Bailout Watch 344: GM Lowers Sales Forecast to 10.5m, Ups Bailout Ante
GM has revised the estimate for U.S. new car sales in submitted to Congress in December. At the time, the company predicted the U.S. market would account for 12m new vehicles in ’09 (a goodly amount from their factories), The General now reckons the number will be closer to 10.5m. As CNNMoney indicates, GM’s second sales revision in as many months suggests that they’re preparing to increase their mega-suckle on Uncle Sugar’s teat when they return to the pig sty in February and/or March. “According to the turnaround plan, GM said it might need $15 billion in federal help by the end of March if estimated industrywide sales fell to the 10.5 million level.” And here we are. But the numbers are a double-edged sword. On one hand, they substantiate GM’s Curley defense. On the other, there isn’t an accountant outside of Dearborn who thinks GM can even break even if sales remain at anything near that level. Prop-up a vital industry for a year or more at the cost of hundreds of billions of taxpayer dollars, or cut bait and fish? The battle lines are drawn.
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First rule of Snouts and Troughs. Once the Snout is in the Trough the Snoutee will move heaven and earth to keep it there.
13 million, 10 million, 5 million, who cares. The question never came up when tax and spend Republican W handed them free taxpayer money. It won't matter in the future when tax and spend H hands them free money. It is never about justification, earning, viability, good management. It is just about, hand it over, we deserve it because we are victims. If anything, the very fact that the numbers are going down proves we are even sadder victims, hence deserve it even more.
I blame the "big 3" for the fact that even Honda, Toyota and Nissan were slow to introduce "cutting edge" car models simply becuase there was no innovation from Detriot in the American market - they had little incentive to "better" the Big 3 when the Big 3 was selling optioned-up BOF SUV's for huge profits. Now that Detroit has realized the error of its ways, we're suddenly becoming duluged with hopeful vehicle concepts (with GM especially at the forefront), that won't see the light of day without more bailout bucks... But the good in all of this is that the "forigen" makes are starting to offer smaller, more interesting vehicles as well, and hybrids and EV's (which were a 'niche' at best) are suddenly on the radar, as there is "incentive" from the bailout-supported carmakers (who I actually hope manage to survive). 2010 will be a magic (as well as tragic) year for the industry.