Yes, GM’s “core brands” Chevy, Buick, GMC and Cadillac combined for a 25 percent improvement over their Cash-4-Clunker-fueled July 2009 performance, although The General moved so many Pontiacs and Saturns during July of ’09 that overall sales were up only an anemic 5.5 percent. Because C4C boosted sales of value-oriented models last July, Chevrolet was up a mere 12 percent, while GMC was up 27.2 percent. The big gains in year-over-year volume came from Buick and Cadillac, which 136 and 141 percent combined. In short, every year-over-year number we’re looking at has been deeply skewed by last year’s C4C program, meaning volume numbers and month-to-month numbers will be the keys to properly analyzing this month’s sales results.
(Read More…)
Tag: GM
China’s red-hot growth numbers are coming down to earth. Which doesn’t mean that the Chinese are stopping to buy cars. We are now getting into a territory where previous year sales increases were so insane that any more outrageous growth would simply be certifiable. In July 2009, sales in China had exploded by 70 percent. A month later, in August 2009, sales nearly doubled from a year earlier. Any growth that betters these numbers is amazing. (Read More…)
Yes, there were abortive attempts to rename French Fries to Freedom Fries (you want ketchup with your freedom?) There were calls for a boycott of all things French, including French mustard, excluding French’s Mustard (and maybe the Statue of Liberty.) Nevertheless, I think deep down the Americans secretly admire the French. With their lavish welfare system, generous benefits and their willingness to strike if someone so much as asks them to work an hour outside of their contract, who wouldn’t want to be French?
Hell, in the UK we wish we could be like them. If we were we might still have some global companies in our ownership, instead of selling out to the first bidder. But as Peter Schiff (who I’ve mentioned before) said, the party is over, we have to stop paying ourselves these lavish benefits, allow the free market to function and stop being lazy. In the UK, the government is going on a massive austerity program in order to balance the books, Italy pushed through a huge €24b cost cutting plan and even Spain just managed to push through a €15b budget reduction plan by a majority of just one vote. France hasn’t made a cost cutting plan of their own. It’s almost as if the current economic turmoil doesn’t apply to them. French benefits have survived recessions before and they’ll survive this one, right? Well, don’t be so sure. It seems that the French may be coming around to the rest of the world’s thinking, and the message to change their ways is coming from an unlikely source. General Motors. (Read More…)
If you want, and if you don’t feel discouraged by Ed’s op-ed piece in the New York Times, you can go to your friendly GM dealer and pre-order the 2011 Volt for an MSRP of $41,000 (before a $7,500 federal tax credit). A 36-month lease costs $350 a month, with $2,500 down. Bring a cot, we are given the impression that there are long lines at the dealerships. GM’s spokesman David Darovitz told Automotive News [sub], that based on customer reactions, GM expects demand for the Volt to exceed the 10,000 units it will build between its launch and the end of 2011. (Read More…)
Noticed that things have been a little slower around here this week? Yes, well, it’s summer and I’m much harder to motivate in the summer. Also, I’ve been working on this op-ed on the Chevy Volt for the New York Times. My conclusion on the Volt?
In the end, making the bailout work — whatever the cost — is the only good reason for buying a Volt. The car is not just an environmental hair shirt (a charge leveled at the Prius early in its existence), it is an act of political self-denial as well.
If G.M. were honest, it would market the car as a personal donation for, and vote of confidence in, the auto bailout. Unfortunately, that’s not the kind of cross-branding that will make the Volt a runaway success.
The Obama administration went here before, when it tried to quantify how much worse things would have been without its stimulus bill. And considering the task force has enjoyed access to GM and Chrysler’s business plans, it’s surprising that this graph (from the Auto Task Force’s just-released Bailout “report” [PDF]) is based on notoriously iffy BLS data. Instead of projecting how many jobs were saved by Detroit’s $86b life raft, couldn’t the White House have cited GM and Chrysler’s pre-bailout Chapter 11 plans? Or were there pre-bailout bankruptcy plans? Either way, the Task Force’s claim that 56k jobs have been created in Automotive since mid-2009 is a bit hard to swallow given the SIGTARP’s recent finding that
Treasury made a series of decisions [regarding the bailout-era dealer cull] that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls.
By narrowing a broad bailout to just the manufacturing side (the report leaves out dealer cuts and the GMAC rescue), the Task Force is simply defining its way to victory. Besides, the problem is that there’s really no way of knowing what might have happened without last year’s landslide of government sugar. For all we know, Fiat might have bought a bankrupt Chrysler with its own money. GM might have shuttered dying brands and cut its bloated capacity of its own volition. Both might even be in mediocre-to-OK shape right now. The only thing we know for sure is that the auto bailout has been a qualified success at best so far. Luckily for the bailout boosters, it will be years before Treasury fully divests from GM and Chrysler, so there will be plenty of other opportunities to declare victory.
Recently, Opel’s boss Nick Reilly was asked by the Süddeutschen Zeitung how long it could be before GM’s top management decides that it doesn’t want to rescue its European division Opel after all. His answer [via Autobild]:
It’s not a question of two years, but rather six or nine months, before we need to have proven that we’ve made positive progress
Even then, Reilly admits that
We need four to five years before we’re able to get back to where we were
That doesn’t sound so good, does it?
Now that GM’s acquisition of the subprime lender AmeriCredit has had 24 hours to sink in, howls of protest are starting to surface. The charge is being led by Senator Chuck Grassley, who has requested a review of the deal from the SIGTARP, saying
If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first. After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.
And though Grassley’s criticism could be read as mere partisan gamesmanship from a leader of “the party of no,” there are a number of very good reasons for opposing the deal.
After months of speculation about GM’s re-entry into the subprime lending market, The General has announced a deal in which it will purchase the lender AmeriCredit for $3.5b. Founded in 1992, and managing assets worth $10b, AmeriCredit has been pursued by GM for the last month, according to GM CFO Chris Liddell in the WSJ [sub]. GM paid AmeriCredit stockholders $24.50 per share for a controlling interest in the firm, a 24 percent premium over its $19.70 closing price yesterday. Still, GM insists that acquiring AmeriCredit will have “a minimal impact” on its balance sheet, although no explanation is given as to how. $3.5b is at least ten percent of GM’s cash pile at this point, and it’s not clear if that qualifies it as a “minimal impact” or if GM is using some kind of financial instrument to purchase the firm. AmeriCredit says it will “expand its offerings” to support GM, likely in the area of lease deals, but it will also continue to offer loans to non-GM-brand car deals.
If GM wants to pull off a smashing IPO, they need smashing numbers. There are people they can learn from: Their friends and joint venture partners at China’s SAIC. China’s largest automaker (they have joint ventures with both GM and Volkswagen, can’t get any bigger), said first-half profit may have more than quadrupled from a year earlier, reports Bloomberg. And the secret to their success? (Read More…)
Today, GM broke ground for another R&D Center in China, called the GM China Advanced Technical Center. The new facility is in addition to existing R&D centers in China, including the Pan Asia Technical Automotive Center (PATAC) in Shanghai and the China Automotive Energy Research Center (CAERC) in Beijing. (Read More…)
After ending the first quarter of this year with $35.7b in cash and equivalents, GM was in the best position it’s enjoyed in decades. And yet, with an IPO prospectus looming, The General is seeking a $5b line of credit and trotting out EBITDAPRO as its in-house measure of financial success. Both of these tactics are hallmarks of companies that are doing poorly, and GM has already learned how problematic loading up on debt and sliced-and-diced financials can be. So why is The General inviting criticism from outlets like Edmunds Autoobserver, which characterizes GM’s push towards an IPO as the rebirth of old bad habits? The simple answer: “business execution.” In other words, GM may have a lot of cash, but it’s got nearly as many demands on its resources as well… and these cash drains hardly add up to a coherent strategy.
Bloomberg reports that GM has already pulled off one of the ballsiest IPO moves ever, by asking banks bidding to underwrite its IPO to use fees to subsidize the purchase of GM vehicles by its employees. According to the report, a GM document sent to bidding banks solicited
ideas as to how we can use the IPO to reposition GM and its vehicles within the investment community including your firm’s willingness to reinvest any portion of any underwriting fees into the purchase of GM vehicles for your employees and/or company use.
In hopes of convincing consumers that buying a battery-electric car will not be a financial disaster for them, GM is announcing an eight-year, 100k mile transferable warranty for its Volt battery. According to GM’s release, Volt batteries have undergone
more than 1 million miles and 4 million hours of validation testing of Volt battery packs since 2007, as well as each pack’s nine modules and 288 cells. The development, validation and test teams have met thousands of specifications and validated each of the Volt battery’s components.
Tests include short circuit, corrosion, dust, impact, water submersion, crush and penetration, and extreme temperature swings combined with aggressive drive cycles, also known as “Shake, Bake and Roll.”
GM does not, however, specify a minimum-performance range for the battery, saying only that it can run on battery power for “up to the first 40 miles.” That makes it tough to understand what kind of defect or level of performance would deserve a warranty repair or replacement, which is really the key consideration. GM’s claim that this
is the automotive industry’s longest, most comprehensive battery warranty for an electric vehicle
is technically true, but it is also the same warranty period enjoyed by Toyota’s Prius hybrid. Full release after the jump.
The monthly Chinese car sales number confusion is finally over. The China Association of Automobile Manufacturers CAAM has spoken their official word on June 2010 motor vehicles sales in the Middle Kingdom. We nearly lost confidence, but again, our patent pending sales oracle has been proven right. A week ago, our oracle said “that the Chinese market will come in at a growth in the low 20 percentile range.“ And what says CAAM? (Read More…)
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