By on November 3, 2008

“General Motors dealers in the United States delivered 170,585 vehicles in October, down 45 percent compared with a year ago. GM truck sales of 97,119 were down 51 percent and car sales of 73,466 were off 34 percent.” And so the death knell sounds for what was once America’s largest automaker, the world’s largest automaker and the world’s most profitable company. As I stated previously, GM is now practically begging for a government bailout. Needless to say, the situation isn’t their fault. “We are obviously disappointed in our results which reflect a difficult comparison with a strong year-ago October performance,” writes Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. “More importantly, it also reflects an unprecedented credit crunch that is dramatically impacting the entire U.S. economy – from the housing market to big and small companies to banks to family run businesses. The credit freeze has also had a very negative impact on consumers’ confidence and their purchase behavior across America.” Oy. Anyway, in the search for good news, GM points to the new fleet queen Malibu, sales of which are up 129 percent, and the truck sales, which are… at 45k. But then GM really reaches, with hybrid numbers that are, frankly, embarrassing…

“GM hybrids continue to build sales momentum and the company has broken through the 10-thousand vehicle sales mark. A total of 1,496 hybrid vehicles were delivered in the month. Hybrid sales included: 372 hybrid Chevrolet Tahoe, 193 GMC Yukon and 230 Cadillac Escalade 2-mode SUVs delivered. There were 325 Chevrolet Malibu, 22 Saturn Aura and 354 Vue hybrids sold in October. GM has sold 10,549 hybrids so far in 2008.”

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37 Comments on “GM October Sales Off 45%...”


  • avatar

    what would you expect after GM discount for everyone? even new Silverados for $10,000 didn’t help. what now? another Red Toe Tag Sale of course. the madness continues under Red Ink Rick. when you engage in brand destroying marketing and distress merchandising there is no end to the downward spiral. here’s an article I wrote three years ago addressing this very issue.

    How to Get a Free Vehicle

    Did you hear about the customer who went into a GM dealership? He qualified for the following:

    AARP
    GM Discount
    Recent College Grad
    Active Military
    Olds Owner
    Resident of North Central Region
    GM Cardholder
    Father who was a UAW Retiree
    Owned Import
    Took Overnight Test Drive
    Incremental Allowance
    Bonus Cash
    Matching Downpayment

    Needless to say, the car was FREE. He passed, saying he’d prefer to pay for a Toyota. The sales manager came in for the close and offered Two On Us. Didn’t work. The car was already FREE. As a last ditch effort, the manager offered to remove the emblems.

    Customer left saying he’d get back in touch.

    Who is John Galt?

  • avatar
    MichaelJ

    Hardly surprising when their “captive” financing arm won’t loan to anybody.

  • avatar
    allen5h

    I would be tempted to buy a new mid sized Chevy sedan if it was priced at 2/5 X MSRP. Tempted, but not sure I would pull the trigger.

    This scenario may never happen, so I will never really know what I would do.

    (meanwhile, I’ll keep driving my 2001 Accord :-))

    I should also mention that last month’s sales performance is worth at least a $1,000,000 bonus to fearless Rick. But he is saving his best for last, as in “I’,m abandoning ship and that there fat money bag goes with me, thank you.”

    Ahhhhh……. American style capitalism.

  • avatar
    peejay44

    Then there is this from Marketwatch:
    Porsche U.S. October sales fall 50.1% to 1,427 units from 2,862 a year ago. Boxster and Cayman sales fell to 153 units from 706 a year ago, and sales of the 911 model fell to 584 units from 972 a year ago.
    Draw your own conclusions.

  • avatar
    Lichtronamo

    MichaelJ:

    The issue with GMAC is that it’s not GM’s captive finance arm anymore, it belongs to Cerberus. Cerberus is using their leverage to pressure GM into turning over the other 49% and/or take Chrysler from them.

  • avatar
    Airhen

    Buickman, that’s funny! Okay, sad, but funny.

    You are so right about marketing gone bad. It cheapens the brand to sell a product at a loss. The temporary cash flow it may generate is not going to last and the day of reckoning is still in their future…

  • avatar
    toxicroach

    So whats their monthly cash burn now? 2 billion? 3?

    Happy 100 years.

  • avatar
    jkross22

    That headline is a bit of a stinger.

    Nothing to see here. Move along, move along…

  • avatar

    It’s the “half-off no sale.”

  • avatar
    Richard Chen

    45% was GM’s SUV YTD sales drop through the end of September 2008. The jarring image: http://www.nytimes.com/imagepages/2008/10/25/business/20081026_JANE_GRAPHIC.html

  • avatar
    GS650G

    I wonder if GM is going to get more Reardon metal to build cars with once the government takes it over. just who will be installed in charge of automobile production anyway?

  • avatar
    threeer

    To be fair, just about everybody lost sales from a year ago. To single out GM here is a tad bit sensationalist.

  • avatar
    snabster

    Please explain why GM doesn’t shutdown all NA production except the Malibu? I realize it is coming as a negotiating tool to get a bailout, but really if you are losing a billion dollar a month. 172K vehicles a month at an average of 25K a vehicle = 4 billion a month. Profit is probably only 1500 a vehicle, so that is about 258 million. You could SAVE 3.8 billion a month by not making anything.

  • avatar
    Point Given

    threer : When Ford is down 30% Chrysler down 35% and the very biggest manufacturer is down 45% ….it’s very staggering number that deserves analysis, opinions and speculation. Had the drop been low 30% I think it would be sensationalism to make a big deal of it.

    And shutting down production and selling down inventory is like waving the white flag that you are done and done. I don’t know about the cost structure at GM (profit per vehicle), I will say rental fleets get significant discounts over fleet pricing which is well under retail invoice.

  • avatar
    geeber

    snabster: Please explain why GM doesn’t shutdown all NA production except the Malibu? I realize it is coming as a negotiating tool to get a bailout, but really if you are losing a billion dollar a month.

    Under its UAW contract, GM must pay blue-collar workers whether they are producing anything or not. Labor is essentially a fixed cost. GM thus doesn’t really save any money by shutting down plants.

  • avatar
    Steve Green

    So if GM loses money on every car sold, shouldn’t October’s lousy sales figures reduce their cash burn?

  • avatar
    DPerkins

    Buickman

    I think that you will like this graph (prepared by the Detroit Free Press):

    GM under Wagoner

    Rather ‘graphic’.

  • avatar
    DeanMTL

    That 38 billion dollar loss was just an accounting trick, from what I heard. In reality it was an absolute loss of around 5 billion, on par with the previous year’s losses.

  • avatar
    volvo

    So if GM loses money on every car sold, shouldn’t October’s lousy sales figures reduce their cash burn?

    I’m pretty sure you said that tongue in cheek however they certainly lose money on every car produced. And because of their labor contracts lose even more money on every car not produced!

    And when the Uncle Sam bails out GM and the Unions taxpayers will get to subsidize what they lose on every car not produced.

    At least paying workers not to produce cars is easier on the environment. Perhaps that is the whole purpose of this exercise.

  • avatar
    Steve Green

    Volvo —

    Any further in my cheek and I’d be pushing out teeth.

  • avatar
    John Horner

    Remember way back in September when GM was getting praise for not losing as many sales as the competition did? Sure enough, they gave away the store and pulled a little demand forward.

    You know things are just horrible when GM is running radio ads about how they will help buyers find financing with anyone other than GMAC. I heard one of their ads the other day and it left me dumbfounded.

    What’s next, Malibu Hybrids on Priceline.com?

  • avatar
    geeber

    Well, I would put more faith in William Shatner than Rick Wagoner at this point…

  • avatar
    volvo

    From the news release

    “GM hybrids continue to build sales momentum and the company has broken through the 10-thousand vehicle sales mark. A total of 1,496 hybrid vehicles were delivered in the month. Hybrid sales included: 372 hybrid Chevrolet Tahoe, 193 GMC Yukon and 230 Cadillac Escalade 2-mode SUVs delivered.”

    I wouldn’t be surprised if most of these were being driven around DC and various state capitols keeping a green image for our public servants. Probably one Tahoe Hybrid set aside for Bauer to use on 24.

    Do I seem cynical?

  • avatar
    Cicero

    DeanMTL :
    November 3rd, 2008 at 5:47 pm

    That 38 billion dollar loss was just an accounting trick, from what I heard.

    When Arthur Anderson was performing accounting tricks for Enron, at least the tricks made Enron look good. Maybe GM needs better accountants.

  • avatar
    snabster

    @geeber:

    When I say shut down, I mean old fashioned lock the factory gates and let the UAW sue. The most they could get is 3 months pay, and there are a lot of other debtholders in front of them. UAW would have to settle for 5-6 billion, which is about what they would lose in two months now (given the sales drop)

    Here’s another question: Do you think Obama will suspend the proposed CAFE rules? No way any american car company is investing in new models at this point – even with the 2010 bailout money.

  • avatar
    SkiD666

    Something else to put this in perspective, October GM sales in Canada were down 6.4% (I’ll assume that exposure to american media and the US financial climate accounted for much of this).

  • avatar
    bumpy

    “As a last ditch effort, the manager offered to remove the emblems.”

    The last-ditch effort should have been, “What color Camry would you like? We’ll have it here in an hour.”

  • avatar
    oboylepr

    Just passed GM Corporate HQ in Canada an hour ago. All the GM signs are off and the big floodlit Malibu poster is in darkness. First time I’ve seen that in twenty-five years passing that place. Must be trying to save a few loonies!

  • avatar
    menno

    Well, oboylpr, I have to wonder if GM is so close to the brink, that they are literally doing just that.

    Either that or tomorrow, while everyone’s attention is “elsewhere”, they throw in the towel.

    Only question that’ll remain will be “chapter 11 or 7”?

  • avatar
    Usta Bee

    I’m trying to think of a good jingle for GM to compete with “Saved By Zero”….

    Highway To Hell by AC/DC

    Low Budget by The Kinks

    Nothing From Nothing by Billy Preston

    Down In A Hole by Alice In Chains

    Everything Must Go by Steely Dan

  • avatar
    autonut

    I guess new course at Sloan School of Management (MIT) should be named “The most effective money losing strategy”. If someone (whom am I kidding there will be dozens) will publish book/dissertation/course on this subject it will read like comedy of errors. Shakespeare, roll over.

  • avatar
    luscious

    This mortality thing is surely an eye-opener.

    I mean, we’ve watched this unfold for 3+ years on this website…and we’ve watched it unfold in real life for MANY years beyond that.

    But DAMN!!! This beast is REALLY DYING!!!

    It’s like when you see your grandmother lying in an open casket…it FINALLY *HITS* you…SHE’S DEAD!!!

    I thought I was going to laugh my ass off at this month’s (October’s) sales figures….but HOLY COW…45%!! It’s a complete bloodbath!!

    …and a well-deserved one at that.

    Congratulations Ricky, Momma’s proud of her little darling. You’re such an American Icon…right up there with Charlie Manson.

    You’ve left quite a “legacy” for your children to look up to, bless your heart.

  • avatar
    oboylepr

    Captain Rick must clearly see where the ship is going to impact by now. I can just see him now with his hand caressing the eject lever. He has completed his checklist and he is waiting for the right moment to bail out. He’s hoping the ejection seat will do it’s job correctly and that he doesn’t hit the canopy (or Bob) on the way out. Don’t want to wait too long or he will get caught in the massive explosion. Don’t want to go too soon either or everyone will see the colour of the parachute (gold). Gotta make it look like he stayed with it to the bitter end. Hopefully the chute will open and he lands on open ground then he can do a runner to that forest and disappear. He should make to to the highway where the getaway car (Hyundai Genesis) is waiting. Any second now……..he can’t bear to look!

  • avatar
    theflyersfan

    Harvester of Sorrow by Metallica

    Numb by U2

    Any song about worthless pain and suffering by Linkin Park

    To quote another combination of history and Hollywood (directed towards GM):
    “Iceburg, right ahead!”

  • avatar
    luscious

    Thanks for reminding me, I promised the other day I’d post this again…knowing full well that darkness is setting in:

    You’ve seen life through distorted eyes
    You know you had to learn
    The execution of your mind
    You really had to turn
    The race is run the book is read
    The end begins to show
    The truth is out, the lies are old
    But you don’t want to know

    Nobody will ever let you know
    When you ask the reasons why
    They just tell you that you’re on your own
    Fill your head all full of lies

    The people who have crippled you
    You want to see them burn
    The gates of life have closed on you
    And now there’s just no return
    Youre wishing that the hands of doom
    Could take your mind away
    And you don’t care if you don’t see again
    The light of day

    Nobody will ever let you know
    When you ask the reasons why
    They just tell you that you’re on your own
    Fill your head all full of lies

    Where can you run to
    What more can you do
    No more tomorrow
    Life is killing you
    Dreams turn to nightmares
    Heaven turns to hell
    Burned out confusion
    Nothing more to tell

    Everything around you
    Whats it coming to
    God knows as your dog knows
    Bog blast all of you
    Sabbath bloody sabbath
    Nothing more to do
    Living just for dying
    Dying just for you

    Sabbath, Bloody Sabbath
    -Black Sabbath

    Ricky, I hope you get totally sloshed drinking your fine Merlot this Thanksgiving. Oh the stories…OH THE STORIES around the dinner table!!!

    Please remember to tell EVERYONE how “unfair” things have been to you.

    “Why, I no longer get free car washes anymore…what’s this world coming to!!!”.

    “Let them eat Stove Top and one of those pressed Turkey guts…I mean “loaves”!!!”.

  • avatar

    GM over the past ten years has been an epic study in value destruction – and every single step of the fray the blame was always due to “circumstances being out of control,” to which GM management were the hapless victims …

    I was somewhat involved, many years ago. Just being exposed to how GM was “thinking” froze your brain, and left you with the conclusion that this was going to blow up big one day.

    That day is here.

  • avatar
    DweezilSFV

    Waggy will probably see GM through to the end.

    Then enter politics. He’s made for it. Running the govt. after running GM should be a piece of cake.

    Think they use the same steering wheel on the Federal Ship Of Fools that they do on the SS GM ?

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