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Old 11-20-2008, 12:39 PM   #1
AVANTI R5
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Default A Sea of Unwanted Imports

Quote:
http://www.nytimes.com/2008/11/19/bu...er=rss&emc=rss





LONG BEACH, Calif. — Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.

For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.


And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.


“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.”


The backlog at the port is just part of a broader rise in the nation’s inventories, which were up 5.5 percent in September from a year earlier, according to the Commerce Department. The car industry has been hurt particularly, with sales down nearly 15 percent this year. General Motors has said it would run out of operating cash by the end of the year if it does not receive a government bailout.



But the inventory glut in Long Beach is not limited to imported cars. There has also been a sharp drop in demand for the port’s single largest export: recycled cardboard and paper products.


This material typically goes to China, where it is used to make boxes for new electronics and other products that are sent back to the United States. But Chinese factories reacting to sharply falling demand are slowing production, so they need less cardboard. Tons of paper are piling up recycling businesses around the port, the detritus of economies on hold.


Long Beach is an important port, particularly for the West. It is where imported products arrive and filter through the tributary of trucks, trains and retailers into the hands of consumers. But now, products are just sitting.



“We’re supposed to move things, not store them,” Mr. Wong said.


Roughly 20 percent of the nation’s container imports last year came through Long Beach, putting it close behind the largest container port, Los Angeles. This year, shipping volume at Long Beach is down 10 percent from 2007, and nearly all major ports around the country have seen similar declines. Veteran port workers say the slowdown since mid-October is like nothing they have ever seen. And it is having a cascading impact on other businesses and workers.


In the 150-acre terminal where Toyotas are unloaded, there is a sea of Corollas, Camrys and RAV4s. The mere presence of so many cars is not unusual, given that Toyota brings in 250,000 cars a year in biweekly shipments. But in a sign that something is amiss, dozens of tractor-trailers that transport new cars to dealers sat empty last week amid the rows of Toyotas.


Kurt Golledge, 48, was one of just two truckers loading his green, 75-foot-long hauler with cars last week. Mr. Golledge said eight of his colleagues were laid off this month because Toyota dealers did not want more deliveries.



“I was dropping cars in Henderson, Nev., about a month ago and the dealer told me: ‘Take ’em somewhere else and dump ’em,’ ” said Mr. Golledge, who works for a company called Allied Systems. “All the dealers are telling us the same thing.”


Auto dealers typically place orders with manufacturers months in advance, but they can modify their orders to receive fewer vehicles.



“The ships keep coming, but there’s nowhere for the cars to go,” Mr. Golledge said. He said he believed the vehicles he was loading would be his last before he was laid off, and he was already considering where he might find a new job.
While shipments for some items have slowed, the cars have kept coming in at their regular pace partly because the auto factories can take months to adjust to changes in demand. Toyota is wrapping up a deal to use six acres to park cars at the port, and is seeking more space.



“Toyota wants as much as we can give them,” said Gail Wasil, assistant director of the port’s real estate division.

For its part, Toyota says the higher-than-usual inventories at the Long Beach port are a result of shrinking demand, particularly in Southern California, which is one of its biggest markets. The company declined to say how many cars were at the port or how long they would be warehoused.

Toyota has adjusted its output to reflect falling demand, said Sona Iliffe-Moon, a Toyota spokeswoman.



Ms. Wasil said Nissan, whose cars arrive through the port of Los Angeles, sought a deal with Long Beach to park its overflow vehicles there. Mercedes struck a deal to use more acres just a few weeks ago, she said.


Officials from Mercedes and Nissan did not return calls seeking comment.


The mothballing of cars is nothing new for Detroit, where thousands of unwanted American-made cars have been parked over the last two years at Michigan’s state fairground and in lots at its airports.



It is more unusual to see a lot at the California port filled with thousands of unsold Mercedeses, most of them gathering dirt on the plastic white film that protects their hoods and trunks. Some appeared to have been stashed at the port for several months.


Last week, Mercedes delivered around 1,000 more cars to Long Beach on the Grus, a 580-foot container ship.
“A year ago, I was looking into buying one of these for my wife,” said Kurt Garland, the terminal manager overseeing the unloading of the white, silver and black sports cars, sport utility vehicles and sedans. “Now I’m not. I’m saving money, paying bills, hunkering down.”



Not far away, metal, cardboard, paper and plastic are piling up in the lot of Corridor Recycling. The company takes in refuse from around the country, then bales it for shipment to China. The cardboard is used to make new boxes while used shrink wrap is turned into shoe soles and insulation for sleeping bags and coats.



For much of this year, the company shipped about 25 containers a day, each filled with 23 tons of refuse to be recycled. But after the Olympics, demand slowed for recycled metal. In October, demand for everything else took a sharp downturn, and for the last two weeks the company has not shipped a single container.


“It just came to a complete stop. Absolutely a stop,” said Gilbert Dodson, the recycling company’s co-owner. “I’ve seen it slow over the last 25 years, but this is the worst,” he said of the current downturn.


Like his counterparts in the auto industry, Mr. Dodson is looking for extra space to accommodate the growing number of bales on his three-acre property. The recycled goods keep arriving in big trucks, even though he now pays only $21 a ton for refuse he paid $120 a ton for earlier this year, but there is nowhere for him to export.


“It keeps coming in,” he says. “But no one is buying.”







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Old 11-20-2008, 01:33 PM   #2
design1stcode2nd
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Gimme 30k off a C63 and I'll take one. I' even do 15k off a C350 sport.
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Old 11-20-2008, 01:46 PM   #3
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^^ word. dealerships are still so stubborn on the pricing its ridiculous. i still cant get over what the sales manager said when i asked about the 08/09 STI pricing: "you know... this is just one of those super rare cars so we cannot sell it for anything less than sticker... and no other dealerships will either i promise you." i walked out and never looked back.
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Old 11-20-2008, 01:52 PM   #4
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Quote:
Originally Posted by JuggernautTCW View Post
^^ word. dealerships are still so stubborn on the pricing its ridiculous. i still cant get over what the sales manager said when i asked about the 08/09 STI pricing: "you know... this is just one of those super rare cars so we cannot sell it for anything less than sticker... and no other dealerships will either i promise you." i walked out and never looked back.
hahaha. I would have laughed pretty hard. They aint gonna sell jack **** with that attitude.
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Old 11-20-2008, 01:59 PM   #5
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I think I'd walk back in with the ad from South Coast and the 8k off MSRP with 0% financing for 63 months and go "O' Rly"!
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Old 11-20-2008, 02:05 PM   #6
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Must be good to be BMW...
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Old 11-20-2008, 02:06 PM   #7
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I see some priuses in there!

I laugh at those who forked out over MSRP for a Prius!
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Old 11-20-2008, 02:07 PM   #8
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here comes deflation!
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Old 11-20-2008, 02:36 PM   #9
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I can't wait to pick up a brand new wrangler for $9,000.
I chose an american company...because...you know
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Old 11-20-2008, 02:45 PM   #10
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I got a call out of nowhere yesterday from a local Honda dealership asking me if I was in the market for a new car. I told them no, they said OK, and we hung up. The guy sounded like he didn't even want to be on the call... I'm guessing it's related to the surplus in supply they (and other manufacturers) are experiencing right now. This has never happened to me before... it's particularly strange since I've only had my current Honda for 11 months.

-Mike
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Old 11-20-2008, 02:48 PM   #11
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dam all those cars sitting for months exposed to weather, rail dust, acid rain?!?....
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Old 11-20-2008, 03:07 PM   #12
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Originally Posted by naimouasta View Post
dam all those cars sitting for months exposed to weather, rail dust, acid rain?!?....
Well, yes and no. Most the the new Hondas I get off the truck here at our dealership have a pretty abundant amount of plastic covering them.
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Old 11-20-2008, 03:20 PM   #13
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Quote:
Originally Posted by JuggernautTCW View Post
^^ word. dealerships are still so stubborn on the pricing its ridiculous. i still cant get over what the sales manager said when i asked about the 08/09 STI pricing: "you know... this is just one of those super rare cars so we cannot sell it for anything less than sticker... and no other dealerships will either i promise you." i walked out and never looked back.
Yep thats what lots of dealerships are saying and it happened to me too but i was like 'Oh sir thank you for your time, i will just wait a couple weeks and pick one up at auction.'

Sure as CRAP! 3wks later the dealership folded and several of there cars were at the dealer auction for almost nothing. Its so funny to look on autotrader and cars and see the dealers asking 28K for a USED STi or EVO and knowing that they would rather lose the dealership than sell the car.

Times are hard Mr. Moneybucks car dealer owner and too bad you cant sell all your cars for 8K+ profit...... oh wait there is more TAX TIME IS JUST A MONTH AWAY TOO!!!
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Old 11-20-2008, 03:28 PM   #14
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Originally Posted by SonicYeller View Post
Well, yes and no. Most the the new Hondas I get off the truck here at our dealership have a pretty abundant amount of plastic covering them.
That salty sea air will get into everything.
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Old 11-20-2008, 03:55 PM   #15
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Originally Posted by AVANTI R5 View Post

The mothballing of cars is nothing new for Detroit, where thousands of unwanted American-made cars have been parked over the last two years at Michigan’s state fairground and in lots at its airports.
Im not surprised
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Old 11-20-2008, 05:24 PM   #16
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Must be good to be BMW...
Probably due to Mini's flying off the lots.
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Old 11-20-2008, 05:26 PM   #17
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the port near my office looks similar with Audi's as far as the eye can see, about 3 times the number of Audi/VWs filling lots compared to last year, even saw a few R8's inside one of the buildings
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Old 11-20-2008, 06:21 PM   #18
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Probably due to Mini's flying off the lots.
and the 135's etc... also, BMW started trimming inventory a long time ago to the US Market.
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Old 11-20-2008, 06:49 PM   #19
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At least the imports can manage their inventories. The domestics are locked into contracts where it's cheaper for them to keep building vehicles nobody wants, rather than to idle production.

I heard somewhere that GM had nearly 200 days inventory of trucks last month...
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Old 11-20-2008, 06:59 PM   #20
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At least the imports can manage their inventories. The domestics are locked into contracts where it's cheaper for them to keep building vehicles nobody wants, rather than to idle production.

I heard somewhere that GM had nearly 200 days inventory of trucks last month...
You can thank the UAW for that!!
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Old 11-20-2008, 07:01 PM   #21
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You can thank the UAW for that!!
That, and their bankrupt and near-bankrupt suppliers. When it's all about cash flow, idling production could push even more key suppliers into bankruptcy...
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Old 11-20-2008, 07:23 PM   #22
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if they were smart they would park them in tornado alley and collect the insurance after the tornados hit.
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Old 11-20-2008, 10:10 PM   #23
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Originally Posted by JuggernautTCW View Post
^^ word. dealerships are still so stubborn on the pricing its ridiculous. i still cant get over what the sales manager said when i asked about the 08/09 STI pricing: "you know... this is just one of those super rare cars so we cannot sell it for anything less than sticker... and no other dealerships will either i promise you." i walked out and never looked back.
check out canadian pricing for ridiculous
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Old 11-20-2008, 10:29 PM   #24
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Theres a port just outside of Baltimore that has the same thing going on.
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Old 11-21-2008, 05:06 AM   #25
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I saw the pics on the news today.....boy thats sick.
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