Detfan

Lithium-ion Batteries for the Hybrids?

GM didn't "just ask" Hitachi to produce Li-On batteries. That has been in the works for two years, shortly after the Aura and Malibu "BAS" hybrids were launched. This is VERY old news. I guess I should be blogging instead of Juan, who is hopelessly behind the times regarding LI-ON.

I Was Wrong About GM Bankruptcy

GM is fine and will be great in the future. They were on track to be profitable THIS year without the economy falling off a cliff. They are now at break even on 10M SAAR, which we will exceed in the coming months. GM will make $5,000 per vehicle more in 2010 than they did in 2004. GM has made all the right moves for several years to posture them for tremendous success. The government involvement, obviously, is very minimal, as I see products coming out on schedule with more beautiful cars coming soon. With the renaissance of great new product launches over the last 4 years, GM's market share has stabilized and retail share is actually increaing now, as people buy the new Malibu, CTS, Enclave, Camaro, etc. GM's comittment to fuel economy has transformed them over the last few years to the company that has more industry leading vehicles in mileage than any other manufacturer. The next successful launch is the 2010 Chevy Equinox, which I drove last week. It gets 20% better mileage than the Toyota Rav-4 and Honda CR-V, and highway mileage beats even the Ford Escape Hybrid. Interior is class leading, with more features included at each trim level than the competition. Yes, the future looks very bright for GM, especially in light of their explosive growth in emerging markets around the world, using their new global platforms that are now the envy of the industry. Look for the stock from the IPO next year to systematically be bought back by GM until we see a private stock holding company again.

7 Reasons Why the New GM Might File for Bankruptcy

Actually GM is in great shape, totally discounting the authors points. The reduction of GM dealers is necessary where there is too much duplication in major cities. GM's rural dealers remain strong, and GM will still have many hundreds of dealers more than Toyota after the reductions are complete.
Union income has already reduced, and is now lower than foreign transplant employes. With all the GM restructuring over the last few years, GM will be making $5,000 per vehicle more than they did just five years ago (source John Holstein, author, "Why GM Matters". GM has gone from being middle of the road in mileage ratings, but now has the most segments of industry leading vehicles in mileage of any manufacturer. GM is already moving way past the imports on getting to the 35 MPG mandate. The Chevy Cruze will get well over 40 MPG. the Chevy Orlando will get well over 40 MPG, and the Chevy Spark will get almost 50 MPG. The electric Chevy Volt will be rated at 100 MPG, and there will be several iterations of the Volt being built by 2012.

SO, I'm not too worried about GM. I just looked at the next industry leading vehicle that GM has launched, the Chevy Equinox, which gets 32 MPG, which beats the Rav-4 at 27, and the CR-V at 28. Industry leading interior and fit and finish, just like most of GM's recent launches.

GM's retail market share has been stable for almost three years now, and is now beginning to increase. Meanwhile, GM is exploding in emerging markets like China, where they almost at a pace of 2 million vehicles sold this year.

Costs are way down, profit is going way up. GM breaks even now at 10 M SAAR, which looks like may happen when June sales get reported next week.

Bailout Scorecard - The End of the Beginning

GM has received 13.4B of the $18B they requested back in December. They announced a week or so ago that they would NOT need the $2B they were scheduled to receive in March, due to the effect of their cost cutting measures. These requests were based on SAAR at 10.5M in 2009. Since January was 9.5M SAAR, and February was 9.3M SAAR, GM has stated that they possibly will be needing another 7.5B, which makes sense. The auto crisis is all about national sales volume. The longer national car sales are depressed, the larger the price tag will be for help. Sales levels need to increase to about 12.5M SAAR for ANY of the car manufacturers to, at least tread water. Keep in mind, before the economic downturn, SAAR was at 16M. When GM gets to 2010, and the effects of all their contract negotiations, and other restructuring savings take full effect, they will be saving $5,000 per vehicle made over their cost just five years ago.

Six Reasons Why GM Should Declare Bankruptcy

Too negative of a stigma to help GM. Meanwhile all GM needs, really, is to have auto sales improve somewhat. A thawing of the frozen credit market would add another 1.5M a year in auto sales. A normalization of fleet sales would add another 2M in annual sales. That brings sales levels up to 12.8B SAAR, a level GM says is enough to make them profitable. Most auto experts expect SAAR to return to at least 15B by 2011. Plus, when 2010 gets here, the full effect of restructuring savings and labor union negotiations will result in a cost savings per car of $5,000. That's right, $5,000. Plus GM will actually be paying back the federal bridge loan at 5% interest, the best use of federal dollars our government has spent on in the last 4 months, for sure!!

As GM Goes, So Goes the Nation (Part 2)

I take a different view of GM, and expect them to return to profitability sometime in 2010, unless SAAR remains under 11M. GM spent a ton on worldwide platforms that are now the envy of the world. Their product launches over the last few years have been awesome, and into the future are just fantastic. If the economy wouldn't have tanked, GM would already be reporting a profit. We're earning 5% interest on our bridge loan to GM, which will, at worst, begin to be paid back in 2012, and if SAAR returns to 15B or up, much faster. The business moves that GM has made over the last five years or so have put GM in a much better competitive position. Of course, you'll have to ask our government why they even allowed Japanese manufacturers in this country decades ago, when Japan doesn't reciprocate, basically closing their 3 million car market to U.S. Manufacturers. Ask our government how they expected the domestic manufactures to compete with health benefits placed squarely on the companies back, while the Japanese have their benefits completely subsided by their government. It may not look like it for awhile longer, but the future is bright for GM. When America begins to buy cars again, and they will, then the GM recovery and return to profitability will shortly follow. Look for GM's market share, relative to the market, to actually increase this year.

Made in USA Is Alive and Well

The demise of the domestic auto manufacturers is highly overstated in your comments. Let's see what happens in 2010-2011, when all three domestic auto manufacturers are profitable, shall we?


On Feb 22 12:09 PM Glen L. wrote:

> Dave Wrixon is absolutely correct. American manufacturing is much
> too heavily involved with weapons production ordered by the federal
> government, and as anyone who has ever worked on a federal contract
> knows, the supposed "productivity" of high sales vs. low number of
> workers merely reflects the outrageous prices the government pays
> its favorite crony capitalists.
>
> If and when the Obama administration drastically cuts war spending
> the true weakness of America's manufacturing sector, and the entire
> economy, will be fully exposed. For one example, that household
> electronics name, GE, will likely go bankrupt without the huge DOD
> contracts it relies on now. This will be on top of the demise of
> most of our domestic auto industry (unless it's nationalized) which
> also contributes heavily to the gross numbers above. Then there's
> the decrease in commercial jet orders...
>
> The doodoo is getting deeper by the day.

General Motors: Time to Shed Some Brands

The Chevy Malibu is distinctly different than the Pontiac G6, which are both distinctively different than the Saturn Aura. Great job GM!! The Buick Enclave is distinctly different from the GMC Acadia, which both are distinctly different from the Saturn Outlook, of which all three are distinctly different from the Traverse. Great job GM!! The Pontiac G8 is distinctively different from the Cadillac CTS, which are both distinctivly different to the new 2010 Buick Lacrosse, which all three are distinctively different from the Chevy Impala. Great job GM!!

I have no clue what the authors vision is like, but their are excellent eye doctors throughout this great nation that could help.

What's an American Car These Days?

American cars are what they always have been. A car purchased thru GM, Ford or Chysler. Nothing has changed. Profits still go to the home country when you buy from anyone else. People who are buying imports continue to weaken the manufacturing complex in this country. Plus, because you can now choose a GM, Ford, or Chysler car, and have it be equal or superior to the import, you can buy American with confidence these days. Why doesn't our government force Japan to open their market (3rd largest in the world) to U.S. cars? Free trade is only free if its equal.

What's Driving Toyota Down?

Whoops, regarding Ford--number 2 position.

What's Driving Toyota Down?

GM sure is on a roll. Look for GM to continue to build market share against Toyota in 2009. In fact, I predict that GM will sell more cars than Toyota in 2009, while keeping thier truck share intact. I'll even predict that Ford will reduce the gap with Toyota in sales in 2009 and could go back to the number 1 position in 2010. Those two manufacturers cars are getting too good and the car buying public is starting to pick up on it.

The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

There is certainly nothing wrong with lending to people with a 621 score and above. The higher risk is accounted for in a higher interest rate for people with scores at that level. GMAC has done nothing more than re-institute their previous lending standards, and it is not automotive, but mortgage loans that have created profit problems for GMAC,

General Motors Fights Uphill Battle with Double Edged Sword

All GMAC has done is gone back to its lending standards of a few months ago. This is not a loosening of credit for "high risk" candidates. However the person qualifying with a 631-650 score will certainly have a higher interest rate than someone at 750, as it should be. GMAC's underwriting of automobile loans is bread and butter for them. Their sub-prime mortgage loans is what got them in trouble. GM's ability to sell vehicles has been greatly enhanced by the return of GMAC. I look for GM's sales to be 20% higher than Novembers.