Jump to content
  • Drew Dowdell
    Drew Dowdell

    GM, Ford Brace For Economic Downturn; German Economy Shrinks

      ...Preparing for the worst...

    Ford and GM, the U.S.'s top two auto manufacturers are bracing themselves for the worst.  They have been running economic modeling to determin the steps they would take given a medium or severe recession in the US and across global markets.  General Motors has a stockpile of $18 billion in cash while Ford has $20 billion saved up.

    GM is relying on deferring non-essential capital expenditures and a shift in production to lower cost vehicles as part of its plan to save costs in the event of a a strong downturn.  Ford says is is evaluating its future moves. 

    Fears of a recession have plagued Wall St. most of 2019 while a trade war with China rages on.  Higher costs of materials due to tariffs is adding to the pain of weak product demand in the U.S., China, and Europe.  In Germany, Europe's biggest economy, growth shrank by 0.1 percent in Q2 2019 as trade conflicts and auto industry troubles weighed heavily on the economy.  Both exports and lagging demand at home have put a strain on German automakers already looking to slash costs. 

    Today, a strong signal that a recession is looming appeared as the 10-year treasury yield dropped below the 2-year treasury yield while do Dow Jones Industrial Average sank over 450 points.  

    Related:
    Honda Slowing Production, Cutting Shifts
    Nissan Profit Plunges 99%; 12,500 Job Cuts Eminent
    Ford Europe Laying Off Another 12,000
    Daimler Books First Quarterly Loss in Ten Years

    Source: Automotive News (Subscription Required)

    • Upvote 2


    User Feedback

    Recommended Comments

    Prepare for the worst and if it doesn't happen you were at least afloat and have "extra" cash. 

    • Upvote 4

    Share this comment


    Link to comment
    Share on other sites

    The slow down is coming.  If China wants to get in an all out trade war and flood the market with some of the US treasury bonds they owe that can really throw gas on the fire.

    • Upvote 3

    Share this comment


    Link to comment
    Share on other sites

    Economic downturn?  I like to look at real estate sites.  There are already residential properties (not the mansions Robin Leach would tour) in California, Washington state, et. al. that are showing "reduced" in their prices.  We've only seen this recently.  We certainly haven't seen this in a long time.  I would agree that there is a downturn coming.

    Share this comment


    Link to comment
    Share on other sites

    Apparently Singapore officially entered recession yesterday. Germany technically did also, but at such a low rate, they're not calling it yet. 

    • Like 1
    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites

    I think the mass amount of firearms in the US will not allow an official "cast system". 

    Share this comment


    Link to comment
    Share on other sites
    51 minutes ago, ccap41 said:

    I think the mass amount of firearms in the US will not allow an official "cast system". 

    Are you sure about that? About half of all firearms are owned by about 4% of all Americans.  Most gun owners only have at most two or three firearms, often just one.

    Share this comment


    Link to comment
    Share on other sites
    9 minutes ago, riviera74 said:

    Are you sure about that? About half of all firearms are owned by about 4% of all Americans.  Most gun owners only have at most two or three firearms, often just one.

    Well, if you think about the cast that would be put at the bottom of the system.. yes.

    You don't need an arsenal of firearms to defend yourself or family. You also don't need 100% pushback to defend your "cast". 

    Share this comment


    Link to comment
    Share on other sites
    27 minutes ago, riviera74 said:

     Most gun owners only have at most two or three firearms, often just one.

    My idiot brother had 45...

    • Haha 1

    Share this comment


    Link to comment
    Share on other sites
    27 minutes ago, riviera74 said:

    Are you sure about that? About half of all firearms are owned by about 4% of all Americans.  Most gun owners only have at most two or three firearms, often just one.

    Those numbers don't seem right. Theres an estimated 400 million guns in the US. 4% of US population is 14,000,000, obviously a lot less once you eliminate minors.

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    2 minutes ago, Robert Hall said:

    My idiot brother had 45...

    I assume he was a collector with those numbers. 

    Share this comment


    Link to comment
    Share on other sites
    Just now, ccap41 said:

    I assume he was a collector with those numbers. 

    No, just an idiot.  They were seized when he was arrested last year, but he may get them back after probation ends next year..but that's neither here nor there. 

    Anyway, the automakers shift to CUVs and SUVs seems short sighted if a downturn is coming...smaller, cheaper cars seem more likely to sell in a down market...

    • Like 1
    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    2 minutes ago, Robert Hall said:

    Anyway, the automakers shift to CUVs and SUVs seems short sighted if a downturn is coming...smaller, cheaper cars seem more likely to sell in a down market...

    There's also the glut of used cars on the market at the moment. 

    GM could bring the Cruze back in an instant. It's still in production in South America.  Just load them on a boat and ship them north. Sonic and Spark are still in production for now.  Sonic is not officially on the death list yet and its plant is not listed in the list of 5 plants that GM is closing

    • Upvote 3

    Share this comment


    Link to comment
    Share on other sites
    ykX

    Posted (edited)

    There are still bunch of cheaper smaller cars and CUVs from Asian automakers.

    A lot of used post lease vehicles, but I think they still on a more pricey side because people tend to lease more expensive vehicles.

    Edited by ykX

    Share this comment


    Link to comment
    Share on other sites
    30 minutes ago, Robert Hall said:

    My idiot brother had 45...

    I know several people with several hundred, and a few people with over a thousand. 

     

    • Like 1
    • Confused 2

    Share this comment


    Link to comment
    Share on other sites
    2 hours ago, Drew Dowdell said:

    Sonic and Spark are still in production for now. 

    Did sales of that price tier really jump during the ‘08-09 recession? Cause the Trax MSRP’s starts @ $21K before deals/incentives.

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    3 hours ago, riviera74 said:

    Are you sure about that? About half of all firearms are owned by about 4% of all Americans.  Most gun owners only have at most two or three firearms, often just one.

    Just the Facts please and according to the following:

    http://concealednation.org/2016/01/how-many-guns-does-your-state-have-a-look-at-the-numbers-plus-comparisons-to-other-countries/

    This info is from the recognized statista.com web site.

    https://www.statista.com/statistics/215655/number-of-registered-weapons-in-the-us-by-state/

    image.png

    As of 2018 it would seem 43% of US households have at least one gun. Of those that do have a gun, most have multiple.

    https://www.statista.com/statistics/249740/percentage-of-households-in-the-united-states-owning-a-firearm/

    This in comparison to the number of auto's:

    https://www.statista.com/statistics/196010/total-number-of-registered-automobiles-in-the-us-by-state/

    image.png

    According to the statistics, we have 375 million guns or equal to 113 guns per 100 people.

    According to the statistics, we have 272.48 million auto's registered to people in the us or .85 of an auto per person.

    Guns are winning ownership. :( 

    Share this comment


    Link to comment
    Share on other sites

    Enough of the gun talk. I'll delete further posts of it.

    1 hour ago, balthazar said:

    Did sales of that price tier really jump during the ‘08-09 recession? Cause the Trax MSRP’s starts @ $21K before deals/incentives.

    Spike is a relative term because the entire industry was in a massive contraction at the time. Smaller cars did well relative to bigger ones yes, but part of that was cash for clunkers.

    • Like 1
    • Thanks 1

    Share this comment


    Link to comment
    Share on other sites

    I would think most consumers in the Spark/Sonic shopping tier would largely go to the pre-owned market in a hard downturn (not artificially effected by a ‘CfC’ program), not to mention CUVs are much closer in price to low-end cars than they were 10 years ago. I don’t expect the same dynamic of radical oil speculation to happen again, oil was down today with the news of an unexpected rise in supply.

    I think GM & Ford are safe in a future economic storm without small cheap cars.

    • Like 1

    Share this comment


    Link to comment
    Share on other sites
    15 hours ago, balthazar said:

    I would think most consumers in the Spark/Sonic shopping tier would largely go to the pre-owned market in a hard downturn (not artificially effected by a ‘CfC’ program), not to mention CUVs are much closer in price to low-end cars than they were 10 years ago. I don’t expect the same dynamic of radical oil speculation to happen again, oil was down today with the news of an unexpected rise in supply.

    I think GM & Ford are safe in a future economic storm without small cheap cars.

    Keep in mind that Nissan, Kia, Hyundai, are ahead of GM and Ford in the small cheap crossover area. 

    Nissan Kicks, Hyundai Venue, Kia Seltos and Soul,  all start under $20k.  Trax is over $20k and Ecosport sits right at $20k.

    Share this comment


    Link to comment
    Share on other sites


    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.




  • Similar Content

    • By Drew Dowdell
      Ford is acknowledging the trouble prone Ford Powershift transmission and is extending the warranties on them.  The 6-speed transmission is a dual clutch setup meant to increase fuel economy in Ford's smallest cars.  While a solid idea on paper, customers reported a number of problems with them including slippage, hesitations while accelerating, jerkiness through the gears, difficulty downshifting, and premature wear on the clutch packs. 
      The extended warranty will cover 2014 - 2016 model year Ford Focus, and 2014 - 2015 model year Ford Fiesta and will increase the warranty coverage of the clutch from five years/60,000 miles to seven years/100,000 miles.  Ford will also reimburse customers in this group who have already paid for clutch repairs out of pockets.  The transmission control module will also be warrantied to 10 years/150,000 miles. 
      In addition to that, there is a small group of customers (16%) who need a software update which Ford will provide for free. 
      Affected customers will receive a letter from Ford with instructions on how to proceed.

      View full article
    • By Drew Dowdell
      Ford is acknowledging the trouble prone Ford Powershift transmission and is extending the warranties on them.  The 6-speed transmission is a dual clutch setup meant to increase fuel economy in Ford's smallest cars.  While a solid idea on paper, customers reported a number of problems with them including slippage, hesitations while accelerating, jerkiness through the gears, difficulty downshifting, and premature wear on the clutch packs. 
      The extended warranty will cover 2014 - 2016 model year Ford Focus, and 2014 - 2015 model year Ford Fiesta and will increase the warranty coverage of the clutch from five years/60,000 miles to seven years/100,000 miles.  Ford will also reimburse customers in this group who have already paid for clutch repairs out of pockets.  The transmission control module will also be warrantied to 10 years/150,000 miles. 
      In addition to that, there is a small group of customers (16%) who need a software update which Ford will provide for free. 
      Affected customers will receive a letter from Ford with instructions on how to proceed.
    • By Drew Dowdell
      Ford's second quarter 2019 income fell 86 percent to just $148 million.  The result is largely due to one-time charges related to its restructuring of operations globally.  Excluding the one-time items, Ford's income before interest and taxes fell just 2% to $1.65 billion.  Global revenue was flat year over year at $38.9 billion.
      The charges are primary caused by plant closures in Europe and South America. Ford has said it would cut 12,000 jobs in Europe by the end of 2020.  Ford's sales in the US have fallen 7 percent, including a large decline in Ford Explorer sales as the company moves the nameplate to a new rear wheel drive platform. Ford CEO Jim Hackett said that the changover was a "bigger endeavor" than overhauling the F-150 to an aluminum body. 

      View full article
    • By Drew Dowdell
      Ford's second quarter 2019 income fell 86 percent to just $148 million.  The result is largely due to one-time charges related to its restructuring of operations globally.  Excluding the one-time items, Ford's income before interest and taxes fell just 2% to $1.65 billion.  Global revenue was flat year over year at $38.9 billion.
      The charges are primary caused by plant closures in Europe and South America. Ford has said it would cut 12,000 jobs in Europe by the end of 2020.  Ford's sales in the US have fallen 7 percent, including a large decline in Ford Explorer sales as the company moves the nameplate to a new rear wheel drive platform. Ford CEO Jim Hackett said that the changover was a "bigger endeavor" than overhauling the F-150 to an aluminum body. 
    • By Drew Dowdell
      In a lawsuit filed in U.S. District Court for the Eastern District of Michigan, Ford is accused of falsifying fuel economy numbers in the Ford F-150 and Ford Ranger. The suit is seeking class-action status and aims to collect $1.2 Billion in damages.  The law firm, Hagens Berman, says that consumers are spending up to $2,000 more in fuel over the lifetime of the truck due to misleading EPA numbers.
      Back in February of this year, Ford launched an investigation into its own EPA emissions and fuel economy certification process after an anonymous tip line at Ford received concerns that there were issues with the test. The concern surrounds Road Load, a vehicle-specific resistance level used in dynamometer testing. Too much or too little resistance will alter the results of the emissions and fuel economy. Road load is determined through engineering estimates that are then validated on the track.
      Ford already hired an outside firm to investigate their testing, with the Ranger the first to go through re-testing.   The suit alleges that the F-150, by far Ford's best selling vehicle, is also subject to the same issue as the Ranger.
      Ford is declining to comment on the lawsuit at this time. 


      View full article
  • Posts

  • Social Stream

  • Today's Birthdays

    1. FAPTurbo
      FAPTurbo
      (32 years old)
  • Who's Online (See full list)

  • My Clubs

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets

facebook

×
×
  • Create New...