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2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
A few weeks ago I would have said that GM declaring bankruptcy would put the US economy into a recession. Now with what is going on it would put the US into a depression much like the old one.
2014 Malibu 2LT, 2015 Cruze 2LT,
Though it may be that that statement may have been made purely to stave off any further fear, uncertainty and doubt. If the credit market doesn't get sorted out soon, the public perception will be that nobody can qualify for a loan and therefore the market will dry up - not just for GM, but for the industry as a whole.
As an owner of 3 GM sourced vehicles - all Saturns - I'm a bit shocked at how quickly this company has spiraled out of control.
The $64 question is this -- how much of their current situation is self-inflicted and how much can be attributed to outside factors ($4 gas, tight credit markets)?
An additional question is what will $2.50 gas or lower do to STIMULATE theeconomy from the consumer side? It will make more vehicles more attractive. It will leave more money in consumer pockets to spend elsewhere. The additional spending will help the economy since 2/3 is based on consumers--if I recall the right number. Don't hesitate to put in the right number if I'm wrong.
Here gas is $2.79 and dropping like a rock as it should with gas price wholesale at $2.06. Add on .50 tax and it should be at $2.60
That's going to stimulate a lot of spending that people have had to cut back. I hope it will help the auto dealers and manufacturers.
>nobody can qualify for a loan
Actually friends of ours are shopping for a third house on 11 acres in the $350 range. It was a builder's house which he let go in some flim-flam moves and the bank has it. The builder continues in business. The value is much higher in pre housing collapse value. I haven't seen it. Credit is no problem is you have some money and good record.
2014 Malibu 2LT, 2015 Cruze 2LT,
There are no old large manufacturing companies in the US anymore other than the big 3 that make their products here. None. They are all out of business or moved off shore. At least we still have refineries for all the imported oil.
62 - agreed; unlike airlines, who people continue to use after a CH 11, I don't see any confidence at all in a manufacturer that files BK. Will that company be around to service the product that was sold?
Analysts are saying GM's stock is so low now that it would be ripe for takeover if they didn't have so much debt. From AP:
http://news.yahoo.com/s/ap/20081010/ap_on_bi_ge/auto_stocks
A person with knowledge of GM's plans said Friday that the company is likely to announce more production cuts and possible plant closures as early as next week. The person did not want to be identified because plans are not finalized
GM announced a plan in July that calls for cutting $10 billion in costs and raising another $5 billion through asset sales and borrowing through 2009.
The Detroit automaker had $21 billion in cash and $5 billion available through credit lines at the end of June for total liquidity of $26 billion, but it has been burning through cash at a pace of more than $1 billion a month and needs about $11 billion to $14 billion on hand to keep operating.
Overseas sales in growing markets like Russia and South America been a bright spot for GM as U.S. sales slumped. GM said Thursday, however, that sales of its Opel and Vauxhall brands dropped more than 6 percent in Europe during the first nine months of the year — a sign that the downturn is hitting economies globally and taking worldwide auto sales down with it.
The rapid growth of auto sales in China, the world's second-largest auto market after the United States, also has slowed sharply.
Of the $5 billion in asset sales GM was planning, I believe $1 billion was the sale of the Hummer brand. But does it have $4 billion more in assets that it could readily sell without hurting operations?
With a total liquidity reserve of $31 billion including the $5 billion it could borrow, and the need to maintain $11 billion in reserves, it has only about 20 months at the present burn rate before there is no choice BESIDES bankruptcy. If they manage to raise $5 billion more in asset sales, that's 25 months. I don't think they should let things go that far before they do it. It's just a waste of all that money. 25 months doesn't seem long enough to turn things around given that the present state of affairs in the economy will probably last that long, maybe longer.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
GM wants to borrow about $500 million from two city pension funds. The requests come as the automaker is trying to raise about $5 billion through asset sales and borrowing to survive the worst auto sales market in 15 years.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20081009/AUTO01/810090474
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Chevrolet Silverado PU.... 50,428 -3.9
Ford F - Series PU......... 32,727 -41.6
Toyota Camry / Hybrid.... 29,486 -27.1
Chevrolet Impala............. 27,143 17.1
Honda Accord / Hybrid ....22,371 -36.1
Honda Civic / Hybrid .......21,577 -12.8
Toyota Corolla / Matrix ....21,316 -27.9
Dodge Ram PU.............. 20,812 -30.9
Chevrolet Malibu............ 19,725 79.0
GMC Sierra PU.............. 18,744 1.6
Chevrolet Cobalt .............16,521 -16.5
Gotta believe though that they had Impala fleet sales to help.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
If you're the gambling sort and have some money laying around gathering dust, that you're not afraid to lose, then go for it!
Another place to wonder if it's time to buy:
Are car stocks driving you out of the market?
A bankruptcy filing is a strong possibility, no matter what Rick Wagoner says. And that "loan" from the federal government is chump change compared to what GM really needs to keep afloat, let alone tool for new models. GM's situation is truly dire.
Of course bankruptcy is an option. Anyone with any sense at all knows that GM may have to declare bankruptcy. GM had to say they are not considering it. Can you imagine the carnage if they had said the opposite?
Involuntary maybe....
2014 Malibu 2LT, 2015 Cruze 2LT,
1 - Bring over cars directly from Europe. Get a waiver from our government to allow Euro crash tests to function as U.S. ones for a while and cut the myriad of red tape and other testing and political nonsense. If the bean-counters and stupidly anal ENCAP guys over there say it's safe, I'm inclined to believe them.
2 - Get a waiver between the EU and U.S. for their vehicles so that they CAN just bring them over, change a few lights and gauges, and push them out the door in a few *months* and not by waiting until next September.
3 - STOP SELLING TO FLEETS. This is the #1 problem that they have. They churn out zillions of no profit models to a government that is essentially also bankrupt. This means that they have larger plants, more workers, more outsourcing, more parts, more insurance, more operators to run Onstar... on and on it goes.. And, they basically are doing "busy work" at most plants.
No wonder their secondary costs are exploding. This also causes their resale values to hurt. When half of a models for sale used are ex taxis and rentals, good luck if you bought one as an individual in getting anything other than auction value for it used.
They need to move away from the image of being the best used deal in the world to the best NEW deal, money-wise. Nobody sane buys a new GM(or Ford) any more, because the depreciation is like falling off a cliff. Money's far too tight now to be throwing away thousands a year in depreciation.
4 - Simplify.
- GMC - all trucks, SUVs, and commercial vehicles.
- Chevrolet - all cars. Not one truck, SUV, or van.
- Cadillac - luxury.
Saab, Isuzu, Buick, Pontiac, Saturn... all the rest of the crud... pick the one model out of each that you care about and toss the rest.
Consumers need a new image - a simplified and easy as a brick to the head to understand image.
Trucks/etc - GMC.
Cars - Chevrolet.
etc.
Then go Honda on options - A, B, or C. Pick a package, no alterations allowed. Pick a color. Give the consumer an easy to sort and recognize set of choices that is at most a few decisions long. This also helps resale value greatly and reduces tooling and assembly line costs
GM needs to think more like this and less like a hodge-podge of conflicting pet projects and 70 year old executives who can't be bothered to change their ways.
Effectively, they have no business being a business anymore. They do not have even 1 vehicle of any type that is its class leader. Not ONE.
GM and FORD at least have the potential to compete with Toyota,Honda,Nissan-Renault, etc....
Chrysler is toast. They have been on borrowed time for 20 years.
The only entity that has something to gain here is Cerberus.
If people spend their gas savings on other consumables it could help. nearly 70,000 GM trucks a month when gas was $4.20?
The ratio of truck cylinders to civic cylinders that month? 7 to 1. which way does that point US fuel economy?
Saturn - Not selling much of either Astra or Aura.
Ask Ford about the Contour, Festiva (1st generation) Merkur, etc.
Bringing over Euro spec cars doesn't work.
:confuse:
DA
Like I said earlier, I didn't see that one coming, but it isn't a completely surprising development. Consolidation is a typical response to economic troubles. There are some very interesting possibilities.
If it would be a straightforward swap, which I'm not sure it would be, but if it was, Cerberus gets GMAC which they are probably better positioned to handle, and I have to believe they want out of the car business. It has got to be hurting GM to keep servicing that troubled fanancial arm. GM gets the auto operations of Chrysler, and there is simply no denying that is where GM has been king for a long time, regardless of what we think about how they have held that position.
Combined Hummer-Jeep becomes a very intriguing property. Probably would have a lot of cache on the market. I think GM would off-load it as quickly as possible.
GM gets Chrysler's work on plug-in hybrids to go along with the Volt.
Chrysler benefits from GM's leadership in trucks and SUV's. Even though it is a shrinking market, that market will always be with us. GM gets Chrysler's work on technologies that Chrysler brings to the table, primarily diesels.
GM would obviously have to deal with the issue of inherently competing brand/models/nameplates, but they're juggling too many brands/nameplates/models as it is anyway. On the flip side they pick up some promising stuff they just don't have in their line up, minivans, mid CUV that has a practically stand alone price point.
Unclear if GM could/would maintain any strategic partnerships Chrysler has been developing, but if they could, that could be interesting. Even the combined giant still wouldn't have a serious competitor in the small sub-compact segment. The Chinese love their Buicks and Chery might get excited about the association. Nissan might be more interested in a rebadged Tahoe and Silverado than a Durango and a Ram.
Even in their poor shape, Chrysler has some market value. That could be a lot stock GM could sell, even if only at a few bucks a share.
If any of it negatively impacts GM's cash burn rate it could be suicidal.
Sure is fun to watch, huh?
$2-$3 gas could be a game changer on many levels.
It is also being reported that GM made merger overtures to Ford before Chrysler. Apparently Ford quickly rejected the idea.
NY Times article
Well, Jeep would be good for GM. Why? Because after demise of the Trailblazer/Envoy, and the possibly similiar fate for the Tahoe/Yukon, GM will be left with only crossovers. Jeep could put GM back into the game.
GM would also return to the minivan Market, and lay its hands on the Hemi.
Other than that, the rest of Chrylser is simply worthless, and GM would have to replace every Chrylser model with a GM-based model.
The new Ford Fiesta? Oops - we get the wrong engine, and the hot looking hatchback... nope... A hatchback that got 50mpg... yeah that would eviscerate VW's TDI sales.
Just one brain-dead decision by both GM and Ford after another...
This, too, shall pass! No way these errors continue indefinitely. The end nears at an ever quickening pace.
Next, they'll try get the Government to limit Toyota and Honda imports...too bad a lot are made on U.S. soil. Not an easy task when the financial crisis spans all borders and conformity will rule over opposition in the near term.
Regards,
OW
>European transplanted cars for the most part.
HELLO, where have you been in the past few years?! The Ford Focus was a smashing hit when it got introduced to the States and is the only current model within Ford where demand is strong.
Allowing US automakers to temperarily import their European Models in a limited amount without Tariff and other redtape would give them them a great breathing room......unless you want them all bankrupt in the middle of this outright ugly credit crisis where nobody is lending nobody any money.
Let them go bankrupt. Why are their good cars over in Europe and not in the US in the first place? Why do we get stuck with second hand models? Bad business decisions got them in this mess. Toyota and Honda should never even had a chance to get such a strong hold on fuel efficient vehicles.
GM is in no position to take on Chrysler. GM is fighting for their on survival. When you are drowning, you are suppose to grab a life preserve not another anchor.
2021 Kia Soul LX 6-speed stick
Will have to wait until the dust has settled.
Otherwise; my foot will be in my mouth :P
Lurk mode on.
DA
autonews.com
Rich and powerful Toyota, stung by a stunning collapse in sales last month, will spend a ton of money in October on a nationwide TV blitz that brags about the company's captive finance arm. The message: In a credit-crunched America, Toyota Financial Services has plenty of cash to lend. Executives say they're trying to do what General Motors' "Keep America Rolling" campaign did after 9/11 -- get the country rolling again.
I disagree on GMC/Chevy/Cadillac, however. Make it only Chevy and Cadillac. Toyota does fine with trucks in that division - why GMC?
Wow, they're really going to be selling a lot of those :confuse: .
Wrong product, too late. How many years has Ford's new Mustang been out?
Regards,
OW