By on March 2, 2009

Dear God, will no one pull the plug on this company? I know the Obama administration needs to wait until March 31st to appear as if they’ve fully contemplated all the options. But even for me, a professional General Motors Death Watcher, charting the final dissolution of what was once the world’s largest automaker has become a painful pursuit. The breakup of the global empire. The raiding of the pension fund. The kow-towing to politicians. Automotive News [sub] gives us a way-point, reminding us that GM’s epic cash conflagration is getting worse, not better. 

In a conference call last week, CFO Ray Young said GM’s cash burn this year would be less than last year, which it put at $19.2 billion — but admitted the cash burn in 2009 would be “front-loaded.”

Translation: The short-term bleeding will continue. It will be hard in this quarter for GM to reduce its cash-burn much below the $5.2 billion consumed in the last three months of 2008. 

All this while GM inventory piles up, everywhere. The post-jump run-down is sobering stuff. One hopes.

Maker           Days Supply of Inventory

GM                               161

Chrysler                      151

Honda                         125

Ford                            120

Toyota                          91

Nissan                          85

Hyundai                       79

Industry target          60

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42 Comments on “GM Leads League of Extraordinary Inventory at 161 Days Supply...”


  • avatar
    KalapanaBlack

    Meanwhile, we at Hertz just had a shipment of ’09 Impalas delivered with the incorrect rear bumpers. All of them.

    They are 3.5L LT models, with single exhaust. Despite this, GM built them with the LT3/LTZ dual exhaust rear bumper, with two cutouts that extend beyond the fascia. The 3.5L’s single exhaust bends downward and doesn’t reach as far back as the dual exhaust cars’ meaning it looks horrible and there’s a useless hole on the left side of the bumper.

    All of the other 2009 3.5Ls I’ve seen have the correct bumper, so I don’t think it’s an intentional design change.

  • avatar
    mikey610

    but admitted the cash burn in 2009 would be “front-loaded.”

    Remember, this is the same company that publicly stated that they expected a sales rebound in the second half of 2008 due to Bush’s stimulus checks winding up in consumers’ hands. (anyone have time to find the exact quote from roughly this time last year?) How’d that work out?

  • avatar
    KalapanaBlack

    In fact, the bumper hole on the right side where the exhaust is on the 3.5 doesn’t even line up correctly with the tailpipe.

  • avatar
    Tommy

    Wow. I kind of hope someone’s going around and checking the tire pressures and fluid levels on some of these cars! 150-160 days? That’s getting awfully close to half a year of sitting on the lots…

  • avatar
    like.a.kite

    “GM Leads League of Extraordinary Inventory”

    Now that’s a line.

  • avatar
    GS650G

    125 days of supply for Honda is surprising but they are probably taking steps to rectify the situation. Like most transplants they have the flexibility to handle this.

  • avatar
    Hwanung

    Wow, Ford inventory supply is LOWER than Honda? Ouch…

    Any idea what Hyundai is at?

  • avatar
    Happy_Endings

    In a conference call last week, CFO Ray Young said GM’s cash burn this year would be less than last year, which it put at $19.2 billion — but admitted the cash burn in 2009 would be “front-loaded.”

    Well, you can’t burn through cash if you don’t have any…

  • avatar
    austinseven

    If all those cars are stored outside, a lot of them are going to need a brake job before they even leave the lot.

  • avatar
    Robert Schwartz

    Honda replaced their CEO. I will bet that their inventory is back in line soon.

    GM hasn’t replaced any executives in the last 5 years of its death spiral.

  • avatar
    CarPerson

    HE: Well, you can’t burn through cash if you don’t have any…

    Red Ink Rick has proven for 5 years and counting that at General Motors, yes you can!

    He’s run up a debt that is beyond any rational belief that it can ever be paid off. That General Motors has been looted and gutted in the process is not, apparently, his problem.

    As long as he can deliver the salaries and perks to those who would throw him and the Board out, he’s safe and will continue running his executive gravy train that keeps him in office.

  • avatar
    mikey

    @KalapanaBlack.The first thing that comes to mind.No way that many got out without someone picking up on it.Most material is bar coded the color and model would have to match.My guess both
    Hertz and GM were aware before the cars got to you guys.Its a sin that both companies would allow it,but nothing shocks me anymore.

    I will gaurantee you that somebody in production,or final finish caught that.
    An hourly/union worker is at the bottom of the food chain.No doubt in my mind an hourly worker
    was told, “ship em” management call.

  • avatar
    Richard Chen

    @Hwanung: good question. Hyundai dealers are sitting on a sizeable pile of 2008 Santa Fe’s. The 2009′s have been sitting on the Alabama factory’s lots for months, finally having shipped out last month. Sonata inventories are also high, and the factory has had to cut back production.

    On hyundaiusa.com they’re still listing the 2008 Santa Fe, Veracruz, and Entourage. Kia.com site has the Sedona, Amanti, and Sorento stuck in 2008, jarring when they’re listing 2010 models such as the Genesis Coupe and Soul.

  • avatar
    mikey

    161 days of cars?within days, if not hours,
    production cuts and down weeks will be anounced.

    Atttention all employees

    In order to bring our inventory inline with sales we will be taking the following steps.
    blah…..blah…..contact your superviser for details.

    And another 1000 jobs vanish….pffff

  • avatar
    revjasper

    Does anyone have a breakdown by model?

    Just asking because the local Ford store and the local Saab store both have a few new 2007 models left on the lot. Anyone need a 500, F-250 or 9-7x?

  • avatar
    Swallow_Doretti

    According to Automotive News, Hyundai had a 79 days supply of vehicles on February 1, while Kia was at 60 days.

  • avatar
    Stein X Leikanger

    KalapanaBlack :
    March 2nd, 2009 at 10:41 am

    In fact, the bumper hole on the right side where the exhaust is on the 3.5 doesn’t even line up correctly with the tailpipe.

    Send Robert a photo, we want to see this!

  • avatar
    Redbarchetta

    I wonder what sort of give away sale GM will come up with this time to try and sell some of that over stock. IT will of course get funded by money from our tax coffers. I think they are running out of ways to convince people to buy on price which is the only way they seem to sell cars anymore. 50% off sale, buy one get one free, no payments for 24 months. Tax payers should at least get some cars out of all the money we have given them, they are just sitting there rusting and turning fuel into varnish.

  • avatar
    menno

    Re: the back bumpers on these rental Impalas…

    see what happens when Oshawa lets our Mikey retire?! Sheesh.

  • avatar
    jkross22

    Everyone would save a lot of time and money if GM just shut down for a few months (or years). Nah, paying people to make cars that very few are buying is the preferred route.

  • avatar
    Hwanung

    RE – Swallow_Doretti :
    March 2nd, 2009 at 11:34 am

    According to Automotive News, Hyundai had a 79 days supply of vehicles on February 1, while Kia was at 60 days.

    Damn, Hyundai is schooling the industry. This will be very interesting to see if Hyundai can maintain this inventory performance in the following months.

    How are the Germans doing?
    …Damn, I need to sign up for an Automotive News account.

  • avatar
    new caledonia

    @KalapanaBlack –

    I have a sneaking suspicion that shipping the Impalas with the wrong bumper was intentional — they’re assembling the cars with parts on hand to get the product out the door. A supplier problem?

  • avatar
    Kevin

    Well, you can’t burn through cash if you don’t have any…

    Sure they can, they’ll just keep burning through YOUR cash and MINE. Hey where’s my wallet?

  • avatar
    Kevin

    Hwanung How are the Germans doing?
    …Damn, I need to sign up for an Automotive News account.

    The article doesn’t say, only gives what’s listed here.

  • avatar
    Kevin

    Hwanung How are the Germans doing?
    …Damn, I need to sign up for an Automotive News account.

    The article doesn’t say, only gives what’s listed here.

    Then again I guess I COULD look it up on their data tables section. Here you go as of Feb 1st in days:

    BMW – 75
    Daimler – 101
    VW – 136

  • avatar
    highrpm

    @KalapanaBlack, I agree that your bumper issue is probbaly a supplier flow issue. The plant was filling a fleet order and possibly grabbed whatever was on hand. This was no mistake.

  • avatar
    segfault

    Chrysler still has 151 days worth? After idling their plants over Christmas? Did they restart production now?

  • avatar
    RobertSD

    Does this include the 1000s of Toyotas and Hyundais sitting at Long Beach and on ships in the Pacific? Just a question. I don’t know how Autonews gets its inventory data.

  • avatar
    Pig_Iron

    Anybody at the top levels should be fluffing their parachutes. Why would they stay? Anyone even remotely associated with Wagoner will be tainted.

  • avatar
    mtypex

    A few rental Impalas here and a few rental Impalas there, and pretty soon, you have the biggest news story for a Monday. Of course, what I want to know is what happened with Honda, or what happened to get Ford’s inventory below Honda’s number.

    In other news, pull the plug on Chrysler first. They produce nothing of value. For every misbegotten rentalpala, GM does produce like 0.10 interesting cars.

  • avatar
    mel23

    The local Hyundai dealer closed the doors 2 weeks ago. The used inventory was gone in less than 3 days. The new inventory is still on the lot. Amazing to me at least. I guess it means that no nearby Hyundai dealer is willing to take the stuff.

    The local Honda dealer’s inventory just keeps increasing. I wonder how long, in days, the supply line is from Japan. My guess is that it takes a while after the spigot is shut for the product to drain from the pipeline. And I also wonder what they do with parts that have already been ordered. Even with JIT, there is a long pipeline in terms of materials heading to the suppliers who are first in the manufacturing sequence. With manufacturers like Toyota and Honda that seem committed to keeping suppliers healthy, I can believe they’d want to not leave anyone hanging with unused stuff during a time like this, and might decide to feed it through to the market before stomping on the brakes.

  • avatar
    NickR

    mtypex, I actually do think that the bumper story is newsworthy. If this can happen in this day and age something at GM is seriously amiss.

    As for the inventory, I guess in the grand scheme it doesn’t contribute much to the average but there are still new Ford GTs for sale.

  • avatar
    mikey

    @menno thanks but its been 15 years since I worked in final assembly.I could see the wrong
    fascia happening on one car,but for a bunch to get out?I can tell you,when I worked there,heads would have rolled.If it was not intentional the supervision on shift,[it can be traced]should sharpen up thier resume’s

  • avatar
    oldyak

    I’m sure it will get worse…
    but,all G.M.slamming aside,I wonder about Fiat,Renault,VW,BMW,Mercedes…How do you work the math on smaller manufacturers…
    After all,being honest here ,how can you POSSIBLY compare a Manufacturer that geared to produce 500,000 vehicles to one that only makes 5,000 without slanting the percentages?
    I’m not arguing with anyone!
    I just want more of an explanation.
    How much of this inventory glut is caused by buyers that used to be able to get financing through the big 3 no longer being able to?
    I hate to break it to the”best and brightest” but a lot of individuals that would buy a new car fit into the categories of the ‘largest inventory’
    Much as the ‘best and brightest”would like everyone to drive a Honda or Toyota(for the wealthy,BMW)it just doesn’t work out that way!
    Sorry for the cold slap in the face of reality!
    Im disappointed not one of the ‘best and brightest’
    haven’t spoke about it!
    When a lot of folks car breaks down and you need a new one NOW,you go to a dealer that can get you “bought”
    and getting “bought” is getting much harder to do for the American car buyer.
    With the improvements in quality,these should be boom times for the big 3
    You tell me………
    and YES..I LOVE using “the best and brightest” a LOT!!!
    WE ALL HAVE SO MUCH TO LEARN!!!!

  • avatar
    brettc

    Wow, 136 days for VW eh? I was looking at my local VW dealer’s lot last Sunday, and they had plenty of Jettas, which isn’t all that abnormal, but they also had a bunch of Jetta TDIs. I don’t imagine VW will contemplate leaving the US market like they did in the early 90s, but they’ve apparently got more cars sitting around than Ford. That’s not good. If I had to buy a car today, it’d likely be a Jetta TDI, but I don’t want a chromed up VW so I’d likely look for an older model, which wouldn’t help their new car sales. Stupid car companies.

  • avatar
    moawdtsi

    Is it just me, or why do all these pics of Wagoner look like he is taking a dump?

  • avatar
    esldude

    “Is it just me, or why do all these pics of Wagoner look like he is taking a dump?”

    Because he is in a sense. The biggest dump in automotive history.

  • avatar
    npbheights

    @kalapanaBlack
    I have seen an impala with the bumper of which you speak. It was a new red Impala. It really stuck out and i thought “man, that looks awful”. Figured that’s the way they must be making them now. Then I promptly forgot about it until I read your post. (I live in Palm Beach County FL)
    By the way, Palm Beach is a car buffs dream. I see super exotics on the road daily. You have to have carry least $300,000 in liability insurance around here. You are about as likely to hit a maybach here as a Camry anywhere else. The Mitsubishi dealer closed and a Lambo dealer took it’s place if that tells you anything.
    Side note: a few weeks ago I was talking to a customer of mine. Somehow cars came up and she said that when she turned in her Corvette she was thinking of getting something more conservative. She said that she told her son that she saw a car she liked. She thought it was a Buick. It was a really sharp two door. She thought it was a Buick because it had a “B” with wings on it. Her son informed her that it was no Buick, but a Bentley. Only in Boca Raton.

  • avatar
    nino

    How much of this inventory glut is caused by buyers that used to be able to get financing through the big 3 no longer being able to?
    I hate to break it to the”best and brightest” but a lot of individuals that would buy a new car fit into the categories of the ‘largest inventory’
    Much as the ‘best and brightest”would like everyone to drive a Honda or Toyota(for the wealthy,BMW)it just doesn’t work out that way!
    Sorry for the cold slap in the face of reality!
    Im disappointed not one of the ‘best and brightest’
    haven’t spoke about it!
    When a lot of folks car breaks down and you need a new one NOW,you go to a dealer that can get you “bought”
    and getting “bought” is getting much harder to do for the American car buyer.
    With the improvements in quality,these should be boom times for the big 3
    You tell me………

    Well, it seems as though Toyota (number one carmaker in the world) with a 91 day supply of inventory is getting people “bought” much easier than GM is with its 161 day supply.

  • avatar
    nino

    I believe those mis-matched Impala fashias point out one of the reasons why GM finds itself in this predicament:

    Why does a mainstream family sedan need different fashias front or rear? Also along the same vein, why does a mainstream family sedan need different exaust systems from the engine back?

    If you look at either Honda or Toyota, you will see that the rear fashias have both the cutouts for the dual exaust V6 motor, but use a plug to cover up the hole on one side for the single exaust four cylinder model. Also, Honda uses the same basic exaust system for both of their 4 cylinder Accord engines.

    I’m thinking it has to cost more money to manufacture different fashias, exaust systems, etc.

  • avatar
    workerbee

    Mikey is completely correct. Somebody caught those and was told to ship them. Anything to keep the line moving. “Ship em’, we’ll catch em in repair!” Once they get there, they are stamped off by management and out the door they go. 161 is a pretty big number, but I have seen bigger. When we were building Yukons and such we were over 200 days on hand and they kept us running to the tune of 500 per shift. This was right before the implosion. I imagine the conversation went something like this, “We have 3 plants making these right now. Let’s just keep building them to, you know, stockpile them. These vehicles are recession proof, even at $4 dollar gas people will keep right on buying them.” You can’t imagine how many times I’ve heard in my 15 years there, “recession proof”. They honestly believed that the big trucks would keep the entire thing afloat forever.

  • avatar
    windswords

    161 days? You know in times of war they practice triage. Maybe it’s time to sacrifice GM so that the others can live. :-)

    GS650G:

    “125 days of supply for Honda is surprising but they are probably taking steps to rectify the situation. Like most transplants they have the flexibility to handle this.”

    If they had the flexibility to handle it they wouldn’t already have 125 days of supply. They are screwed like everyone else.

    nino,
    Toyota’s 91 days probably does not include the tens of thousands of cars they have sitting at the docks and on ships. They probably don’t count as inventory until they are shipped to the dealers. I would put the real number at 120-130 days supply.


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