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| Home Front Economy |
| US stocks drop on automaker news |
| 2008-12-12 |
| US stocks have declined on worries that a USD 14b emergency bridging loan for the ailing car industry won't pass in the Senate. |
| Posted by:Fred |
| #4 They're donks. |
| Posted by: Nimble Spemble 2008-12-12 18:04 |
| #3 Who wants to buy a car from a company that may not be around tomorrow? And no matter how you spin it, bailout money with no business model change does nothing to persuade me that the company will be around the day after tomorrow - except with even more bailout money. The workers claim the problems are not their fault and they should not be punished for it - but I am afraid they are wrong (at least in part.) The Big Three are not and have not been cost-competitive for quite some time (and depending on specifics, not quality-competitive either). Raw materials cost the same as their competitors; executive compensation, even if out-of-line, is only a very small fraction of the cost discrepancy; that leaves work practices and laborer compensation. Effectively the labor force has been over-compensated/under-efficient for a long time and have just about killed that golden goose; now they want federal life-support for the goose so they can maybe get one more egg. Repeat as necessary. Until they kill that federal golden goose as well. It sucks to have to compete, but why should they be exempt? |
| Posted by: Glenmore 2008-12-12 15:32 |
| #2 GM to temporarily close 20 plants to slash output General Motors Corp. said Friday it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production as it tries to adjust to dramatically weaker automobile demand. GM said it will cut 250,000 vehicles from its production schedule for the first quarter of 2009, which includes a cut of 60,000 vehicles announced last week. Normal production would be around 750,000 cars and trucks for the quarter, spokesman Tony Sapienza said. Many plants will be shut down for the whole month of January, he said, and all told, the factories will be closed for 30 percent of the quarter. ... GM and nearly all automakers who sell in the U.S. are mired in the worst sales slump in 26 years. GM reported its sales in the U.S. plunged 41 percent in November and are down 22 percent for the first 11 months of the year compared with the same period last year. Problem is this does nothing to lower GM's fixed costs. But it's better than having unsold cars rusting away at dealerships. |
| Posted by: ed 2008-12-12 14:07 |
| #1 So the sheep are stampeding that direction today? Just wait till tomorrow, maybe they'll run the other direction. |
| Posted by: bigjim-ky 2008-12-12 12:07 |