Can Green Cars and the Chevy Volt Save Detroit?
Unfortunately, sad fact is the the big 3 U.S. automakers have been losing a lot of money lately. This matches almost dollar-for-dollar with what the Japanese automakers profits are.
For example, if we look at GM, for the fiscal year 2006, net income was -$1,978,000,000 , i.e. a loss of 2 billion dollars. Toyota, however, in the same time frame had a net income of $13,927,000,000 or a gain of 14 billion dollars. In the same year Ford lost 12.6 billion, and Honda made 5 billion. We will hear GM’s 2Q earnings tomorrow at 9:30 AM.
NBC nightly news just ran a report about Detroit’s troubles. The reporter noted that Detroit had seen a 26 percent population decrease since 1980, and has 31% of it’s population living in poverty. The report also extolled Bob Lutz’ green plan and quoted him as saying it’s not “too little too late”. Analysts say it will take five years for the U.S. to arrive head to head with Japan in terms of hybrid production numbers. It was also noted that the new GM green drive has already resulted in producing new jobs.
GM remains optimistic on its growth and sales potential, however. Indeed Paul Ballew, director of GM’s global market and industry analysis, says in an interview “We’re on pace to reach our highest (sales) level since 1978 and our second highest in history.”
Lets’ hope the Volt can save GM, but what about Ford and Chrysler?
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7 Responses to “Can Green Cars and the Chevy Volt Save Detroit?”
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July 30th, 2007 at 5:26 pm
Among Detroit’s many problems are:
*Legacy Costs (socialism) forced upon them by union “entitlements”.
*The US Gov’t is printing $Trillions of fiat US Dollars to service the national debt which is causing hyperinflation and worsening trade imbalances.
*Cheap labor abroad coupled with NAFTA, GATT, WTO and Lax environmental regulations abroad leaves unleveled global playing field.
*Pinching pennies created inferior products.
*GM’s old guard execs were looking down at the bottom line instead of looking ahead toward the future causing boring designs that lack imagination.
*FEAR of change & inability to adjust to rapidly changing market conditions.
This will only worsen as personal and national debt service strips capital from the economy while inflation increases costs.
The US is rapidly approaching the point where debt service surpasses revenues. At that time the $ Dollar will cease to be a world currency and will collapse of its own debt. Sounds like fun, right?
July 30th, 2007 at 8:49 pm
GM seriously needs to kick the UAW in the balls.
There are guys that turn bolts there that make TWICE as much as I do… I support servers running Linux and VMWare… a job no highschool dumba$$ dropout could do, but there are many uneducated, unskilled UAW workers that make a LOT more than I do.
Unions are a major reason the US auto companies have a hard time competing.
July 30th, 2007 at 9:11 pm
… but at least they have the Tigers, right?
The things you mentioned are serious problems but I have to believe that everything is not simply headed down the drain. The article above mentions that GM moving green has already produced jobs and that they might reach their second highest sales level in history. I think changes have to be made, and car companies have to start being much more environmentally conscious. I also think the union mess there has to stop or they’re going to get outsourced. They’re almost asking for their demise. If GM can put one of the first sporty, attractive, electric cars on the market at a reasonable price; I believe (however optimistic it is) that they will turn themselves around and hopefully their city will follow. I know that not only one car can bring about a change that large but they definitely seem to be headed in the right direction.
August 2nd, 2007 at 11:45 pm
I really think GM and Ford will merge before all is said and done. I hate to say it, but these companies are too far behind, technology-wise, to turn around quickly enough to survive competing against one another.
August 6th, 2007 at 12:49 pm
GM is one of the companies that always ahcieves its financial goals. I have done well over the years owning their stock. Even during difficult times they have always rebounded well.
August 6th, 2007 at 12:52 pm
It’s aamazing in these age of profitability, companies like GM exemplify such stride. I have always being a big fun of GM.
January 14th, 2008 at 3:18 pm
why did not GM make a volt like car with their late electric car? the battery used were lead-acid type, i think. it would have better than junking them all.