GM CEO: "Under Any Scenario We See, We're Good Until the End of the Year"

John Horner
by John Horner
gm ceo under any scenario we see were good until the end of the year

Talk about your diminished expectations… Post-Black Tuesday, GM CEO Rick Wagoner's told the world [via The Financial Times] that his employer has enough cash to make it through '08. And while you're filing that under "methinks he doth protest too much," Wagoner defends GM's (and the rest of the 2.8's) reliance on big trucks and full sized SUVs by… pointing a finger at Toyota. By his way of thinking, you can't blame Detroit (i.e. him) for missing the SUV and pickup truck exodus because Toyota got caught building a new truck factory at the wrong time. Huh? Toyota added a full-sized truck to its product portfolio to compete vigorously in one of the few segments of the market where they were weak. (Lest we forget, they built the Prius in record numbers at the same time.) Sure it turns out that Toyota's Tundra timing was off, but they aren't at risk of closing up shop because of it. Bottom line: ToMoCo books more profit in one year than GM's entire net worth. Comparing GM's management decisions to Toyota's is patently absurd. Will no one rid us of this troublesome man?

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  • Thalter Thalter on Jun 06, 2008

    You are spot on, Robert. Even if they have enough cash to make it through the end of 08, does anybody think they have a chance of being profitable by the end of the year? Ford is in better shape, and they are not expecting to be profitable until 2010 (assuming they make it).

  • Lichtronamo Lichtronamo on Jun 06, 2008

    If GM (or Ford or Chrysler do go down and out), Toyota will be in a good position to pick up some volume with its Tundra. As has been pointed out Toyota doesn't depend on its trucks for profits - Camry and Collola do fine. The incentives Toyota put on the all-new Tundra probably hurt GM, Ford and Chrysler more than Toyota by gutting any profits they had in those models as they had to match Toyota to maintain volume. The dependency of GM, Ford and Chrysler on their trucks is the noose around their next and Toyota has handing them the rope in trucks.

  • John Horner John Horner on Jun 07, 2008

    "The incentives Toyota put on the all-new Tundra probably hurt GM, Ford and Chrysler more than Toyota by gutting any profits they had in those models as they had to match Toyota to maintain volume." Very true. Toyota can afford to sell Tundras at break-even without feeling much pain; putting the hurt on the 2.8 big time by kicking the only profitable Detroit tent pole out at the base. Not that mighty Toyota would ever play hardball like that ....

  • Lichtronamo Lichtronamo on Jun 07, 2008

    They can afford to sell Tundras at a loss without feeling any pain (eg, 1st Generation Prius).

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