toyota,GM,Ford post massive losses. GM and Ford to ask Gov for more help
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- GR-MI-USA
- YSSMAN
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That is a bit overdone, but its nevertheless an interesting viewpoint of the issue. GM is looking to save money, and arguably, a large portion of their current product line is at the very least good for a decent shelf life. The problem is, the key cars that they need to get here NOW (as Toronado points out) may be delayed, cars like the Cruze, the Aveo replacement, etc have been pushed back.
We'll see how the Toyota deal works out. Meethinks it could be a short-term partnership on small cars to hold them over until the new GM ones roll out, but that may be hoping for too much at this point.
We'll see how the Toyota deal works out. Meethinks it could be a short-term partnership on small cars to hold them over until the new GM ones roll out, but that may be hoping for too much at this point.
- 23,800
- Philippines
Marketing don't sell cars.
Production volume don't sell cars.
Low production costs and tooling costs don't sell cars.
Wishful thinking don't sell cars.
Good Product sells cars.
It's the perennial problem of the US auto industry, one which has lead them to their current sad state.... the bean counters, the marketing men and the CEOs don't care about the product. And if you don't care about the product, you're dead.
This is just further affirmation of how far-removed from reality these businesses are.
Production volume don't sell cars.
Low production costs and tooling costs don't sell cars.
Wishful thinking don't sell cars.
Good Product sells cars.
It's the perennial problem of the US auto industry, one which has lead them to their current sad state.... the bean counters, the marketing men and the CEOs don't care about the product. And if you don't care about the product, you're dead.
This is just further affirmation of how far-removed from reality these businesses are.
- 5,768
- Anoka, MN
I agree. 90% of the time, whenever a concept has a great interior for example, the production model usually has a cheap interior just because it's cheaper to produce.
forza2.0
(Banned)
- 987
- And they look better
- Cheaper too
There were almost no words on Monday to describe how abysmal U.S. auto sales were in the woe-begotten month of October.
Bled by battered consumer confidence, by more-expensive and harder-to-obtain loans, by financial-market disasters and Election Day anxieties, October sales limped in at only about 852,000 vehicles nationwide, a 32-percent plunge from a year ago.
"This level of sales is not sustainable for anyone in the industry," said Michael DiGiovanni, head of global market analysis for General Motors. "It doesn't matter how deep their pockets are. Everyone is pulling in their reins to one degree or another, but everyone is affected by this."
GM's sales slumped by a horrific 45 percent, the worst showing among the Big Six automakers selling in the United States. Chrysler's declined by 35 percent, Nissan's by 33 percent, Ford's by 29 percent, Honda's by 25 percent and Toyota's by 23 percent.
The industry total comprised its lowest sales volume for any month since 1992. And adjusting for population growth - that is, on a per capita basis - October auto sales were the industry's worst since World War II.
Record Sluggishness
Similarly, the annual pace of sales in October was an abjectly dismal 10.5 million to 10.6 million vehicles on a seasonally adjusted basis, a rate more than two million vehicles below the 12.8-million rate in a rotten September. It was the worst monthly sales rate, GM said, in 26 years.
This basket of terrible numbers put some flesh on the rationale for the now-likely GM-Chrysler combination and is sure to get the attention of a newly elected president and Congress as the U.S. government sits on the struggling automakers' demands for federal loan assistance to bring about a merger.
More immediately, October's reports were so bad that industry executives and analysts were left grasping for superlatives to describe its awful dimensions.
"I'm always very optimistic by nature," said Mark LaNeve, GM's North American vice president of sales, "but in my 27 years I never saw a month like this." Sales levels were those of a "severe, severe recession," he said. "In September, the consumer was hanging in there with us, but by the time we got to October, he was done and finished."
LaNeve noted that Americans spent only about 2.8 percent of their income on vehicles in October, the lowest percentage since the federal government began keeping records in the Sixties. A level about 4 percent, he said, is typical.
No Words to Describe
Chrysler Vice Chairman Jim Press remarked that October "may have been a month that showed how low the industry can go," what he called "the toughest month we've seen."
Jim Farley, Ford's executive vice president of sales and marketing, called October results "a sobering number," while even the company's press release described "an economic gauntlet the likes of which haven't been seen in more than two decades."
With an industry "hovering at [a sales rate of] 11 million vehicles," said George Pipas, Ford's head of U.S. sales analysis, "there are no hot vehicles and no hot segments."
Even Hyundai, which had been experiencing a relatively strong 2008 in U.S. sales, was wracked for a 31-percent sales decline in October. "We are experiencing one of the most challenging times in recent automotive history," said Dave Zuchowski, Hyundai Motor America's vice president of national sales.
Such was the tenor of October reports that a merely dour assessment of the industry came off as sort of timid. "This is the toughest economy we've seen in a long time, especially within the automotive industry," said Mark Barnes, chief operating officer of Volkswagen of America. Of course, VW's sales were sparkling by contrast with those of the Big Three: down only about 8 percent for October and behind just 0.6 percent for the year to date.
A Perfect Storm
All the big players, meanwhile, faced an epochal mix of dreadful negatives that swept all but the most determined American consumer out of the vehicle-purchase picture last month.
First and foremost was an absolute deflation of consumer confidence. "Wall Street now is finally being fully felt on Main Street," DiGiovanni said, in the form of the huge paper losses of investment wealth from markets around the globe, collapsing consumer confidence, rising unemployment rates, and widespread uncertainty about the future.
LaNeve said that the industry "really has been contracting since Hurricane Katrina" about three years ago, which badly nicked economic activity in the South and slowed the overall U.S. economy. Earlier this year, he said, consumers reacted to the spike in gasoline prices and hesitated to buy new vehicles. "But the impact of the credit and confidence crisis is much more severe than the impact of the gas-price issue."
Credit restrictions - in the form of tougher terms for auto loans and qualification of many fewer consumers for those loans - were another huge factor. "The decline in consumer spending and shrinking credit markets feed off each other in a downward spiral," said GM's DiGiovanni.
The intensifying election campaign didn't help matters, either, because of how media coverage heightens public anxiety. And Chrysler and GM added another dollop of uncertainty with their merger talk.
"That's probably a distraction" to consumers, Chrysler's Press said. And Chrysler has had to do more hand-holding with anxious dealers to "assure them that we'll be in business next month and next quarter and next year."
More Clouds Ahead
For their unanimity about how bad October was, however, industry players and observers couldn't agree whether the market had seen its worst - though they were all hoping so.
"What was most frightening" about October, said DiGiovanni, "is that a week ago we didn't see this big a decline coming." Typically, he noted, retail sales are stronger at the end of each month than the beginning, accounting for as much as 60 percent of monthly sales. "But," he said, "we never got that pickup in the last 10 days. It never materialized."
So, DiGiovanni and others are worried that November might not be any better and that sales could limp along at close to October's trough for a few months yet.
But others see a thinning of the clouds.
"We are encouraged by the prospects for November," said Hyundai's Zuchowski. "With the financial markets beginning to stabilize and the election behind us, we believe consumer confidence will be bolstered and prospects who have been on the sidelines during this period of uncertainty will re-emerge into the market to help fuel the economic engine."
Press said that October "may have been the high-water mark" for bad news. "The period ahead is not laced with optimism," he said, "but I don't think it's going to continue to deteriorate. I think we've gone through the worst of the storm and came out on the lawn and found that our place is intact."
Still, at best, the industry now is hoping for a 2009 that isn't materially worse than 2008 will turn out to be, and talk of any meaningful recovery generally extends to 2010 at the earliest.
By then, perhaps only starting with a GM-Chrysler merger, the U.S. auto industry likely will have been dramatically reshaped.
General Motors: Shooting Itself in the Foot
GM sold only 171,000 vehicles in October, down 45 percent compared with a year ago.
The company said that its results were compared with "a strong year-ago" October, and executives noted that even as recently as September, it posted relatively robust results.
To try to generate some new momentum, GM moved up the start of its holiday-seasonal Red Tag Event a few weeks, to tomorrow. "We're barely behind Costco, where I saw Christmas decorations up already three weeks ago," LaNeve said.
But while fighting tremendous headwinds in October along with the rest of the industry, GM had only itself to blame for part of its problems. That's because its captive finance arm, GMAC, announced a dramatic tightening of its credit standards last month, leading to widespread consumer perceptions that they couldn't get a loan at a GM dealer. And a few weeks earlier, GMAC had announced big cuts in leasing.
"Half of our year-over-year loss was due to leasing and credit issues," said LaNeve, meaning that GM's sales loss in October otherwise would have been more in line with the rest of the industry. From its virtual elimination of GMAC leasing last month alone, he said, GM lost as many as 60,000 sales.
GM recently launched a new national advertising campaign to reassure Americans that GM dealers could obtain a loan for a creditworthy buyer from one of hundreds of other financial institutions.
LaNeve blamed a decline in consumer confidence on "the credit freeze," but many other industry and executives have suggested that would-be buyers are staying out of showrooms because of the nation's economic shocks rather than out of some fear that they won't be able to get a loan.
Another factor that hurt GM is a relative lack of interest in its pickup trucks because both Ford and Chrysler are introducing new versions of their competitive models.
Ford: Increases Retail Share, Company Says
Calling the current sales environment "an economic gauntlet, the likes of which haven't been seen in more than two decades," Ford reported October sales of 129,121 Ford, Lincoln and Mercury vehicles, down 29.2 percent from 182,434 vehicles sold in October 2007.
On the plus side, Ford said its retail market share was the best in two years. Ford's chief sales analyst George Pipas predicted, when final industry sales are tallied, the automaker's retail share would be 13.5 percent or as high as 14 percent. Ford's retail share has been running at 11 to 12 percent and hasn't seen the mid 13 percent range since late summer 2006.
About 28 percent of Ford's total vehicle sales went to fleets, roughly the same as a year ago. It was the third straight month of a lower fleet mix than GM and Chrysler, Ford executives claimed.
Yet only one Ford, Lincoln, Mercury or Volvo vehicle showed a sales rise, that being the Lincoln Town Car. And the 140.3-percent sales hike likely was due to a fleet order.
Ford Division sales dropped 27.9 percent, pushing sales down 17.5 percent for the calendar year to date. Ford SUV sales were the main culprit with sales down 51.4 percent in October and down 41 percent for the year.
Ford just launched the 2009 Ford F-150, with the national ad campaign breaking during Sunday's football games. F-Series sales in total, which included a mix of 2008 and 2009 models, were down 16.3 percent in October; they're off 26 percent for the year. Of the 43,324 F-Series trucks Ford sold in Octber, 3,000 were the 2009 model.
The usual bright spot, the Ford Focus, had its first down month in October, with sales off 18.2 percent. Still, the small car's sales are up 20.5 percent for the year. Ford said despite October's decline, the Focus gained share in the small car segment.
Similarly, the Ford Fusion, which had only a tiny 3.3 percent drop in sales for the month, gained market share in the midsize car segment. The Fusion got a boost from Consumer Reports that praised it for having the best reliability in the midsize class, ahead of Toyota Camry. Ford introduces the redesigned 2010 Fusion, including a hybrid version, during next week's press days for the Los Angeles auto show.
Ford analysts have been predicting this year will be the first year since crossovers were invented in the mid-1990s that the segment will experience a decline in sales. That decline has already begun, taking Ford's crossovers with it. Ford Edge sales, which had a record month last October, were hit with a nearly 58-percent drop.
Still, Ford execs say the Ford Escape and Mercury Mariner gained share in their category. Likewise for the Ford Flex and Lincoln MKS in the midsize luxury crossover segment.
Ford sold only 2,017 units of the new Flex - only the Taurus X had fewer sells of Ford's crossovers. Still, Ford's chief marketing exec Jim Farley said about 55 percent of Flex buyers are new customers to Ford and transaction prices for the Flex are higher than the automaker expected.
At Mercury, sales plummeted 47.4 percent in October, pushing them 27.3 percent lower for the year.
Sales of Lincoln branded vehicles dropped 27.7 percent in October,
Volvo reported a mere 3,717 vehicles sold in October, a 52.1 percent drop from a year ago.
Chrysler: Looking for Traction
Chrysler sold more than 94,000 vehicles in October, down 35 percent compared with a year ago. And despite the fact that they may soon be part of the larger company, Chrysler was happy to leave the bottom rung of October sales performance to GM.
"Our retail share of sales was better than last month and almost as good as last October even though we're doing less leasing than other manufacturers, and the [sales loss] from segment shifts have been more dramatic for us than others," said Steven Landry, Chrysler's executive vice president of sales and marketing.
Chrysler executives emphasized early consumer enthusiasm for the new version of its staple Ram pickup truck. "The sell-down of the old version" is going well, Press said, "and we're getting some real good tailwind" behind the new Ram.
Notably, on Monday Chrysler also celebrated the 25th anniversary of the debut of its Minivan 25th - small.JPGminivans, which the company began producing in 1983 in its Windsor, Ontario, assembly plant. More than 12 million have been sold since then. Chrysler introduced the fifth generation of the vehicles last summer, and they hold onto a 40-percent share of an overall segment that is shrinking - but not as much as the market in general.
The company also announced the launch of a new incentive program featuring rich cash offers and low-percentage-rate loans, which Chrysler is calling Rev Up America. "We've got a half-billion dollars of incentive money in the marketplace," Press said.
Michael Berube, senior manager of Chrysler brand marketing, said that "getting out there with good values, on reasonably and affordably priced vehicles," will be the key to Chrysler's ability to hang on during this slump. "The market will come back a bit," he said, "when confidence picks up."
In the meantime, Berube said, Chrysler marketing is emphasizing "lower-funnel" activities such as online advertising.
Toyota: Also Taking It on the Chin
The world may want to emulate Toyota's cars, but probably not the Japanese juggernaut's recent sales results. Like everyone else, Toyota Motor Sales USA Inc. gutted through a withering October, with overall sales down 25.9 percent versus last year - this despite a wide-ranging 0-percent financing offer on many vehicles in the Toyota lineup.
Equally upsetting to the bottom line: Toyota's premium Lexus division recorded a grinding 37.6-percent drop compared with last October. What's more, Lexus' trucks actually performed better than its cars.
Only two Toyota-nameplate vehicles posted sales increases in October: Corolla, at 2.2 percent and the Sequoia fullsize SUV, whose 16.3-percent jump likely can be partially attributed to an incentive factor.
And the recent plunge in gasoline prices hasn't seemed to stem the demand for hybrids, which remain some of Toyota's best-selling models. In October, Toyota said it sold 16,310 hybrids; rival General Motors Corp. bragged October saw the company surpass 10,000 hybrids sold - for the entire year.
Year-to-date, Toyota has moved 216,760 hybrids, with the Prius leading the pack, selling 11,804 units in October. The total nonetheless represents a 13.6-percent drop, and Prius remains off by 5.6 percent for the year.
Camry Hybrid accounted for almost one in 10 Camry sales in October, or 2,792 of the total 30,556 Camrys sold. Camry was down 12.8 percent for the month, however, and 3.6 percent year-to-date.
And although the Yaris subcompact dropped 13.3 percent in October, year-to-date sales are outstripping 2007 by a still-heady 25.9 percent, one of the better performances in any market segment.
The Toyota sales chart saw some stunning plunges in October. The Scion line - possibly overexposed victim of the industry's ongoing credit crunch - took an absolute beating: the xD was off 12.9 percent, the xB plunged 42.9 percent and the tC coupe was down 51.7 percent. Scion may have been siphoned by Toyota's own 0-percent financing deal which covered 11 different models - but no Scions.
The Avalon large car was down by a blistering 44.7 percent in October and is down 37.9 percent for the year.
Toyota's trucks continue to be a black eye, with an ugly 65.4-percent October drop for the Tundra fullsize pickup underscoring Toyota's tenuous position in the plunging segment. Apart from the low-volume Lexus SC, the Tundra was the worst-performing model in the entire Toyota lineup in October.
In other notable truck results, the FJ Cruiser cruised to a scalding 61.7-percent downfall in October and the 4Runner was off by 52.4 percent. Total Toyota SUV sales dropped by 31.6 percent in October, while total truck sales were off by 36.5 percent; year-to-date performances dropped by 23 percent and 20.1 percent, respectively.
And executive collars have to be getting a little tight over at the Lexus unit, where October car sales plunged 40.2 percent and year-to-date car sales are off by 21.7 percent. October's results included a frightful 51-percent fallout for the LS flagship (which also is off 40 percent for the year) and a 47.7-percent drop for the midsize GS, not to mention a 28.4-percent drop for the entry-level IS, although for the year the IS is holding its own with an overall 5.4-percent decrease.
Honda: Record Fit and Strong TL, But Worst Month Since Jan. 2005
American Honda sold 85,864 Honda and Acura brand vehicles in October, a 25.2-percent decline from a year ago. It marked American Honda's worst month for sales since January 2005.
For the year, Honda is doing better with only a 3.6 percent drop in sales to 1,266,447 vehicles sold.
Honda Division sold 75,756 vehicles, down 28.4 percent from the year earlier. The Honda Fit set a new October sales record with 6,478 sold, a 28.1-percent increase in the second month of availability for the redesigned 2009 model. For the year, Fit sales are up a whopping 51.4 percent.
The Acura Division had sales of 10,108, a 24.5-percent decrease. The redesigned 2009 Acura TL is off to a strong start as well, with sales up 22.2 percent in October, its first full month of availability in its new guise. That helped Acura car sales push 2-percent ahead of a year ago. Still, the TL has ground to make up with sales for the year off nearly 18 percent.
But only the Fit and TL were on the plus side for the month. Honda's bread-and-butter Accord and Civic saw significant sales declines again this month. Accord sales were down 38.4 percent in October, pushing calendar-year-to-date sales into negative territory - off .3 percent. Civic sales were down 24.8 percent in October but remain 8.7 percent ahead for the year.
Acura RDX sales were down nearly 68 percent with only 647 sold, the worst sales month for the crossover ever
Mazda: Mazda5 Record
Mazda North American Operations posted October sales of 16,442, down 25.9 percent from a year ago.
Bucking the sales trend with a record sales month was the Mazda5 multi-activity vehicle. With sales of 1,921, volume was up nearly four times over 2007. On a year-to-date basis, the Mazda5 is up 51.8 percent.
Mazda6 sales were off 3.5 percent but the redesigned 2009 Mazda6 just began arriving in dealerships last month.
The once-hot Mazda3 has chilled, with sales off 25.3 percent in October. CX-7 and CX9 crossover sales also have slowed, with sales of more than 40 percent each for the month.
In the "why bother" category, Mazda sold a scant 418 Tributes and only 92 B-Series trucks.
Mazda is doing better than the industry in general with year-to-date sales down 7.5 percent.
Mitsubishi: Better than September
Mitsubishi, always skimpy on details, put the best face it could on its October sales, comparing them in their press release more with September than with October a year ago.
In fact, Mitsubishi's October sales were down 19 percent from a year ago. But Galant sales were up 64 percent from October 2007 and the Lancer Evolution was up more than 800 percent from a year ago. No numbers were provided.
From September to October, Galant, Outlander, Endeavor, Lancer Evolution and Raider sales improved.
Subaru: Still Ahead for the Year
Subaru of America had sales of 12,917 vehicles in October, a 14-percent decline from a year ago. Still, Subaru remains ahead 2 percent at 156,706 vehicles sold for a year that likely will see industry sales fall by double digits.
Forester sales soared 28 percent and Impreza sales were flat, a positive in a down market. Subaru's other models were down double digits; worst was Tribeca with sales off 60 percent.
"Despite the weakness in the market caused by credit concerns, depreciating home values and the corresponding reduction in consumer confidence, Subaru continues to outperform the industry," said Tom Doll, executive vice president for Subaru of America, Inc.
Tim Colbeck, Subaru's vice president of sales, noted October marked some good news for the Japanese maker: The Forester was named the Motor Trend Sport-Utility of the Year.
Audi: Bucks the Trend
Audi bucked the plunging sales trend by being the only automaker AutoObserver reports on that had higher sales this October than last.
Audi sold 7,443 vehicles, up 0.3 percent from a year ago. When the dust settles, Audi obviously gained market share. For the year to date, Audi sales are off a tad - 3.5 percent.
The redesigned 2009 Audi A4, which went on sale in late September, drove Audi sales, The A8 and R8 saw higher sales and the A5 posted its third consecutive record month for sales.
BMW Group: Mini Buoys Group, BMW Shows Signs of Life
The BMW Group, including the BMW and Mini brands, performed fairly well in the dismal month of October. The group sold 25,475 BMW and Mini vehicles, for only a 5-percent drop from a year ago. Sales are off about that much for the year so far as well.
Mini sales buoyed the group with sales up 56.4 percent in the month; for the year, Mini is up 30.2 percent. "We are looking at Mini's continued sales success as a barometer of changing consumer habits," said Jim McDowell, Mini USA vice president. "The frenzy of a couple of months ago of dumping large vehicles has abated, but our persistent and ongoing demand seems to be saying small is the new big."
On the BMW side, sales were down but nearly as much as the industry in total. They were down 13.9 percent for the month, putting the year 10-percent lower. BMW Car sales were off 15.1 percent; SUV sales dropped by 8.2 percent
"October sales show there is still life in the market, but it will take some hard work to achieve results," said Jim O'Donnell, president of BMW of North America, LLC.
O'Donnell said attractive financing rates and four year/50,000 miles free maintenance program have helped keep sales reasonably strong. "We believe these are major reasons why the year-to-date sales continue to track better than the overall premium market."
Daimler: Mercedes Sales Weakning; smart Still Strong
Daimler reported sales of Mercedes-Benz combined with smart car sales totaled 17,322 vehicles in October, a nearly 25-percent decline from a year ago.
Mercedes-Benz had sales of 14,996, down a hefty 34.3 percent from a year ago. For the year so far, Mercedes sales are off only 5.3 percent from last year's record.
Sales of the smart fortwo, which began in the U.S. only in January, totaled 2,236 in October, bringing total sales to 20,392 so far.
Volkswagen: New Models Buoy Sales
Volkswagen of America sold 15,889 vehicles in October, a 7.9-percent decrease from the year-ago October.
"This is the toughest economy we've seen in a long time especially within the automotive industry." said Mark Barnes, Volkswagen's chief operating officer.
Volkswagen's October performance was buoyed by new product offerings. "Our Tiguan, Jetta SportWagen, and TDI's continued to sell well for the month of October, which demonstrates the strength of our new products," said Barnes.
The Tiguan pitched in 1,856 sales for the month, the Jetta SportWagen with 1,267 sales, the Routan with 789 sales and the CC with 659 sales.
But Volkswagen's bread-and-butter Jett sales, in total, slipped 6.6 percent for the smallest drop. Passat sales plummeted 55.3 percent, the Touareg 37.6 percent and the rest of the line were down hefty double digits.
For the year-to-date, Volkswagen sales are holding fairly steady in a down industry market, slipping only 0.6 percent behind 2007 sales through October.
Joey D
Premium
- 47,508
- Lakes of the North, MI
- GTP_Joey
- GTP Joey
I was surprised how much MINI jumped this month, although I was at the dealership the other day and they told me the wait list on a Cooper is 10-12 weeks and 14-16 on a Clubman. I like my car but that's a really long time to wait for one. They also said that used vehicles with 20,000 miles are selling for close to what they were bought for...maybe I should trade in mine 
.
.
- 21,286
- GR-MI-USA
- YSSMAN
- YSSMAN
I was too, because didn't they tell everyone that they were "sold out" for the foreseeable future? Hey, when you've got a car that people want, by all means...
I think the only other automaker to end on the upswing was Audi, which as I recall was a fraction of a percent. The folks at CNBC leveled that at high discounts on '08 inventory, but I'm not sure how much truth there is in that.
Either way, its also interesting to see how far Nissan fell. For quite some time they had been one of the few car companies with strong sales despite the failures everywhere else, but I will be interested to see if the new Versa 1.6 will be able to float it (now the cheapest car in America, arguably the best in that price range). We'll have to see what happens with those guys...
Toyota, obviously, is the big surprise. I would assume that their 0% financing had to curtail their losses for a bit, but what did occur is HUGE for the brand thats supposed to be dominating our market. I seem to recall that they didn't outsell GM this month, but obviously that doesn't mean much when you aren't making money anyway.
- 27,219
- United Kingdom
I was surprised how much MINI jumped this month, although I was at the dealership the other day and they told me the wait list on a Cooper is 10-12 weeks and 14-16 on a Clubman. I like my car but that's a really long time to wait for one. They also said that used vehicles with 20,000 miles are selling for close to what they were bought for...maybe I should trade in mine
That's more or less the same as happened when BMW first launched the MINI in the UK - after one and two years, second hand examples weren't significantly cheaper than brand new showroom models because the demand was still so high. I think at the moment even the earliest Ones and Coopers are still at roughly 50% of their brand new value, and that's after 5 years.
- 7,666
I think for the first few years the MINIs here in the states might have actually appreciated in value, because you could get your used one now instead of waiting.
Once again, good to see Volkswagen being among the smallest losers. Perhaps it's because the Sign Then Drive event is back?
Once again, good to see Volkswagen being among the smallest losers. Perhaps it's because the Sign Then Drive event is back?
- 21,286
- GR-MI-USA
- YSSMAN
- YSSMAN
Perhaps, they are pretty good deals after all. I nearly considered doing that (car payments would have been about $40 more a month than what I'm paying now on the Celica), but I wouldn't have been able to keep it. Either way, not many cars are being sold, but what it comes down to is that they're able to push what few cars they have here by comparison to the kajillions that are sitting in Ford, GM and Chrysler lots.
Which reminds me:
If you're looking for a deal on a new GM car or truck, the "Red Tag" event will be starting within the next week or so, which will have as much as an $8500 discount on some of their larger, and more slow-selling vehicles.
Which reminds me:
If you're looking for a deal on a new GM car or truck, the "Red Tag" event will be starting within the next week or so, which will have as much as an $8500 discount on some of their larger, and more slow-selling vehicles.
forza2.0
(Banned)
- 987
- And they look better
- Cheaper too
more news.
GM Says It May Run Out of Operating Cash This Year (Update4)
By Jeff Green and Mike Ramsey
Nov. 7 (Bloomberg) -- General Motors Corp., seeking federal aid to avoid collapse, said it may not have enough cash to keep operating this year and will fall ``significantly short'' of the amount needed by the end of June unless the auto market improves or it raises more capital.
The largest U.S. automaker reported a $4.2 billion third- quarter operating loss today and said its available cash fell to $16.2 billion on Sept. 30 from $21 billion at the end of June. Merger talks with Chrysler LLC were suspended.
``GM is making a pretty direct plea for help,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee. ``The message is, `we've done all the things we can do, and we need help.' And if we don't get help, fill in the blank.''
The cash drain reflected the strain of a 21 percent slump in U.S. sales in the quarter as the credit freeze deepened. It also added urgency to U.S. automakers' request for government aid. The companies are asking for $50 billion in new loans, a person familiar with the proposal said.
Chief Executive Officer Rick Wagoner and the CEOs of Ford Motor Co. and Chrysler renewed the push for assistance yesterday in meetings with U.S. House and Senate leaders in Washington. Wagoner said GM also has been in contact with the staff of President-elect Barack Obama.
GM rose 44 cents, or 9.2 percent, to $4.36 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have tumbled 82 percent this year.
$73 Billion in Losses
Today's outlook was the bleakest yet from the automaker, which has lost almost $73 billion since the end of 2004. Using $6.9 billion in cash last quarter pushed GM closer to the $11 billion minimum it says is needed to pay bills.
A bankruptcy filing ``would be a disaster far beyond General Motors and a sad chapter in American history,'' Wagoner, 55, said in a Bloomberg Television interview. GM said on Oct. 24 that bankruptcy ``is not an option.''
Should GM take such a step, the result would be 2.5 million jobs lost in the first year among automakers, suppliers and related businesses, according to a Nov. 4 report by the Center for Automotive Research, based in Ann Arbor, Michigan. Ford, which reported using $7.7 billion in cash last quarter, said today it has ``sufficient liquidity.''
Bailout Optimism
A U.S. rescue package for GM, Ford and Chrysler is likely before President George W. Bush leaves office in January, said Dennis Virag, president of Automotive Consulting Group in Ann Arbor.
``Either the federal government provides money for a bailout and lets the industry retool, restructure, and move ahead, or the industry dies,'' Virag told Bloomberg Television.
While GM didn't specify any prospective partners in saying merger discussions were being halted, the biggest U.S. automaker had been in negotiations on a tie-up with Chrysler, according to people familiar with the plans.
Consideration of a strategic acquisition was ``set aside'' to focus on ``immediate liquidity challenges,'' Detroit-based GM said in a statement.
Chrysler CEO Robert Nardelli, who hadn't acknowledged the talks, sent a note to employees that included the wording of GM's statement. The company, owned by Cerberus Capital Management LP, will ``continue to explore multiple strategic alliances or partnerships,'' Nardelli said.
GM Loss, Estimates
GM's per-share operating loss was wider than the average estimate on an adjusted basis of $3.94, based on 10 analysts surveyed by Bloomberg.
Including a non-cash, $4.9 billion one-time gain related to unloading retiree medical bills, GM had a net loss of $2.5 billion, compared with a $38.9 billion year-earlier loss on a tax-accounting charge.
GM's cash use in the fourth quarter should be closer to the levels in this year's first and second quarters, when it was about $3.6 billion, Chief Financial Officer Ray Young said on a conference call.
GM said it is trying to boost cash by $20 billion by the end of next year, an increase from a July 15 plan for $15 billion.
Asset sales, a part of the strategy, have been hampered because potential buyers can't get financing, Chief Operating Officer Fritz Henderson said. GM's Hummer brand of sport-utility vehicles is among the businesses on the block.
Paring Spending
Capital spending is being trimmed in 2009 to $4.8 billion, down $2.4 billion, by delaying the debut of some vehicle programs in North America and Europe by as long as a year. GM will also save $1.5 billion by cutting advertising and dealer promotion support and by reducing production starting next quarter.
GM will further pare engineering and cut back on discretionary expenses, including travel, consulting and unscheduled overtime.
Working-capital spending will be reduced by $500 million by lowering reserves of parts and inventory, the company said. GM also said it will try to slash 30 percent of salaried-workforce expenses, up from a goal of 20 percent.
GM will protect the capital budget for the electric Chevrolet Volt and the Chevrolet Cruze compact car, Henderson said on a conference call.
GM's debt rating was lowered by one grade to CCC+ by Standard & Poor's, which said it was ``cautious'' regarding GM's ability to raise capital.
Ceding a Crown
The latest retrenchment for GM comes two months after its 100th birthday. After 77 years as the world's largest automaker, it is poised to be surpassed in 2008 global sales by Toyota Motor Corp. It employs about 266,000 people around the world with factories in 34 countries.
Today's release on GM's results was delayed 48 minutes past its scheduled 10:30 a.m. arrival because of the need for a wording change, said Julie Gibson, a spokeswoman.
GM's $3 billion of 8.375 percent bonds due in July 2033 fell 4.3 cents to 24 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 34.83 percent.
Credit-default swaps protecting against a GM default for one year rose to a level that implies the market has priced in a more than 66 percent chance of default, according to CMA Datavision.
One-year credit-default swaps were quoted at a mid-price of 51 percentage points upfront, compared with 50 percentage points yesterday, CMA data show. That means it would cost $5.1 million initially in addition to $500,000 over one year to protect $10 million of GM bonds. The contracts reached as high as 52 percentage points upfront on Oct. 16.
Ford posts $3B operating loss
Automaker announces further job cuts, other cost savings as it tries to stem losses.
NEW YORK (CNNMoney.com) -- Ford Motor reported a $3 billion operating loss in the latest quarter, and said Friday it would reduce staff and capital spending in order to preserve its dwindling cash.
Ford said it would cut salaried employment costs by 10%, as it cut the pay of managers and likely would move to reduce staffing levels as well. It also said hourly staffing would be reduced by an additional 2,600 workers.
The company, which earlier this year sold brands such as Jaguar and Land Rover, said it would continue to look to sell assets.
Ford's loss came to $1.31 a share, excluding special items, far worse than the penny a share loss it reported on that basis a year earlier. Analysts surveyed by earnings tracker Thomson Reuters had forecast a loss of 93 cents a share.
The company had a one-time gain of $2.2 billion, related to the accounting of its retiree health care expenses. With that gain it reported a net loss of $129 million, or 6 cents a share, an improvement from the $380 million, or 19 cents a share, it lost on that basis a year earlier.
But the operating losses continued to burn through the company's cash position, leaving with its auto operations with only $18.9 billion in cash on hand at the end of the quarter, down $6.3 billion from the start of the quarter.
Ford, which saw the volume of its U.S. vehicle sales plunge 25% in the quarter, reported that overall revenue tumble by $9 billion in the quarter to $32.1 billion. High gasoline prices at the start of the quarter, followed by tight credit, rising job losses and record lows for consumer confidence late in the quarter combined to keep potential auto buyers on the sidelines.
Ford (F, Fortune 500) is not the only automaker seeing trouble. Rival General Motors (GM, Fortune 500) is forecast to report a jump in losses in the quarter later in the day Friday. On Thursday, Japanese rival Toyota Motor (TM), which is poised to see its first annual decline in U.S. auto sales, slashed its earnings outlook for its current fiscal year.
You know things are bad when seemingly invincible Toyota is struggling, and it is.
Calling the current economic environment "unprecedented," Toyota reported Thursday its quarterly profit plunged 69 percent, mainly due to slumping vehicle sales in the U.S. and Europe, where Toyota lost money, as well as depreciation of the yen versus the U.S. dollar.
Toyota's earnings drop was far more dramatic than analysts had anticipated and prompted Toyota executives to severely downgrade its profit forecast for the year. Earlier, Honda and Nissan announced larger-than-expected profit declines. Toyota President Katsauaki Watanabe Thursday predicted the automaker, when it posts its financial report when its fiscal year ends March 31, 2009, will report its smallest annual profit since 1999.
Toyota also lowered its forecast for full-year vehicle sales globally by nearly 6 percent or 673,000 vehicles, to 8.24 million vehicles from 8.74 million. The automaker is reviewing its previous goal of selling 9.7 million vehicles in calendar-year 2009.
In the U.S., where Toyota curtailed production at two plants to take down inventories of its Tundra pickup and Sequoia SUV, Toyota lost money -- about $350 million -- in the first half of its fiscal year. Toyota also lost money in Europe.
Toyota's Emergency Response
In response to the deeper-than-expected profit decline, Toyota immediately established an "emergency profit improvement committee" headed by Watanabe to look at ways to cut costs and maximize profits.
Toyota will cut costs across the board. Included will be slicing in half the number of contract workers in Japan from the current 6,000 to 3,000 by March, reviewing capital expenditures, reconsider the timing and scale of projects and review capital expenditures.
At the same time, Toyota aims to increase vehicle sales and profits by launching new models, such as the iQ in Europe and new hybrid vehicles. In the U.S., despite the struggles, Toyota has gained market share in the U.S., where its share of industry sales reached a record high of 17 percent for the first half of its fiscal year due to strong sales of the Yaris and Corolla.
The automaker plans to "stimulate market demand with special models and revised pricing strategies by region and by models," company executives said in a conference call Thursday with financial analysts and media.
In that call, Takahiko Ijichi, senior managing director of Toyota Motor Corp., said the total pot of incentive spending in North America likely won't increase but will be redistributed. Instead of plunking most of the incentive funds on big vehicles like the Toyota Tundra and Sequoia as the automaker has most of this year, it will shift that spending to other models now that once-bloated inventories of trucks and SUVs are more in line with demand.
GM Says It May Run Out of Operating Cash This Year (Update4)
By Jeff Green and Mike Ramsey
Nov. 7 (Bloomberg) -- General Motors Corp., seeking federal aid to avoid collapse, said it may not have enough cash to keep operating this year and will fall ``significantly short'' of the amount needed by the end of June unless the auto market improves or it raises more capital.
The largest U.S. automaker reported a $4.2 billion third- quarter operating loss today and said its available cash fell to $16.2 billion on Sept. 30 from $21 billion at the end of June. Merger talks with Chrysler LLC were suspended.
``GM is making a pretty direct plea for help,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee. ``The message is, `we've done all the things we can do, and we need help.' And if we don't get help, fill in the blank.''
The cash drain reflected the strain of a 21 percent slump in U.S. sales in the quarter as the credit freeze deepened. It also added urgency to U.S. automakers' request for government aid. The companies are asking for $50 billion in new loans, a person familiar with the proposal said.
Chief Executive Officer Rick Wagoner and the CEOs of Ford Motor Co. and Chrysler renewed the push for assistance yesterday in meetings with U.S. House and Senate leaders in Washington. Wagoner said GM also has been in contact with the staff of President-elect Barack Obama.
GM rose 44 cents, or 9.2 percent, to $4.36 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have tumbled 82 percent this year.
$73 Billion in Losses
Today's outlook was the bleakest yet from the automaker, which has lost almost $73 billion since the end of 2004. Using $6.9 billion in cash last quarter pushed GM closer to the $11 billion minimum it says is needed to pay bills.
A bankruptcy filing ``would be a disaster far beyond General Motors and a sad chapter in American history,'' Wagoner, 55, said in a Bloomberg Television interview. GM said on Oct. 24 that bankruptcy ``is not an option.''
Should GM take such a step, the result would be 2.5 million jobs lost in the first year among automakers, suppliers and related businesses, according to a Nov. 4 report by the Center for Automotive Research, based in Ann Arbor, Michigan. Ford, which reported using $7.7 billion in cash last quarter, said today it has ``sufficient liquidity.''
Bailout Optimism
A U.S. rescue package for GM, Ford and Chrysler is likely before President George W. Bush leaves office in January, said Dennis Virag, president of Automotive Consulting Group in Ann Arbor.
``Either the federal government provides money for a bailout and lets the industry retool, restructure, and move ahead, or the industry dies,'' Virag told Bloomberg Television.
While GM didn't specify any prospective partners in saying merger discussions were being halted, the biggest U.S. automaker had been in negotiations on a tie-up with Chrysler, according to people familiar with the plans.
Consideration of a strategic acquisition was ``set aside'' to focus on ``immediate liquidity challenges,'' Detroit-based GM said in a statement.
Chrysler CEO Robert Nardelli, who hadn't acknowledged the talks, sent a note to employees that included the wording of GM's statement. The company, owned by Cerberus Capital Management LP, will ``continue to explore multiple strategic alliances or partnerships,'' Nardelli said.
GM Loss, Estimates
GM's per-share operating loss was wider than the average estimate on an adjusted basis of $3.94, based on 10 analysts surveyed by Bloomberg.
Including a non-cash, $4.9 billion one-time gain related to unloading retiree medical bills, GM had a net loss of $2.5 billion, compared with a $38.9 billion year-earlier loss on a tax-accounting charge.
GM's cash use in the fourth quarter should be closer to the levels in this year's first and second quarters, when it was about $3.6 billion, Chief Financial Officer Ray Young said on a conference call.
GM said it is trying to boost cash by $20 billion by the end of next year, an increase from a July 15 plan for $15 billion.
Asset sales, a part of the strategy, have been hampered because potential buyers can't get financing, Chief Operating Officer Fritz Henderson said. GM's Hummer brand of sport-utility vehicles is among the businesses on the block.
Paring Spending
Capital spending is being trimmed in 2009 to $4.8 billion, down $2.4 billion, by delaying the debut of some vehicle programs in North America and Europe by as long as a year. GM will also save $1.5 billion by cutting advertising and dealer promotion support and by reducing production starting next quarter.
GM will further pare engineering and cut back on discretionary expenses, including travel, consulting and unscheduled overtime.
Working-capital spending will be reduced by $500 million by lowering reserves of parts and inventory, the company said. GM also said it will try to slash 30 percent of salaried-workforce expenses, up from a goal of 20 percent.
GM will protect the capital budget for the electric Chevrolet Volt and the Chevrolet Cruze compact car, Henderson said on a conference call.
GM's debt rating was lowered by one grade to CCC+ by Standard & Poor's, which said it was ``cautious'' regarding GM's ability to raise capital.
Ceding a Crown
The latest retrenchment for GM comes two months after its 100th birthday. After 77 years as the world's largest automaker, it is poised to be surpassed in 2008 global sales by Toyota Motor Corp. It employs about 266,000 people around the world with factories in 34 countries.
Today's release on GM's results was delayed 48 minutes past its scheduled 10:30 a.m. arrival because of the need for a wording change, said Julie Gibson, a spokeswoman.
GM's $3 billion of 8.375 percent bonds due in July 2033 fell 4.3 cents to 24 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 34.83 percent.
Credit-default swaps protecting against a GM default for one year rose to a level that implies the market has priced in a more than 66 percent chance of default, according to CMA Datavision.
One-year credit-default swaps were quoted at a mid-price of 51 percentage points upfront, compared with 50 percentage points yesterday, CMA data show. That means it would cost $5.1 million initially in addition to $500,000 over one year to protect $10 million of GM bonds. The contracts reached as high as 52 percentage points upfront on Oct. 16.
Ford posts $3B operating loss
Automaker announces further job cuts, other cost savings as it tries to stem losses.
NEW YORK (CNNMoney.com) -- Ford Motor reported a $3 billion operating loss in the latest quarter, and said Friday it would reduce staff and capital spending in order to preserve its dwindling cash.
Ford said it would cut salaried employment costs by 10%, as it cut the pay of managers and likely would move to reduce staffing levels as well. It also said hourly staffing would be reduced by an additional 2,600 workers.
The company, which earlier this year sold brands such as Jaguar and Land Rover, said it would continue to look to sell assets.
Ford's loss came to $1.31 a share, excluding special items, far worse than the penny a share loss it reported on that basis a year earlier. Analysts surveyed by earnings tracker Thomson Reuters had forecast a loss of 93 cents a share.
The company had a one-time gain of $2.2 billion, related to the accounting of its retiree health care expenses. With that gain it reported a net loss of $129 million, or 6 cents a share, an improvement from the $380 million, or 19 cents a share, it lost on that basis a year earlier.
But the operating losses continued to burn through the company's cash position, leaving with its auto operations with only $18.9 billion in cash on hand at the end of the quarter, down $6.3 billion from the start of the quarter.
Ford, which saw the volume of its U.S. vehicle sales plunge 25% in the quarter, reported that overall revenue tumble by $9 billion in the quarter to $32.1 billion. High gasoline prices at the start of the quarter, followed by tight credit, rising job losses and record lows for consumer confidence late in the quarter combined to keep potential auto buyers on the sidelines.
Ford (F, Fortune 500) is not the only automaker seeing trouble. Rival General Motors (GM, Fortune 500) is forecast to report a jump in losses in the quarter later in the day Friday. On Thursday, Japanese rival Toyota Motor (TM), which is poised to see its first annual decline in U.S. auto sales, slashed its earnings outlook for its current fiscal year.
You know things are bad when seemingly invincible Toyota is struggling, and it is.
Calling the current economic environment "unprecedented," Toyota reported Thursday its quarterly profit plunged 69 percent, mainly due to slumping vehicle sales in the U.S. and Europe, where Toyota lost money, as well as depreciation of the yen versus the U.S. dollar.
Toyota's earnings drop was far more dramatic than analysts had anticipated and prompted Toyota executives to severely downgrade its profit forecast for the year. Earlier, Honda and Nissan announced larger-than-expected profit declines. Toyota President Katsauaki Watanabe Thursday predicted the automaker, when it posts its financial report when its fiscal year ends March 31, 2009, will report its smallest annual profit since 1999.
Toyota also lowered its forecast for full-year vehicle sales globally by nearly 6 percent or 673,000 vehicles, to 8.24 million vehicles from 8.74 million. The automaker is reviewing its previous goal of selling 9.7 million vehicles in calendar-year 2009.
In the U.S., where Toyota curtailed production at two plants to take down inventories of its Tundra pickup and Sequoia SUV, Toyota lost money -- about $350 million -- in the first half of its fiscal year. Toyota also lost money in Europe.
Toyota's Emergency Response
In response to the deeper-than-expected profit decline, Toyota immediately established an "emergency profit improvement committee" headed by Watanabe to look at ways to cut costs and maximize profits.
Toyota will cut costs across the board. Included will be slicing in half the number of contract workers in Japan from the current 6,000 to 3,000 by March, reviewing capital expenditures, reconsider the timing and scale of projects and review capital expenditures.
At the same time, Toyota aims to increase vehicle sales and profits by launching new models, such as the iQ in Europe and new hybrid vehicles. In the U.S., despite the struggles, Toyota has gained market share in the U.S., where its share of industry sales reached a record high of 17 percent for the first half of its fiscal year due to strong sales of the Yaris and Corolla.
The automaker plans to "stimulate market demand with special models and revised pricing strategies by region and by models," company executives said in a conference call Thursday with financial analysts and media.
In that call, Takahiko Ijichi, senior managing director of Toyota Motor Corp., said the total pot of incentive spending in North America likely won't increase but will be redistributed. Instead of plunking most of the incentive funds on big vehicles like the Toyota Tundra and Sequoia as the automaker has most of this year, it will shift that spending to other models now that once-bloated inventories of trucks and SUVs are more in line with demand.
- 10,620
- gtp_jimprower
I think the only reason they didn't mention Chrysler is because they have nothing to lose.
- 40,874
You have to remember, also, that Cerberus makes hundreds of billions of dollars each year, so Chrysler hemorrhaging money isn't such a big deal if Cerberus was willing to stick it out. They probably aren't, but they could.
