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Automotive News & Views GM News, New Models and Market Share
8500 messages, Last post on Nov 28, 2009 at 6:31 PM
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Replying to: anythngbutgm (Nov 11, 2008 6:09 am) The entire industry was caught by surprise 3 months ago by the credit issue. This came on suddenly. Even Toyota is very surprised at the loss in business and they may even make no money this coming year in the US. So everyone was going forward with their business such as opening a plant in Russia where sales are going gonzo. One year ago inside GM everything was looking up. The UAW issue was evened out with the competitors, the health care issues were evening up, the quality was evened up and MPG was evened up. But with sales suddenly in the dumper all the cash flow to pay the bills stopped. No credit is really killing the entire market. Even the $700 Billion is doing little because the companies that got it are sitting on it. I think it was a mistake to give it to them because they did not do anything with it as the were supposed to. Our wise congress jsut gave them free money with what looks like no strings attached. So the bottom line is our entire industry, and our entire country was surprised by what happened. No one is buying anything. We are going into a world wide depression if it goes much further. As far as the marketing, Marketers make media buys months in advance. Money is already spent. Now Ford is in a better position because they "sold" all their assets (plants, buildings, etc.) a year ago for credit. They are now living on all that credit. GM still owns everything but in todays credit crunch they cannot get anything for them.
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Replying to: bvdj84 (Nov 11, 2008 7:14 am) G6, mid sized Pick ups Everything else is at least competitive with the top players. |
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Replying to: cooterbfd (Nov 11, 2008 5:50 am) Yes the first $25 billion was offered just as you say as part of the Energy bill. It did have specific ties. Refurbishing old plants in the USA & alternative technologies to be built in the USA. It was not specific for the Big 3. HonToy could also apply for money from that pool if they met the criteria. The $50 billion is a bailout and I have not seen any mention of paying it back. Other than it may be considered part ownership. I would say the Big 3 bailout is not going to happen now that Obama has leaked details of his meeting with Bush. The Big 3 can lay everyone off over the holidays to try and keep enough cash flowing. If the UAW will not agree they can just file for chapter 11 and let the chips fall where they will. They have plenty of stock at the dealers to last several months. Maybe a lot longer. See what sells over Christmas and reopen the plants that are building what the people are buying. With the economy and the warnings I would think that most of the Big 3 employees would have saved enough to last 6 months without a paycheck. We are in for some hard times and 30% or 40% of nothing is still nothing. That is about where the Big 3 are sitting.
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Replying to: anythngbutgm (Nov 11, 2008 6:09 am) Second, GM also just announced a new plant opening in Russia to the tune of 300 million dollars to pump out Cruzes and SUV's. Where is this money coming from? Exactly. They are doing *GREAT* in Europe and Asia. It's the U.S. market and Faustian deals they made with the UAW decades ago that are sucking them dry. That money? It's all going overseas to increase profits where they are currently making said profits unless there's some real teeth in the package. But I fear that instead, we'll be left holding the bill and wondering what happened as plants still keep closing and everything is moved overseas. In simple terms - GM and Ford are most likely planning to use this money to close everything in the U.S. and more it all to Europe, Mexico, and China(or Russia). That 25 billion with no strings attached? Probably will be used to pay off the pension fund so that they can be free of everyone as they close the last plants in the U.S. Man our leaders are such idiots. This happened with electronics and computers and now it's happening with our vehicles. |
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Replying to: gagrice (Nov 11, 2008 7:43 am) Do they really have that many days supply left???? Either way, they are between a rock and a hard place. I fear that a massive layoff, bankruptcy, or any such action will stifle sales, and sound a death knell. But if somehow they could wrest 2% of GMAC from Cerebus........
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Replying to: gagrice (Nov 11, 2008 7:43 am) But, who will buy the vehicles. Saw an interview given last week by Wagoner. He talked about a number of studies done on consumers about bankruptcy. He said that 80 percent of potential car buyers would not buy a car from a company that announced bankruptcy. |
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Replying to: xrunner2 (Nov 11, 2008 8:12 am) That is encouraging. Only 20% of buyers are stupid. Or plan to get a car for half price and take their chances. I might give 50 cents on the dollar for a GM vehicle today. Knowing that I am on my own as far as service and repairs. How many dealerships are going to do warranty work if GM is in bankruptcy? They will be lucky to get rid of inventory. Rocky's brother bought an Impala, one of their better cars, for 35% off of MSRP. That dealer was tired of paying the flooring cost. Several big dealers are already in bankruptcy. $25 billion will only be a band-aid that prolongs the agony another few months. |
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Replying to: 62vetteefp (Nov 11, 2008 7:15 am) Let's put this in terms of GM being a ship and the executives of GM being the officers. The ship was in poor shape when the weather was good (economy growing), as it was sleaking water (losing money on daily operations and market-share declining). Now you're telling me the captain is surprised when the officers could see stormclouds gathering and a storm comes which is a normal occurrence (economic downturns occur every decade or 2). Yes it is bad storm, but the captain, officers and crew should have prepared for it. The consequences of bad leadership, planning, and execution are failure. They all need to go; we should not reward incompetence (or whatever you call it) and let it continue.
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Replying to: kernick (Nov 11, 2008 8:35 am) GM sold control of their cash cow ,GMAC, when the credit was flowing fast and furious. Now that it is tight they are blaming Cerberus for holding back credit for losers wanting to buy a car. If you have good credit you can get a good car loan today. If you do not. You should not get a loan. Simple as that. If we had followed that time honored principle for the last 15 years we would not be in this mess.
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Replying to: gagrice (Nov 11, 2008 8:45 am) In years past, I would chuckle when seeing tv commercials for cars. They used to shout, "Bad credit, no credit, doesn't matter. Come on in today and you will drive out with the car of your choice." Have not seen these in a while.
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