Ford Motor (F) reported that its U.S. sales tumbled 28% in June from a year ago, in what could turn out to be the weakest month for auto sales in 16 years. The No. 3 automaker in terms of U.S. sales, saw demand for its SUVs plunge by more than half and for pickups and other trucks fall more than a third.

The declines were exacerbated fewer selling days; there were 24 selling days last month, compared with 27 in June 2007.

However, much like a sustained bear market, both GM and Ford continue to make lower highs and lower lows, both in their business performance and stock price, increasing the probabilities of a permanent meltdown unless radical changes are made soon. Due to the difficulty and timeliness of needed changes, I am doubtful that each of the Big 3 players will be around in eight years without government assistance, which appears likely. I stated some of the most critical issues faced by this industry in a May 12 article, "Industries to Avoid, Industries to Buy."

British Airways (BAIRY.PK) said it would pay £54m ($107.6m) for the French airline, which includes £26m of cash in the business...

There are, of course, multiple ironies here, not the least of which is the fact that the very US brands that are collapsing in their homeland are some of the hottest models in Russia. GM’s Chevrolet brand saw a 59% increase in units sold in Russia for 1Q08 vs. 1Q07. Ford saw slower growth—only a 6% increase quarter over quarter— though its Focus is the best-selling model in Russia.

Outside of such an occurrence as it pertains directly to the current market environment, an interesting trading strategy could be to short those market participant who made premature bets that the market is ready to rebound. In that regard, the trucking sector appears to be a prime candidate for shorting at the moment given the challenging macroeconomic environment and surging fuel costs. Additionally, despite the fact that it has sold off significantly, the financial sector is still vulnerable to the downside. There are still unknowns lurking in the books of many of these institutions, which could precipitate further write downs and destruction in shareholder value.

By contrast, select suppliers will hold up better in the market turbulence either because they have strong balance sheets or because they are developing emissions and fuel economy technology that is being increasingly prized.

The dramatic abandonment of gas guzzlers by American consumers continues, with last month's sales of domestically manufactured light trucks (which includes the once almighty SUV category) down 28% from June 2007.

What do you foresee if oil prices remain at high levels?

First, the big news: auto makers, especially US-based ones, got hammered by their product mixes. As expected, Americans are responding to a rise in gasoline prices by turning away from trucks and demanding cars, especially small ones. Of course, this spells nothing but hard times for the likes of Ford (F), GM (GM) and Chrysler, who are still hung over from a decade-long party fueled by high-margin pick-up trucks and SUVs. Economic incentives, whether state-imposed or market-driven, work after all.

Merrill now believes that much higher cash burn is likely to result in the need for a larger capital raise than anticipated, likely about $15 billion (including revolver draws), which would materially dilute return of value to existing shareholders. They also believe the company has not recognized the stress in the capital markets. As time passes, the supply of capital for GM to bridge the gap to 2010 is becoming increasingly scarce, which is at least driving up the cost.

The Board found that CSX Transportation, Inc. (CSX) was charging unreasonably high rail rates and ordered CSX to reduce rates and to pay reparations on six of the seven movements challenged by DuPont." This marks the resolution of a complaint where DuPont challenged "...CSX rate increases of 30% to 176% on seven routes.

Navistar International Corporation (NAVZ)

F1Q08 & F2Q08 Earnings Call

Q2 2008 Earnings Call

Mesa Air Group, Inc. (MESA)

Sometimes a company faces a perfect storm and gets squeezed on all sides. This is what is happening to RAIL right now. Demand is slowing down due to the economy being in the pits and material costs are going through the roof at the same time. The company said it is having a tough time passing along its costs to customers. It is forced to pay surcharges on its raw materials.

Development costs for intangible assets can be capitalized only under the most stringent conditions (page 580).

Why, in fact, is Toyota Motor (TM) not in the same condition? Low quality, low quality/cost ratio, lack of attractiveness of products, service to customers, etc, characteristics which hurt a company's competitiveness, are all missing today at GM.