Mike Jackson of AutoNation to Speak at 'Wall Street Journal' Economic Conference .......

    

      In interviews on CNBC and Fox Business...Mike Jackson Chairman and CEO of AutoNation gave guidance on the positive moves Ford Motor Company is making to improve the company’s operational efficiency and financial balance sheet. He also address General Motors and Chrysler as to the current 'state of affairs' within the respective companies. 

 

     Upon meeting with Alan Mulally Chief Executive Officer of Ford, Mr. Jackson had high praise for the way Mr. Mulally has “stepped into the industry” and has begun significant positive changes within the company. Ford has been consolidating brands; restructuring loans, made significant progress with the unions, and has embarked on a disciplined approach to the manufacturing and inventory side of the business, Mr. Jackson explained. 

 

     Mike Jackson believes that Ford has “charted its own course” and gives Mr. Mulally much of the credit for the positive and healthy moves Ford has been making recently......As to General Motors, in an interview with Fox Business reporter Liz Clayborn, Mr. Jackson believed it was no surprise that GM placed an “ongoing concern” statement within its 10k statement recently released.  'Clearly General Motors will need more support.  as for Chrysler, Mr. Jackson contended that, though the company has formed an alliance with Fiat there will still be obsticles ahead in lowering costs and expanding to world wide footprint, but it is viewed as a positive turn that Chrysler and Fiat wouldsign a joint venture deal as Fiat does have "excellent 'small car platform'" engineering and a european reach in marketing.

 

     Mike Jackson was asked about the 'Wall Street Journal' conference and the difficulty for the U.S. auto industry in “Going Green”…. At this moment, the current administration is pushing Detroit to manufacture “green” cars and Mr. Jackson indicated that there is a major disconnect between Washington and the consumers change in behavior to preference  larger vehicles because of the drop in fuel prices.   At this time only 5% of car customers are committed to “green vehicles” and will pay the price for fuel efficiency and 95% of  consumers care about green but will not buy  "green" for a higher price.

 

     Mr. Jackson went on to explain that ‘the car industry switched to fuel efficiency last summer and the sales lots are brimming with fuel-efficient vehicles that the car customer will not buy;  Currently, the U.S. auto industry is operating at depression levels and the only salvation to the current situation will be the much talked about TALF that was scheduled to be launched during the month of February. There are a lot of reasons that the auto industry is at depression levels and you have to go back to the Second World War to find such a low level of car sales within the U.S….The TALF will help but is late and we should have had this six months ago. Now that loans that have been written since October of 2007 will be able to be securitized within TALF, this should help the large auto financing companies within the industry and will help to get consumer credit flowing again. Additionally, ongoing healthy companies may make use of the TALF securitization program and there should be Billions of dollars in auto consumer loans may be funded.

 

As a closing note...Mr. Jackson indicated that ‘much damage has been done to the consumer’s confidence because of the withdrawal of consumer credit for six months, and we have a long way to go to restore this confidence.

 

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