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Doom and Gloom, but some interesting points within. What is GM doing, or what can they do to "to accelerate the arrival of more fuel-efficient models"? Besides giving Pontiac the Wave, and of course, the coming $40,000 Volt, what new, fuel efficient cars (not redesigns of existing cars) are being pushed up for sale within the next year or two (like Ford's Fiesta), and will they make a difference?

That shrinking feeling
Jul 2nd 2008
From Economist.com
High gasoline prices land Detroit’s Big Three in even deeper trouble

THE share price of General Motors (GM), America’s biggest carmaker, fell to $10.57 on Monday June 30th, valuing the giant firm at little more than $6 billion. In 1954, the last time GM’s share price was this low, the Cadillac Eldorado had yet to grow fins and the Volkswagen Beetle was still a novelty.

GM’s woes are shared by the other two members of Detroit’s Big Three. Ford has abandoned all hope of returning to profit as promised in 2009 and appears to be bracing itself for an even bigger loss in 2008 than last year’s $2.7 billion. And on June 26th Chrysler had to deny rumours that it was preparing to file for bankruptcy.

It was not meant to be like this.

At the beginning of the year both Ford and GM were expecting the credit crisis to knock sales in the first half of the year, but they were still cautiously optimistic that they would soon reap the rewards of their expensive and painful turnaround plans. Along with Chrysler, they had just secured a big package of concessions from unions that went a long way to closing the production-cost gap with the lean, non-union North America factories operated by Asian and European rivals.

Independent reports by J.D. Power and Harbour showed that Detroit was also fast catching up with the Japanese on quality and productivity. But the carmakers have been completely taken by surprise by the meltdown in the housing market and, above all, by the soaring cost of fuel. Falling house prices have persuaded many people to postpone buying new cars, and gas at over $4 a gallon is radically changing the types of cars that buyers want.

Detroit is still stuck with model ranges heavily biased towards the big, thirsty sport-utility vehicles (SUVs) and pick-up trucks that raked in the profits when gasoline cost half of today’s price, so this is wreaking havoc.

The Big Three were certain that America’s love affair gas-guzzling trucks would never end—so much so that both Ford and Chrysler pinned their hopes of recovery on new versions of their bestselling pick-ups, the F-150 and Dodge Ram respectively. But that conviction has been shattered in a matter of weeks. Figures released this week show that sales of cars and light trucks in America in June fell by 18% compared with a year earlier.

The hit taken by Detroit was even worse. Despite flinging costly rebates at the market, GM’s sales were down by 18%, and Ford’s by 28%. Chrysler dropped by a stunning 36%, pushing its market share below 10% for the first time in decades.

Unless there is a sudden reversal in the price of oil, Japanese and Korean brands will make big gains in market share both this year and next. GM, Ford and Chrysler are all trying to reduce the speed at which they are burning cash, and to accelerate the arrival of more fuel-efficient models.

So just how bad are things for the Big Three? This is hardly the first time that their survival has been questioned, of course. But two aspects of the current crisis are new. Carmakers’ finance arms used to bring in cash even during cyclical downswings in the vehicle market. That is not the case now. Not only have they been infected by the contagion from the home-mortgage market, but the value of SUVs and pick-ups has collapsed so catastrophically that they are losing big money on vehicles returned after lease.

It also seems increasingly unlikely that consumers will eventually shrug off the high price of fuel and return to their old buying habits, which means that Detroit’s old business model is now obsolete. The problem is that the smaller, more efficient cars that buyers now want, and which will come on stream in a year or two, are inherently far less profitable for both manufacturers and dealers.

GM and Ford can at least take some comfort from their well-run foreign operations, which are benefiting from growing demand in China, Russia and Brazil. But Chrysler has no such cushion. Worse, it is planning to replace only half its fleet in the four years after the 2009 model year (compared with Honda’s 72% replacement and Nissan’s 80%). John Murphy of Merrill Lynch believes this is “an active decision by the new owners to rationalise the product portfolio in advance of a break-up or sale.” It may not be long before the Big Three become the Not-So-Big Two.

Source: http://www.economist.com/business/displaystory.cfm?story_id=11660385
 

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Doom And Gloom. I Am So Tired Of Reading The Same Article Over And Over. Don't These Journalist's Have Any Talent? I Mean Come On Write About Some Of The Good For Once. We All Could Use Some Good News And Are Eager To Read It.
 

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Oh, and I suppose Toyota didn't drop 21% yesterday. I LOVE how the media was talking about the fall as a certainty, and all of a sudden Toyota comes out with a 21% decline.

We need a media for the media so we can sit there and criticize their stupidity.

If their share price was as affected by fair reporting as selling cars was to GM's, they would be in worse shape - arguably taking their last breath.

Oh, wait. Aren't the big media companies bleeding ratings? I guess Americans are voting with their remotes.

Yes, Detroit is going to change. I wouldn't be shocked to see them all merge together to some degree. But it isn't doomed. As in every business, the media is far removed from reality. You don't know the full story if you are camping outside their headquarters. The people inside know what is going on, and will fix it.
 

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This is more gloom and doom writing. A jump on the bandwagon of Detroit is dead. There is no mention of the new DeltaII car, or sub-Cobalt car comeing. No mention of Fords Fiesta etc. Hopefully the domestics are pulling forward launches of more fuel efficient cars but even though the stock prices are trashed, I will not count the domestics out just yet. Chrysler? I'm not sure what's going on over there...
 

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With the elections pending, a bumper crop of corn, when do we see $2.00 ethanol? This is what the USA needs to get a jump start. Then the manufacturers will have a chance to survive. But, remember no going back. to gas guzzling, tank like trucks when the fuel prices ease, it's conservation for the duration.
 

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56 Starchief, great point about media coverage of the June results. Nissan's results were equivalent to GM's (down 17.7% versus GM's 18.5%) and Toyota's results were equivalent to Ford's (down 21.4% versus 28.1%). The outlier is Honda, which was of course up slightly thanks only to their lack of trucks relative to the others.

The Titan and Pathfinder, among a few other Nissans, saw some of the largest single-model declines in May of any manufacturer (at least among nameplates not being discontinued).

I know I'm damn glad I unloaded my Pathfinder in December 2007. That thing would be an albatross today.
 

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With the elections pending, a bumper crop of corn, when do we see $2.00 ethanol? This is what the USA needs to get a jump start. Then the manufacturers will have a chance to survive. But, remember no going back. to gas guzzling, tank like trucks when the fuel prices ease, it's conservation for the duration.
How would we possibly have a bumper crop of corn this year? Does the phrase "Iowa flooding" mean anything to you? Corn prices are through the roof this year - basically double what they were last year, when they were already at historical highs.
 

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Blah blah blah. Why don't they talk about how crappy toyota's doing too?

Oh wait. I forgot. They can't bash their lord and savior toyota.
Why would they talk about how poorly a foreign company is doing over their own industry? I would say because the big 2.8's problems affect a greater number of people.

Although this sentence: "Unless there is a sudden reversal in the price of oil, Japanese and Korean brands will make big gains in market share both this year and next." goes to show the guy has pretty much no idea what he's talking about.
 

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"In 1954, the last time GM’s share price was this low, the Cadillac Eldorado had yet to grow fins and the Volkswagen Beetle was still a novelty."

Nice quote!

Now, if it steadies any at the $10 mark, it's TIME TO BUY!!!!
 

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Yes it's doom and gloom reporting, but they're just reporting what the current environment it. It sucks out there now and it's going to get worse before it gets better. I am beginning to seriously consider the possibility that more than one of the "Big 3" may not survive this crisis. IMO, Chrysler is probably doomed and GM and Ford are both burning through cash at an alarming rate. If they can't affordably raise capital in this market they may have to consider filing for bankruptcy protection. Now, is that the end of the world? I'm not sure. It would give them the freedom to dump their union contracts health care and pension obligations. Good for GM but crummy for the UAW and the U.S. taxpayers who are left holding the pension bill. Plus, if it does come to that, will people still buy cars from a company in bankruptcy? Who knows? Hopefully it doesn't come to that but things are getting pretty ugly here in the NA market and it'll be a while before things turn around.

IMO, there will not be any uptick in sales at all for the remainder of the year so it's gonna be tough for these guys to weather this particular storm. Hell, it's gonna be tough for all of us to weather this storm!

p.s. Maybe they're not reporting about Toyota's sales drop because they have more than enough cash to make it through this.
 

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Doom And Gloom. I Am So Tired Of Reading The Same Article Over And Over. Don't These Journalist's Have Any Talent? I Mean Come On Write About Some Of The Good For Once. We All Could Use Some Good News And Are Eager To Read It.
I wish I could feel as comfortable and at ease writing so many words in caps. :)
 

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56 Starchief, great point about media coverage of the June results. Nissan's results were equivalent to GM's (down 17.7% versus GM's 18.5%) and Toyota's results were equivalent to Ford's (down 21.4% versus 28.1%). The outlier is Honda, which was of course up slightly thanks only to their lack of trucks relative to the others.

The Titan and Pathfinder, among a few other Nissans, saw some of the largest single-model declines in May of any manufacturer (at least among nameplates not being discontinued).

I know I'm damn glad I unloaded my Pathfinder in December 2007. That thing would be an albatross today.
There is a resounding echo in this forum. Can I join it?

OK. How about: 56 Starchief, great point about media coverage of the June results. Nissan's results were equivalent to GM's (down 17.7% versus GM's 18.5%) and Toyota's results were equivalent to Ford's (down 21.4% versus 28.1%). The outlier is Honda, which was of course up slightly thanks only to their lack of trucks relative to the others.

The Titan and Pathfinder, among a few other Nissans, saw some of the largest single-model declines in May of any manufacturer (at least among nameplates not being discontinued).

I know I'm damn glad I unloaded my Pathfinder in December 2007. That thing would be an albatross today
 

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There is a resounding echo in this forum. Can I join it?

OK. How about: 56 Starchief, great point about media coverage of the June results. Nissan's results were equivalent to GM's (down 17.7% versus GM's 18.5%) and Toyota's results were equivalent to Ford's (down 21.4% versus 28.1%). The outlier is Honda, which was of course up slightly thanks only to their lack of trucks relative to the others.

The Titan and Pathfinder, among a few other Nissans, saw some of the largest single-model declines in May of any manufacturer (at least among nameplates not being discontinued).

I know I'm damn glad I unloaded my Pathfinder in December 2007. That thing would be an albatross today
You really are a weirdo. WTF are you trying to say???

:sad::zippy::rolleyes::confused::stupid:
 

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One thing is for sure; it is going to be a rocky road. I just hope there is enough nouse within GM to have centred their efforts on speeding up delivery of vehicles that are going to economical without compromising any gains they have had in regard to quality and reliability.
 
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