Three Legends Die In Auto Industry Disaster - Wake Monday

[SpudRacer]

The culling of the herd has begun in every industry. GM, Ford, & Chrysler are all weak and unlikely to survive without government intervention. When credit was flowing like water, the weak players could get by (barely). That's all changed for a long long time.

Saddled with unions
Pulled down by huge pension legacies
Fighting an image of poor quality and service they spent 30 years crafting
Heavily dependent on trucks and SUV's for profits as the market shifts violently away from those segments
No viable product plan for small and midsize vehicles that can slug it out with the Japanese and Europeans any time soon
Supply chain is shutting down
Credit costs are skyrocketing
Cash burn is measured in billions
Credit rating in the toilet
Chances of obtaining additional capital thru normal equity markets is zero
Chances of obtaining additional capital thru normal debt markets is zero

Too bad for GM IMHO. They were just starting to market some solid products across a broader range. Ford deserves to join the Dodo bird in oblivion. Their quality is still a decade behind the rest of the industry. Chrysler, like Ford is marketing cars with interiors and powertrains that would have been very competitive in the late 80's.

If any of these players survive, it will not be in their current form and probably not as a U.S. company. I predict bankruptcy followed by a sell-off of the assets to the healthier players leaving unions and pensioners out in the cold. Equity of current investors will be wiped out (almost is already). There are parts worth saving but expect several brands to die in the "cleansing" of the market. Chevy, Caddy, Ford, Dodge, and Jeep brands survive. Chrysler, Mercury, Lincoln, Pontiac, GMC, Saturn, and Buick are toast.

JD Powers released the latest North American market forecast for 2008 this morning. 16.1 million vehicles in 2007 becomes 13.6 million in 2008. That means 2.5 million vehicles need to disappear from of the market.....now! Personally, I don't think they have a handle on the bottom of this market yet. 2.5 million may easily become 4.0 million.

NADA predicts 700 dealers will close their doors in 2008.

[Msedanman]

-- in light of all that doom and gloom, what about that magic panacea know these days as a Bailout?

BTW, I can't find fault in any of your post, but God help us if all that transpires.

C.

[eljoker]

i say they should combine and make cars and take on the imports i mean if they are to survie

[SpudRacer]

A government bailout is the only hope these guys have beyond a breakup and sale to competitors. The bailout is likely because of pensioners and the broad supply base that would go under with the Titanic, the Lusitania, and the Andrea Doria. UAW is screwed, beginning of the end. They assisted in their own demise.

[Kyosho]

A government bailout is the only hope these guys have beyond a breakup and sale to competitors.

i have a hunch that it'll be the latter... even with a bailout i doubt these guys will be around for long, especially Ford. we're talking almost no competitive advantage in a severely declining market

[SpudRacer]

Originally Posted by Kyosho

i have a hunch that it'll be the latter... even with a bailout i doubt these guys will be around for long, especially Ford. we're talking almost no competitive advantage in a severely declining market

Pssst!

Hey, wanna buy a truck? No?
C'mon, how bout an SUV? No?
We'll extend the warranty! No?
We'll chop the price! Still no?
Ummm, give us a minute.....

[Red_G35]

These guys arent going anywhere.

[Triji]

I heard that GM and Chrysler are in talks about a merge.

[RBull]

Good post Spudracer. I think you're spot on with what you've said. This would be devastating to investors, employees and pensioners.

[elau]

Just like the banking fiasco, give me one good reason for Government bailout, aka, our tax dollars?

Why save a company whose products no one wants? Would you sell your Infiniti tomorrow and go buy a GM? You didn't then for various reasons and what makes you think you will now?

UAW has just as much to blame for their own demise. I say, screw them.

[Wannabe6MT]

Originally Posted by elau

Just like the banking fiasco, give me one good reason for Government bailout, aka, our tax dollars?

Why save a company whose products no one wants? Would you sell your Infiniti tomorrow and go buy a GM? You didn't then for various reasons and what makes you think you will now?

UAW has just as much to blame for their own demise. I say, screw them.

Depends on the GM.

My mom has an 08 Silverado LTZ VMax and it is 10 times the truck the old one was.

Fit and finish is pretty nice for a truck. Sound system is top notch, sunroof, full leather, dual zone climate, it's is actually a pretty sweet truck (and the new tahoes and suburbans are the same way)**t
I honestly feel bad for GM. They are just starting to come back around with some decent products then this happens.

Just a shame. Cant say that they werent warned though. They built some sh**ty cars in the 80s and 90s.

[SpudRacer]

Originally Posted by Wannabe6MT

Depends on the GM.

My mom has an 08 Silverado LTZ VMax and it is 10 times the truck the old one was.

Fit and finish is pretty nice for a truck. Sound system is top notch, sunroof, full leather, dual zone climate, it's is actually a pretty sweet truck (and the new tahoes and suburbans are the same way)**t
I honestly feel bad for GM. They are just starting to come back around with some decent products then this happens.

Just a shame. Cant say that they werent warned though. They built some sh**ty cars in the 80s and 90s.

It is a shame. GM has finally pulled it's collective head out of the dark stinky place after decades of mediocre product and contempt for its customers.

The CTS, STS, Malibu + Saturn Aura, Buick Enclave + Outlook + Acadia, Pontiac G8, Corvette, and Lucerne are all credible products in their segments. V6 and V8 powertrains are finally reaching parity with Japan & Europe. Only their small engines are still lagging in refinement if not output.

Trucks and truck based SUV's are excellent for what they are. Unfortunately the market is rejecting those segments rather violently at the moment.

Even the Kappa cars, Solstice & Sky are OK. Decent looks and performance offset by flawed design and spotty quality. But they are inexpensive. Likewise the Cobalt while not a Corolla or Civic, is not the joke the Cavalier used to be. The Camaro looks to be a great inexpensive retro 2+2 with a modern chassis and decent powertrain. Sadly it too is late to the party. The Camaro could be the figurehead for GM.

If Bob Lutz had started a decade earlier revamping product. If this liquidity crisis hadn't come along. If the competition from Europe and Japan wasn't so good. If the tooth fairy really granted wishes.

[Wannabe6MT]

That is pretty much it. If.

[elau]

You still have not answered my question. Would you go out tomorrow and buy a GM?

[Wannabe6MT]

Tomorrow is Sunday, so no, i dont think id be able to. But id stop in Monday and buy one for sure. Have you seen the new Tahoes? Things are sweet.

As many people know, im a GM fanboy. I like quite a few GM cars and trucks.