GM Situation in US getting worse - Page 3

**Fordman1** · 02-03-2009, 07:09 PM

Quote:

Originally Posted by The Monty

But the volume would still be the same, same amount of cars being sold, but to a different manufacturer.
Or am I still missing something? lol.

Ford won't be able to increase their volume for quite some time. And by no more than a few percentage points.

The supplier's also won't have the raw material in the 'pipeline' for the unique Ford or other parts that require a volume increase, and the manufacturing process for the manufacture of those unique Ford parts may not be capable of significantly increasing in the short to medium term.

We are talking about 1000's of different parts here, NOT a couple of tyres.

The logistics in just "turning" Ford parts on and stopping the "GM / Chrysler" ones is not that simple. It may be possible over 12 months, but not weeks.

Before that happens the supplier will have gone bust....

Bent8 · 02-03-2009, 07:13 PM

The only people to blame here are the greedy bankers...they have effectively ruined the world economy and have left us holding the bag.

What happens when you inject hundred's of billions into a failing economy, you just devlaue an already devalued US dollar which inturn directly hurts the average person on the street when the price of food and petrol start to skyrocket.

Problem here is people don't have the same buying power anymore.

This affects every area of the economy....except the super rich who create the money out of thin air of course.

The BIG 3 (like every other business) will have to start cutting back big time very soon, but it will be too little too late.

Just have a look at the derivatives market right now and you'll see what I mean.

vztrt · 02-03-2009, 07:24 PM

Quote:

Originally Posted by Barraxr8

Ford won't be able to increase their volume for quite some time. And by no more than a few percentage points.

The supplier's also won't have the raw material in the 'pipeline' for the unique Ford or other parts that require a volume increase, and the manufacturing process for the manufacture of those unique Ford parts may not be capable of significantly increasing in the short to medium term.

We are talking about 1000's of different parts here, NOT a couple of tyres.

The logistics in just "turning" Ford parts on and stopping the "GM / Chrysler" ones is not that simple. It may be possible over 12 months, but not weeks.

Before that happens the supplier will have gone bust....

I guess this is where paxton's idea of not helping the car companies and helping the supplier would be more beneficial.

Wally · 02-03-2009, 07:36 PM

Quote:

Originally Posted by Barraxr8

Seems you have forgotten to include assets in your post above.

Was that convenient ?

If I didn't know better, I'd say you are 'trolling'. But that would be wrong wouldn't it ?

I couldn't admit to that, now could I?

Interestingly GM haven't filed their 10-k, instead opting for a 12b-25 late filing, due April 30th. The reasons:

Quote:

GM believes that additional time is necessary for a more thorough review of the extensive financial and other disclosures regarding the events occurring at year-end 2008 and during early 2009. Additionally, as a result of GM’s upcoming bond exchange, its 2008 Form 10-K will contain information regarding executive compensation, which would not normally be disclosed until the proxy statement is issued for GM’s annual stockholder meeting.

and

Quote:

GM expects to report a net loss of $30.9 billion, or $53.32 per basic and diluted share, for the year-ended December 31, 2008 compared to a net loss of $38.7 billion, or $68.45 per basic and diluted share, for the year-ended December 31, 2007. In addition, GM expects to report a loss from continuing operations before income taxes, equity income and minority interests of $29.4 billion in 2008 compared to a loss of $6.3 billion in 2007, and total net sales of $149 billion in 2008 compared to $180 billion in 2007.

Should be fun.

mrbaxr6t · 02-03-2009, 07:50 PM

For many years I have had the closet belief that the world has too many automakers, and as a result quality is high and what it costs you to buy one is low. Maybe these happenings allude to the fact that this is the case and the sales are spread too thinly between the automakers, both in the USA and elsewhere. Sales are declining why do we think that in this highly competitive auto market the amount of manufacturers won't also shrink?

Sorry for being mr. doom and gloom but the world economy is contracting, we all know that and as a result new car sales are too. If we believe what we are reading they are all in trouble somewhat. The supply of cars needs to contract to align with the demand. This will mean less automakers. Sorry but unless GM start selling autos to another planet to increase demand they are screwed. And even if they survive the next "worse off" automaker will take their position under the guillotine.

Bossxr8 · 02-03-2009, 08:01 PM

GM's biggest problem, and one of the major reasons they are in a much worse state than Ford, is a lack of future product. They have not much new product on the way, and some models have been held off for a couple of years to save money. They are relying on the Chevy Volt to be a magic bullet for them, but everyone knows hybrids don't really sell, and the weird thing is that GM didn't really expect it to make much money anyway.

At least Ford have a good business plan moving forward and have continued to invest in new product, such as US made Fiesta, new Euro Focus for US, new model Lincolns, Mustang, F series, new Taurus, hybrid Fusion etc, with many more new vehicles on the way. Mullaly knew that the best way out was good products that people want to buy. Thats why the think they can be profitable by 2011.

**Elks** · 02-03-2009, 09:46 PM

Quote:

Originally Posted by EgoFG

But Hey .... this may be easier .....

Ford
http://ccbn.10kwizard.com/cgi/conver...rl=0&dn=2&dn=3

GM
http://media.corporate-ir.net/media_...30/10Q1108.pdf

Seriously, nearly 500 pages between them. How does that make it easier?

Whilst I hope that both GM and Chrysler survive this (although I don't mind them coping some pain) If either or both were to fail Ford and the remaining competitors would not only pick up market share but for the first time in decades, demand would exceed supply. Even $500 per car margin improvement would make a huge difference to the bottom line. Which would be more beneficial than market share.

The thing that may in the end save GM is the banks. Remember the old saying "if you owe the bank 50 grand and can't pay you have a problem. However if you owe 50 Billion and can't pay, the bank's got a problem."

SSbaby · 02-03-2009, 10:54 PM

Quote:

Originally Posted by The Monty

I know this has already been covered before, but I can not fully understand how the iminent Bankruptcy of GM and Chrysler will affect Ford as much as is being led on.

I know for instance that if the other two go belly up, parts suppliers will soon fall as well. But why?
If there are 10 tyre manufacturers who make a 234/45r17, and three go down, that means you only have a choice of 7. That 30% of the marketshare will now be split between the remaining 7.

Err, assuming all 10 manufacturers all had 10% market share, then your statement would be spot on.

However, GM commands over 20% market share. I'd say if GM were to close up shop today, then a 20% reduction in volume would probably cut well below the breakeven point for most suppliers.

Don't forget, only the very good automakers make 5% profit per vehicle on total volume. Now apply the same margin to the tyre makers that need to supply GM the +2 million vehicles it sells each year for tyres... that's about 10 million tyres. At 5% margin for every tyre... that's a lot of money.

As for the comment to help the suppliers stay afloat, you think it makes more financial sense to compensate the suppliers instead of the automakers if GM and Chrysler were allowed to fail? Car makers are very efficient mass producers. If the government were to compensate the suppliers for parts, imagine the cost per unit they would have to spend for the reduced volume as a consequence of GM and Chrysler failing?

Somehow, I don't think you've thought through your question properly.

SSbaby · 02-03-2009, 11:15 PM

Quote:

Originally Posted by Bossxr8

GM's biggest problem, and one of the major reasons they are in a much worse state than Ford, is a lack of future product. They have not much new product on the way, and some models have been held off for a couple of years to save money. They are relying on the Chevy Volt to be a magic bullet for them, but everyone knows hybrids don't really sell, and the weird thing is that GM didn't really expect it to make much money anyway.

At least Ford have a good business plan moving forward and have continued to invest in new product, such as US made Fiesta, new Euro Focus for US, new model Lincolns, Mustang, F series, new Taurus, hybrid Fusion etc, with many more new vehicles on the way. Mullaly knew that the best way out was good products that people want to buy. Thats why the think they can be profitable by 2011.

Nothing true there ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^.

GM are not expecting to make any money on Volt. It's just a halo vehicle to tell the world that GM is up there with the best when it comes to alternative and viable automotive technology.

GM have released heaps more new models than any other North American car maker over the past few years. And I'm not just referring to brand multiplicity.

Ford have a good business plan only if the market doesn't stay the same way over the next year or so. Ford's market share has plummeted over the past few years because people are not buying cars from Detroit - I don't see where your comment "good products that people want to buy" has any substance. A 14% market share isn't exactly better than Toyota's, which is easily the second biggest car maker in the US and ahead of Chrysler's 10%.

EgoFG · 03-03-2009, 12:54 AM

Quote:

Originally Posted by myts

Seriously, nearly 500 pages between them. How does that make it easier?

Reading is my strong point - I learned how months ago ;-)

I actually meant it would make the documents 'easier to find'

hmm ... and i only looked at the pictures

Ohio XB · 03-03-2009, 04:29 AM

Quote:

Originally Posted by barbarian

Japanese carmakers slash production by up to 50%

Japan's big three carmakers today reported a dramatic fall in production as the auto industry counts the cost of plummeting global demand.

Toyota, the world's biggest carmaker, said global production dropped 39.1% in January from a year earlier to 487,984 vehicles. Honda reported a fall of 33.5% worldwide to 226,551 vehicles and Nissan 54% to 145,286.

..................

.....................

....................

The world's second-biggest economy last week reported that GDP had contracted at by 3.3% in the last quarter of 2008, three times faster than the shrinkage seen in the US.

http://www.guardian.co.uk/business/2...ash-production

I didn't want to quote the whole article.

That article is what needs to be reported and spread in the US. You will not see anything like that here excpet for individuals stumbling acorss it on the internet, if they are looking for foreign reports.

Steve

Ohio XB · 03-03-2009, 04:30 AM

Quote:

Originally Posted by Paxton

I have seen this suggested on other forums, but I'd like to gauge the opinions of those here.

What would be people's reaction to, instead of having Obama bail out GM and Chrysler, have Obama actually bail out the component suppliers (by offering them loans), which will help cushion the effect if (and when) GM and Chrysler fail. This gives Ford, Toyota, Honda, Mercedes and BMW the backup of components, and allows the US Government to say no, we don't believe you will ever service this debt. At least helping the suppliers allows a number of people to keep their jobs, people would would have lost them if GM and Chrysler went down.

Any opinions people?

I think that could be a heck of an idea.

Steve

Ohio XB · 03-03-2009, 04:46 AM

Quote:

Originally Posted by Bent8

The BIG 3 (like every other business) will have to start cutting back big time very soon, but it will be too little too late.

START cutting back???

With all due respect, where have you been the last couple years?

Steve

Wally · 03-03-2009, 03:04 PM

Quote:

Originally Posted by myts

................If either or both were to fail Ford and the remaining competitors would not only pick up market share but for the first time in decades, demand would exceed supply. ............

That may be wishful thinking considering the market is contracting. February sales have plumetted in the US, with Chrysler dipping 50%, GM 45%, Ford 42%, Toyota 37% , Nissan 34%, Honda 32%. The projected annualised sales of 9.5 million units will be as low as 1982 volumes.

Ford reckon they can survive on bread and water so long as they maintain their % market share on 9 million units.

imugli · 03-03-2009, 05:45 PM

Quote:

Originally Posted by SSbaby

Ford have a good business plan only if the market doesn't stay the same way over the next year or so. Ford's market share has plummeted over the past few years because people are not buying cars from Detroit - I don't see where your comment "good products that people want to buy" has any substance. A 14% market share isn't exactly better than Toyota's, which is easily the second biggest car maker in the US and ahead of Chrysler's 10%.

Not correct. Ford have stated a number of times that they can survive unless the market gets considerably worse than it is already.

On top of this, their market share in the states has increased 4 in the last 5 months (feb being the only decrease in the last 5) and they are expecting that to continue as new models - Fiesta, Fusion, Taurus - come on line.

SSbaby · 03-03-2009, 06:25 PM

Quote:

Originally Posted by imugli

Not correct. Ford have stated a number of times that they can survive unless the market gets considerably worse than it is already.

On top of this, their market share in the states has increased 4 in the last 5 months (feb being the only decrease in the last 5) and they are expecting that to continue as new models - Fiesta, Fusion, Taurus - come on line.

Then tell me why their past few quarters were huge losses? The results are listed above. Their cash burn is enough to last them through to the end of this year. That's nine months away.

I've got the quarterly results to go by. What do you base your comments on?

Ford might well have new models coming but that's gonna do squat when nobody is buying.

Gobes32 · 03-03-2009, 06:35 PM

I would almost swear you are looking for an argument.......

SSbaby · 03-03-2009, 06:52 PM

Quote:

Originally Posted by Gobes32

I would almost swear you are looking for an argument.......

Can't argue with facts no matter how you want to interpret them.

The whole global economy is in a severe downturn. The Japanese car industry has suffered a huge drop in demand. Toyota has done the unthinkable and made a loss for the first time since.... since they were making cheap, poor quality cars.

If you want to argue that Ford are in sound shape... what ever makes you happy, I say.

Gobes32 · 03-03-2009, 07:44 PM

Ford are by no means in good shape, but they have the right management team and it would appear, the right products. The main topic in this thread is that GM are in more than a little bit of trouble. They are in real danger of bankruptcy and don't really have a plan to avoid it.

Wally · 03-03-2009, 08:00 PM

Well obviously there is a plan, otherwise the US Congress wouldn't have given them the money.

Enjoy:-

http://gmfactsandfiction.com/wp-cont...1709-final.pdf

**Fordman1** · 03-03-2009, 08:21 PM

Quote:

Originally Posted by Wally

Well obviously there is a plan, otherwise the US Congress wouldn't have given them the money.

Enjoy:-

http://gmfactsandfiction.com/wp-cont...1709-final.pdf

Yes there is, they had to submit something.......

Is it viable ? We'll see in another 12 months.

BTW: How are things at Fishermans bend ?

Romulus · 03-03-2009, 08:39 PM

Quote:

Originally Posted by Wally

Well obviously there is a plan, otherwise the US Congress wouldn't have given them the money.

Enjoy:-

http://gmfactsandfiction.com/wp-cont...1709-final.pdf

It's written by GM. They can pretty much write whatever they 'think' may happen.

SSbaby · 03-03-2009, 08:42 PM

Quote:

Originally Posted by Gobes32

Ford are by no means in good shape, but they have the right management team and it would appear, the right products. The main topic in this thread is that GM are in more than a little bit of trouble. They are in real danger of bankruptcy and don't really have a plan to avoid it.

You're right. Ford are in much better shape than GM. Personally, I don't believe that GM will ever recover from its plunge.

But what does it say about the industry when Toyota are making losses? It's darn right scarey. Toyota only made a huge profit the year before. That's the amazing thing. The industry has turned 180* in just a mere 12 months.

Personally, it would be really sad if any of GM, Chrysler or Ford were to go under. I made the comment on another forum that if the US govt gets a say in the type of cars that GM, Chrysler (even Ford) should build (as a condition of any govt loan) as opposed to the cars that customers want, I would boycott all things American made/owned - I'm basically sick of how the oil companies are making squillions in profit, the frequency of wars around the globe and the sheer ignorance of the US govt to fix their auto industry when the signs were bad a few decades ago. The USA's priorities are definitely misplaced, in my view. That's what's wrong with the USA, in general, if you ask me. It's run by Zionists and has been for some time.

I'll look forward to driving Japanese or Korean (as I currently do) in future. They are good for what they offer.

Wally · 03-03-2009, 08:54 PM

Quote:

Originally Posted by Barraxr8

Yes there is, they had to submit something.......

Is it viable ? We'll see in another 12 months.

BTW: How are things at Fishermans bend ?

Well yeah, who else would submit a plan, but the GM management...Alan Mulally?

Fisherman's Bend is a much nicer and civilised place than Boredmeadows. LOL.

**Fordman1** · 03-03-2009, 08:57 PM

Quote:

Originally Posted by Wally

Fisherman's Bend is a much nicer and civilised place than Boredmeadows. LOL.

Lets see what it's like in April......

Gobes32 · 03-03-2009, 09:18 PM

Do you work for Holden Wally? Sorry if this is common knowledge.......

Wally · 03-03-2009, 09:30 PM

Take no notice of him Gobes, he's fishing. :evil3:

**Fordman1** · 03-03-2009, 09:45 PM

Quote:

Originally Posted by Wally

Take no notice of him Gobes, he's fishing. :evil3:

Maybe....

But you'd be better off here:

http://www.ls1.com.au/forum/forumdisplay.php?f=4

Sprint XR8 · 03-03-2009, 09:47 PM

Quote:

Originally Posted by Wally

Well obviously there is a plan, otherwise the US Congress wouldn't have given them the money.

Enjoy:-

http://gmfactsandfiction.com/wp-cont...1709-final.pdf

Congress didnt give them the money. Last December congress rejected the auto bailout, To avoid a December bankruptcy Bush stepped in and loaned GM/Chrysler the $17.5b from the bank bailout fund without approval from congress. Congress decide on GM's viability plan 31 March

4Vman · 03-03-2009, 10:03 PM

Wally/ssbaby, you guys are funny!!!!