The Fusion Event: Why Ford Is Boosting Production

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

August 29 (Bloomberg) -- Bloomberg’s Matt Miller reports on demand for the Ford Fusion and outlook for sales compared to its rivals. He speaks on Bloomberg Television's “In The Loop.” (Source: Bloomberg)

Well, the launch of even one tomahawk missile is a serious measure.

We have become callous and to comfortable with the a -- definition of what limited is.

We launched into libya and there was not authorization.

The long-term accomplish this -- what are we trying to accomplish here?

History it takes that we slow the process down.

It does not show weakness on the part of the president in my view.

I am hopeful, i really am, that he will join us.

It is not democrats or republicans.

It is not partisan.

It is not personal to the president.

I hope you will listen.

Me play one comment the governor of mississippi said to me on my radio program.

His state is reliant on the defense industry.

Here is what he said about launching any kind of attack as we go through sequestration.

Now, at a moment where it would be ill advised to go into this war, this should have been talked about months ago before it escalated to the point of the use of chemical weapons, but also putting the defense and -- cutting back the defense industry as this administration and sequestration has decided.

You have many defense jobs in your state, so does this factor in?

Jobs are critical, but it is the people, the family.

Four of the destroyers available are home-ported in north folk.

-- norfolk.

Our men and women in uniform will execute the mission, but the long-term impacts of sequestration are really catastrophic.

We can do far better.

I am working with other members to do just that.

We have to do what is right for america to put our country first.

We can bend without breaking on our principles.

Congressman, thank you for joining us.

Always.

Henderson scott rigell -- congressman scott rigell of virginia.

They are stalking serious -- the missiles that would attack.

The auto industry bounces back.

We go to michigan to check under the hood.

? first.

Bloomberg.

You are watching "in the loop " live on bloomberg television and streaming on your phone and bloomberg.com.

Bloomberg television is on the markets.

Equity futures are higher.

S&p futures are up by .3%. we will have economic data in a few moments with initial jobless claims and revisions to second- quarter gdp.

We will watch those numbers closely.

We are on the markets again in 30 minutes.

Here are our top headlines.

Verizon has a big deal in the works -- a $130 billion deal.

They are in advanced discussions with vodafone which is looking to sell its 45% stake in verizon.

Proving it is still hip after 30 years, gas lord -- guess lured customers and investors.

Jpmorgan is in hot water again after probes into hiring practices in china could lead to formal accusations of bribery.

Regulators have uncovered an internal spreadsheet that links jeff appointments to specific deals being -- job appointments to specific deals being pursued by the bank.

We are awaiting jobless claims.

Meanwhile, we had two car country where matt miller is going under the hood at ford ahead of his interview with ceo alan mullally.

Also helping us break down economic headlines and to talk about the housing recovery, which seems to have stalled, we are joined by stan humphries, the chief economist at the zillow.

First, matt miller, automakers are trying to do everything they can to capitalize on a comeback.

Why is adding production to the planet you are at such a big deal for ford?

Exit is a big deal for a number of big -- it is a big deal on a number of levels.

It is a $555 million investment in the area.

It is big for michigan and for the u.s.. the ford fusion, which is being added to this line, has been previously produced in mexico.

It will now be brought here.

They will make over 100,000 of those a year.

For the u.s. economy, that at 1400 jobs.

For ford, it is important because the company will be better able to meet demand.

Ford fusion sales have only risen 13% year-to-date and the reason is they cannot make enough for customers to buy.

The demand is there.

They think they can sell more and they will do that by boosting production.

Galaxy change the picture with competition.

Right now the camry is the best- selling midsize in the u.s.. they sell out how to under 40,000 camrys a year.

Ford sells about a hundred 80,000 a year.

-- 180,000 the year.

They think they could give camry a challenge.

It is key for the local economy, the u.s. economy, and for ford to get out there and produce these cars on the same line that they now produce the mustang and they could add more production here if need be.

Thank you.

Matt miller, our auto expert.

In a few moments, we get breaking economic numbers.

In fact, they're coming right now.

Jobless claims -- 331,000 claims for the week ending august 24 , which is pretty much in line with what economist expected and unchanged from the week before.

In revisions to second-quarter gdp -- the headline number, up 2.5%. this higher than original reporting.

. -- personal consumption, very important, up 1.8%. slightly higher.

Equity futures had just been coming off of their highs and they are stabilizing given that the numbers are matching with estimates or just a little bit that are.

I want -- better.

I want to bring in stan humphries, chief economist at zillow.

A lot of people have been wearing that given some of the data that we have seen in the last few weeks, that housing is really taking a turn for the worse, but the numbers we are getting right now didn't really match with those predictions.

We need to differentiate between a slowdown in the housing market, which is actually needed, because home values have been depreciating in some markets are growing 20%, 30% year-over-year.

That is not sustainable long- term.

We need to slow down in terms of appreciation.

We have seen an uptick in mortgage rates as the fed announced a plan to ramp down the stimulus.

I think it is necessary and it would think.

-- and a good thing.

I is it a good thing -- is it a good thing?

Why do we need a break?

It is important to remember that home prices nationally look at a large imprint of every home in the u.s. and they are still down 17% from their peak.

That is a peak price we knew was over-inflated.

We do not want to be back to peak prices.

Naturally, the long-term before the cash nationally, and should -- nationally, homes are very affordable.

In some markets, the numbers are pretty close.

We are concerned that as interest rates increase, even as home prices stay the same, some california markets might look overheated and we need to slowdown appreciation appreciation right now, so that rates getting back to five percent in 2014 are -- does not leave us in a situation where they look inflated.

Interest rates are only expected to go up, so how was the housing market expected to continue to recover when interest rates only go higher and higher?

Well, we saw new home sales number, last week.

It was a big dip down.

I think that is an indication that we will see the pace of new home sales, existing home sales and ultimately prices themselves start to moderate.

In june and july data, there is a slowdown nationally.

It is important to remember we are slowing down from an incredibly high pace of appreciation.

We do not want to see the wheels come off the wagon.

I understand that you think it is healthy that it will slow down, that i do not get how we are going to go higher?

Where is the catalyst to bring us up again?

The catalyst is the fact that household formation rates are going back up.

They have been historically low.

We meant about one and one quarter million new households each year, and we obsolete about 300,000, 400,000 homes.

We had a glut in 2006. we have built homes that blow by one million a year.

As the broader economic recovery picks up, household formation rates are picking up also.

We have enough long-term housing demand to satisfy the market and keep it growing, not the pace that it has been growing at, but at a reasonable pace that matches historical averages.

I know you have this report out that you are going to put out tomorrow about negative equity.

What about people that are still underwater because they do not think it is healthy that housing prices will slow down?

They want them to continue to go up.

That is exactly right.

They would love to see is grow -- see us grow.

We have released 3 million people from negative equity last year and we are on pace for 2 million this year, but we still have 12 million people underwater on their homes, and for them, home prices cannot rise fast enough.

That will be a long-term distortion.

That number will not get back down to zero for several years, and that will create wonky distortions.

It could constrain supply, making it look like there is less housing supply and there really is because people cannot sell their homes and put them on the market because they are underwater.

That creates artificial price hikes.

That will persist for a while because it will take 12 -- all while for 12 million people to get out of negative equity.

Thank you, stan humphries with his zillow.

The impact of a potential multilateral strike on syria remains to be seen.

All the world is turning to the u.s. defense team and four destroyers sailing off the coast of the mediterranean sea.

We look at the sailing of these warm -- were machines and the companies behind them -- war machines and the companies behind them.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change