GM COO Henderson: US Auto Industry in Recession

Samir Syed
by Samir Syed
gm coo henderson us auto industry in recession

GM's Rick Wagoner clone, Fritz Henderson, recently told the AP's Tom Krisher that the U.S. auto industry is in a recession. (Insert "Duh!" here.) Regular, non-lobotomized reader of Frank Williams' By The Numbers series would have come to that conclusion two months ago. Fritz trots out the usual explanations for GM's woes: "troubled housing market, tight credit and higher gasoline prices that are sending consumers from trucks to cars at a rate much faster than the company has ever seen." The last part is particularly odd and GM-centric, because the truck-for-car swap hits GM a lot harder than Toyota or Honda given each company's respective product mix ratios. Fritz then goes on to confirm what many have speculated: "The 11-week strike at parts supplier American Axle and Manufacturing Holdings Inc. has had only a minimal effect on the company's retail sales, largely because it had built up a large inventory of pickup trucks and sport utility vehicles at a time when the market shifted to smaller vehicles." By minimal, of course, Fritz means $800m in lost EBT (earnings before taxes, which in this case, is sales to dealers) as the AP diligently reminds us. Be careful Fritz, $800m here, $800m there, and pretty soon we'll be talking about real money.

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4 of 11 comments
  • Captain Tungsten Captain Tungsten on May 13, 2008

    Trying to liquidate Silverados and Suburbans coming off lease these days can't be helping GMAC's financial performance....

  • Jthorner Jthorner on May 13, 2008

    "They now have an Aveo and a Cobalt" If you post an address perhaps we can mail sympathy cards :(.

  • RedStapler RedStapler on May 14, 2008

    Its not just GM getting hosed on residuals. BMW recently took a big right down for lower than projected residuals on lease returns. Not as many people want to belly up to the bar for the "Bavarian Money Waster" experience of a 3-5yr old off warranty BWM.

  • Raymond Hieber Raymond Hieber on May 14, 2008
    “They now have an Aveo and a Cobalt” If you post an address perhaps we can mail sympathy cards :( The wifey goes running on our road a couple times a week... I need to think of a more subtle conversation starter than "so, Suburban to a Cobalt, how's that working out?" I saw her drive by this morning with their 3 kids in the back in the 'balt, so apparently hubby got the Aveo. The couple times I've talked to her, she's been a little snooty, and they live in a mCmansion on only 2 acres (everyone else has at least 5), so the change of cars will be coming up... somehow.