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General Motors and Ford Motor's credit has been de-rated and their bond rating has been reduced to "junk" status, which is an indicator they are simply not making enough money. A business weekly magazine had an article last week that said GM will need to trim down and start selling more cars or it will run out of cash and face bankruptcy within five years. Ford is in a similar state, but I don't know how much cash they have. Derating them erodes their purchasing and negotiating power for parts, and makes it more expensive for them to borrow money. Presently, GM is losing about $1600 per car it builds. This is not a good way to stay in business.
Anybody want to invest in a pool to see who folds first, or if they actually will, or will George bail them out? What the heck, it's only money, maybe George can skim a little off the war budget to save our car biz.

maybe american car companys should offer direct financing to people with a low rate. seems like the only people making the cash are the finance places that get high rates off people. gm could offer a fixxed low rate and bring people in that way.

or let them die off and pin up another us company thats gone leaving fewer jobs and less money being put into our economy. pretty soon we will have no thing made here and no jobs to make money to spend on the imported goods and services.

invest in foreign real-estate.

Forget cheap financing, LEASING(what a scam), and making 23 cars the same with different names and make a good car! G.M. quality on their front wheel drive cars is bloody aweful and myself, like others, won't get fooled again. 15 years ago we heard about how they had quality to rival the Japaneese and they gave us even worse cars. No matter how cheap a GM front wheel drive car is, I won't buy it.....ever again! The Fords that I've owned have been alot better. Still not a Japaneese levels of quality though......

this tale of financial woes is nothing more than a coverup to move the remaining auto plants to mexico.

Maybe. Just another bunch of manufacturing jobs heading out. Wonder what we will have left in 10 years?

what we will have is exactly what big business and our government has planned.2 classes of people.

the very few incredibly rich.
the overwhelming hundreds of millions in abject poverty just like the third world countries are now.

There really isn't an american car left is there? Mercury's are being made in canada but my toyota was made in ohio. At that point which car is more "american"?

I guess it should be called American BRANDS that aren't selling, and for obvious reasons, if you look at 'em. They're ugly and unreliable and just as expensive as a nice, foreign brand with a good reliability history. Of course, that reliability thing pretty well excludes German brands like BMW and Mercedes. Not that I'd know about them via personal experience.......

oldnslo wrote:I guess it should be called American BRANDS that aren't selling, and for obvious reasons, if you look at 'em. They're ugly and unreliable and just as expensive as a nice, foreign brand with a good reliability history. Of course, that reliability thing pretty well excludes German brands like BMW and Mercedes. Not that I'd know about them via personal experience.......

BMW and Mercedes were both rock-solid cars in terms of reliability til they started going electronic with everything and installing electronic butt warmers, etc etc in their cars.

Almost 85% of the problems with vehicles these days are electronic ... so what to do?? MAKE ELECTRONIC HYBRID CARS AND INSTALL MORE ASSWARMERS!!

Seriously. I blame management

Oldnslo - did your article mention ehether GM and Ford subsidiaries (like Saab and Volvo for example) are part of the downward trend in these manufacturers' profits, or is it just the vehicles w/ the American branding?

Also, I've read more than one article on the possibilities of the Chinese market .. Seems the chinese really want big nasty gas-guzzling behemoths just like Americans!!! I think (maybe wrong) GM is building a manufacturing plant in China (??) This could really work out well for GM's profits, especially since the Chinese labor force could probably build Caddys for pennies on the Dollar. (Think of the repurcussions the burgeoning chinese automotive market will have on Oil Reserves and Gas Prices )

The owned brands like Saab may have uncertain futures. Typically, companies divest themselves of unprofitable divisions. This is a global corporate problem for GM, and nothing is "safe". In the article, which was predominantly about GM, it was suggested that Pontiac, Buick, and Saab would be dropped.
My guess is that Ford, facing problems similar to GM, will do pretty much the same things, because they share the same source of big problems, which are "legacy costs." These legacy costs have to do with high pension payouts and prepaid healthcare til death negotiated by the auto unions in years past. These costs are so high now they are causing losses on vehicles built, and they cannot be legally rescinded.
If Volvo isn't contributing enough to the profit picture, it will disappear. So will Mercury, at least. Maybe Jaguar, if Ford still owns it
I remember a time when it was said that "whatever is good for GM is good for the country." How things can change.....