chrysler-ford-general motors DOWN GRADED

[malcolm]

I NOTICE ON CNBC SAT MORNING that united states 3 biggest car manufactures have all been down graded substantiially by credit agency MOODYS--- so what you say----- don,t forget that industry is still united states largest blue collar employer--- more unemployment more deeper the recession:(

[lakedaemonian]

I NOTICE ON CNBC SAT MORNING that united states 3 biggest car manufactures have all been down graded substantiially by credit agency MOODYS--- so what you say----- don,t forget that industry is still united states largest blue collar employer--- more unemployment more deeper the recession:(

A couple things to keep in mind in regards to US auto manufacturers:

It's a bit of a fallacy that they produce inferior product compared to their Japanese & European competitors. Some US auto brands have seen tremedous improvements in their product quality in recent years.

In my opinion, the REAL problems are:

*Excessive health care and pension costs.....the cost per vehicle sold staggers compared to their competition...so all things being equal, it's like running a marathon with a backpack full of rocks...which means less money for new product R & D and more model years between updates.

*Excessive dealership numbers......this is an often neglected problem in the mass media......Toyota and Honda have far, far fewer...but much larger, more profitable, and more capable dealerships selling their respective profit. If the dealers aren't profitable.....the product will be poorly sold and poorly supported, resulting in poor profits(if any) for all in the chain.

*Excessive reliance on light trucks/SUVs.......Ford in particular is reliant on it's F150 line to keep the company going....and it's being assaulted on two fronts....ONE....petrol prices, and TWO.....the Japanese are fielding excellent light trucks.

I expect the US government to support GM and Ford, but let Chrysler fall or allow it to be acquired by the Chinese.

In 5-ish years I expect to see GM/Ford dealership numbers drop by approximately 33%, and sales to drop by over 25%. It is NOT going to be a good industry to be in for about a decade.

Just my 0.02c

[AMR]

Too many unions in the US...why don't they simply close down the whole of detroit and shift production to China?

Also from my limited knowledge of automobiles I believe that Toyota and Honda are way ahead of the Americans when it comes to hybrid technologies.

At a wild guess, would we see a GM/Ford merger in the near future followed by massive layoffs?

[malcolm]

the general feeling in the united states is that the big manufacturing plants like --- GM -FORD- CHRYSLER-- ARE FINALLY at deaths kneel-- but the unemployment repercussions could distroy states------ i agree with lakedamanion there products not to bad but like the POMS in the late 70,s the japs sneeked up and squashed them--- deep recession fellows is looming in UNITED STATES and will spread like measles;)

[malcolm]

general motors low low 33year low-- was america,s number one company mid 70,s:rolleyes::D

[Steve]

general motors low low 33year low-- was america,s number one company mid 70,s:rolleyes::D


As low as your apstrohphes? :D

Now we know that there is at least one person who reads MALCOLM'S posts! :rolleyes: ;)

[Huang Chung]

There are now plenty of Japanese car makers with new factories in the US, but they are in the south, and largely non-union.

[malcolm]

There are now plenty of Japanese car makers with new factories in the US, but they are in the south, and largely non-union.

HUANG CHUNG so right the japs are winning thier way through america-- chinese is next to infiltrate america by- by yanks wealth

[LKSteve]

The American car co's quite simply can-not compete with the Japanese. Continuing to go head-to-head in the internal combustion powered vehicle market is a one way ticket to financial ruin. The Americans must innovate & switch to products that the Japanese can not quickly gain dominance in. Intel got out of memories in the 90's because the Japs were slamming them on quality & price, exactly what's happening to the American car makers now. Intel switched to integrated circuits, a market in which they still lead. It's time the car companies did the same. Abandon the market. If this isn't an inflection point I don't know what is.

[Huang Chung]

It's all a bit sad, as some off the Ford / GM offshoots don't make a bad product....thinking specifically of Ford Europe or our very own GMH.

The yanks just don't have much of a clue when it comes to designing a modern, desirable vehicle. Many of their designs look like they were penned by art school drop-outs (and the guy who designs the grills was definitely given a bum-steer by his school career councellor :eek:).

They need to pay whatever it takes and hire some of the people who penned the new BMW 3 series, or some of the latest Audis to have a fighting chance.....

[malcolm]

It's all a bit sad, as some off the Ford / GM offshoots don't make a bad product....thinking specifically of Ford Europe or our very own GMH.

The yanks just don't have much of a clue when it comes to designing a modern, desirable vehicle. Many of their designs look like they were penned by art school drop-outs (and the guy who designs the grills was definitely given a bum-steer by his school career councellor :eek:).

They need to pay whatever it takes and hire some of the people who penned the new BMW 3 series, or some of the latest Audis to have a fighting chance.....

MAY BE THE YANKS COULD COPY THE RUSSIAN STARSHIP :DLADA:D that may save the united states auto industry:rolleyes::rolleyes::D

[malcolm]

chrysler st louis van plant closing down anothier few thousand good americans unemployed ---

[Steve]

Chrysler may be headed for bankruptcy, says analyst (http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10519974)
Faced with soaring gas prices, a sputtering economy and a rapid US market shift away from trucks, the US auto industry's weakest player, Chrysler, may have to file for bankruptcy or sell its storied Jeep and Dodge Ram brands as early as next year, says JPMorgan.

But rivals GM and Ford are likely to get through the rough patch and turn a profit in 2010.

[malcolm]

Chrysler may be headed for bankruptcy, says analyst (http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10519974)
Faced with soaring gas prices, a sputtering economy and a rapid US market shift away from trucks, the US auto industry's weakest player, Chrysler, may have to file for bankruptcy or sell its storied Jeep and Dodge Ram brands as early as next year, says JPMorgan.

But rivals GM and Ford are likely to get through the rough patch and turn a profit in 2010.
i predicted chrysler was dead meat some weeks ago very sad for WORKERS-
yep agree with you guys major restructuring is needed or the collapse of which was the --number one employer in- united states- the automotive industry-- i don,t think the US economic climate is going to blow over in 2 yrs GM FORD will strugle to survive in present mode.. deep recession on our door steps and will gather pace 2nd half of 08. watch the dow this week and late july

[ELYOB]

The auto Industry is only just spilling its guts! What has to be said is that the market for them is going to be a hard road to recover especially for GM . GM has been borrowing, and using as credit to pay people to buy , lease etc.,. its vehicles ; and it has in fact being paying its buyers to hold the krop which no one wants in the first place. GM cash burn is unmeasured and out of control at this time ? The auto credit crunch may yet be still to come ..... and the likes of GM are not exactly international banking giants.

[Dr_Who]

I would never buy an American car. Why would you when you can get a jap car which is much cheaper and more reliable. Maybe this is a opportunity for the Japs and Chinese to buy some cheap American car firms?

[malcolm]

I would never buy an American car. Why would you when you can get a jap car which is much cheaper and more reliable. Maybe this is a opportunity for the Japs and Chinese to buy some cheap American car firms?
AS EARLIER DISCUSED the japs are all ready set up and possible expanding but the CHINEESE as you say DR are smileing all over there rice dinners with whats happening and i bet you a rod petricevic honesty box that the chineese will take a big part before 09-

[malcolm]

it was annouced today in USA that chrysler who are suffering financial hardship are no longer offering lease deals to save MONEY--but the general consensus from industry leaders is that thier customers will vote with thier feet and purchase els where compounding chryslers problems

[AMR]

GM's very ugly loss

GM's $15.5 billion loss worked out to $27.22 a share, down from a net profit of $891 million, or $1.56 a share, a year ago. Revenue fell 18% to $37.67 billion from a year ago.

GM's results were affected by $9.1 billion in charges it took in the quarter, including $3.3 billion for buyouts for U.S. factory workers, $1.6 billion to cover the declining value of leased vehicles and a $1.3 billion impairment charge from its former financing arm, GMAC.
The loss is distressing no matter how you slice it:

$170,329,670 a day.


$7,069,069 per hour.


$118,284 per minute.


$1,971 per second

[AMR]

Just wondering, what happens to their pension plans if GM and ford declares bankruptcy?

The whole thing goes poof?

[lakedaemonian]

Just wondering, what happens to their pension plans if GM and ford declares bankruptcy?

The whole thing goes poof?

Pension Benefit Guaranty Corporation (PBGC)

http://www.pbgc.gov/workers-retirees/benefits-information/content/page13181.html

As I've mentioned here before.....the pensions will be yet another layer to this rotten onion.

It will continue to spiral downward and one problem cascades into another, and repeating until the rot is removed....hopefully there will still be some healthy tissue left after the cancer is cut out.

[AMR]

GM has now set up a blog trying to ask the public to support their bailout plan. A nice video on it ends saying congress can spend $25 billion now or lose $156 billion in tax revenues.

http://gmfactsandfiction.com/

[Hoop]

Reading through old news (1929 - 1932):)
Came across these headlines

November 1930
“I see no reason why 1931 should not be an extremely good year.”
– Alfred P. Sloan, Jr., General Motors Co. :):)



And in 1931 was Mr Sloan right?



August 12, 1931
“Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.”
– The Nation.:(:(


Nope :p

[graeme50]

If it wasn't for the UAW GM may be a little better off. Instead they have been slowly throttled by the unions. Unfortunately GM bowed to the unions demand in the early days and as a result couldn't compete with the japanese companies in USA. Someone asked why not build the cars in China. For one the us company employs directly and indirectly over 3 million people. The new administration cannot see the company fail. Better it go into managed chapter 11 rather than full chapter 11. and secondly the Chinese Juan continues to strengthen against the US dollar making import more expensive. Even though the americans are pressuring china to devalue china will not do it for obvious reasons. On GM shares, trading at 3.93 I have made a lot of money off these shares in recent times right up to jan this year and I still think they are a short term by with upside to $5.00

[AMR]

When do they run out of money? I remember the news saying the bridging loan would last them until March and I don't think there was anything in this stimulus plan to bail them out as such

[trendy]

GM CEO Wagoner resigns....I mean was pushed out.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aIbMMG6cfihY&refer=home

General Motors Chief Rick Wagoner Said to Step Down (Update1)
Share | Email | Print | A A A

By Doron Levin and Jeff Green

March 29 (Bloomberg) -- General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.

The people, who asked not to be named because the announcement hasn’t been made, didn’t give a reason why Wagoner, 56, is leaving the job. Wagoner said March 19 that he didn’t plan to resign.

The departure of Wagoner comes as President Barack Obama prepares an address tomorrow morning on his plans for the future of the U.S. auto industry. GM is surviving on $13.4 billion in U.S. loans and is asking for as much as $16.6 billion in additional aid to survive.

Wagoner, who has been lampooned in Saturday Night Live skits and vilified for his central role in the auto-industry collapse, said March 19 that he hadn’t been asked by the government or his own board to resign and his plan is to finish the restructuring.

“I do it because it’s important and I feel like I have a responsibility to do it,” Wagoner said. “I plan to stay here until we get things well in shape and on track and beyond that, we’ll see.”

[stevo1]

Google founders back 'Model T' of electric cars
Chris Keall | Sunday March 29 2009 - 08:48am


Tesla Motors, run by PayPal founder Elon Musk, and backed by Google co-founders Sergey Brin and Larry Page, is now taking orders for what it says will be the world's first mass-produced, highway-ready electric sedan.

Electric cars have several advantages over petrol, and some that you might not expect.

They develop maximum torque instantly, meaning a keenly specc’d battery-powered vehicle like WrightSpeed’s X1 can accelerate faster than a Porsche

Great looking car innovative and non oil reliant.

Check it out here http://www.nbr.co.nz/node/95308

[Dr_Who]

If the electric cars are successful, which I am sure they will be, then it could mean oil can go down to $10bbl.

[belgarion]

It would seem that the US administration has had enough of the big car companies. Controlled failure seems to be on the cards. Probably the best thing for the bloated US car industry. We might even see them start producing cars that non-americans want to own.

[Dr_Who]

Watch for China to be a dominant player in the auto industry in another 5-10 years.

The Jap and Korean car makers will have something to fear from the Chinese auto makers.

GM and Chrysler are history. Even if they get through this round, they will not survive the distance future. The fundamentals are stacked against them.

[lakedaemonian]

A couple things to keep in mind in regards to US auto manufacturers:

It's a bit of a fallacy that they produce inferior product compared to their Japanese & European competitors. Some US auto brands have seen tremedous improvements in their product quality in recent years.

In my opinion, the REAL problems are:

*Excessive health care and pension costs.....the cost per vehicle sold staggers compared to their competition...so all things being equal, it's like running a marathon with a backpack full of rocks...which means less money for new product R & D and more model years between updates.

*Excessive dealership numbers......this is an often neglected problem in the mass media......Toyota and Honda have far, far fewer...but much larger, more profitable, and more capable dealerships selling their respective profit. If the dealers aren't profitable.....the product will be poorly sold and poorly supported, resulting in poor profits(if any) for all in the chain.

*Excessive reliance on light trucks/SUVs.......Ford in particular is reliant on it's F150 line to keep the company going....and it's being assaulted on two fronts....ONE....petrol prices, and TWO.....the Japanese are fielding excellent light trucks.

I expect the US government to support GM and Ford, but let Chrysler fall or allow it to be acquired by the Chinese.

In 5-ish years I expect to see GM/Ford dealership numbers drop by approximately 33%, and sales to drop by over 25%. It is NOT going to be a good industry to be in for about a decade.

Just my 0.02c


GM, Chrysler to cut up to 3,000 dealers: sources

By Soyoung Kim and John Crawley Soyoung Kim And John Crawley – Wed May 13, 4:44 pm

DETROIT/WASHINGTON (Reuters) – General Motors Corp and Chrysler aim to drop as many as 3,000 U.S. dealers and are expected to begin sending notifications as early as Thursday, three people briefed on the still developing plans said.

GM, facing a U.S. government-imposed deadline of June 1 to restructure or file for bankruptcy, is expected to send termination notices to up to 2,000 dealers -- a third of its roughly 6,000 U.S. dealers, the sources told Reuters.

Chrysler, which filed for bankruptcy on April 30, will also tell up to 1,000 of its 3,189 U.S. dealers it is terminating their franchise agreements, according to the sources who asked not to be identified because the controversial closure plans have not been yet announced.

The moves to shut down auto dealerships underscores how the economic pain caused by the downward spiral of both automakers -- now operating under U.S. government oversight -- is spreading beyond their home base in Detroit.

The development comes as dealer representatives have stepped up lobbying in Washington to try to slow down closures they estimate would cost 200,000 dealership jobs.

The involuntary terminations are also widely expected to prompt a legal challenge from dealers who are independent retail networks protected by state franchise laws.

Chrysler spokeswoman Kathy Graham said the automaker had not announced its dealership closure plans.

"We have not announced anything at this point," she said. "We are not done with our process at this point."

A GM spokesman was not immediately available for comment.

More than 100 members from the National Automobile Dealers Association, a group representing the country's 20,000 new car dealers, met members of the House of Representatives and Senate in Washington on Wednesday, asking them to intervene with the Obama administration's autos task force on planned reductions.

"A rapid cut of dealers is a bad idea," NADA Chairman John McEleney said in a statement.

McEleney said his organization does not oppose dealer consolidation, but believes the administration and the companies are moving too fast.

NADA leaders are scheduled to meet the U.S. auto task force on Thursday.

The task force, headed by former investment banker Steve Rattner, is driving the restructuring of both companies, which are planning to close plants, cut jobs and restructure dealer lineups to establish viability.

PLANS BEING FINALIZED

GM, which is operating with $15.4 billion of U.S. government loans, has to cut debt and operating costs and present a new restructuring plan to officials by June 1 to avoid a government-controlled bankruptcy.

Both GM and Chrysler have faced pressure to cut struggling dealerships to bring their large sales networks line with those run by more successful rivals led by Toyota Motor Corp. Toyota, No. 2 in U.S. sales behind GM, has about 1,200 dealerships in the country.

Chrysler is using the bankruptcy process to move faster toward that goal, while GM plans to tell its dealerships they are being dropped for not meeting standards for capitalization and profitability.

GM wants to cut its dealer network to 3,605 from over 6,246 at the end of 2008. But it has not specified how it would achieve that and how many dealerships would be involuntarily terminated and how many it expected to go bankrupt or shut down on their own.

Chrysler's plan has remained under wraps.

GM Chief Executive Friz Henderson said on Monday the automaker was completing its plans for dealership consolidation this week.

Chrysler Chief Executive Bob Nardelli said in a memo to staff on Tuesday, a copy of which was obtained by Reuters, that the automaker would determine how to organize its dealer networks during the rest of the week.

Carroll Smith of Monument Chevrolet in Houston, one of the 100 new car dealers who lobbied lawmakers in Washington, warned that a rapid wind down of outlets could lead to a flood of new vehicles hitting the market simultaneously at much lower prices, further undercutting hard-hit dealers.

"Dealers are not cost. What we are retail and distribution," Smith added.

Dang! I thought the crunch would have been far more spreadout.

[STRAT]

Watch for China to be a dominant player in the auto industry in another 5-10 years.

.Maybe Doc but it will take another 10 before they start making a decent product. It took the Japs that long and Korea aint even close yet with the junk they make.