GM Tidbits

[sirAQUAMAN64]

Quite sad, but predictable. After 2008MY I wouldn't expect an oversupply of Astras in Canada either.

GM: Currency shift stalled Astra

Amy Wilson
Automotive News
September 8, 2008 - 12:01 am ET

CHICAGO — The Saturn Astra costs too much for U.S. customers, and sales and profitability of the small hatchback are suffering, says General Motors product chief Bob Lutz.

GM decided to import the Belgium-made Astra when the value of the U.S. dollar was stronger. At that time, the starting list price was planned at around $15,500. And it would have been marginally profitable, Lutz, GM vice chairman of global product development, said at a press event here.

"Well, I have to tell you, the price is no longer $15,500, and the profit is no longer there, either," Lutz said. "The car is priced too high."

The Astra's base price, including shipping, has risen since it went on sale in January, to $16,495 from $15,995.

Astra sales have been disappointing at 7,914 units for the year to date. The company's employee pricing promotion provided a lift in August: Astra sales were 1,994, up from a previous monthly high of 1,555 in July.

Saturn had aimed to sell at least 25,000 Astras annually. If the August sales figure could be sustained, the Astra would be back on pace with expectations, said Mark LaNeve, vice president of GM North American vehicle sales, service and marketing.

But outside of the employee pricing deal, LaNeve said, the currency exchange penalty on the Astra has kept GM from "being very aggressive with incentives or marketing the unit."

[carcrazy]

I only hope that GM doesn't conclude that small hatches are not selling in the US and abandon the idea of selling the next gen Astra and potentially Corsa in North America.
The key is to import the design and build the cars here.

[Zoo]

I only hope that GM doesn't conclude that small hatches are not selling in the US and abandon the idea of selling the next gen Astra and potentially Corsa in North America.
The key is to import the design and build the cars here.

Right car, right time.... Possibly wrong brand. The Astra might not sell as well as it could have if it were branded as a Chevy and marketed well.

There is a price point for 5 door hatches and the average Joe might not realize how much different an Astra is compared to say an Aveo. Completely different car that compares more to a Rabbit than a Korean hatchback.

Too bad the Astra isn't made here. Maybe GM will rectify this as this is exactly the sort of car that they should be fostering and improving.

[sirAQUAMAN64]

I only hope that GM doesn't conclude that small hatches are not selling in the US and abandon the idea of selling the next gen Astra and potentially Corsa in North America.
The key is to import the design and build the cars here.

That was my concern too, but appears Ford will show 'em all the way.

[carcrazy]

I only hope that GM doesn't conclude that small hatches are not selling in the US and abandon the idea of selling the next gen Astra and potentially Corsa in North America.
The key is to import the design and build the cars here.

That was my concern too, but appears Ford will show 'em all the way.

I'll keep my fingers crossed. However, I'm not sure if GM will follow.

[Wolfe]

Quite sad, but predictable. After 2008MY I wouldn't expect an oversupply of Astras in Canada either.

Very sad and predictable. The Astra will be an orphan very soon I'm sure.

What makes me shake my head is the lack of foresight on the part of GM's management. They made a decision to bring the car over here (a good decision IMO) but they knew at the beginning that their margins on the car would be very tight and that they were highly vulnerable to currency fluctuations yet they did nothing to either promote the car to push sales or hedge their currency exposure. If their profit margin was so small they should have protected it by hedging their F/X exposure so they could concentrate on making the car successful in North America.

GM has tons of people with MBAs and CPAs this currency stuff should not have caught them by surprise. That's simply gross incompetence ...unless, of course, they wanted the Astra to fail.

GM decided to import the Belgium-made Astra when the value of the U.S. dollar was stronger. At that time, the starting list price was planned at around $15,500. And it would have been marginally profitable, Lutz, GM vice chairman of global product development, said at a press event here.

"Well, I have to tell you, the price is no longer $15,500, and the profit is no longer there, either," Lutz said. "The car is priced too high."

 

[sirAQUAMAN64]

Obama says GM will be 'strong,' thrive after pain

May 23, 2009 - 12:00 pm ET
UPDATED: 5/23/09 1:20 p.m. ET


WASHINGTON (Reuters) -- President Barack Obama said he is confident General Motors would thrive after restructuring while making no mention whether GM might have to enter bankruptcy to complete reorganization.

Obama, in an interview with the C-SPAN cable television network, said he wanted the government to get out of the auto business as soon as possible, and he said if some auto jobs never return, the government will work to ensure workers are effectively retrained.

"Ultimately, I think that GM is going to be a strong company, and we are going to be pulling out as soon as the economy recovers and they've completed their restructuring," Obama said in the interview scheduled to air today.

GM is facing a government-imposed June 1 deadline to complete a sweeping restructuring that analysts believe will require a bankruptcy to complete. Obama was not asked about a potential GM bankruptcy during the C-SPAN interview and did not raise the issue himself.

Obama's comments echo remarks he made on March 29 about Chrysler LLC before its U.S. deadline.

"I'm actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler auto company out there," Obama said the night before Chrysler filed for bankruptcy.

The Chrysler plan is to sell substantially all of its assets to a new company owned by Fiat S.p.A., a UAW health care trust, and the U.S. and Canadian governments.

Keeping GM solvent

The Obama administration has injected $19.4 billion to keep GM afloat since the beginning of the year, including another $4 billion on Friday. The government stake is commitment is expected to rise to $27 billion after June 1.

GM has said it could file for bankruptcy if it fails to convince bondholders to agree to forgive some $24 billion they are owed, about 90 percent of the total.

Under Obama administration orders, GM has offered bondholders a 10 percent stake in the restructured company, a deal they view as unfair.

"My hope ... is that we will see both GM and Chrysler having emerged from this restructuring process leaner, meaner, more competitive with a set of product lines that appeal to consumers, good cars that are fuel efficient and that look at the markets of tomorrow," Obama told C-SPAN.

He predicted a jump in auto sales once the U.S. economy recovers from the current recession because Americans are not buying enough vehicles to replace the ones that are being worn out.

"You are looking at a substantial market that is going to be available for U.S. automakers if they've made some good decisions now, and if they are building the kinds of fuel-efficient, high-performance cars that American consumers are hungry for," Obama said.

"I think GM and Chrysler can do that," he added. "We're confident that they can emerge and take advantage of that new market and actually be very profitable and thrive, but it means going through some pain now."

Obama reiterated that he did not want the U.S. government, which would hold a majority stake in GM under the company's proposal, to remain in the car business for long.

"We want to get out of the business of helping auto companies as quickly as we can," he said. "I have got more enough to do without that."

[articsteve]

GMAC receives $7.5 billion in new Treasury aid
By JEANNINE AVERSA and MARCY GORDON - Associated Press Writers
Published: Thu, May. 21, 2009 10:39AMModified Fri, May. 22, 2009 01:28AM
 

WASHINGTON -- Auto lender GMAC Financial Services will receive $7.5 billion in additional government aid to keep loans flowing to would-be buyers of GM and Chrysler vehicles and shore up its capital postion - marking the second time the government has stepped in to prop up the lender.

To help GMAC raise additional funds, the Federal Deposit Insurance Corp. took the rare step Thursday of allowing the junk-rated company to gain access to its debt guarantee program. GMAC will be allowed to issue as much as $7.4 billion in debt, guaranteed by the FDIC in case the company defaults on payment.

In addition, the Federal Reserve waived rules to give GMAC's new bank, called Ally Bank, more leeway to make loans to GM customers.

 File - Exterior of General Motors Acceptance Corp. headquarters in Horsham, Pa., in this Thursday, March 23, 2006 file photo. The government deepened its support of the battered domestic auto industry on Thursday May 21, 2009, providing auto lender GMAC Financial Services with $7.5 billion in additional aid to keep loans flowing to would-be buyers of GM and Chrysler vehicles.

The GM and Chrsyler US vehicle TV ads are back with 0%/60 months.  Can Ford compete with this 

[Leviathan]

Henderson Speaks Informally to Detroit-based Reporters

Speaks of Opel, incentives and suggests that they'll release financials in November amongst other stuff.

I found this entertaining

On U.S. incentives, pickups are a big driver of the discussion. We built '09 pickups longer for technical reasons. … I think that certainly we will see some moderation in incentives on the '10s as we clear out the '09s. …The other thing is that we are, as we reduced the inventory, we lowered the water level in so much of our inventory that (what) was remaining over aged. And, we are aggressively clearing out the over-aged stock which is a good thing to do. But it does take some money. And, it is funny when you think of it this way, if you ran 900,000 units of inventory and 30 percent of it over aged, then, you have 270,000 units of over aged inventory. When you run 400,000 units of inventory, that over age(d) (inventory) unfortunately, didn't diminish per rate. We are aggressively progressing. These (are) vehicles greater than 90 days and 120 days in the lot. Those two thing(s), over-aged (inventory) as well as pickup trucks, are what is driving the incentive levels reasonably higher. Higher than what we with like them to be today. … I think… one factor that will tend to go the other way a little bit, leasing is growing. But I don't think that is going to be, you know, we think… leasing winds up at 6-7 percent of our business here, with the majority of it in Cadillac. It won't be a big driver of real incentives spend(ing). When leasing was 22 percent of the business, it was a big driver of the incentives.