Rant....Ford & GM stupid

[Deleted member 3577]

So what do you think about Ford?

It's down to $1.73

 

[tony barnhill]

So what do you think about Ford?

It's down to $1.73

Ford will make it even though Standard & Poor's pushed its credit rating deeper into junk status. But the reason for that was the erosion in its key full-size pickup amid fierce competition and high gas prices. It did, however, sell Jaguar, Land Rover and Aston Martin, companies it never should have owned & which pulled it down; so, that'll bode well as it goes into 2009. Plus, a few years ago, Ford started a restructuring that's still on course.

GM & Chrysler probably won't make it unless they merge.

 

[ecurie_ecosse]

I read somewhere this morning that GM had sold it's 2.something% in Suzuki,and received a pretty penny or two.The only problem is,I can't find the article anywhere. I think it was an NZ report,but it has dissappeared from the site.
And I agree that chapter eleven is the only way out.
Doc, when you find some one to "bail your butt out" let me know,so that I can sign up too.

Stuart.

 

[Baz]

Ford will be bringing the Kuga, Focus C-Max, and the new Fiesta from Europe. If their shares drop to close to dollar, I'm buying.
These Euro Fords are awesome. They stand a better chance imho, the quicker they can get them out.

 

[tony barnhill]

Will GM last 2 more months without chapter 11?

Now that I've thought about the direction you're going with that question....were I the CEO, I could make it past January 20th.

Back down production by cutting shifts or going to 4 day weeks of regular shift hours or idling all factories for a 2-week Christmas break could get them past January 20th. Ford did some of that back in June when they idled a Michigan factory for 9 weeks; GM idled the Corvette factory for a week in October and the the Detroit-Hamtramck assembly plant, which and makes the Buick Lucerne and Cadillac DTS sedans will be idled for a week starting November 24th.

BMW stopped production in its Leipzig, Austria factory for four days back in October, while Mercedes-producer Daimler announced it would close factories for up to five weeks in December. Renault also temporarily shut down all of its local factories and some of its foreign plants, such as Dacia Mioveni in Romania, while Peugeot-Citroen said it would slash production by 30 percent.

 

[coldplugs]

After ruminating on this a while I've decided that unless any bailout plan requires among other things that union workers accept that they contribute to their own health plans etc (fat chance!) then GM ought to be left to go chapter 11 if they choose. I still blame their (then) management for caving back when they needed to stand up to the unions.

But - I still think chap 11 is a lousy "solution" since they're off the hook re their lower priority suppliers getting paid. These guys provided goods & services in good faith and don't deserve to get stiffed because the general couldn't keep its own house in order.

 

[ecurie_ecosse]

Ford is selling 20% of its holding in Mazda.Expected to raise 540million dollars from sale.And GM made 230 million from the sale of 3% in Suzuki. This information was from an NZ news site. Has anyone heard anything on this Stateside?
I suppose you could say that both companies are attempting to help themselves,just a tad.
GM is removing a shift in Shreveport,among other things,to try to eke out their existance a little longer.I should have said,reputedly,huh?

Stuart.

 

[tony barnhill]

Stuart: Both are moving all sorts of money around in their international divisions trying to keep them profitable...ultimately, some of that cash will make it back here but the tax implications would render it almost negligable to their problem.....I think all 3 realize their future depends on international operations remaining soluble.

Ford is selling 20% of its holding in Mazda.Expected to raise 540 million dollars from sale.And GM made 230 million from the sale of 3% in Suzuki. This information was from an NZ news site. Has anyone heard anything on this Stateside?

Jay Alabaster of the AP recently wrote <span style="font-style: italic">"Ford Motor Co. is slashing its stake in Japan's Mazda Motor Corp. by nearly two-thirds, joining other struggling U.S. automakers in a fire-sale of prized assets to stay afloat.

Ford, which owns 33.4 per cent of Mazda, will sell about a 20 per cent stake, the companies said in separate statements.

The sale would net Ford 52-billion yen ($540-million U.S.) based on Mazda's closing price Tuesday, barely a quarter of what a 20 per cent stake in the Japanese automaker was worth one year ago. Mazda's shares rose 6.4 per cent to 184 yen Tuesday amid media reports of a coming sale."['i]

On other fronts:

"The closure dates for those plants likely will be accelerated, the person said. GM announced last week that its Moraine, Ohio, SUV factory will close Dec. 23, and it has said it will idle assembly factories in Oshawa, Ontario; Toluca, Mexico; and Janesville, Wis., by 2010.

General Motors' Shreveport assembly plant, which produces pickups and Hummer products, was not affected by the announcement last week. GM already eliminated the Shreveport plant's second shift, putting 798 people out of work. The plant, which once had 2,000 employees, now has fewer than 800."</span>
Source: Shreveport Times

{Personal Note: It's unfortunate about the Shreveport plant - it's one of GM's jewels...my '92 Sonoma that was built there is coming up on 390,000 miles....& right now its in the shop for its first distributor replacement since new!}

And by December 2008, GM will close its Jamesville, WI and Moraine, OH plants....in 2009 it plas on closing its Grand Rapids (Wyoming), MI plant, its Masenna, NY plant, its Fling, MI plant, A shift will also be removed from the plant in Moraine, Ohio.

Yes, Toluca, Mexico and Oshawa, Ontario will also close (man, it's hard to keep up with all the garage sales!).

Hummer will probably be the first division under the axe and the 2005 changes at the Saturn plant (only 1 production line in operation) don't bode well for that division either.

Maybe all our gov't leaders & the Big Three executives should read Jeff Wilson's book, <span style="text-decoration: underline">Manhattan Project of 2009</span>.

 

[swift6]

Ford will be bringing the Kuga, Focus C-Max, and the new Fiesta from Europe. If their shares drop to close to dollar, I'm buying.
These Euro Fords are awesome. They stand a better chance imho, the quicker they can get them out.

Ford is also, supposedly, already retrofitting assembly lines in Kentucky to build these smaller "European" Fords over here. I guess that make them a more true "world" car.

 

[tony barnhill]

Interesting article in yesterday's <span style="text-decoration: underline">New York Times</span> comparing BL to GM....a couple of quotes from it & a link to the whole story:

<span style="font-style: italic">"Today, G.M.’s German subsidiary, Opel, is appealing to Berlin for help, seeking more than 1 billion euros in credit guarantees, according to Carl-Peter Forster, G.M.’s European chief.

Monday, Chancellor Angela Merkel of Germany said her government would make a decision before Christmas."

...

"“If these guarantees become necessary, those funds should remain within Opel” in Germany, she added, echoing a concern some Americans have expressed that any United States bailout money go only to American automakers."

...

"As it turned out, every MG the company sold in the United States resulted in a loss of $2,000 for British Leyland."

...

"Eventually, the government put up £3.6 billion, equal to £11 billion in today’s money. But the rescue did not do much to preserve British Leyland’s labor force or market share in the long term."</span>

The complete article: https://www.nytimes.com/2008/11/18/business/economy/18car.html?_r=1

 

[TR6oldtimer]

GM

Total assets $136B
Total Liability $193B
Stock holder equity -$57B

That -$57,000,000,000 is a big hole to get out of.

The GM balance sheet has been in the read since 2006. No wonder they cannot get financing.

 

[tony barnhill]

Interesting article in today's "Huntsville Times" business section:
(https://www.al.com/business/huntsvilletimes/index.ssf?/base/business/122708981981920.xml&coll=1)
....Qvale Automotive is buying the defunct Bill Heard Chevrolet property for $7 million....that includes all the new & used cars, all parts, etc.....Qvale doesn't have a dealership agreement with Chevrolet & can't use Bill Heard's agreement....so Qvale has to buy one....I'll Bet Bill Qvale knows something we don't or he wouldn't waste $7 million (unless he's looking for a tax loss)!

 

[TR6oldtimer]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:]<span style="font-weight: bold">$7 million for the real estate </span>at 4930 University Drive and $500,000 for the dealership's fixed assets. [/QUOTE]

Auto dealerships generally are established in under developed areas. Over time, they become encircled with higher priced real estate. I have seen profitable dealerships here sell when the return on investment from selling the property, or converting it to other uses is greater then the dealership operation can make. I think this is a real estate acquisition that just happens to have a dealership attached to it. But I could be wrong.

 

[tony barnhill]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:]<span style="font-weight: bold">$7 million for the real estate </span>at 4930 University Drive and $500,000 for the dealership's fixed assets.

Auto dealerships generally are established in under developed areas. Over time, they become encircled with higher priced real estate. I have seen profitable dealerships here sell when the return on investment from selling the property, or converting it to other uses is greater then the dealership operation can make. I think this is a real estate acquisition that just happens to have a dealership attached to it. But I could be wrong. [/QUOTE]
Could be....but, what's he gonna do with about a hundred new & used cars....and a fully stocked parts room? Bill Heard always kept at least 6 new Corvettes on the lot & more new white trucs of all sizes than you can shake a finger at - plus all the other new Chevrolets!

 

[Silverghost]

Seems to me he could sell the new and used cars at like 30% less than market value and still come away money ahead. Also sell the parts inventory to smaller auto stores at a reduced price, allowing them to make a few more dollars. Then sell the lifts and equipment to smaller repair facilities, etc. And then develope the real estate with the profits from the sales of the cars and equipment. Almost like free money.......

 

[GregW]

<span style="font-weight: bold">Seems to me he could sell the new and used cars at like 30% less than market value and still come away money ahead.</span> Also sell the parts inventory to smaller auto stores at a reduced price, allowing them to make a few more dollars. Then sell the lifts and equipment to smaller repair facilities, etc. And then develope the real estate with the profits from the sales of the cars and equipment. Almost like free money.......

Not really free money in that the $7 mil doesn't include the cars.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:]Under the proposed agreement, Qvale's purchase will include the dealership's new and used cars, contracts, parts and other assets. <span style="font-weight: bold">The filing does not include a total sales price or the cost for the cars on the lot.</span> Court records said Qvale would pay $7 million for the real estate at 4930 University Drive and $500,000 for the dealership's fixed assets. [/QUOTE]

 

[tony barnhill]

<span style="font-weight: bold">Seems to me he could sell the new and used cars at like 30% less than market value and still come away money ahead.</span> Also sell the parts inventory to smaller auto stores at a reduced price, allowing them to make a few more dollars. Then sell the lifts and equipment to smaller repair facilities, etc. And then develope the real estate with the profits from the sales of the cars and equipment. Almost like free money.......

Not really free money in that the $7 mil doesn't include the cars.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:]Under the proposed agreement, Qvale's purchase will include the dealership's new and used cars, contracts, parts and other assets. <span style="font-weight: bold">The filing does not include a total sales price or the cost for the cars on the lot.</span> Court records said Qvale would pay $7 million for the real estate at 4930 University Drive and $500,000 for the dealership's fixed assets.

[/QUOTE]
True, Greg...he's paying $7 mil for the property plus the cost of the cars...guess I didn't make that clear, sorry....would GM hve a problem with a non-dealer selling new vehicles at a huge reduction in price that have a factory warranty...doesn't part of the selling price include what GM thinks the warranty on that car could cost?

You'd think GM would step in & stop him from flooding the market with cheap, new cars because it upsets the balance for dealers....plus, leaves GM holding the bag for warranty.

 

[Brooklands]

Instead of getting the bailout money from the taxpayers, how about Exxon-Mobil giving the companies the same money from their profits. It would be small change for the oil companies to keep the fuel burners in production. Seems like a win-win?

 

[Randi]

well if everybody in a fat cat zone who is receiving a bonas for a " job well done" in this dismal economy was denied- the fund would probably bail out quite a few situations that the tax payers seem to be left holding the bag on! :madder:

 

[vagt6]

If the person who's buying the dealer's assets does not have a franchise agreement with the vehicle manufacturer, he cannot sell the new cars as "new". All 50 states have similar dealer franchise laws that prohibit the sale of new cars without a franchise agreement. And, it's very, very expensive and hard to obtain franchise agreements, especially with foreign marques such as Toyota & Honda.

Also, I doubt if the dealer actually owned all the cars on his lot(s). Most franchised dealers "floor plan" their vehicles, financing at least part if not all the vehicles' cost with a loan with a bank, or with the manufacturer's lending plan (i.e., GMAC).

A franchised car dealership is a cash business that operates on relatively thin profit margins. If cars aren't selling, there's no cash and things can go south very quickly. That's what we're witnessing here. And, if a dealer doesn't have a thriving service department nowadays (big cash generator in a dealership), he's dead in the water, kaput.

I <span style="text-decoration: underline"><span style="font-style: italic">hate</span></span> to see this economic collapse. Car dealers pay a LOT of local taxes and support a lot of people locally. I formerly worked for a state franchised dealer trade association and met many great dealership owners who performed tons of charity work and vigorously gave back to their locale. The best of them were the pillars of their communities, and extremely savvy businessmen.

I sure do hope things turn around soon . . . we're losing an American retail icon. Very sad, indeed.