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8665 messages, Last post on Dec 07, 2009 at 9:23 PM
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Replying to: cooterbfd (Dec 02, 2008 7:12 pm) Also consider the number of states that GM and Delphi are in. What have the STATES offered them? Or the CITIES - maybe in the form of tax breaks? If the people of MI and OH ... desperately need the Big3 - what are they doing? Maybe they can't provide all the support, but are they doing anything extra in the last 3 months? has anyone heard? Is MI issuing $5B in bonds or anything, and lending to GM? No? Why not? |
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Replying to: kernick (Dec 03, 2008 5:48 am) That would work in normal times where the lobbyists and their cronies (congressfolk) hadn't messed up the financial system to the point where banks aren't lending the money that the FEDS just gave them to lend. Instead they're using it to bolster their highly over-leverages loan portfolios and are investing it in treasuries. >vIf the people of MI and OH ... desperately need the Big3 - what are they doing? I just saw a list of things that other states, three, had done to "win" (bribe) the foreign makers to build their plants in their nonunion states. As for Ohio and Michigan, we have tried to "lure" (bribe) the companies to build here but are discriminated against because of a higher union reputation and having US manufacturers plants in the area. The article I just read pointed out a Mercedes plant in AL that cost their taxpayers $200,000 per job. In Ohio the painting/body plant that's closing in December was given taxfree status a few years ago so that GM would upgrade the plant and continue to build and assemble the vehicles here. The jobs lost through the last years in those areas means the states' incomes are dropping. Granting loans and floating bonds to give more to the companies to make up for the damage caused by federal government laws and by buying of plant's locating in their states by other states isn't possible. EDIT: Ohio needs 5 Billion Ohio's Strickland helped campaign for BO after he campaigned for Hillary. He even had state employees doing campaign work on state time violating laws of privacy .
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Replying to: imidazol97 (Dec 03, 2008 6:05 am)
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Replying to: gagrice (Dec 03, 2008 6:14 am) But new revenue numbers released Tuesday show the state tax haul is running about $70 million behind projections. State budget officials have instructed agencies to hold back 7 percent of their appropriated spending; a few building projects have been postponed and hiring is being closely scrutinized. But it's the new biennial budget legislators have to craft starting in January that will be even harder as Indiana takes in less revenue than the year before, leaving no room for inflationary growth. "We are going to have a very austere budget," Daniels said. link title |
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Replying to: imidazol97 (Dec 03, 2008 6:05 am) I don't believe that banks aren't lending ANY money to companies, or to consumers. Less is being loaned, as banks now are only willing to lend to good companies and consumers with a good probability of paying it back. Granting loans and floating bonds to give more to the companies to make up for the damage caused by federal government laws and by buying of plant's locating in their states by other states isn't possible. News alert - the federal government is over $10T in debt. They're more broke than the cities and states. And I just posted links this morning that Detroit gave the Tigers and Lions $300M in the last few years to build stadiums. http://oversight.house.gov/documents/20070329144701-85817.pdf NY is currently giving the Yankees $833M to help with the Yankee Stadium project. |
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"...once sales go back to 15,000,000" Honestly, vette, do you still believe that GM will ever get back to 15 mil annually? GM can still manage 10 million right now simply because they're practically giving away their cars for barely any profit, if not none. As more and more customers will become educated in the market, GM will lose sales even more. I have mentioned this many times, GM is relying too much on 1) very few competitive products, and 2) the tired old "buy American" cliche. Whats with insisting on 15mil annual sales anyway? Forget getting back to 15 million, GM will have to figure out how to retain less but more profitable sales instead of just numbers. Simply thinking of the number of units sold is exactly what will make GM plummet even further. "It just doesn't happen, as the world works on an equilibrium. If 12M vehicles are in demand here in the U.S. 12M will be bought and sold, no matter who's nameplate is on it. The market is very efficient in that respect. " This is one thing I disagree with you, kernick.. I believe GM going under will affect sales and demand in 2 ways: Demand changes due to the loss of GM cars From the survey data I read in MT, the top reasons for choosing imports are higher reliability and resale value, whereas top reasons for choosing domestics are cheaper price (and better incentives) and the wish to buy American. Here's my prediction: 1) Should GM go under, most customers seeking price will look elsewhere, like to the Koreans and other Japanese. Others will stick to domestics. 2) Some fraction of the buy American customers will convert to something else, being non-loyalists and in need for a new car. 3) Some of the persistent domestic brand customers will be served by Ford (Chrysler is a goner imo). 4) The last group will be GM loyalists, which will probably choose to keep their current cars as there's no GM replacement. So in the end the market will only lose demand from GM loyalists, and lets face it, there aren't enough of them to hurt demands significantly. Whats more, this drop in the market won't last long as GM assets will be purchased, plants re-opened, and in a few years there will be new GM cars for the loyalists. Demand changes due to customers' financial condition The fall of GM will cause approx. 1 million people to lose their jobs. This will at least affect our economy, meaning there will be less demand as some buyers can no longer afford a new car. And when/if someone or some company buys GM, they will most likely cut capacity in half, meaning not too many new jobs for Americans. Plus I doubt they'll make any new contracts with UAW (well they dont deserve it anyway). Doesnt matter, there are many more looking for jobs out there. Either way there will be changes in demand, and both financial condition and the loss of GM lineup will put a negative number in the equation. As for how dramatic (or slight) the change will be is something I honestly can't predict, but I say YES there will be changes. |
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GM started this whole "pulling sales forward" thing when they extended the post-9/11 0% financing thing too long, and now the next six years of right-sized U.S. sales will compensate for the over-incentivized last six. And that is happening at a time when GM is most overextended financially. I believe they call that "reaping what you sow".
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Replying to: m4d_cow (Dec 03, 2008 8:49 am) That is the industry number, not GM. GM was already cutting capacity by closing plants and getting rid of models for a lower, profitable percentage of the market. Unfortunately the overall market dropped faster than anyone predicted. Just in July Ray Young said that GM had enough cash on hand to get through a 14 million year. Now we are looking at 10 million. Little info, Saturn had no new product in the pipeline. GM had already planned on phasing them out. Pontiac only had a few products in the pipeline and now we will see just a few performance products coming out. Most of the cuts announced in the plan were already in the pipeline, but many are just starting now or a year out. I think the UAW will be announcing some cuts today. Hopefully dropping the job banks start of 2009, paying for a much larger part of their medical care for both the retirees and workers and more buyouts of the higher paid workers making way for cheaper workers. top reasons for choosing domestics are cheaper price (and better incentives) and the wish to buy American. old data: Exterior styling has bumped "the deal'' as the top reason consumers give for buying a General Motors product. In 2003, 26.5 percent of those who bought a GM vehicle listed the deal as the top reason for their purchase, according to J.D. Power and Associates data. Performance followed, and exterior styling came in third. But in 2007, that changed. Exterior styling led the rankings, with 12.6 percent of buyers listing it as the most influential reason to buy a GM car. Fuel economy and performance followed. The deal landed in fourth place http://findarticles.com/p/articles/mi_hb6674/is_/ai_n26640497
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Replying to: nippononly (Dec 03, 2008 9:02 am)
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I am sure someone will say this company is beholden to the industry somehow so you can read at your own risk. http://www.globalinsight.com/SDA/SDADetail15175.htm Outlook and Implications The automakers had an opportunity with the request to provide detail about their plans for federal funding to go in a new direction with their turnaround plans. What much of the country outside the "Rust Belt Midwest" does not understand (and has not really had communicated to them) was that the domestic automakers began taking steps to put themselves on the way to recovery two years ago, before a confluence of events outside their control basically took away their revenue streams. Plans were in place and being executed at GM and Ford to drastically revamp the way the automakers did business, the way they created vehicles, how they operated and interacted internationally, even what kinds of products were being scheduled for introduction in the United States. Those plans however were not effectively communicated outside the boundaries of the automotive press, it would seem, if the reactions of Congressional politicians and the American public at large are anything to judge by. Now that the bottom has fallen out of the conomy, taking new car sales to lows not seen in 26 years, the automakers' need to come to the only organisation in the land willing to lend money has been perceived as the fault of the industry itself, despite the progress it had been making. So what the automakers have apparently done is finally taken those turnaround plans, tweaked them slightly to account for the fact that sales for the next several years are not going to be anywhere near what most people had thought they would be, and put them in a form to respond to Congress' request for business plans on viability. The double standard evident in the request itself is staggering; for the comparably paltry sum of US$34 billion, the Detroit Three automakers have to jump through hoops not demanded of the financial industry, which has received hundreds of billions of dollars with no oversight, no testimony before Congress on how it will be used, no request for reform or executive compensation cuts, and far from any guarantees that any of it will be seen again. So the question then remains: has Congress' and the American public's question of "how will the money be spent" been answered? The answer is a resounding "maybe." There is little new information for an auto industry insider in any of the business plans presented by the Detroit Three; but to an outsider, it may seem like a wealth of information, a treasure trove of data on which to measure the merits of the claims of continued viability of the Detroit Three. Of the plans, GM's is probably the strongest in responding to the point-by-point requests that the original Pelosi/Reid letter outlined. GM's scenarios are conservative, but in line with IHS Global Insight's forecasts for potential market volumes going forward. Ford's are a bit more aggressive, but like GM, it presents a variety of scenarios in terms of how the company would fare given varying levels of market health. But the one thing that the Chrysler plan does that neither the GM nor Ford plan do is to say exactly how the federal loans would be spent.
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