BioInvestor

The US Auto Crisis

Thanks for the post, but I'd respectively discount the article as personal opinion.


On Jul 24 12:32 PM Gino Lattarulo wrote:

> Bio Investor, "Factual Documented Information" as released by the
> media is just that. I am giving you information based on 15 years
> of working inside these companies. Take from it what you do or do
> not wish to believe. In any case, I applaud your convictions.

The US Auto Crisis

Not really a valid argument. Women are fired in all companies; that's not news. Men are too--no news then.

As for the discussion about people in women's dresses, what a minimalist argument to make. State something substantive; something meaningful; something relevant! Please. This is a site for investors.


On Jul 24 11:09 PM Joey wrote:

> BioInvester, women were fired. Check your records. It was several
> contractors in the advertising field across the country that were
> fired or demoted. The RDMMs made the recommendations. Also, if women
> do not make a difference, then why did you have the engineers at
> GM be forced to dress up in women's dresses to experience the Acadia
> from a woman's point of view?

The US Auto Crisis

Gino Lattarulo, I am not sure why you wrote the article. It has, at best, only moderate benefit to investors.

The article also contains serious factual errors. The failure rates among different brands--and consumer preferences--are well documented. Companies like Honda and Toyota have consistently manufactured cars that perform better. You actually talk about the quality problems in US cars in your article; I don't see how you can conclude that there is no difference in quality among the different brands.

The US Auto Crisis

paulk8756, a lot more than your case seems to be resting--or not functioning.

Your comments don't reflect women, they reflect who you are and what you attract.


On July 21, paulk8756 wrote:

Let's see...

If you were a woman being polled, you'd say you were in charge of the buying decisions. And if you were a man, and your wife and/or girlfriend was in earshot, you'd say the same thing, wouldn't you?

My former wife and present girlfriend don't know where to check the oil in a vehicle, much less make a sensible decision on which to buy or how to finance one.

I rest my case.

The US Auto Crisis

Joey, your argument lacks logic. People don't buy cars based on the management team!

I don't buy your argument that getting rid of women has had an adverse affect on sales. In fact, I don't believe what you wrote about GM firing women.

Finally, the problems at GM aren't related to gender, they're more related to fenders. GM doesn't make cars that people want to buy. It doesn't matter who is in management, on the board, on the production line, or in sales in market: GM doesn't have a product that people want to buy.


On July 21, Joey wrote:

Well written analysis by the author. Women do represent 65% of new car buying decisions yet GM's management is over 90% men. GM should have started to change its employee makeup to accomodate for targeting their new buyer to the industry - women (this should have occurred 20+ years ago). I remember in 2006, GM took its advertising contractors and fired and demoted almost every women in the advertising field and replaced them with men. GM's men wanted to work with male advertising executives. The result, GM's sales for the brands affected by the switch dropped by more than 40%. So why are these men who made this terrible business decision still there? Is this fair to GM stockholders, especially since so many women who own GM stock? If getting rid of women decreases sales, what would getting rid of the men and adding women to GM do for sales? Would GM finally see a positively changing sales track? Would GM's stock that dropped so much so quickly finally turn around because their target market is being taken care of and their needs met?

General Motors: General Malaise

hoffman23, you're ignoring the facts! Check out the financials for GM: it's pretty clear that the company is in serious trouble.

I don't accept that GM reacts quickly to change; at least, I don't see any evidence to support the claim.

The quality argument is a myth. For example, if you check out the JD Power website, you'll see that the big three receive the first place ranking in dependability in only five out of nineteen categories. Read the survey results from Consumers Union and you'll see that the Big Three perform much worse. The quality may have improved, but it's still not on par with competitors.

For the record, Peter Lynch may have advocated buying what you know but he insisted on looking at the financials of companies too.


On July 9, hoffman23 wrote:

When does this stupidity end? GM has a very bright future. First look at the overseas business. It's booming!!!! Next, look at how quickly this company is reacting to the current dramatic change in the market. As a veteran of 30 years in this industry, GM used to take YEARS to react. Now they can change within weeks. And PLEASE stop lumping GM and Ford together. The situations are completely different. FORD has put up the entire company including the Blue Oval as collateral on its loans!!!! GM will survive and eventually prosper. Ford and Chrysler are quite a different story. Why don't you write about Toyota and their
Tundra-Texas factory fiasco. How about how much the Europeans are losing money on their American sales due to the crappy dollar? If you went out into the marketplace and compared the quality of the various vehicles, you would have a very different tune. Try the Peter Lynch theory of actually getting out of the ivory tower and going among the masses. It will open your eyes!!!

Big Three Automakers: Recapitalization or Bankruptcy?

What you wrote doesn't make a lot of sense. The issue is reorganization under bankruptcy laws; it's not a question of the company disappearing.

The purchase of company stock by insiders is irrelevant. It doesn't matter who owns the shares; that's not the issue. The issue is cash and how GM, as an example, can repair its balance sheet. If the current trend continues, GM will have to enter C11.


On July 11, Richard Wendling wrote:

I agree with this article. It would be far better for these companies to survive then go bankrupt. I also believe that they will survive based on the internal accumulations of stock by insiders as these issues achieve their lows in the coming weeks. For more information on how those accumulations happen click on my site and read the stock reviews on these issues and the articles on how they are being manipulated.

Challenge for Ford and GM: To Stay in Business

If there are any subscribers to the Wall Street Journal, here's a link to a new story on GM: online.wsj.com/article...

The full story requires a subscription, but the synopsis is that GM is laying off even more white collar workers in an effort to reduce costs.

SUV Makers Feel the Heat of Higher Oil Prices

johndough110, your abusive comment is out of place on this site. If you can't be civil, stop posting.

Auto Sales Dismal: GM and Chrysler Oddly Optimistic

edaddy, I don't follow what you're saying. What I read is that

1. The US Big Three sold cars to rental car companies at cost or less;
2. They no longer sell cars to rental car companies at cost or less;
3. As a result, the share price of rental car companies has dropped.

So, the argument offered in the post is that the reason the share prices of rental car companies have declined is that they can no longer buy cars from the major three domestic car makers at a discounted price.

One could conclude that these companies are either (a) buying cars or (b) they're not buying cars. If the rental car companies are not buying cars right now or are extending the average age of their fleets (neither situation is actually occurring in a way to support the argument), then, at least in the past two years, they no longer have a major cost, which would seem to argue against a decline in stock price.

On the other hand, if they are buying cars right now from the Big Three and paying higher prices for those cars, then they do, in fact, have a higher overall cost, which should negatively impact their stock price. Conversely, if the Big Three are selling cars to rental companies at a higher margin, then, presumably, these sales should help car company revenue numbers.

So, I don't understand the argument you're making. The facts you state don't appear to support your claims.

Incidentally, if you look at the financials for Hertz, as an example, you'll see that the company hasn't changed the average age of its fleet: it continues to buy cars. Further, last year Hertz generated almost $6 billion in car rental revenues worldwide and $1.76 billion in equipment rentals. In 2007, revenues grew by $8.69 billion (aided by a declining dollar!); pre-tax income grew by 35.8% and net income grew by 36.7%. The company is diversifying its fleet and no longer depends exclusively on US automakers; however, this trend has been in place for some time.

For Hertz, at least, the stock has been in decline, but I see no evidence to support the thesis that this decline is driven by higher prices from the Big Three US automakers.



On July 4, edaddy wrote:

I love how all the wall street articles over look a major component that is missing from the big 3 sales numbers this year, sales to rental car companies. The big 3 has dramatically cut these zero profit sales to Avis, Budget, Dollar, Hertz, Thrifty, etc. since 2007. The big 3 used to sell their over capacity cars to the rental companies at cost or less and then would guarantee buyback prices. The big 3 stopped a large portion of these sales in 2006 and have reduced every year since. That is why you see the rental car stocks like CAR, DTG and HTZ tank since the end of their fiscal year 2007. So for companies like Chrysler, Ford and GM to sell as many trucks and SUV's as they did in June is actually amazing considering the state of the economy and fuel prices.

Challenge for Ford and GM: To Stay in Business

The problem is that for each company that turns around and bounces back, approximately nine others cease to exist. Turnarounds are tough. Personally, I can't imagine the big three disappearing. Of course, five years ago, I wouldn't have imagined GM hitting a half century low.


On July 4 paulk8756 wrote:

What we know about the history of equities is the greatest gains are made in stocks that NOBODY wants anymore. GM and Ford certainly qualify here. But that's a TOUGH CALL when you're investing real money, which is precisely why the returns are so great if they make it. GM at 10 and F at 4 are beginning to look awfully tempting, aren't they...?

How Bad Is the Oil Shock of 2008?

I'm off to see if there are any unused clichés left! ;)


On Jun 09 02:03 PM Independent E.G. wrote:

> 1. Leadership. Leadership at all levels and in all walks of lives
> and communities.
> 2. Good conscience. Imagine if every citizen or resident proactively
> contribute his/her share, what's no to overcome?
> 3. Collective power. Why not utilize all these talents collectively?
> We have the largest pool of smart and practical brain power in the
> World, don't we? We need to pull these people together.
> When the world changed after 911, when we are under attack in so
> many angles, the status changed. Don't surrender to this mess! Ask
> not what others can do for you, ask what you and your corporation
> can do for your own country!
> Do we have that spirit? We used to.
> When Asian financial crisis hit Asia a few years ago, Korean Airlines'
> flight attendants jointed other citizens at their airport in Seoul
> to ask people not to leave their own country so their money will
> be spent inside their own country.
> Right now in Taiwan, the Mayor of Kaohsiung is offering free ride
> on all their public buses. The government in Taipei is offering 20%
> raise for their employee in helping them overcoming oil crisis.
>
> And their citizens responding actively in efforts to reduce energy
> consumption.
> Just to list a few. What are we going to do?

Is Anything Worth Owning in the Auto Industry?

I think that value depends on your time horizon. If you believe that Ford and GM will survive and thrive, one could argue that there is good value today.

I'd be careful of citing a PE of 9 as signaling compelling value. In a cyclical industry, a low PE ratio doesn't necessarily signal value.

How Bad Is the Oil Shock of 2008?

blocks, if it's a terrorist attack, we're in trouble. It looks like Canada and the UK are involved too, since they charge market prices for oil. Watch out for Texas and those oil wells in California and Alaska--they're on it it too! :D

How Bad Is the Oil Shock of 2008?

VP of Common Sense: I must say I agree--a refreshing post.

I am not bothered by those that pedal doom and gloom--I need them. The collective pessimism of others has helped me build a great portfolio!