GM May Feel Pain of AA Strike Soon

by Frank Williams

March 19th, 2008 7:50 AM

As the American Axle strike stretches into its fourth week, GM still maintains it's not affecting them. Not that they'll admit, anyway. With truck sales (real trucks, not them sissified half-breed crossover things) down 20 percent last month, they've weathered the storm pretty well with what they had on hand when the strike started. As the strike progresses and the inventory starts getting picked over, they're going to start feeling some pain as buyers look elsewhere for their $50k crew-cab, long-wheelbase, four-wheel-drive, six liter commuter vehicles. Since The General counts a "sale" when they ship a vehicle to a dealer, this quarter's sales will look really bad (but they'll have the strike to blame it on). Once production resumes and they start stuffing the supply channels again, you can bet GM'll be bragging about their best truck sales in years. But now CNNMoney reports Standard & Poors placed GM's ratings (as well as those of American Axle, Lear and Tenneco) on "creditwatch with negative implications" because they "believe the strike has gone on long enough to possibly begin to affect the financial resources of GM and those suppliers most exposed to the automaker." I wonder how Rick Wagoner will spin that one!

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4 of 5 comments

Lprocter1982 on Mar 19, 2008

I bet Wagoner's response will be "S & P's analysis is a crock of shit."

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Eastaboga on Mar 19, 2008

lprocter1982, that effing hilarious!! COTD!! (oh wait, wrong site)

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Redbarchetta on Mar 19, 2008
$50k crew-cab, long-wheelbase, four-wheel-drive, six liter commuter vehicles. I have been looking at a lot of the Chevy and GMC stock in my state for a truck and the one you describe is in abundance even in 2007s. They have a huge stock of trucks around here in just about all trim levels but way more of the $40-50,000 trim. I'm seeing the same thing as RayH not many white work trucks in crew cab or regular cab but they do have them. Move up to the 2500 and they are a bunch to choose from. They have so much of an oversupply of trucks I think it will be a while before they start feeling this strike from the inventory end, but the billions they are lossing by idling plants and workers is another story.

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Oboylepr on Mar 19, 2008

GM's spimmeisters and their lackeys in the printed automotive press have managed to keep the lid on the very worst of GM's financial condition and hype up the vast amounts of vapourware the General is making/might be making/could be/should be/ought to be making (or not)! I get the feeling that we may have reached the point where GM will not find it so easy to keep it's real condition hidden from the public. And while GM might dismiss S & P's analysis as, well a C-O-S! it is slowly becoming apparent to all that GM is in the very same C-O-S!

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