The New York Times has reported: The last Chevrolet Tahoe rolled off the line here in Janesville shortly after 7 a.m. in the 90-year-old plant, which had built more than 3.7 million big S.U.V.'s since the early 1990s. While the overall new vehicle market has dropped 16 percent so far this year, sales of big S.U.V.'s have plummeted 40 percent. Their closings leave the Big Three with only one factory each still devoted to making traditional big S.U.V.'s - Ford Motor (NYSE: F) in Kentucky, General Motors (NYSE: GM) in Texas, and Chrysler in Detroit.

The car manufacturers have been hit hard by tight consumer credit, the high cost of fuel and an overall slowing of the economy. All three manufacturers have been pleading with Congress and the White House for financial support and with the UAW for contract concessions. After Two of the three (Congress and UAW) failed to act, President Bush stepped in to provide an aid package of $17 billion to get the auto companies through the first quarter of 2009.

Despite the rescue package finally coming through Wall Street has not been impressed. The stocks of GM (NYSE: GM) and Ford (NYSE: F) are down 35% since the announcement. Ford closed yesterday at $2.19, down -0.40, losing -15.44% in one day. GM closed at $3.00, down -0.52, losing -14.77%.

Can either of these companies avoid bankruptcy if they cannot stay off the pink sheets? Is bankruptcy inevitable? Are you buying these stocks with hopes of a recovery?

The New York Times reports that General Motors (NYSE: GM) wants a $50 billion bailout due to the credit crunch. It says it can't get the money it needs to build fuel efficient cars. But during the decade, when it was minting money from SUVs and trucks sales, GM could have invested those profits in fuel efficient products. Now that those profits have evaporated, it wants taxpayers to step in.

What kind of bailout does GM want? The Times reports it seeks $50 billion in government-backed loans to retool its plants to build fuel efficient cars. GM is not alone -- Detroit's automakers and the United Auto Workers (UAW) already requested Congress to "appropriate $3.75 billion to back the $25 billion in loans authorized last year." Now they want to double that amount and are "urging Congress to act by the end of September so that the money can be available next year." No doubt the industry is in trouble. The Times reports that "total sales for [August are forecast to be] 14.4 percent lower than a year ago and that G.M.'s sales [will drop] 27.5 percent."

But the economic logic for this taxpayer-funded bailout is tenuous. GM wants the government to leave it alone when it comes to fuel efficiency and it made huge profits on gas guzzlers before the price of oil shot up from $24 a barrel to $117. Thanks to GM's lack of investment in fuel efficient vehicles, its losses are soaring. Most recently it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. It wants our money to make up for its bad management. Since its current CEO, Rick Wagoner, has taken over, GM's stock price has fallen 83%. But he still has the support of GM's board.

I know, I know: forecasting the imminent demise of America's car companies is nothing new, but recent events have highlighted the kind of shortsighted planning that has plagued Ford Motor Company (NYSE: F) and General Motors Corporation (NYSE: GM) for years. While the gas crisis has exacerbated the shortcomings of the automakers, the companies' failures to understand their core audience, invest in R&D, and ensure the quality of their finished product are long-term, endemic problems that make them a very questionable bet.

Recently, for example, General Motors' decided to offer incentives, extended protection plans, and employee pricing to draw buyers to the line; these innovations, however, have had the added impact of massively undercutting revenues. As Williams-Sonoma could now point out, slashing your profit margin is not really the best way to make a profit. While their decision to get rid of Hummer should help GM shed a pricey and currently unpopular line, by the time the sale is finished, gas prices will be back down and everybody will be driving hydrogen-powered cars.

Ford, meanwhile, has decided to focus its attention on cars, a long-term plan that doesn't seem very well thought out. While the Mustang is, perhaps, Ford's most famous model, their trucks have long been an iconic symbol of the company. Rather than invest in making their strongest sellers more fuel-efficient and thus more attractive to consumers, Ford seems to be placing its eggs in a somewhat unreliable basket.

GM (NYSE: GM) has decided that it will come close to suspending development of new SUVs. The market for the trucks is so bad that even Toyota (NYSE: TM) thinks it will lose money on the beasts in the US this year.

The Wall Street Journal reports "General Motors Corp. is delaying the redesign of SUVs and full-size trucks as part of a wholesale review of its product." For those not watching the car business over the last year, GM's decision comes way too late.The company should have cut back SUV development some time ago and made an attempt to get more of the mid-sized sedan market controlled by the Japanese.

It is easy to say that GM could not have seen the future, but that would be slighting companies like Nissan and Honda (NYSE: HMC) which was early in marketing more fuel-efficient cars.

GM is paying dearly for its mistake. Its shares hit a multi-year low at $14.75 in trading yesterday. They have not been so low since the Arab Oil Embargo in 1974.

How ironic.

Douglas A. McIntyre is an editor at 247wallst.com.

This post is part of a series on some of the most memorable companies that have disappeared.

America loves an underdog. And for all its 33 years, American Motors Corporation (AMC) was clearly an underdog.

The American automobile company was formed on January 14, 1954, by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company, in an effort to challenge the "Big Three" automakers -- General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler. At the time, it was the largest corporate merger in U.S. history, and the new carmaker became the steward of the popular Hudson Hornet and Nash Rambler lines.

After chairman George Romney retired from AMC in 1962 to run for governor of Michigan, the company struggled to come up with a way to compete with such popular "pony cars" such as the Ford Mustang. Sticking with its strengths in fuel economy, AMC introduced the Gremlin in 1970, its most popular car since the Rambler. The AMC Pacer followed in 1975. The Pacer was wider than Gremlin and featured fishbowl windows designed to eliminate blind spots. Unfortunately, it also had a bigger engine, which ran counter to trends during energy crisis of the mid 1970s. Some blame the Pacer's failure to catch on as the reason for the ultimate demise of the company.

Billionaire investor Kirk Kerkorian said he has added $100 million to his pool of capital for buying shares of Ford, and may borrow as much as $600 million to buy shares, according to a U.S. Securities and Exchange Commission filing, Bloomberg News reported Friday.

Kerkorian now says he may borrow up to $600 million, up from $500 million, from the Bank of America (NYSE: BAC), according to the filing, Bloomberg News reported.

Ford's (NYSE: F) shares fell 40 cents to $6.75 in mid-day Friday trading, amid a broader market sell-off.

Kerkorian's announcement occurred one day after Ford advised analysts and investors that it had abandoned its profitability target for 2009, due to rising steel and gasoline costs, among other factors, The Washington Post reported Friday.

Ford's shares: not overpriced

Independent stock analyst C. Leonard Bauer said Kerkorian's tactic, should he follow-through and increase his 5.5% Ford stake, is daring, but risky. "Let's just put it this way: Kerkorian would not be radically overpaying for Ford at these price levels," Bauer said.

General Motors Corp (NYSE: GM) eliminated overtime at six of its North American SUV and pickup assembly plants for 2007, citing fuel prices and the competitive market. Spokesman Tom Wickham said the automaker cut production to manage its inventory levels, according to the Detroit Free Press.

The move by General Motors hints that the auto industry is moving towards a "longer and more painful downturn in the U.S. than many had expected," according to the Wall Street Journal.

What's baffling is that GM, as well as the WSJ, didn't see this coming any earlier. SUV and truck sales for General Motors were down 9% over the first seven months of the year. Auto sales were surprisingly weak in June and even worse in July for the whole industry. Add the weak housing environment, the current credit market debacle, the ever rising price of oil and the global demand for hybrid technology to the mix and one has to question who didn't see this coming.

General Motors Corp. (NYSE: GM) has announced plans to cut back vehicle production at six plants inside its N.American operations. GM plant scale backs are not really news anymore (as they happen all the time), but this recent announcement has to do with GM's perennial best-sellers: large pickup trucks and SUVs. We all know that SUV sales have plummeted in the last 24 months as gas prices have made American consumers opt for more gas-efficient vehicles, but large trucks are one of the most profitable and popular GM products.

So, what is going on with GM's truck sales? Possibly nothing, as the automaker says that it just wants to decrease the amount of inventory on dealer lots. This reduction in truck and SUV building at six U.S. plants will speed that goal along. Once national dealer inventory returns to 'normal' (whatever that may be), will GM resume full production of large-model trucks under its various brands?

Hard to say, but when questions pop up every single month about how Toyota Motor Corp. (NYSE: TM) Tundra is taking market share away from GM's larger trucks, one has to wonder. The Tundra does not have the track record of GM's reliable truck lines, but overly aggressive customer incentives and consumer marketing are causing more truck customers to take notice. This steals attention away from GM's truck products as well as Ford's F150 truck series, currently the best-selling truck line in the U.S. Is GM's "no-interest" loan strategy along with large customer rebates going to help move more trucks off lots during the remainder of 2007? It may help, but more action is apparently needed. Hence, we have production cutbacks on some of GM's best overall vehicle sellers.

Due to potential safety problems, Toyota (NYSE: TM) has decided to delay the launch of new high-mileage hybrids with lithium-ion battery technology by one to two years, according to The Wall Street Journal, which cited people familiar with the strategy. The decision destroys any chance of Toyota meeting its goal of selling 600,000 hybrids a year by early next decade, up from almost 200,000 in 2006. The move allows General Motors (NYSE: GM) and others the opportunity to narrow the gap of future vehicle technology.

Toyota has also postponed its plans for the hybrid versions of the Sequoia SUV and the Tundra pickup until 2013-2014. That puts Toyota way behind General Motors and Chrysler's plans to launch hybrid SUVs in 2008.

The "potential safety problem" Toyota says, is the development of lithium cobalt oxide particles in its batteries, which have a tendency to overheat, catch fire or even explode. According to the company, similar problems have been seen in Sony Corp. (NYSE: SNE) lithium-ion batteries in laptops -- mostly because the chemistry of Sony's batteries was similar to that of batteries they were attempting to use in future hybrids.

The next-generation Prius will instead use the conventional nickel-metal-hydride batteries for its launch in early 2009. The first Toyota hybrid with lithium-ion battery technology will not arrive in the U.S. until 2011.

GM will have an opportunity to launch its first lithium-ion hybrid, the Saturn VUE Green Line model, as soon as late 2009, and before any competitors. Toyota's delays also give Honda Motors (NYSE: HMC) the opportunity to highlight its launch of a subcompact hybrid with improved nickel-metal-hydride batteries in 2009. Volkswagen (OTC: VLKAY), BMW and DaimlerChrysler (NYSE: DAI) all plan to create clean diesel engines for U.S. cars starting in 2009. The automakers say they now have obtained the technology to meet tough American clean-air standards.

Regardless of which company produces the first lithium-ion hybrid, Toyota's delays push back J.D. Power's estimates on future hybrid sales. Hybrid sales totaled 2.3% of all auto sales this year and were expected to reach 5% by 2010.

General Motors Inc. (NYSE: GM) kindly sent me the promotional material I've been waiting for about the new Buick Enclave. As a life-long fan of GM (six Buicks, four Chevys, and one Jimmy thrown in), I greatly looked forward to getting a look at promotional materials for the well-crafted Enclave. While that little beauty met all my expectations in regard to looks, style, appointments, and detail, one particular issue has left me a bit deflated.

The 2008 Buick Enclave sports an overall mpg rating range of 16/24 for all types of driving. I would have overlooked the gasoline use issue if not for the fact that these promotional materials use the words "superior fuel economy " when revealing the numbers. This fuel economy rating applies to an "advanced" 275hp V6 engine, which I'm sure makes the Enclave a blast to drive, but my issue is this: I already get similar mpg numbers for my 1997 Chevrolet half-ton pickup with its 5.2 litre V8!

Really GM, it's not that I have a particular problem with the rating as it stands. The fact of the matter is, at a list price of between $32,000 and $37,000, anyone who purchases the Enclave is probably not too concerned about the price of gas anyway. My point here is this: if the company is not interested in stoking the fire under loudmouth goofballs like me who enjoy spewing our opinions, until the day GM puts out a half-ton pickup that gets 30 mpg in town and a crossover SUV that rates closer to 36 mpg, it would do better to reserve the words "superior fuel economy " for when it's speaking of GM's goals.

But that's just my opinion.

In a report on GM's sales in China, there's a link to a CNN video about falling gas prices. (Douglas McIntyre blogged about the report earlier today.) Apparently, lower gas prices are making some American consumers think about buying SUVs again. We've heard so much about smaller cars lately, and hybrids and new technologies. But this report -- and basic knowledge of American culture and consuming habits -- suggests that these improvements are a long way off.

The American love affair with large, inefficient vehicles shows no signs of ending anytime soon. Even though gas prices are still over $2 per gallon in most parts of the country -- and nearly $2.50 per gallon on the west coast -- they are low enough to bring visions of unlimited power and size back into many consumers minds.

Are we really that shortsighted? I suspect so. And you can bet that General Motors Corporation (NYSE:GM) and Ford Motor Company (NYSE:F) and Chrysler hope we are. The last few quarters have shown just how much the American auto producers rely on SUVs to make money. When consumers start demanding better and smaller cars, the red ink begins to flow through Detroit. American companies simply cannot compete with the Japanese when it comes to fuel efficiency and small cars.

This raises the interesting question of what is really in the best interest for the United States. Should we hope (and fight) for cheaper gas so that Detroit can make money and Americans can satisfy their fantasies of power on the roads, or do we bite the bullet and try to design more efficient vehicles? It may be that the short term interests of Detroit and the American consumer are at odds with the long term interests of the country.

GM says that it will raise prices on some of its models due to rising costs. Somehow the reason does not seem to ring true. Although component parts, like plastic, are more expensive, GM is a company that is cutting $9 billion a year out of its costs in North America. It would seem that a little increase in plastic would be offset by such a large number.

But perhaps we should let GM have its little fiction. Its pricing problems are much worse.

According to a study released today by Edmund's, the online car buying company, a smart shopper can get up to 30% off the price of a pick-up or SUV now. For example, the GMC Sierra is available at 23% below its sticker price. Since Ford and Toyota are also offering discounts on their SUV and pick-up trucks, the market is going to be even more competitive.

Some industries do not give the consumer any chance to negotiate price. Gasoline sales are a good example. But other industries, including cars, are built around a sales experience where the customer can bargain for a better deal.

Raise the price 1% and then lower it 25% when the customer shows up.

Nice marketing technique.

Douglas McIntyre is a partner at 24/7 Wall St.

Ford Motor Company (F) has announced plans today to slash third and fourth quarter production. In today's announcement the company stated that third quarter production would fall by roughly 20,000 vehicles, but for the fourth quarter, the reduction would shoot up to around 168,000 vehicles with much of the reduction being in trucks and sport utility vehicles.

Ford enacted its "Way Forward" plan back in January which called for the company to shut down 14 plants and lay off between 25,000 and 30,000 employees by 2012. Today's announcement will mainly affect production at the Louisville Assembly Plant, but many other plants will also experience some downtime.

"We know this decision will have a dramatic impact on our employees, as well as our suppliers," Mr. Ford said. "This is, however, the right call for our customers, our dealers and our long-term future."