"part of Wagoner's plan to recover from a $10.6 billion loss last year"
"Despite what appears to be normal inventory levels, the cost of
carrying inventory for dealers has risen significantly with the rise in
interest rates," Merrill Lynch analyst John Murphy said in a report
Wednesday about automakers' unsold cars and trucks. He rates GM shares
GM had enough vehicles to last for 79 days at a normal sales rate, or
1,063,564 unsold cars and trucks, compared with a five-year average of
a 74-day supply, he wrote.
The company's total U.S. sales of cars and light trucks fell 8.3
percent through November, more than triple the 2.5 percent decline for
the industry, according to Autodata Corp. figures. Asian rivals led by
Toyota Motor Corp. have been gaining sales and market share at the
expense of GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler unit.
GM plans to shutter 12 North American locations by 2008, and 34,400
U.S. union workers have agreed to take either early retirement or
buyouts and leave by the end of this year.
Those reductions are part of a plan to reduce costs
Unfortunately, in every sensitivity analysis I have ever done, employees and
have the most serious impact on the operation (mathematically, at any rate).
Get rid of the employees, and those costs fall off the chart. But remove
or the wrong ones, and the chart falls off the wall.
There are no easy answers when you are in a situation like this
How does closing factories by the dozen and laying off workers by the
10s of thousands increase market share? Weren't those factories
building anything? Weren't those workers contributing?
It simply is not possible to slash and burn a company into prosperity.
It is, if one gets rid of outdated plants and moves production to those that
have recently been upgraded and can produce more vehicles with an increase
in economies of scale, as both GM and For have been doing for the past
They sure can, if they continue to increase the Asian vehicle and parts
GM may recover, but have no NA factories.
Then GM is just a sales & service organization for foreign produced
You forgot to say in my opinion. Americans still buy more vehicles from GM
and Ford than ANY import. Those millions of buyers must think what they buy
is better than the import you buy, it seems
If you actually did some comparison shopping you would discover Toyota,
Honda, and Nissan cost MORE to drive home than comparably equipped domestics
of teh same size.
Recently CR said the Ford Fusion and Mercury Milan outscored the Camry and
Accord with buyers of 2006 midsize cars. They also pointed out the V6
Fusion cost thousands less than a 4 cy Camry LOL
That is one opinion. I owned a fleet maintenance business for ten years,
that operated in six eastern states and serviced
thousand of vehicles monthly. Unlike rental car companies, where the cars
are their 'product,' large corporate fleets meticulously, maintain their
vehicles, which are a 'tool' like any other used in their business. Fleets
buy what they buy based on total cost of ownership, they have no brand
loyalty. Fleet been counters concise records consider the cost to acquire,
insure, maintain, repair, parts cost, down time, and replacement cost of
their vehicles that are in their fleets for a period of five years or 300K
WOF because if US federal corporate tax depreciation laws. That is much
longer and much higher mileages than the average new car buyer. The average
new vehicle buyer in the US buys another new vehicle, in three to four
years, with 30K to 45K on the clock.
Very few fleets buy foreign cars to use as a tool in their business because
the overall costs are higher, not lower. The frequency of repair cost among
ALL the brands is around the same, but availability and price of European
and Japanese cars is dramatically higher in comparison and so are the
acquisition costs. All manufacture foreign and domestic offer the same
discount to fleets of more than five vehicles, currently around $800 per
The foreign cars the fleets do buy are used primary used in the courier
business. Low end cars that are hardy ever turned off and run to very high
mileages, in a very short period of time, 120K a year or more. They are
generally replaced in less than two years, on average. Although they use
Corollas, Focus, Cavaliers, Hyundai's, Civics, VW etc. the Korean cars,
Hyundai, Kia and Suzuki, are becoming more the car of chose for courier
cars, because of the very low initial costs
Everybody is free to spend their money where they wish. I personally made
the switch from Toyota/Lexus to Ford/Lincoln, based on what I learned in the
fleet business. I seldom keep a vehicle more than two years and I am now
spending many thousands less than when I bought Toyota/Lexus vehicles.
Yes and much of the cost analysis depends on how long the vehicle is to
In '94 a friend asked me if she should buy a more expensive Honda
instead of a Taurus, because the Honda salesman said the Honda would
have a much better resale value. He was correct in the first few years.
I asked my friend how long she planned to keep the car.
She said at least 10 years. Based on that I recommended the Taurus
because I felt that at 10+ yrs the resale would be similar on both, only
a few thousand dollars.
She still has the '94 Taurus!
When you consider the difference in drive home price between a Taurus and an
Accord, the Taurus returns MORE of its original investment, from day one,
than the Accord. I E a three year old V6 Accord is indeed worth around
$4,000 more retail than the larger V6 Taurus according to NADA. However the
Accord cost between five and six thousand dollar more to drive home when
new, making the Taurus better choice based on depreciation.
I guess you've never heard of a "transmission" then. Ford seems to
have forgotten how to build them. All of your "savings" go down the
drain when you have to have your transmixer replaced. Not to mention
it's worth a little extra $$$ to have a car that doesn't have major
component failures after only a few years.
There's very few cars that I wouldn't take over a Taurus, they are
truly the bottom of the barrel. Maybe a Daewoo is worse, not sure.
Mike Hunter wrote:
We all realize that some owners do not properly maintain their vehicles.
Many of the Fords I have owned have been run up to some very high mileages
without a transmission failure. I currently own a 41, 64, 70, 72 and a 83
all of which still run great. The 71 has 300K on the clock. One of the most
problematic vehicles I ever owed was a Honda. I sold it with less then 30K
on the clock. I would not conclude therefore that ALL Hondas are
This points up the importance of the question, "How long do you expect to
keep the car?" For fleets and for anybody who expects to keep a vehicle only
three years, Fords and GMs are very good choices. They are still mainstays
of most fleets in the US, and with that much money at stake I daresay more
savvy people than you and I are still choosing those brands.
I doubt that even then Tauruses are a good buy. If I were GIVEN one
I'd dump it as soon as the warranty was up. I've heard a lot of
stories about transmission falures at 50K miles or less. Also I
believe CR stated that owners were reporting transmission failures at
about 4x the average rate on certain MY Tauri.
I personally only know one person that ever bought one, and she bought
two (father was a Ford employee) and after a few years of ownership of
the second one I think she was pretty well soured on Ford products in
general. She then bought a Honda.
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