GM's Rick Wagoner clone, Fritz Henderson, recently told the AP's Tom Krisher that the U.S. auto industry is in a recession. (Insert "Duh!" here.) Regular, non-lobotomized reader of Frank Williams' By The Numbers series would have come to that conclusion two months ago. Fritz trots out the usual explanations for GM's woes: "troubled housing market, tight credit and higher gasoline prices that are sending consumers from trucks to cars at a rate much faster than the company has ever seen." The last part is particularly odd and GM-centric, because the truck-for-car swap hits GM a lot harder than Toyota or Honda given each company's respective product mix ratios. Fritz then goes on to confirm what many have speculated: "The 11-week strike at parts supplier American Axle and Manufacturing Holdings Inc. has had only a minimal effect on the company's retail sales, largely because it had built up a large inventory of pickup trucks and sport utility vehicles at a time when the market shifted to smaller vehicles." By minimal, of course, Fritz means $800m in lost EBT (earnings before taxes, which in this case, is sales to dealers) as the AP diligently reminds us. Be careful Fritz, $800m here, $800m there, and pretty soon we'll be talking about real money.
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Well, at least GM is making it up by selling lots of Astras at a profit, right?
The only reason the truck/car swap hits GM (and Ford and Chrysler) hard is because no one wants their cars and they have to give them away!! Catch a clue Fritz!
Give Fritz a break. It’s not like they should have seen this coming. Oh, and there’s that perception gap that GM’s really not been building shinola on wheels for the past 20 yrs.
Yeah. That’s it.
You can’t expect them to be able to sell *cars* at GM, can you? Seriously. Oh, wait…
Claiming that they didn’t expect a slump is SUV demand is a bit disingenuous. Oil prices were clearly on an upward trend since like 4 years ago. Any idiot could have predicted that the SUV and truck market was going to collapse. Yes, GM kept banking its future on big bloated body on frame grocery getters like the GMT900 platform. As recently as two years ago, GM’s management was assuring its investors: “just give us some time, these new GMT900 products will take us back to profitability.” Yeah, right.
My question is why would those in charge of GM care much about Profits anyhow? They make their money no matter what, don’t they? At least a big shunk, no need to worry about money for execs.
Quick! Get the Door!!!! There Goes the Horse!!!
I’ll second your duh.
A family who lives up the road from me apparently got rid of their Suburban and Silverado this weekend. They now have an Aveo and a Cobalt, both with temp tags. I’m glad they got out of those trucks, or it was a lease up, but what an adjustment that must be!
Well, at least GM is making it up by selling lots of Astras at a profit, right?
Maybe it’s cheaper to carry floorplan cost than actually sell one of those things… that’s going to catch up with them soon! At least it’s not as bad as the interest on expensive SUV’s and trucks.
Trying to liquidate Silverados and Suburbans coming off lease these days can’t be helping GMAC’s financial performance….
“They now have an Aveo and a Cobalt”
If you post an address perhaps we can mail sympathy cards :(.
Its not just GM getting hosed on residuals.
BMW recently took a big right down for lower than projected residuals on lease returns. Not as many people want to belly up to the bar for the “Bavarian Money Waster” experience of a 3-5yr old off warranty BWM.
“They now have an Aveo and a Cobalt”
If you post an address perhaps we can mail sympathy cards :(
The wifey goes running on our road a couple times a week… I need to think of a more subtle conversation starter than “so, Suburban to a Cobalt, how’s that working out?” I saw her drive by this morning with their 3 kids in the back in the ‘balt, so apparently hubby got the Aveo. The couple times I’ve talked to her, she’s been a little snooty, and they live in a mCmansion on only 2 acres (everyone else has at least 5), so the change of cars will be coming up… somehow.