US Big 3 ask for $34bn dollars...

They are going broke because of fixed costs, most of which will be leave their income statements beginning in 2010. Nobody is selling anything, cars, electronics, even groceries. Black friday was big because things were given away, it has already fallen way back as far as a daily sales rate.

 

By fixed costs, are your talking about the bloated dealer network Malorn ?
GM is too stupid to survive, and I prefer to send my charity elsewhere.

 

Dealers don't cost anything in real economic terms. If you are such an expert tell me how they cost the manufacturers anything? Show me.

 

Well that's already a done deal.

Ford and Toyota have cross-patented tech too each other. Basically when they finished their design, they both realized that similar tech had been developed independently. Instead of starting a patent court war, they decided to "not sue you if you don't sue me". Both companies claim that they are not using tech from the other company.

Now... one of Fords suppliers for the FEH CVT is Aisin. They also make the Gen II PSD. As far as I can tell, they are making the FEH CVT to Ford's specifications. Ford has cried foul because Ford feels Asin has throttled FEH CVT production, while increasing Prius PSD production.

Really, the best thing Ford could do (and may have done) is to build the FEH in-house and not rely of foreign suppliers with conflicting interests. For the record the FEH is a great vehicle good for 50-60 mpg if you know what your doing with it.

11011011

 

The cost is in (on average) lower quality sales venues and hungrier (often pushier) salespeople. It's pretty simple economics. If GM sells as many cars as Toyota but has 3 times as many dealers (I think the ratio could be higher), each dealer is selling 1/3rd as many cars, making 1/3rd as much money, but has 100% as much overhead. On average (there will always be some overperformers), American dealers just don't make enough money to compete on venue quality (nice frontage, modern floor, courtesy cars, service promotionals, etc.) with foreign dealers who sell three times as many cars with less same-brand competition.

Auto dealers are overpopulated for some brands and many need to die off or consolidate, but dealerships rarely merge. It's sad, but the free market is merciless. It doesn't matter how nice or hard theytry, if their product is not what the market wants delivered as efficiently as possible then they should go out of business and direct their energies to an endeavor more valued to society.

(When I can get detached from personal worries long enough, I find myself optimisticly wondering what may come from having several thousand small business people cut loose their safe but failing dealership and look for something to do in a country awash in available manufaturing labor. Economic booms only take root and from recessions.)

 

Ah, the cry of the middle-man: it's FREE to the customer !

Didn't you study marketing at a community college Malorn ? That should have been enough if common sense does not do the trick for ya.

Tell me, how much did GM have to pay to close it's most recent failed brand ? I remember about 2 Billions $US.

 

Auto dealers are set up for the scale of the business. If a dealer has $15 million invested in land and buildings with 250 employees, his sales people will be less pushy than the dealer with $1 million invested in land and buildings with 20 employees? The note on just the land and buildings is $100-$150 grand a month just to pay the rent and a payroll of $1,000,000. That is 75-90 cars/month just to pay the rent. The dealer with $1 million invested has a rent factor of $7000/month and a payroll of $80,000.

Please do not comment on things you have no knowledge of .

the best dealers are profitable or 90% profitable without selling any new cars. Which store of the two above would you want to do that with?

 

Yup. Toyota sales reportedly dropped 30%. Nobody's immune at this stage. We're going full bore into this downturn. Hang on to your job...

 

I have reviewed actual construction budgets for small and large commercial buildings. The costs do not scale with size (a 10ksf building is NOT half the cost of a 20ksf building). Likewise, payroll, admin labor do not scale very easily (tough to hire quality part time to deal with paperwork). One $10k copier can support 5 or 20 people, supporting a courtesy van is tough if you only have 1 service bay. At some point (about 50 people for an engineering firm), a full time IT person is cheaper than the contract labor.

But that's just my personal experience, I'm not an autodealer. Which is why I pretty much just paraphrased statements made and published by automakers such as Ford and analysts who are paid just to think about these issues. Just Google "GM too many dealers" if you want to find the people who you need to convince.

 

I am not saying that there are not too many dealers, i continually hear how more dealers is bad for the consumer and adds cost to the consumer. Nothing could be further from the truth.

 

Tell that to GM, Malorn. The parent company says it wants to cull brands and dealers, but the cost *to them* is too high. Sounds just like labor agreements, doesn't it ?

This is unrelated to costs passed on to the consumer by the dealer.

 

Christ on a crutch, that ain't going to happen.. PERIOD.

 

Yes and on July 1st of this year I am sure you would have said I was a sane person if I told you on December 4th of this year I would have filled up with gas $1.66/gallon.

Which part the dow @ 2000? A 10+ year depression? unemployment @15-20%. If the first three happen i will guarantee you the war will come. Economic catastrophe is usually followed by far-left or right politics which leads to war. Why would today be any different? I am sure if you would have polled the average german in 1930 and foretold what the next 15 years would bring, you would have been locked up for being nuts too.

 

I prefer that the Big 3 stay in business and over power the foriegn markets.

Thats exactly what will happen! It will be a worldwide failure of all economies.

People on this board will sit and bicker and blame the Big 3 for making crappy vehicles. They make great vehicles and I'm very proud to own 2 of them now. My friend has a 94 GMC Sonoma with 384,000 miles on it. All original parts.

Reality check------>
What people don't know is that a staggering amount of Americans wash their vehicles more than checking the air pressures in the tires. It's is the number 1 reason why people have vehicle problems is lack of maintaining them. Toyota makes horrible and ugly looking vehicles of all times.

The problem with the BIG 3 is the UAW. These people are the bloodsuckers of the American auto industry. The damn janitors at GM probably make $25.00 per hour just to sweep the damn floors. But, GM is starting something new and they literally killed the job bank.

And these people that get elected are so freaking brainless about how to handle issues in office. I personally think everyone of them need to be handcuffed and walked out of office and we get some real, Sensible people that will actually DO what they say on the campaign trail.

Here's a video for you all to enjoy.
YouTube - 12/4 #7 "you are missing something Health Care, Trade how can we compete" Union guy keeps it real!

 

LOL! So true, And who would have thought gas would nail $1.55 per gallon? I guess only me and you Malorn...

I always knew for a fact that there will be a gas shortage. Them prices were driven up by executives and investors on wall street. Heck, I even heard today that we could see $25 US Dollars per barrel soon.

 

For how long?

It's not realistic to base any expectations upon that price, especially when considering lifetime consumption of a vehicle.
.

 

It will stay like this for quite awhile. The economy is only going to get worse folks.

 

Unfortunately I think gas will get under $1.00 gallon, the price of a barrel of oil will dip under $20/barrel. I don't see gas getting above $2.50/gallon for several years.

 

GM welfare does not a depressed economy saver make. The welfare does however, benefit Malorn.

 

they are loans and they will benefit every North american member of Prius Chat without exception.