- #2383 of 8044
-
Re: [kernick]
by 62vetteefp
-
Dec 01, 2008 (10:04 am)
-
|
|
Replying to: kernick (Dec 01, 2008 9:56 am)
"You're also guessing that if GM goes under - 1) the plants wouldn't be restarted by someone else, and 2) the other manufacturers wouldn't get increased business in the meantime. "
Not guessing. Experts in the field (independent from the big 3) have already said what they calculate will happen if one of the big 3 goes under. The entire supplier system shuts down in this country and production stops for up to one year of all assembly plants.
You can disbelieve this or not. That is what they came up with.
|
- #2384 of 8044
-
Re: [kernick]
by bpizzuti
-
Dec 01, 2008 (10:06 am)
-
|
|
Replying to: kernick (Dec 01, 2008 9:56 am)
Also - take a look at how much Ford and GM have lost over the last few months and do the math. How long does $25B last? 6 months? Is that enough $ to make them get to profitability?
Ford made a profit earlier this year. They're losing much less than GM right now, and are asking for a line of credit rather than an out and out bailout. This thread is about GM, don't try to bring Ford down with you. 
It's a fair statement about how they'll pay these things back...I think that's why buying an equity state is preferable to a loan. I don't think GM stands a chance of paying their loan back...honestly, same with Ford, which is why I'm hoping they DON'T tap the credit line.
Oh, you're forgetting Chrysler, which would have to pay back part of the $6 billion too. But then again, everyone always forgets Chrysler, as they should, 
|
- #2385 of 8044
-
Re: Auto sales bubble [gagrice]
by dtownfb
-
Dec 01, 2008 (10:10 am)
-
|
|
Replying to: gagrice (Dec 01, 2008 7:08 am)
I think more and more people are looking to the used car lots for their next car. We'll finish paying off our Quest minivan in January. I have to replace my 2000 Intrigue very soon. I'm looking at the used market and have no desire to saddle myself with a $20k loan on a new car. I've had very good luck with my two used car purchases. With the credit crunch, I think more people will decide either to stay in their car longer or go the used car route. I think we are looking at 2012 at the earliest for the auto market to rebound.
|
- #2386 of 8044
-
Re: [kernick]
by 62vetteefp
-
Dec 01, 2008 (10:12 am)
-
|
|
Replying to: kernick (Dec 01, 2008 9:36 am)
"I think in this sentence you mean "utilization" in regards to costs, and sales in regards to revenue. Utilization is how much of the capacity of the plant is being used currently. The capacity of a plant is a fixed-number - as in how much can a plant make when run 24/7 (with labor available, and accounting 15% or so for planned and unplanned maintenance)."
No, capacity. The big 3 have shut down and are shutting down plants to reduce capacity. And sales mean vehicle sales which is correlated to capacity. If capacity goes down they build fewer vehicles. If plant closings keep going down and corresponding new plants are not built then sooner or later there is a crossover and the country will have under capacity. Of course since we dropped to 10,000,000 sales a year there is a lot of over capacity today. BUT once sales go back to 15,000,000 or even less than that there will be undercapacity.
|
- #2387 of 8044
-
Re: [62vetteefp]
by dtownfb
-
Dec 01, 2008 (10:27 am)
-
|
|
Replying to: 62vetteefp (Dec 01, 2008 10:12 am)
I agree with what you are saying but that basing sales on plant capacity is what got the big 3 in this trouble to begin with. They need to build cars based on demand (see Honda for how to do this) not capacity. They can't do that right now because they have contractual agreements with the UAW and suppliers to honor. This is the business model they need to change. If you follow this model, it doesn't matter what the US sales are, you can make a profit.
Right now, they are shutting down plants to reduce capacity but they still have to pay the workers and suppliers. And you are selling fewer cars than forecast. And you have to have a $2000-$6000 rebate to move the product. It's no wonder they are losing money hand over fist.
They need to break this business model to have any chance to make a profit. And the only was they can do this is bankruptcy.
|
- #2388 of 8044
-
Re: [dtownfb]
by 62vetteefp
-
Dec 01, 2008 (10:57 am)
-
|
|
Replying to: dtownfb (Dec 01, 2008 10:27 am)
Where did you get the supplier contractual? If you mean car parts GM has no contracts requiring volumes. They buy what they need.
|
- #2389 of 8044
-
Re: Auto sales bubble [dtownfb]
by dave8697
-
Dec 01, 2008 (10:58 am)
-
|
|
Replying to: dtownfb (Dec 01, 2008 10:10 am)
My last 3 purchases have been used cars and trucks bought from private parties. All had mileage in the low 80's. What's available out there now on the used car market is much more for the money than 3 - 4 years a go, when I bought. I've put 134k miles on the three of them. They also happen to be my highest mpg vehicles. I didn't want a $20k loan to save gas when gas jumped from $1.59 to what it went to. $2, then $3, then $4.
|
- #2390 of 8044
-
Re: Auto sales bubble [dave8697]
by dtownfb
-
Dec 01, 2008 (11:14 am)
-
|
|
Replying to: dave8697 (Dec 01, 2008 10:58 am)
My last two used car purchases was a 1989 Buick Century (first year for the 3.3.L engine) which ai bought for $3300. Ran great for 4years. My current car which is a 2000 Oldsmobile Intrigue which I bought with 61k miles. I currently have 168k miles on it. Relatively trouble free but I must admit if I had bought it new at over $22k, I would tolerate some of the issues.
You're right. There are more off lease cars available. You can get a used SUV for a song right now.... I think your situation is becoming more typical. Do i really need that new car smell or can I get by with a not so new car but be able to take the family to dinner at Chili's or Red Lobster on Friday or Saturday night?
|
- #2391 of 8044
-
Re: [62vetteefp]
by dtownfb
-
Dec 01, 2008 (11:18 am)
-
|
|
Replying to: 62vetteefp (Dec 01, 2008 10:57 am)
Well, that is much different than what I have heard. I was told that they have contracts to buy a certain number of parts based on their production schedule. If what you are saying is true, then I don't see how they are in debt to some of these suppliers. Also not sure how these suppliers can stay in business without some form of guarantee from GM.
|
- #2392 of 8044
-
Re: [dtownfb]
by 62vetteefp
-
Dec 01, 2008 (11:28 am)
-
|
|
Replying to: dtownfb (Dec 01, 2008 11:18 am)
They are in debt because GM pay after delivery and GM does not pay for them right away. Do not know if this is true but perhaps GM is behind in payments.
|
![[F]](http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com/media/townhall/webxicons/site.gif){kind=small}
Forums
Automotive News & Views 
