GM Leads League of Extraordinary Inventory at 161 Days Supply
Dear God, will no one pull the plug on this company? I know the Obama administration needs to wait until March 31st to appear as if they’ve fully contemplated all the options. But even for me, a professional General Motors Death Watcher, charting the final dissolution of what was once the world’s largest automaker has become a painful pursuit. The breakup of the global empire. The raiding of the pension fund. The kow-towing to politicians. Automotive News [sub] gives us a way-point, reminding us that GM’s epic cash conflagration is getting worse, not better.
In a conference call last week, CFO Ray Young said GM’s cash burn this year would be less than last year, which it put at $19.2 billion — but admitted the cash burn in 2009 would be “front-loaded.”
Translation: The short-term bleeding will continue. It will be hard in this quarter for GM to reduce its cash-burn much below the $5.2 billion consumed in the last three months of 2008.
All this while GM inventory piles up, everywhere. The post-jump run-down is sobering stuff. One hopes.
Maker Days Supply of Inventory
GM 161
Chrysler 151
Honda 125
Ford 120
Toyota 91
Nissan 85
Hyundai 79
Industry target 60
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I believe those mis-matched Impala fashias point out one of the reasons why GM finds itself in this predicament: Why does a mainstream family sedan need different fashias front or rear? Also along the same vein, why does a mainstream family sedan need different exaust systems from the engine back? If you look at either Honda or Toyota, you will see that the rear fashias have both the cutouts for the dual exaust V6 motor, but use a plug to cover up the hole on one side for the single exaust four cylinder model. Also, Honda uses the same basic exaust system for both of their 4 cylinder Accord engines. I'm thinking it has to cost more money to manufacture different fashias, exaust systems, etc.
Mikey is completely correct. Somebody caught those and was told to ship them. Anything to keep the line moving. "Ship em', we'll catch em in repair!" Once they get there, they are stamped off by management and out the door they go. 161 is a pretty big number, but I have seen bigger. When we were building Yukons and such we were over 200 days on hand and they kept us running to the tune of 500 per shift. This was right before the implosion. I imagine the conversation went something like this, "We have 3 plants making these right now. Let's just keep building them to, you know, stockpile them. These vehicles are recession proof, even at $4 dollar gas people will keep right on buying them." You can't imagine how many times I've heard in my 15 years there, "recession proof". They honestly believed that the big trucks would keep the entire thing afloat forever.
161 days? You know in times of war they practice triage. Maybe it's time to sacrifice GM so that the others can live. :-) GS650G: "125 days of supply for Honda is surprising but they are probably taking steps to rectify the situation. Like most transplants they have the flexibility to handle this." If they had the flexibility to handle it they wouldn't already have 125 days of supply. They are screwed like everyone else. nino, Toyota's 91 days probably does not include the tens of thousands of cars they have sitting at the docks and on ships. They probably don't count as inventory until they are shipped to the dealers. I would put the real number at 120-130 days supply.