Here's a link to a series of conversations with Steve Rattner. It gives interesting insight to the GM & Chrysler bailouts. He also talks about firing Rick Wagoner.
A friend of mine had a 69 Nova with a 307 and a 2-speed PG...it too would hold first until what seemed like 50+ when it would finally upshift. That seemed really odd to me.
That's somewhat normal, especially for a PG. If you have the throttle opened a certain amount (i.e. ramming speed) the PG, as well as the TH350, will hold low (1st) until around 50mph. I'm not sure with the TH400. You can also adjust the bands & pressure on a PowerGlide to not shift from low to high up to around 60 or so, depending on the year and adjustments you make.
I wouldn't recommend it on a PG, especially one with a lot of miles on it, though the one in the '66 handled that and a lot more abuse once I did the motor swap.
"GM's board of directors was "utterly docile in the face of mounting evidence of a looming disaster" and former GM chairman and chief executive Rick Wagoner set a tone of "friendly arrogance" that permeated the company, Rattner wrote."
Cars are low margin, and with the D-3s historic cost problems, an unprofitable area for them.
A margin is short for profit margin. A profit margin is a theoretical profit that a Product manager sets forecasting that they will sell X-number of that model. The cost to make a model is dependent on how many of the item you plan on making. The cost VARIES based on what is actually made. For if you have a factory that costs $20M in taxes, heat, repairs and insurance whether it is closed, making 10,000 vehicles on 1 shift, or 50,000 vehicles working 24/7, that affects the cost per vehicle. Divide the fixed factory cost by the number of vehicles made. So the actual profit or loss is based on volume.
GM is losing $1-$2 billion/month. I doubt the have more than a handful of models that are selling enough to make a profit. Even when GM was selling 50% trucks and SUV's when the market was 17M vehicles/year, GM lost money.
So if GM was making a lot of money at a time it was selling a lot of trucks (say $8K/vehicle profit) then you think GM was losing $9K/car in order to end up with their loss?
So the management of GM were idiots for the last dozen years trying to sell cars? Why would anyone continue to sell a product year after year, loss after loss.
The reason is is that GM never really made that much on their trucks and SUV's. The profits on their trucks and SUV's were good for only very short times, and never equalled what the profit margin theoretically was.
A forecast profit margin does not = actual profit.
as all 3 will be coming with many small cars
Really? I haven't seen any small cars such as they have in Japan. The smallest car I've seen is the Ford Fiesta, and that rebadged Fiat Chrysler plans on selling.
which Americans don't really want unless forced into.
If the economy, our budget deficit, and the buying power of the U.S. $ do not improve, then the typical American is going to be driving a micro-car made in China or India. That is the direction we're headed. Gas prices are going up right now, as well as everything imported because the $ continues to lose value.
Yep. GM and Chrysler will not survive long without the continued support of the U.S. taxpayer. They have done some trimming so that they are not losing money so fast.
But what have they done to really make the companies profitable? New models you say - competing with Accord, Camry, Civic ... That sounds like the same strategy they had the last 10 years; why would it work now? The competition also is improving and has better reputations and similar pricing.
What does GM and Chrysler and even Ford think they offer that's substantially better that in this economic environment, that I want to spend $25K-$30K on their typical vehicle?
What has GM really done? Have they really changed the way I buy a car? - No Have they cut prices? - No. Are they really fun? - No What has really changed?
Its interesting that Rattner and his crew said GM may have had the worse financial management they've seen, so the promote the VP Finance to President? Oh, the government can be confusing at times!
GM 1/2 ton vehicles with the L460e trans are well known for dieing early. As I've mentioned many times, the trans in my 2000 Suburban upchucked at 45k miles. In the boating and camping circles I socialize in, I can't count the number of people I've talked to that have had a trans in a GM 1/2 ton Tahoe/Suburan/Silverado fail at low miles.
When I replaced my Suburban, one of the biggest reason's I avoided another is at the time of my purchase, they were still using the weak l460e trans, so I went with an Expedition with a 6 speed trans. Almost 60k w/o any issues and lots of towing and it's still tight. By 60k miles on my Suburban I'd already spent about $5k in repairs, not including the $ I spent on rentals. Plus it was a complete rattle trap. By the time I put 100k on the Suburban, I basically bought the damn thing twice with as much money as I had to dump into the POS. Just pure garbage. My ownership experience was so bad, it will be along time until I'll consider another GM product.
The high end of your estimate is close. At present the losses are well over $50 million daily with no hope of breaking even before 2011 at the earliest.
Another massive infusion of taxpayer dollars will be required next year to keep them floating into 2011. Minimum of $20 billion cash and likely more.
By the time the world's economies are robust again (2012 maybe), GM will have well over $100 billion in losses at the taxpayer's expense.
It will be sad day when they fold but unless Obama keeps handing them money, they are gone within 24 months.
I completely agree! They are forgetting that the competition is also getting better too. So, at what point is GM any better? They have a few new models, but they are also removing several too. Though the ones they are removing have been dead for a while, but why did they make a brand, or start a project and not finish or invest in them.
I am not sure I would want to buy a car from them right now. Not that I personally ever will, but in general. I am not a big fan of them, but for the very reasons discussed. It is frustrating to think that I am supporting such behavior right now with my current lease, in which I cannot get out of, because the car is worth poo out on the market. Thanks GM! I feel bad for those who have big massive loans on a GM car.
Ho ho !! We would love to see you walking to work instead of the [non-permissible content removed] Japanese cars! :shades: C`mon ,GM is as pathetic as it gets.. :lemon:
lf you can be happy driving a late 80's Park Ave, then you should be happy to drive anything, IMO;)
Deep down, I'm a Ford guy, but if Ford were gone tomorrow, I'd buy something else to enjoy, lots of good vehicles available across the board. I've purchased vehicles from VW, Nissan, Plymouth, Saturn, Chevy, Ford, and Mercury. I've pretty much enjoyed them all except for the GM models.
Saying "if I can't have X, then I don't want anything" is something my 7 year old would say.
Ho ho !! We would love to see you walking to work instead of the [non-permissible content removed] Japanese cars! :shades: C`mon ,GM is as pathetic as it gets.. :lemon:
While I tend to agree that GM has been pathetic, I will give credit where credit is due. The CTS is good and the new LaCrosse seems to be really good if powered by the 3.6. I've read a few rags that have stated the 3.6 powered LaCrosse is better than a ES350.
Deep down, I'm a Ford guy, but if Ford were gone tomorrow, I'd buy something else to enjoy, lots of good vehicles available across the board. I've purchased vehicles from VW, Nissan, Plymouth, Saturn, Chevy, Ford, and Mercury. I've pretty much enjoyed them all except for the GM models.
I've never had anything BUT GM or Mopar vehicles, so maybe I need to get out more! :P
I've never had anything BUT GM or Mopar vehicles, so maybe I need to get out more! :P
Drive what you like. But some on these boards don't seem to believe GM makes a bad car and are blinded by loyalty. Come on, that loyalty certainly doesn't go both ways. I had a bad Ford once, a 98 SVT Contour. I absolutely loved the car but I had tons of problems with it. Ford never stepped up (or the dealer) on the issues I had and several went unresolved. Once the extended warranty was up I traded it in on VW Jetta TDI, that was also great, but far more reliable (I know some may find that hard to believe, guess I had the only reliable jetta ever made). Same with my Suburban, neither GM or the dealer ever stepped up to try to keep me as a customer when my Suburban was a complete lemon, nothing broke twice, but I swear nearly everything broke once.
10 years went by until I bought another Ford. Even though I'm a Ford guy, I'll be the first to say they built a lot of crappy vehicles from the late 90's til 2006 or so. I certainly wasn't going to buy a Ford because of blind loyalty, particularly when many more appealing vehicles from other makes are available.
Personally, I'd rather walk. I could easily walk to work in 45 minutes and be in much better health on account of the exercise. Japanese cars are so incredibly ugly, I'd have to drink the entire distillery to even get close enough to look at one, let alone drive one. European cars are pretty, but one would have to be a bigger crook than Bernie Madoff to afford to buy, service, and repair one.
Amen Diesel, great post. I am a diehard Ford guy myself and I'll be the first to admit my 97 Explorer was what pushed me towards imports. Traded it after just 10 months because of brake problems and a 4WD system that would half engage/disengage the hubs so when they finally did, it was a large BANG! that shook the whole truck.
My friends replaced a tranny in their 2002 Explorer (which greatly improved fuel economy for some reason) as well and three guys here at work have had ball joint problems with their F-150's.
But my grandfolks also drove a 92 Taurus with over 300k miles that still had the original headgasket (not a misprint) and tranny (also not a misprint) and they currently drive a 93 Taurus wagon with over 200k and it also has these original items which supposedly were major problem areas.
Back on point I know Lemko is a diehard GM fan with a softspot for Mopars and the Ford panthers. I can understand the preference for big, cushy vehicles. But there are so many choices he is missing out on IMO that would be similar in size, comfort and space, it's a shame to just claim surrender.
I'm thinking an Infiniti M would be right up his alley. :shades:
My dad has primarily bought fords. He put 250k miles on a 92 Crown Vic (great car in it's day), then 200k on a '00 Taurus that was pretty much trouble free until 150k or so, but nothing major ever went wrong. Last winter when it was time to replace the Taurus, he decided to test drive everything in his price range. He wasn't impressed with the '09 Fusion or Taurus (the new '10 models weren't out yet), he didn't like the LaCrosse, Malibu, or Impala. He also wasn't overly impressed with Camry, he ended up with an 09 Accord EX-L v6 and loves it. In 9 months he's put 25k trouble-free miles on it and he absolutely loves the car. It feels like a bank fault and tomb quiet compared to my wife's 07 GrandCrap, I mean Grand Prix. Plus it has nearly 70 more HP and gets better fuel economy.
To put my dad's decision in perspective, his last 4 vehicles have been red Fords, now he's got a Silver Honda. 3 years shy of his 60th birthday he's embraced some change. Though I doubt he'll ever by a Buick after being saddled with a 2000 Park Ave that he inherited from my grandpa. After the first month of having it, he declared that he was completely baffled at why anyone would spend their hard earned money on such a cheaply made overpriced POC. Not to mention, that car cost thousands to keep running past 70k miles.
I was a stockholder for a while and did a lot of research, but don't have the annual reports in front of me. I believe though GM made $ maybe 1 out of the last 10 years? Anyone have the exact numbers. They lost many 10's of billions of $ in assets, while increasing liabilities and losing market-share.
and are the other car makers like chrysler kia ford toyota also losing money every year like gm??
Hard to tell about Chrysler since there finances were skewed by their "parents" twice; but they were seeing their % of market decline. Ford is losing money too for many years. Most of the foreign makes were making money, until just the last year, and therefore their piggybanks are much better off, and you don't see bankruptcies.
ETROIT, Oct. 14 — Sapped by everything from surging domestic health care costs to a hemorrhaging European operation, General Motors today reported third-quarter earnings that were well below Wall Street's expectations, including a loss in North American automotive operations for only the second time in the last decade.
Kind of blows your ",GM only made money one year out of the last 10," idea.
You'd really have to dig into the quarterly/annual reports to see the last time GM made money actually selling cars. Going back 10 years or so, many of the profitable years were due to GMAC mortgage and auto loans etc. While the actual manufacturing of autos was in the red.
how the heck are kia and suzuki still in business if everyone else has been struggling for a decade i mean they make the most undesirable vehicle with horrible reputations for being cheap and unappealing
how the heck are kia and suzuki still in business if everyone else has been struggling for a decade i mean they make the most undesirable vehicle with horrible reputations for being cheap and unappealing
I don't know about Kia, but Suzuki makes a lot of other stuff. ATVs, outboard marine engines, motorcycles, and other small engines etc., that have a good reputation. Suzuki has earned a quarterly profit 3 of the past 5 quarters. More than can be said of most other automakers.
Because their sales are mostly in their home countries, India,China and other asian nations. Infact Suzuki is a big player in India .Kia is big in Korea. US is an additional market for them to crack into.Not a make or break market. Whereas for GM , US is the biggest marker especially pickups and SUV`s which are tanking right now.
Kind of blows your ",GM only made money one year out of the last 10," idea.
No, it really doesn't, because GM had GMAC which was making lots of money on loans and credit card operations. GM was losing money on vehicle-sales, which is what I'm considering. When GMAC had trouble with its loans, then it became apparent how much money GM was losing on vehicle sales.
And if you know anything about accounting rules; you'll know that several years ago companies like GM did not have to have their pension plans fully funded. So in order to avoid losses, GM was able to put less money into their pension funds then they should have for that year. So yes GM accountants could show that they made $400 million for a given year; by putting $2,000M in their pension reserve instead of the projected future cost of $2,500M!
The rules have changed now, and the gains of GMAC through their loans has been shown to be fleeting, unlike an actual vehicle-sale, and it has been shown that any GM profits were simply accounting maneuvers.
A corporation the size of GM which once had 50% market-share, and decades of profits and wealth-building, is not brought to bankruptcy by 1 or 2 bad sales years. It had been losing value for many, many years.
No, it really doesn't, because GM had GMAC which was making lots of money on loans and credit card operations. GM was losing money on vehicle-sales, which is what I'm considering. When GMAC had trouble with its loans, then it became apparent how much money GM was losing on vehicle sales.
And that is why I quoted the section of the article talking about North American Automotive operations.
ETROIT, Oct. 14 — Sapped by everything from surging domestic health care costs to a hemorrhaging European operation, General Motors today reported third-quarter earnings that were well below Wall Street's expectations, including a loss in North American automotive operations for only the second time in the last decade.
I understand that GMAC was the vast majority of GMs profits but according to that article they did make money selling cars in the US for all but one year in the past 10 years as of 2004.
North American automotive operations reported a $22 million loss in the quarter, down from a $128 million profit a year earlier. In Europe, losses increased to $236 million from $152 million a year earlier. Earnings in Latin America increased to $27 million from a $104 million loss.
I admit that I don't follow the ebb and flow of pension accounting rules and GM did have to restate earnings a few times back in the past years.
A corporation the size of GM which once had 50% market-share, and decades of profits and wealth-building, is not brought to bankruptcy by 1 or 2 bad sales years. It had been losing value for many, many years.
Yup that was the 70s through mid 80s. GM made some pretty good cars by the late 80s but their reputation was already pretty screwed up and many were ignored. The Grand National and its derivatives were good and so were the GM Front wheel Drive H-Body cars. They still made a lot of bad cars then too so the good ones were missed.
I never said that just a couple of years caused their problems just that they have had good years recently.
Their problem was that they didn't take the massive profits they got from trucks and invest them into R&D on good midsize and smaller cars. The profit margin on full size trucks is enormous way more then most people realize.
Back around 1999 or 2000 I ended up reading a breakdown on what it cost Ford in labors and material to build a full size F-150. Not a strippy V6 model but your basic V8 automatic regular cab model. Can't remember it it was 2wd or 4wd but doesn't really matter. The breakdown was around 5,000 dollars on a truck that would MSRP over 20,000 and with incentives sell in the high teen range.
Now obviously there were other costs in building that truck to market it, ship it and that 5,000 dollars didn't count legacy health care or retirement costs but all those costs don't add up to another 5,000 dollars. Then of course you have the more loaded up trucks that sell for 30,000 and sticker in the mid to high 30,000 range. Yes it costs a little more to make that truck but it doesn't cost 20,000 more. The profit margin is even larger.
Now you take an Expedition or a Navigator that uses many of the same components as the F-150 and can sell for over 40,000.
Ford has admitted that they didn't use those big profits to fund R&D and investment in cars. All that math works the same for GM too but I bet their costs are less as those modular SOHC and DOHC ford motors cost more to make then the various pushrod V8s GM uses.
I admit that I don't follow the ebb and flow of pension accounting rules and GM did have to restate earnings a few times back in the past years.
I've taken graduate level accounting, finance, and other business courses, so thus let me assure you that it was very easy for the GM CFO and his staff to work within the loose rules to paint a picture that was relatively rosy. The information coming from GM (or most any company) is biased. Biased to support stock-prices, and keep and promote the executives' careers.
I know in the last week or 2, there have been links here on these forums to Rattner (?? the government's overseer), about the shock the government had when they took control and really saw the financial condition of GM.
What GM was doing to promote their financial condition would be similar to: you reporting your house is worth 10% more, your bank-account is growing; because you stretching out payments to people you owe, and you have plenty of money to spend - because you're not putting $ in your 401K. Meanwhile your business is selling less and less. If you only report the good stuff, then things look bright ... while you're heading for the rocks. This is GM's story.
Now obviously there were other costs in building that truck to market it, ship it and that 5,000 dollars didn't count legacy health care or retirement costs but all those costs don't add up to another 5,000 dollars
You don't have an indepth understanding of costing. I work at a manufacturer and do cost analyses. There is much more to cost then you list. The $5,000 you quote in costs and labor for the F-150 does not sound like it includes: heating, lighting, security of the building, maintenance labor and materials, the development costs (maybe $1B for a vehicle?), tooling, engineering, accounting, inventory control, QA-personnel, executive offices and buildings, marketing, advertising, property taxes, permits, business travel, warranty expenses, recall expenses ... And within these various functions there may be 3 or 4 workers for every direct-labor-worker quoted in that $5,000 cost.
And the factory does not sell the car to a dealer at sticker-price. They sell at invoice, and also give the dealer's incentives at times.
Also eroding the price of what a manufacturer gets for a vehicle is any rebates offered on the vehicle.
Then after you're done with all those costs, then if there's anything left, then take off 37% for U.S. income tax.
You don't have an indepth understanding of costing. I work at a manufacturer and do cost analyses. There is much more to cost then you list. The $5,000 you quote in costs and labor for the F-150 does not sound like it includes: heating, lighting, security of the building, maintenance labor and materials, the development costs (maybe $1B for a vehicle?), tooling, engineering, accounting, inventory control, QA-personnel, executive offices and buildings, marketing, advertising, property taxes, permits, business travel, warranty expenses, recall expenses ... And within these various functions there may be 3 or 4 workers for every direct-labor-worker quoted in that $5,000 cost.
I did say that the 5,000 dollar number included labor and materials but did not include other costs like marketing, advertising etc. I guess you skipped over that part. I understand perfectly how all those other costs add up because we have the same costs when selling a new car. Sure we might gross 500 on a new car but by the time you just cover floorplan expenses, pay the salesperson, detail the car and fill it with gas most of that is wiped out. Then you still have all your other fixed building costs to contend with. That is what the service department and used cars are for.
Yes they are other costs on top of that 5,000 dollars but they aren't 10,000 more dollars on top of it.
I doubt it costs a billion to develop a new regular truck chassis. I know Ford spent about 1.5 billion to develop the T5 platform that Land Rover uses but that included retooling the Sollihul factory. Also that T5 platform is much, much more advanced then any regular old truck chassis. The Volume that the T5 platform will support is probably less then 100,000 a year although that will probably jump as more vehicles move to that platform in the next couple of years.
Even if it is a billion dollars the volume on the F-series trucks is enormous, 500,000 at their peak and of course less now, so the costs are spread out over huge numbers. Then of course you can roll some of that development cost into the Expedition/Navigator as a platform-mate.
I work for a dealership and have been in the auto business on either the sales or service side nearly 13 years. When referring to the selling price I was referring to invoice minus incentives as in the selling price to the dealership. Invoice minus incentives just happens to be for the most part what new cars sell to consumers for now too.
Yes they are other costs on top of that 5,000 dollars but they aren't 10,000 more dollars on top of it.
I bet they're at least that, based on what I've seen in 20 years. Even in my prior post I did not list all the expenses - things such as interest on loans and bonds, dividends to shareholders.
And these are not fixed costs in many cases. The more you're market-share drops the higher the cost per vehicle.
Believe what you want, but the fact is GM blew thru many 10's of billions of $'s in the last few decades.
BTW - did you know that one of the assets the government allows corporations is what is know as Goodwill. They can list this just like a factory on their balance sheet to say they can cover their liabilities. Do you know what some of these Goodwill assets are? Oh things like trademarks. So back when GM owned Hummer, and Hummer had a good reputation, the tradmark of Hummer, (or Saturn or Saab) had a value. GM listed that as an asset they could sell - just the name not the parts and facotry. Guess what GM lost a lot of money right there when these became worth pennies on the $. It was very easy for GM to cook-the-books for anyone doing a cursory review, and that sort of thing is perfectly legitimate to auditors, as long as the value seems reasonable.
If nothing else this financial crisis of the last year, may make everyone consider what these companies are reallying setting the value on.
When someone has a vested interest in what they're telling me (such as an executive or politician), the warning flags go up.
As confusing as US accounting and Finance methodolgy is (and it certainly can be improved), try deciphering a lot of this in foreign markets including a lot of Europe. The US looks good in comparison IMHO. I expect the new GM balance sheet will be cleaned up of a lot of this legacy stuff that stays with the old GM. My big initial concern with the upcoming new GM will actually be revenue because its still going to be a large company with significant fixed costs and cost of goods sold.
..... the new GM balance sheet will be cleaned up of a lot of this legacy stuff that stays with the old GM. My big initial concern with the upcoming new GM will actually be revenue because its still going to be a large company with significant fixed costs and cost of goods sold.
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I agree that revenue will be a major problem for GM in 2010. Another bail-out in the fall of 2010 is almost inevitable unless a miracle happens in the next 12 months.
The thing that just kills me is that after the bankruptcy they still have significant (albeit reduced) legacy expenses and an unworkable UAW contract to work with. It's a joke. The Fed Gov't (taxpayers) gave them enough money to get to next fall. Without a decent recovery in light vehicle sales next year, GM will be a very tough spot right before the 2010 elections.
Kia is big in Korea. US is an additional market for them to crack into.Not a make or break market.
right on. Kia doesn't hold their breath on potential U.S. sales. The U.S. carbuyer tends to think he makes or breaks a brand. Not even close to being so. Y'all should've taken notice in the late 90's that carmaking is a globally-entertaken enterprise.
Try to enjoy your schmaltzy Infinity-Hon-Duh-Toyota-Lexus-Porsche-Mercedes-paranoi-ish biasees.
My Kia friends are prospering despite your obvious U.S. ignoramusii. :shades:
Without a decent recovery in light vehicle sales next year, GM will be a very tough spot right before the 2010 elections.
Well despite all the optimistic news, or should I say views of the economy right now, which I believe are artificially promoted to increase confidence, our economy is still in a precarious position and can fall again.
Unemployment is still going up, foreclosures are still strong and will be as people's unemployment-benefits run out, and commercial real estate is a disaster that is still dragging banks under. So GM should not be betting on an increase in their vehicle sales. Buying a new $25K Chevy isn't the first thing on peoples' lists in this situation.
GM should be positioning itself for a new vehicle market no bigger than 10M, with their current market share, with vehicles for people that don't have the money or credit they once did to buy fully featured vehicles. They need to drastically lower their costs, and get vehicles like the Cruze or smaller out there selling in the $10K - $15K range.
For example, for someone that is contemplating going green, to get the latest GM green gadget, one is going to need to fork over $40,000 for a new Volt. Umm...in a recession that's really not over for all practical purposes?
Smaller but still roomy SUV's from GM, like the one advertised during Jimmy Fallon's show yesterday, are not what I would call an answer to Hyundai/Kia. :confuse:
Its not that i thought that the US market makes or breaks a vehicle brand. Its simply that Kia makes ugly and unattractive automobiles. But i guess people buy what they can afford and that happens to be cheap and ugly Kia's. And i agree with you post below that the Chevy Volt is fail. I also bet you drive a Lancer because no vehicle Kia makes is even close to being in the same ballpark as your GTS.
Bah. GM's new product is quite excellent. The problem is going to be perception, economic recovery, and whether their costs really are sufficiently low to allow them to survive at a low enough level of sales. Right now it's good for GM that they may have the best or close to the best crossovers in the business. The Enclave, Equinox and SRX are all supposed to be real good. At current gas prices, the eco stuff is a non-starter- the only hybrid that has ever done any serious business is the Prius. Those crossovers are much more profitable right now. All these US companies betting on small cars have to hope that gas prices are going to go way up by the time they get here or they'll be in serious trouble with oversupply.
Those crossovers are much more profitable right now. All these US companies betting on small cars have to hope that gas prices are going to go way up by the time they get here or they'll be in serious trouble with oversupply.
Sounds like GM's old strategy. Look where it got them.
No need to hope. Gas prices will continue to rise and are going to go to $3.00 very soon. Any company that depends on crossovers are just going to repeat history. GM, Ford and Chrysler remain in frail business condition at the moment.
As Cash for Clunkers proved, the Asians remain the gas economy and quality KINGS at this period in automotive history..
Period.
Korea's Hyundai and Kia brands reported huge gains while both Chrysler and GM suffered declines. Honda Motor Co. and Toyota Motor Corp also posted improvements, leading Asian-based brands to a record 52.3% share of the market, according to Autodata.
Meanwhile, U.S. carmakers saw their share drop to just under 41%. See full story.
Troubling for the entire auto industry is the survey finding that showed only 9% of respondents expressed interest in buying any new car in the next year, down from 19% in a June 2008 survey. That's hardly a surprise considering the big spike in sales the government's clunker promotion had in August.
Don't look now, GM, while slowly but surely the innovators will drive your sales down further.
U.S. sales for General Motors, Ford Motor (F, Fortune 500) and Chrysler Group, as well as Japan's Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY), are all down between 25% to 50% from a year ago. But combined U.S. sales for the Hyundai and Kia brands are up 2.6%.
As a result, the two brands have picked up 2.2 percentage points of market share during the first nine months of 2009. Hyundai and Kia now combine for 7.4% of the U.S. auto market.
That puts Hyundai Motor Group just ahead of Nissan as the sixth-largest automaker in terms of U.S. auto sales. And the Korean automaker is rapidly closing in on Chrysler, which now has just a 9.2% share of the U.S. market.
"They're definitely considered one of the major automakers today, which was definitely not the case this time last year," said Jesse Toprak, vice president of industry trends for car pricing tracker TrueCar.com.
Though, I applaud GM for putting in a 4cyl in their newest crossovers, but most are not going to come this way, most will opt for the V6. If and when the gas prices rise higher, people again will opt out of an SUV. I am not sure where GM is going with all of their SUV's. They keep releasing close duplicate SUV's. I really thought GM was told to downsize? Example....
Acadia Outlook equinox GMC crossover Traverse Cadillac SRX
Did I miss any? I am sure I did. That is ALOT of SUV's/Crossover's for any company. Again, there are other cars in the GM family that are in need of some help, but hey, lets keep them out, and just make new. This is exactly what happened to Pontiac. "Could have" been a seller! But, they lost interest in it, and sales fell.
Getting bailed out one time, but if they fall hard again, would you be willing to give them yet another chance? Hey, there is always 60 days to take the thing back if you don't like it.Why not? I didn't know that GM compared to a Lexus? Or even to an Accord, oh wait, its like driving a Camry.
Do you think Honda will compare the Accord to the new Malibu? lol :confuse:
I'm guessing they were in development for a long time, it takes a while to design new vehicles. But yes they have alot of em, and GM for a long time liked selling trucks/suv's for the profits they make on em.
I didnt want them to get bailed out in the fist place, definately wouldnt want them to get bailed out again.
Speaking of designing new vehicles, there's another weak point of the "Smaller 3". Let's assume now this will change but when and how fast is the key.
A failure to introduce new products at the same rate as foreign manufacturers explains the dwindling market share of United States auto companies, according to a new Virginia Commonwealth University study to be published in the Journal of Business Research.
Getting bailed out one time, but if they fall hard again, would you be willing to give them yet another chance?
Realistically, the advantage of the bailout was that the failures of GM and C a desynchronized with the rest of the economy. If they fail next year or the year after that, the economy will be better, the banking system will have recovered significantly, and the economy will be able to absorb GM's liquidation more gracefully.
Excellent point. If GM and Chrysler had been allowed to fail at the end of 08 on top of all the banking sector we'd have bread lines by now. If they fail in the next year it's not nearly the same mindset. Essentially it halted the avalanche of bad financial news. Now, a year down the road, we could better deal with such bankruptcies and a lot of us actually expect them to happen.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
Comments
http://money.cnn.com/video/fortune/2009/10/20/f_sl_rattner_GM_Wagoner.fortune/in- dex.html#cnnSTCVideo
I wouldn't recommend it on a PG, especially one with a lot of miles on it, though the one in the '66 handled that and a lot more abuse once I did the motor swap.
GM, Chrysler Recovery Not Assured, Rattner Says
And a bit more at Reuters and the AP.
Here's one tidbit:
"GM's board of directors was "utterly docile in the face of mounting evidence of a looming disaster" and former GM chairman and chief executive Rick Wagoner set a tone of "friendly arrogance" that permeated the company, Rattner wrote."
A margin is short for profit margin. A profit margin is a theoretical profit that a Product manager sets forecasting that they will sell X-number of that model. The cost to make a model is dependent on how many of the item you plan on making. The cost VARIES based on what is actually made. For if you have a factory that costs $20M in taxes, heat, repairs and insurance whether it is closed, making 10,000 vehicles on 1 shift, or 50,000 vehicles working 24/7, that affects the cost per vehicle. Divide the fixed factory cost by the number of vehicles made. So the actual profit or loss is based on volume.
GM is losing $1-$2 billion/month. I doubt the have more than a handful of models that are selling enough to make a profit. Even when GM was selling 50% trucks and SUV's when the market was 17M vehicles/year, GM lost money.
So if GM was making a lot of money at a time it was selling a lot of trucks (say $8K/vehicle profit) then you think GM was losing $9K/car in order to end up with their loss?
So the management of GM were idiots for the last dozen years trying to sell cars? Why would anyone continue to sell a product year after year, loss after loss.
The reason is is that GM never really made that much on their trucks and SUV's. The profits on their trucks and SUV's were good for only very short times, and never equalled what the profit margin theoretically was.
A forecast profit margin does not = actual profit.
as all 3 will be coming with many small cars
Really? I haven't seen any small cars such as they have in Japan. The smallest car I've seen is the Ford Fiesta, and that rebadged Fiat Chrysler plans on selling.
which Americans don't really want unless forced into.
If the economy, our budget deficit, and the buying power of the U.S. $ do not improve, then the typical American is going to be driving a micro-car made in China or India. That is the direction we're headed. Gas prices are going up right now, as well as everything imported because the $ continues to lose value.
But what have they done to really make the companies profitable? New models you say - competing with Accord, Camry, Civic ... That sounds like the same strategy they had the last 10 years; why would it work now? The competition also is improving and has better reputations and similar pricing.
What does GM and Chrysler and even Ford think they offer that's substantially better that in this economic environment, that I want to spend $25K-$30K on their typical vehicle?
What has GM really done? Have they really changed the way I buy a car? - No Have they cut prices? - No. Are they really fun? - No What has really changed?
When I replaced my Suburban, one of the biggest reason's I avoided another is at the time of my purchase, they were still using the weak l460e trans, so I went with an Expedition with a 6 speed trans. Almost 60k w/o any issues and lots of towing and it's still tight. By 60k miles on my Suburban I'd already spent about $5k in repairs, not including the $ I spent on rentals. Plus it was a complete rattle trap. By the time I put 100k on the Suburban, I basically bought the damn thing twice with as much money as I had to dump into the POS. Just pure garbage. My ownership experience was so bad, it will be along time until I'll consider another GM product.
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The high end of your estimate is close. At present the losses are well over $50 million daily with no hope of breaking even before 2011 at the earliest.
Another massive infusion of taxpayer dollars will be required next year to keep them floating into 2011. Minimum of $20 billion cash and likely more.
By the time the world's economies are robust again (2012 maybe), GM will have well over $100 billion in losses at the taxpayer's expense.
It will be sad day when they fold but unless Obama keeps handing them money, they are gone within 24 months.
I am not sure I would want to buy a car from them right now. Not that I personally ever will, but in general. I am not a big fan of them, but for the very reasons discussed. It is frustrating to think that I am supporting such behavior right now with my current lease, in which I cannot get out of, because the car is worth poo out on the market. Thanks GM! I feel bad for those who have big massive loans on a GM car.
Deep down, I'm a Ford guy, but if Ford were gone tomorrow, I'd buy something else to enjoy, lots of good vehicles available across the board. I've purchased vehicles from VW, Nissan, Plymouth, Saturn, Chevy, Ford, and Mercury. I've pretty much enjoyed them all except for the GM models.
Saying "if I can't have X, then I don't want anything" is something my 7 year old would say.
While I tend to agree that GM has been pathetic, I will give credit where credit is due. The CTS is good and the new LaCrosse seems to be really good if powered by the 3.6. I've read a few rags that have stated the 3.6 powered LaCrosse is better than a ES350.
I've never had anything BUT GM or Mopar vehicles, so maybe I need to get out more! :P
Drive what you like. But some on these boards don't seem to believe GM makes a bad car and are blinded by loyalty. Come on, that loyalty certainly doesn't go both ways. I had a bad Ford once, a 98 SVT Contour. I absolutely loved the car but I had tons of problems with it. Ford never stepped up (or the dealer) on the issues I had and several went unresolved. Once the extended warranty was up I traded it in on VW Jetta TDI, that was also great, but far more reliable (I know some may find that hard to believe, guess I had the only reliable jetta ever made). Same with my Suburban, neither GM or the dealer ever stepped up to try to keep me as a customer when my Suburban was a complete lemon, nothing broke twice, but I swear nearly everything broke once.
10 years went by until I bought another Ford. Even though I'm a Ford guy, I'll be the first to say they built a lot of crappy vehicles from the late 90's til 2006 or so. I certainly wasn't going to buy a Ford because of blind loyalty, particularly when many more appealing vehicles from other makes are available.
Well, there's always Chrysler.
My friends replaced a tranny in their 2002 Explorer (which greatly improved fuel economy for some reason) as well and three guys here at work have had ball joint problems with their F-150's.
But my grandfolks also drove a 92 Taurus with over 300k miles that still had the original headgasket (not a misprint) and tranny (also not a misprint) and they currently drive a 93 Taurus wagon with over 200k and it also has these original items which supposedly were major problem areas.
Back on point I know Lemko is a diehard GM fan with a softspot for Mopars and the Ford panthers. I can understand the preference for big, cushy vehicles. But there are so many choices he is missing out on IMO that would be similar in size, comfort and space, it's a shame to just claim surrender.
I'm thinking an Infiniti M would be right up his alley. :shades:
To put my dad's decision in perspective, his last 4 vehicles have been red Fords, now he's got a Silver Honda. 3 years shy of his 60th birthday he's embraced some change. Though I doubt he'll ever by a Buick after being saddled with a 2000 Park Ave that he inherited from my grandpa. After the first month of having it, he declared that he was completely baffled at why anyone would spend their hard earned money on such a cheaply made overpriced POC. Not to mention, that car cost thousands to keep running past 70k miles.
Regards,
]OW
I was a stockholder for a while and did a lot of research, but don't have the annual reports in front of me. I believe though GM made $ maybe 1 out of the last 10 years? Anyone have the exact numbers. They lost many 10's of billions of $ in assets, while increasing liabilities and losing market-share.
and are the other car makers like chrysler kia ford toyota also losing money every year like gm??
Hard to tell about Chrysler since there finances were skewed by their "parents" twice; but they were seeing their % of market decline. Ford is losing money too for many years. Most of the foreign makes were making money, until just the last year, and therefore their piggybanks are much better off, and you don't see bankruptcies.
Just sort by year and you can see GM made decent money as late as 2004. I haven't finished going through all the other years.
http://news.google.com/archivesearch?um=1&cf=all&ned=us&hl=en&q=GM+earnings+repo- rt&cf=all&scoring=n&sugg=d&sa=N&lnav=d0&as_ldate=2002&as_hdate=2008&ldrange=1960- %2C1999
bah its so easy I will do it.
http://www.nytimes.com/2004/10/14/automobiles/14CND-AUTO.html
ETROIT, Oct. 14 — Sapped by everything from surging domestic health care costs to a hemorrhaging European operation, General Motors today reported third-quarter earnings that were well below Wall Street's expectations, including a loss in North American automotive operations for only the second time in the last decade.
Kind of blows your ",GM only made money one year out of the last 10," idea.
I don't know about Kia, but Suzuki makes a lot of other stuff. ATVs, outboard marine engines, motorcycles, and other small engines etc., that have a good reputation. Suzuki has earned a quarterly profit 3 of the past 5 quarters. More than can be said of most other automakers.
Whereas for GM , US is the biggest marker especially pickups and SUV`s which are tanking right now.
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Yes - until 2007 GM was doing okay. 2002-2003 were rough but 2004-2007 were decent years for the General.
Now if they had said, "GM only gained market share one year out of the last 10", then they'd be much more accurate.
I give GM a 30% chance of surviving the next two years. Without more government aid that drops to 15%.
No, it really doesn't, because GM had GMAC which was making lots of money on loans and credit card operations. GM was losing money on vehicle-sales, which is what I'm considering. When GMAC had trouble with its loans, then it became apparent how much money GM was losing on vehicle sales.
And if you know anything about accounting rules; you'll know that several years ago companies like GM did not have to have their pension plans fully funded. So in order to avoid losses, GM was able to put less money into their pension funds then they should have for that year. So yes GM accountants could show that they made $400 million for a given year; by putting $2,000M in their pension reserve instead of the projected future cost of $2,500M!
The rules have changed now, and the gains of GMAC through their loans has been shown to be fleeting, unlike an actual vehicle-sale, and it has been shown that any GM profits were simply accounting maneuvers.
A corporation the size of GM which once had 50% market-share, and decades of profits and wealth-building, is not brought to bankruptcy by 1 or 2 bad sales years. It had been losing value for many, many years.
No, it really doesn't, because GM had GMAC which was making lots of money on loans and credit card operations. GM was losing money on vehicle-sales, which is what I'm considering. When GMAC had trouble with its loans, then it became apparent how much money GM was losing on vehicle sales.
And that is why I quoted the section of the article talking about North American Automotive operations.
ETROIT, Oct. 14 — Sapped by everything from surging domestic health care costs to a hemorrhaging European operation, General Motors today reported third-quarter earnings that were well below Wall Street's expectations, including a loss in North American automotive operations for only the second time in the last decade.
link title
I understand that GMAC was the vast majority of GMs profits but according to that article they did make money selling cars in the US for all but one year in the past 10 years as of 2004.
North American automotive operations reported a $22 million loss in the quarter, down from a $128 million profit a year earlier. In Europe, losses increased to $236 million from $152 million a year earlier. Earnings in Latin America increased to $27 million from a $104 million loss.
I admit that I don't follow the ebb and flow of pension accounting rules and GM did have to restate earnings a few times back in the past years.
A corporation the size of GM which once had 50% market-share, and decades of profits and wealth-building, is not brought to bankruptcy by 1 or 2 bad sales years. It had been losing value for many, many years.
Yup that was the 70s through mid 80s. GM made some pretty good cars by the late 80s but their reputation was already pretty screwed up and many were ignored. The Grand National and its derivatives were good and so were the GM Front wheel Drive H-Body cars. They still made a lot of bad cars then too so the good ones were missed.
I never said that just a couple of years caused their problems just that they have had good years recently.
Their problem was that they didn't take the massive profits they got from trucks and invest them into R&D on good midsize and smaller cars. The profit margin on full size trucks is enormous way more then most people realize.
Back around 1999 or 2000 I ended up reading a breakdown on what it cost Ford in labors and material to build a full size F-150. Not a strippy V6 model but your basic V8 automatic regular cab model. Can't remember it it was 2wd or 4wd but doesn't really matter. The breakdown was around 5,000 dollars on a truck that would MSRP over 20,000 and with incentives sell in the high teen range.
Now obviously there were other costs in building that truck to market it, ship it and that 5,000 dollars didn't count legacy health care or retirement costs but all those costs don't add up to another 5,000 dollars. Then of course you have the more loaded up trucks that sell for 30,000 and sticker in the mid to high 30,000 range. Yes it costs a little more to make that truck but it doesn't cost 20,000 more. The profit margin is even larger.
Now you take an Expedition or a Navigator that uses many of the same components as the F-150 and can sell for over 40,000.
Ford has admitted that they didn't use those big profits to fund R&D and investment in cars. All that math works the same for GM too but I bet their costs are less as those modular SOHC and DOHC ford motors cost more to make then the various pushrod V8s GM uses.
I've taken graduate level accounting, finance, and other business courses, so thus let me assure you that it was very easy for the GM CFO and his staff to work within the loose rules to paint a picture that was relatively rosy. The information coming from GM (or most any company) is biased. Biased to support stock-prices, and keep and promote the executives' careers.
I know in the last week or 2, there have been links here on these forums to Rattner (?? the government's overseer), about the shock the government had when they took control and really saw the financial condition of GM.
What GM was doing to promote their financial condition would be similar to: you reporting your house is worth 10% more, your bank-account is growing; because you stretching out payments to people you owe, and you have plenty of money to spend - because you're not putting $ in your 401K. Meanwhile your business is selling less and less. If you only report the good stuff, then things look bright ... while you're heading for the rocks. This is GM's story.
Now obviously there were other costs in building that truck to market it, ship it and that 5,000 dollars didn't count legacy health care or retirement costs but all those costs don't add up to another 5,000 dollars
You don't have an indepth understanding of costing. I work at a manufacturer and do cost analyses. There is much more to cost then you list. The $5,000 you quote in costs and labor for the F-150 does not sound like it includes: heating, lighting, security of the building, maintenance labor and materials, the development costs (maybe $1B for a vehicle?), tooling, engineering, accounting, inventory control, QA-personnel, executive offices and buildings, marketing, advertising, property taxes, permits, business travel, warranty expenses, recall expenses ... And within these various functions there may be 3 or 4 workers for every direct-labor-worker quoted in that $5,000 cost.
And the factory does not sell the car to a dealer at sticker-price. They sell at invoice, and also give the dealer's incentives at times.
Also eroding the price of what a manufacturer gets for a vehicle is any rebates offered on the vehicle.
Then after you're done with all those costs, then if there's anything left, then take off 37% for U.S. income tax.
I did say that the 5,000 dollar number included labor and materials but did not include other costs like marketing, advertising etc. I guess you skipped over that part. I understand perfectly how all those other costs add up because we have the same costs when selling a new car. Sure we might gross 500 on a new car but by the time you just cover floorplan expenses, pay the salesperson, detail the car and fill it with gas most of that is wiped out. Then you still have all your other fixed building costs to contend with. That is what the service department and used cars are for.
Yes they are other costs on top of that 5,000 dollars but they aren't 10,000 more dollars on top of it.
I doubt it costs a billion to develop a new regular truck chassis. I know Ford spent about 1.5 billion to develop the T5 platform that Land Rover uses but that included retooling the Sollihul factory. Also that T5 platform is much, much more advanced then any regular old truck chassis. The Volume that the T5 platform will support is probably less then 100,000 a year although that will probably jump as more vehicles move to that platform in the next couple of years.
Even if it is a billion dollars the volume on the F-series trucks is enormous, 500,000 at their peak and of course less now, so the costs are spread out over huge numbers. Then of course you can roll some of that development cost into the Expedition/Navigator as a platform-mate.
I work for a dealership and have been in the auto business on either the sales or service side nearly 13 years. When referring to the selling price I was referring to invoice minus incentives as in the selling price to the dealership. Invoice minus incentives just happens to be for the most part what new cars sell to consumers for now too.
I bet they're at least that, based on what I've seen in 20 years. Even in my prior post I did not list all the expenses - things such as interest on loans and bonds, dividends to shareholders.
And these are not fixed costs in many cases. The more you're market-share drops the higher the cost per vehicle.
Believe what you want, but the fact is GM blew thru many 10's of billions of $'s in the last few decades.
BTW - did you know that one of the assets the government allows corporations is what is know as Goodwill. They can list this just like a factory on their balance sheet to say they can cover their liabilities. Do you know what some of these Goodwill assets are? Oh things like trademarks. So back when GM owned Hummer, and Hummer had a good reputation, the tradmark of Hummer, (or Saturn or Saab) had a value. GM listed that as an asset they could sell - just the name not the parts and facotry. Guess what GM lost a lot of money right there when these became worth pennies on the $. It was very easy for GM to cook-the-books for anyone doing a cursory review, and that sort of thing is perfectly legitimate to auditors, as long as the value seems reasonable.
If nothing else this financial crisis of the last year, may make everyone consider what these companies are reallying setting the value on.
When someone has a vested interest in what they're telling me (such as an executive or politician), the warning flags go up.
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I agree that revenue will be a major problem for GM in 2010. Another bail-out in the fall of 2010 is almost inevitable unless a miracle happens in the next 12 months.
The thing that just kills me is that after the bankruptcy they still have significant (albeit reduced) legacy expenses and an unworkable UAW contract to work with. It's a joke. The Fed Gov't (taxpayers) gave them enough money to get to next fall. Without a decent recovery in light vehicle sales next year, GM will be a very tough spot right before the 2010 elections.
right on. Kia doesn't hold their breath on potential U.S. sales. The U.S. carbuyer tends to think he makes or breaks a brand. Not even close to being so. Y'all should've taken notice in the late 90's that carmaking is a globally-entertaken enterprise.
Try to enjoy your schmaltzy Infinity-Hon-Duh-Toyota-Lexus-Porsche-Mercedes-paranoi-ish biasees.
My Kia friends are prospering despite your obvious U.S. ignoramusii. :shades:
2021 Kia Soul LX 6-speed stick
Well despite all the optimistic news, or should I say views of the economy right now, which I believe are artificially promoted to increase confidence, our economy is still in a precarious position and can fall again.
Unemployment is still going up, foreclosures are still strong and will be as people's unemployment-benefits run out, and commercial real estate is a disaster that is still dragging banks under. So GM should not be betting on an increase in their vehicle sales. Buying a new $25K Chevy isn't the first thing on peoples' lists in this situation.
GM should be positioning itself for a new vehicle market no bigger than 10M, with their current market share, with vehicles for people that don't have the money or credit they once did to buy fully featured vehicles. They need to drastically lower their costs, and get vehicles like the Cruze or smaller out there selling in the $10K - $15K range.
That's why a clon CUV at GMC can not sell over the competition based solely on price (not too mention a bad taste due to taxpayer bailouts).
Regards,
OW
For example, for someone that is contemplating going green, to get the latest GM green gadget, one is going to need to fork over $40,000 for a new Volt. Umm...in a recession that's really not over for all practical purposes?
Smaller but still roomy SUV's from GM, like the one advertised during Jimmy Fallon's show yesterday, are not what I would call an answer to Hyundai/Kia. :confuse:
2021 Kia Soul LX 6-speed stick
Sounds like GM's old strategy. Look where it got them.
As Cash for Clunkers proved, the Asians remain the gas economy and quality KINGS at this period in automotive history..
Period.
Korea's Hyundai and Kia brands reported huge gains while both Chrysler and GM suffered declines. Honda Motor Co. and Toyota Motor Corp also posted improvements, leading Asian-based brands to a record 52.3% share of the market, according to Autodata.
Meanwhile, U.S. carmakers saw their share drop to just under 41%. See full story.
Troubling for the entire auto industry is the survey finding that showed only 9% of respondents expressed interest in buying any new car in the next year, down from 19% in a June 2008 survey. That's hardly a surprise considering the big spike in sales the government's clunker promotion had in August.
C4C Boost F but NOT GM and C
Regards,
OW
U.S. sales for General Motors, Ford Motor (F, Fortune 500) and Chrysler Group, as well as Japan's Toyota Motor (TM), Honda Motor (HMC) and Nissan (NSANY), are all down between 25% to 50% from a year ago. But combined U.S. sales for the Hyundai and Kia brands are up 2.6%.
As a result, the two brands have picked up 2.2 percentage points of market share during the first nine months of 2009. Hyundai and Kia now combine for 7.4% of the U.S. auto market.
That puts Hyundai Motor Group just ahead of Nissan as the sixth-largest automaker in terms of U.S. auto sales. And the Korean automaker is rapidly closing in on Chrysler, which now has just a 9.2% share of the U.S. market.
"They're definitely considered one of the major automakers today, which was definitely not the case this time last year," said Jesse Toprak, vice president of industry trends for car pricing tracker TrueCar.com.
The NEW U.S. Auto Power
It's only a matter of time...
Regards,
OW
Example....
Acadia
Outlook
equinox
GMC crossover
Traverse
Cadillac SRX
Did I miss any? I am sure I did. That is ALOT of SUV's/Crossover's for any company. Again, there are other cars in the GM family that are in need of some help, but hey, lets keep them out, and just make new. This is exactly what happened to Pontiac. "Could have" been a seller! But, they lost interest in it, and sales fell.
Getting bailed out one time, but if they fall hard again, would you be willing to give them yet another chance? Hey, there is always 60 days to take the thing back if you don't like it.Why not? I didn't know that GM compared to a Lexus? Or even to an Accord, oh wait, its like driving a Camry.
Do you think Honda will compare the Accord to the new Malibu? lol :confuse:
I didnt want them to get bailed out in the fist place, definately wouldnt want them to get bailed out again.
A failure to introduce new products at the same rate as foreign manufacturers explains the dwindling market share of United States auto companies, according to a new Virginia Commonwealth University study to be published in the Journal of Business Research.
Full Article: Longer Restyles = Lost Market Share
Regards,
OW
Realistically, the advantage of the bailout was that the failures of GM and C a desynchronized with the rest of the economy. If they fail next year or the year after that, the economy will be better, the banking system will have recovered significantly, and the economy will be able to absorb GM's liquidation more gracefully.