Weak GM Sales Cast Shadow Over Industry

[UpInArms]

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5696704

CHICAGO (Reuters) - Slow car sales, production cuts and bloated inventories at General Motors Corp. (GM.N: Quote, Profile, Research) caused a profit shortfall at its biggest parts supplier on Friday and could foreshadow more weakness in the sector, analysts said.

GM and Ford Motor Co. (F.N: Quote, Profile, Research) both posted double-digit drops in June U.S. sales, sending shock waves through the auto industry. The possibility of more production cuts later this year to empty overstocked car lots adds further industry pressure.

<snip>

"The question on everybody's mind is whether the consumer has bought himself out and isn't going to step up to the plate and spend on cars and trucks," said George Magliano, director of automotive industry research at forecasting firm Global Insight.

...more...

[Jacobin]

1. 12 month wait for a Prius

They're making zillions of over-bloated, over cushioned, floating living rooms instead of technologically improved, interesting, gas conserving vehicles.

[goforit]

35. Next to bikes........Hybrids are great!!!!

Mine runs like a kitten.

[The Zanti Regent]

37. The Price Is Wrong

I bought one of the first AMC Gremlins in 1971 for $1,970.50.

It was the base model, no power steering/brakes, unsynchronized manual transmission, crunched when you went in first gear, windshield wipers that worked off the engine vacuum and a manual pump for windshield spray.

It ran well for 8 years.

now what does $1,970.50 buy you? Half a Segway...

No way would I pay $35,000 for a mid size car. In California, if the car price doesn't kill you, the insurance does!

[Wilber_Stool]

2. I can hear it now.

We left you with a strong economy and you ran it into the ground. A new Republican mantra.

[treepig]

3. hmm, maybe they should try something like 0% financing

oh wait, they've been doing that for three years.

will they go negative?

[PDittie]

4. I just bought a Chevy

and I had to take ahold of their head and hold them under water to get them to discount it ('05 Equinox, for those that care).

The car business is in serious trouble right now, and probably for a few years.

[KeepItReal]

5. Serves them right for making their best sellers SUV's

Now that gas prices are through the roof, the average American maybe ain't too hot on buying a Tahoe/Suburban/Excursion/Expedition/Navigator...

GM and Ford's small and mid-size car lines aren't that great. There's a reason why the Honda Accord is the best selling car in the U.S.

[TahitiNut]

8. The Saturn line is actually quite good.

I have a couple of friends who own Saturns and they're hooked. I've rented them and been far more impressed than I expected to be. I'm a "big fella" (linebacker-sized) and find them surprisingly comfortable. "Creature comforts" (i.e. convenience features) are abundant. The road handling is excellent. They're quick and have good passing speed - and get good (>20mpg) mileage. The mechanics I've spoken with like the design and accessibility of maintenance parts (filters, plugs, etc.).

Reliability, performance, and comfort are high.
Initial cost and maintenance costs are moderate to low.
In all, not a bad car at all. (Most of what I've seen are the LS200 and LS300.)

[Kokonoe]

12. not to be a commercial but the new ion red line has a 4 cylinder engine

the new ion red line has a 4 cylinder engine and goes 143 miles per hour. :puffpiece:

[PROGRESSIVE1]

28. They probably stole that design from a Respectable Japanese...

car maker.

[leesa]

33. Why do you need to go 143mph?

[Elginoid]

19. difference of opinion-

when my wife and I went looking, we found Saturns to be quite uncomfortable. we are both fairly tall, I'm 6'4", and my wife is 5'11", but neither of us is all that overweight- I'm in at a deuce and a quarter(225lbs.), and my wife weighs 145.
we ended up going with a VW Beetle- now there's a roomy small car- almost reminds me of my beloved Pacers, of which I owned 7 through the years.


(not me,btw)

[UpInArms]

6. related article: Oversupply of cars and trucks could mean layoffs in Lockp

Oversupply of cars and trucks could mean layoffs in Lockport

http://www.buffalonews.com/editorial/20040717/1059435.asp

Delphi Corp. expects automakers to reduce orders

Delphi Corp., owner of the Thermal & Interior Division plant in Lockport, warned Friday of a production slowdown coming in the July-September period, as automakers face a glut of cars and trucks.

That could be bad news for workers at the 4,200-job Lockport plant, which makes components for General Motors and other automakers.

The U.S. auto industry's stockpile of unsold vehicles was about 500,000 greater than usual at the end of June, with GM's inventory the largest, according to industry analysts.

"I'm very concerned about that," said Paul Siejak, president of the United Auto Workers Local 646 Unit 1 in Lockport. "Any plant shutdowns at GM are going to affect us."

The UAW represents about 3,300 production workers at the Lockport components plant, making radiators and ventilation components.

...more...

[AP]

14. I know someone who worked at that plant who got 40K to move to

Cleveland to work at a plant there a couple weeks ago.

[LiberalFighter]

15. The right time for it to happen... just before the election

And if they are laid off they should volunteer to campaign for candidates.

[AP]

16. New York won't be voting for Bush, but the move the remaining workers

to Cleveland which is a close state. Interesting.

[LiberalFighter]

21. They don't have to work directly for Kerry

They could work for another local candidate especially in the Senate or House. If there are close races in those campaigns it could mean that money will have to be expended in those races by the national party that they would rather spend on gw*.

They don't have to work in the state either. There should be ways of assisting campaigns in other states without actually having to be there.

[AP]

24. My point is that Delphi had to allocate workers in response to reduced

demand, so they're reducing employment at the New York plant and increasing it in Ohio.

Ohio is a swing state. New York isn't.

If Delphi wants to help Republicans in small ways, they're doing the right thing. They're giving a little boost to the Cleveland economy, and they're hurting the Lockport economy.

[LiberalFighter]

25. Most of the members are going to see through the ploy...

especially with the network in place. There are at least 4 different levels of activities that can occur to get the word out to the members.

[AP]

27. I'm not talking about the members. I'm talking about the whole community.

Back in Lockport, all businesses will feel the hurt when jobs disappear -- from real estate agents right down to the pizza delivery guy and the paper boy.

But in Cleveland, they'll get an influx of jobs. And what do you think those employees are going to do with those 40K bonuses? They're going to spend it on housing, pizza and newspapers. Those people who get the money are going to believe that Bush is doing an OK job with the economy, regardelss of how the Delphi blue collar employees vote.

So the people in Cleveland -- people in a swing state -- might not feel the hurt of the Bush years that they're feeling in New York State.

And here are the 2004 donations of Delphi execs if you have any doubt that they're inclined to do what it takes to help George Bush win OH (NY be damned).

http://www.opensecrets.org/indivs/search.asp?NumOfThou=0&txtName=&txtState=MI&txtZip=&txtEmploy=Delphi&txtCand=&txt2004=Y&Order=A

[whistle]

7. Let's see now, a bloated GM SUV costs in the neighborhood...

....of $40,000.00.

Suppose you are a soccer mom who buys this gas guzzler and own it for 4 years putting 80,000 miles on that little baby. At an average of 12mpg city/highway driving you will need 6,667 total gallons of premium gasoline at a current average price per gallon of $2.39 or you'll spend another $15,933.34 just for fuel. Insurance, oil, maintenance, tires all are proportionately higher than comparable sedans. The middle east flares up with several more crises over the next four years and gas doubles in price. Your original investment in this vehicle will drop substantially while the costs to keep using it will skyrocket.

So, does it really make sense to buy one of these? I'm not at all surprised that the major automobile show-lots are way over-stocked with these vehicles.

[ozymandius]

9. GM makes the Hummer.

I see these obnoxious behemoths on the road, filled with proud owners pretending to be urban warriors. Then I see how gas in Atlanta has crept up to the $1.88/gal mark. Society should never be polite to those who grossly consume so conspicuously.

[Geo55]

10. "urban warriors"

will not be able to feed their beasts in the very near future.
The dinosuar age is coming to a quick end.....their food supply is literally "drying up"

[lucky777]

11. A Hummer looks worse than a 50 yr old guy in Red Corvette

in my opinion. It is boxy, square, wasteful, awkward -- and so ugly. Why can't they re-write the tax code to punish these gas-guzzlers.

[Geo55]

22. Repeat after me.....

Conspicuous Consumption is a GOOD thing
Conspicuous Consumption is a GOOD thing
Conspicuous Consumption is a GOOD thing
Conspicuous Consumption is a GOOD thing
there ya go , know your getting the idea !

[Nay]

13. Hmmm...overproduction...guess which plants will be idled soon?

(Hint: it won't be the ones in China.)

Just another reason to move ALL production overseas.

[Media_Lies_Daily]

17. If the auto industry begins massive lay-offs, the ripple effect will....

...be devastating throughout the supporting industries.

[osaMABUSh]

18. ripple - exactly and in the July-September period - guess Shrub

can't bank on that 1 stellar calendar quarter out of 16 just before the election

[llmart]

23. The auto industry and their suppliers.......

have never recuperated since after Bush took office.

[havocmom]

29. Unemployed/underemployed workers do not buy big ticket items.

Outsourcing of decent jobs, most newly created jobs pay a pittance, there is no buying public. Why can't CEOs see they can't sell to people who are sinking economically? @#!*@)^$( twerps!

[osaMABUSh]

20. And those tax refunds were all spent and gone by June

Any chance we'll get advance on our 2004 tax refunds this Fall? Of course, Bush would have to ram another tax cut down our throats and it would be sooo transparently political.

[DaveSZ]

26. Here is what Kerry should do:

Instead of giving tax breaks for people to buy Hummers like Bush is doing, change that policy so people get tax credits or refunds for buying gas/electric hybrid vehicles (even large hybrid trucks).

This will help the auto industry, environment, and reduce our dependency on the Saudis - some who financed those who killed 3000 of our people - all at the same time.


Bush is too beholden to big oil and the Saudis to do this.

[notadmblnd]

30. Whe people have no jobs, they have no moeny to buy new cars.

I'm surpeised GM didn't think of this back when they started the outsourcing/off shoring craze. Citizens of India... citizens of Maylasia... citizens of Brazil.. wont you please help a corporate greed monster out?

[Tight_rope]

31. No tears from me....

As for the paid for Mazda that I have now. I'm going to drive the mutherfucker until the wheels fall off. And after that my next car will be a hybrid!

"Fool me once, shame on you...Fool me twice can't be fooled again!

[cliss]

32. The problem of oversupply is not new.

I read somewhere that while Henry Ford was really excited that people were driving around in his cars, he also realized that there was only so much need for a new Model T. He understood that when people started selling their used cars in the paper, he was competing against himself with his used cars versus his new cars.

In other words, his success held within the seeds of his own destruction if pushed too far. So this dilemma has been with the car industry for quite a while.

I'm willing to bet that all the "gimmicks" they've had over the years; introducing new models, certain collector cars, 0% financing, bigger monstrosities, have all been used to fight this phenomenon.

[andino]

34. I think that their problem is that

a new car costs around 1/2 the price of a new house. I just find it hard to believe that someone would spend $40,000 - $60,000 on a SUV. I find it even harder to believe that they can perpetuate those prices for any extended period of time.The country hit a downturn in the economy and the auto companies just kept pumping out the high priced SUVs. Their customer base couldn't afford to purchase the overpriced SUVs and now there are extra ones setting on the lots. Sounds to me like the good ol law of supply and demand will take over soon. I know that they are offering extra money off of the new cars and lower financing and it isn't working. Maybe they need to think of looking to the future and planning for their customers trends and economic situations instead of just over producing what is hot right now.

Same old story of the American car producers being 3 steps behind and out of touch with their customers.

[jayfish]

36. Trickle Down Is Dead.

Can we, please, try trickle up for a few years?

Jay