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Old 16th April 2005, 01:40   #1
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Default Are GM, Ford going Broke?

hey everyone.
here is my first post since I moved to Canada and it's bad news
Go through this link . Some crazy professor thinks both GM and Ford are going broke and anaylsts are asking people to avoid buying shares of these companies.
Guess it's time to stop worrying about Fiat and focus our energies on these two biggies.
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Old 16th April 2005, 02:06   #2
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Quote:
Originally Posted by amit
hey everyone.
here is my first post since I moved to Canada and it's bad news
Go through this link . Some crazy professor thinks both GM and Ford are going broke and anaylsts are asking people to avoid buying shares of these companies.
Guess it's time to stop worrying about Fiat and focus our energies on these two biggies.
Looks like the link points to malware / spyware.... my Pest Patrol beeps like crazy when I click on the link and the link ultimately takes me to microsoft....

Anybody else having this problem?
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Old 16th April 2005, 02:14   #3
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The link is from workopolis.com. Go to sales and then automotive sales section and it will be there in the top left corner. Hope it works!
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Old 16th April 2005, 03:14   #4
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yeah the link ultimately leads me to microsoft.the second method works just fine though !!
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Old 16th April 2005, 06:15   #5
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HAha dont you think Ford is broke?? What does it seem like.. Last time I did financial analysis on ford international they were broke from 2002 and cant cope up till 2007 even if everything was right. only asian sales were profitable and they are relying on the sales of new mustang and pickups i guess in american market.the number of restructuring they had recently ,that you cant count with your fingers.

As far as GM is concern they are on the border, but they are better off in the 3 biggies.

what causes all these, is the health benefit package which is eating a lot of money, wonder how indian companies are like if they have to shell all their profits plus extras only on health benifits???ford and gm spend wooping 3 billion only for Health benefits in US. Now you can say they are broke.

* just for information they have profits close to a billion from american markets I guess.

toyota has seen a phenomenal growth in US, it has chased ford in sales and is now the second in US market after GM and closing on to top spot. Nissan has done a very striking restructuring which made it the best business model (AUTO SECTOR) in US.

Here we have to see something, american car companies work not for profits but for american community, means they have a mother to son relationship for american community , but japs work for profits hence that difference. that's the only reason why japs dont have attractive health benefit packages for wage workers.

Ok I want some guys to commnet on european companies and indian if you feel its not
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Old 16th April 2005, 07:05   #6
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American auto unions are very notorious, they extract every penny possible from the management. Besides, they oppose every attempt to out source. No wonder US auto companies can't make profit after feeding their union employees.
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Old 16th April 2005, 07:53   #7
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Is there a single exceptional automobile for the masses produced by these two manufacturers' american divisions? NO.

You might say the Mustang and 'vette are good, but they arent exactly high volume cars. Accord and Camry pummel the americans on their own turf, and the yankees have no car to reverse that trend. No wonder they are going broke!!

Even in europe, the Focus and Mondeo are no longer at the top of the class, they have been dethroned.
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Old 16th April 2005, 10:01   #8
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An auto enthusiast will care less about the stock of these companies, and look towards their new models. Personally I love the new Pontiacs from GM. Checkout the 2006 Pontiac solstice. Its an awesome roadster for under $20K. Simply incredible curves. The Pontiac GTO and the convertible look promising as well. They will bring back the lost charm into GM, just as the 300c and magnum did to Chrysler.

Ford and GM simply own too many companies and models. They will have to try very hard to lose. Like hiring Enron CEOs. The turnover generated by just the Ford F150 in the US is greater than the total turnover of Toyota or Honda. These guys are huge, but they operate on wafer thin margins that hits their balance sheets, and hence their stock.

All my finance and accounting projects for my MBA program were based on my study of these 2 companies, and I found some astonishing financial facts about them. For example - they were so powerful a few decades back, that they bought the railroad companies in the US and destroyed all the railway tracks. This is what capitalism can do for us.

So, dont worry guys GM and Ford are here to stay - for a long long time.
-Prasadee

Last edited by prasadee : 16th April 2005 at 10:03.
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Old 16th April 2005, 10:16   #9
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Quote:
Originally Posted by islero

You might say the Mustang and 'vette are good, but they arent exactly high volume cars. Accord and Camry pummel the americans on their own turf, and the yankees have no car to reverse that trend. No wonder they are going broke!!
You got to check your numbers buddy. The US auto industry is mostly dominated by Pickup trucks and SUVs. The Ford Taurus may have lost it to the Accord, but look at the number of companies and models they own. Do not compare singlemodels but look the company as a whole.

GM = Chevrolet + Pontiac + Buick + Cadillac+ GMC+ Oldsmobile + Saturn + Hummer + Saab + Opel + Daewoo + Vauxhall + Holden + Stakes in Fiat, Isuzu, Subaru, and Suzuki.
In addition, All the US military vehicles are custom built by GM.

Ford = Ford + Lincoln + Mercury + Mazda + Volvo + Jaguar + Land Rover + Aston Martin. All the cop cars are custombuilt by Ford (Crown victoria)

Honda = Honda + Accura
Toyota = Toyota + Lexus

You do the math.
-Prasadee
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Old 16th April 2005, 11:46   #10
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broke not really just not coming out with juicy models they have on offer for europe.
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Old 16th April 2005, 13:21   #11
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Quote:
Originally Posted by prasadee
You got to check your numbers buddy. The US auto industry is mostly dominated by Pickup trucks and SUVs.

GM = Chevrolet + Pontiac + Buick + Cadillac+ GMC+ Oldsmobile + Saturn + Hummer + Saab + Opel + Daewoo + Vauxhall + Holden + Stakes in Fiat, Isuzu, Subaru, and Suzuki.
In addition, All the US military vehicles are custom built by GM.

Ford = Ford + Lincoln + Mercury + Mazda + Volvo + Jaguar + Land Rover + Aston Martin. All the cop cars are custombuilt by Ford (Crown victoria)

Honda = Honda + Accura
Toyota = Toyota + Lexus

You do the math.
-Prasadee
Yes, but Toyota crept past Ford and all its numerous models last year.....

Of the GMC Models mentioned, very few sell outside the US of A (except the arab countries, especially Saudi Arabia and Kuwait).

Its a matter of when, not if...
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Old 16th April 2005, 16:07   #12
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Prasadee, I'll answer in an orderly manner.

GM:
Chevrolet= Managing somehow on pickups, saloons' sales mediocre
Pontiac= Aged models which Americans no more see the point of. Solstice again not volume material.
Buick= Ho hum
Cadillac= Here I agree, they are making good cars.
GMC= Market being eaten up by Jap pretenders to the SUV throne.
Oldsmobile= Did you forget? They are extinct now.
Saturn= see buick.
Hummer= Not volume, and H2 losing novelty fast.
Saab= Not exactly pushing along as far as sales is concerned.
Daewoo= *snigger*
Opel, Vauxhall= see cadillac
Holden= Selling well in Aus only.

As you can see, there are very few cases where there are genuinely good cars in the portfolio of GM, and a lot of the companies you mentioned might be making losses for all we know.

A few decades ago the saloon market was booming in America and was dominated by American manufacturers before the Japs came. Until very recently the pickups were in vogue and again, the Americans dominated. But now the japs are catching up fast, with Toyota and Nissan making incrasingly competitive trucks. So obviously, they must be losing sales.

I'll take back what I said before: I dont think they're bankrupt, but I'm sure they're in trouble.
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Old 16th April 2005, 18:07   #13
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You bet they are in trouble:

1. Manufacturing cars in the US is no longer a disadvantage - Honda, Nissan and some other foreign manufacturers have been doing a good job of it for ages.

2. GM and Ford : They simply dont have a nice lineup of high - quality and genuinely desireable cars. There are some exceptions to this statement, but they are very few in number.

3. SUVs and Trucks : Long the US car maker stronghold. But the Japs and Europeans are catching in like crazy.

4. No fresh technologies : Some still use push rod engines. Some are still heavy weight as crap.

5. Too much dependence on low profit fleet sales. In addition, a vast majority of GM cars are bought by their employees and under the family benefit schemes.

6. Depreciation : And not only in terms of how fast they age! Too many new cars by Ford and GM are being sold on 0 down, 0% interest, 0 monthly payment blah blah schemes.

I believe that the GM credit division is one of the only bright sparks in this auto giant.

Chrysler is doing pretty decent compared to its bigger brothers, isnt it?

GTO
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Old 16th April 2005, 19:11   #14
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And if that is not all, with gasoline crossing the $2 mark a gallon in the US, people are shifting towards smaller cars that are more fuel efficient than the huge trucks and SUVs. No doubt, Ford and GM are having to fight back with hybrid SUVs like the Escape to claw back any possible loss in marketshare or volumes.

Ford and GM will survive. While health, ex-employee benefits and other costs are eating into their profits, they have a long way to go. Shutting businesses like Oldsmobile, and tentaively Buick and Pontiac should help these companies re-align. Also, they need dedicated platforms that are flexible, rather than have so many models eating into each other's pie.

Infact, one suggestion in Businessweek turned out that if GM were to re-sign the agreement with UAW, rather than wait till 2008 (that's when the 5 year period ends), GM can save upto $ 5 bn in the forthcoming period (2005-08). Some smart business thinking can go a long way in saving the two greats.

Revv
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Old 16th April 2005, 19:25   #15
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Quote:
Originally Posted by GTO
Chrysler is doing pretty decent compared to its bigger brothers, isnt it?

GTO

Yeah, they are, but even they suffer from marital problems!!!!!!
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