Click here to read more from The Wall Street Journal online.
Click here to read more from Reuters
Posted on 07/07/2008 4:34:16 AM PDT by Zakeet
Bruised by a deep sales slump and a half-century-low in its stock price, General Motors Corp. is preparing to cut thousands more white-collar jobs and is considering whether it should sell or shutter more of its brands, people familiar with the matter said.
Both moves are part of a broader re-evaluation of GM's strategy and of its ability to meet an internal projection of returning to profitability in 2010, these people said.
[Snip]
The company currently sells vehicles under eight different brands, but most, including Buick, Saturn and Saab, struggle to attract buyers despite offering new models that cost GM billions of dollars to develop. The company has already decided to put its Hummer division up for sale.
Discussions among top executives about the number of brands have intensified in recent weeks, and signal a potential major shift in thinking by the company — especially by Chief Executive Rick Wagoner. As top executives review future cars and trucks earmarked for various brands, "nothing is off the table," several people said. All but Cadillac and Chevrolet, which GM considers core to its business, are undergoing close scrutiny, other people said.
(Excerpt) Read more at foxnews.com ...
I don’t blame GM for making tons of SUVs and trucks...that’s what people wanted. But I blame them for not having a long term plan. It’s unbelievable to me that GM couldn’t have seen the days of higher gas prices coming. The signs have been there.
That might actually fix part of the problem. It's hard for many to picture but in 1952 or thereabouts, there were ten or twenty auto manufacturers in the US and not two or three. A bit of real competition might not hurt.
The same thing happened to Ford in the early 80’s and is happening again.
I don't think they could give that division away in the current climate.
This is a perfect opportunity for someone to buy one of the brands and turn it non-union.
And this is all caused by the libs refusing to allow us to access our own petroleum reserves. Had gasoline prices not gone to the level they have today none of this would be on the horizon.
The libs have blocked drilling off each coast and in ANWR as well as prevented any new refineries in the past 30 or so years. They have made it all but impossible to build nuke power plants. Using nuclear energy to generate electricity would lesson the demand for fossil fuels now used for this purpose. This would in addition to lowering the price of the fossil fuels result in a decrease in CO2 emissions, calming (maybe) the hysteria of the envirowackos.
The writing has been on the wall since the 1970's when the Arab's first flexed their tiny muscles. They only have a reaction for everything that happens in the market an no ability to create an economic product and constantly improve on it regardless of market signs. If they had stuck with the Vega and improved on it, maybe Corolla wouldn't be the world's all time top selling car.
Hehehehe, My family was just talking about that subject over the weekend. With the job market and economy dropping quickly in the rust belt, combined with the non-union manufactures getting more and more of the market share, now is a perfect time to make big strides to bust the union once and for all. The UAW has done more to hurt the state of Michigan in the past forty years than any other factor.
Detroit hasn’t had an original idea in decades. Their idea of a new model is another revival of an inappropriate heavy gas-guzzling retro-car like the T-bird, Camaro, Mustang, etc. They are living in the past, rather like our 2 political parties.
I have been through this 3 times including the latest silliness.... In reality, there is no shortage...its a simple supply and demand issue.
A peak under the congressional kimono reveals the ugly truth....in more ways than one.....YIKES!
A peak? Is it pointed?...........
As sad as it is that massive numbers of people are losing their jobs it makes sense for GM to sell off its less profitable lines of business to cut expenses and focus on its core brands to return to profitability. This will also benefit consumers by increasing the amount of competition in the market as well as allow new players to enter and introduce newer and less expensive technologies to market under an already recognized brand name. We could be looking at a revolution in the making for the auto market.
“I don’t blame GM for making tons of SUVs and trucks...that’s what people wanted. But I blame them for not having a long term plan. It’s unbelievable to me that GM couldn’t have seen the days of higher gas prices coming. The signs have been there.”
You’d think they would have been smart enough to realize that the SUV boom couldn’t last forever and to plan for that. But GM is the company that pissed away incredible market dominance because of decades of crappy cars and a disdain for the consumer. Companies like Toyota and Honda swooped in with better cars and took a lot of the bussiness. Now those folks are loyal to the Japanese and will be very hard to win back indeed.
It’s sad but totally avoidable and solvable. Well, maybe when people have had enough they just MIGHT demand that their “representatives” start doing something for the country like developing our resources.
I guess if they want to (or HAVE to) live in teepees, well there you go.
Reminds me of turkeys looking up at the sky during rainstorms (old farmer’s tale that is based on truth) and drowning. Congress is disgusting, it’s no one’s fault but ours for tolerating these idiots—and reelecting them time and again.
Yep. It’s also done the most to drive the price of autos up dramatically. I guarantee the prices of autos would be in free-fall if union labor was suddenly subtracted.
Making trucks and SUV’s is fine, refusing to invest and devevelop decent vehicles outside of that area is inexcusable.
Yes they were high margin products and they sold well, but the very idea that the market would not turn? are you kidding me?
The american brands have basically turned their backs on 2 primary long term markets, 1 being the small basic reliable affordable transportation, and 2 being the family sedan.. and a virtual 3 for ford and GM being the minivan (Ford doesn’t even make one, and given what GM has offered as them, they might as well not even have one.)
These companies are making similar mistakes as they have in the past... you have to invest in the core, not just in what’s hot at the time. I don’t write them off as some have... I think being able to buy ford stock for a few bucks a share is an incredible long term opportunity.
What gets my goat is I know these companies can do better, look at Ford’s european offerings and tell me they can’t make sexy vehicles. I think they are turning the corner with some of their offerings, but still wonder about some of their long term strategies.
If the Dems and Reps would agree to pass legislation to allow immediate, emergency drilling, the construction of oil refineries, and of nuclear-power development (even if they agreed informally that they'd never take step-one to accomplish the plan, as they must have done with building the wall) and they announced that they were doing so for national security, that single act of solidarity would be a shot across the bow. Those Middle Eastern countries that could increase output enough to bring down prices would do so immediately to call off our plan
“look at Ford’s european offerings and tell me they can’t make sexy vehicles.”
Agreed...and to some degree, GM makes nice cars in the Euro and other markets as well.
A good example of what you’re talking about is the Focus. Ford’s Euro Focus has been a highly regarded compact car over there but here in the States we get a totally different version which doesn’t compare to the Euro one.
They didn't swoop in with better cars... they swooped in with CRAP cars.. but did so in a market the big 3 ignored, and kept improving them until they were no longer crap.
Koreans are doing the same thing today, they came in with less than stellar cars, mostly in the subcompact classes, and now compete across the lines competatively.
The days of one company dominating as GM did in the past are over, and even the greatest management in the world could not have prevented this from happening. (And believe me I'm not saying gm has great management)
Would that our Federal Government would shrink as much as the American auto companies have!
“I don't think they could give that division away in the current climate.”
While sales in this market segment has dropped significantly and will probably never to return to it's previous rates, I think it's a mistake to write H-2’s, pickups, and SUV’s off as dead. After all, if one drives say 15,000 miles per year in one of these vehicles at 12 mpg and gas at $4.oo/gal, the cost is about $5,000 per year. If one should sell or give away their H-2 and buy something that get’s 24 mpg which is twice as much, the gas cost will be $2,500 per year. This is a difference of $208 per month in gas cost. Not really a show-stopper for many folks who prefer larger vehicles for various reasons - many of which are quite reasonable - except perhaps to the Enviro Nazis...
And continue to crank out the kinds of cars that people aren't buying? Good plan.
People who write off 2500 a year in fuel costs are a very small number indeed.
$208 a month extra in gas that is an avoidable expense is really teh equivalent of about $300 in gross income per month.
That’s not chump change, even folks very solidly in the UMC are going to think twice about burning $300 of income a month just because. Oh I’m sure some will do it anyway, but not nearly as many are going to sign up for double fuel costs with costs being what they are.
SUV resale values aren’t falling like rocks because there’s pent up demand by most american’s to spend more on transportation than need be. I’ll bet you dollars to doughnuts you are going to see a spike in Minivans and Family sedans over the next 12 months. Since most SUV’s were sold to families where daddy or mommy were just too “cool” to be seen in a minvan.
Amen, brother. Amen. They were followed in lock step by Ford and Chrysler, just for the record, although of course neither of them had the market share that GM had.
agree.
they fought making smaller cars for decades, since 1973.
management and unions are to blame.
and, i do not feel sorry for them.
they can literally copy a honda or a toyota if they can’t find their way to success.
True, but in 1958, U.S. automanufacturers (about 7-8 main ones) accounted for almost 90% of the world market in cars.
Hmmm. A gas-guzzling retro 1969 Camaro goes for more than five Priuses. If you are lucky enough to own a Boss 429 Mustang, it goes on the market for about $150k. The problem is not that they use gas. There is plenty of oil. The problem is that we have constricted supply artificially.
You forgot Mercedes. I just bought a new R Class which is manufactured in Alabama (of all places), and it's easily the best car I've ever owned.
The Vega was a poorly executed car. It was plagued with problems like fender wells with no paint; promoting a rapid rust-out of the vehicle; and a poorly designed aluminum engine.
The car was also ugly, even by the standards of the 1970's.
I agree. In fact, they were ignored and written off by the Japanese in the 1980s when SUVs/minivans/trucks became the TOP selling cars. Only then did the Japanese play catchup.
But ultimately the blame lies with management. Management directed GM through its downward spiral and continues to do so to this very day. GM needs to hire a “hatchet man” who will clean out the ranks of incompetent managers and replace them with fresh new faces. It is true - What is good for GM is good for the US.
Thanks Democrats!
Toyota’s are not nearly as reliable any more as they want you believe... I’m just saying.
Hondas and Toyotas are the most consistently reliable vehicles on the market. Some American marks (like Buick) have made gains, but the long term track record speaks for itself.
Toyota’s in particular are not nearly as reliable as the companies want you to believe anymore. They fudge their numbers. Things that Ford or GM or Chrysler would issue a recall over, Toyota doesn’t, they don’t report it to the NHTSA and don’t issue a recall, but quietly deal with it without it showing up in their stats.
Toyota’s are not as reliable as they once were, trust me. There was a time TOYOTA reliability was not a marketing and PR line.. now while being reasonable cars, are hardly the outstandingly reliable vehicles they once were.
Toyota’s previously sterling reliability has slipped a bit, and two Toyota models, the V6 Camry and the four-wheel-drive, V8 version of the Tundra, have below-average reliability in their 2007 redesign. The all-wheel-drive version of the Lexus GS also dropped below average. We now predict below-average reliability for all three models and can no longer recommend them.Other news from our latest survey:
Despite Toyota's problems, the automaker still ranks third overall in reliability, behind only Honda and Subaru, with 11 models in the best list. Honda has six with a smaller model lineup.
We might still have a more major share of the market if competition had remained part of our own system.
No question about that-—but was it GM’s fault that Rambler made a crap car? or that Kaiser-Frazer was grossly underfunded? It’s not the lead companies’ job to maintain competition, either foreign or domestic. It’s their goal to eliminate competition.
Why would I want to buy a new car that I have to back into the driver’s seat like a narrow toilet stall? And have the added problem of a very low roof line?
Why would I want to ride in the back seat where I have to stick my feet under the front seat? And get out by putting my head close to my knees and grabbing the door frame and various straps and handles?
Forget it!
That's what Capitalism is all about. It probably still hurts though. :-P
That Vega engine was one of the strangest engines I have ever seen designed. Although the block was aluminum and quickly wore out causing oil burning, the cylinder head was cast iron. It also gave pathetic fuel mileage. I owened a ‘75 Monza which had this engine and it was pile of crap as was the rest of the car.
I can’t even imagine what the engine designers/engineers were thinking of when they dreamed this nightmare up.
Well, “dollars to doughnuts”, suggest you re-read my ping, this time with your eyes open. I merely suggested that $208 per month difference in one's gas bill is not enough to sway many users of H-2’s, pickup, and SUV’s to give them up. Of course there are people who can not handle the uptick of $208 per month in their budget. These folks should obviously get into something more economical asap. Btw, your statement “Since most SUV’s were sold to families where daddy or mommy were just too “cool” to be seen in a minvan.” seems loaded with penis, oops, class envy to me. Are you by chance a Democrat who accidentally logged on to this site?
Besides, when the original muscle cars came out, they weren't copies of something 30-40 yr old. The Germans, Japs, and Koreans don't waste time making replicars. They make new designs for today and tomorrow; the cars most people need and want.
Moreover, the solution is not conservation "hoping we don't run out," but the natural invention and innovation that will produce something entirely different (NOT an "electric car," but something so radical we haven't thought of it yet).
In the meantime, I've got two SUVs and plan to get a muscle car as soon as I can.
If you want to rob your posterity of cheap energy and a cheap chemical raw material so you can live it up now, go ahead.
Do you think we should all open our taps and let water pour down the drain, because "invention and innovation" will give us a substitute for water? Oil is a natural resource, and it is limited. Drilling here and there is just a short-term fix.
And yes, Detroit is run by gutless incompetents who show precious little "invention and ingenuity." They produced junk for years, and most of the customers left them as a result. That's your precious free market at work.
I'll even drive one of my SUVs to pick it up.
Class envy over stating the obvious about SUV’s? are you kidding me. There is nothing class envious about stating the biggest seller of SUV’s... folks who have kids, but don’t want to be seen in a minivan.
That’s not class envy. And before you start throwing around the class envy label, it helps to know what class the person you are accusing of it resides.
You may want to reread my post as well while you are at it, when current SUV owner buys their next car, they will trend toward family sedans and minivans. Most, yes even those who make good money, will not buy a vehicle whos cost of operation costs 3600 more a year in gross income. Will they run out and trade them in because of it? Probably not, but when they do buy a new vehicle to replace it, most will not be replacing it with another SUV.
They are already doing it in large numbers, resale prices of SUV’s have fallen like rocks, exactly because people replacing their vehicles are not selecting another SUV, but are going for the family sedans and minivans.
1. Nouveau Riche/credit riche immigrants who feel that the best way to flaunt the fact that they have "made it" in America need the Lexus SUV to go along with the Mumbai Mansion they built up to the property line.
2. A remnant of ditzy soccer moms doped up on xanax who are always crashing the damn things, causing their poor husbands to pay through the nose on insurance.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.