GM, Ford, Chrysler

jdobbin · November 8, 2008

http://www.msnbc.msn.com/id/27575144/

For mighty General Motors, the news could hardly be worse. The nation's biggest automaker said it lost $2.5 billion in the latest quarter as it was slammed by a slowing economy, global credit crisis and the effect of high energy prices.
The company is now going through cash at a rate of $2 billion a month and says that without help it will run out of money in 2009.

The news seems even more grim for Chrysler.

All of the Big 3 are approaching the Fed in the U.S. and will probably do the same in Canada for cash.

If one of the Big 3 shuts down, it is estimated to affect around 2 and just under 3 million people directly and indirectly in terms of jobs. If all three go out of business...well, it will be a disaster for a lot of businesses.

It seems very likely that one the car companies will be gone in 2009. Chrysler is the most likely company. The question remains is whether anyone will buy parts of the business, the brand or whatever. Or will the company simply fade to nothing.

And this could be the fate of the other two. Are they considered too big to fail? Some say this will be Obama's problem but Chrysler might collapse even before that.

Smallc · November 8, 2008

They won't be allowed to fail. At least, Ford and GM won't.

Vancouver King · November 8, 2008

http://www.msnbc.msn.com/id/27575144/
All of the Big 3 are approaching the Fed in the U.S. and will probably do the same in Canada for cash.

Absolutely, auto bailouts are coming from Washington and Ottawa. Too bad the handouts won't be tied to the 3 companies actually building vehicles that people want to buy.

In addition to poor current sales, all 3 are losing billions by eating losses on lease returns - customers won't touch buyouts that price their returned vehicles well above market values.

Smallc · November 8, 2008

Too bad the handouts won't be tied to the 3 companies actually building vehicles that people want to buy.

That's just something people say. If you look at the latest offerings, they have improved markedly and are just as good as the competition.

Vancouver King · November 8, 2008

That's just something people say. If you look at the latest offerings, they have improved markedly and are just as good as the competition.

Then why are they not selling?

Smallc · November 8, 2008

Then why are they not selling?

Every auto maker was down about 30% last month (except for GM, they were down 45% because they pulled sales ahead with large incentives the month before. If you average the 2 months out, its about 30%.). GM and Ford had problems in the past with product. They don't now. Gm still has a bit of a quality problem (but not much of one). If your comments were correct about any company, it was Chrysler. They only have 1 or 2 products going for them.

Alta4ever · November 8, 2008

Every auto maker was down about 30% last month (except for GM, they were down 45% because they pulled sales ahead with large incentives the month before. If you average the 2 months out, its about 30%.). GM and Ford had problems in the past with product. They don't now. Gm still has a bit of a quality problem (but not much of one). If your comments were correct about any company, it was Chrysler. They only have 1 or 2 products going for them.

Don't forget about an overpowerful union that has crippled the ablity of these companies to compete as they decide which vehilces will be produced in which plant, and also force their opinions on what types of vehilces will be produced.

Smallc · November 8, 2008

Don't forget about an overpowerful union that has crippled the ablity of these companies to compete as they decide which vehilces will be produced in which plant, and also force their opinions on what types of vehilces will be produced.

That is partly true I woulds say, but not completely. Ford and GM did drop the ball for a time on quality and on passenger cars (although they had an excuse at the time). Ford has fixed most of the problems and GM has fixed some of them. Gm though did not streamline their business the way they should have and they may have to pay for it now. They won't be allowed to fail though.

eyeball · November 8, 2008

Is this bailout epidemic ever going to end? Its like watching my kids all mysteriously coming down with the same thing just before getting up for school. A flue or stomach cramp that's mysteriously passed by the mere sight of another afflicted sibling. I'm reminded of the way my mother in law's poodles are suddenly struck with lame forelegs whenever they happen to spy me glancing at them when I leave them out in the rain.

I say we just zero everyone's accounts, reset the entire economy and start a new game. We'll still need something real on which to base the money we print, sorry, I mean the liquidity we inject into it though. Our brains seem to be wired to respond positively to pretty shiny metal so lets just imagine how much of that is floating around in outer space in asteroids and meteors. What's the difference between gold orbiting the sun or sitting in a vault? Its not like its going anywhere. All we need is for the treasury to hire some physicists and theoretical alchemists, sorry, mathamaticians to calculate a way that convinces us that our money supply is securitized indefinitely into the future.

Whattya think? Too exuberant? Too irrational or rational...whatever?

jdobbin · November 8, 2008

They won't be allowed to fail. At least, Ford and GM won't.

How much do you think Canadians are willing to pay to not see that happen?

And how many workers do you think will be fired even if that happens?

jdobbin · November 8, 2008

Absolutely, auto bailouts are coming from Washington and Ottawa. Too bad the handouts won't be tied to the 3 companies actually building vehicles that people want to buy.

I haven't heard of any of the Big 3 approaching the Harper government yet but I expect it will be soon now that Chrysler and GM merger talks are over. Chrysler is tottering right now.

I think in the past bail outs for the auto industry have always been tied to employment. It creates a vicious cycle since the car companies can make terrible judgments and just threaten to fire people and expect bail outs.

In addition to poor current sales, all 3 are losing billions by eating losses on lease returns - customers won't touch buyouts that price their returned vehicles well above market values.

The Big 3 want out of leasing and are trying to recover whatever they can from returned leases. I have heard of every little nit picky thing being listed in terms of dent repair, etc so that it costs the consumer plenty just to turn the car back over.

jdobbin · November 8, 2008

Don't forget about an overpowerful union that has crippled the ablity of these companies to compete as they decide which vehilces will be produced in which plant, and also force their opinions on what types of vehilces will be produced.

Decide what vehicles will be produced? The union does that? Do you have a citation for that?

Drea · November 8, 2008

Every auto maker was down about 30% last month (except for GM, they were down 45% because they pulled sales ahead with large incentives the month before. If you average the 2 months out, its about 30%.). GM and Ford had problems in the past with product. They don't now. Gm still has a bit of a quality problem (but not much of one). If your comments were correct about any company, it was Chrysler. They only have 1 or 2 products going for them.

Not every automaker.

Toyota's Sept 2008 sales were 14.9% above their Sept 2007 sales.

Toyota Canada sales up 14.9

So what is Toyota doing better than the others?

... I drive a Pontiac, so it's not me driving the sales LOL

msj · November 8, 2008

Not every automaker.
Toyota's Sept 2008 sales were 14.9% above their Sept 2007 sales.

Toyota Canada sales up 14.9

So what is Toyota doing better than the others?

... I drive a Pontiac, so it's not me driving the sales LOL

Although this thread is in Canadian politics, I think they were talking mostly about US sales.

In the US, Toyota sales were down 25.9% yoy as compared to October, 2007.

Edited November 8, 2008 by msj

GostHacked · November 8, 2008

How many bailouts have happened in the past for these auto makers??

What were the conditions that led to the bailouts?

Why are we looking at another bail out now?

Drea · November 8, 2008

Isn't all consumer spending down by about 25% in the US? It's not just automakers, it's everything.

IMO, a bailout won't help. Unless it decreases the price of the vehicle to the consumer. People just aren't buying in the US. When one cannot afford the mortgage, a new car is crossed off the list of "must haves".

I do lay some blame on the "big 3", however. IMO they screwed up by telling every housewife she needed a huge, gigantic, mammoth vehicle to drive the kids to school.

Saw a cute little crossover the other day - a Suzuki something-or-other. My next vehicle when mine starts breaking down and costing too much to fix. Fuel pump on Monday... cost me $950 ACK!

Oleg Bach · November 8, 2008

General Motors was the icon of American corporate prowess. To see it go down is a shame. You can blame the re-dependence on off shore slavery for that one - You can blame those in charge of corporate America for embracing a greed like disloyalty to the nation that gave them their begining. We were sold our by our own corporate leaders and it happened 20 years ago - I hold those in contempt that are ungrateful for their wealth - those that once they were up and running - disposed of the workers that made them rich - not smart - If they think Japan and China are their personal and protective friends then they are delluded. NOW they are learning that their buisness partners abroad screwed them - and I don't want to hear the excuse that Japan's auto products are superiour - they could have matched the quality of product here but choice to take the easy way out at our expense and now there will be millions out of work domestically - Power and money made our corporates crazy - You must be loyal to your own family- which is us. I hope they learned their lesson.

AngusThermopyle · November 8, 2008

Fuel pump on Monday... cost me $950 ACK!

Damn thats steep! You should have done it yourself, a fuel pump is easy to replace, you just have to drop the tank (at least in the vast majority of vehicles).

That way it would have cost you about 50 to 100 bucks instead. Well, depending on what you drive.

Drea · November 8, 2008

The part itself was $545. The rest was labour and taxes.

These newfangled computerized cars are a pain. Normally my brother (backyard mechanic for-ever) would have done it but the computer "sensor" made it impossible for him to do so.

He did use his cool toy, the "OBD reader" but it came up with nothing... and my check engine light never came on. Just got off work and the car sounded like it was running on two or three cylinders (really rough) and wouldn't stay running.

We used to have an old 78 Ford pickup -- we should've kept it -- no computer! LOL

Oleg Bach · November 8, 2008

The part itself was $545. The rest was labour and taxes.
These newfangled computerized cars are a pain. Normally my brother (backyard mechanic for-ever) would have done it but the computer "sensor" made it impossible for him to do so.

He did use his cool toy, the "OBD reader" but it came up with nothing... and my check engine light never came on. Just got off work and the car sounded like it was running on two or three cylinders (really rough) and wouldn't stay running.

We used to have an old 78 Ford pickup -- we should've kept it -- no computer! LOL

You should have kept the old Ford for sure! - Sealed bick lighter type engins are disposable - there is no room to tinker and repair or tune - Your friends fuel pump could have been bought for 35 bucks and installed by a dummy - YOU ... but now - you can not even lubricate your own ball joints because they are sealed - One dollars worth of grease sqirted into the old style ones would tripple their life - now they have a limited span and are also disposable and expensive - progress? :lol:

Drea · November 8, 2008

The world will cry when all the computerized cars go "kaput" when the sun shoots out an EMP someday! LOL

My father has an old 74 VW beetle and it will be mine to restore one day. I've been begging for that car since I turned 16 but it's his "baby". He did let me drive it tho!

On my old 76 Civic, I did the oil changes, spark plugs, etc myself. Thanks to my bro who taught me how to read a Chilton manual. :lol:

Oleg Bach · November 8, 2008

The world will cry when all the computerized cars go "kaput" when the sun shoots out an EMP someday! LOL
My father has an old 74 VW beetle and it will be mine to restore one day. I've been begging for that car since I turned 16 but it's his "baby". He did let me drive it tho!

On my old 76 Civic, I did the oil changes, spark plugs, etc myself. Thanks to my bro who taught me how to read a Chilton manual.

Henry Ford granted us the car so we could leave the city on sunday and all could have a pic nic . His dream was not to use the damned machine every day - nor was the creation of nuclear energy meant to make thousands of useless weapons. I was an artsy kid and frowned upon back yard grease monkeys that drank beer and talked about cars - Eventually I was given this huge boat - a big old Buick Park Avenue - I figured it out real quick and had that machine for over 8 years with out one single visit to the mechanic - just take it apart and put it back together in reverse - new part added - It was fun - and I could adjust the power and fuel intake. I as a non-mechanical type even attempted to tinker with the transmission - ended up with a hand full of springs and screws..that was the only time I seeked professional help...but I knew enough not to get ripped off at that point. 74 VW - nothing like German air cooled engineering - have fun.

kimmy · November 8, 2008

I always loved old Dodge and Plymouth cars. What would be cooler than bombing down the road in a classic Charger or Roadrunner or Barracuda back in the days when gas was cheap and nobody though carbon emissions meant anything. These cars, and their contemporaries, had charisma and character and inspire affection. Today's cookie cutter cars inspire nothing, they're just functional devices like a toaster.

I drive a Malibu... not a '69 Malibu SS 396, but a '97 Malibu LS 3.1

Having decided to build toasters, the American "Big 3" are now competing on the basis of how well they can make toast. And the consensus seems to now be that the Japanese and Koreans make better toasters.

-k

Vancouver King · November 8, 2008

Something is just not right when the same TV news program that hints at imminent 'Big 3' bailout relief then runs a commercial extolling the virtues of hemi V-8 powered half tons.

Who will save these corporations from themselves?

Smallc · November 8, 2008

Something is just not right when the same TV news program that hints at imminent 'Big 3' bailout relief then runs a commercial extolling the virtues of hemi V-8 powered half tons.
Who will save these corporations from themselves?

So you don't think that people will still buy trucks? You don't think that their necessary? Did you forget to mention that Toyota and Nissan both build V8 trucks, the Toyota with an engine just as big as that in the Ram.

In the US, its one of the few markets that is starting to pick up again. Because of it, Ford posted its highest retail market share in 2 years despite the loss in sales.