Analysts: GM Needs To Cut An Additional 150k in Production This Year

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Thread: Analysts: GM Needs To Cut An Additional 150k in Production This Year

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    Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Analysts: More North American production cuts needed

    David Barkholz
    Automotive News
    November 4, 2008 - 4:14 pm ET


    North American vehicle sales are falling so precipitously that automakers must accelerate fourth-quarter production cuts or risk an inventory glut by year end, analysts said today.

    General Motors may have to cut an additional 150,000 vehicles in the fourth quarter -- beyond a forecast that already was 16 percent below the year-ago quarter's production, Barclays Capital analyst Brian Johnson said in a report today.

    GM should produce about 725,000 units this quarter instead of the 875,000 forecast, Johnson reported.

    Ford Motor Co. and Chrysler LLC also need to slash faster than previously anticipated, he wrote.

    GM spokesman Chris Lee said the automaker has no new production cuts to report.

    Failure to curb production will allow the days supply of vehicles to balloon, Johnson said. In terms of units, inventories are down substantially from a year ago at the Detroit 3.

    Ford finished October with 492,000 vehicles in inventory, 72,000 fewer than in October 2007. But vehicles are selling so slowly that the days supply is increasing dramatically.

    Johnson reports that Ford has 103 days of supply at the October sales rate, compared with a 10-year average for September of 76 days. GM and Chrysler have similar issues, with the total numbers of inventory down but days supply well over 100 days, Johnson reports.

    Ford already is planning to cut North American production of cars and crossovers during the fourth quarter, Ford sales analyst George Pipas said Monday.

    More details on the production cut are expected Friday when Ford details its third-quarter results. It would mark the fourth time this year that Ford has announced cuts to its North American production plan.

    The latest cut comes after a 32 percent skid in Ford's U.S. sales during October compared with the same month last year. Industry sales for the month translated to an annual rate of around 10.9 million, the lowest since March 1983.

    Robert W. Baird & Co. analyst David Leiker sees it the same way. He said in a report today that to align production with demand, the automakers must cut North American production 25 percent in the fourth quarter. Currently, a 15 percent cut is scheduled.

    Amy Wilson contributed to this report
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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Maybe an indication of what is coming tomorrow, idling plants for a few weeks to get the numbers down, the last thing GM needs is a massive backlog of vehicles on the lots and needing to do more firesales to get them sold.

    I suppose say idling most plants for 2 weeks could also save them a few $$ in utility costs etc.
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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by jbernie View Post
    Maybe an indication of what is coming tomorrow, idling plants for a few weeks to get the numbers down, the last thing GM needs is a massive backlog of vehicles on the lots and needing to do more firesales to get them sold.

    I suppose say idling most plants for 2 weeks could also save them a few $$ in utility costs etc.

    Rumor has been out for quite awhile that GM is going to shut down everything for the month of December.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    I hear that there is going to be shut down weeks and line speed reductions come December and the first of the year.
    Last edited by Josenez11; 11-06-2008 at 03:02 PM. Reason: misspelled word

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by wolverine View Post
    Rumor has been out for quite awhile that GM is going to shut down everything for the month of December.
    That is probably a very smart idea, I think.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by mgescuro View Post
    That is probably a very smart idea, I think.
    a prelude to the permanent closing. what else would you expect? this from the idiots who took away LeSabre, Regal, Century, Grand Prix, Monte Carlo, Bonneville, Firebird and gave us "G" everything. been saying it for years that Red Ink Rick would bankrupt GM. the guy threatened to have me removed from the property during an annual meeting for passing out copies of Return to Greatness. Why?????

    the end is drawing nigh....too bad, it was so preventable.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by Buickman View Post
    A prelude to the permanent closing. what else would you expect? this from the idiots who took away LeSabre, Regal, Century, Grand Prix, Monte Carlo, Bonneville, Firebird and gave us "G" everything. been saying it for years that Red Ink Rick would bankrupt GM. the guy threatened to have me removed from the property during an annual meeting for passing out copies of Return to Greatness. Why?????

    the end is drawing nigh....too bad, it was so preventable.
    Agreed.
    Have you seen what the new Camry is called for 09? Its Camry.
    Of course not the end all be all answer to GM problems, but sure doesnt hurt to not confuse consumers every year.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by tirediron View Post
    Agreed.
    Have you seen what the new Camry is called for 09? Its Camry.
    Of course not the end all be all answer to GM problems, but sure doesnt hurt to not confuse consumers every year.

    add in the most confusing, frustrating, and foolish incentives/giveaways and it starts to add up why sales drop every year under Red Ink Rick. oh...and those darn Billion dollar losses we've become so accustomed to.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by Buickman View Post
    add in the most confusing, frustrating, and foolish incentives/giveaways and it starts to add up why sales drop every year under Red Ink Rick. oh...and those darn Billion dollar losses we've become so accustomed to.

    ya know, i would just love to see one of rick's bonus checks. i think anyone that's been leading this corporation and doing as bad as this shouldn't receive a regular paycheck, let alone a bonus. how does someone merit millions of dollars by LOSING billions of dollars? i admire his guts tho..he likes to say it's not our fault, it's those darned consumers.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by johnnyl321 View Post
    ya know, i would just love to see one of rick's bonus checks. i think anyone that's been leading this corporation and doing as bad as this shouldn't receive a regular paycheck, let alone a bonus. how does someone merit millions of dollars by LOSING billions of dollars? i admire his guts tho..he likes to say it's not our fault, it's those darned consumers.
    it's the fault of the shareholders who kept the Board that kept Red Ink Rick. (gosh that name fits eh?)

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by Buickman View Post
    a prelude to the permanent closing. what else would you expect? this from the idiots who took away LeSabre, Regal, Century, Grand Prix, Monte Carlo, Bonneville, Firebird and gave us "G" everything. been saying it for years that Red Ink Rick would bankrupt GM. the guy threatened to have me removed from the property during an annual meeting for passing out copies of Return to Greatness. Why?????

    the end is drawing nigh....too bad, it was so preventable.
    I hope you are wrong about the end but indeed it looks grim.

    I agree with you on GM's brand management. Simply stated, it sucks. In the 50s and 60s GM owned car brands (ford to a lesser degree) and all of thier brands relfected Americana. In addition to the ones you mentioned add Belair, Biscayne, Nomad, ElCamino (someone had to say it), Catilina, Wildcat, Invicta, Cutlass, Nova.. the list goes on. And now we have G whatever, CRUZ (the brand people can;t even spell right). Not totally Rick's fault but he sure has not stopped .

    Sad but true

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    GM is a hot tranny mess!!!
    Poor management and no short, mid-term or long term goals.
    Everyday it seems like GM is trying something new to get something going.

    If GM would have had a "real" board and a "real" leader they wouldn't be in such a craptastic shape.

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    Re: Analysts: GM Needs To Cut An Additional 150k in Production This Year

    Quote Originally Posted by wolverine View Post
    Rumor has been out for quite awhile that GM is going to shut down everything for the month of December.
    im an employee, and we have been told numerous times that this not true, and nothing more than what you said it was, a rumor. working at gm, ive learned to believe it when i see it, and that never happens.

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