NEIL: TENTATIVE TREATMENT.
THAT'S WHAT THEY'RE CALLING IT.
UAW AND GENERAL MOTORS
CONFIRMING, THAT IS STRIKE COULD
BE ON THE VERGE OF ENDING.
GOING ON BETTER PART OF 31 DAYS
RIGHT NOW.
THE LONGEST SUCH WALKOUT GOING
BACK TO 1970.
RICHARD NIXON WAS PRESIDENT AT
THE TIME.
READ FROM TOYOTA NORTH AMERICA
CEO JIM LENTZ.
ALWAYS SO GOOD TO HAVE YOU.
SO MUCH WE KNOW, SO MUCH WE
DON'T.
BOTH SIDE THINK THEY HAVE
SOMETHING HERE TO SATISFY BOTH
SIDES, UNION GETS A BUMP IN PAY.
DEVIL IS IN THE DETAILS.
BUT A LOT OF THIS IS HOW IT IS
FACTORED OUT OVER THE NEXT FOUR
YEARS.
THAT IS CRUCIAL TO GM WHERE
THESE COSTS HAVE GOTTEN KIND OF
STEEP, HAVEN'T THEY?
>> I THINK IT IS GREAT NEWS.
I THINK IT IS GREAT NEWS.
I'M SURE TEAM MEMBERS AT
GENERAL MOTORS ARE ANXIOUS TO
GET BACK TO WORK TO EARN A
PAYCHECK.
I'M SURE GENERAL MOTORS
CUSTOMERS ARE ANXIOUS TO COME
BACK IN THE DEALERSHIPS TO GET
THEIR CARS REPAIR AS PARTS
CONTINUE TO FLOW.
IT IS GREAT NEWS FOR SUPPLIERS,
MANY OF WHICH WE ALL USE.
NEIL: RIGHT.
>> I THINK OVERALL THE BIG
WINNER IS THE U.S. ECONOMY
BECAUSE IT'S, AUTO INDUSTRY IS A
HUGE PORTION OF THAT AND
GENERAL MOTORS IS OBVIOUSLY A
BIG PLAYER IN THE INDUSTRY.
I THINK IT'S A WIN-WIN ALL
AROUND.
NEIL: IT DOES HAVE INDIRECT
EFFECT ON GUYS LIKE YOU AND
TOYOTA, WHAT HAVE YOU?
EVERYTHING IS SORT OF
INTERLOCKED HERE.
IF THEY DO HAVE AN AGREEMENT,
OBVIOUSLY THOSE PARTS AND ALL
START FLOWING AGAIN.
WORK CONTINUES AGAIN, BUT THE
IMPACT IS ALREADY THERE, RIGHT?
HOW SEVERE AN IMPACT?
>> WELL, YOU KNOW,
GENERAL MOTORS ENTERED THE
STRIKE PERIOD WITH A FAIRLY
REASONABLE SUPPLY OF VEHICLES.
SO I'M NOT SURE NECESSARILY
IMPACTED THEIR CURRENT SALES
VOLUMES.
DEPENDS HOW LONG IT WILL TAKE TO
BE ABLE TO GET THE FLOW OF
PRODUCT MOVING BACK IN.
THEN HOW LONG IT WILL TAKE TO
GET THE PARTS MOVING.
SO, YOU KNOW, IT IS DIFFICULT
FOR ME TO SAY SITTING HERE, THE
IMPACT ON GENERAL MOTORS.
HOPEFULLY IT IS LIMITED.
AND THEY WILL BE ABLE TO GET
BACK TO BUSINESS AS SOON AS
POSSIBLE.
NEIL: I KNOW HOW THESE THINGS
GO, JIM.
YOU EDUCATED ME ON THIS IN THE
PAST, THE BLUEPRINT THEY'RE
USING HERE WITH GM, THEY WOULD
USE ON THE UAW TAKES THE SAME
PACKAGE I GUESS, FORD, CHRYSLER,
SOME OF THESE OTHERS.
HOW DO YOU EXPECT THAT PROCESS
TO GO?
>> HOPEFULLY GOES VERY SMOOTHLY.
THE IMPORTANT THING THEY'RE ABLE
TO COMMUNICATE TO THE WORKFORCE,
WHAT THE DEAL IS, SO IT CAN GET
RATIFIED VERY QUICKLY.
THEN MOVE ON TO THE OTHER
MANUFACTURERS AND WE GET BACK TO
A INDUSTRY THAT IS, THAT IS
SELLING CARS AGAIN AND TAKING
CARE OF CUSTOMERS.
NEIL: HOW IS THAT AGAIN GOING?
EVEN PRIOR TO THE GM WALKOUT, A
LOT OF AMERICANS WERE SORT OF
PULLING BACK FROM AUTO RELATED
PURCHASES, AND THE LIKE.
THEN WE HEARD STEPH TALK ABOUT
AMERICANS LOOKING AT THIS, ARE
LOOKING UPWARDS OF SEVEN-YEAR
LOANS, THAT SORT OF THING.
TELL ME WHAT THE ENVIRONMENT
LOOKS LIKE NOW THESE DAYS?
>> YEAH, YOU KNOW, IT IS
INTERESTING.
BECAUSE OF WHERE LABOR DAY FELL
THIS YEAR, RELATIVE TO LAST
YEAR, EVERYONE LOOKED AT THIS
LARGE DROP-OFF IN SEPTEMBER
VOLUME.
THEY WERE WONDERING IF THE SKY
WAS FALLING.
BUT THE FACT IS, IF YOU LOOK AT
AUGUST AND SEPTEMBER COMBINED,
THIS YEAR COMPARED TO LAST,
SALES WERE ALMOST IDENTICAL FOR
THE INDUSTRY.
NEIL: IS THAT RIGHT?
>> INDUSTRY IS STILL VERY, VERY
STRONG.
IT IS TRACKING AT ABOUT A
17 MILLION RATE, WHICH IS
FRANKLY STRONGER THAN WE
FORECAST IT TO BE.
OVERALL IT IS VERY GOOD.
BUT YOUR QUESTION ABOUT
CONSUMERS AND THEIR ABILITY AND
WILLINGNESS TO PAY FOR VEHICLES
IS THE IMPORTANT QUESTION.
I WILL GIVE YOU AN EXAMPLE.
IF YOU LOOK AT THE SMALL SUV
SEGMENT TODAY, THE HOTTEST
SEGMENT, LARGEST SEGMENT IN THE
INDUSTRY, OVER THE LAST SIX
YEARS WHAT CONSUMERS ARE PAYING
ON MONTHLY BASIS IS ALMOST
IDENTICAL.
IT IS ABOUT $400 A MONTH.
THEY ARE EITHER UNWILLING OR
UNABLE TO MOVE BEYOND THAT.
AND THAT IS A RESULT OF PRICES
GOING UP BUT PAYMENTS STAYING
THE SAME.
INCENTIVES HAVE GONE UP AS A
RESULT AND STRETCH THEIR
PAYMENTS.
NEIL: DO THEY EXTEND OVER MORE
YEARS, IS WHAT I'M SAYING?
MIGHT BE 400 A MONTH, BUT NOW
NOT THREE YEARS, FOUR YEARS.
COULD BE UPWARDS OF SEVEN YEARS?
>> YES.
YES.
SO I THINK WE ARE REACHING THE
POINT AT WHICH, CONSUMERS ARE
EITHER GOING TO BE WILLING TO
PAY MORE, BECAUSE THEY REALLY
CAN'T STRETCH ANY FURTHER IN
TERMS OF THEIR, THE NUMBER OF
MONTHS THEY'RE PAYING FOR