General Motors Corporation is in trouble lately. It’s market share in the United States is at a 25-year all time low. Sales are down 26% this month compared to October last year.
The troubled car maker, which is the world’s largest automobile manufacturers posted it’s fourth consecutive quarterly loss on Monday. It’s total loss in North America alone has been more thna USD 4.5 billion this year.
An internal GM sales report for the chicago area says that from 1-12 October 2005, 576 Chevrolet makes were sold. Most Buick, Pontiac, and GMC dealers had zero sales. Total sales was only 12% of the company’s monthly sales goals.
A quote from the owner of one of the dealers, Gilmour Ford-Chrysler owner Allan Gilmour – “There are no sales. We have done reasonably well in used cars, but there are litreally no sales.” The dealership would normally sell 50 vehicles a month, but could only manage seven vehicles this month. Another dealer, Dennis Doerge of Loren Buick-Pontiac says “It’s the worst I’ve seen in 30 years. It is just awful. It is horrendous! The consumers are scared to death to buy. They need a reason to come in, and General Motors is not doing a thing right now.”
Analysts say that customers are waiting for the next big pricing program like employee discounts. Dwindling sales isn’t the only problem for General Motors. It’s main parts supplier Delphi has gone bankrupt. General Motors is suffering from bloated pensions, astronomical health care costs, tough worker unions and high fuel costs. The Delphi bankruptcy could hold General Motors liable for up to USD 11 billion worth of retiree health premiums and worker pensions.
University of Maryland business professor Peter Morici even predicts GM is on a path to bankruptcy within five years. Banc of America auto analyst Ronald Tadross has said GM should consider bankruptcy protection. Bob Hoffman, another critic has posted an interesting entry on his blog on why GM should consider bankruptcy protection. He says GM should enter bankruptcy, reorganize and exit financially stronger, with better management.
General Motors CEO knows about what all the analysts are saying though, and issued a statement on Wednesday that the company is not considering bankruptcy as a way to solve it’s financial troubles as they think it’s not a good option. He says, “when you’re buying a car it’s a very different thing. It’s a massive financial commitment. You expect to own it for a long time, and bankruptcy is something that’s going to have an impact in the consumer’s mind.”
Second largest automaker in the world Ford is also going down the same dark path. It posted a net loss of USD$ 284 million compared to a profit of USD$ 266 million last year.
Source: Reuters, WBEN, ABC News
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This whole Article mean ONE thing , CHINA!!
its way way too expensive for manufacturers in the US to sell Cars AND make Profits…u see the amount of health care thy have to pay….its draining thm..labour too expensive…i wont be surprised if thy all shift operations to asia , infact,its theONLY common sence ting to do….GM/FORD have been selling cars on discount factor and zero interest alone…werseas the japnaese of toyota /honda are seling and making margins…i oso believe US manufactures cant compete with their products…the japanse Know wat the market wants,n thy do it taylor made…Americans try n set new trrends in their approach …which is the wrong ting to do in a competitive n saturated market…lucky GM didnt buy into proton!
good la if GM buy plotong.. die faster ^_^
Please keep in mind that there are incentive for American corporations to make their cars in Canada, the Usa and Mexico. However, many of the so-called "Big Three car companies in Detroit choose to build their vehicle in Mexico or Canada becuase of low labour charges. But the Us government does encourage these companies to build plants in the southern region of the USA because of the lack of jobs for families that live in the low income area. These are the reason why some factories that are in the states are far from their Head Quarters in Michigan. But the two major reasons why Ford and especially Gm are in debt is because of the Unionization of their workers. (Union is an association representing a group of people working for a company or corporation.) Many of these unions demand a hell load of benefits and money from these corporation; if these demand aren't met. The unions will ask their workers to go on strike causing the company lose millions of dollars. This is probably the reason why the materials in a Gm or Ford are so cheap in their domestic market. The other reason is that they are banking on the loyalty of their fellow Americans to be strong. Although, that is obviously not working for them please don't say that americans can't build cars because Gm holds the title to having the best assemble quality In canada. Toyota ranked about 60 something on that. But this doesn't mean I support Gm, Ford or Chrysler. I love Jap cars.
ahahaha…
the americans think they are so good in almost everything.
feel the pain of going down.
bak kata pepatah 'sepandai-pandai tupai melompat akhirnya jatuh ke tanah jua'.
…aR – agreed. Many people in this world of ours may already have forgotten the pains and misery of failure – but on a broader front, the more important question is " WHAT lessons are there for us all to learn from ? " … and after that, the next question will be " HOW are we, as Malaysians, going to benefit from our learnings ? " This is purely logical, and not nuclear science – every dumbo and his grandmother should be able to come to the same conclusion.
How come, then, so many of us are still so worried ?
hmm…do i smell something….
ya…..
big manufacturer in a region…
mission from government…
not following market needs….
profit decreasing/loss….
so look a like…
dont every seem the reason bcoz of china is the main culprit here. Dont forget brands like toyota, honda and hyundai has suceessfully attacked and conquered a huge potion of American markets. They ahve set up factories on the US as well. Toyota is particulalry the most successful brand in the US,say if u want a normal car/SUV/truck go for the toyota, or if u want a sporty hip car for young ppl, there Scion and for luxury, there lexus (even rappers have lexus on their songs)
totally strong brand power!
Well dont forget they still have ford, kekeke.
OK.. This time, blame the oil producing country. They cause the whole market gone haywire.. All are their fault!!!
GM trouble is not something unexpected case to me.
American are to concern about the workers, but the workers are not really productive I believed. I have many experience working with these ppl, their are low performance and talks more than actions, not efficient at all.
The benefits given by GM to workers are too much. Next, the US market had been changed a lot recently due to HIGH fuel price and Cheap car floated in the USA.
Most of the US ppl had less income nowadays and need to save the cost of living. Koreans made car was the cheapest on town and quality is getting better and better now. Therefore, more American shift to buy these low price cars.
Also, Japanese car is famous on high quality and low fuel consumption in the USA, therefore American love these cars and keep on buying only Japanese made cars.
The lesson learn from GM, don't always under estimate your ENEMY or Competitors. Today you are NO. 1 doesn't means NO. 1 forever!!
Welcome to the world of competitive automaking. It seems like the Japanese/Koreans carmakers is a bunch of parasites. They come to your country and later overwhelmed you with their cars, change the market from big cars to small cars and even have the nerve to open their factory in the country that they have come to do business.
This is a new form of Command and Conquer – Asia strikes back! No need to start a war, we control them in a different way…nice.
Lots of younger people in the States spit on "Fix Or Repair Daily (FORD)." Aside from maybe the Mustang, most car-buyers in the college-student/young adult category buy Jap for the reliability, or other shitty cars from Saturn or Chevrolet.
GM=potong?:P
Have you ever looked at the balance sheet of Ford and GM?
Ford:
Total Debt: USD 158.44B
GM:
Total Debt: USD 285.13B
Looks like we can say goodbye to the American car companies, much the same way we said goodbye to the British car makers not too long ago… after the crash of MG Rover
i'm curious… as u guys said, those JAP or KOREAN company have factoroy at US, of coz they will hire US workers… and Union inside too… but y we have not seen any news that these asian car company facing same problem with this dummy GM? emm… anyone mind to tell me?
cheerss…
gegaoff,
imho GM in the US only makes cars which they think would suit their own market.. they never considered jap made cars would appeal to their customers…. which means theit design went one way while the japs when another…. the victor proved to be the japanese..
at the same time, GM in the 70s and 80s could give their workers all the incentives they need… because they had 50% market share..
they need this number to support their workers….
the problem now arises when they have too many many workers to much dept and too little cash inflow..
at the moment the jap companies do not have this problem because their share is rising… and the koreans have just opened one factory in the south..
its actually a whole different ball game between the japs and GM
my 2 cents
i have seen this problem long time ago….the "big three" are not producing cars that the consumers want…reliability is another big issue…but u can only improve so much on reliability when no one wanted to buy the car u produced becoz its dull, boring, too big, weird (read: pontiac aztek SUV )…and the big three tend to waste money on thick ads and simple ads…only recently exciting cars begun to ermerge from the big three, inc the cadillac cts, linclon LS, doge magum, chrsyler 300cblablabla…but these are far and few in between…..most of the time, GM held on to their decade-old platforms and cars models , with only slight facelifts and tweaks and calling it the "new model " (read: potong)…and cases like re-badging by taking holdens from australia and selling it as the "exciting " pontiac grand am in america just dont works…the customers are not stupid…
and their workers are unwilling to adapt and yield, and in the end they are killing the goose that lays the golden egg, the very hand thats feeds them
How old are you people, seven? Eight? Learn how to use grammer before you decide your fat fingers should mash the keyboard into what you call contextual thoughts.
As The White Stripes sang, "The Big Three killed my baby". We all have a little to hate the US for, I say good ridance to big US auto business.
cant find the reason why gm is not going for hybrid acrs the fuel efficient……….japneese r alrady doing that tyoyta alrady heaving a megnificant share in hybrid cars…….efficiency is the very important attribute that consumer percieve…so gm should be quick before consumers used to tyota or other japeenes hybrid cars…..
WE SOME AMERICAN MAKE UM HEAP BIG WAR .
G.M.COMING THE OUT ON TOP AGAIN UG !
I would love to see these two boring, dull car manufacturers go make something else, maybe used up scraps of bits of parts in their warehouses for washing machines, mini-household swimming pool submarines… .whatever, just stay off cars. They know nothing bout cars. ok, maybe Ford had abit more talent given that they have the Ford GT…. other than that, all american cars are Johnny Bravos, big fat muscle cars with steering lock to lock ratio 0.00001 to 0.00002 …. LOL
because of iraq war..i buy emerican,british and australian last….
let see how long product of this country last… soory wrong topic..
hahaahahah………its the end of united states of america automotive industry……see how japanese can do………..