GM shares fall to lowest level since 1950
10-09-2008, 03:45 PM
#1
GM shares fall to lowest level since 1950 http://biz.yahoo.com/rb/081009/busin...gm_shares.html
I find this to be pretty ridiculous. In addition, the publishers of these articles know little to nothing of the automotive industry. Reuters has a picture a group of SUV's and states that its a group of minivans!
Last week, even though GM and the rest of the automakers were all down, GM's market share went up...Good news for GM relative to the rest of the market. One week goes by and GM is once again the red headed step child, no offense to red heads< (my pc statement for the day
.
How about the media jumping on Toyota for building a giant gas eating truck at the exact wrong time or a series of v6 trucks that get the same or worse gas mileage than a full size 5.3 GM truck. Its not going to happen, the media is socialist and Toyota is their darling!
I find this to be pretty ridiculous. In addition, the publishers of these articles know little to nothing of the automotive industry. Reuters has a picture a group of SUV's and states that its a group of minivans!
Last week, even though GM and the rest of the automakers were all down, GM's market share went up...Good news for GM relative to the rest of the market. One week goes by and GM is once again the red headed step child, no offense to red heads< (my pc statement for the day
. How about the media jumping on Toyota for building a giant gas eating truck at the exact wrong time or a series of v6 trucks that get the same or worse gas mileage than a full size 5.3 GM truck. Its not going to happen, the media is socialist and Toyota is their darling!
10-09-2008, 04:37 PM
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http://biz.yahoo.com/rb/081009/busin...gm_shares.html
I find this to be pretty ridiculous. In addition, the publishers of these articles know little to nothing of the automotive industry. Reuters has a picture a group of SUV's and states that its a group of minivans!
Last week, even though GM and the rest of the automakers were all down, GM's market share went up...Good news for GM relative to the rest of the market. One week goes by and GM is once again the red headed step child, no offense to red heads< (my pc statement for the day .
How about the media jumping on Toyota for building a giant gas eating truck at the exact wrong time or a series of v6 trucks that get the same or worse gas mileage than a full size 5.3 GM truck. Its not going to happen, the media is socialist and Toyota is their darling!
I find this to be pretty ridiculous. In addition, the publishers of these articles know little to nothing of the automotive industry. Reuters has a picture a group of SUV's and states that its a group of minivans!
Last week, even though GM and the rest of the automakers were all down, GM's market share went up...Good news for GM relative to the rest of the market. One week goes by and GM is once again the red headed step child, no offense to red heads< (my pc statement for the day
. How about the media jumping on Toyota for building a giant gas eating truck at the exact wrong time or a series of v6 trucks that get the same or worse gas mileage than a full size 5.3 GM truck. Its not going to happen, the media is socialist and Toyota is their darling!
Toyota has felt the impact from the economy. I believe their San Antonio plant shut down making Tundras for a few month considering none where selling at the rate when they first where introduced. Also you need to take into consideration that Toyota doesn't need trucks to stay afloat. This isn't their bread n butter.
10-09-2008, 04:58 PM
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Uh, GM is fast going broke.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
10-09-2008, 05:40 PM
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GM and Ford face credit downgrades after new report projects U.S. auto sales will hit recession levels this year; Ford slides nearly 22%.
GM chief Rick Wagoner calls the company's future "bright" - but investors aren't so sure.
By Alex Taylor III, senior editor
Last Updated: October 9, 2008: 5:31 PM ET
NEW YORK (Fortune) -- Investors cast a shocking vote of no confidence in the future of U.S. automakers Thursday.
After dropping sharply early in the day, GM (GM, Fortune 500) stock closed down 31% to $4.76 a share, while Ford (F, Fortune 500) fell nearly 22% to $2.08. A flurry of bad news was to blame, of which the latest was a declaration by ratings agency Standard & Poor's that it was putting GM and Ford on credit watch negative "because of the rapidly weakening state of most global auto markets" and weak capital market conditions.
The stock selloff effectively puts both companies on death watch, and it's easy to see why. The ratings warnings followed a new report by Global Insight that shows U.S. auto sales hitting recession levels this year - and then sinking lower in 2009.
"We won't get back to where we were in 2006 until 2013," said George Magliano, director of forecasting for North America for Global Insight. The economic forecasting and consulting firm based outside Boston is forecasting sales of 13.8 million units this year and only 13.4 million in 2009, compared with 16.1 million last year.
The impact of oil prices at the beginning of the year was mild compared to the squeeze from the credit crunch. As Nigel Griffiths, Global Insight's managing director of global forecasting, points out, expensive oil merely meant that wealth was being transferred to oil-producing countries like Russia from oil-consuming ones like the United States. Now, the credit crunch is destroying wealth and making it impossible for customers to buy.
"The impact is worse than if the price of oil had been sustained at $200 a barrel," he said.
No help from foreign markets
It turns out that auto finance companies were as guilty as mortgage lenders in providing loans to subprime borrowers - and their generosity is coming back to haunt them. Lenders dramatically cut standards for credit worthiness at the beginning of 2008 and now delinquency rates have been shooting up to levels not seen in 30 years.
"Some 18% of sales volume came from people with bad credit scores," said Magliano. "Now the subprime buyer has been squeezed out."
There is little relief overseas. According to Global Insight, at least half a dozen countries in Western Europe experienced greater house-price appreciation over the last 10 years than did the United States. Ireland led the way with a nearly 250% rise and the United Kingdom was not far behind. With that kind of wealth accumulation unlikely to be repeated, sales experienced a "total collapse" in July and have gone into a "violent downshift."
Nor is Asia likely to provide a safety net. Sales growth in China is slowing markedly and vehicle demand in India is also ebbing. Even the much publicized $3,000 Nano car developed by India's Tata Motors is off to a slow start. Plans for an assembly plant in India have been scuttled by local opposition and Global Insight says Nano "will only see a big build-up in volumes from 2010."
"When will the credit crunch free up enough to allow consumers to finance again?" asked Griffiths. "That is the several-trillion-dollar question. It is the core assumption on which all forecasts will be based and it is unforecastable."
To combat this flood of negative news, GM has adopted the Sarah Palin approach: bypassing the media by communicating directly with customers and investors. GM executives can now be seen in videos posted on its Fast Lane Web site talking about the company.
In the first video, posted Sept. 22, chairman and CEO Rick Wagoner responds to the question "What's GM's future look like?" by saying "GM's future is actually quite bright." After ticking off progress on new models, technology and sales in developing markets," he concluded by saying, "though times are challenging, we're really making sure that we keep planting the seeds for what we think should be a very exciting future for General Motors."
Three weeks later, you have to wonder what he'd be saying today?
GM chief Rick Wagoner calls the company's future "bright" - but investors aren't so sure.
By Alex Taylor III, senior editor
Last Updated: October 9, 2008: 5:31 PM ET
NEW YORK (Fortune) -- Investors cast a shocking vote of no confidence in the future of U.S. automakers Thursday.
After dropping sharply early in the day, GM (GM, Fortune 500) stock closed down 31% to $4.76 a share, while Ford (F, Fortune 500) fell nearly 22% to $2.08. A flurry of bad news was to blame, of which the latest was a declaration by ratings agency Standard & Poor's that it was putting GM and Ford on credit watch negative "because of the rapidly weakening state of most global auto markets" and weak capital market conditions.
The stock selloff effectively puts both companies on death watch, and it's easy to see why. The ratings warnings followed a new report by Global Insight that shows U.S. auto sales hitting recession levels this year - and then sinking lower in 2009.
"We won't get back to where we were in 2006 until 2013," said George Magliano, director of forecasting for North America for Global Insight. The economic forecasting and consulting firm based outside Boston is forecasting sales of 13.8 million units this year and only 13.4 million in 2009, compared with 16.1 million last year.
The impact of oil prices at the beginning of the year was mild compared to the squeeze from the credit crunch. As Nigel Griffiths, Global Insight's managing director of global forecasting, points out, expensive oil merely meant that wealth was being transferred to oil-producing countries like Russia from oil-consuming ones like the United States. Now, the credit crunch is destroying wealth and making it impossible for customers to buy.
"The impact is worse than if the price of oil had been sustained at $200 a barrel," he said.
No help from foreign markets
It turns out that auto finance companies were as guilty as mortgage lenders in providing loans to subprime borrowers - and their generosity is coming back to haunt them. Lenders dramatically cut standards for credit worthiness at the beginning of 2008 and now delinquency rates have been shooting up to levels not seen in 30 years.
"Some 18% of sales volume came from people with bad credit scores," said Magliano. "Now the subprime buyer has been squeezed out."
There is little relief overseas. According to Global Insight, at least half a dozen countries in Western Europe experienced greater house-price appreciation over the last 10 years than did the United States. Ireland led the way with a nearly 250% rise and the United Kingdom was not far behind. With that kind of wealth accumulation unlikely to be repeated, sales experienced a "total collapse" in July and have gone into a "violent downshift."
Nor is Asia likely to provide a safety net. Sales growth in China is slowing markedly and vehicle demand in India is also ebbing. Even the much publicized $3,000 Nano car developed by India's Tata Motors is off to a slow start. Plans for an assembly plant in India have been scuttled by local opposition and Global Insight says Nano "will only see a big build-up in volumes from 2010."
"When will the credit crunch free up enough to allow consumers to finance again?" asked Griffiths. "That is the several-trillion-dollar question. It is the core assumption on which all forecasts will be based and it is unforecastable."
To combat this flood of negative news, GM has adopted the Sarah Palin approach: bypassing the media by communicating directly with customers and investors. GM executives can now be seen in videos posted on its Fast Lane Web site talking about the company.
In the first video, posted Sept. 22, chairman and CEO Rick Wagoner responds to the question "What's GM's future look like?" by saying "GM's future is actually quite bright." After ticking off progress on new models, technology and sales in developing markets," he concluded by saying, "though times are challenging, we're really making sure that we keep planting the seeds for what we think should be a very exciting future for General Motors."
Three weeks later, you have to wonder what he'd be saying today?
10-09-2008, 06:14 PM
#5
Uh, GM is fast going broke.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
In my opinion, from a future product standpoint GM is in a better position than it has been in years. The Vette is the best value in class, the new Camaro is coming out, Malibu is ranked as good or better than Camry/Accord even by the traditionally foreign biased media, midsize SUVs are attractive, and the trucks have always been good. I'll be buying the Camaro next year and my wife is trading in a pos Toyota RAV for the Malibu, so I will be putting my money where it counts.
From a financial standpoint GM has issues and could still use some trimming, especially from the executive ranks. When I was with GM I always said you could get rid of 25% of the development staff and 75% of the management and it would have no effect on the final product. I'm sure its still true today. On the other hand GM employs so many more people in North America than Toyota does it would further depress our own economy if those jobs were lost> The last thing we need.
Like they say: GM is a microcosym of the US and it doesn't look good.
10-09-2008, 07:35 PM
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10-09-2008, 07:39 PM
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In my opinion, from a future product standpoint GM is in a better position than it has been in years. The Vette is the best value in class, the new Camaro is coming out, Malibu is ranked as good or better than Camry/Accord even by the traditionally foreign biased media, midsize SUVs are attractive, and the trucks have always been good. I'll be buying the Camaro next year and my wife is trading in a pos Toyota RAV for the Malibu, so I will be putting my money where it counts.
In fact every new shiny thing GM has introduced has pretty much failed to meet sales expectations or turn any profit. GM's margins on cars are razor thin.
They put all their money in the truck basket the past 15 years and completely ignored cars, it's come home to roost. Trucks were GM's lifeblood (along with subprime vehicle financing) and all of that went poof this past year. GM has been losing money for quite awhile now and they have come down to just enough money to eek out another year of business as usual.
After that, well, it's not good.
10-09-2008, 07:46 PM
#9
Thanks for the insight. I'll start monitoring this situation though. With the DOW being so low right now, you know when it rebounds (in about 5 years), there will be some easy money had by the savvy investors. I really can't see GM folding, but maybe I can't see it because I don't want to believe it.
10-09-2008, 07:56 PM
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I believe both Ford and GM will be delisted eventually
If you're looking for a good deal on an automotive stock you probably want to look at Toyota. The stock has lost a good bit of value but the company has the most liquidity out of any manufacturer and a 6.5 price-to-earnings ratio.
If you're looking for a good deal on an automotive stock you probably want to look at Toyota. The stock has lost a good bit of value but the company has the most liquidity out of any manufacturer and a 6.5 price-to-earnings ratio.
10-09-2008, 07:56 PM
#11
GM shares may have fallen to lowest levels today, but don't forget the whole market dropped by almost 700 points today as well. Doesn't look good for them though, I want them to recover so bad. What doesn't help is people's anti-american mindset though and their crazy idea that toyota/honda = god 
10-09-2008, 08:48 PM
#15
Or now would be a great time to pick up a new Vette. First time I've seen the Vette's with employee pricing last month. Another few months and it'll probably be even better to get a great deal on one.
Thanks for the insight. I'll start monitoring this situation though. With the DOW being so low right now, you know when it rebounds (in about 5 years), there will be some easy money had by the savvy investors. I really can't see GM folding, but maybe I can't see it because I don't want to believe it.
I know I may lose some over the next couple years or even more, but since I've got 30 years to wait it out I'm putting in the max I'm allowed to in the market for my 401. Looks like now is a great time to put all you can in the market if you have the time to wait it out.
10-09-2008, 09:18 PM
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for those considering buying stock... hold your horses!! its not even half way through october! (history hasn't been nice too october, lets hope we don't have a black monday) The stock will continue to drop and many analysts predicting the automotive sector will collapse. Transportation stocks (whether it be auto, air, or whatever else) are not good investments in times of uncertainty / recessions. The market will bounce back, but trust me... we have more bad days on wall street in the coming months and automotive sector is not a bright short term future.
However, GM in the long term should be okay given that they can survive this economic crisis we're in now. Their trucks are arguably the best, the new malibu rocks, the cts is "the best caddy in 50 years," and the company as a whole is way in front with their average MPG's besting most companies.
However, GM in the long term should be okay given that they can survive this economic crisis we're in now. Their trucks are arguably the best, the new malibu rocks, the cts is "the best caddy in 50 years," and the company as a whole is way in front with their average MPG's besting most companies.
10-09-2008, 11:06 PM
#18
Uh, GM is fast going broke.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
Toyota on the other hand has a massive warchest of wealth that GM can only dream of now. Toyota's reduced profit alone this year is still more than enough money to purchase both GM and Ford outright. It will be the same next year with their sales forecast down 40%.
The differences between a profitable and unprofitable automaker don't get any more stark than now.
Translation: Japan wins and America loses.
Thanks to all of you who bought Toyotas instead of GMs/Fords
....I hope your career/employment/business has absolutely nothing to do with the U.S. auto industry (even if it's something as minute and distant as a company that makes the the bolts that go into the seats/booths that a truck stop in Detroit uses) or otherwise that Toyota purchase just bit ya in the ***.
10-09-2008, 11:10 PM
#19
True. Toyota wins and GM/Ford lose.
Translation: Japan wins and America loses.
Thanks to all of you who bought Toyotas instead of GMs/Fords....I hope your career/employment/business has absolutely nothing to do with the U.S. auto industry (even if it's something as minute and distant as a company that makes the the bolts that go into the seats/booths that a truck stop in Detroit uses) or otherwise that Toyota purchase just bit ya in the ***.
Translation: Japan wins and America loses.
Thanks to all of you who bought Toyotas instead of GMs/Fords
....I hope your career/employment/business has absolutely nothing to do with the U.S. auto industry (even if it's something as minute and distant as a company that makes the the bolts that go into the seats/booths that a truck stop in Detroit uses) or otherwise that Toyota purchase just bit ya in the ***.
10-09-2008, 11:19 PM
#20
There are only two ways this whole thing can go now.
Either the market will turn around in the next few days and head straight back up or we will be facing what will one day be known as the REAL Great Depression. It's very very very bad out there right now, I've been in the market for over 20 years now and in my worst possible nightmare I could've NEVER dreamed that what is happening right now could be possible.
Every safeguard and every bit of 'cushion' that I've built into my portfolio has been breached and pushed through.
This is bad.
But, anyone sitting on the sidelines with some cash in hand ready to invest can still potentially make LOTS of money in the coming months. GM and Ford might just be two of those shining spots that could jump up too.