GM backlog looking a lot like 2008, so whats changed?

Discussion in 'Economy' started by Trajan, Jul 5, 2011.

  1. Trajan
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    Trajan conscientia mille testes

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    channel stuffing, backlogs etc etc etc whatever. We have been led to believe the economy was gaining ala Jan thru march then the bomb dropped. 1.8 gdp q1. so what was GM thinking?

    So with what appears to be a pretty stagnant consumer economy ( have not heard any q2 gdp numbers being ballyhooed or the June employment figures by the media btw) they didn't ramp down production?

    I have to go with hot air here;


    The federal bailout of GM only made sense if the automaker’s difficulties entirely sprang from the financial collapse (caused mainly by government intervention in housing and financial markets through Fannie and Freddie junk bonds), and had been both competitive and profitable without it. That was obviously not the case; GM had struggled for years against foreign and domestic competition. The bailout forced GM to make some long-needed changes, such as consolidation of its product lines, as well as allowed the company to benefit from a politically-engineered bankruptcy that left the legacy benefit issues largely on the backs of taxpayers.

    However, the basic management issues remained and apparently still do. Even with the bailout, the company has trouble operating in a profitable and efficient manner. That points to the bailout being a very bad investment for taxpayers, and with billions of dollars already lost on loans to GM and Chrysler, is a rather easy conclusion to reach. As Doug Ross puts it, more succinctly:

    You mean that abrogating bankruptcy law, screwing over secured creditors and rewarding Democrats’ union supporters with billions in equity, tax breaks and subsidies didn’t really fix GM?

    Gee, that was hard to predict.


    Uh oh: GM backlog looking a lot like 2008 « Hot Air

    palate cleanser-

    The Detroit-based automaker, 33 percent owned by the U.S. after its 2009 bankruptcy, has 280,000 Silverado and GMC Sierra pickups on dealers’ lots around the country. If sales continue at June’s rate, that would be enough to last until November.

    After GM’s truck inventory swelled to 122 days worth of average sales, the company said 100 to 110 will be normal going forward for such a large and complex line of vehicles, compared with 60 to 70 days for most models. Peter Nesvold, a Jefferies & Co. analyst, isn’t convinced.Ford Motor Co. (F), which makes similar trucks, is running at 79 days, and Nesvold says GM averaged 78 days on hand at year end from 2002 to 2010.

    “It’s unbelievable that after this huge taxpayer bailout and the bankruptcy that we’re right back to where we were,” Nesvold, who has a “hold” rating on the stock, said in a telephone interview. “There’s no credibility.” In a research note he asked: “Is GM falling into old, bad habits?”

    GM
     
  2. william the wie
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    william the wie Gold Member

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    GM logistics have sucked for decades.
     
  3. Trajan
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    Trajan conscientia mille testes

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    Thx WW; I guess news like this doesn't even rate on the piss o'meter as there is so much of it...:lol::lol:
     
  4. Quantum Windbag
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    Quantum Windbag Gold Member

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    I actually used this today to rebut an argument that the GM bailout worked.
     
  5. ShackledNation
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    ShackledNation Libertarian

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    What's changed? Now we have a stronger moral hazard. Companies will beg government for bailouts under the guise they are too big to fail rather than innovate or correct business mistakes.

    The profit motive has two sides: if you fail, you don't get bailed out. You lose profit. And if you are losing profit, that means you are not serving consumers, and absolutely must go out of business to free up resources to be used more efficiently.
     

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