VIDEO: Japanese Earthquake Rattles American Car Industry

March 31, 2011 by · Comments Off 

By Bridget Bennett
brekow@smu.edu

VIDEO: Japan Impact from SMUDailyMustang.com on Vimeo.

The effects of the tsunami and earthquake in Japan are being felt throughout the American auto industry.

Toyota announced that it’s U.S. manufacturing plants are preparing for a possible shutdown. More than 70 percent of their vehicles are produced in the U.S.; however, small component parts made in Japan are needed to continue production.

Foreign-based auto companies are not alone in this crunch.

American auto producers Ford and General Motors depend on small component parts like paint pigments and computer chips that are manufactured in Japan.

Belo Corporation Holds on Tight Through Advertising Slump

May 3, 2010 by · Comments Off 

By Taylor St. Eve
tsteve@smu.edu

The local Texas television company, the Belo Corporation, is slowly climbing back to the top after being hit hard by the recession.

The company posted a net profit of $5.6 million in the fourth quarter, up from a $33 million loss a year ago, even though revenues declined 19.5 percent in the fourth quarter.

Paul Fry, vice president of investor relations for Belo Corp, said the company has seen some downturn from the recession in regards to advertising spending.

“We’re looking ahead in the future to keep improving our growth,” says Fry.

The decline in revenues is in direct correlation with advertising sales being down in 2009. When companies are not spending money on advertising, Belo Corp is adversely affected.

About 90 percent of Belo Corp’s revenues come from advertising, and 40 percent of that is from automobile advertising. With GM and Chrysler regaining momentum and Toyota fixing its manufacturing hiccups, there’s substantial growth to go around.

In the fourth quarter, Belo’s auto advertising declined only nine percent, which was a significant improvement from the third quarter decline of 36 percent.

TV advertising revenue is considerably down across the U.S. In 2009, TV advertising hit $41 billion, compared to $52 billion in 2008. This is an estimated 21 percent decline over one year.

In 2010, TV advertising has been on the rise due to sporting event coverage. Advertising in January climbed nine percent, while February continued to improve with the coverage of the Olympics on NBC and the Super Bowl on CBS.

The recession has forced companies to cut costs and reduce expenses to make their businesses more efficient and profitable. Belo Corp has reduced its capital expenditures $15 million in order to preserve cash. The company has become more profitable since reducing expenses.

While managing through one of the weakest television advertising environments in recent history as a result of the recession, Belo Corp’s stock has risen 7.96 percent, or 88 percent compared to 2009. During the same period, the S&P 500 went from 832 to 1207, an increase of 45 percent.

Belo Corp is the eighth-largest operator of TV stations in the U.S. It owns and operates 20 TV stations in 15 markets, nine of which rank in the top 25. Those 20 stations reach roughly 14 percent of total U.S. households. Among the top station affiliates are ABC, CBS, NBC and FOX.

Dunia Shive, president and chief executive officer, said in the company’s recent fourth quarter earnings release that Belo has enjoyed strong performances throughout 2009 and is looking towards the future for more strength.

JP Morgan Chase analysts expect to see revenues increase 12 percent in 2010, an election year in which Belo should pick up political advertising revenues of $47 million. Analysts also expect auto advertising to rise 40 percent in the upcoming first quarter.

Global News Blog: Outside Nations Petitioning Bolivia for Lithium Rights

March 26, 2009 by · 1 Comment 

Posted by Sarah Stradtman

Uyuni, Bolivia is one of the world’s largest providers of lithium. Just recently, leading car distributers have been determined to win over the rights to this natural resource in hopes of introducing the “world’s next generation of hybrid and electric cars.” Major car corporations like Mitsubishi, BMW, and General Motors have been actively meeting with Bolivian president Evo Morales to discuss the issue according to a New York Times article.

“We know that Bolivia can become the Saudi Arabia of lithium,” said Francisco Quisbert, 64, the leader of Frutcas, a group of salt gatherers and quinoa farmers on the edge of Salar de Uyuni, the world’s largest salt flat. “We are poor, but we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”

It shocks me that Bolivia, although not a terribly poor nation, but still facing economic struggle, would rather waste the time debating internally than using their time to export lithium for millions, or maybe even billions of dollars. European and Japanese nations have managed to find lithium elsewhere, however, they still frantically pursue Bolivia as a resource.

If I were Evo Morales and knew how the profits from allowing access to the lithium would benefit my country, I would take the other nations up on their offer, especially at this time.

Too bad the world’s greatest lithium supply isn’t in the United States. Then I wouldn’t have to worry so much about getting a job in the next couple of months!

Global News Blog: What is America Saying?

February 22, 2009 by · 1 Comment 

Posted by Madison Wertz

General Motors (GM) is one of the most recognizable American companies and as we all know, it is struggling to survive. On Saturday, Reuters reported that GM and Chrysler are asking for an additional “loan” from Canada. Reportedly, they are negotiating for C$10 billion from the Canadian governments, specifically Ontario. This is in addition to the C$4 billion that Canada had already pledged to auto companies last year.

What is interesting about this entire situation is not the widely known fact that the American auto industry is circling the drain, rather what the company’s dire situation is communicating to the rest of the international and highly inter-twined economy. From my limited understanding of economics, it seems that where America stands and the attitudes our companies have, are similar to the rest of the world’s economic confidence. American’s most well known car industry just requested another loan from a county who’s currency is weaker, politics are most sporadic and hardly ever makes an official statement – right or wrong in international conflicts. This loan, however, must be sending a message about America’s serious economic problems to the rest of the world.

Now, I am of course not finding fault in GM for requesting a loan, and GM does have a strong relationship with Canada, but let’s face it this is another bad signal our financial market is sending. If GM goes under, which to be honest I’m leaning towards the reality that it is- American is going to panic. What should America do to communicate confidence? Or should we stop with the marketing and PR and just say- Hey guys, we’re lost?

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