Comments on: Credit Suisse: GM’s Purge and Binge Production

By: highrpm

highrpm — Mon, 15 Sep 2008 11:36:36 +0000

I was wondering when we would start using the term Dinosaurs around here to denote the big SUVs. Remember in the 70s that’s what we called those huge domestic sedans.

By: mel23

mel23 — Sun, 14 Sep 2008 14:37:34 +0000

the General in denial, Ford a work in progress, and Chrysler, although in better shape than generally perceived, a question mark.

Excellent summary.

By: Rix

Rix — Sun, 14 Sep 2008 02:47:53 +0000

I read the Credit Suisse research weekly on this. It is undoubtedly correct as they do their homework. I have not been impressed with some of the industry analysts but Credit Suisse seems OK to me although I haven’t tried to tie out their numbers.

It pretty much tells us what we already know- the General in denial, Ford a work in progress, and Chrysler, although in better shape than generally perceived, a question mark.

By: rtz

rtz — Sat, 13 Sep 2008 20:20:27 +0000

I have noticed the Ford dealer lots getting thin. One still has the original allotment of five Flex vehicles still sitting there. I have never seen a Flex on public roads.

Why restock the lot when the vehicles won’t sell? They can’t be sold. No market.

It’s like the bargain book table. Can’t even give that stuff away.

By: Diewaldo

Diewaldo — Sat, 13 Sep 2008 20:14:15 +0000

Honestly, these are numbers from analysts. As we all now analysts are not always correct in their numbers.

As we know Ford has a new F150 standing by. So it seems logical to reduce the stocks on the old models before introducing the new one. The same should be true for the Dodge Ram.

In my opinion all three have problems to shift their volumes from Pickups and SUVs to cars. Simply cutting down the Pickup production and having nothing else to produce instead would also kill them because of a massive personal cost overlap. So what they are doing is to push their SUVs and Pickups in the market anyways to keep flowing and to cover at least their variable costs.

The question that remains is what do they have in the pipeline to replace these now obsolete Dinosaurs with? I have deep concerns that they all are missing the signs. Ford wants to go with the Fiesta first … I would say the car is too small for the US. The missed the opportunity to introduce the new Focus some years ago. No they are competing with a trimmed down version of the old one. GM wants the Cruze … well the car seems to be a mediocre Korean Daewoo, no competition really for Honda, Toyota and the European brands. The Volt will not surely not hit the economies of scale fast enough as the battery makers seem not to be ready to go in large numbers yet. Chrysler wants to sell rebadged Nissans. Now this could work out, but what will come next?

So it does look really grim. From my German view I am happy that Daimler got rid of (the most) of Chrysler fast enough to be unaffected. However it looks like the thing that happened with BMW and MG Rover some years ago.

By: 50merc

50merc — Sat, 13 Sep 2008 19:06:03 +0000

“The excess car inventory at GM is being driven by an aggressive production schedule that calls for a 21% year-over-year increase in car output. … By the end of the year (under current production plans) we think GM will still be about 30% overstocked.”

Who knew the spirit of David Farragut (”Damn the torpedoes! Full speed ahead!”) is guiding GM management?

By: ronin

ronin — Sat, 13 Sep 2008 15:00:09 +0000

I would love to hear how Credit Suisse analysts are ranking its own unbelievable losses and malinvestments.