Continue reading Tesla and Toyota Teaming Up for Electric RAV4

Tesla and Toyota Teaming Up for Electric RAV4 originally appeared on BloggingStocks on Fri, 16 Jul 2010 11:45:00 EST. Please see our terms for use of feeds.

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?

Continue reading GM SUV dinosaurs are a thing of the past

GM SUV dinosaurs are a thing of the past originally appeared on BloggingStocks on Wed, 24 Dec 2008 12:02:00 EST. Please see our terms for use of feeds.

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.

Continue reading Does GM deserve a taxpayer bailout?

Does GM deserve a taxpayer bailout? originally appeared on BloggingStocks on Fri, 29 Aug 2008 10:00:00 EST. Please see our terms for use of feeds.

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.

Continue reading Going down in flames: Ford and GM

Going down in flames: Ford and GM originally appeared on BloggingStocks on Fri, 22 Aug 2008 18:16:00 EST. Please see our terms for use of feeds.

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.

GM's SUV development gets arrested originally appeared on BloggingStocks on Thu, 19 Jun 2008 09:35:00 EST. Please see our terms for use of feeds.

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.

Continue reading Companies that vanished: American Motors Corp. -- always the underdog

Companies that vanished: American Motors Corp. -- always the underdog originally appeared on BloggingStocks on Sat, 07 Jun 2008 15:10:00 EST. Please see our terms for use of feeds.

Continue reading Kerkorian adds $100 million to capital to buy Ford shares

Kerkorian adds $100 million to capital to buy Ford shares originally appeared on BloggingStocks on Fri, 23 May 2008 12:30:00 EST. Please see our terms for use of feeds.

Continue reading General Motors (GM) (finally) planning for the future

General Motors (GM) (finally) planning for the future originally appeared on BloggingStocks on Thu, 23 Aug 2007 16:15:00 EST. Please see our terms for use of feeds.

General Motors Corp.

General Motors (GM) reduces production at six U.S. truck-making plants originally appeared on BloggingStocks on Thu, 23 Aug 2007 11:55:00 EST. Please see our terms for use of feeds.

Toyota (TM) hybrid stalled -- can Detroit capitalize? originally appeared on BloggingStocks on Thu, 09 Aug 2007 14:00:00 EST. Please see our terms for use of feeds.

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.

General Motors, what do you mean 'superior'? originally appeared on BloggingStocks on Sun, 17 Jun 2007 09:40:00 EST. Please see our terms for use of feeds.

The SUV love affair isn't over yet originally appeared on BloggingStocks on Thu, 16 Nov 2006 12:14:00 EST. Please see our terms for use of feeds.

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.

GM fakes a price hike originally appeared on BloggingStocks on Thu, 09 Nov 2006 00:12:00 EST. Please see our terms for use of feeds.

Continue reading Ford slashes production

Ford slashes production originally appeared on BloggingStocks on Fri, 18 Aug 2006 11:20:00 EST. Please see our terms for use of feeds.