J.D. Power Warns of "Outright Collapse" of Auto Industry

[bcjohnso99]

Cyberus must be wishing they held off purchasing Chrysler until 2009.

[member12]

Originally Posted by Snafu_SS

I've already decided long ago that a new vehicle is out the question for many many many years. Used is probably the only way I'll buy for a long time.

Why should I pay 40k plus for a new F250 when I can get a nice used one that's 3 years old for 20k?

I'd have to agree with this.

My Silverado is my last "new" truck unless something dramatic changes in the market.

When you think about it, the car market has been in a bubble for a while. With 1st year depreciation being so bad on so many models, it was just a matter of time for the market to react.

[member12]

Originally Posted by triadecho

Nothing can kill a company faster than lack of cash flow.
I was with Douglas Aircraft when they became McDonnell Douglas for that reason.
Great products or even unfilled back orders can't save you when money stops coming in.

Let's get something right here......every company has cash flow problems. Halliburton and Microsoft has cash flow problems. Clients don't always pay on time, markets go through hard times, etc.

That's when companies take out short term loans to make payroll. Unfortunately, even short term loans are nearly impossible to get now, which forces companies to lay people off. The only reason I am still employees is because I do just as much work as the guys who have been here for 4 or 5 years but for about $25K less per year. I'm cheap, therefore I can still work another day.

GM and Ford and Chrysler are lucky to get government backed loans. It's not quite a bailout, but it is a bit of corporate welfare that is probably worth having. My company surely won't get that.

GM and Ford are going to have to figure out how to idle for about a year. Their payroll dollars will need to go to R&D instead of production since demand is going to be weak for a while.

At least gas prices are starting to go down. That's sure to help out.

[Stovebolt]

Gee thanks Big Government.

Thanks for forcing banks to extend credit to people who didn't deserve it.

Thanks for helping create the housing bubble.

Thanks for creating the financial bubble.

Thank You, George W., Barney Frank, Barack Obama (he was involved in a lawsuit against Citibank because Citibank wouldn't give the EXACT same proportion of loans to indigent and poor as to stable middle-class families) and the rest of you semi-socialist retards.

As much as Ron Paul's associations and foreign policy disgust me, I'm starting to see his appeal.

O, and Thank You, GM and Ford management for not recognizing these things as a temporary bubble....I mean, I didn't either, but it's not MY job, it's theirs.

Great. Looks like instead of a G8, my next car will be a B-O-P compact from the 60's.

[TriShield]

They are a little late.

[Deep Blue]

Originally Posted by Snafu_SS

I've already decided long ago that a new vehicle is out the question for many many many years. Used is probably the only way I'll buy for a long time.

Why should I pay 40k plus for a new F250 when I can get a nice used one that's 3 years old for 20k?

Depends on the incentives-with rebates and employee pricing, my brand new Sierra went from $21,600.00 to 15,500.00. I didn't see the advantage in buying used with those kinds of discounts.

[triadecho]

Originally Posted by member12

Halliburton and Microsoft has cash flow problems.

I saw a high level Halliburton executive walked out the door for allowing a client to defer progress payments provided he paid us the prime. Not only did this hurt cash flow, it allowed the client to borrow at a rate which was well below our minimum opportunity return.

[johnny smallblock]

Hey, remember when we cared whether Toyota would outsell GM? Now we just hope they make it.

On the bright side, GM can probably get through till 2011 by selling off Hummer, Saab, Saturn, the Ren Cen and some foreign holdings plus getting some gov't loan money. If enough dealers fold, GM may be in the core position they're looking for. Whether anyone will buy their cars still remains to be seen.

[TriShield]

Originally Posted by johnny smallblock

On the bright side, GM can probably get through till 2011 by selling off Hummer, Saab, Saturn, the Ren Cen and some foreign holdings plus getting some gov't loan money.

Who is going to buy all of that and how will those sales do anything to stave of GM's monster cash burn?

[PontiacBixler]

Originally Posted by coaster.n3rd

Tell me about it. I have seen 3 customers all week.

Sounds like around 9/11. I was working as a salesman at a Pontiac Buick dealership from Aug 27, 2001 til Sept 19, 2001. We were fairly busy, at least I thought, my first week or two there but when 9/11 happened it got spooky. The dealership is on a main drag in a fairly heavily populated and traveled area of Western New York. About an hour after the towers fell, the roads was deserted. We had one person come that entire week onto the sales floor.

[gmlr]

GM sales were good last month and they will be good this month.The imports will have higher costs due to the dollar going down, GM will have lower costs due to health costs in Jan 2010. The two chevy stores near me are selling about the same as last year in total sales and they could sell more Malibus and Traverse if they could get them. The Camaro comes on line soon, more car sales for GM. What upsets the talking heads on cable is that GM sales in Sept did not go down like Toyota. I went by the Toyota store and salesmen said store sales down 50% as of the today. No cable stories about Toyota going BK or Toyota factories shut down, Or Toyota trucks with dusk on them while Chevy and GMC trucks are moving,.

[Mr. Burns]

perhaps a merger with Ford is in order.

[miken123]

Originally Posted by Mr. Burns

perhaps a merger with Ford is in order.

This reminds me of (what i think is) a good quote by Lee Iaccoca. Something his dad taught him. Back when Chrysler was at the brink of destruction, many companies came to talk merger. One was DeLorean of DMC, who was also struggling to get his show going.

Iaccoca's dad always told him two losers should never partner together expecting to get a win out of it. Ford and GM merger would be tough to justify. I don't think either wants a part in the other's debts and problems.


I do agree that the government won't let GM shut down because GM indirectly creates unbelievable amounts of jobs. (I saw the numbers last week, it was Huge).

If an automaker were to fold (especially our biggest) it would sink us incredibly deeper in the crapper (just when you thought that wasn't possible?).


Of course the government itself is tied up pretty stiffly between deficits, bailouts, loans... I could see the situation being where the US govt. has to help the outmakers but simply can't afford to and has to watch them go under!

Exciting and depressing times! Those of us who live through them will look back and say wow that was nuts! (or something similar but with many more profanities thrown in there).

I'm staying in grad school for a while, we'll see what's left when I'm done.

[Citation84]

Originally Posted by gmlr

GM sales were good last month and they will be good this month.The imports will have higher costs due to the dollar going down, GM will have lower costs due to health costs in Jan 2010. The two chevy stores near me are selling about the same as last year in total sales and they could sell more Malibus and Traverse if they could get them. The Camaro comes on line soon, more car sales for GM. What upsets the talking heads on cable is that GM sales in Sept did not go down like Toyota. I went by the Toyota store and salesmen said store sales down 50% as of the today. No cable stories about Toyota going BK or Toyota factories shut down, Or Toyota trucks with dusk on them while Chevy and GMC trucks are moving,.

GM's Sept sales weren't down as massively as they have been month to month because they drew buyers ahead with their employee pricing orgy. Watch what happens next month. And the month after. People who consider GM cars wait for the "deal". If there aren't any deals they don't buy, and those that were planning on buying already got theirs, probably earlier than expected because of the special pricing. Of course their #s looked better. And their FLEET sales were up in Sept. as well. I read Malibu was only 49% retail for the month, the rest went to the fleets. That's Chrysler territory, almost.

And Toyota's loss is in loss of profit for one month, something GM hasn't seen since, what, 2004-2005 ? There's no talk about Toyota going BK because they're still PROFITABLE and don't have Red Ink Rick running their company. They aren't in any danger of not being able to meet their bills on time and don't have to dog paddle while asking for 60 day terms instead of 30 day from their suppliers.

Hate Toyota all you want but that comparison is absurd and doesn't even reach the level of talking head bias as GM and Toyota's financials are not close to being comparable. One is in the black, the other has been bleeding red ink for years now.

Jan 2010 is pretty far away when you don't have enough cash to get yourself through 2009. Good that 2 GM dealers in your area are doing well. How are the other 5000 or so GM dealers doing ?

As for the new products coming ? Heard it all before, except this time they don't have the cash flow to back up their hubris and what might be coming may way well be cancelled or put off way into the future. We'll see the Cruze, but a Pontiac or Saturn version ? Doubt it.

Then again by that time perhaps gas will have dropped to 1.49 a gallon and GM will be able to concentrate on building big BOF SUVs again. The new golden age of GM coming in 2010.
Pipe dreamin'. Stock goes from $46.00-47.00 a share to under $5.00 in a year and you're actually trying to say wait till 2010 and the press is GM bashing when it reports on this massive flow of red ink coming out of headquarters ? GM has no time and their lack of money is NEWS. Their lack of cash flow is not going to support R&D and the launch of much of anything if they can't pay their suppliers to supply the parts.

Unless they go BK and buy time to sort out this mess, keep the wolf from the door you won't be worrying about media bias and Toyota's downturn in sales. You won't even have to worry about the 2 Chevy dealers in your town. One or both will be gone.

[Pinnacle]

I couldnt imagine Ford and GM shutting down in Ontario, that would just shut down the whole province.