Hemorrhaging money and sales at that rate would seem to mean that GM stands
little chance of making it to the 2007 contract negotiations without
declaring bankruptcy. Since GM is just about betting the farm (and Ford
too) on the "success" of their new large SUV and large truck lineup that
will, most likely, prove to be a vain hope since gas prices are very
unlikely to go down for any significant amount of time. Up yes, down no.
Sales of those vehicles won't stop but they will be down very significantly.
I would think that it is also a given that the '07 contract talks are going
to be the most difficult and contentious in living memory.
GM is in a very tough spot right now. The problem with the bankruptcy
route is that it could further push away customers and lead to even more
sales declines, which makes the problems even worse.
Right now the marketplace continues to move towards smaller, more fuel
efficient vehicles. GM unfortunately is just now rolling out it's
updated truck line just when truck sales are tanking. New models
typically launch with a higher initial cost structure than those of the
models they replace because of start up inefficiencies.
Like many, I still think that GM needs to pare itself down to two brands
and then make every product in those brands best-in-class and focus
it's huge marketing expenses on the support of those brands. Chevy and
Cadillac are big enough brands to cover everything GM has to offer the
marketplace. Pontiac, Buick, Saturn, Saab and GMC are just costly
distractions. How much does GM spend every year cooking up slight
variations on it's vehicles just to be able to slap other names on
them.? Chevy for the everyman and Cadillac for the high end covers the
market completely. Imagine the marketing dollars which would be
available to Chevy and Cadillac if all the money being pissed away on
the secondary brands were available to the primary brands.
I also still think that GM should dramatically improve the terms of it's
new car warranty to demonstrate the confidence it says it has in the
quality and durability of GM products.
But, none of things are going to happen due to inertia and a lack of
"It was a year in which two significant fundamental weaknesses in our North
American operations were fully exposed -- our huge legacy cost burden and
our inability to adjust structural costs in line with falling revenue,"
Chief Executive Rick Wagoner said in a statement.
He must have forgotten to mention the third "significant fundamental
"John Horner" < firstname.lastname@example.org> wrote in message
Every publisher seems to have their own spin on this matter. Is the cup
half full or half empty? A US$3.4 billion loss, before "Extraordinary
Items" is a far cry from an $8.5B loss! News stories can be misleading.
Check out this link:
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