Big 2.8 Still Trying to Cut Their Way to Prosperity
The New York Times reports that GM's November sales fell 10.9 percent compared to last year, with every one of their eight U.S. brands reporting diminished turnover. Chrysler and Ford fared better– a 2.1 percent drop and a 1.3 percent gain respectively– but it's highly likely that both companies turned to low-profit fleet and commercial sales to prop-up their American business. Worse still, U.S. new car sales in general only dipped by three percent, indicating that the domestic automakers continue to lose market share to their transplant rivals. "All three major Japanese automakers not only increased sales during November, but all reported their highest sales ever for the month… For the second time this year, Detroit accounted for less than half of the United States market." Both GM and Ford attempted to calm camp followers by announcing more production cuts. The General said it will build 950k vehicles from January through March, representing an 11 percent drop from last year's total. Ford will build 685k vehicles in the first financial quarter, reflecting a seven percent decline. Privately held Chrysler remained shtum, but analysts expect it to follow suit. The cut backs are as we predicted: a tail-chasing exercise that spirals Detroit towards disaster. Only better product can save Detroit, and it may already be too late.
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KixStart: "Gosh, Umterp85, I’d sure like to know what “Jimmy Carternomics” is" Well...lets start with 18% interest rates (you think they are rising now pal...did you even try to buy a house back then ?)----12% inflation and gas lines for as long as the eyes can see. Carters stewardship (or lack there-of) of the US economy makes the current idiot in office look like a genius. And like the current occupant---we were a laughingstock abroad. Carter should have stuck to pounding nails in dilapidated houses, beating killer bunnies, and helping his brother Billy's brewing business. But you know----the country did not buy into Carters malaise posture---we elected a guy called Reagan who led us out of Carter's morass---not with luck as some intellectual libs would like to posit---but with real change in policy both economically and abroad. I pray that our next president (could care whether this person is democrat or republican) can clean up the mess he / she is being given like Reagan did in the 80's. Americans have dug out of messes before---we can do it again---despite what doom and gloomers like moveon.org think
@KixStart: Now we reach a point where maybe the Chinese aren’t so interested in soaking up loose dollars any more. What do you suppose this will do to the dollar? What do you suppose this IS doing to the dollar? This is one of the things that’s fuelling oil price increases. As an avid fan of fossil fuels and Exxon-Mobile stock, I must say that current oil prices are surprising. Economist Julian Simon was very prescient in predicting that most natural resource prices decline over the long term (10+ years). I wonder if he will (finally) be proven wrong about oil? Note that I don't think that there will EVER be oil shortages - every such prediction by Malthusian morons over the years has been proven laughably wrong - I'm just uncertain as to whether prices will ever decline.
Umterp85: Well…lets start with 18% interest rates (you think they are rising now pal…did you even try to buy a house back then ?) As a matter of fact, yes. I was also lucky enough to put money IN the bank in CD's at 18%, effective. And it wouldn't matter WHO was in office 1977-1981; oil-price driven inflation and exploding workforce would have made ANY President look bad. Of course, Carter understood that we should get our oil dependence under control and the laissez-faire policies subsequent let terrorists get rich and attack us with our own money. "But you know—-the country did not buy into Carters malaise posture—we elected a guy called Reagan who led us out of Carter’s morass—not with luck as some intellectual libs would like to posit—but with real change in policy both economically and abroad." Not hardly; falling oil prices and slowed growth in the workforce "led us out of the morass." And now we're going to pay - and dearly - for Reagan's fiscal irresponsibility, a tradition proudly continued by Dubya.
KixStart---I have NEVER seen anyone defend the failed presidency of Jimmy Carter like you have. Historians who weigh these things with a hell of alot more factors than can be discusssed here have rated Carter an abject failure on just about every dimension you can measure. Every living president (including Clinton) can't stand the guy because he comes off as a know it all who is free to criticize them while in office even though Carter himself failed miserably. Its like GM giving Toyota advice on how to run their business. He also presided over one of the worst era of car design in American automotive history---wasn't the Chevette launched on his watch ? I blame Carter for that to :) That said---the guy can pound nails with the best of them.