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GM is trying to pull off a very tricky and painful double play. On one hand it is moving as quickly as possible to downsize the second largest auto maker in the world. On the other, it is trying to show Washington lawmakers that it is a viable company worthy of more government aid.
When I broke the news this morning about GM Vice Chairman Bob Lutz retiring I had mixed emotions. On one hand I thought to myself, "Good for him. If this is what he wants to do, he should do it." On the other hand, I was thinking to myself, "It's too bad he won't be 'in the arena' because this industry needs someone like Bob Lutz."
At a time when there is little good news, I hate to be the bearer of even more bad news, but it kind of goes with the territory. So here it is: Used vehicle prices have bottomed out and are moving higher.
Yes, even the seemingly bullet proof auto makers have stalled. This morning, Toyota reported abysmal third quarter results and warned that it's heading toward its first annual loss since 1950.
The suppliers are now talking with the Treasury Department about getting $20.5 Billion in federal aid. These guys are hurting, close to collapsing, and on the verge of blowing a hole through the auto industry.
When auto sales plunge 37%, it may seem like I'm piling on pointing out the auto makers who really struggled during the worst month for the industry in 27 years.
All right, before you fire off an e-mail to me and tell me to "get a clue" because tens of thousands of people did buy a new car or truck last month, take a deep breath. Exhale.
Ford reported January sales dropped 42 percent, which is far worse than the estimate on Wall Street of a decline of 31 percent. On the surface, this would appear to support concerns that the auto market has not stabilized. I'm not sure that is a fair conclusion. Here's why.
Strange as it sounds, January auto sales could wind up being worse than the dismal numbers we saw in December. While that may lead some people to think the auto market and consumer are getting weaker, the reality could be far different.
For GM and Chrysler, this is when the good stuff will start happening. After a month of seeing relatively little from GM and Chrysler about how they plan to restructure their operations, we could be on the verge of a couple busy months.
In truth, few Super Bowl car ads ever really stick with viewers. Think about it? How many can you remember? Aside from Cadillac's "break through" ads featuring Led Zeppelin, few have staying power.
Any time a company burns through 59 million dollars in cash every day, it's not good. But for Ford, burning through $5.5 Billion in the fourth quarter is a huge improvement from burning 83 million dollars a day in the third quarter.
I asked the questions, and you told me in no uncertain terms what you think the President should do with the auto makers. Your reasons for each answer varied, and there were some you disagreed on more than others. With that said, let me give you a sense of some answers.
I hear it all the time. "Those guys know how to build a car that can get 50 MPG, but they just don't want to."
When I strolled into the New Orleans Convention Center this weekend for the National Auto Dealers Association annual meeting, I expected optimism. Even in a recession, these guys are sales people. It's what they do.
Wondering what President Obama is planning to do to save the auto industry? Just ask some of the people the President's advisors have been consulting.
Now that he's taken the oath of office a second time, watched the Jesse White Tumblers in the inaugural parade, and danced at several balls celebrating his inauguration, President Obama faces some tough choices with the auto industry. What should he do? What would you do if you were sitting in the oval office?
A few years ago, this kind of news would elicit hand wringing in Detroit, another round of "Detroit is Failing" headlines, and statements of false bravado from GM executives who often reacted with denial whenever the company slipped. Those days are gone.
Like a Clint Eastwood spaghetti western, the alliance between Chrysler and Fiat is an intriguing piece of work that leaves you scratching your head.
Less than a month from today, GM and Chrysler will have to give the federal government an update on how they are doing in restructuring their companies.