Thread: GM going bust?

General Motors Corp. shares fell yesterday to their lowest level since 1954 after a Merrill Lynch & Co. analyst said the automaker may need to raise as much as $15 billion and faces the possibility of bankruptcy. The company's June U.S. auto sales fell 18 percent, as rising gasoline prices damped demand for pickups and sport-utility vehicles.

Bloomberg.com: Worldwide

Bet they are regretting not developing economical cars now.

I doubt they'll go bust. They are in the poo though and have been for some time.

I think they've finally clicked that building what people want rather than what you think they want is a better business focus.

A few years back they divested a large parts manufacturing operation to a gullible public- Delphi I think that was called. That went bust. Now they are talking about closing down hummer, and no doubt a few more auto plants will need to go.

They won't go bust, but they are going to need to slim down condiderably, maybe sell off some more brands. The management of GM got it horribly wrong with their continued focus on SUV's & big cars.

More pain for the rust belt.

In today's global marketplace there is only room for 3 major players.
One in the US, one in the Pacific rim and one in Europe.
GM may not be the one US based company

GM has survived or years on the back of its finance division, now as sales have tailed off even that hasn't generated enough cash to beak even.
Fukcem,the writing was on the wall years ago for the barges they build but they kept on building them anyway.

Hello. It's what people wanted.

I'm amused by the notion that people were only buying what was available -- because that's all that was available.

When gas is $2 a gallon, gimme a barge over a fcuking beer can anyday. The dynamic has shifted, so too will US automakers.

Originally Posted by Texpat

Hello. It's what people wanted.

I'm amused by the notion that people were only buying what was available -- because that's all that was available.

But it's this exact thing that originally opened the door for the Japanese car makers; people wanting cheap, economical, and reliable cars.

Small car focus, tis a no brainer.

Originally Posted by Texpat

Hello. It's what people wanted.

I'm amused by the notion that people were only buying what was available -- because that's all that was available.

When gas is $2 a gallon, gimme a barge over a fcuking beer can anyday. The dynamic has shifted, so too will US automakers.

Easy enough for amanufacturer to cater for the existing market requirment, it takes a bit more business skill to predict the market needs for 3 years down the track, and thats where they have failed.The gestation perion or a new model is about three years, in the meantime GM is stuck with a pileof barges in its product portfolio, fickle public and all that

Who predicted the price of gas would double in those three years?

Not many.

And if gas were back to $2, Americans would want bigger cars.

The preference is not for smaller, economical cars.
The economic reality dictates it.

Originally Posted by Texpat

Who predicted the price of gas would double in those three years?

Not many.

And if gas were back to $2, Americans will want bigger cars.

The preference is not for smaller, economical cars.
The economic reality dictates it.

All fair and valid points Tex. But the fact remains that most other car manufacturers correctly identified the market decades ago. And it's not as though high oil/gas prices are without precedent either - the oil crisis of the 70's srings to mind, and pretty much the exact same thing happened then as now.

most other car manufacturers correctly identified the market decades ago

Wrong.
It's not like Toyota forecast the spike in oil.
That's what they make, little beer cans with wheels.

GM makes what Americans want.
Toyota is what America is forced to settle for.

Originally Posted by Texpat

Wrong.
It's not like Toyota forecast the spike in oil.
That's what they make, little beer cans with wheels.

GM makes what Americans want.
Toyota is what America is forced to settle for.

Well that's patently incorrect because Toyota has steadily been taking US market share from GM for a long time now (and even surpassing GM last year, worldwide, to become the world's largest car maker).

So there was clearly a demand well in advance of any external economic conditions. Pining all GM's woes to the door of a sudden and sharp rise in fuel prices is like correctly identifying a symptom but misdiagnosing the disease.

Originally Posted by Texpat

GM makes what Americans want.
.

Wrong Tex, its what Americans wanted yesterday.
Paint it anyway you want,its just incompetent business planning.

You didn't need a crystal ball to see that rising consumption and static out put are going to result in a price blowout down the track at sometime in the near future.

Honda Civic Now America's Best-Selling Vehicle

Posted: Jun. 04, 2008 12:06 p.m.

Honda Civic Now America's Best-Selling Vehicle - U.S. News Rankings and Reviews

In 2001, Ford and Chevrolet led all other makes in local new car registrations with a combined total of 8,763 vehicles - 3,763 more than the 5,017 registered by Honda, Nissan and Toyota.
But a scant five years later, Chevy and Ford saw their sales cut by nearly half, down 3,875 vehicles to 4,888 sales. Meanwhile, Japan's "Big Three" increased sales by 1,414 units, led by Toyota, which, with 3,078 sales, took over the No. 1 spot from Ford.

'Big 3' not what they used to be: American auto manufacturers sales | Colorado Springs Business Journal | Find Articles at BNET

All things being equal, Americans prefer large cars.
A steep increase in gas price is forcing them to buy small cars.
Following the 70s oil crisis, Americans went right back to the boats. They will again if oil ever goes down.

Toyota makes small cars, (and better cars IMO) and therefore sells more than GM. I'm not arguing that point. My issue is with the notion that the manufacturer drives demand. I don't believe it.

And some more

U.S. vs. Foreign Auto Market Showdown: Car Owner Straw Poll

As we continue to analyze just how overseas automakers took a majority share of the American car market, the owners of five cars in New York City—two homegrown models and three from across the seas—offered their quick thoughts on the future of the U.S.-built vehicle.

'THEY NEED TO WORK ON GAS MILEAGE’

Teresa Krug | Pontiac Grand Prix

17. RE: U.S. vs. Foreign Auto Market Showdown: Car Owner Straw Poll
Why can't the American companies build a car that gets at least 45 miles to the gallon and why can't the foreign cars be larger and more comfortable. I believe that higher gas prices are just a way to make us buy these uncomfortable box like toy cars from foreign countries and that the money is lining the pockets of lobbyist in Washington. A car is a car is a car, but comfort would be nice not matter whether it is foreign or American!!!

They echo you Tex. I know that my old man likes his Yank-Tanks he hires when he is over their on holiday - loves them in fact. Never own one in the UK though. 20mpg is too little, even when he doesn't do more than 7000 miles a year now.

16. RE: U.S. vs. Foreign Auto Market Showdown: Car Owner Straw Poll
I can't see how people defend the big American car companies when they move jobs over seas and turn once thriving cities into slums. I'm sorry, GM could have been siting pretty with the EV1 by now. They chose to destroy those cars and even if there was no market for it then..their certainly is now. They were able to put out a good stable electric car almost 10 years ago..but they need another 2 or 3 years to bring one out now. I think its a smoke screen. The only reason they are trying to make hybrids at all is because Toyota is crushing the small car sales with the Prius. The Prius is so popular, few deals can get one to show off on display..they sell out before new stock comes in and GM's response to to put out a Giant Tahoe hybrid that does 20..20! mpg as if anyone wants that. They are getting what they deserve. When they start delivering what we really want and bring the jobs back to this country, then i'll buy one.

American Cars vs. Foreign Auto Sales - Man on the Street Owner Poll - Popular Mechanics

Originally Posted by Texpat

All things being equal, Americans prefer large cars.
A steep increase in gas price is forcing them to buy small cars.
Following the 70s oil crisis, Americans went right back to the boats. They will again if oil ever goes down.

Toyota makes small cars, (and better cars IMO) and therefore sells more than GM. I'm not arguing that point. My issue is with the notion that the manufacturer drives demand. I don't believe it.

Manufacturers drive demand by having the correctly placed products at the right time, in most cases consumers don't know what they want, manufactures anticipate a market need, have the products ready and then the demand follows.
Ipod, good example, consumers were quite happy wth their CD players, then IPOD came along resulting in a demand for compact music devices. But I'm not a marketing guy, so maye I'm spouting BS.

Originally Posted by peterpan

But I'm not a marketing guy, so maye I'm spouting BS.

Technically speaking you'd have to be spouting BS to be a marketing guy. It's what they do.

Originally Posted by sabang

You predictably fall into line to defend all things Amerkin tex

Guess you missed this part:

Originally Posted by Tex

Toyota makes small cars, (and better cars IMO)

But they are a bit like beer cans.

^ as long as you don't say that about Lexus . one of my favourite cars.

Originally Posted by Texpat

But they are a bit like beer cans.

Full of piss, sometimes found half-full with cigarette butts in them, and about 6 of them currently parked in my refrigerator?

The last six cars I've owned: Toyota, Honda, Toyota, Toyota, Ford, Toyota.

But I would prefer Coupe DeVille, Olds 88, Crown Victoria ...