Triangular Force Continues to Weigh on the Market

Earnings season propelled the stock market in July, 2010 to its best month in a year, with the Dow gaining 7.1% as corporations continually shattered earnings estimates and revenue consensus. Technology (Apple, Intel), financial (Goldman Sachs, Wells Fargo), big oil (Exxon, Chevron), automotive (Ford), and most other sector heavyweights were weighing in with stellar quarterly reports. Containment of the Gulf oil spill as well as the passing grade received by 84 of the 91 European banks given the “stress test” also helped make July a winner.

Valuation of the market at large continues to be beneath historical levels. Although corporations are turning large profit and many are flourishing, it remains to see if July was a temporary reprieve of market mediocrity or a springboard to a rally that will bring share prices in line with value. I believe that the triangular depressive forces of unemployment, housing, and debt (both European and domestic), will continue to suppress the market for sometime and keep the market undervalued. This is bad news for those currently invested in the market, however, it provides nice entry points for the long-term value investor who has the opportunity to buy company shares at a discount.

On July 30th, it was announced that the United States gross domestic product grew at 2.4% for the second quarter, a number below first quarter growth as well as analysts’ expectations. On August 6th, the Federal Labor Department will report on the national unemployment rate, currently at 9.5%. Housing reports have continually been uninspiring, and the previously mentioned European stress tests of the 91 banks have been coming under increasing scrutiny that they were lenient and ultimately ineffective gauges. This continually tepid news continues to offset the corporate earnings successes, so the question is, what specific news has to come over the wires to get the market winning again?

Of course, any positive report tends to put the market up for the day, however what would trigger and sustain a rally? I believe that unemployment is the most important of the three depressive factors, and that it currently weighs as the largest bear. Not until unemployment falls under 8% do we have a chance to party like it’s October, 2007. There is just too much money on the sidelines and too much depressive mood when unemployment is this high. It appears that it will take sometime for the unemployment rate to get that low, however a surprisingly good number like 9.2 on August 6th would at least display that the United States is slowly but definitively putting people back to work.

Time will tell if the European banking stress tests had validity. If for example, Moody’s decides to give a downgrade to the financial health of one or more of the European nations, this will reinforce criticism of the test and re-invoke anxiety surrounding the global system. On the other hand, if negative news lays dormant and investors begin to gain some measure of confidence that the continent will not collapse; this will go a long way in reintroducing some panicked money back into the game.

People will be avoiding foreclosure, buying new homes, and increasing the value of their current home through renovative improvement when they are back to work. Home buying tax credits and record low interest rates have been unable to boost the industry because of high unemployment, however, at least a floor seems to have been established and pockets of increasing real estate value are beginning to appear in a small number of markets. In addition, homeowners have been able to refinance their homes at these record interest rates that have saved many a family from falling into foreclosure as well as bankruptcy, two positive points which strengthens that floor. But, not until reports surface that new homes are being built at generational baseline levels and homes are selling again will the market be in a position to reach its potential.

The fundamentals are in place for a bullish run. Hopefully, the preponderance of excellent corporate earnings translates into increased employment the way this correlation existed in the 1990’s. If the triangular forces of high unemployment, debt, and a poor housing market do not show improvement, it appears that we may hover in the 9000-11,000 range indefinitely. I do not subscribe to the bearish claims of Armageddon. Europe is not going to collapse, unemployment rates and housing appear to have bottomed out as they do now and again show flickers of light, and our domestic banking system is in much better condition than it was in the fall of 2008.

Chevrolet Camaro – One of the Most Popular Cars for Modification in the Automotive History

The Chevrolet Camaro was a compact car introduced in North America by the Chevrolet Motor Division of General Motors at the start of the 1967 model year as competition for the Ford Mustang.

Although it was technically a compact (by the standards of the time), the Camaro, like the entire class of Mustang competitiors, was soon known as a pony car.

Though the car’s name was contrived with no meaning, General Motors researchers found the word in a French dictionary as a slang term for “friend” or “companion.” Ford Motor Company researchers discovered other definitions, including “a shrimp-like creature” and an arcane term for “loose bowels”! In some automotive periodicals before official release, it was code-named “Panther”.

Four distinct generations of the car were produced.

Generation 1

1967

Sharing mechanicals with the upcoming 1968 Chevrolet Nova, the Camaro featured unibody structure. Chevrolet offered the car in only two body styles, a coupe and convertible. Almost 80 factory and 40 dealer options including three main packages were avaible.

* RS Package included many cosmetic changes such as RS badging, hidden headlights, blacked out grill, revised taillights and interior trims.

* SS Package included modified 5.7 L (350 in³) V8 engine (first 350 in³ engine ever offered by Chevrolet), also L35 396 in³ “big block” was avaible. SS featured non-functional air inlets on the hood, special striping and blacked out grill. It was possible to order both – RS and SS packages to receive RS/SS Camaro. In 1967 Camaro RS/SS Convertible Camaro with 396 in³ engine paced the Indianapolis 500 race.

* Z28 option code was introduced in 1966. This option package wasn’t mentioned in any sales literature so was unknown by most of the buyers. The only way to order Z28 package was to order base Camaro with Z28 option, front disc brakes, power steering and Muncie 4-speed transmission.

Z28 package featured unique 302 in³ “small block” engine, designed specifically to compete in the Club of America Trans Am racing series (which required engines smaller than 305 in³ and public availability of the car).

Advertised power of this engine was listed at 290 hp (216 kW) while actual dyno readings rated it at 360 to 400 hp (269 to 298 kW). Z28 also came with upgraded suspension and racing stripes on the hood. It was possible to combine Z28 package with RS package. Only 602 Z28’s were sold.

Generation 2

The larger second-generation Camaro featured an all-new sleek body and improved suspension. The 1970-1/2 Camaro debuted as a 2+2 coupe; no convertible was offered and would not appear again until well into the third generation.

Most of the engine and drivetrain components were carried over from 1969 with the exception of the 230 in³ (3.8 L) six cylinder — the base engine was now the 250 in³ (4.1 L) six rated at 155 hp (116 kW).

The top performing motor was a L-78 396 in³ (6.5 L) V8 rated at 375 hp (280 kW). (Starting in 1970, the 396 in³ big block V8’s actually displaced 402 in³ (6.6 L), yet Chevrolet chose to retain the 396 badging.) Two 454 in³ (7.4 L) engines – the LS-6 and LS-7 – were listed on early specification sheets but never made it into production.

Besides the base model, buyers could select the “Rally Sport” option with a distinctive front nose and bumper, a “Super Sport” package, and the “Z-28 Special Performance Package” featuring a new high-performance 360 hp (268 kW) 350 in³ (5.7 L) cid V8.
1972

The 1972 Camaro suffered two major setbacks. A UAW strike at a GM assembly plant in Ohio disrupted production for 174 days, and 1100 Camaros had to be scrapped because they did not meet 1973 Federal bumper safety standards.

Some at GM seriously considered dropping the Camaro and Firebird altogether, while others were convinced the models remained marketable. The latter group eventually convinced those in favor of dropping the F Cars to reconsider, and Chevrolet would go on to produce 68,656 Camaros in 1972, the lowest production numbers for any model year.

Generation 3

1982

The 1982 model introduced the first Camaros with factory fuel injection, four-speed automatic transmissions (three-speed on the earlier models), five-speed manual transmissions (four-speed manual transmissions in 1982, and some 83-84 models), 15 or 16-inch rims, hatchback body style, and even a four-cylinder engine for a brief period (due to concerns over fuel economy).

The Camaro Z28 was Motor Trend magazine’s Car of the Year for 1982.

1985

In 1985 Chevrolet introduced a new Camaro model – the famous IROC-Z, called after popular racing series. IROC-Z Camaro featured upgraded suspension, special decal package and Tuned Port Injection system taken from the Chevrolet_Corvette Third generation Camaros also had a suspension system that was more capable in corners than the previous generation.

The Camaro IROC-Z was on Car and Driver magazine’s Ten Best list for 1985.

Engines

* 1978-1981 5.7 L (350 in³) Small-Block V8

* 1982-1985 2.5 L (151 in³) Iron Duke L4

* 1982-1984 2.8 L (173 in³) LC1 V6

* 1985-1989 2.8 L (173 in³) LB8 V6

* 1990-1992 3.1 L (191 in³) 60 Gen II V6

* 1982-1992 5.0 L (305 in³) Small-Block V8

* 1985-1992 5.7 L (350 in³) Small-Block V8

Generation 4

1993

1993 began the fourth and last generation of Camaros, lasting through the 2002 model year. Production of the fourth and final generation was moved from GM’s Van Nuys, California assembly plant to one in Ste. Therese, Quebec in 1993.

Though the car would no longer be produced in the US, the new design which incorporated lightweight plastic body panels over a steel space frame, and a better suspension, further improved upon the Camaro line.

From 1993 to 1997 the Camaro was available with the LT-1 engine, the same Generation II small block V8 used in the Corvette, although in slightly de-tuned form.

In 1996, the long-discontinued “SS” option was resurrected and in 1998, the all-new LS-1 engine Generation III small block was offered on the SS and Z28 Camaros, marking the end of the Generation I small block V8 that had its roots in Chevrolet’s 265 in³ engine of 1955. Unfortunately, sales were below expectations, and production of the Camaro ceased in 2002.
1998

1998 saw a new head light design for the Camaro. The new design removed the previous recessed-light design present in the 1982-1997 Camaros. The faux air intakes on the hood were also eliminated. In addition the LT1 engine was removed and instead an LS1 in its place.
Engines

* 1993-1995 3.4 L (208 in³) 60 Gen III V6

* 1995-2002 3.8 L (231 in³) 3800 Series II V6

* 1993-1997 5.7 L (350 in³) LT1 V8

* 1998-2002 5.7 L (350 in³) LS1 V8

2002

2002 marked the last year of the Chevrolet Camaro and was also the 35th anniversary for the Camaro. This milestone was celebrated with a special anniversary car modified from the factory by SLP. The anniversary package was only available on the SS (Super Sport).

Engine modifications were available in addition to the 325 hp (242 kW) engine which all Super Sports produce. Silver racing stripes down the hood and trunk lid made the car more noticeable than ever–especially against the Bright Rally Red paint (the only color available with the anniversary package).

The car also had the slogan attached to it “Leave a Lasting ImpreSSion” and had the logo embroidered in the seats. The car was only available as a convertible or with T-Tops. 3,000 Camaros with the anniversary package were produced for the United States and 152 for Canada.

Though production Camaros were never as fast as the flagship Corvette, the car cost less than half as much and was easily modified. If its frequent inclusion in automotive enthusiast magazines is any indication, the Chevy Camaro is one of the most popular cars for modification in the automotive history.

Throughout its history, the Camaro shared its internal body and major components with a sister car – the Pontiac Firebird.

China Motorsports and Why It Is Impressive

China is constantly in the headlines in many foreign newspapers, magazines, TV shows. As a French citizen living in China for the past 7 years, I am amazed at how much is written about China in my own country. A few years back it was the year of China in France, the following year it was the year of France in China, exhibits, shows, conferences, it was a great way for both countries to get to know each other better. But even if China is on the forefront of the media all around the world, in many areas it is still at a growing stage and going through the learning process, but not for long.

Motorsport is no exception to the rule; China is learning but is learning fast, really fast. Europe has had a racing culture for much longer, people have enjoyed going to events for years with their family, people have driven cars for over 100 years, but it seems that slowly, the western world is not what is used to be for motorsport, it is sort of stagnating while China is leveraging on motorsport more and more through the involvement of car manufacturers, race teams, promoters.

China is catching up, motorsport is booming. It is impressive to see so many events of international standard coming to China one by one over the years, not all successful right away but all trying their best to succeed: FIA GT, F1, MotoGP, V8, DTM, Le Mans, WTCC. The age of China begging to get events is over. I remember a few years back, as I was working at Zhuhai international Circuit, we had the visit of an American promoter who wanted to discuss a historic F1 event to take place in ZIC. As much as we welcomed his ideas and his vision, and were open to listen to his offer, he had not yet realized that Chinese Motorsport Companies were now in a position to negotiate, partner with series and championships rather than just buy events at any cost. So when he offered for us to purchase the rights to his event for a few million dollars, the deal was off immediately.

And by this simple anecdote, I just want to show that China’s motorsport market has already moved to a different level over the past few years. It took time from the first Hong Kong Beijing Rally, the first GT race downtown Zhuhai, the first F1 Race in Shanghai, to put China motorsport on the map of international motorsport but if we look now, in 2011, what events come to China, what deals are made, what partnerships are signed and the level of sponsorship and involvement of all the partners, teams and federations, it is a completely different scene than the one in the 1990’s, at the start of China motorsport.

Obviously, all is not perfect and a few things have to improve. When an industry grows fast, the foundations can be rocked. I would say that one of the key things to improve is the relationship between all the actors of the industry: promoters, circuits, teams, federations, sponsors, it could often be smoother and healthier. Most parties are passionate about this sport, which is great and necessary, but often, business priorities wildly take over. At times, the struggles that take place amongst the actors seem unnecessary: who will promote what, who will organize what. But it is also part of any growing business community, we all want a piece of the cake and it is no different in China motorsport, actually maybe it is even more obvious because of the glamorous image of motorsport and the strong media coverage. But let’s not forget that we all have a responsibility towards the sport we love, the image we give of it is what people will remember. Small to big operators all contribute to that image. The best we do for China’s motorsport future, the more business will flow back to the community.

2011 is going to be another impressive year with new events and a super busy month of November in South China with WTCC in GIC and Intercontinental Le Mans Cup in Zhuhai for the final round, followed by the world renowned Macau Grand Prix. 2011 is also: news circuits, new teams, new Chinese drivers on the local and foreign scenes, and more foreign businesses looking to invest in our sport, let’s look forward to it and make it grow together.

Automotive Retail: What Makes a Great Employee? And How Do We Notice Them?

When you think about the automotive industry, the first thing that comes to mind are the sleazy used car salesmen, of yesterday, with their plaid blazers and the pressure they place on you to buy a car. This is NOT how the automotive industry works today. The same tactics used in the 1980s will not work with buyers today; so the automotive industry had to change. Now you have people who are specifically working in guest relations, finance, management, internet sales, call center representatives, and much more. With the growth of various automotive groups, there has been a need for accounting, human resources, product trainers, and even talent development! But how can you tell if someone is cut out for today’s automotive industry?

The automotive industry requires bright talent that can produce results (such as sales or finding more efficient ways to operate, allowing the business to save money) or support those who produce results. It is still, very much, like running your own business in most positions. You need to be able to sell your product as well as yourself. Those in the supporting roles need to make sure to keep up with the busy, daily demands that keep processes running smoothly. I have narrowed down 6 qualities that make a great automotive retail employee, both customer-facing and behind-the-scenes:

(1) Integrity. This is defined by hiring those that exhibit honesty and morals. Honesty and morals are qualities thought to be forbidden in the automotive retail world, but integrity must exist!

(2) Respect. This is the ability to appreciate others for the qualities that they exhibit. To be able to truly understand a customer, co-worker, leader, or subordinate… respect must be a quality each candidate possesses.

(3) Tenacity. Tenacity is the desire to go after a goal with the utmost intensity and desire. We need folks in the automotive world who have an “itch” to work on projects until completion. These are the folks who clock out when the job is done, not when the clock tells them to.

(4) Transparency. When you show your hand, so to speak, to your employees or your customers… you are being transparent. Not hiding things, or being deceitful, will help to build trust with others. Trust is the most important aspect of trying to build a team or a relationship.

(5) Cleverness. This isn’t the kind of cleverness to find your way around tasks. This meaning of cleverness is the ability to understand and learn quickly. To keep up with an ever-changing automotive industry, you have to be willing to learn. To build on this idea of cleverness even more, the ability to learn from your mistakes and make changes is an ability that all automotive industry personnel must have to truly be successful.

(6) Accepting. This is an important idea so employees are not trapped in the stone age. Processes change, automobiles change, management techniques change… being accepting of these changes is very important to continue developing new and better ways of working in the automotive industry.

In order to find the talent that possesses the aforementioned qualities we, as automotive industry recruiters, must find a way to vet the quality talent. This means to change the interview process a bit. Develop a ranking system, based on hypothetical and past experience questions, that focus on asking about the qualities you deem as important. You don’t just have to interview once, interview a second time to see if you get the same feeling and similar answers. Set minimum standards for the people you want to hire. This doesn’t mean that a dismal background history should exclude them from consideration, but do look to see if they have learned from their mistakes and taken action to be better. Find out if their motivators are suited for their particular position. For example, take the sales consultant who lists that they desire a $40,000 per year salary versus the sales consultant who lists that they desire a $100,000 per year salary. The $100,000 per year candidate, most likely, has a higher desire to sell cars and will outperform the candidate who is complacent with a $40,000 per year salary. The $40,000 per year candidate may be better suited for a different position.

With these tools in hand, and the ability to vet candidates before presenting them to the hiring manager, it should be easy to spot and hire the right candidate for the right position. A cliché I’ve heard floating around for a while is, “hire hard, manage easy.” I believe this cliché is the living embodiment of proper hiring to ensure a quality workforce.