"In my 27 years, I have never seen a month like this," said GM sales chief Mark LaNeve. "It was like somebody turned off the lights in the month of October."
October's declines were led by GM, where sales fell 45% to 166,744 vehicles. The company was hurt when its financing arm, GMAC LLC, began offering loans only to customers with top credit scores. In many areas of the country, only a third or so of all customers would qualify for loans, Mr. DiGiovanni said.
Ford reported its sales fell 30% to 132,248 cars and light trucks, Toyota Motor Corp.'s fell 23% to 152,101 and Honda Motor Co.'s dropped 28% to 85,864. For Toyota, fleet sales comprise less than 10% of total sales.
Let's loan these guys some money -- they seem really credit worthy, don't they?
The central issue with the car companies is their size and impact. Ford and GM combined employ about 500,000 people according to Yahoo Finance. While these figures don't break that number into foreign and domestic numbers I think a majority are US based. And those jobs have impacts on many other industries. Assume at minimum that 1 auto job directly impacts the employment of at least one other person. For example, an auto employee also shops for clothes at local malls etc.... In other words, we're looking at minimum at 1 million people directly impacted by the auto industry. That's the main reason people are scrambling to do something about this mess.
James Hamilton at Econbrowser made the following observation about car sales:
Lost income from motor vehicles and parts subtracted 64 basis points from the 2008:Q2 GDP growth rate (quoted at an annual rate), and took another 80 basis points away from quarter 3 (see BEA Table 1.5.2). Today's numbers suggest that the fourth quarter is going to be significantly worse than that.
But there is also the issue of horrible leadership. Toyota invested a lot of time and money in the Prius. It's a well-made car with that gets fabulous gas mileage. And it's now sold over 1 million cars indicating there is a clear demand. The US industry in contrast has relied on large autos/trucks which are well made but which are not well-positioned for an expensive oil environment. And despite oil's recent drop, we are in the age of peak oil where gas mileage will become a driving factor in car purchases. Bottom line, the US car company's management has closed their eyes to the underlying fundamentals of the car market for some time. Neither company has been profitable for fiscal year 2006 or 2007. And for that they should be punished, not rewarded.
Finally, take a look at their stock charts. These charts say "headed for bankruptcy."