North American car of the year.

A number of Pontiac Vibe’s have been recalled as have 2.3 million Honda (HMC) cars suspected of having a faulty electrical switch.

As consumers look for safe vehicles, 24/7 has looked through a list of cars and trucks sold in the US to find The Top Seven Cars Not Being Recalled:

The VW Golf. Winner in Insurance Institute for Highway Safety crash tests. VW has not had any recalls in Europe, Asia, South America, or North America–yet. Anti-lock brakes and low drag co-efficient.

Audi A3. Also gets good IIHS crash ratings. ABS. Tire pressure monitor. Four wheel drive. Design not based on the Audi 5000 featured in a” 60 Minutes” segment on unintended acceleration in 1986 which ruined Audi’s sales for a decade.

Jeep Patriot. SUV has accident avoidance system, ABS, hill descent transmission feature, and electronic stability control. High crash test ratings, and no recalls. No relationship to Jeep Liberty or Commander which had brake related recalls earlier this year.

Ford Explorer. No recent recalls. Has electronic stability control. Safety Canopy system for wreck protection. Built-in adaptive load-limiting safety belt retractors, driver- and front-passenger air bags, and adaptive steering column. ABS. NHTSA five-star crash test rating. Little relationship to Explorer which had tire and rollover problems in late 1990s which caused over 100 deaths.

Subaru Legacy. Subaru never seems to have recall problems except for a recent incident of 5,724 Subaru Impreza WRX 2002-2003 model vehicles sold in 16 cold weather states because fuel leaks in the fuel delivery line could result in a fire when there is an ignition source. No deaths or injuries. Current Legacy gets top IIHS crash rating. Has AWD, ABS, Vehicle Dynamics Control, and Traction Control System.

Mercedes C63. Excellent crash test ratings. AMG high performance break system. Electronic Stability Program which handles engine power and individual wheel brakes. One weakness is RWD configuration.Limited slip differential. Less than $70,000 fully loaded.

Volvo C30. Won several crash safety tests. Stability and traction control. Whiplash protection system. ABS and EBA systems.  If Ford does not sell Volvo to China car firm Geely, the entire operation may be shuttered making future recalls less likely

Douglas A. McIntyre

Markets in Asia fell.

The Nikkei was off .5% to 10,356. Toyota (NYSE:TM) fell and Honda (NYSE:SNE) gained. Sony (NYSE:SNE) announced a profit.

The Hang Seng was off 1.8% to 20,342.

The Shanghai Composite was down .3% to 2,995.

At the open in Europe, the FTSE dropped .3% to 5,239. Vodafone (NYSE:VOD) rose and Shell (NYSE:RDS.A) fell. The Dax was up .1% to 5,675 and the CAC 40 lost .1% to 3,788.

Data from MarketWatch and Reuters.

Douglas A. McIntyre

Tesla Model S Sedan and Roadster

On Friday last week, high-end automaker Tesla announced that is was planning a $100 million IPO.  This will probably be one of the most anticipated IPOs of the year, as Tesla is the highest profile electric automaker, an industry that is already struggling to live up to expectations of rampant growth and mass acceptance. The question remains, should investors be interested in the growth potential, or should they run and hide from this highly speculative stock?

A lot has been sprung on investors with the release of the company’s S-1 as filed with the SEC to declare the intent to issue shares.  In August of last year, the company announced that it was profitable for the month of July, however it has yet to maintain profitability for a year or even a quarter.  The company is highly dependent on the continual stream of government incentives and the full drawdown of the DOE’s $465 million loan offer.  While President Obama has made alternative energy a top priority, nothing from the government should be taken for granted at this point with all the noise being made about deficit reductions.

The company’s flagship product, the Roadster, is slated to be discontinued in 2011 and a replacement will not be available until 2013.  And investors should be careful as small companies without infinite resources have a habit of missing deadlines.  The same caution should be applied to the forthcoming Model S sedan, on which it appears the company is pinning all its hopes.  The sedan, which few outside the company have driven, is expected to arrive in 2012 and would cost under $50,000 with a tax credit of $7,500.  This debut cannot be compared to the Volt, a ~$40,000 series hybrid sedan due next year, as the success (or failure) General Motors is not dependent on one car.

Bottom line is that, as with most IPOs, Tesla Motors’ stock will not be for the weak.  As we get closer to the (as yet unannounced) time when Tesla will actually sell the shares, we will get an indication of pricing and total IPO size, but right now this one feels a bit too risky for my blood.

Should investors crave exposure to companies heavily involved in moving the internal combustion engine into the 21st century, Honda (HMC), Ford (F) and Toyota (TM) spring to mind.  Honda has always been a champion of small, powerful and highly efficient naturally aspirated engines, and were the first automaker to sell a hydrogen powered car to the public (the Clarity).  Ford is championing their Ecoboost engines, which use turbochargers to gain class leading MPG while delivering great performance.  It may behoove investors to avoid Toyota until they work out their issues with this recall, however they are the leader in hybrid technology and have highly skilled engineering teams at their disposal.

-AH

Disclosure: Long HMC, no position in any other stocks mentioned

The bad news is just beginning for Toyota (TM). The eight million vehicles the company has recalled, the shut down production of eight of its most popular cars, and potential brake defects with its hybrid Prius will cause large numbers of liability suits, significant losses in sales, and a substantial drop in revenue and earnings in this fiscal year and next. Toyota’s current year ends March 31.

The effects of the defect problems will almost certainly cost Toyota 500,000 unit sales worldwide over the next twelve months. Toyota sold 7.8 million cars in 2009, down 13% from the 9 million it sold in 2008. The world’s No.1 car company lost 16% of its sales in its largest market, the US, in January. The recalls were announced late enough in the month so that they would have only affected sales for a few days. Now that the Transportation Secretary has suggested and retracted a statement that people should not drive Toyotas, sales could easily drop 20% in February. Toyota sold 1.8 million cars in the US last year. If sales stay down by a fifth for the balance of the year, the car company would lose 360,000 vehicle sales in America in 2010.

Toyota’s second largest market is Japan, where it sold 1.35 million cars last year. Toyota’s product problems in its home market now include a request by the government to look into brake problems on the Prius. The concern about product safety in Japan could certainly cut its sales by 10%, or 135,000 vehicles, as local companies including Nissan and Honda (HMC) fight to pick up sales and Korean, European, and US firms scramble to get more inventory into the market to take advantage of Toyota’s situation.

Toyota sold 700,000 vehicles in China, probably the most competitive vehicle sales market in the world, in 2009. GM and VW are the dominant brands in China and local companies are improving product quality and production levels to push up sales in their own country. Toyota revenue could be badly damaged if the Chinese government elects to force recalls or a suspension of Toyota products.

So, Toyota’s sales losses in its three largest markets could be well into the hundreds of thousands of units this year.

Most large global car companies cut large portions of their work forces in 2008 and 2009. The hardest hit firms like GM cut tens of thousands of workers. Toyota faces a large enough drop in unit sales and revenue that it will be forced to fire a substantial number of its factory and white-collar staff. The firm now employees 320,000 people. Toyota may not come close to the kind of cuts GM had to make over the last two years, but it will almost certainly have to shop 10% to 15% of its staff to keep costs in line with falling revenue.  In its last full fiscal, Toyota has sales of 20,529 million yen and lost 437 yen. Toyota’s revenue for the next twelve months may drop to the 17,000 million yen to 18,000 million yen level. That drop in revenue and the costs of the recalls and accrued liabilities will drive Toyota deep into the red.

Akio Toyoda, the grandson of Toyota’s founder, took the CEO’s job in June 2009 after the board decided it needed new management to help the firm recover its reputation for quality, production efficiency and cost control. The recalls make Toyoda’s short tenure a complete failure. As a decedent of the company’s founder, he will be under relentless pressure to step down as an apology for the company’s failures.

A year or two from now, Toyota will have downsized enough to be the size the Honda and Ford are today.

Douglas A. McIntyre

The news media is filled with stories about the eight million or more vehicles that Toyota (NYSE:TM) has recalled in the US, China, and Europe. These have gas pedals that can stick, which can cause unintended acceleration. Audi had a similar problem in the American market in the late 1980s. It took the Germany company 15 years to rebuild its business in the US.

Toyota has a “fix” for the problem that it is sending to dealers now so that they can make the necessary repairs on the cars which have the problem. The press and consumer groups assume that Toyota’s sales will fall and it may face liability lawsuits from owners of cars which may have been in accidents because of the defect. Brand experts claim that it could take years for Toyota to get back the quality image that it took the Japanese company over three decades to build.

But, when it come right down to it, why would a consumer every buy a Toyota again? Why won’t Toyota’s sales in the US fall by a half, two-thirds, three-quarters, or more?

Toyota had something in the 1980s, 1990s, and early in this century that American car companies did not. It built a nearly defect-free set of cars that got good gas mileage, needed few repairs, had strong trade-in value, and was head-and shoulders above its competition in customer satisfaction studies. Honda and Nissan did well in these surveys as well, but Toyota usually finished in first place and its US sales dwarfed those of its Japanese rivals.

The quality balance has shifted in recent years. Most major studies from firms like J.D. Power and Consumer Reports show that the view of US car companies has changed radically. Car buyers no longer see a huge gulf between the workmanship and reliability of Toyota and its US rivals. Hyundai’s American sales have surged as it has done what Toyota did a generation ago–provide low-priced cars that are reliable, fuel-efficient, and fun to drive.

Toyota has its reputation and broad model line as foundations for its 18% of the American car market. Many rival brands make vehicles that are competitive with every Toyota model.

Toyota has shown that it can make a major error in product development and manufacturing. There are enough rival products that consumers need not ever buy a Toyota again. And, why should they?

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei rose .1% to 10,205. Toyota (NYSE:TM) and Honda (HYSE:HMC) fell on recall news.

The Hang Seng rose .4% to 20,193.

The Shanghai Composite dropped 1.6% to 2,941.

At the open in Europe, the FTSE dropped .4% to 5,160. The Dax fell .6% to 5,573. The CAC 40 was down 1% to 3,702.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

If you are running shared processing pools on your IBM Pseries hardware, and you should be, you can make a couple of tweaks to enable some really cool commands / field.

For example, on your hmc:
- Click on your LPAR
- Go to properties
- Click on the Hardware tab
- Check the box that says ‘Allow performance information collection’

Next, reboot your server and log into it via ssh or however and su to root.

- Type the command ‘lparstat 2′.

You will see scrolling information about your LPAR, but the information you want is in the ‘app’ field. This field shows you how many processors are left in the shared processor pool that your LPAR belongs to.

This can be useful to determine why your server is getting pegged, as you can see how your pools are doing inside your LPAR. If there isn’t anything wrong, or very taxing, happening on your LPAR, but you see the app field is at 0 – you will be able to tell where your congestion is.

Markets in Asia were higher.

The Nikkei rose 1.6% to 10,414. Honda (NYSE:HMC) and Sony (NYSE:SNE) rose. Toyota (NYSE:TM) fell on recall news.

The Hang Seng rose 1.6% to 20,351.

The Shanghai Composite was up .3% to 2,994.

At the open in Europe, the FTSE rose .9% to 5,266. The Dax rose 1.1% to 5,708. The CAC 40 was up 1.1% to 3,800.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei was down .8% to 10,765. Honda (NYSE:HMC) and Toyota (NYSE:TM) dropped and JAL filed for bankruptcy after the close.

The Hang Seng rose .9% to 21,661.

The Shanghai Composite was up .3% to 3,247.

At the open in Europe, the FTSE was down .3% to 5,476. Cadbury (NYSE:CBY) rose on news of a possible friendly deal with Kraft (NYSE:KFT). The Dax dropped .4% to 5,894. The CAC fell .3% to 3,964.

Data from Rueters and MarketWatch.

Douglas A. McIntyre

By Paul Ausick of 24/7 Wall St.

Auto companies have recently reported sales figures for the month of December and full-year 2009. For nearly all, the numbers are better. The numbers are also not particularly good.

Ford Motor Co. (NYSE:F) posted a nice 33.5% increase for the month compared with December 2008. Toyota (NYSE:TM) and Honda (NYSE:HMC) also posted monthly gains of 32.3% and 24.5% respectively. General Motors and Chrysler posted monthly declines of 5.7% and 3.7% respectively.

Read more….

Most analysts believe that the VW merger with Porsche is about to create the largest car company in the world which will have annual sales greater than both GM and Toyota (NYSE:TM). VW’s December sales in the US were up 16% to 20,387, which means the German car company is not at all a factor in the American marketplace. Even small South Korean car company Kia sold 21,048 units last month, up 47%.

Ford (NYSE:F) clearly won the American car sales sweepstakes in December with sales higher by 33% over last year to 184,655. Ford’s board did the right thing by going outside the industry to hire CEO Alan Mulally from Boeing (NYSE:BA), although Boeing probably still wishes he was there. Mulally bet the company on a $23 billion loan which kept it out of Chapter 11 and allowed it to rush popular fuel-efficient cars to market ahead of its domestic competitors.

Toyota (NYSE:TM) was a close second to Ford in the impressiveness of its performance. December sales compared to last year were up 32% to 187,860. Toyota is not only ahead of Ford, but with any success could move ahead of GM for the full year 2010. Toyota has the models, dealer network, balance sheet, and marketing programs to thrash the General in its home market.

GM’s number were mixed, especially if one looks below the surface. Unit sales dropped 6% to 208,911. But, sales of its discontinued divisions, especially Saturn and Pontiac, were off 55%. It is still not clear whether GM will rue the day it shuttered such well-known brands which might have bounded back strongly with the economy.

At the middle of the pack were Honda (NYSE:HMC), with sales higher by 25% to 107,043, Nissan, where sales were up 18% to 73,404, and Chrysler, which is still hanging on by the skin of its teeth. Its December performance was down 4% from the same month last year to 86,523. The only good that can be said of Chrysler is that while it is still bleeding the flow out is not as great as it was earlier this year.

Douglas A. McIntyre

GM said today that its sales in China were up 67% in 2009 to 1.83 million vehicles. The No.1 US car company believes that things could get even better. “Despite the sales records in 2009, it looks as if 2010 will be even stronger,” Kevin Wale, president and managing director of GM China Group, said in the statement.

GM’s expectations in India are nearly as great as those for China. The Indian market is smaller. GM expects to sell 100,000 cars in the world’s second most populus nation in 2010, an improvement of more than 40% from last year. India could become on of GM’s largest markets by the middle of the decade if the sales increase stays at the current pace.

GM may find that it is better to be lucky than good. The quality of its cars still generally lags behind vehicles manufacturers in Japan, particularly Toyota (NYSE:TM) and Honda (NYSE:HMC). Korean manufacturer Hyundai is the fastest growing brand in the US. Hyundai has strong global distribution, so it can challenge GM in most markets.

GM is finding that as its sales in its home market plateaus they are improving sharply in emerging market. GM had either the foresight or good fortune to set up manufacturing and marketing partnerships in nations such as China back when the car market there was still small.

The turnaround of GM may work, but it will be largely due to improved sales outside the US.

Douglas A. McIntyre

Markets in Asia were higher.

The Nikkei rose a fraction to 10,638. Toyota (NYSE:TM) and Honda (NYSE:HMC) moved up. JAL hit record lows on fears of bankruptcy.

The Hang Seng was up 1% to 21,499.

The Shanghai Composite was higher by .7% to 3,212.

At the open in Europe, the FTSE was up .4% to 5,428. The Dax was higher by .1% to 6,009. The CAC 40 rose .2%.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Hyundai is likely to continue its string of sharply improved monthly sales in December.The firm is expected to sell 63,000 cars this month when its Hyundai and Kia nameplates are taken together. That figure would put it close to Nissan’s projected 70,000 units for December, according to car research firm Edmunds. Hyundai’s share of the American market would move to 6.3%.

Ford (NYSE:F) is expected to be the winner among The Big Three with sales up 25% unadjusted for the difference is selling days between December 2008 and 2009. Ford’s market share is expected to reach 17.2% on the sales of 172,000 vehicles. That would move Ford close to its rival GM, which is expected to have sales of 206,000 units and a market share of 20.4%. Ford could pass GM in share next year based on the trends at each company.

Toyota (NYSE:TM) is expected to lead the Japanese car companies with sales of 185,000 units, putting it ahead of Ford with a market share of 18.3% for the month. Honda (NYSE:HMC) is expected to sell 100,000 cars and light trucks and have a market share of 9.9%.

Douglas A. McIntyre

MarketWatch:   Moody’s (NYSE:MCO) downgraded Greece’s debt to A2 from A1 and said it had a negative outlook on the nation’s sovereign paper.

Reuters:   The FBI is probing a cyber attack on Citigroup (NYSE:C).

Reuters:   China is asking the WTO to rule on US duties on tires.

Reuters:   The US mortgage industry will have trouble with new disclosure rules.

Reuters:   A Chinese mining company backed out of a deal to buy a part of a US mining company when the US government objected.

Reuters:   Banks with political ties got bailouts according to a new study.

Reuters:   The US pay czar will allow incentives for some AIG (NYSE:AIG) executives.

Reuters:   GM named Microsoft’s (NASDAQ:MSFT) CFO as head of finance at the big car company.

WSJ:   A breach of Citi security by hackers, perhaps from Russia, caused the theft of millions of dollars.

WSJ:   Apple (NASDAQ:AAPL) may offer online TV subscriptions. Disney (NYSE:DIS) and CBS (NYSE:CBS) are in talks with Apple.

WSJ:   Stores are hoping last-minute shopping will make up for the weekend on which weather hurt sales.

WSJ:   Yahoo! (NASDAQ:YHOO) will shut down for a week to save money.

WSJ:   Redefault rates are hurting programs to help people with mortgage problems.

WSJ:   E*Trade (NASDAQ:EFTC) appointed a new CEO.

WSJ:   Altera named a new CFO from Sun Microsystems.

WSJ:   Alcoa (NYSE:AA) has joined a huge Saudi metals project.

WSJ:   Xerox (NYSE:XRX) and Hewlett-Packard (NYSE:HPQ) are making money on corporate printing outsourcing.

WSJ:   GM will start to run assembly lines around the clock.

WSJ:   Honda (NYSE:HMC) will expand in China.

WSJ:   China Telecom will offer the RIM (NASDAQ:RIMM) Blackberry.

WSJ:   R&D spending in the US is rebounding.

WSJ:   Dubai World started talks to restructure debt.

WSJ:   OPEC will probably keep oil prices steady.

NYT:   A business is growing to manage better returns from search ads on Google (NASDAQ:GOOG).

NYT:   The founder of Galleon pled not guilty to fraud charges.

FT:   Collapsed Lehman paid out bonuses.

FT:   China is moving to improve capital ratios at banks.

FT:   Bankers fear what many happen to some sovereign debt in 2010.

Bloomberg:   Sands China may have revenue of $5 billion.

Douglas A. McIntyre

Brand measurement is a popular exercise. Several major business magazines run brand value lists. The annual Brand Z and Interbrand lists always get heavy press coverage. Companies are concerned about their rankings and what they will brag to customers, investors, and consumers about how the world sees their products and services. The Tiger Woods fiasco brought up the issue of how much a brand’s value can be undermined by a rapid and negative change in the fortunes of an important endorser.

Most brand valuation analysis focuses on dollar value, sales and earnings momentum, and how much an individual brand helps a company’s market capitalization. 24/7 Wall St. looked at several major systems to determine brand value and the brand lists based on them. We then looked at the future earnings forecasts for those companies and the recent movement in their stock prices to decide which brands should have the most appreciation in their values in 2010. 24/7 used brand valuations from Brand Z and Interbrand to set 2009 values and then made its own adjustments based on anticipated 2010 improvement. Each brand on the 24/7 list is expected to have an increase in value of least 20% next year.This list is restricted to brands based in the US.
1. Amazon (NYSE:AMZN) has increased its dominance among e-commerce companies, and holiday figures show that traffic to its website is running well ahead of the No.2 shopping destination, Walmart.com. Amazon should sell about two million of its Kindle e-readers this year and there is no competitor that is likely to blunt the increasing sales of the Kindle or the e-books and e-magazines that Amazon sells. Amazon’s share price is up 150% over the last year compared to the NASDAQ, which is up 40%. The stock has continued to outperform the market over the last three months as well. Brand value: $25 billion.
2. BlackBerry, the smart phone made by RIM (NASDAQ:RIMM), maintains its dominance over all of its competitors, and its recent earnings show that its profitability is still increasing and its subscriber base is rising quickly. RIM’s market cap is $40 billion, which as a multiple of sales is extraordinary. The Blackberry may not be competition-proof, but Apple (NASDAQ:AAPL) and the Google (NASDAQ:GOOG) Android do not seem to be taking away its momentum. Brand value: $35 billion.
3. Nike (NYSE:NKE) shows no signs of losing its spot as the world’s premier sportswear company. Its earnings were especially strong in the last quarter. Worldwide future orders are up 4% to $7 billion for the period from December 2009 to April 2010. Brand value: $20 billion.
4. Goldman Sachs’ (NYSE:GS) brand dropped rapidly during the credit crisis and some brand analysis companies pushed down their valuations of the firm by as much as 40%. Last quarter, Goldman posted record earnings and most of its investment banking businesses are doing better than they were before the federal government had to step in and support the financial industry. Congress and some taxpayers are unhappy with Goldman’s compensation practices, but Wall St. has always paid winners well. Brand value: $13 billion.
5. Oracle’s (NASDAQ:ORCL) dominance in the enterprise software industry is growing despite competition from Microsoft (NASDAQ:MSFT), SAP (NYSE:SAP), and Salesforce.com (NYSE:CRM). Oracle’s profits were up 13% in the last quarter even in a market where IT spending is slow. License revenue and support sales are up 14%. Oracle has strengthened its business in the server software industry substantially by buying Sun. Brand value: $26 billion.
6. JPMorgan Chase (NYSE:JPM) is another example of a financial services company that had its brand valuation battered during the credit crisis. It is viewed by investors and customers alike as the most successful money center bank. Its CEO Jamie Dimon is considered the strongest senior manager in the industry. JPMorgan’s stock has outperformed its peers Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC). The company paid back its TARP funds earlier than the other banks. Dimon is conservative in his guidance, but the company results show that future earnings should be impressive.  Brand value: $15 billion.
7. Google share price has risen as it has become clear to investors that the company’s earnings were only slightly dented by the recession and the performance of its core text advertising business is recovering very rapidly, which should improve earnings sharply. Several Wall St. firms have raised their earnings estimates for the company and its stock price has more than doubled from its 52-week low. Google’s move into the mobile operating system business with its Android open-source product is making the company one of the most important providers of software for smartphones and that should extend its search dominance from the PC to the mobile environment. Brand value: $140 billion.
8. Ford (NYSE:F) was pushed off most top 100 brand value lists along with GM as US sales of domestic cars dropped more than a third in 2009 and the market share of American cars kept dropping in their own country. US brands were replaced on brand list by nameplates including Nissan, Porsche, and Honda (NYSE:HMC). Ford is the only American vehicle manufacturer that can claim it has engineered a complete turnaround. It is likely to make money in its home market next year. Its line-up of new fuel-efficient cars has gotten strong reviews from industry experts and is selling well. Ford’s stock is up almost seven times from its 52-week low. Brand value: $28 billion.
9. Avon’s (NYSE:AVP) sales were up for the first through the third quarters of 2009. The same was true with operating income. Avon’s stock price has more than doubled off lows. Despite a poor economy, Avon’s revenue was essentially flat in the last quarter at $2.6 billion. Analysts estimate revenue will rise 10% next year to $11.4 billion. EPS should rise from $1.72 to $2.22. Brand value: $14 billion.
10. McDonald’s (NYSE:MCD) is extending its dominance in the world’s fast food business. Same-store sales have been modestly increasing, but that they have impressively risen every month during the recession. Revenue is Europe and Asia are rising quickly, and the company is making inroads in China. McDonald’s is adding close to 200 stores a year in the world most populous market. The company has been aggressively buying back stock and increasing returns to shareholders. Earnings per share are expected to rise from $3.96 in 2009 to $4.14 next year.  Brand value: $75 billion.

Douglas A. McIntyre

JD Power’s Sales Satisfaction Index Study for 2009 has been published. The research firm questioned 48,000 people. American cars did well as they have for several years in the Powers Initial Quality Survey, its second annual study, and a number of other polls of what consumers think about US brands compared with brands from Asia and Europe.

Among the 38 brands in the Sales Satisfaction questionnaire, Jaguar placed first among luxury cars followed by Cadillac, Lexus, and Mercedes. Among “mass market” autos, Ford’s (NYSE:F) Mercury brand was on top just ahead of Buick, Pontiac, and Chevrolet.

American car company executives trumpet the results of these studies as proof that domestic auto have closed the quality gap with their rivals and continue to make progress in many cases passing the Japanese  for a reputation in quality among consumers.

What the surveys about new cars don’t says is that it is hard for consumers to hate a new car which they have recently purchased unless is a complete lemon from the start. People looks at cars and often test drive several models before making a choice. A nasty salesman may undermine the experience of buying a new car, but consumers who have their brand new vehicles almost always drive them off the lot in a state of near-euphoria.

The perception of a car when it is sold after several years of ownership is quite another matter and the process is much more bloodless and calculating than dealing with a new car. Used cars are often bought for transportation or by poor souls who cannot buy a new one. It says a great deal about what a car is really worth when the price of a used vehicle is compared to the same model when it was new.

The Kelley Blue Book Best Resale Value Awards “recognize automakers’ outstanding achievements in producing vehicles that best retain their value.” The vehicles were grouped into 16 categories including various types of SUVs, sedans, coupes, performance cars, and trucks. Only three American cars topped their categories for resale value. Toyota (NYSE:TM) and its Lexus brand took six spots. Honda (NYSE:HMC) was the leader in three. BMW, Audi, and Mini also did well.

Once the new car smell has been washed away, consumers don’t think that American cars will hold their value very well. The romance of the first two or three trips in a new car gives way to the realization that when that prized possession ages the owner will find out the real value of his purchase.  Then everyone suddenly wants to own a Toyota.

Douglas A. McIntyre

Markets in Asia fell sharply.

The Nikkei dropped 1.3% to 10,005. Honda (NYSE:HMC) and Toyota (NYSE:TM) fell.

The Hang Seng was off 1.4% to 21,761. HSBC (NYSE:HBC) fell.

The Shanghai Composite was lower by 1.7% to 3,240.

At the open in Europe, the FTSE was up .2% to 5,234. The Dax dropped .1% to 5,686. The CAC 40 rose .1% to 3,787.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

J. D. Power and Associates released its new 2009 sales satisfaction index. The survey covers responses from 48,000 people and “is measured for five factors: dealership facility; salesperson; paperwork/finance process; delivery process; and vehicle price.” Of the 38 brands included in the study, 29 have improved from 2008.

Ford’s (NYSE:F) Mercury division won the “mass market” car category, but ironically GM’s discontinued brands Pontiac and Saturn did very well. Pontiac ranked at the same level as Buick.

Among other mass market cars Toyota (NYSE:TM) got relatively poor ratings as did VW and Nissan. The Ford brand and Chevrolet did well.

Among luxury cars, Jaguar, which Ford sold to Tata Motors, ranked first. Cadillac, Lexus, and Lincoln did well. Infiniti, Volvo, and Audi got worse ratings.

It says something about the judgment of car company executives when many of the most highly rated brands are being closed or have been sold.

One of the elements of the car sales process that can be controlled by dealer management to help sales is service. It turns out that impressing customers is not a strength of most dealerships. Powers reports that “automotive brands, on average, are losing 12 percent of buyers to competitors due to poor customer treatment.” This means that manufacturers are doing a mediocre job controlling the enviroment at the locations that sell their products. “The study finds that more than one in five shoppers who leave a dealership without purchasing a vehicle do so because they experienced poor treatment or dealer performance issues such as pricing games, sales pressure tactics or discourteous treatment.”

Douglas A. McIntyre

Markets in Asia were mixed.

The Nikkei was up .4% to 10,023. Honda (NYSE:HMC) and Sony (NYSE:SNE) rose but Toyota (NYSE:TM) dropped.

The Hang Seng fell .3% to 22,495. Sinopec (NYSE:SNP) fell.

The Shanghai Composite rose 1.6% to 3,317.

At the open in Europe, The FTSE fell .4% to 5,294. The Dax dropped .5% to 5,740. Deutsche Bank (NYSE:DB) dropped. The CAC 40 was off .5% to 3,781.

Data from Reuters and MarketWatch.

Douglas A. McIntyre