The Bullseye - October 2008

Wednesday, October 1, 2008

In This Issue:
Trains Taking on Speed,
Alumni Update,
Buy vs Lease? Your Guide to Smart Car Shopping,
August 2008 Manufacturing ISM Report on Business

Trains Taking on Speed

It started with American Airlines charging a $25 dollar fee for the second checked bag, then United Airlines followed suit. Next came charges for in-flight snack service. Prices range from $3 to $5 depending on the airline. Oh yeah, and complimentary drinks are complimentary no more. Expect to pay $2.00 per drink and up. Lastly, don’t forget about ticket-changing charges, which can range anywhere from $100 to $250. And this is just the beginning. Traveling with a pet or requesting more legroom or an aisle seat can all rack up additional fees.
 
It is well recognized that the rising fees are due to escalating gas and oil prices. According to the International Air Transport Association, in May 2008 jet fuel prices were up nearly 98% over the previous May. Fuel now accounts for nearly 40% of airline ticket prices. With the increase in ticket prices and all of the additional surcharges, many airline passengers are now turning to the rails for their travel plans. And it is anticipated that this will not be a summer trend. The upcoming holidays should continue to see an increase in railway passengers.
 
According to an article in The Washington Post, “Amtrak's systemwide ridership climbed to 7.9 million passengers from May through July, compared with 7 million in the same three-month period in 2007.” Furthermore, “the airline industry is projecting a decline of 6.5 percent in domestic travel over the holiday period.” Some Northeastern US ridership has seen double-digit increases.
 
What are some of the advantages that railway travelers are taking advantage of?  Passengers can bring their own food and drink. In addition, they are welcome to bring heavy suitcases and avoid excess baggage fees.  Passengers can pick their own seat and use electronics at ease. Also, there are no security headaches and airport congestion. Perhaps the most appealing reason to travel by train is the reduced ticket price. In general train prices cost significantly less than airline travel.
 
One downside of traveling on a train is time delay. Certain Amtrak routes are notorious for late arrivals. However, keep in mind that with current flight delays, airport congestion and layovers, a train can arrive faster than a plane. That being said, taking the train can be a more affordable and appealing choice in today’s economy.

Alumni Update

"I wish I would have contacted Orion International sooner than I did, but it all worked out in the end!
 
Working with Orion was a great experience from the get-go. All my questions were answered up-front, and the follow-up during the entire process was outstanding.
 
Since getting my job, I have found that there is awesome opportunity for growth within CIRCOR Aerospace. CIRCOR is an expanding aerospace firm and one of five different global businesses in our aerospace group. I envision a great future ahead and plenty of career advancement opportunities!"

Do you have an update to share with us?  Did you get promoted, have a new addition to your family or any other news you’d like to share?  Click here to tell us about it.

Buy vs Lease? Your Guide to Smart Car Shopping

Are you in the market for a new car? Before you head to the dealership, here is some insight on buying and leasing cars to help you determine which option is right for you.
 
 Art Spinella, President of CNW Marketing Research Inc., which publishes new and used vehicle industry reference guides and study summaries, suggests that it is important to decide first and foremost if you want to buy or lease an automobile. In an article by Jean Chatzky on Oprah.com, Mr. Spinella says, “What you wind up doing is looking at what you need and how long you are going to need it. For example, if your children are leaving for college in a few years and you won't need a large vehicle anymore, a two-year lease on an SUV could be a great option. It's easy to get into and easy to get out of. You don't have the hassle at the end of the term [of] trying to sell it.”
 
 It is also important to determine what monthly payment you can afford. Generally speaking, a lease has lower monthly payments and less out-of-pocket upfront expenses, including no initial sales tax payments. You also get the pleasure of a new car every few years. Also, for business owners, leasing a car may offer tax advantages if that car is used for business purposes.
 
The cons of leasing a car are typically mileage limitations and fees. Most dealerships will lease cars at 12,000-15,000 miles per year. This means, at the end of the lease, any mileage over your lease mileage limitation amount will result in financial penalties. The penalties can range from 15-25 cents per mile. Also, you walk away with nothing and don’t build any equity. At the end of the lease, you turn in the car (unless your lease gives you a purchase option).
 
A purchased vehicle does yield higher monthly payments and a larger down payment, but you will build equity (if the right payment plan is in place) and will one day own the vehicle. You can then sell your vehicle at your own discretion. In addition you aren’t subject to financial penalties if you have excess mileage on your purchased vehicle.
 
Overall, life circumstances and personal choice help dictate the buy versus lease dilemma. Choose wisely to fit your situation, and be sure you know what you are doing before entering a dealership. Remember that the dealer is there to make money, so be a cautious and knowledgeable consumer.
 

August 2009 Manufacturing ISM Report on Business

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM). ISM is largely considered the most respected supply management organization in the world.  The Manufacturing ISM Report On Business in a national index based on surveying purchasing and supply executives at over 300 industrial organizations. The Report’s market importance is extremely high. It is the most valuable of all manufacturing indices.
 
Economic activity in the manufacturing sector failed to grow in August, while the overall economy grew for the 82nd consecutive month, the nation’s supply executives reported in the latest Manufacturing ISM Report On Business. The PMI (Purchasing Managers’ Index) fell below 50% with a slight decline to 49.9%.
 
The New Orders Index gained 3.3 percentage points over July to 48.3%. The Production Index registered 52.1%, down slightly from July’s 52.9%. And, the Employment Index registered 49.7%, 2.2 percentage points lower than July’s 51.9%.
 
The performance of Supplier Deliveries continued to slow in August, but at a slower rate. The Supplier Deliveries Index registered at 50.3%, which is 4.8 percentage points lower than the 55.1 percent registered in July.
 
Manufacturer’s Inventories contracted in August to 49.3%. The Customer’s Inventories Index registered at 54.5% in August, an increase of 7.5 percentage points from July, indicating that respondents believe their customers’ inventories are too high.
 
The ISM Prices Index in August was 77%, suggesting manufacturers are paying higher prices compared to July.

The Backlog of Orders Index was 43.5% in August, 0.5 percentage points higher than the previous month. ISM’s New Export Orders Index registered at 57 % in August. This was the 69th consecutive month of growth in export orders.
 
The 10 industries that reported growth in new export orders in August were: Apparel, Leather & Allied Products; Paper Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Fabricated Metal Products; and Transportation Equipment. Machinery was the only industry reporting a decrease in new export orders in August. he dealer is there to make money, so be a cautious and knowledgeable consumer.