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Are Truck Buyers Avoiding GM Because of Bailout?
NLPC ^ | October 7, 2013 | Mark Modica

Posted on 10/07/2013 9:07:10 AM PDT by jazusamo

Chevy Silverado: "Strong" Commercial | Chevrolet 1:03 minute

One of the most disappointing aspects of last week's sales results from General Motors was the underperformance of the much-hyped new truck offerings from the company. While the industry-leading Ford F-Series saw sales increase about 10 percent to around 60,500 vehicles for the month, GM's combined sales for its competing Chevy Silverado and GMC Sierra fell approximately 8 percent to about 46,000 units.

GM's Obama-appointed management's performance in trying to explain the declining sales was as lame as the sales results. Amongst the excuses for disappointing truck sales, GM did not include the possibility that a hangover from the auto bailout is contributing to the dip and to many consumers GM still stands for "Government Motors."

Demographically, truck buyers are older, less urban and more politically conservative than other consumers, just the kind of people who are responsible for all the internet postings along the lines of, "I'll never buy another Chevy..." In fact, GM's latest "Strong" ad is clearly calculated to appeal to this demographic. The targeted audience did not respond favorably, as evidenced by the sales figures. GM's spokespeople tripped over themselves trying to explain why.

GM tried to get ahead off what could be viewed as a problem on Wall Street with truck sales, which is considered the most profitable segment of the auto industry. Management went the easy route by resorting to the old Chevy Volt standby; that darned supply just can't keep up with all this demand! Before the sales figures were even reported, the Detroit News gave excuses for the impending underperformance of GM's truck division with an article entitled, " Demand for Most Popular GM Trucks Reportedly Outstripping Supply."

The piece quotes a GM spokesman who offered this hazy harbinger of the bad news to come:

Dealers always want more of the "hot new truck," said Terry Rhadigan, a GM spokesman. "It's a temporary thing." A dealer ordering 10 of the 5.3-liter pickups is getting eight of them, he said. "It's almost an oxymoron to call it a constraint at 80 percent."

It would also appear to be an oxymoron to say that we have an honest asssesment from a credible GM source. The initial convoluted explanation pointed to "a supplier's ability to produce certain drivetrain parts" for the 5.3 liter V8 motor used in some of GM's trucks. GM sources "declined to identify the supplier." As with the Chevy Volt supply constraint excuse , this one doesn't hold water.

GM backpedaled on its alibi, as mentioned in USA Today . This piece blows holes in the supply constraint theory by quoting, "The V-8 shortage 'is nothing that is affecting sales right now,' says Don Johnson, Chevrolet sales head." I'm glad we got to the bottom of that!

So just what is behind the disconcerting sales drop for GM trucks? Maybe Bloomberg Businessweek can come up with a better one from GM's media-manipulating arsenal. Here's a clip from the Businessweek article addressing the issue:

These models are brand-new-ostensibly the cutting edge of truck technology-and customers still aren't clamoring to buy them. Ford, meanwhile, sold 10 percent more of its F-Series trucks in September. GM is in big trouble if people are kicking its trucks' tires and deciding to go with slightly more dated models made by other companies.

That's not the case, though-at least that's what GM executives were saying Tuesday. Some buyers are choosing competing trucks, but only because the company is torqueing up its profit margins, they said. GM's average transaction price per truck was up about $3,000 from a year earlier and $800 since August.

"No one was close to us from an incentive reduction standpoint and a [price] increase standpoint," says Kurt McNeil, vice president of U.S. sales. "We definitely took a different tack."

That explains it! GM is just making so much darn more money than competitors when it comes to selling trucks! How credible is a company that would cut $5000 from the price of cars like the money-losing Chevy Volt but says that it will not sacrifice profitability for volume on the most important segment of its sales? No need to worry, though. The pricing strategy for GM trucks apparently only lasted the day as new incentives have been offered.

Trucktrend.com reported on the new incentives but was sure to add to their title that GM "Claims Incentives Part of Sales Plan, Not in Response to Competitors." Not in response to competitors? Shouldn't part of a sales plan be to respond to competitors?

GM is also ramping up discounts to its employees, retirees and friends and family of employees. From Automotive News, "GM also permanently expanded the program to include aunts, uncles, nieces and nephews in addition to spouses, parents, children and siblings. Previously, GM offered discounts to extended family only occasionally, and on a month-to-month basis." This move reeks of desperation as GM is pulling out all the stops to revive sales momentum.

My guess is that the employee pricing program does not show up in incentive spending, so GM can deceptively brag about how incentive spending is being held in check while it discounts its vehicles through other means. Perhaps they will also revive the dealership " stair-step" program to prop up sales without having to divulge how much money is being discounted .

GM will now have to get truck sales back on track, despite the cost to profitability, or face harsh criticism from even those analysts who continue to be lenient on the company's shortcomings. No excuse for poor truck sales will continue to be accepted. If supply for V8s was limited, why did they advertise the heck out of trucks that were supposedly unavailable? Does anyone actually believe that Ford is selling trucks at a loss while GM is making so much more on each unit sold?

The more likely, simple truth might be a little more unnerving for shareholders of GM. That is that competitors can afford to make vehicles that are equal or superior to GM at prices that are lower. Like the government that bailed them out and appointed the management, this is a company that still is not run like an efficient free-market corporation with a goal of profitability over appearance. As GM utilizes a political-campaign style playbook to cover up any perception of weakness with excuses, blame and smoke and mirrors, there may be yet another unspoken reason for lagging truck sales. Many consumers have not forgotten the auto bailout.

Mark Modica is an NLPC Associate Fellow.


TOPICS: Business/Economy; Government; Politics
KEYWORDS: bailout; builtfordtough; chevy; f150; ford; gm; governmentmotors; sierra; silverado; trucksales
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Many FReepers here have said they'd never buy another GM product, looks like we're not alone.
1 posted on 10/07/2013 9:07:11 AM PDT by jazusamo
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To: jazusamo

It would appear so.


2 posted on 10/07/2013 9:08:03 AM PDT by RJS1950 (The democrats are the "enemies foreign and domestic" cited in the federal oath)
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To: jazusamo

I won’t buy another GM product.


3 posted on 10/07/2013 9:08:51 AM PDT by rbbeachkid (Get out of its way and small business can fix the economy.)
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To: jazusamo

Hell yeah. So are the SUV buyers and muscle car buyers.


4 posted on 10/07/2013 9:10:54 AM PDT by b4its2late (A Liberal is a person who will give away everything he doesn't own.)
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To: jazusamo
Are Truck Buyers Avoiding GM Because of Bailout?
You betcha.
5 posted on 10/07/2013 9:11:14 AM PDT by rpierce (We have taglines now? :)
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To: jazusamo

I prefer to explain that Americans are Rewarding Ford for cleaning up their situation as opposed to GM going to the government to have the taxpayers pay to fix GM’s problems.


6 posted on 10/07/2013 9:11:22 AM PDT by Lockbox
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To: jazusamo

Yup...just bought a new truck...F150...
Though, wasn’t happy to see Obambi visiting a Ford plant recently...


7 posted on 10/07/2013 9:11:37 AM PDT by matginzac
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To: jazusamo
Many FReepers here have said they'd never buy another GM product, looks like we're not alone.

There will never be a GM product in my family.

8 posted on 10/07/2013 9:11:54 AM PDT by justlurking (tagline removed, as demanded by Admin Moderator)
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To: jazusamo

“Many FReepers here have said they’d never buy another GM product, looks like we’re not alone. “

I know two staunch conservatives who bought GM. They were actually embarrassed. Both said, essentially, “You know, they practically gave it to me.” One of them got $10,500 off on a Volt. The other got a new Impala.

According to one of my car magazines if they charged the full cost of a volt, by amortizing costs as the do on all the other models, it would be $50,000 on top of the $40,000 price tag.

Me, I’d rather die than buy a GM product.


9 posted on 10/07/2013 9:11:56 AM PDT by Gen.Blather
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To: jazusamo

The 2014 Silverado should be a home run for GM. Most accounts praise it as a great improvement.

If it isn’t a hot seller, the reason will not be because it’s a bad pickup truck, but something else...


10 posted on 10/07/2013 9:12:06 AM PDT by ltc8k6
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To: Lockbox

Well said, I agree.


11 posted on 10/07/2013 9:12:30 AM PDT by jazusamo ([Obama] A Truly Great Phony -- Thomas Sowell http://www.freerepublic.com/focus/news/3058949/posts)
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To: jazusamo

One of my buddies has been hard core Chevy his whole life. There is a new Ford truck in his drive and he tells everyone why.


12 posted on 10/07/2013 9:12:57 AM PDT by CrazyIvan (Obama phones= Bread and circuits.)
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Please bump the Freepathon or click above and donate or become a monthly donor!

13 posted on 10/07/2013 9:14:00 AM PDT by jazusamo ([Obama] A Truly Great Phony -- Thomas Sowell http://www.freerepublic.com/focus/news/3058949/posts)
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To: rpierce

I bought a Ford.


14 posted on 10/07/2013 9:14:44 AM PDT by EQAndyBuzz (Make today a great day. Insult a liberal.)
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To: jazusamo

I would have thought bailing out an auto manufacturing company that had real hardship, actually what was bailed out was the UNION, United Auto Workers, that’s where my sore spot started.


15 posted on 10/07/2013 9:14:45 AM PDT by rovenstinez
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To: matginzac
Though, wasn’t happy to see Obambi visiting a Ford plant recently...

That's not good at all. It's like a mob guy telling a store owner he'd hate to see something happen to you. I can see this as intimidation via his his union thugs.

16 posted on 10/07/2013 9:15:11 AM PDT by Lx (Do you like it? Do you like it, Scott? I call it, "Mr. & Mrs. Tenorman Chili.")
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To: jazusamo

People around rural Vermont have a lot of four-wheel-drive pickups. Mostly what I see is either Toyota or Ford. And that was BEFORE GM became Government Motors. When I think of GM, I think of careless union workmanship and know-nothing bosses.


17 posted on 10/07/2013 9:15:53 AM PDT by Cicero (Marcus Tullius)
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To: jazusamo
That, and the fact that GM truck build quality has gone downhill since 2007. The metal they use for body and bed is thin and cheap. The interior trim simply falls off after a year or two. Friend has a 2010 and it's already rusting in some areas from rad salt.

In short, bailout or not - who wants to buy a POS?

18 posted on 10/07/2013 9:17:03 AM PDT by apoxonu
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To: jazusamo

Yes. No GM or Chrysler ever.


19 posted on 10/07/2013 9:17:08 AM PDT by Paine in the Neck (Is John's moustache long enough YET?)
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To: jazusamo

Not only won’t I never buy another GM product, I won’t even rent one when I go on trips.


20 posted on 10/07/2013 9:17:16 AM PDT by ProtectOurFreedom
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To: apoxonu

Road salt.


21 posted on 10/07/2013 9:17:25 AM PDT by apoxonu
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To: apoxonu

Road salt.


22 posted on 10/07/2013 9:17:41 AM PDT by apoxonu
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To: rovenstinez

Exactly...Bond holders, taxpayers and many (Republican) dealers took the hit to save the UAW.


23 posted on 10/07/2013 9:17:57 AM PDT by jazusamo ([Obama] A Truly Great Phony -- Thomas Sowell http://www.freerepublic.com/focus/news/3058949/posts)
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To: jazusamo

Some are, I’m one of them.


24 posted on 10/07/2013 9:19:22 AM PDT by SampleMan (Feral Humans are the refuse of socialism.)
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To: jazusamo

I did. Didn’t look at a Dodge either, which I have owned exclusively since 1991. Bought a Ford to pull my fifth wheel, and so far, I love this truck.


25 posted on 10/07/2013 9:20:05 AM PDT by Yogafist
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To: jazusamo

My wife has had 4 suburbans in our marriage and will have a brand new toyota when her 9 year old one sputters out. I’d rather walk than buy a GM union thug product. 4 kids and they have 2 toyotas, 1 nissan and probably going with another toyota.

I’ve got a 11 year old F-150 that just will not die. So I’m good.

I’d walk before I ever buy any GM crap.


26 posted on 10/07/2013 9:20:07 AM PDT by Dick Vomer (democrats are like flies, whatever they don't eat they sh#t on.)
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To: ProtectOurFreedom

Not only won’t I never buy another GM product, I won’t even rent one when I go on trips.
***************************************************************
Sir (or Madame), you are a patriot. I agree 100% and particularly like your attention to detail evidenced by also boycotting rental GM vehicles.


27 posted on 10/07/2013 9:20:10 AM PDT by House Atreides ( D)
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To: jazusamo

Meanwhile, take a look at the sales numbers of the F150.


28 posted on 10/07/2013 9:21:04 AM PDT by lurk
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To: jazusamo

I’m one of those FReepers. I have never owned a GM vehicle and I never will.


29 posted on 10/07/2013 9:21:24 AM PDT by clintonh8r (Don't twerk me, Bro!)
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To: jazusamo

Even though I really like the GMC pickup, GM pooped in the nest big time in snuggling up to this commy WhiteyHut and deserves to fall.

I think there are also technical design reasons why Ford and Toyota dominate the pick up world.


30 posted on 10/07/2013 9:21:26 AM PDT by X-spurt (CRUZ missile - armed and ready.)
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To: jazusamo

You could’t give me a GM vehicle. My family will NEVER buy one (though we are looking at a Ford for my husband). This article is exactly the reason why!


31 posted on 10/07/2013 9:21:54 AM PDT by Rutabega (If you don't want me in your personal affairs, don't stick your hand out for my help.)
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To: jazusamo

Many people will never buy a Goobermint Motors vehicle again. Way to go Barry!


32 posted on 10/07/2013 9:22:25 AM PDT by MtnClimber (0-Bomb-a-Nation. Resist we much!)
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To: jazusamo

No GMC’s ever again here. I have an Acura and a Toyota Sequoia. When it’s time for a new car, Ford, Toyota or Acura will be my choice.


33 posted on 10/07/2013 9:22:58 AM PDT by albie
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To: ltc8k6

One “Ah Shit!” Wipes out a thousand Attaboys.


34 posted on 10/07/2013 9:23:41 AM PDT by X-spurt (CRUZ missile - armed and ready.)
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To: jazusamo

That and the GM is a crappy 5.3 crewcab only right now, the EcoBoost F-150 is better and roomier, and an all new F-150 is on the way in January. No need for a GM.


35 posted on 10/07/2013 9:24:03 AM PDT by conservative98
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To: jazusamo

I will not buy one made by a United Auto Worker.


36 posted on 10/07/2013 9:24:05 AM PDT by bmwcyle (People who do not study history are destine to believe really ignorant statements.)
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To: jazusamo

My low mile 2000 K-3500 is PB (pre-bailout). When I replace it, it will be with an F-350, 4x4.


37 posted on 10/07/2013 9:25:11 AM PDT by Fireone (Impeach and imprison, NOW! Treason and murder are still crimes.)
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To: jazusamo

No GM ever again. Picked up an Explorer a couple of months back.


38 posted on 10/07/2013 9:26:31 AM PDT by CelesteChristi
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To: bmwcyle

I am. Only I do not call it a bail out. I refer to it as a theft by Obama.


39 posted on 10/07/2013 9:26:45 AM PDT by sport
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To: jazusamo

Government Motors products?

HA ha ha ha ha ha!!!!!


40 posted on 10/07/2013 9:27:18 AM PDT by Uncle Miltie (Need health care? Dial 1-800-F1UCK-YO to reach Obama's hotline)
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To: jazusamo
I am among those who will never buy another GM product even though at one time I worked for GM.
But, I can tell you that new model glitches require production be kept at lower levels while the invariable bugs are worked out.
41 posted on 10/07/2013 9:27:45 AM PDT by oldbrowser (We have a rogue government in Washington)
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To: jazusamo

I have to admit that I quit buying GM long before the Bailout. I’ve been a proud Ford Truck owner since 1985. I usually put around 250,000 miles on one then sell it and buy a new one. Usually every 5 to 6 years.


42 posted on 10/07/2013 9:28:17 AM PDT by Conspiracy Guy (What's the frequency, Kenneth?)
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To: jazusamo

My 10 year old Tundra was built in Texas, and has not had a single problem.

Except for the deer that jumped into the door. I do have a dent.


43 posted on 10/07/2013 9:28:26 AM PDT by Uncle Miltie (Need health care? Dial 1-800-F1UCK-YO to reach Obama's hotline)
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To: jazusamo

I was in the market for a new p/u in 2011. I was deciding between the F150 and the Tundra. Asked my kid (runs an auto shop outside San Diego) who she saw the least in her shop. The Tundra with that big honkin’ V8 sits outside. GM was never an option.


44 posted on 10/07/2013 9:28:36 AM PDT by W.Lee (After the first, the rest are free.)
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To: jazusamo

I bought a Ford. I eill NEVER buy a GM product again


45 posted on 10/07/2013 9:30:37 AM PDT by Farnsworth ("The people have always some champion whom they set over them and nurse into greatness...This and no)
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To: albie

My brother in law bought a Kia Soul

Yes, one of those


46 posted on 10/07/2013 9:31:14 AM PDT by GeronL
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To: jazusamo

I’ll never buy another UAW made vehicle. I’d take a look at a Chevy if they got rid of the UAW.


47 posted on 10/07/2013 9:31:29 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: jazusamo

And I’m still not buying GM... EVER again. When and if I replace the Dodge it will be with a Ford or a new Nissan Cummins diesel.

The Buick will probably be replaced with a Toyota Avalon or some non-union and U.S. assembled automobile.

No more GM products in my garage.

I’d like to see GM go where it and the UAW should have gone 5 years ago... into the dustbin of history. The necessary jobs would remain. Something else would rise to replace the gap.


48 posted on 10/07/2013 9:31:53 AM PDT by Sequoyah101
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To: Farnsworth

THE FOREIGNERS REGIME said people who failed to buy a GM truck were racist.


49 posted on 10/07/2013 9:32:12 AM PDT by spawn44 (moo)
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To: jazusamo

Individuals are saying no to Government Motors, aka GM, and conservatives in control companies which buy a lot of trucks are buying Fords or Tundras. Tundras are made an assembled in America without our Tax $’s.


50 posted on 10/07/2013 9:33:01 AM PDT by Grampa Dave ( Boycott Reno & Las Vegas until those in control there, remove Reid from the senate!)
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