1Q09 GM sales slump – Ford and Toyota make gains – Ever Wonder Why?

First quarter auto sales data shows that while GM sales continued to slump, Ford and Toyota made significant gains. Keep in mind that Ford accepted NO bailout moneys and Toyota is Japanese owned. Could it be that American car buyers are steering clear based on principled, ethical reasons – not supporting a company asking for a hand out? Or could it be concern of more practically matters, such as future availability of parts and dealership for repairs, or issues of warranties?

And what happens with GM and Chrysler? There is much talk of them being “smaller, leaner” companies. But could such significantly smaller companies continue to complete with a much larger Ford and Toyota who are already picking over the bones of these all but busted companies? Only time will tell for sure, but remember – American’s love an underdog, not a loser.

Auto Industry Soap Opera – All My Makes and Models? Search for Tomorrow’s Bailout? The Broke and the Bloated?

This week, GM announced that it would be closing 2600 dealerships by 2010 in an effort to shore up the profitably of top performing locations. The Hummer, Saab and Saturn lines are on the chopping block to be sold or shuttered. The once proud Pontiac line has been scrapped.

The daily soap opera continues. This week’s news from GM reads like a sweeps week death of a soap opera heroine. The dramatic scene, the last gasp. But are American auto buyers rolling their eyes instead of dabbing at the corners? With so much up in the air for GM, is there any sympathy left?

GM sales continue to stagnate. While the Total Confidence plan is a step in the right direction, it is hard to restore confidence in a company that is being forced to sell off its brands as if forcing its children to leave. Who wants to buy a car from a brand that may or may not be around in the next six months?

Will the car companies by able to weather the storm? Will they will make it to tomorrow? Will American car buyers care?

Stay tuned, dear reader, for the next episode of Guiding Headlight!

Fiat Fiasco

As part of the automotive bailout package, the United States government gave both Chrysler and General Motors an ultimatum: Come up with significant cost savings and restructuring plans to prevent or delay falling into bankruptcy. Chrysler was given an additional 30 days to comply – GM was given 60. It seems this disparity may be the death knell for Chrysler, but time will tell.

Prior to this governmental ultimatum, Chrysler had been in talks with Fiat about a possible merger. Those talks had broken down. But, in light of the 30-day deadline, Chrysler seemed to enter panic mode and restarted those merger talks. Within hours after President Obama made his announcement, Fiat CEO Sergio Marchionne flew to the US to participate in the negotiations with Chrysler. It seems again that these talks have become mired because Mr. Marchionne and the unions have reached a virtual impasse over contract re negotiations. Chrysler corporate officials have also looked askance at the bigger share of Chrysler that Mr. Marchionne as now asking for. While both sides are playing hardball with each other, time is running out for Chrysler to secure a deal and present its plan to the government.

Chrysler needs this merger to survive. If Chrysler should fail, the union and the workers lose. Without it, Chrysler will most likely end up in bankruptcy. Perhaps though, once Chrysler has reorganized within its bankruptcy filing, it will emerge as a new, leaner company, without all the excess baggage they are currently fighting to keep.

Dear GM

In amongst all the news about the automotive industry of late, it was reported that you are considering selling your patent for the 4.5-liter diesel engine. Please don’t; this could be a catastrophic mistake. Wake up! Can’t you see that this could be the basis of an overall redesign?

Such a knee-jerk reaction, brought on by our economy and gloomier forecasts, would defeat GM’s current turnaround plans. This innovative engine design showcases your engineering talent and prowess. Although currently out of production in GM models, these engines are:

• Easier to repair
• Cost less to repair
• Have increased fuel efficiency

Selling this patent would have dire effects. Remember Cadillac selling its cylinder cancellation technology back in the ‘80s. While the cylinder cancellation concept was right, a technical bug hastened the car company’s decision to jettison the technology before the bug could be worked out. Cadillac’s premature decision resulted in other manufactures making cylinder cancellation the concept of choice for engine displacement system to conserve fuel in almost every engine in the market today. With fuel economy at the top of new car buyer’s lists of must haves, followed quickly by low and easy maintenance, the reintroduction of the 4.5-liter diesel engine could be the pivot point in GMs recovery.

Come on GM, lace up those boots and run for it!

Show Us the Books

Car companies are still trying to dig themselves out of the current recession, asking for billions in support funds and promising leaner, more efficient, restructured organization. Like other companies, many hope that the car manufactures take this restructuring opportunity to weed out non-essential employees and broker better deals with the unions.

Some may argue this is painfully poor timing, while others say that this is the new way, a necessity. For years these companies have seemingly mismanaged their books, their companies, their relationships with America. While much of the backroom paper pushing and mice-type is best handled by the experts, transparency is the theme of the day. If the car companies want the American people to fund a bail-out of such staggering size, they need to put their cards on table. They need to show us who and what is being reorganized and why.

It may be ugly. It may be painful. But I say, show us the books.

Welcome

Thanks for stopping by.

My name is Brenton and I am starting this blog for the same reason I started my company ACS8 –to apply my automotive background to help people save money and feel more comfortable about managing their automobiles.

If you need a second opinion on a mechanic’s bill, need to manage a fleet of cars for your business, or just have general automotive questions—send me an email.

Otherwise, this blog is here to alert you about scams, provide automotive tips, and give you general information about my journey helping customers through their auto issues.  I hope you will bookmark this blog and visit often.

Thanks!

Brenton