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Auto industry slowdown creates vehicle backup at port
Delivery of new cars stalled
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Photo by Dana Rene Bowler
There is a notable drop in the number of vehicles moving off the lots at the Port of Hueneme this month, according to a Global Auto Processing Services Inc. official. Cars are parked on land leased from Naval Base Ventura County.
Photo by Dana Rene Bowler
Global Auto Processing Services Inc.'s parking lots on 113 acres at the port are filling because auto dealerships have slowed their requests for inventory, said a senior official. The company recently increased its storage capacity from 9,900 to 14,000 vehicles.
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More from BusinessWhile not as bad as the backup in Long Beach, the Port of Hueneme is getting crowded with new vehicles because of the paralyzed auto industry.
"The global auto processors on the Navy base are pretty well filled with cars," said Anthony Taormina, executive director of the Oxnard Harbor District.
Global Auto Processing Services Inc.'s parking lots on 113 acres at the port are getting full because auto dealerships have slowed their requests for inventory, said Michael Wynn Song, the company's senior executive vice president.
"Most of the space is being used," Song said. "You know the industry overall, as everybody knows, is facing difficult and challenging times, so it's causing things to back up."
The company recently increased its storage capacity from 9,900 to 14,000 vehicles. It would be just as disconcerting if dealers had depleted inventory and there were a lot of unused extra acreage, Song said.
"Right now we're OK because we've got cars here to keep our lots full," he said. "We try to keep an optimistic outlook no matter what the market challenges happen to be, but we can't predict what lies in the future because the forecasts that you get from the manufacturers have all gone out the window."
In Long Beach, Mercedes-Benz, Toyota and Nissan have each asked to lease space from the port there to store vehicles — a first — according to a story last week in the New York Times.
The cars normally would be loaded on trucks within hours of being unloaded from ships.
Fewer imports
The Port of Hueneme has built a substantial business as a West Coast destination for several auto manufacturers, with about 254,000 vehicles rolled off ships every year.
However, the port has suffered along with the auto industry. Imports fell 26 percent in the first quarter of the new fiscal year that began July 1, declining to 39,106 from 53,120 for the same quarter the previous year.
The vehicles Global Auto processes include Hyundai, Kia, GM and Saab.
Some of its manufacturers have reduced production, Song said, but there was a notable drop in the number of vehicles moving off the port lots in November. He did not provide more specific information.
"Of course, we'd like to have as many if not more cars going out than cars are coming in," he said. "But with the sales off right now, we're not out-gating as many cars at this time as last year."
'Lower consumer demand'
Doug Minnis, president of Pacific Vehicle Processors Inc., referred questions to a parent company spokesman at New Jersey-based Wallenius Wilhelmsen Logistics. He sent an e-mail attributed to Christopher Connor, president of Wallenius.
"Given the current economy, of course we are seeing cargo build up at ports of entry on both coasts, as well as other inventory points such as factories and rail yards and dealerships," Connor wrote.
"This is to be expected while factory production schedules continue to adjust to lower consumer demand."
Pacific Vehicle Processors handles Volvo, Mitsubishi, Suzuki and Land Rover vehicles at the Port of Hueneme.
BMW makes adjustments
The BMW distribution center at the port is not having trouble because it is processing a lower volume of vehicles than last year, said Al Cardona, manager of the BMW distribution center.
"So the only thing that is abnormal is we have slightly lower volume than last year," he said.
"We are taking fewer cars from Germany, and we are taking fewer cars from South Carolina." He refers to the BMW Manufacturing Co. near Greer, S.C., which makes sport utility vehicles.
The German automaker processes about 105,000 vehicles annually through the port.
This year, Cardona said BMW manufactured 4,000 fewer cars for the U.S. market.
About one-third of those come through the Port of Hueneme, so there will be 1,600 fewer cars processed here than last year, he said.
Taormina is optimistic that the port will not suffocate in automobiles because of the industry downturn.
"I would have to say that a lot of auto manufacturers are beginning to adjust their production because they don't want to have a lot of cars sitting at the ports," he said. "It's a difficult issue."
Posted by newshound on November 25, 2008 at 6:51 a.m. (Suggest removal)
Buy American cars! Support your fellow Americans!
Posted by cassandra2 on November 25, 2008 at 6:54 a.m. (Suggest removal)
I know what we are leaving our grandkids: a polluted, warming planet with catastrophic climate change in the offing; declining resources of all kind--land, water, fossil fuels; burgeoning overpopulation, and the brain dead notion that perpetual expansion--expansion of markets, consumer credit, deficits, population--makes an iota of sense in a finite world.
That big cars are safer than small ones cannot be borne out by the evidence. They just FEEL safer, just like doing what we've always done makes us FEEL better.
As to American made automobiles--last I heard GM was planning an SUV factory in St. Petersberg, you know, the city formerly known as Leningrad. My husband's Ford was made in Mexico. My former Honda was made in Ohio. And this is just where the cars are assembled. God only knows where the parts come from. So what's an American made car?
US manufacturers could have made smaller, safer, less gas consuming vehicles but didn't.
P.S. The union is not the villain here. It didn't make the bad decisions and they have already made concession after concession to keep the companies afloat.
Posted by ponygirl515 on November 25, 2008 at 7:27 a.m. (Suggest removal)
Who can afford a new car anyways? Finance one for 7 years? Your American car won't last past 5....American cars need to catch up...they need to make a quality car that doesn't rattle when you go down the road.
Posted by cslaurie on November 25, 2008 at 7:33 a.m. (Suggest removal)
Interesting article about Honda opening a new plant in the Midwest.
At GM for example, it takes up to a year and 250 million dollars to retool a plant to make a different vehicle.
Honda's new plant can switch from a sedan to a van in a 5 hour line halt.
Honda spent several millions improving its production methods.
GM spent millions suing California and other States to block pollution and economy standards. Standards that are already met by Honda.
Posted by cassandra2 on November 25, 2008 at 7:51 a.m. (Suggest removal)
My 5 year old VW was "made" i.e. assembled in Brazil. (So is it a German car?) It has safety features up the kazoo, seats 4, and gets mpg in the low forties most of the time but has gone to 50 on one long trip. All of its repairs so far have been exceedingly minor e.g. replacing a fuse, replacing sensors of some kind.
I read somewhere that Honda, also an exceedingly reliable make, has been producing cars in Ohio since 1982. Forgot where I read that factoid as I'm omnivourous in my reading. They are opening a new factory in the Midwest? Where? Do you know?
Posted by lawson_wayne on November 25, 2008 at 7:59 a.m. (Suggest removal)
The quality of American cars may be hurting sales. In the 80s you felt your car was falling apart after 40,000 miles. Now you replace your car because you get bored with it, the decision to replace a car can be delayed 2-3 years. In the past 15 years I've had four American cars that I drove for well over 100,000 miles each one for 197,000 none required more than normal maintenance or replacement of parts that normally wear out. A far better record than the imports I've had. The fit and finish is as good as the imports.
No affiliations with the auto industry.
Posted by cslaurie on November 25, 2008 at 8:06 a.m. (Suggest removal)
The plant is in East Liberty Ohio.
Here is a link:
http://www.projo.com/projocars/conten...
Posted by cassandra2 on November 25, 2008 at 8:19 a.m. (Suggest removal)
Thanks. Interesting article.
I don't see any compelling reason to rescue the "big three" other than nativeism and nostalgia.
Posted by simivalleycoordinator on November 25, 2008 at 8:40 a.m. (Suggest removal)
My Ford Focus was built in Mexico. I didn't know that until after I had already bought the car and there was a sticker that said "Hermosillo, Mexico".
A year after I bought my Focus at a cost of $14,000.00, it was worth $6,000.00.
My husband's Scion tC (a Toyota built in the U.S.) was $19,000.00 new and within a year it was worth $12,000.00.
What incentive does someone have to buy a new car when the depreciation is so high? We'll be driving our cars until they stop running, because otherwise we'll be in a neverending circle of debt! Not to mention the 12.5% interest rates to even purchase a car if you don't have cash on hand.
Posted by AVDirtFarm on November 25, 2008 at 9:05 a.m. (Suggest removal)
As a former certified “everything mechanic” we had laughed at all the odd looking import trucks in the mid 70’s but noticed the quality of the NISSON 4 cylinder engines the import builders were installing that seemed ahead of their time….so long Vega aluminum silicone lined cylinders, yuk..
Posted by fungus on November 25, 2008 at 9:10 a.m. (Suggest removal)
This story and simivalleycoordinator's comment further the reasons to oppose the auto industry bailout. Instead of supporting the "Big 3", we should be encouraging the foreign auto companies to utilize the existing auto assembly & manufacturing infrastrucure to have their cars labeled for domestic (or even continental) sale made and/or assembled in the U.S.
This would create domestic jobs, provide opportunities for foreign manufacturers to realize price savings, cut down on carbon footprints (due to a reduction in gas/oil use from shipping assembled vehicles), etc. The only real downside is that for a short time there would be some autoworkers out of business while the foreign manufacturers get settled in.
Posted by redsparrow1334 on November 25, 2008 at 9:16 a.m. (Suggest removal)
American cars just have a bad rep. I have had two American cars and haven't had a single problem with them. My Acura and Toyota were piles of junk. Wake up people.
Posted by fungus on November 25, 2008 at 9:37 a.m. (Suggest removal)
redsparrow1334... sounds like user error
Posted by Prodigy on November 25, 2008 at 10:31 a.m. (Suggest removal)
I had a BMW and after the second time if left me stranded I was ready to give American another try. I ended up buying an Australian manufactured Pontiac GTO and love it. The car gets excellent mileage considering the displacement and has had zero issues.
To compare reliability to where a company is based out of doesn't work anymore. Some VW's are made in Mexico, some BMW's in the Carolinas, GM's in Germany and so on.
What it comes down to is every car has its ups and downs. From Pinto's exploding to the new Toyota Tundra's cam shafts snapping. When buying a car try looking at the recalls and service bulletins. Do your homework and shop based on reliability and bang-for-buck. Not what your dad drove or your neighbor loves.
Posted by lawabider on November 25, 2008 at 10:48 a.m. (Suggest removal)
I am above-and-beyond FOR use of American-made products as I see our sell-out to foreign nations as contributing to the financial demise of America -- now, having said THAT, I want to see OUR companies putting their time, energy, effort and money into the cars of the future -- you know, the ones that run without dependency on foreign oil?? My friend in Ventura drives a Mercedes powered by vegetable oil -- sure it smells like pancakes wherever she goes, but she has no "interest" in bombing Iraq/Iran -- and I know a kid that drives a car powered by WATER! It can be done -- that we are not doing it is the real mystery...
Posted by BabyzDaddy_01 on November 25, 2008 at 11:32 a.m. (Suggest removal)
Buying a new car is ridiculous if you can find a comparable 1-2 year old car. Why be so dumb as to take on the depreciation of the first and second years of ownership?
As for domestic vs. foreign...I think it has to do more with engineering and design rather than manufacturing. Sure some foreign make production plants here are more efficient, but it's really the design and R&D that makes the difference. The big 3 should follow through on their failure to be proactive and see into the future needs within the automobile industry and go BK.
Posted by bugmenot on November 25, 2008 at 11:52 a.m. (Suggest removal)
To put things in perspective the bailout costs more than Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA's lifetime budget -- *combined*!
Posted by bugmenot on November 25, 2008 at 11:54 a.m. (Suggest removal)
Honda has never had an unprofitable year. It has never had to lay off employees.
Posted by cassandra2 on November 25, 2008 at 12:55 p.m. (Suggest removal)
I love the idea of recycling cooking oil for fuel. That said, there just isn't enough of it for all our needs and it only works with diesel engines and most people don't have diesel powered vehicles. As for growing biofuels, there is not enough land in this country to grow all the soy or corn or switch grass or whatever to grow enough. Literally. Someone did a study. Again most people don't have diesel powered cars that can use it.
The reasons we are not doing most of these good things is that most take more energy to do than we get back--hydrogen, for example, we are already invested in what we have, we don't have the infrastructure to support the new technology.
There is no getting around the unfortunate fact that petroluem is the top of the heap in terms of power, convenience, versatility, efficiency, etc.. And petroleum is so fraught with bad byproducts--including resource wars . . . .
We need to organize our economy and our lives around not driving so much at least in private, low occupancy vehicles.
I really don't see this bailout as a good thing. It's one thing for government to set standards like mpg or emissions and require tht vehicles meet them and quite another to be co-investors and either micromanage or fail to take care of the people's investment.
Posted by AVDirtFarm on November 25, 2008 at 1:13 p.m. (Suggest removal)
Yes – research before buying is the key, but the car manufacturers need to assess the $3k dollar replacement fee for HYBIRD batteries! .. the next generation fuel efficient car must be affordable and safe…hold on while I set the idle on my big block with dual 50cc carb pumpers….ahhh 115 octane hmmmm – oh yeah, buy American
Posted by bugmenot on November 25, 2008 at 2:39 p.m. (Suggest removal)
cassandra2- have you heard much about algae-fuel?
Posted by cassandra2 on November 25, 2008 at 3:14 p.m. (Suggest removal)
No, not much.
Posted by speaktruthtopower on November 25, 2008 at 3:22 p.m. (Suggest removal)
The Situation...
1. We provide few viable alternatives to the single-passenger commuter car. Our exurbian existence depends on the car to transport us to distant workplaces.
2. We have supported our Auto industry with our insatiable demand for larger vehicles. As these amass on the highway, the lighter alternatives are perceived as unsafe. What if we all had lighter vehicles? Would we all be unsafe, or would we all feel so much safer? The analogy extends to so much more in our society today - we throw our weight around, warring across the globe and leaving a trail of despair and consumptive destructiveness. Well - what if we were to tread lightly and reach out a helping hand? Imagine the possibilites...
3. Our consumptive automotive appetites were fed by excessive borrowing, often with redemptions of home equity. Now that the credit well has dried up with the collapse of the false financial economy, capital goods like Automobiles languish unsold amid the detritus of the real economy.
There is a better way.
The way is to Stop. Think. Converse. Change.
We owe it to our children, and theirs after.
It is the challenge for our generation, but will we take it up?
.
Posted by holdenon_2000 on November 25, 2008 at 5 p.m. (Suggest removal)
Who owns a Sony, when they could own a Phillips?
Who Owns a Toshiba, when they could own a Dell?
Who buys junk from Chin?
The problem is that we keep sending our money overseas, when we could keep it in house.
A great analogy would be, buying girlscout cookies from a neighbors child, instead of buying them from your own child.
We as Americans should tax the crap out of Foreign goods. Our American goods are taxed heavily when imported into foreign countries.
As for American Cars - Ive only owned American. Ive maintained the vehicles, and have never had any expensive problems. A mercedes cost more to tune up once than Ive spent on the entire life of my american car.
Quit buying foreign junk.
Would you support a sweat shop that hires 10 year olds and works them 12 hours a day, just to save a few dollars on your "designer" shoes.
People who buy foreign goods, are contributing to the sweat shops, underpaid poor working conditions, while the business get rich.
I say the number one way to save the American Auto Industry is to tax the foreign goods, that way we are on a level playing field. We pay our workers more, so the products cost more to manufacture. If we want sweat shops in the US, keep buying foreign goods, and the only way American goods could compete in price would be to have the same labor practices here.
If american cars are so poorly made, then why is it in Japan, China, etc, it is a luxury to own an American Car?
Posted by holdenon_2000 on November 25, 2008 at 5:06 p.m. (Suggest removal)
To all the Liberals who hate Big Business in America.
Keep buying for foreign sweat shop made goods, and support Big Business in the rest of the word.
Makes about as much sense as a screen door on a submarine.
Posted by horsespinner on November 25, 2008 at 5:26 p.m. (Suggest removal)
Laws of physics dictate that I must drive a vehicle that has a full chassis. A full chassis vehicle beats a uni-body sheet metal car every time. At least every time our paths have crossed so far. A second law of physics says only one of us can occupy the same space at the same time. Natural laws are so cool, and they hate crummy laws from legislatures.
Posted by cassandra2 on November 25, 2008 at 6:09 p.m. (Suggest removal)
Absolutely, buy an American car so the Ford workers in Mexico make their casa payments and the GM workers in the proposed factory in St Petersberg can buy their ration of vodka for the long white nights.
Don't buy a Honda; the workers in Ohio make too much money and it keeps the local repairs shops from making money off of repairs since they are so reliable.
Happily we should tax foreign goods assuming you can find anything made in the US on the shelves to replace them. But tax them anyway, big time, put Wal-mart out of business.
Posted by simivalleycoordinator on November 25, 2008 at 6:46 p.m. (Suggest removal)
"Posted by holdenon_2000 on November 25, 2008 at 5 p.m.
Who Owns a Toshiba, when they could own a Dell?"
I love this comment.
holdenon_2000, have you called Dell customer support lately? If you do, I'll tell you what you will get... a worker in India.
Dell subcontracts all of their customer support to India instead of the U.S.
No offense to India, it's a fine country...but if I am trying to keep my money in the U.S., do you think buying Dell will help?
Posted by Will on November 25, 2008 at 7:05 p.m. (Suggest removal)
Ford has nice little Ranger pick-ups in Brazil that have diesel engines that get ~40 miles to the gallon. They also have kits to run them on natural gas. You cannot tell me that these would not be mega popular here.
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