General Motors Corp posted a $15.5 billion quarterly loss
BMW issued a profit warning and Nissan badly missed quarterly operating profit forecasts.
The U.S. unemployment rate hit its highest level in four years.
51,000 jobs were eliminated in July. Analysts had expected 75,000 jobs would be cut.
Gee, I wonder which item will be the stimulus for market action today.
On Wednesday, Hope Now, a private-sector alliance of mortgage services, investors, and counselors, said it completed in June 181,000 workouts of loans to prevent foreclosure. In the past year, the group reports preventing 1.9 million loans from being foreclosed. More than half of the workouts were subprime loans that is, loans made to people with less-than-stellar credit.
We need a Fannie/Freddie solution for GM, Ford and Chrysler: they are too big to fail. Taxpayers should buy stock via Treasury. FED should take their bonds in exchange for Treasuries. Congress should bail them out with a direct line into the arteries of the government. (a GOP market stalwart of free enterprise said on Friday AM). [j/k]
I wonder how GM's joint venture with Chrysler to build a new super sized SUV is working out?
I heard an industry analyst a few months ago who said that Detroit management was, at that very moment, still counting on gas prices reversing so they could continue to sell high-margin trucks and SUVs. At this point, it makes sense for a Chinese company to buy GM to use for a distribution channel. They could possibly downsize the truck division to the point where they might be profitable. Other than that, I don't see how GM is a viable company.
I guess Doug Fehan and the Corvette boys (sportscar racing) will be looking for new jobs soon....
How they can continue to justify that expense in the face of that loss in one qtr (already mentioned) remains to be seen. Love to see the sales of the "blue devil" corvette....this is the model that the sycophantic engineers code-named after the CEO's alma mater in order to get approval.
Anyone need a racing team??? This one will be disbanded very soon.
if I were getting GM pension, I would be very worried.. How many people are getting those, 1 million or more?
If contributions from GM stop, how long will existing balance last, Etc.
"G.M. acknowledged in its most recent annual report that from 1993 to 2007 it spent $103 billion to fund legacy pensions and retiree health care an average of about $7 billion a year a dramatic competitive and cash-flow disadvantage. During those 15 years, G.M. paid only $13 billion or so in shareholder dividends. The company has been sending far more money to its retirees than to its owners."
- NY Times.
won't all our ponies ...
Lord, people around here sure beat a joke (horse) to death until it isn't isn't wry anymore...
GM, in order to survive, should...like NOW...start cutting divisions down. They also shouldn't bet on gas prices spurring the sale of humungous SUVs in this lifetime. A racing program is a drop in the bucket and R&D, this is serious. They need to slash and burn NOW operationally.
I also can't even believe that they are cutting leasing. Um, brilliant GM execs, let me give you a clue here: no one is going to buy your crappy autos on a 6 year payment plan. Furthermore, americans just lost their home ATM, which people used to buy cars because the money was cheap. Take the mean salary and take out food and housing...what do you have left for auto expenses? Certainly not enough for a 40k purchase with a bunch down. Leasing was the only option for expensive cars. This move is like the nail in the coffin.
The time for GM to cut the fat, so to speak, is long past. The only thing that will allow it's survival is a bailout ala Chrysler....even that won't work only prolong the inevitable...but it's working for others
That Wagoner (and Lutz) are whistling past the graveyard at each Q release is just utter lunacy.
Hey, I've been ashamed to ask, but where did the pony thing come from anyway?
I have no idea, but for it to be a meme means widespread use, not just here. And it's tired now anyhow, which was my point.
What's not tired is the red ink at GM. I've been looking through their financials and, honestly, if someone doesn't take them over, I have no idea who they are going to survive. The day they file chap 11 is the day the US should really say WTF. As goes GM....
You know GM et al the prices will be coming down , way down , in the future thanks to being able to renegotiate labor costs...
you see we will have national health care and national insurance and equal wage system based on 10 dollar minimum wage, so now the Unions will not be able to get the private HC packages that are 6K per every car...
Thank God they are supporting the push for national HC.
[Take the mean salary and take out food and housing...what do you have left for auto expenses?]
Nearly every file I look at, the person is paying FAR too much of their take-home pay just to own it.
Then, in addition, they have to insure it, fuel it.
I'm guessing most aren't shelling out the money to properly maintain it.
The talk lately is how obsessed we've become with the "ownership society" when it comes to homes, but the amount we spend on our vehicles is irrational, too.
Inego, they should prepare to die Honestly, this isn't going to save them. Check out the financials...they are bleeding from a thousand cuts. They're going to fuck over the sale of anything past the 30k mark by cutting leasing, they have unsustainable costs assoicated with the brands and their channels, they have high overhead, and the products they are making don't fit the market and to turn that around it will take a couple of years. they don't have a couple of years.
and the unions aren't the issue here at all. they are hollow shells now because, like a virus, they killed their host. and management is, well, completely incompetant and doesn't understand the market anymore. This is just a disaster movie now for them.
I thought I was being completely extravagant by paying 22-23k, couldn't understand other people paying so much, and we have the house paid off, and almost had it paid off when we bought the car!
Both GM and Ford sell a lot of very suitable and competitive cars in non-U.S. markets. For the last several decades, they have allowed their U.S. market share to progressively erode in favor of other automakers selling cars of the type that GM and Ford sell overseas but won't sell here. It's baffling. For decades now, their "high profit margin" truck and SUV rubbish has been a pursuit for fool's gold.
Agree with you, they should have all seen the writing on the wall, i would rather be underpaid and employeed than an out of work union man..
But the problem with the leasing is that the vehicles are being turned in now with more miles and the fgolks are unable to pay, i,e, the home ATM the banked on isnt there...
and if the lease high end, no one will be there to buy them...they are not there now...
energyecon, i actually think Ford is in a much better position because they aren't so big and have scaled back. they have staunched the bleeding to a much better degree than GM has. I just don't see anything for GM to do but to cut cut cut on the divisions and consolidate, and FAST. Swift, decisive action is what the capital markets will appreciate, and they need capital.
Chrysler is done. Cerebus wanted to trim it and sell it. They will but if they escape without a loss it will be a miracle. Nardelli is an idiot and he'll do for them what he did from Home Depot...rob the stakeholders of equity by being a complete moron. How these people put him in charge I'll never know.
So my prediction on this is Chrysler sold off, GM goes chapt 11 soon, and Ford pulls a Lazarus act with some investment.
Inego, the leasing here is a huge issue. The entire auto industry is dependent now on it for sales of the large profit vehicles...anything over, say 30k. And people are just not going to take 6 years to pay off a car. And even if they were, it puts them out of the market for longer, so where is the win? They need people to turn their vehicles around, and that happens though a lease now, primarily.
I've said this before, I'd NEVER pony up the money to pay for a car with cash and lease because I can work the capital better. Why would I give BMW 55k now, when I can give them 600/mo and work the 28K in least payments as I go along? I like knowing the outcome and being able to back into it. But even for most people, they can afford that much a month and drive a 55k car, otherwise it isn't happening. Especially now.
Lawyerliz:
I always assumed that the pony thing is a direct reference to the fact that every kid wants one. It's mocking the fantasy inherent in the expectations of many of the people discussed.
I grew up in the city, so i never wanted one. I did always want a train set though and eventually got one! Maybe instead of tech i should have been in railroads
The way I heard the pony thing was from a joke about a bad-acting kid who wanted--DEMANDED--a pony for Christmas, so his parents wrapped up a box with a pile of manure in it. Next morning the parents come downstairs to find their child up to his elbows in manure and flinging it in all directions while muttering to himself, "There MUST be a pony in here somewhere!"
It gained currency as a metaphor for our "conservative" adventure in Iraq.
yes anon, they'll be trading down those volvos for the lesbaru's (as we call them around these parts as the credit is taken away, so is the ability to reach up to the luxury auto segment.
This is what GM gets for killing the EV1. It's a curse. Well, maybe not a curse, but hopefully the clowns who advocated cutting EV1 funding are kicking themselves in the butt on such a poor decision.
Fitch Ratings on Friday cut Ford Motor Co and Ford Motor Credit ratings deeper into junk territory on weaker U.S. sales, concerns about access to capital and higher commodity costs.
Cutting the EV1 made a lot of sense for GM, the technology just wasn't there at the time. A lot of the people who worked on it then are working on the Volt now.
Second, in response to several of the above posters, GM and Ford currently do make several compelling cars that could compete with anything the Japanese companies have to offer. The problem is that they've spend the last 20-30 years pissing away all their consumer goodwill that their cars had built up.
ipodius writes:
energyecon, i actually think Ford is in a much better position because they aren't so big and have scaled back. they have staunched the bleeding to a much better degree than GM has. I just don't see anything for GM to do but to cut cut cut on the divisions and consolidate, and FAST. Swift, decisive action is what the capital markets will appreciate, and they need capital.
Last week (or was it this week?) Ford put out some future plans. Much of it was stuff that they had already been telling everyone - the next Focus will be the same car that Europe gets; the new Fiesta will be sold in the US, etc. But the release also said something about another small car that they will be selling that would be a brand-new entry into the US.
Today they released production photos of the new Ka, which will be displayed at the Paris auto show in October.
Could this be it? It would be a micro-car, smaller than the Fiesta. It doesn't look cheap like most tiny cars; if they can sell it profitably for Ford prices I bet they have a segment leader on their hands.
Cutting the EV1 made a lot of sense for GM, the technology just wasn't there at the time. A lot of the people who worked on it then are working on the Volt now.
You should watch the documentary "Who Killed the Electric Car." Tells a different story than the technology not being there at the time.
Nothingburger?
Drove my Chevy to the levee
But the levee was dry.
Market cap is $6.2 billio
Book value was negative $41bil in Q1...now maybe negative $53 billion. How are they still in business
This is damn scary!
How are they still in business
And why is their stock price still even positive.
Anyone want to bet when the much heralded savior project (Volt) is cancelled because they can't afford it?
Must feel good to be a GM dealer this AM.
General Motors Corp posted a $15.5 billion quarterly loss
BMW issued a profit warning and Nissan badly missed quarterly operating profit forecasts.
The U.S. unemployment rate hit its highest level in four years.
51,000 jobs were eliminated in July. Analysts had expected 75,000 jobs would be cut.
Gee, I wonder which item will be the stimulus for market action today.
We made love in my chevy van and that's alright with me!.................
Must feel good to be a GM dealer this AM.
If you sell GM all day, you probably don't have a lot of feelings in the first place.
this # gets worse in the 3rd qtr
"What's good for America, is good for General motors and vice versa."
OT but CR does this sound right?
On Wednesday, Hope Now, a private-sector alliance of mortgage services, investors, and counselors, said it completed in June 181,000 workouts of loans to prevent foreclosure. In the past year, the group reports preventing 1.9 million loans from being foreclosed. More than half of the workouts were subprime loans that is, loans made to people with less-than-stellar credit.
Yahoo! 404 - Page Not Found
We need a Fannie/Freddie solution for GM, Ford and Chrysler: they are too big to fail. Taxpayers should buy stock via Treasury. FED should take their bonds in exchange for Treasuries. Congress should bail them out with a direct line into the arteries of the government. (a GOP market stalwart of free enterprise said on Friday AM). [j/k]
Canadian wwp: That song did WONDERS for van sales when it came out. Maybe THAT'S what GM needs now.
won't all our ponies come with trailers and vans to pull them?
With this kind of market news, the market should be up 150 today. Plus Cramer says the bottom is in.
woocouldanode that SKF and SRS are at the top of my streaming screen (+2.xx%)?
The probability of "Mish" writing an article on this subject is, to quote my old statistics professor, exactly 1.
I'm sorry ... wait ... that was in ONE QUARTER???!!!
ONE QUARTER???!!!
Inconceivable!
"talking about bankruptcy is ridiculous..." wagner
on so many occasion's he's said this...
I wonder how GM's joint venture with Chrysler to build a new super sized SUV is working out?
I heard an industry analyst a few months ago who said that Detroit management was, at that very moment, still counting on gas prices reversing so they could continue to sell high-margin trucks and SUVs. At this point, it makes sense for a Chinese company to buy GM to use for a distribution channel. They could possibly downsize the truck division to the point where they might be profitable. Other than that, I don't see how GM is a viable company.
ONE QUARTER???!!!
I guess Doug Fehan and the Corvette boys (sportscar racing) will be looking for new jobs soon....
How they can continue to justify that expense in the face of that loss in one qtr (already mentioned) remains to be seen. Love to see the sales of the "blue devil" corvette....this is the model that the sycophantic engineers code-named after the CEO's alma mater in order to get approval.
Anyone need a racing team??? This one will be disbanded very soon.
Ciao
MS
It's just a write off for them, threetorches. Someone cue that Seinfeld clip...
Anyone want to bet when the much heralded savior project (Volt) is cancelled because they can't afford it?
I doubt the American public can afford it either. It has a 40K price tag?
The next bailout????
They're getting what they deserve.
Kramer: "It's okay, Jerry. They'll just write it off."
Jerry: "What? Write off what?"
[Pause]
Jerry: "You don't know what a write-off is, do you?"
Kramer: "No. Do you?"
Jerry: "No."
Kramer: "Ah, but they do, Jerry. They do."
I look forward to the day when Paul Krugman refers to CR as "My go-to auto dizasta site"!
if I were getting GM pension, I would be very worried.. How many people are getting those, 1 million or more?
If contributions from GM stop, how long will existing balance last, Etc.
"G.M. acknowledged in its most recent annual report that from 1993 to 2007 it spent $103 billion to fund legacy pensions and retiree health care an average of about $7 billion a year a dramatic competitive and cash-flow disadvantage. During those 15 years, G.M. paid only $13 billion or so in shareholder dividends. The company has been sending far more money to its retirees than to its owners."
- NY Times.
won't all our ponies ...
Lord, people around here sure beat a joke (horse) to death until it isn't isn't wry anymore...
GM, in order to survive, should...like NOW...start cutting divisions down. They also shouldn't bet on gas prices spurring the sale of humungous SUVs in this lifetime. A racing program is a drop in the bucket and R&D, this is serious. They need to slash and burn NOW operationally.
I also can't even believe that they are cutting leasing. Um, brilliant GM execs, let me give you a clue here: no one is going to buy your crappy autos on a 6 year payment plan. Furthermore, americans just lost their home ATM, which people used to buy cars because the money was cheap. Take the mean salary and take out food and housing...what do you have left for auto expenses? Certainly not enough for a 40k purchase with a bunch down. Leasing was the only option for expensive cars. This move is like the nail in the coffin.
ipodius, you are confusing a meme with a joke.
Cheers,
Prat
The time for GM to cut the fat, so to speak, is long past. The only thing that will allow it's survival is a bailout ala Chrysler....even that won't work only prolong the inevitable...but it's working for others
That Wagoner (and Lutz) are whistling past the graveyard at each Q release is just utter lunacy.
Think it's bad now??? Wait.
Ciao
MS
Hey, I've been ashamed to ask, but where did the pony thing come from anyway?
Three torches said "inconceivable"
I don't think that word means what you think it does....
The taxpayers will take over the pensions, unless the pension plan is fully funded and I'll eat my hat if it is.
Why isn't the stock mkt down even more?
Couldn't happen to a nicer bunch of guys.
These are the same execs that made sure that the US has lower fuel efficiency standards than China.
Hey, I've been ashamed to ask, but where did the pony thing come from anyway?
I have no idea, but for it to be a meme means widespread use, not just here. And it's tired now anyhow, which was my point.
What's not tired is the red ink at GM. I've been looking through their financials and, honestly, if someone doesn't take them over, I have no idea who they are going to survive. The day they file chap 11 is the day the US should really say WTF. As goes GM....
ipodius..
You know GM et al the prices will be coming down , way down , in the future thanks to being able to renegotiate labor costs...
you see we will have national health care and national insurance and equal wage system based on 10 dollar minimum wage, so now the Unions will not be able to get the private HC packages that are 6K per every car...
Thank God they are supporting the push for national HC.
[Take the mean salary and take out food and housing...what do you have left for auto expenses?]
Nearly every file I look at, the person is paying FAR too much of their take-home pay just to own it.
Then, in addition, they have to insure it, fuel it.
I'm guessing most aren't shelling out the money to properly maintain it.
The talk lately is how obsessed we've become with the "ownership society" when it comes to homes, but the amount we spend on our vehicles is irrational, too.
ip[odious,
no more than 10% of take home should go towards vehicle costs (loan, ins, main, gas)
So you rpoint is valid re pay vs cost..
here in the affluent burbs of dc, per capita high end estimatye is 55K tops..
so that means 458 total for a vehicle(s) gas a 100, ins 100 , that leaves 258 ...means 10K car tops....
Inego, they should prepare to die
Honestly, this isn't going to save them. Check out the financials...they are bleeding from a thousand cuts. They're going to fuck over the sale of anything past the 30k mark by cutting leasing, they have unsustainable costs assoicated with the brands and their channels, they have high overhead, and the products they are making don't fit the market and to turn that around it will take a couple of years. they don't have a couple of years.
and the unions aren't the issue here at all. they are hollow shells now because, like a virus, they killed their host. and management is, well, completely incompetant and doesn't understand the market anymore. This is just a disaster movie now for them.
Two things:
I thought I was being completely extravagant by paying 22-23k, couldn't understand other people paying so much, and we have the house paid off, and almost had it paid off when we bought the car!
Both GM and Ford sell a lot of very suitable and competitive cars in non-U.S. markets. For the last several decades, they have allowed their U.S. market share to progressively erode in favor of other automakers selling cars of the type that GM and Ford sell overseas but won't sell here. It's baffling. For decades now, their "high profit margin" truck and SUV rubbish has been a pursuit for fool's gold.
Oh, my car is a Ford Fusion, and I like it a lot.
Are you implying Ford will die sooner, or has a chance to live?
ipodius,
Agree with you, they should have all seen the writing on the wall, i would rather be underpaid and employeed than an out of work union man..
But the problem with the leasing is that the vehicles are being turned in now with more miles and the fgolks are unable to pay, i,e, the home ATM the banked on isnt there...
and if the lease high end, no one will be there to buy them...they are not there now...
sorry, it's Eekneegogh actually, and reiner is rhiner... but who kwarels over such detales... ;)~
fixed, thanks InergyIcon
...sigh...
energyecon, i actually think Ford is in a much better position because they aren't so big and have scaled back. they have staunched the bleeding to a much better degree than GM has. I just don't see anything for GM to do but to cut cut cut on the divisions and consolidate, and FAST. Swift, decisive action is what the capital markets will appreciate, and they need capital.
Chrysler is done. Cerebus wanted to trim it and sell it. They will but if they escape without a loss it will be a miracle. Nardelli is an idiot and he'll do for them what he did from Home Depot...rob the stakeholders of equity by being a complete moron. How these people put him in charge I'll never know.
So my prediction on this is Chrysler sold off, GM goes chapt 11 soon, and Ford pulls a Lazarus act with some investment.
Inego, the leasing here is a huge issue. The entire auto industry is dependent now on it for sales of the large profit vehicles...anything over, say 30k. And people are just not going to take 6 years to pay off a car. And even if they were, it puts them out of the market for longer, so where is the win? They need people to turn their vehicles around, and that happens though a lease now, primarily.
I've said this before, I'd NEVER pony up the money to pay for a car with cash and lease because I can work the capital better. Why would I give BMW 55k now, when I can give them 600/mo and work the 28K in least payments as I go along? I like knowing the outcome and being able to back into it. But even for most people, they can afford that much a month and drive a 55k car, otherwise it isn't happening. Especially now.
won't all our ponies come with trailers and vans to pull them?
You've got the cart in front of the horse as it were. The ponies are there to pull the car.
Lawyerliz:
I always assumed that the pony thing is a direct reference to the fact that every kid wants one. It's mocking the fantasy inherent in the expectations of many of the people discussed.
the fact that every kid wants one.
I grew up in the city, so i never wanted one. I did always want a train set though and eventually got one! Maybe instead of tech i should have been in railroads
The way I heard the pony thing was from a joke about a bad-acting kid who wanted--DEMANDED--a pony for Christmas, so his parents wrapped up a box with a pile of manure in it. Next morning the parents come downstairs to find their child up to his elbows in manure and flinging it in all directions while muttering to himself, "There MUST be a pony in here somewhere!"
It gained currency as a metaphor for our "conservative" adventure in Iraq.
ipodius:
Yep, the high-end aspirational market looks like its dead.
Volvo sales down 46.3% YoY. Nearly as bad as the SUV sales, -54%.
CNNMoney.com: 404 Page Not Found
yes anon, they'll be trading down those volvos for the lesbaru's (as we call them around these parts
as the credit is taken away, so is the ability to reach up to the luxury auto segment.
Wow, what happens when NASCAR becomes all-Toyota spec?
just wow on the auto sales segment - crispy&cole posted up on the construction spending thread that Toyota sales were down 13.5% - uffda...
ipodius, thanks for your read
This is what GM gets for killing the EV1. It's a curse. Well, maybe not a curse, but hopefully the clowns who advocated cutting EV1 funding are kicking themselves in the butt on such a poor decision.
Corn, Soybeans Decline as Midwest Rain to Cut Heat Wave Short
Corn, Soybeans Decline as Midwest Rain to Cut Heat Wave Short - Bloomberg.com
These guys are Cornholiod, they will be ASSimilated.
Fitch Ratings on Friday cut Ford Motor Co and Ford Motor Credit ratings deeper into junk territory on weaker U.S. sales, concerns about access to capital and higher commodity costs.
Fitch cuts Ford deeper into junk on sales slump
| Reuters
Another bunch of loosers.
Cutting the EV1 made a lot of sense for GM, the technology just wasn't there at the time. A lot of the people who worked on it then are working on the Volt now.
Second, in response to several of the above posters, GM and Ford currently do make several compelling cars that could compete with anything the Japanese companies have to offer. The problem is that they've spend the last 20-30 years pissing away all their consumer goodwill that their cars had built up.
ipodius writes:
energyecon, i actually think Ford is in a much better position because they aren't so big and have scaled back. they have staunched the bleeding to a much better degree than GM has. I just don't see anything for GM to do but to cut cut cut on the divisions and consolidate, and FAST. Swift, decisive action is what the capital markets will appreciate, and they need capital.
Last week (or was it this week?) Ford put out some future plans. Much of it was stuff that they had already been telling everyone - the next Focus will be the same car that Europe gets; the new Fiesta will be sold in the US, etc. But the release also said something about another small car that they will be selling that would be a brand-new entry into the US.
Today they released production photos of the new Ka, which will be displayed at the Paris auto show in October.
2009 Ford Ka officially revealed
Could this be it? It would be a micro-car, smaller than the Fiesta. It doesn't look cheap like most tiny cars; if they can sell it profitably for Ford prices I bet they have a segment leader on their hands.
Cutting the EV1 made a lot of sense for GM, the technology just wasn't there at the time. A lot of the people who worked on it then are working on the Volt now.
You should watch the documentary "Who Killed the Electric Car." Tells a different story than the technology not being there at the time.
Ka has been on sale in Europe for about a decade. It's really quite a nifty looking runabout, cooler than a Mini to my eye.