General Motors Corp. said its third-quarter vehicle sales dropped 11% world-wide, the latest indication that growth overseas has stopped offsetting declining sales in North America.
GM, marking its third straight quarterly drop, sold 2.11 million vehicles in the quarter. That pushed GM, until recently the world's largest auto maker by sales, further behind Toyota Motor Corp., which last week reported third-quarter global sales of 2.24 million vehicles, down 4%.
In North America, a slumping U.S. market and a consumer shift to smaller cars from trucks, on which GM depends for much of its revenue, are hurting the auto maker. Until this year, overseas growth had kept GM's total vehicle sales rising, but sales in Western Europe have slid and key emerging markets show signs of weakness as economic and credit turmoil hurt consumer confidence.
The markets have had bad feelings about these companies for awhile. Note the following charts for GM and Ford:
Still -- let's lend these guys some money because they deserve it.
4 comments:
In essence this is socialism. The reason the automotive companies are kept afloat is because they employ a lot of people. They aren't directly operated by the government, but ultimately, were it not for government intervention they'd probably have collapsed.
GM is pressuring the government to lend them money to buy out Chrysler. This looks like a deal between GM and Cerberus Capital to take taxpayers' money and run, and by the way eliminate GM's competition from Dodge trucks (close 2 plants in Michigan) and eliminate the Dodge passenger car and minivan brand in favor of Pontiac and the Chrysler car and minivan brand in favor of Buick (close the huge plant in Belvidere Illinois as well as plants in St. Louis, MO, Newark, DE, Windsor Ont., Bramalea Ont., etc. etc. Not to mention all Chrysler's tier 1 & tier 2 suppliers. This woould leave only the Jeep plants in Detroit and Toledo. GM and presumably Cerberus are pressuring congress to co-sign & underwrite this catastrophe now on track.
Let's get real. This is the inevitable result of 30 years of aggressive management stupidity by US auto execs. Nobody should even consider any kind of bailout with firing all upper management and the corporate boards. The European, Japanese, and Korean automakers made smart decisions and are generally doing well. The insane resistance to retooling to make smaller, more fuel efficient vehicle by Detroit inevitably sealed their doom. Anybody with half a brain should have been able to see this coming 30 years ago.
It's all short term thinking that's hurt them. They cranked out SUV's because they had huge margins. They ignored the small more efficient car segments because they couldn't make as much profit.
They ignored serious innovation efforts and they ignored the long term trends in oil prices, etc. So we have what's effectively a repeat of the 80's. They are all left flat footed while the Asian car makers eat their lunch. We'll bail them out, maybe Chrysler goes away, they'll grudgingly start making small cars, and that'll be that.
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