Jump to content
  • Greetings Guest!

    CheersandGears.com was founded in 2001 and is one of the oldest continuously operating automotive forums out there.  Come see why we have users who visit nearly every day for the past 16+ years. Signup is fast and free, or you can opt for a premium subscription to view the site ad-free.

Sign in to follow this  

Is the General losing the war?

Recommended Posts

##Excuse the grammatical errors they arent the best in the world##

ANDERSON — Concern about General Motors’ ability to restructure operations, cut costs and boost sales was raised after the company filed its annual report to investors Thursday with the U.S. Securities and Exchange Commission.

“(GM’s) recurring losses from operations, stockholders’ deficit and inability to generate sufficient cash flow to meet its obligation and sustain its operations raise substantial doubt about its ability to continue as a going concern,” the company’s auditor, Deloitte & Touche LLP, indicated in the report.

Shares in the company closed at $1.86 Thursday on the New York Stock Exchange, down $.34 cents from Wednesday’s closing price.

GM has received $13.4 billion of $30 billion in requested loans from the federal government, following three consecutive years of operating losses totaling $82 billion.

Despite the loans, officials say everything is riding on the success of a restructuring plan GM submitted to the Treasury Department in February. The plan includes 47,000 layoffs and the closure of five United States factories by the end of the year.

GM said it will focus on improving revenues in its four core brands — Chevrolet, Cadillac, GMC and Buick, sell or phase out the Hummer brand, reduce Pontiac and Buick production, and close more than 1,500 dealerships by 2014. The company also has expressed a willingness to sell certain domestic and international operations, including Saturn and Saab.

“If we fail to (successfully implement our restructuring plan), we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code,” GM officials indicated in the report.

To offset costs, the company is negotiating concession agreements with debt holders and the United Auto Workers union under a March 31 deadline.

GM Chief Operating Officer Fritz Henderson said the company wants to avoid bankruptcy protection because of the negative impact it would have on sales, which during February dropped to 1981 levels and were 53.1 percent below February 2008 sales figures.

Henderson said there is not a lot of research about consumer confidence in cars manufactured by a bankrupt company, but “(the data that is there) suggests sales would fall off a cliff.”

GM Chief Executive Office Rick Wagoner, who was compensated $14.9 million last year in salary and stock options has agreed to accept just $1 this year as part of the restructuring plan. Wagoner called the restructuring effort “aggressive but achievable” in a February statement.

Kurt Mechling, owner of Performance Chevrolet, Buick, GMC on U.S. 123 in Seneca, said he believes the company is confronted by a twofold problem — slumping sales and overproduction.

Certain international GM-owned vehicles are also part of the problem, Mechling said.

“GM is still the No. 1-selling vehicle in the U.S., but Opel in Germany, Vauxhall in Britain, Holden in Australia and Saab in Sweden — those (GM-owned) brands are doing terrible in their respective markets,” he said.

Mechling also noted a sharp rise in the number of years Americans keep their cars.

“The most interesting number I have is the scrap rate,” Mechling said. “That number was 12.5 million cars going to the junkyard, and we (the United States) are only selling 8.5 million new cars a year. That tells me the average length of time Americans keep their cars has gone from 7.1 years to 9.1 years almost overnight.

“The average American drives 15,000 miles per year,” Mechling said. “That car is now going about 150,000-plus miles before the owner is ready to have it replaced. There is a tremendous demand out there, and people need to buy cars, but they won’t do it until they are confident about their jobs,”

Mechling said Performance Chevrolet, Buick, GMC achieved 106 percent of its sales objectives in February, and he believes there is still a market for GM automobiles, even if demand is down.

Mechling’s dealership is one of only 14 from among South Carolina’s 67 GM dealerships to be at or above 90 percent on sales objectives through Sunday, according to an industry report.

“We go to work and work hard every day,” he said. “The Chevrolet and Cadillac brands are absolute rock stars. They are the vehicles people still want to drive.”

In GM’s Southeast region, an area that includes South Carolina, GM dealerships are at 69 percent of their sales objectives as of Sunday, according to an industry report.

At Johnny’s Buick Pontiac GMC in Easley, a man identified as the sales manager said, “I’m not in to doom and gloom,” when asked about Thursday’s annual report.

Calls to several other upstate GM dealers were not returned as of Thursday night.

The Associated Press contributed to this report.


they allow for comments, there are 5 as of now and most of them seem on target and oddly enough not anit-gm off the bat.

Share this post

Link to post
Share on other sites

now the particular dealership that was interviewed is the one my truck came from. the sales people are good and the process is fine. the service department is atrocious. i have loathed everytime i have been there for something because they cant get a freakin thing right. if they dont know what to do they just send you away saying "its supposed to do that" i have NEVER had a good experience with them... so if they fold during this i will go dance in their parking lot. but at least the article gives a local view of the situation GM as a whole is facing. why he brought GME and Australia into it i dont know though.

Share this post

Link to post
Share on other sites

Your content will need to be approved by a moderator

You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   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.

Sign in to follow this  

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets



Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.