The Carmagedonn Thread: FCA and "Consolidation"

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At the end of 2008, Ferrari went from a 2 year waiting list to an 85% drop in sales. They had a 20-day "holiday" around Christmas because nobody was buying their cars. Porsche dropped around 50% (I think) but are, again, still on a high from the billions they made on trading in VW stock.

Don't matter if yo' customers is po' or stink ta hai heavens o' dough... ain't nobody buyin' them apples.

It's a fallacy to think the rich haven't been hit. That's why the stock market crashed. All those rich folks pulling all their money out of stock speculation and stockpiling dollars. Even oil futures collapsed. Nobody wants to spend on anything that doesn't contribute to their continued ability to breathe... even if it's just a measly few hundred thousand bucks. Even those who didn't lose a ton on the stock market aren't willing to engage in conspicuous consumption at the moment, lest it arouse the wrath of the self-righteous or at least irritate the neighbors.

Every crisis, the hardest hit manufacturers are those who deal in the rarefied field of automotive toys. Take a page from history... every single time we've had an oil crisis or financial crisis, it's the sportscar and luxury car markets that are worst hit.
 
Tol have you been watching the news, i just saw Citigroup which is one of the biggest banks in the world, after being bailed out by the gov, spent 50 million dollars on a brand new jet liner! so yea use your imagination, they just dont get it.
 
Citigroup isn't a rich person. It's a corporation. A buisness jet is a corporate tool. Despite the brouhaha over "JetGate", corporations do need them to facilitate travel of management staff for meetings with clients and other corporations, especially when commercial air schedules might cause delays. Whatever posturing and pouting politicians may do in mock indignation of execs gallivanting across the globe in private jets, there's a reason for them. Note that when the "Big 3" dropped their buisness jet trips and instead "drove" to Congress to do their begging last year, they actually spent more than they did by flying themselves, as the "green" cars they used had to be shipped out to them. Madness.

A supercar or exotic isn't a buisness expense. It's a toy. While there are some vehicles that are actually shifting well (because they're more low-key and easier for people to buy without inducing a lot of eyebrow-raising), the market for high end goods is well and truly in the loo.
 
LOL the money they used to buy that jet airliner was the 20 billion money bail out which was given by the gov, and american tax payer's money.....and yea this so called corporation is sorrounded by RICH people.


Tol idk kung nakatira ka sa states or not, pero tatindi ang paghihirap dito talaga.
 
Small_Fryz
how well is ferrari going?
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You mean their Fiat financiers? Alright-ish. They just bought 30% of Chrysler to break into the North American market (we get the 500 in 12-18 months), which will likely increase their sales dramatically. The big question for Fiat is if they break a deal with Peugeot-Citroen as well, which would not only limit development costs extensively, but also give them a well-rounded platform at which they have a strong presence in almost every market on the globe.

Ferrari, in my opinion, has little to worry about if Fiat is running the show. These guys are the champions of restructuring.
 
A corporation is backed by rich people, but it isn't a rich person. Of course, that doesn't excuse the huge perks given to corporate bosses after the government dole-out, but corporate excess doesn't typify the entire upper class.

Like I've said, rich or poor, people are affected, and the rich people who aren't affected badly aren't likely to flout their fortunes by splurging... some of them, anyway... enough to drop the bottom out of the luxury market.
 
Well of course every one is affected by it, but the lower class will get hit the hardest is what i said, thats how life is.


ANyways pinoy kaba?
 
seckcimike
Well of course every one is affected by it, but the lower class will get hit the hardest is what i said, thats how life is.


ANyways pinoy kaba?
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Yup. But so as not to offend other board members, who can't understand us, I use English here. Not because they might be offended that we're writing Filipino, but because they won't be able understand what we're saying, p're. ;) Welcome to the boards, BTW. 👍
 
seckcimike
Wealthy - Rich - Upper/Lower class - Poor - Broke
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Broke and poor are the same by quantity, but broke is temporary and poor is a more permanent lack of wealth.

Unfortunately, everyone holding onto their dollars is making our governments try to steal them from us so that they can spend it on what they want. Stimulate me, baby!
 
Ford Burning Through Cash Too

Today, Ford reported a net operating loss of $5.4 BN for Q4. However, Ford continues to say that they will not be asking the federal government for any time soon. Good on them, but how long that can last while this happens... hard to say.
 
seckcimike
Well of course every one is affected by it, but the lower class will get hit the hardest is what i said, thats how life is.


ANyways pinoy kaba?
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I'd just like to point that the middle upper class families I know could have bought a couple of nice houses with the money they've been losing... and that's just losses from the market tanking for the past few months. Everyone gets hit equally hard, just tends to be the wealthy got there by thinking ahead a bit have some back up plans, instead of planning on the government paying their retirement and their employer staying good. Diversify and invest :p

Still, everyone is getting hit hard right now.
 
FATALITY! Saturn Reportedly Going MIA in 2012

GM Insider
GMI has been told by sources very close to the situation that management and the Board of Directors have approved closing the Saturn brand as part of the plan for viability. Several options were considered for the brand, as evident with the influx of statements from various GM executives as of late about Saturn. One option was to merge the brand into the Pontiac, GMC, Buick sales channel (as GMI broke several months ago). GM also looked into selling the Saturn brand to their Chinese joint-venture in order to get the brand out of the GM umbrella.

Ultimately it sounds as if Saturn is going the way of Oldsmobile. GMI was told that the brand will be phased out down to three products; Aura, Vue and Sky. The final plug will be pulled sometime in the 2012 era. We also do not expect any future product from the brand from now on.
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Only 400 retail locations, overlapped models (or outgunned) models, it was only a matter of time. Disappointing, sure, but necessary to keep GM alive.

...And how about that Saab news? If they can't sell it, "integrate" the brand with Cadillac ala Chevrolet/Daewoo? Interesting!
 
Bah, to be honest I don't care anymore. If Saturn was the same as it was in the 90's, then I'd be upset, but seeing as they are basically another rebadge brand, then I say get rid of 'em.
 
GM and Chrysler have submitted their viability plans, due today.

First up, GM:

Basically, this is what the press release says:

  • Net cash flow is expected to exceed $6bn in the 2012-2014 time period.
  • GM needs support because of the economic crisis. (Apparently they did nothing wrong?)
  • GM will sell or phase out HUMMER by 2010. (Or at least a resolution?)
  • GM will sell 36 nameplates in 2012, apparently only 25% less than this year.
  • They will focus on Chevrolet, Cadillac, Buick and GMC with Pontiac being a niche brand.
  • Saab is going up for sale. It will be independent by Jan. 1 2010 and GM is currently working with the Swedish goverment on the brand.
  • Unless dealers put forth a plan to save Saturn, it will be sold or phased out at the end of the current model cycle.
  • GM will reduce it's dealer network from 6,246 now to 4,700 in 2012 and 4,100 in 2014.
  • GM is working to improve fuel efficiency of it's vehicles.
  • GM is investing significantly in fuel alternatives and advanced propulsion. This will make them a major player in this regard.
  • GM will close 14 more facilities by 2012.
  • They are in negotiations with the UAW make a more competitive work force.
  • And there's some other international stuff funded by other countries that I didn't really want to read.
  • They also asked for $16.6bn more.

Reading through, the vagueness of the press release is scary. They way it is written, you would think that GM is going to keep running how they are for quite a while. I'm also a little worried that they don't mention much of anything before 2012, and I personally would rather see them fix stuff sooner so we don't have to keep paying to keep them running for an extra few years. There also isn't very much in the way of product that'll give them a boost. Granted there is so stuff that doesn't look bad coming out, but they are a car company so I would feel a lot more comfortable with this if they had a plan to do what they are in business for and built quality cars. They also fail to mention anything about executive pays...

As a tax payer, I am not too overly pleased with the "plan" they put forth, but I guess we'll see what happens. I am also severely disappointed that GM takes no responsibility for the situation they are in, placing all the blame on the current economic situation.

I'm also wondering how the dealer situation is going to work out. With the way they're talking now, a lot of disappointing dealers are going to be looking even more bleak as their products slowly dwindle to none. When are some dealers going to combine with others? And I'm assuming they're going to be selling Chevys at their own dealer and the rest at another?

Chrysler

Chrysler is doing much worse than GM, yet I am almost more comforted by their press realease.

  • The alliance with FIAT gives them access to competitive, small and efficient cars.
  • In 2010 Chrysler will launch the new Dodge Charger and Durango (A unibody design), the new Jeep Grand Cherokee and the new 300.
  • Company fuel efficiency is going up, it will still go up with the new V6, a new Hybrid Ram and the Evs blah blah blah,
  • Chrysler will reduce fixed costs by $700m in 2009
  • Reduce to one shift in manufacturing
  • Cut 3,000 jobs
  • Discontinue three more vehicles
  • Reduce capacity by 100,000 units
  • Sell $300m in non-earning assets
  • They're doing something to executive pay.
  • The dealer network will be streamlined by reducing margins, eliminating fuel fill and reducing service contract margins.
  • They say something vague about the unions and that they will be cometitive in labor sometime.
  • They dealt with suppliers and cost reductions have been agreed upon.
  • Something with the debt and things will get them an extra $400m annually.
  • They also asked for $2bn more.

These two images also accompanied their viability plan:

001jeepchrysler2010.jpg

000jeepchrysler2010.jpg


In terms of product, I'm not convinced. Chrysler could use to cut far more than just 4 more model lines. The two images they released also aren't really all that convincing to me. The 300 already looks dated, and both look like they were rather hastily designed and not all too well designed. Who knows. Maybe they will turn out to be nice cars. Also disturbing is the lack of any mention of the Sebring. Chrysler needs to get a competitive Sebring out on the market if they want to succeed. It is probably the single most crucial vehicle made by the whole company. Two new big RWD V8 sedans and two new V8 SUVs aren't going to help them nearly enough.

I also wonder if they're trimmed enough fat when it comes to manufacturing. With them only cutting 3,00 jobs, I'd guess that a lot of workers are going to be losing a lot of hours. I'm also worried about the UAW. It doesn't really look like they're gotten that far with them...

I guess we'll see how this whole thing plays out. Either we're going to be throwing money at these companies for two more years then they're going to return to "normal," or they're just going to sink anyway. It'll be interesting.
 
Philly
I also wonder if they're trimmed enough fat when it comes to manufacturing. With them only cutting 3,00 jobs, I'd guess that a lot of workers are going to be losing a lot of hours. I'm also worried about the UAW. It doesn't really look like they're gotten that far with them...
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I think the thing both makers need to do is pull together some time studies. They can pull the slop out of many of their processes and get their logistics in order, thus doing more with less. Worked with CAT in the '80s. (unfortunately, they may be TOO lean, with overworked white-collar workers. and CAT's Logistics still suck.)

Caterpillar may not be a bad company to check out: they've weathered this recession much better than the Big Three, and the commitment to lean they have may be a part of that.
 
I don't think GM is saying that they aren't to blame with their current situation, however, we are at an unprescedented moment in which people who want to buy cars are faced with two major problems:

1) They're considering otherwise because it may not be "necessary"

2) They would have qualified for loans, but because of new rules, do not

...That being said, my big problem with GM right now is that they have a lot of good products ready. They're primed for the big show in Asia, in Europe, and even in South America. But we're looking at years in some cases before the cars show up. If they want to sell cars, they need to have the good ones here. NOW. Don't put the god damned Chevy Spark and Volt in Transformers 2 and tell people that they'll be available a year from then. They want them N-O-W.

Of course, if you aren't selling cars, you don't have money to fast-track production. Its a vicious cycle.

RE: Killing or Selling Brands

The HUMMER deal is something we've all known about, and GM is saying they can have it out of their portfolio by the end of Q1 2009. Apparently there is a private US firm interested in the brand, so I'd say, "let 'em have it."

The Saab situation is a bit more interesting as GM is counting on getting bailout money from the Swedish government in which they would use to help float Saab off either A) on its own, or B) on its own long enough to find a new suitor. Its an unfortunate end to what was a good match-up (I think), but that also ignores what also has been discussed for Saab; The roll-in for Cadillac.

Saturn, well, too bad. There was a story in the WSJ today that said that dealers already have a suitor ready to pick the brand up and take it in a new direction. How thats going to work out, I have no idea. Makes me wonder if its a Chinese buyer?

=-=-=-=-=-=-=

...and then there's Chrysler...

Just give us the Fiats already!!!
 
As hilarious as this may sound, it is starting to seem to me that once again GM is in last place in regards to pulling themselves out of this hole.
Based purely on those photos from the Chrysler release and knowing about the FIAT deal, Chrysler seems to know exactly what they need to do. Ford has shown to be more competent than the other two combined for years now. But GM is still like a lost child, saying stuff like "We need to cut brands" but then continuing to ignore the reasoning why they need to do such things.
 
Just found this video, look at 4:20:



What The hell, GM? Have these idiots not learned their lesson with Pontiac and Chevy?
 
I guess I'm not sure why its that big of a problem. It was never the intention for Chevrolet to market the Volt across the pond, and consequently, there will be Vauxhall and Opel rebadges made... As well as for Holden down in Australia. There is no word whether or not Daewoo will get a spin-off, but I believe Chevrolet will sell the Volt here in the Americas, and China.

Badge-engineering or not, GM doesn't have all that many options to re-engineer the car with specific differences for every market in their current financial situation.
 
A little bit of import stuff:

The local Nissan dealer near home in Seattle (and another in Seattle) has no cars on the lot. Has anybody heard of anything happening to Nissan as a whole recently?

What I heard is that their bank pulled financing and took all the cars and they're looking for a new bank. But I'm still confused as to what that means, and whether or not there is a bigger issue than a couple dealers in Seattle.
 
O RLY?

gmrickwagoner06_580.jpg


GM CEO Rick Wagoner Steps Down at Request of President Obama

Well, it was bound to happen sometime. My hate for Wagoner has swung back and forth over the years, but in general, I agree with this move. Its time for GM to move on, because as it is, they have suffered most under his tenure. It wasn't until Bob Lutz joined up that the company was worth shaking a stick at, and I constantly get the feeling that Wagoner was dragging his feet the entire time.

Thanks for the occasional effort Rick, hope your retirement doesn't mess up your schedule too much.
 
So how many truck loads of cash does he receive on his way out?
 
VIPERGTSR01
So how many truck loads of cash does he receive on his way out?
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Definately WAY more than enough to raise Octomom's eight new babies. :indiff: I really don't think he really cares anyways...All that money and bonuses he have will let him live like a king for the rest of his life. Unless he have some huge debt that piles higher than how much he have in the bank right now.
 
Philly
A little bit of import stuff:

The local Nissan dealer near home in Seattle (and another in Seattle) has no cars on the lot. Has anybody heard of anything happening to Nissan as a whole recently?

What I heard is that their bank pulled financing and took all the cars and they're looking for a new bank. But I'm still confused as to what that means, and whether or not there is a bigger issue than a couple dealers in Seattle.
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Many dealers(maybe the most, I don't know), they don't actually own the cars they sell on their lots.

Auto sales has been very slow for a while now, but it's damn near dead right now. Dealers who weren't financially secure enough to pay cash to the manufacturers for the cars before, now, they are struggling to pay their bills. Scary.

I'm guessing the bank gave up on your Nissan dealer. The thing is, by my observation, dealers either go out of business, or are bought out by the manufacturer before getting to that point.
 

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