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LEAKED: GM Sees Overcapacity Fiasco in China, Hopes Americans Will Buy Lots of Chinese-Made Buicks

“We do not comment on future product speculation,” a Buick spokesman said, refusing to confirm the leaks, but didn’t deny them either.

GM sold 919,582 Buicks in China in 2014, four times as many as it sold in the US! GM manufactures in China nearly all vehicles it sells there. About half of GM’s earnings are generated in China. After having been bailed out of bankruptcy by US taxpayers to keep the manufacturing base in the US, GM bet big on China.

In July, GM announced that it would invest an additional $5 billion in China to develop a new family of Chevrolet vehicles with its Chinese partner SAIC. All global automakers have invested billions in China, year after year, to build new plants, add capacity, and increase production. More new plants are coming. More capacity is being added. It all worked out because automakers sold these vehicles in China as fast as they could make them.

Until this year. But now supply and capacity are still rising. Demand has started to fall. Inventories are piling up. A vicious price war has broken out. And the bane of the auto industry, overcapacity, is suddenly looming ominously above them all.

Overcapacity tore up the industry in the US. It tore up the industry in the EU. It’s a deadly disease for automakers. It led to bankruptcies and bailouts. And now it’s spreading in China.

But there is a solution, apparently: exporting China-made vehicles to the US.

A few small-scale efforts have gone nowhere. America is a tough market. The best companies fight it out on a daily basis and are being taught lessons the hard way by finicky consumers.

Volvo, owned by Zhejiang Geely Holding, is starting to export its China-made S60 Inscription to the US this summer. It’s the long-wheelbase version of the Swedish-made S60 sedan. This will be the first mass-produced car from China on US streets. Not exactly a tsunami.

But now GM is reportedly jumping into the game in a big way.

On Monday, the first leak appeared, and at a very inconvenient time for GM, currently in contract negotiations with the UAW. Automotive News reported that GM is planning to sell its Chinese-built compact crossover, the Buick Envision, in the US.

more http://wolfstreet.com/2015/08/19/leaked-gm-sees-overcapacity-fiasco-in-china-hopes-americans-buy-chinese-made-buicks-shift-manufacturing-to-china/

Never mind. Here they come.

Insiders know no rate hike coming?

LONDON -A few months ago, Mineweb published a thought-provoking article suggesting the South African Gold Mining industry as we know it might not survive beyond the end of the decade (See: Could SA’s gold mining industry be gone by 2020?).
In it Patrick Cairns reported on a talk by Peter Major, mining specialist at Cadiz Corporate Solutions, to JSE’s Power Hour in Cape Town, where he laid bare the serious problems facing the industry which have almost brought it to its knees. The current gold price is now around, or below, many of the miners’ latest AISC guidance levels and if the forecasts of most mainstream analysts are to be believed – the future of the industry looks bleak.
Major’s talk pointed to numerous political and union-related changes that have already seen the industry reduce to a fraction of the size it was only a decade or so ago. And unless there is a major pick-up in the gold price there would seem to be little prospect of any recovery. A combination of further falling prices and the implementation of a higher wage agreement will undoubtedly result in more closures and/or fewer jobs.
As Major pointed out, issues like government interference, the power of and conflict between unions, and BEE legislation, have all contributed to a situation where domestic gold mine productivity has dipped dramatically, and all this in the face of a declining gold price over the past four years.
While the fall in the value of the South African Rand against the US dollar has helped mitigate potential earnings losses (gold sales are in dollars while most local costs, particularly labour, are in Rands), the miners are, without exception, on the brink with respect to their South African production.
With most South African mines operating at such extreme depths, while grades have also been on a declining path, and with the breakdown in wage negotiations between the unions and the major mining companies suggesting a possible strike, the domestic industry is at a tipping point.
Indeed, one suspects the longer term future of the mining companies may lie in overseas operations where AngloGold, in particular, seems to be coming up with some positive results.

more http://www.mineweb.com/news/gold/major-south-african-gold-producers-fly-into-the-danger-zone/

Pretty heavy volume in GDX out of the gates. Don’t know why there would be buying/covering in front of Fed minutes.

the “druckenmiller effect”  has lent support to gold IMO.

The “Empire Builder” at East Glacier, MT.
We have mountains to climb…
http://www.railpictures.net/viewphoto.php?id=534561

[sidenote: Now, every time I go to the media library to get the RR flashers, I have to scroll past THAT swimsuit pix…    EEEEK! ]

Usually pm’s drift lower into the SM open but not so much this am.

Still have to get thru the always unfriendly Fed minutes but…..ya never know.

Yields on the Ten year are firm, someone dumping treasuries?

Please don’t post any more swimsuit pictures of Hillary Clinton. TY

Greece halts activity at Canadian-run gold mine-minister

http://finance.yahoo.com/news/greece-halts-activity-canadian-run-111357265.html

Cerro Grande Mining Corporation Reports Disruption of Operations at its Pimenton Mine

http://finance.yahoo.com/news/cerro-grande-mining-corporation-reports-113000967.html

Federal Court Rules in Favor of Mines Management Regarding Claims Located Near The Montanore Project

http://finance.yahoo.com/news/federal-court-rules-favor-mines-130316493.html