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Oerdin
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of Internet Music.
Sep 2001
time: 21:24
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http://www.businessweek.com/bwdaily..._7826_db035.htm
In a wierd turn of events the Chrysler part of DC is financially the best off of the big three while Ford made $1.2 billion last quarter and GM lost $1.1 billion. The article didn't give figures for Chrysler but did say it was the "best off". The quality of the cars built by the big three seems to be pretty good (in that they don't break very often) but cost cutting has meant that the look and feel of many of Detroit's cars just doesn't match the look and feel of the competition's cars. GM's accountants seem to have fallen in love with cheap shiny plastic which the costumers all hate. That's not a good thing if you are in the business of meeting costumer expectations.
Business week is reporting that used car prices are up and that the big three would really like to raise prices in order to return to a sound financial footing. That tells me Detroit still doesn't get it. Your cars are pilling up on dealer lots at the current price so you won't sell more if you raise prices 10%. I'm afraid Sikander is right on this one in that labor is going to have to take the hit because they've already decontented all they can and they've squeezed suppliers for all they can and raw materials like steel are more expensive while competition means they can't raise prices. That just leaves labor or dealers to take the hit and the dealers will just walk rather then lose money on a deal.
The labor contracts which make GM pay the same even if factories are ideal is killing them. If you have to pay workers even when they don't work then you might as well keep the factory running and pumping out cars. The problem is that results in over supply and falling prices which makes everyone unprofitable. You have to be able to match output with demand or else you will lose your shirt, ergo, the labor contracts need to be changed in order to reflect market realities.
Sadly even if labor contracts were fixed you still have a screwed up and entrenched management at GM which continues to make all the wrong moves. Chrysler and Nissan turned there business around not just by cutting costs but also by coming up with better designs, edgier styles, better engines, and more compelling products. They knew that in the car business product is king and so they spent big even when they were losing money so that the could develop hot new cars which pulled them out of the red. GM is doing the opposite; they are delaying new models or even canceling models in order to cut costs. Having old cars which don't sell well now won't make things easier or GM's results better next year or the year after that. Unless GM spends the cash to develop new modes which aren't dogs then they're going to have a rough time of it.
Last edited by Oerdin on 27-04-2005 at 15:35
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DanS
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Kickball Capital of the World
Jan 1970
time: 00:24
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AT&T only exists as a name, Rufus. It was recently gobbled by SBC for a paltry $16 billion -- about as much as GM is worth.
It is apparent that GM is no longer promoting the interests of its shareholders and is instead promoting the waning interests of its employees and retirees. There are few other explanations for a $15 billion market capitalization while doing a couple hundred billion in business each year. Essentially, the company is worthless.
Last edited by DanS on 28-04-2005 at 10:04
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Rufus T. Firefly
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is one way of saying it, though I prefer "mensch"
Sep 2000
time: 07:24
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quote:
Originally posted by Ted Striker
Apparently you've missed the last 5 years of bad decision making
Hey, let's be a broadband provider! no..no..that isn't gonna work...
Hey, let's be a wireless provider! no..no.. that sucks too.
In any case, SBC bought them out for $17 billion, the entity known as AT &T will soon cease to exist.
GM will suffer the same fate, trying to reincarnate itself and eventually end up going down. |
No, I haven't missed it. Sadly, AT&T stock is the largest part of my widowed mother's stock portfolio, and she refuses to part with it out of loyalty (my dad worked for now-defunct AT&T subsidiary Teletype).
I just meant that AT&T had actually tried to adapt as a corporate behemoth and had, for a while, succeeded. That seems to me different from GM's strategy, which seems to be to assume that the business hasn't really changed that much since 1955.
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27-04-2005 14:39
... which would of course not be accepted by the current administration if a team had volonteered for that despairing mission.
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