Detroit shudders as Washington dithers

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A brief post on the investment-research site SeekingAlpha.comcontends that automakers are “nervously” watching the back-and-forth on Capitol Hillgiven the growing possibility that the United States will go into default if Republicans and Democrats don’t quickly strike a deal over the government shutdown and the federal debt-ceiling limit.

According to Seeking Alpha, auto execs are lobbying politicians to reopen the government “as they ponder the impact of the stalemate on U.S. consumers.

“Most automobile analysts think if the budget impasse stretches into next week that [new-vehicle] demand will be clipped noticeably,” the post points out.

It also notes that yesterday John Krafcik, CEO & president of Hyundai Motor America “created a stir when he predictedU.S. auto sales could drop by as much as 10% due to the squabbling in Washington.”

Seeking Alpha also reports that Ford spokesperson Erich Merkle said the automaker as of yet hasn’t seen a sales slowdown that can be attributed to the shutdown while Chrysler has acknowledged only experiencing a “minimal impact” so far.

On the other hand, The New York Times reported yesterday that General Motors has “acknowledged that the shutdown was chipping away at the consumer confidence that automakers depend on to sell vehicles, even if it was still too early to gauge the full impact of the fiscal standoff.”

GM already concerned shutdown is injuring consumer confidence

“The longer this issue goes unresolved, the growing anxiety among consumers and the market will not help the industry keep up its strong pace,” GM spokesperson Greg Martin told The Times.

One thing’s for sure is that the skittishness being shown by major players in a key freight sector over the impact of the political brinkmanship playing out in Washington bears close watching by fleet owners.  

 

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on Oct 20, 2013

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What's Hammer Lane ?

David Cullen offers his take on how truck fleet owners are impacted by today’s current events. Follow David on Twitter: @David_L_Cullen

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