Isn't it the pensions and healthcare costs that are crippling them mostly?
Seems that not designing/making cars that people want to buy is what is crippling them. No matter how big you are, you can't stay in business making stuff that won't sell (or sells only at a loss).
Seems to me that the yanks have kept on with the big SUV/pickups for far too long and left the market open for the Far Eastern makers to come in with good quality compact and economy cars. I image with the high and rising oil prices, housing crisis and likely recession, the US domestic makers are going to be taking even more of a pasting.
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End of the road, not yet. In America GM are ceasing prodution at 4 plants that make SUV and Pick ups, and upping production of their chevy and pontiac brands by introducing a third shift. Also they are developing and introducing high efficiency engines for the American market. Onwards and upwards, fingers crossed.
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>>Seems to me that the yanks have kept on with the big SUV/pickups for far too long and left the market open for the Far Eastern makers to come in with good quality compact and economy cars.
BBC News 24 just covered the subject.
Says Toyota were chasing the bigger vehicle market and now have to revert to smaller cars. Honda were doing OK.
"GM US sales beat Toyota in June
General Motors suffered a big fall in US sales in June, but its figures were still better-than-expected and as an added bonus it beat Toyota.
GM delivered 265,937 vehicles, which was 18.5% down on June 2007 although there were three fewer sales days.
Toyota sales fell 21.4% in the month while Ford sales fell 27.9%.
Toyota had been expected to fare better during the month because its smaller, more fuel-efficient cars were better-suited to high fuel prices.
But in the event, Toyota suffered even worse than its US rivals, with its truck sales in particular falling by 38.9%."
(news.bbc.co.uk/1/hi/business/7484360.stm)
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From the news wire:
In 1980, just 2 million light trucks were sold annually, about 20 percent of new vehicle sales. By 1990, light trucks made up about a third of sales, and by 2001 they'd overtaken cars as the preferred ride of U.S. buyers.
Light truck sales hit a peak at 61 percent of new vehicle sales in July 2005, representing an annual sales rate of more than 12 million vehicles.
But sky-rocketing oil prices have brought demand to a screeching halt. Light truck sales dropped to less than 48 percent of new vehicle sales in April and 44 percent in May - the first time they were below 50 percent since 2001. At that pace, only 6 million will be sold in 2008.
In June, sales of domestic and imported light trucks were down 19.4 percent from the same month of last year, the automakers said on Tuesday.
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Chrysler will go bust before GM...
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Hyundai-Kia now 5th largest in the world having overtaken Chrysler and Nissan - report
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Biggest problem for GM is the fact that for way too long they just make too many poor to average models that they have to incentivise very heavily to shift.
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"GM US sales beat Toyota in June General Motors suffered a big fall in US sales in June but its figures were still better-than-expected and as an added bonus it beat Toyota.
That alone shows how bad GM are suffering - when they are considered to have done 'better than expected' by beating just ONE Far Eastern competitor.
Add in companies like Honda, Mitsubishi (who supply a lot of vehicles to Chrysler) and Hyundai and Kia and I would think the picture for GM in the US looks bad.
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>As much about GM culture and its history of hopelessness in taking great ideas all the way to successful production>
Not to mention the forceful, if not fateful, acquistion of Daewoo which seems to have resulted in probably the most expensive advertising campaign ever for a range of (Chevrolet) cars that just don't sell. I see that the new Aveo has come out though, presumably to replace the ugly Tacuma. Watch out for serious discounts and credit-crunch busting deals.
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The end of GM - if only....
Just think; no more rubbish-quality Vauxhalls with weird faults that defy logic - bliss....
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Both Ford and GM have done well for a long time with huge SUVs and were good sellers. But top selling cars were things like Honda Accords or Toyota Camrys. Then the public wake up and think that these big SUVs cost a lot to run and the preferred top selling cars come from Toyota, Honda, etc. But often are also built in the US so still keep Americans in jobs.
My brother had a 5.2l v8 4x4 until around 1999 and then got a VW Beetle diesel. He lives in California. And still has it because they still do not sell diesel cars again.
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GM, Barratts, Taylor-Wimpey, Starbucks........ who else?
Re. GM - I wonder if this makes brand sell-offs likely.
Edited by Sofa Spud on 02/07/2008 at 22:20
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>That alone shows how bad GM are suffering - when they are considered to have done 'better than
>expected' by beating just ONE Far Eastern competitor.
GM didn't beat just ONE Far Eastern Competitor, they beat ALL of them.
>Add in companies like Honda, Mitsubishi (who supply a lot of vehicles to Chrysler) and Hyundai and Kia..
All manufacturers are in competition with each other. You can't "Add in" other companies as if they were a single entity.
>I would think the picture for GM in the US looks bad.
GM sales dropped 18%, Toyota sales dropped 21%, are you predicting the demise of Toyota US too?
Nissan sales were down 18%, Ford down 28% and Chrysler down 36%. Sales across all brands were down 18.3%.
It was a bad month for all manufacturers but GM came did better than most.
Kevin...
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It's not just a months' sales, it's profits and what the company's balance sheet looks like.
I don't know the answer to that.
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>It's not just a months' sales, it's profits and what the company's balance sheet looks like.
Exactly.
Suggesting that GM or any other manufacturer is at the "End of the road" on the basis of one month's sales data is meaningless.
Kevin...
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"GM, Barratts, Taylor-Wimpey, Starbucks........ who else?"
I think it's a tighten the belt moment for a lot of us. M&S also reporting poor results. It's not US or UK but a global issue.
Mention of Barratt for example, we went to look at new (to be developed) site.... Barratt claimed a lot were sold. It now no longer has a sales office, the website and phone has no knowledge of it ever existing etc. These were £300k+ houses and cheaper flats but no longer exist it seems for now. Yet they claimed lots already had buyers....
Time to tighten the proverbial belt. GM is not alone here.
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Suggesting that GM or any other manufacturer is at the "End of the road" on the basis of one month's sales data is meaningless. Kevin...
Over $50bn losses in three years is not meaningless though, is it. Even a company the size of GM cannot sustain those sort of losses for more that a few years. Apparently some SUV's are being sold at less than cost price, with 6 years 0% finance. SUV market down 60% over the last year and GM have over 40% of that market.
I certainly wouldn't want to be a GM shareholder at present. They do have major problems, whatever spin you want to put on it.
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>That alone shows how bad GM are suffering - when they are considered to have done 'better than >expected' by beating just ONE Far Eastern competitor. GM didn't beat just ONE Far Eastern Competitor they beat ALL of them.
I think you missed the point. Its not so long ago that GM outsold ALL of the Far Eastern brands collectively.
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CNN openly talking of its insolvency last night. The problem is a financial one, i.e. relating to its balance sheet, and wouldn't be solved merely by a few months good sales. They may not be able to maintain/renew/afford their borrowings next time round apparently.
Their major issue I'm sure is high labour coasts and a huge pension-funding requirement.
Were they to be able start the company from scratch with the same vehicles, I'd guess the could halve the prices and make more than they do now.
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> > Chrysler will go bust before GM...
You mean Chrysler will go bust again?
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Latest Bloomberg snippet is that GM want to market a 'mini car' in the US to stem falling sales. Surely they just need to sell the Astra, Corsa or small ex-Deawoos, which area already badged as Chevrolets. Or do they sell these in the US already?
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Surely they just need to sell the Astra, Corsa, or small ex-Daewoos
Aren't they in enough trouble already....?
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No-one has mentioned GM's $31billion cash pile.
I know they will spend lots in closures and new models... BUT..
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"Barratt ... claimed lots already had buyers"
It was probably true ... at the time. However when those buyers applied for mortgages, they soon ceased to be buyers.
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GM like BT and a few other big companies with large legacy pension and health liabilities is really primarily a big pension fund and medical insurance provider that happens to make cars as a small sideline, as BT just happens to run a few phone services
the size of the pension pots these companies are managing dwarfs their day to day business massively
but yea the car making side is in trouble
a billion quid is nothing these days, the google and microsoft boys play with billions like confeti
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GM, as with Ford, is trying to respond to a changing world by re-structuring.
It knows the future is with smaller, more fuel efficient vehicles. Maybe these will use new technology like the 'Volt' system.
It also knows that it either re-structures itself, or the re-structuring is enforced on it by becoming insolvent. Insolvency is the end of the road for the shareholders, but isn't the end for the company.
When the manufacturing company I worked for went into receivership four years ago, half the employees were made redundant. But we came through that, and still sell our traditional range of products (plus some new ones).
I also see that the Ford share price is around $4.65 a share, and its the lowest its been since 1985.
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