GM Woes

Yeah.. GM is desperate. They are trying to relate cars to what people already know instead of making things new. Advertisements for their new faster cars are shown next to a Corvette. that way people know a Corvette is fast.. so if a Corvette represents a new car... well.. that new car must be good.. lol America is one funny place to me, and i was born and raised her. Advertisements are funny sometimes. To see that they actualy work is even more funny.

 

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Wow... that's one of the most tangible signs of the SUV popularity on the decline.

Good.... Gravy. Nothing like digging your hole deeper...

 

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Any bets on how many layoffs will be announced after the election is decided?

 

Just read on www.theautochannel.com that the layoffs will entail 5 plants and 10,300 workers - all involved in the production of trucks and SUVs. With all the incentives on these things, they are practically giving them away and now people don't want them at any price.
With the economy now in a real upswing (according to Dubya) you think these things would be flying off the showroom floors! Maybe it's not as rosy as W thinks. Perhaps he and Laura will buy one to tool around the ranch after January. :mrgreen:

 

I heard an advertisement the other day for a $7,000 rebate. Whoa!

That means they were either making an insane profit from those vehicles or they are so desperate to unload them that they are selling at a loss. Both are a very bad way to manage inventory of an already saturated Truck & SUV market.

I saw this coming 5 years ago, when gas was only $1 per gallon and people were making fun of me for so passionately wanting a better technology.

It scares me when I'm right... because last year when gas prices hit $2 per gallon, I stated the next time they did the prices would probably never recover. And that's exactly what appears to be happening. It looks like $1.89 will actually be considered a bargain from this point on. That reality will destroy the gas-guzzler market... which appears to be what we are now witnessing!

 

How much you want to bet some part of those layoff numbers will end up in "low cost country" GM factories building trucks and SUVs?

Sadly, some night shift employee has a new white H2 in the parking lot, still has paper plates. I don't know if (I presume) he is parking it away from other cars to be nice and not take up 2 spaces, or he is afraid someone might bump his baby. Gotta be management, no one on the line makes that kind of money.

 

And isn't Detroit claiming that Toyota MUST be selling the Prius at a loss? Perhaps they are just following the lead of the Japanese automakers (again). :lol:

 

I believe one of the reasons the big SUVs have been marketed so hard is because they DO ( um DID) have a bigger than average profit margin. KBB lookup - Model: $ over invoice, KBB $ over invoice

• Hummer 2: .. $4350, KBB: $2400
• Excursion: .... $4606, KBB: $684
• Expedition: .. $5250, KBB: $263
• Explorer: ..... $3238, KBB: $1257
• Escape: ....... $1866, KBB: $592
• Kia Amanti: . $2320, KBB: $465
• V6 Camry: .. $2800, KBB: $925
• Prius: .......... $1653, KBB: $2295, An anomaly reflecting the fact that some people ARE paying over.
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    Does Ford want you to buy an Escape or an Explorer? I suspect that until recently, the Expedition & Excursion profit was substantially higher than the Explorer.
    
    Of course I have no idea of the actual cost to manufacture each of them.

 

There was an article on PRI's business news magazine last night (on NPR) that the car companies have not reduced production, even though demand is way down.

This has resulted in (as you observed) huge rebates, and a lot of cars on dealer lots.

Dealers have to pay interest to the car manufacturers for cars that sit on their lots. Normally, they don't quibble about this (particularly when a company -- Toyota was named -- is sending them other cars which are selling well)

But that's apparently ending -- the dealers are now really ready to say, "Enough!". Which they think will result in reduce production by the mfgrs, and (a) layoffs and (B) the end to large rebates on cars and trucks.

 

Gads! If I were the boss at your sister's dealership, I would be extremely upset at the manufacturer.

Plus, as gas is going to get nothing but more expensive, I don't see sales growing for trucks and campers. Ditto for fleet sales -- companies are going to be looking for ways to do business without driving when possible.

Thanks for the details!

 

Maybe they should park the expensive non sellers close to the road, with the keys in them so they can be stolen! Ok, just kidding, it would drive up insurance rates.

 

The Big 3 made their own bed ...they are going to reap what they sow...Until such a time the Big 3 get out of bed and out of the smoke filled room,colluding with big oil, they will continue to take big hits in profit and layoffs will continue. I remember years ago, when an engineer in DTW made a 80mpg carb...he was bought out and hushed up...Big oil wouldnt tolerate it. The mentality of screwing the public with the obscene profits of big oil will continue until such a time the public has had enough and better efficiency will be demanded. The big 3 are starting to see only the beginning...and their attempt to get into the hybrid market is "weak" at best...they do this only to appease the govt, ...the mentality of the CEOs will have to change ...the idea of hybrids as only a passing fad is bull...the era of cheap gas is over! $3.00 per gal is shortly around the corner...

 

Well, here's a story that's not a rumor: my in-laws just ditched their SUV because they're sick of how much it costs to run the damn thing. They were so desperate to get rid of it that they're now driving a Ford Escort. Apparently dealers don't want to buy back SUVs in exchange for cars, so trade-in deals aren't exactly generous.

Also, when I picked up the Prius in NH, I noticed someone was building a massive Hummer-only dealership. Oh boy, talk about the wrong time to be jumping on *that* bandwagon...