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GM slashes earnings forecast (forsees $828 million 1st Qtr loss)
Automotive News ^ | 3/16/05 | Dale Jewett and Jason Stein

Posted on 03/16/2005 10:25:18 AM PST by BurbankKarl

Declining sales and production cutbacks in North America are putting a huge crimp in General Motors’ earnings. That prompted the automaker on Wednesday to slash its expectations for this year.

GM expects to lose about $848 million, or $1.50 per share, in the first quarter excluding special items. In early January, the automaker had said it expected to break even for the quarter.

For the full year, GM now thinks it will post earnings in a range of $565 million to $1.13 billion -- or $1 to $2 per share -- excluding special items. That is a dramatic reduction from its earlier earnings forecast of $2.26 billion to $2.83 billion, or $4 to $5 per share.

In addition, GM foresees a $4 billion swing in its operating cash flow for the year -- from $2 billion to a negative $2 billion.

The automaker blamed lower sales in North America and a shift in the sales mix away from high-profit trucks to lower-profit cars for the earnings falloff.

GM's previous first-quarter earnings expectations were based on North American volume of 1.25 million vehicles. Since then, production schedules have been reduced by approximately 70,000 vehicles.

GM also expects negative operating cash flow in 2005 of approximately $2 billion, before the Fiat settlement and GM Europe restructuring, versus the previous target of positive $2 billion.

"Clearly we have significant challenges in North America. The rest of our automotive businesses, and GMAC, are running in line with, or ahead of, our expectations," said GM Chairman and CEO Rick Wagoner. "But North America is our biggest business, and the key driver of automotive earnings and cash flow. So it's important that we get this business right."

More cutbacks appear to be on the way.

"The competitive environment that we face in North America means we must continue to find ways to reduce our costs and grow revenue," warned GM Vice Chairman and Chief Financial Officer John Devine. "While we have made good progress in reducing costs over the last several years, the projected loss in North America reinforces our need to do much more."

"One of the issues we've had for North America is the increasing drag of health-care costs on North American profitability," Devine added on the conference call with Wagoner.

"I don't have any silver bullets on heath care … but clearly I think the weakening profitability this year has focused on our need to make progress on health care."

GM, the largest private provider of health care in the United States, had warned earlier that its medical expenses would increase by about $1 billion this year.

GM said its other automotive regions and GMAC are all on track to meet or beat their 2005 net income targets.

Euro bonds of GM plummeted after the company announced its profit warning.

Standard & Poor's on Wednesday revised its rating outlook on GM and its finance arm to negative from stable, setting the stage for a downgrade of the world's biggest carmaker to junk status.

A downgrade to junk status would likely significantly raise GM's borrowing costs. GM and its finance arm had about $300 billion in debt at the end of last year.

S&P said it views the rating as "tenuous" and could cut it at any time if it looked like GM was not on a trajectory to improve its financial performance in 2006 and beyond.

Moody's Investors Service and Fitch Ratings, which have GM's debt rated 2 and 3 notches above junk respectively, are likely to reconsider their ratings as well, analysts said.


TOPICS: Business/Economy; News/Current Events; US: Michigan
KEYWORDS: automakers; generalmotors
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To: Eric in the Ozarks

Fix It Again Tony


51 posted on 03/16/2005 11:37:36 AM PST by Clemenza (Alcohol Tobacco & Firearms: The Other Holy Trinity)
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To: kaktuskid


The lower dollar. MB recently made the decision not to sell the B Class in the United States...but they are expanding their plant in Alabama. (They just killed the C Coupe in the US, due to poor sales)

>>>Why are Toyota, BMW, and M/B expanding their US plants if auto sales are bad?


52 posted on 03/16/2005 11:37:49 AM PST by BurbankKarl
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To: kaktuskid

That does not conflict with a slowing. Growth of new car sales is down, and some models, the big profit leaders, are not moving as well as hoped. Prices rose steadily and massively for several years, but now there are price cuts and they cannot increase sales by offering huge interest bargains since they have been doing that all along. Used car lots have sprung up all over town, and sales are good.


53 posted on 03/16/2005 11:38:49 AM PST by RightWhale (Please correct if cosmic balance requires.)
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To: BurbankKarl

GM has been dropping a lot lately and was considered weak for quite a long time before. I would wait until the cycle completes and then maybe pick up some.


54 posted on 03/16/2005 11:40:51 AM PST by RightWhale (Please correct if cosmic balance requires.)
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To: BurbankKarl
Toyota building huge plant in Texas. Trucks. This may well be the final "Et to Brute" for American manufacturers. Trucks have been their $$-maker for years now.

Also, MS is negotiating with a foreign company to build large plant their.

GMAC made alot of $ for GM. They could could break-even status. But not losses. Time will tell...

55 posted on 03/16/2005 11:58:39 AM PST by donozark (OLD ARAB SAYING: The dog barks but the caravan moves on.)
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To: donozark


But the ReFi and mortgage booms are over!

>>>GMAC made alot of $ for GM. They could could break-even status. But not losses. Time will tell...


56 posted on 03/16/2005 12:09:40 PM PST by BurbankKarl
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To: BurbankKarl

Oops! My "could could" should read:could COVER.


57 posted on 03/16/2005 12:10:57 PM PST by donozark (OLD ARAB SAYING: The dog barks but the caravan moves on.)
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To: BurbankKarl; All

Analysts React to GM Warning
March 16, 2005 3:30 p.m.

General Motors Corp. was hammered in the market today after saying it expects to lose $1.50 a share in the first quarter. Analysts weren't too kind either, noting the auto maker's falling market share, reduced plans for car production, and fears that the company's debt could be downgraded to junk status. Here's a roundup of what Wall Street is saying. (Analyst disclosures follow.)

***
GM's outlook for 2005 is materially weaker. The downgrade is a result of the company's announcement that market conditions are pressuring results more than originally anticipated. As a result, the company now expects 2005 EPS to be in the range of $1.00 to $2.00, which is down from its previous guidance of $4.00 to $5.00.

-- Merrill Lynch analyst John Casesa, who downgraded the company to "sell" from "neutral."

***
We continue to believe GM's products are overpriced (relative to the Japanese brands) by 10% to 15% due to weak resale values, and that the Japanese brand year-over-year net pricing has been flattish. So, the problem is structural and GM needs to lower net price (on a year-over-year basis) relative to the Japanese brands (a costly task) in order to stop the share loss.

-- Ronald Tadross of Bank of America, who has a "sell" rating on the stock, and lowered his price target on the company to $23 from $27

***
Some of the first-quarter weakness probably relates to one-time pricing actions on midsize SUVs. We estimate the price cut on mid-SUVs would hurt EPS by about 35 cents to 40 cents in the first quarter. The magnitude of the miss vs. our forecast could suggest additional pricing action. Earnings and cash flow are much weaker than expected. This could suggest that GM's $2 dividend may be at risk.

-- Morgan Stanley analyst Stephen Girsky, who has an "equal-weight" rating on the stock

***
Key drivers of the shortfall are weakness in North American sales volume and a higher concentration of lower-margin passenger cars in its sales mix…we expect downward pressure on the shares this morning and would not view this as a buying opportunity.

-- Jon Rogers of Citigroup Global Markets, who has a "hold" rating on the stock with a $36 target price

***
We continue to believe GM is in a precarious position given lower GM North America production volumes, especially related to its highest profit platform, GMT800 [truck frame]; the challenging pricing environment; and less profitable mix (more cars/less trucks). We do not expect modest improvements from automotive operations outside North America to offset these domestic headwinds. … We remain confident that possible credit rating downgrades and a dividend cut are in the company's near-term future and will only add insult to injury.

-- Joseph Amaturo, analyst for Caylon Securities, who reiterated his "sell" rating on GM and lowered his price target to $24 from $30

***
This news … is a reflection of the challenges GM is facing in terms of pricing and mix for the vehicles it sells. Further, we believe that additional production cuts [in the second quarter] may be necessary to bring inventory in line in the short term, which could be an additional drag to earnings and operating cash flow for the year. Perhaps most significantly, we believe that this poor operating performance in North America could result in a dividend reduction, which we believe would be viewed negatively by the market. While the company stressed that it is on pace to meet expectations for its other global operations, as North America is its most important market, we believe the near-term risks clearly outweigh any other factors.

-- KeyBank Capital Markets analyst Brett Hoselton, who downgraded GM to "hold" from "buy"

***
For investors who need to be exposed to this automotive manufacturer, we recommend GMAC bonds over GM given that GMAC's receivables assets are of higher quality than GM's production facilities (which continue to suffer from shutdowns and write-offs). Also GMAC has additional funding sources outside of the unsecured debt markets. … We continue to be negative, longer-term on General Motors given continued pressure from foreign and "transplant" competition, a rising interest rate environment, and high labor and healthcare costs.

-- Brian Fox, analyst at McDonald Investments, of which KeyBanc Capital Markets is a division

--Compiled by Worth Civils and David Gaffen





Analyst Disclosures

• Merrill Lynch received compensation for investment-banking services within the last 12 months from GM.

• Bank of America received compensation for investment-banking services within the last 12 months.

• Morgan Stanley owns more than 1% of GM's stock and has received compensation for investment-banking services for the stock in the last 12 months.

• Citigroup Global Markets owns more than 1% of GM's stock and has received compensation for investment-banking services from the company in the last 12 months.

• Calyon Securities receives or has received compensation from GM for non-investment banking services (i.e., brokerage services) in the past 12 months.

• KeyBanc Capital Markets says GM is an investment banking client of the firm, which has received compensation for such services from the company during the past 12 months.


58 posted on 03/16/2005 7:16:23 PM PST by BurbankKarl
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To: Southack

just buy one from Kerbeck in Atlantic City over the phone and they will ship it to you at a fair price.


59 posted on 03/16/2005 7:20:18 PM PST by oceanview
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To: BurbankKarl

no, its got the Ecotec motors - it should be OK on fuel consumption.


60 posted on 03/16/2005 7:23:15 PM PST by oceanview
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To: oceanview

Kerbeck and Bruce Gluek (is he still alive??) are two of the best.

But it's pretty sad when you use the Chevy.com website and get with error messages instead of *dealer* price quotes (the *factory* sticker quote part of their website works fine, though).

61 posted on 03/16/2005 7:28:29 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: TXBSAFH
You forgot unimaginative styling, and substandard engineering.

Not to mention they finally moved big into the SUV market 10 years plus behind Ford, just in time to see gas prices drive it all into the ground. Bad timing.

62 posted on 03/16/2005 7:33:55 PM PST by Jorge
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To: oceanview

Kerbeck?

Did you buy it from that girl in their ads?


63 posted on 03/16/2005 7:34:40 PM PST by BurbankKarl
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To: meadsjn; A. Pole; JohnHuang2; keri; international american; Kay Soze; jpsb; hershey; TomInNJ; ...
#20 - REAL-WORLD LESSON IN OUTSOURCING ECONOMICS - ping.

(Interesting thread on blaming the poor economy on everything from health care to the price of tea in China.)

64 posted on 03/16/2005 7:39:54 PM PST by Happy2BMe (Government is not the solution to our problem, government *IS* the problem.)
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To: BurbankKarl

That's Vicki! she is older then the picture in that ad.


65 posted on 03/16/2005 7:41:30 PM PST by oceanview
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To: Happy2BMe

No kidding!


66 posted on 03/16/2005 7:43:48 PM PST by ApesForEvolution (I just took a Muhammad and wiped my Jihadist with Mein Koran...come and get me nutbags.)
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To: Mr. Jeeves
Might as well give the bonds the same ratings as the cars. ;)

You got that right. GM does not stand for good merchandise.


50 miles to the quart of oil
Aluminum cylider walls. Who would do that? Only GM.

67 posted on 03/16/2005 8:07:33 PM PST by BJungNan
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To: BurbankKarl

Right on....methinks GM will survive : )


68 posted on 03/16/2005 9:00:45 PM PST by international american (Tagline now fireproof....purchased from "Conspiracy Guy Custom Taglines"LLC)
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To: BJungNan

How about the 4-6-8 Caddy, Or the diesel 350 conversion : )


69 posted on 03/16/2005 9:01:47 PM PST by international american (Tagline now fireproof....purchased from "Conspiracy Guy Custom Taglines"LLC)
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To: oceanview

I see that picture every week in automotive news...she did look younger in the 90s....I remember when they cornered the marketing on Syclones and Typhoons.


70 posted on 03/16/2005 9:04:18 PM PST by BurbankKarl
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To: Southack
In contrast, you got *all* of the above wrong. You just batted zero.

Yes, but the delivery is polished.

71 posted on 03/16/2005 9:29:51 PM PST by gogeo (Often wrong but seldom in doubt.)
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To: wideawake

And outsourcing.. People gotta be makin money to be able to spend it.


72 posted on 03/16/2005 10:45:25 PM PST by Havoc (Reagan was right and so was McKinley. Down with free trade. Hang the traitors high)
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To: Eric in the Ozarks

It reminded me of an egg.


73 posted on 03/16/2005 10:49:40 PM PST by flying Elvis
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To: Havoc
And outsourcing.. People gotta be makin money to be able to spend it.

You're dead wrong. People have been spending more money on cars every year. There is no lack of automobile buyers - people don't want to buy GM cars because they are far too expensive compared to other, better vehicles made by competitors.

People are making money and they are spending it wisely on well-built foreign cars that are superior in every way to GM cars.

If the UAW did not exist, GM could build cars much more efficiently right here in the US, like Nissan does in AL and BMW does in SC.

The UAW is destroying GM.

74 posted on 03/17/2005 6:00:11 AM PST by wideawake (God bless our brave soldiers and their Commander in Chief)
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To: wideawake

No, the UAW is a variable. What's destroying GM is the union, plus outsourcing plus the free trade crap that set the trade imbalznce in motion that is and has been undermining the US market little bits at a time. If there were an even playing field for US auto makers in America, GM would still be selling volume in Cars. As it is now, they can't compete because on an uneven playing field, the union now handicaps them completely. Free trade is nothing more than an unmasked all out offensive against the working class.


75 posted on 03/17/2005 6:15:01 AM PST by Havoc (Reagan was right and so was McKinley. Down with free trade. Hang the traitors high)
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To: Havoc
Free trade is nothing more than an unmasked all out offensive against the working class.

Do you subscribe to The Nation or something?

There is no "working class" in America any more than there is a "landed gentry" in this country. Marxist class analysis is about as applicable to our current situation as phrenology.

Americans who work for a living are not a "class" - they are 94% of the population.

76 posted on 03/17/2005 6:56:55 AM PST by wideawake (God bless our brave soldiers and their Commander in Chief)
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To: Havoc
Free trade is downsizing GM customers (free trade, out sourcing) so it is not at all surprising that GM is losing market share. Poor people do not buy new cars and if they do it's a new inexpensive imported car. GM has been done in by the effects of so called free trade.

I wonder why the GOP thinks a nation of poor destitute people will vote GOP? GOP policies of killing jobs and wealth production in the USA is going to be mean the permeate end of the GOP

77 posted on 03/17/2005 8:30:56 AM PST by jpsb
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To: BurbankKarl

GM.. switch to catastrophic care plans for your workers and self insure up to the cap... If GM put 5k per employee into an account for health care use, and insured only after the 5k was spent... (and what wasn't spent on the 5k is rolled over every year) you'd wind up cutting your recurring costs by 70 to 80%.... yes, up front cost is there, but long term return is there....

This is basically what we are going to be doing sooner or later anyway, why not be the first mover on the block?


78 posted on 03/17/2005 8:34:51 AM PST by HamiltonJay
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To: wideawake

What planet do you live on?


79 posted on 03/17/2005 9:06:59 AM PST by Havoc (Reagan was right and so was McKinley. Down with free trade. Hang the traitors high)
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To: jpsb

Yep; but, apparently to avoid that, some feel the need to distract with wierdness posing for useful discussion.


80 posted on 03/17/2005 9:07:59 AM PST by Havoc (Reagan was right and so was McKinley. Down with free trade. Hang the traitors high)
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To: Havoc
What planet do you live on?

As is your wont, you resort to insult instead of argument.

Again, the burden is upon you, especially at a conservative website, to explain why Marxism and class warfare rhetoric are valid tools for describing economic reality.

You were wrong on the facts to begin with: GM is not losing market share because Americans are too poor to buy cars - simple statistics show that Americans spend more on automobiles every year, and that a higher percentage of Americans own luxury level cars every year, and that numerous manufacturers are gaining sales volume in the US.

Now you assert that simple economic reality is some kind of coordinated conspiracy: i.e. regions like the American South and South America that have a labor surplus are more efficent places to manufacture cars than in Michigan and other non-right-to-work areas where the labor market is artificially restricted and overpriced.

The only conspiracy is the one proudly proclaimed by UAW: they demand that GM and other manufacturers pay extortion-level prices for labor, and they demand it as their "right".

You also assert that there is such a thing as a "working class" which is an outdated, simplistic Marxist concept. 21st century America is not 19th century Europe. We do not have a blood aristocracy that lives off agricultural rents. We do not have classes that one is born into for life. Marxism presumes that manual labor is the destiny of 90% of all men by nature. Nowadays we realize that this is not fate, but a voluntary career choice.

According to Marx, the fat lazy UAW worker who gets paid $80,000 a year to take coffee breaks and collect union dues is a member of the mythical "working class" while the freelance IT consultant who earns $60,000 a year tweaking code is a "propertied bourgeois".

These tired old labels just do not apply to life anymore. There is no such thing as a 40 year career in a factory putting in a bare 40 hour week with endless contractual raises and guaranteed job security anymore. And thank God for that.

81 posted on 03/17/2005 9:33:28 AM PST by wideawake (God bless our brave soldiers and their Commander in Chief)
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To: meadsjn; Southack

You make some good points, but I think a large part of the reason is increased cost of gas. People aren't going to buy SUV's and pickups that only get 12 miles to the gallon, when it appears that gas prices are going to keep going up.

But I agree with you that outsourcing is affecting consumer spending. I just had a customer who canceled a sale with me, because his IT job with IBM was just outsourced to India. No job for him...no job for me...a reverse trickle down effect, so to speak.

Southack may not agree on that point, I don't know.
But when people who made $70,000 a year working on computer software suddenly find themselves losing their job to some guy in India, who will work for $7000 a year, that has a negative effect on consumer confidence and spending power.

It doesn't take an egghead economist to figure that one out.


82 posted on 03/17/2005 1:33:56 PM PST by FBD ("A nation without borders is not a nation." -- Ronald Reagan)
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To: FBD
"But when people who made $70,000 a year working on computer software suddenly find themselves losing their job to some guy in India, who will work for $7000 a year, that has a negative effect on consumer confidence and spending power."

If Software was America's only business, then you'd have a point. However, the U.S. has *millions* of different types of businesses. At any given moment, some of those businesses are becoming extinct, or changing, or shrinking, or growing. New businesses are being added every day, too.

So what matters overall is *not* what happens inside any one business, but to the whole economy.

...And for that, we know that unemployment is down, overall employment is up, and wages are up even after being adjusted for inflation.


83 posted on 03/17/2005 2:23:10 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
I don't know, figures lie, and lier's figure, so the truth is usually somewhere in the middle. I like factcheck.orgs articles, and according to them, the middle class is slightly shrinking, and wages are slightly down, but not as much as Democrats would like folks to believe. Unfortunately they are down. (-1.2% between 25K-75K & -.04 % above75K)

Kerry's Dubious Economics-"He says new jobs are paying $9,000 less than the old ones. That's not a fact."

Update on Kerry's "Shrinking Middle Class" -- Still Shrinking in 2003 "We said his claim was based on stale numbers. Now some fresh statistics support what he said."

.

But there is definitly something wrong with coporate stockholder mentality, when companies reward failure CEO's like CEO Carly Fiorina of HP, with a 21 million severance package, while the company is losing money and outsourcing jobs like crazy to India.

And software and computer companies aren't alone in this stupidity. Sorry to sound negative, but the attitudes of many politicians and corporate heads toward the middle class, and blue collar workers just isn't right. They treat them like crap. Why, I haven't a clue. But they do. http://money.cnn.com/2005/02/09/technology/hp_fiorina/

84 posted on 03/17/2005 3:24:42 PM PST by FBD ("A nation without borders is not a nation." -- Ronald Reagan)
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To: BurbankKarl

Bump for later.


85 posted on 03/17/2005 3:29:10 PM PST by Springman (I'm from Detroit, need I say more?)
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To: FBD

Oh, it's true that the middle class is shrinking, but that's because more and more Americans are now rich!

And that's a good thing.

86 posted on 03/17/2005 3:31:55 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
>"Oh, it's true that the middle class is shrinking, but that's because more and more Americans are now rich!"<

-What would you personally classify as "rich"?
That's a pretty wide variable depending on who you are, and where you live. Here's a fun site, you might get a kick out of it.

http://www.globalrichlist.com/

I'll bet you are "rich" in comparison with most of the rest of the world. ;^)

Myself, I don't view someone as even starting to be "rich", unless they have assets of at least 5 million. Anything less then that (IMO) doesn't even buy an "r" in the word! :)


regards
87 posted on 03/17/2005 7:08:38 PM PST by FBD ("A nation without borders is not a nation." -- Ronald Reagan)
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To: FBD

Being rich or wealthy is having the ability to change your area by simply stroking a check.

Lots of people who have money can't do that, however. Some can't do it because they have no control over their cash burn rate. Others can't do it because they lack discipline or education or sanity. Five Million Dollars does the flake in the sanitarium no good as he crawls on his knees and barks at the guards, after all.

On the other hand, the programmer who moves to rural India after saving a mere $50,000.00, can employ hundreds of workers to build gravel roads and wood bridges and little grass huts and take out one ad in a travel magazine for a back-country tourist trap.

Ditto for the California couple who sells their tiny Long Beach 2 bedroom hovel for 2 million Dollars and moves in to rural Arkansas or down to Panama. Suddenly that working couple can live like retired kings, employing gardeners, maids, nannies, and building up a local church that names its new daycare building for them.

But the lotto winner, baseball star, and rapper who have no control over their daily spending aren't rich, simply consumptive. Many a jazz star and lottery winner has had to file for bankruptcy, after all, without even so much as a building or a song being named after them.

So being truly wealthy requires more than just cash, at least in my book...and even the amount of cash required will vary relative to the amount of money nearby.

88 posted on 03/17/2005 8:02:07 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: RightWhale
"The auto industry is a major leader of the national economy. When autos sag, the economy slows."

That was partially true decades ago, but not valid in modern times at all.

General Motors, the largest producers of cars in the world, has a mere $16 Billion market cap. That's less than Nike...heck, that's less than Harley Davidson ($17 Billion).

The U.S. has a $12 Trillion annual economy. If $16 Billion in market cap disappeared completely, the U.S. at large would never even notice. Losing 1/1,000th of our annual GDP wouldn't even impact a single year of our growth, and future years would certainly never feel it.

89 posted on 03/17/2005 8:07:23 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

>"Five Million Dollars does the flake in the sanitarium no good as he crawls on his knees and barks at the guards, after all."<

Ha! yeah. {G} - good points and perspectives.


90 posted on 03/17/2005 8:37:13 PM PST by FBD ("A nation without borders is not a nation." -- Ronald Reagan)
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To: Southack

The auto industry is more than GM. Got to add the 'foreign' marks such as Toyota and count them. There is also the maintenance and operations part of the industry, e.g., the local service station. Not counting the grossly inflated housing market of the moment, the auto industry is a huge percentage of the national wealth. Cars are like second houses, in time spent inside and in monthly payments and gas/oil. We are wealthy, but a third our wealth is sitting in the driveway quietly oozing various fluids onto the pavement.


91 posted on 03/18/2005 10:55:28 AM PST by RightWhale (Please correct if cosmic balance requires.)
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To: RightWhale
"Not counting the grossly inflated housing market of the moment, the auto industry is a huge percentage of the national wealth. Cars are like second houses, in time spent inside and in monthly payments and gas/oil. We are wealthy, but a third our wealth is sitting in the driveway quietly oozing various fluids onto the pavement."

The *average* American, counting men, women, and children of all ages and races...has $161,700 in net wealth above debt.

That's counting home equity, IRA's, 401k's, brokerage accounts, bank savings, cars, homes, everything.

Of that wealth above debt, less than $10,000 is in a car, on average, per American.

And even if/when GM goes belly up, your cars will still have some value, and still be guzzling gas and getting new tires and maintenance (i.e. churning money back into our economy).

But overall, the U.S. economy would no longer even feel the complete elimination of GM, the world's largest producer of automobiles.

Our $12 Trillion annual GDP is simply too vast to be bothered with a $16 Billion company.

92 posted on 03/18/2005 11:42:45 AM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

GM is no longer primarily a car manufacturing business, but should be in the financial sector. Ignoring the inflated real estate, a large chunk of our net worth is the car. Espcially those who rent.


93 posted on 03/18/2005 11:47:20 AM PST by RightWhale (Please correct if cosmic balance requires.)
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To: RightWhale

GM's credit agency, GMAC, will survive and thrive long after GM itself has forgotten that it once made cars.

94 posted on 03/18/2005 11:49:35 AM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

I still use the GMAC key chain even though the Chevy was paid off 15 years ago. I might have gotten a better deal financing the Toyota through GMAC, who knows unless they ask. Our debt industry is huge, maybe comparable to the healthcare industry.


95 posted on 03/18/2005 11:53:31 AM PST by RightWhale (Please correct if cosmic balance requires.)
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To: BurbankKarl; All
From March 11,2005 KIPLINGER LETTER:

"U.S. automakers are bracing for another bumpy ride this year. The Big Three's market share will slip again...to about 56% of the U.S. market,down two points from 2004. Much-ballyhooed new models aren't wowing consumers. For example, sales of the Ford Five Hundred, the successor to the popular Taurus, are lurching along. The same is true for GM's Pontaic G6 and Buick LaCrosse. They're selling at one-third the rate of the Grand-Ams, Regals and Centuries that they are replacing. And higher-margin domestic SUVs are losing out to foreign competitors.

Detroit has no choice but to dangle more juicy incentives to lure customers, a practice that automakers had been hoping to curb.

That'll dampen profits this year and extend first-half cutbacks in auto production throughout the year. GM will pare back the most.

Foreign brands in the U.S. are enjoying much smoother cruising. Nissan, Toyota, Honda and others will see sales keep growing this year.

Asian manufacturers are building more plants in the U.S...in Tenn., Ohio,Ala., Miss. and S.C....and expanding existing ones. Look for Hyundai to roll out its first American-built cars by fall."

96 posted on 03/19/2005 5:32:51 PM PST by donozark (OLD ARAB SAYING: The dog barks but the caravan moves on.)
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To: Eric in the Ozarks

Somewhere I read GM backing out of Fiat deal. Gonna pony up $2 Billion and drop it, IIRCC.


97 posted on 03/19/2005 5:35:10 PM PST by donozark (OLD ARAB SAYING: The dog barks but the caravan moves on.)
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To: donozark

Yeah. GM paid Fiat $2 billion not to get in bed with them, after paying millions to get in bed with them.


98 posted on 03/19/2005 6:24:21 PM PST by Eric in the Ozarks
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