EATON: Industry traffic going in and out of dealerships is up 12 percent over last year. We’re up 13 percent. Now, the sales-closure rate is down 1 percent for the industry, but we’re up 7 percent. That’s why we’re picking up market share; 2 percentage points in May over last year.
Obviously the new LH series and the Grand Cherokee and minivans are doing well. Even the oldest models are up.
We don’t completely understand it. Clearly, part of it is pent-up demand. Frankly, disposable income is in fairly decent shape, and interest rates now are at the lowest levels in recent memory.
For quite a while, if it stays exactly like it is today. Not only do we see big increases from a year ago, it’s building a little bit month by month. Even as consumer confidence has paled, we’re still going up.
They’ve got 28 percent of our market, and we’ve got less than 1 percent of theirs. We’re exporting hundreds of thousands of jobs. The auto industry is 4 1/2 percent of gross domestic product in the United States. In Japan, it’s more than 10 percent. We can’t export high-value manufacturing jobs and continue to be world power.
An open market is right for the long term. But if necessary, we’ve got to do exactly what Europe did-force Japan into a bilateral trade agreement. They’re building a tremendously powerful country based on exports, and they’re not just going to give that up.
First of all, on minivans I’ve committed in writing to the secretary of commerce that we would not increase prices faster than the consumer price index. We have, by the way, increased prices less than the CPI over the past 10 years, and we expect that will continue.
We have the best relationship with the national union in memory. But there are some big issues on the table, with job security and health care being the biggest. I can’t help but believe the unions and their members recognize the problems of the industry and the fact that a long strike would have a devastating effect on the companies and ultimately on jobs. But it will still be a tough negotiation.
