Friday, August 1, 2008

GM: Unpopular at home

It's time for the auto industry's second quarter numbers to come out, and you know what that means — big losses for G.M.

Bill Vlasic of The New York Times reports:

"The General Motors Corporation reported a stunning second-quarter loss of $15.5 billion on Friday because of a dramatic decline in United States sales and charges for job cuts, plant closings and the falling value of trucks and sport utility vehicles.

"G.M., the largest American automaker, said it lost $6.3 billion on operations in the quarter that ended June 30, and its worldwide revenues fell 18 percent.

"But the company’s overall loss was inflated by $9.1 billion in special charges that included $3.3 billion for buyouts of hourly workers and $2.8 billion related to the bankruptcy filing of its former parts unit, the Delphi Corporation.

"The dismal earnings reflected the impact of steadily falling vehicles sales in the overall United States market, and a huge shift by consumers away from the trucks and S.U.V.’s that were once G.M.’s most profitable vehicles."

And once again, it's the North American market that is really dragging down the automaker born and raised in Flint. A look at G.M.'s Second Quarter Earnings Report shows that things aren't quite so bad in the rest of the world:

"GM sold 2.29 million vehicles worldwide in the second quarter, down 5 percent year over year. Sales in GM [North America] were down 20 percent, or 236,000 units versus the year-ago period, while sales outside of North America grew by 10 percent or 116,000 units. A record 65 percent of GM unit sales for the second quarter were outside the United States. Global market share was 12.3 percent, down 0.9 percent due to weakness in North America."

If it makes you feel any better, the Japanese automakers are experiencing a similar trend, albeit without the catastrophic losses. Earlier this year, reported that sales of Japanese cars in Japan reached a 35 year low in 2007.

"The trend has been blamed on everything from wage stagnation to high price of ownership to population gentrification. Some of the year over year numbers are pretty shocking, Toyota was down 6%, Nissan fell 9.7%, and Daihatsu plummeted almost 50%."

Of course, the Japanese market is a lot smaller than the North American market.

1 comment:

  1. What was CEO Rick Wagoner's salary in 2006? In 2007? What will it be in 2008? Hmmm - I wonder if GM will cancel all of his health insurance when he reaches the age of 65...which is what the company did to my 79-year-old mother and God only knows how many other retirees and their spouses ... Angry? You bet I am.


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