My Predictions for 2012

Need a little horsepower?

It is so hard to make solid predictions about the economy for 2012 because unpredictable events like the earthquake-tsunami in Japan and the floods in Thailand in 2011 will always happen. But so what. We have to make some assumptions and guesses if we are going to run our businesses. These are mine for 2012.

1. Growth in the industrial economy will accelerate. Automotive in North America is hot and getting hotter. I particularly like the growing market share of vehicles being made here−reaching 70 percent−and the rising production of pickup trucks. The Ford F-150 sold almost 600,000 units in 2011.

Some interesting tidbits coming out of the Detroit Auto Show which started yesterday illustrate trends. Sergio Marchionne, head of Chrysler, complained yesterday that he can’t add a third shift at Detroit’s Jefferson Street assembly plant because he is 220,000 engines short of what he needs for the Jeep Grand Cherokee. He blames it on “suppliers who can’t play.” Honda also announced yesterday that it will build its first American made Acura in Ohio. This will be the first Japanese luxury model made in the United States. The supply chain is stressed today at 13 million units. If we hit 15 or 16 it will demand a lot more production from the domestic supply chain.

2. Housing in America will finally hit bottom. Rental housing is already booming and the pickup truck sales reflect that because small truck sales are fueled by purchases of contractors and tradesmen. If business has seen solid growth since 2010 without the housing piece, look for a rapid uptick if builders really start building.

3. It’s an election year so President Obama will move toward the center regarding business (except for millionaires and billionaires).

4. Ben Bernanke will keep interest rates low and the dollar relatively weak, thus keeping companies in the U.S. and attracting foreign businesses to a low cost country.

5. The oil and natural gas drilling boom will get stronger in America. This will stimulate employment and enhance the U.S. position as a net energy exporter.

6. The ample labor force will be augmented by returning military people. Even though the press is focused on a labor glut, there are at least three million unfilled jobs waiting for able, eager people to fill them. Veterans could help fill the need. Also the recession in Europe could pull ambitious young people to America, illegally and “sort of legally” helping to propel this country. I think a lot of tourist visas are going to be issued to Greeks, Irish and Spaniards who will stay here as long as they can.

With these plusses we still have some negatives to worry about.

1. The Iran dilemma will continue. Iran’s development of nuclear weapons is a problem that will not go away. The more America and Europe push on them the more they push back. We are probably near a low-grade war with them already. If we strangle them economically with sanctions, they may start firing at our big boats in the Straits of Hormuz or lob missiles at the nearby Saudi oil fields. Obama is trying to push the mess into 2013, but things could get nasty soon. A preemptive strike by Israel is still on the table. We could be looking at a doubling of oil prices if shooting starts.

2. The Germans might not hold up the European spendthrifts making the Euro start to collapse. This could mess up the world banking system and dry up credit everywhere including here. We saw how we were all tied together by the natural disasters in Asia in 2011 and the banking debacle in Europe could be much worse.

3. Risks we haven’t thought of. China sees a “Chinese Spring” and overreacts. Terrorists start shooting up American colleges and shopping centers. Robots rebel, a bad virus pops up, or a million other scenarios. These things could happen, but meanwhile we must live and plan for the now.

My overall prediction for 2012 is 4.5 percent growth, an amazing Olympic Games, and no “peace in our time.”

Question: What’s your favorite pickup truck, and why?

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14 thoughts on “My Predictions for 2012

  1. Jim

    FORD! They are great trucks that have been well built for decades. I currently own 3 of them and would pick up another no hesitation.

  2. neil westervelt

    I have 2009 Dodge Laramie pickup with the tool boxes built in the bed sides, and of course the HEMI. That I have enjoyed more than any other truck that I have owned, and if you drive it at 60 or less it will beat 20mpg.

  3. Peter @ Polygon Solutions

    I’ve owned Ford Courier, F-100, Ranger and F-150 pickups. The 2003 F-150 was my favorite hands down. Smooth ride I and turned it in at the end of my lease without ever having a problem or complaint. I’ve been a mini-van man since then for the sake of the family, but will return to a Ford truck soon.

  4. Seth Emerson

    My “sorta” pickup truck is a Chevy Avalanche. As a half-truck, half-Suburban, it carries six people inside and retains a weather-tight, mostly plastic lined external bed. With the back seat dropped, 8 ft boards are carried completely out of the weather. With the cover panels removed, you can carry the refrigerator home. It also tows a car trailer. Yeah, a bit too much plastic on my older one, but the newest ones are sharp looking and even have more horsepower. If I didn’t have this, I would have a 1964 Corvair Rampside, another versatile vehicle. Need your lawnmower moved?

  5. Bob Cardoza

    Great predictions Lloyd. The Ford Super Duty F250 Powerstroke. 22 MPG on the highway and pulls ALL the toys. I have owned three F250’s, two F350’s and one F150. I guess I’m a FORD kinda guy…! First On Race Day..!

  6. Lloyd Graff

    Bingo, Leo. You are correct. Personally, I am a member of the effete majority who has never owned a pickup. I did own a station wagon, once.

  7. George Mitchell

    My current truck is my favorite. It is a 2002 Dodge 2500. Why? It has a Cummings diesel in it and it’s PAID for! What more can you ask for?

  8. Jim Evans

    Interesting predictions Lloyd. I really like the design of the Dodge Ram. Mine is an 01 and is a very good work vehicle for hunting and hauling. If I bought another pickup, it would be a Ford due to the fact that Ford did not take any bail-out money! I would never by a GM (Government Motors).

  9. Ray

    2001 F-150 Lightning supercharged, over 500 hp, 160,000 miles and still strong.Original engine and all accessories including spark plugs, water pump, p.s., trans. U-joints, wheel bearings, shocks etc. Fun to drive.

  10. Bruce Renwick

    I agree with others on Ford, Great company properly managed by not seeking any tax funded welfare handouts. The next truck I purchase will probably be the Ford F-150 with the ecoboost engine.

  11. Dale

    My Bold move: F-250 Super Duty, 4 door, 4WD and a turbocharged oil burner under the hood. Tows like there is nothing behind it, 18 to 20% better MPG then the previous F-250 with an ignition combustion engine and more power than I’ll ever use without any chips or modifications. 85K on the odometer as of today and I plan on rumnning it to 200. Built FORD Tough!

  12. Ben Guthrie

    Sergio Marchionne blames his inability to get another 220,000 engines on “suppliers who can’t play”?! We lost several $billion on the Chrysler bailout; Fiat owns acres of idle Chryco manufacturing capacity; his suppliers, who didn’t get bailout, are at capacity (Cycle Time =Takt Time) and don’t have time available for his unforeseen demand; and he blames them? That doesn’t smell right to me.


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