There is an old saying that, “Nothing lies like statistics.”
It is true that without the right perspective numbers can be deceiving.
Take, for instance, news that European auto production rose 36.9 percent to 1,224,091 units in January, according to estimates from J.D. Power Automotive Forecasting.
Good news, right?
Not exactly. The rise comes from comparing January 2010 with a terrible January 2009, which was down 46.9 percent to just 893,961 units compared with January 2008.
When comparing January 2010 to January 2008 – when automakers made 1,683,641 units – production is down more than a quarter (27.3 percent).
This means Europe's plants are still producing well below their optimal capacity. The manufacturing footprint in Europe remains geared to meet pre-crisis demand, which is not due to return until 2012 or 2013.
Therefore, profits will remain under pressure and jobs will be at high risk.
Hold the cheering and optimism until we see a legitimate production boost.