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February 12, 2008
No doubt about it, these are very tough times for the auto industry.
Especially the domestics.
Take General Motors which today announced a loss of $722 million for the fourth quarter – but that was peanuts compared to the $39 billion loss it reported in the third quarter for unused tax credits. It also announced a buyout program to all its 74,000 workers.
For the year, the company reported a loss of $38.7 billion and does not see making any serious money until 2010.
Meanwhile, newly private Chrysler is in the midst of a massive restructuring that includes buying out workers, consolidating its dealerships and cutting the number of its models.
Ford is also buying out workers and consolidating the number of its dealerships as well as negotiating the sale of its Jaguar and Land Rover brands to Tata Motors of India. And it is reported to be interested in selling its Volvo brand.
All this against a backdrop of January sales that stunk – 15.8 million vehicles versus 16.3 million last January. Indeed, out of the six largest auto makers, only GM had higher sales (up 2.6 percent), according to Automotive News.
All the rest were down; Chrysler -12.1 percent, Ford -3.9 percent, Honda -2.3 percent, Nissan -7.3 percent and Toyota – 2.3 percent.
Automakers are hoping the recent cuts in interest rates and the tax rebates from the economic stimulus package will come to the rescue. Let’s hope they do.
- Peter C. T. Elsworth
Posted by Peter C. T. Elsworth 
at 6:05 PM to Auto industry
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