Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Debt-Driven Consumer Economy Breaking Down - 23rd Oct 17
Next Wall Street Stock Market Crash Looms? Lessons On Anniversary Of 1987 Crash - 23rd Oct 17
This Super Metal Is Set To Soar By 300% - 23rd Oct 17
More New Record Highs As S&P 500 Gets Closer To 2,600 Mark - 23rd Oct 17
Another Minor Stock Market Top? - 23rd Oct 17
Bitcoin Hits $6,000, $100 Billion Market Cap As Helicopter Ben and Jamie Demon Warn The End Is Near! - 22nd Oct 17
Time for Caution in Gold Miners - 22nd Oct 17
“Great Rotation” Ahead; Will it Be Inflationary or Deflationary? - 21st Oct 17
The Trigger for Volatility, Rates and the Next Crisis - 21st Oct 17
Perks to Consider an Agent for Auto Insurance - 21st Oct 17
Emerging Megatrends Hurting Consumers - 21st Oct 17
A Catalyst of the Stock Market Bubble Bust - 21st Oct 17
Silver Stocks Comatose - 21st Oct 17
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

GM, Ford, Chrysler on Sales Collapse Risk Bankruptcy

Companies / US Auto's Sep 04, 2008 - 03:17 AM GMT

By: Mike_Shedlock

Companies Best Financial Markets Analysis ArticleThe Wall Street Journal is reporting Auto Sales Tumble, But Industry Sees Signs of Hope .
Sales of cars and light trucks fell 15.5% to 1.25 million last month, down from 1.48 million a year earlier, according to Autodata Corp. The closely watched seasonally adjusted annualized selling rate was 13.7 million vehicles, up from 12.55 million in July, but down from 16.3 million in August 2007, Autodata said.




"There are early indications of somewhat improving conditions," said Ford Motor Co. economist Ellen Hughes-Cromwick, in a conference call with analysts and reporters. She pointed to a decline of about 40 cents a gallon in the price of gasoline, improvement in a key measure of consumer confidence and an upward revision in the federal government's estimate of second-quarter economic growth.

"The biggest issue is credit," Chrysler President Jim Press said in an interview. "It isn't the gas mileage of the vehicles turning people off, it's getting credit and financing.

Disingenuous Talk At GM, Ford, Chrysler

There are no legitimate reasons to state "There are indications of somewhat improving conditions". Falling crude prices are a strong sign of a collapsing global economy. Second quarter GDP is simply not believable. See GDP Much Weaker Than Headline Numbers for the rationale.

To suggest that auto financing issues are "the biggest issue" is complete silliness. People are tapped out and increasingly frugality is one issue. GM, Ford, and Chrysler producing SUVs, trucks, and cars that are now out of favor is another reason.

Car Sales Post 10th Straight Decline

Bloomberg is reporting GM, Ford Drag U.S. Car Sales to 10th Straight Decline .

Here is my favorite quote from the article. It is from Chrysler President Jim Press: " Maybe towards the end of '09, going into 2010, there'll start to be some signs of recovery. "

GM Celebrates

In celebration of our 100th anniversary, we're sharing our GM Employee Discount . You pay what we pay. Not a cent more.



2009 models include Chevy HHR, Cobalt, Malibu, Impala, Equinox, Avalanche, Silverado, Buick Enclave, Pontiac G5, G6, Vibe, G8, Solstice, Torrent, GMC Acadia, Sierra, Saturn Aura, SKY, OUTLOOK, Cadillac CTS, SRX, DTS, STS, HUMMER H2 and H3. At participating dealers only. Take delivery by 9/30/08. See dealer for details.

If things were improving, would GM be celebrating?

On June 24 GM announced price hikes on 2009 models by an average of 3.5%. I called it GM's Ridiculous Bluff . Indeed it was.

I panned GM's Employee Pricing Ploy on August 19th with this statement:

" GM is offering over $4,000 in incentives and extending the offer to some 2009 models as well. It will not be long before the offer is extended to all 2009 models (and/or some other incentive program is put in place for 2009 models). "

Well that did not take too long.

The original offer was due to expire on September 2nd, but has now been extended to September 30th. Coverage of included 2009 models has been expanded to most 2009 models as noted in the above list.

Shop Until You Drive

Chrysler continued its 'Shop 'Til You Drive' Campaign by offering Up to 40 Percent Off MSRP.
"To help consumers, we are offering some of our most popular vehicles at significant savings. In August, we saw this formula generate new signs of momentum on vehicles like our Chrysler and Dodge minivans, Dodge Ram light-duty trucks and Jeep(R) Liberty. In September, we will continue to offer competitive values and showcase dynamic new vehicles like the 2009 Dodge Challenger, and hybrid Dodge Durango and Chrysler Aspen SUVs."

Chrysler's 'Shop 'til You Drive Sales Event' continues through Sept. 30, offering up to 40 percent off MSRP on select vehicles, and zero percent APR for 72-months on the 2008 Dodge Ram, Dodge Durango, Chrysler Aspen, Jeep Grand Cherokee and Jeep Commander. Especially strong values are available on Dodge Ram pickup trucks, with up to $9,000 discounts in select markets. The only sign of momentum is in reverse. Nonetheless, at 40% off Chrysler will eventually clear inventory. What a difference from 2006.

Chrysler Achieves All Financial Targets

Chrysler CEO says Chrysler Shrinking to a Profitable Size .
Chrysler cut a million units of assembly capacity in the past year, pared its lineup and now will thin its dealer ranks with a goal of making money on annual sales of as many as 2.5 million vehicles, down from an "unprofitable" 4 million, Press said today in Los Angeles.

In the first half of 2008, "we've achieved all of our financial targets that Cerberus set at the start of the year," Press said. Those must have been the easiest financial targets in automotive history.

Chrysler Tops Peers in Bankruptcy Risk

On August 15 Bloomberg reported Chrysler Tops Peers in Bankruptcy Risk, JPMorgan Says .
Chrysler LLC is the most likely of the three U.S. automakers to file for bankruptcy protection in the next two years, JPMorgan Chase & Co. said, citing a panel discussion among credit-rating companies.

General Motors Corp. is the next most likely and Ford Motor Co. is the least, JPMorgan analyst Himanshu Patel wrote in a report today, quoting discussion yesterday by analysts from Standard & Poor's, Moody's Investors Service and Fitch Ratings. S&P and Moody's both cut Chrysler's credit one level on Aug. 7, seven steps below investment grade.

Moody's cut GM's rating to Caa1 on Aug. 13. S&P lowered GM and Ford to B- on July 31. Fitch downgraded Ford to B- on Aug. 1, matching its action on GM on June 25.

Without government (taxpayer) bailouts, these companies simply cannot survive.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2008 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Bobby Batts
11 Nov 08, 07:27
The Big Three

Why doesn't the big three cut prices even deeper on vehicles as any other retailer would to move merchandise? People are not going spend big bucks right now unless it is the ultimate deal. When that happens the dealerships will be asking for more vehicles to sell and profits will be up! Too many vehicles are above 20 thousand dollars in price and consumers are looking for those deals way below that price, but with all the goodies included. Not some stripe down verse! What is wrong with this idea?


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife