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GM’s CFO Thinks There’s no Recession but Car Prices will Rise
January 30th, 2008 | Posted in: Financial
GM CEO Wagoner and CFO Henderson
GM CFO Fritz Henderson had a luncheon with reporters yesterday and made a couple of financial comments.
He indicated that although the housing crisis will be a drag on the economy, and that the government needs to soothe public fears, he does not believe a recession is underway.
He also indicated that due to less manufacturing capacity and therefore tighter inventories and increasing costs of raw materials, combined with increased spending on new high technologies, that car prices may increase. He couldn’t specify when that increase might occur.
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Posted by: Lyle
39 Responses to “GM’s CFO Thinks There’s no Recession but Car Prices will Rise”
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January 30th, 2008 at 7:07 am
Here we go again……
There is no real information given, but we will now have 100 comments about how the Volt will be too expensive……..
January 30th, 2008 at 7:13 am
#2 I’ll start then. The Volt is going to be too expensive now. I can’t afford it. I might as well stop following its progress. GM is going to destroy it before it is out. I guess I will have to buy a Prius.
But on a serious note, don’t car prices go up anyway?
I agree with Jim I, there is no news to Fritz Henderson’s comments.
January 30th, 2008 at 7:23 am
More battlefield preparation, its range will be constrained by powerful audio speakers, and its price will be higher, not due to stagflation but due to inflated prices. And still no news of a shipment of a battery package from A123/Conti to the GM labs.
January 30th, 2008 at 8:22 am
#4 - Is this a slow news day at GM-Volt?
January 30th, 2008 at 8:30 am
#4b - I wonder what Wagoner is really saying to Henderson?
January 30th, 2008 at 8:58 am
When the Fed lowers interest rates, more money is borrowed and the Fed creates it out of thin air to make those loans. Yes the private bankers at the Fed charges the taxpayers interest on money they created out of thin air. Where did you think the national debt came from?
Educate yourself! http://www.youtube.com/watch?v=_dmPchuXIXQ
Anyway, the more new money created, the less the existing money is worth. This is called inflation. Yes, cars (and everything else) will continue to increase in cost as long as private bankers and not the government controls the centeral bank.
January 30th, 2008 at 9:27 am
#6
Tim, why isn’t it reasonable to assume car prices act like computers? Technology improves, prices should drop. The same should be said for some areas of health care. I know NEW technology is more expensive in the long run, but are you telling me we couldn’t have figured out a cheaper way to manufacture the EV-1? Come on…
January 30th, 2008 at 9:37 am
~#8
“#4b - I wonder what Wagoner is really saying to Henderson?”
My guess:
“Someone insert a cup of coffee right here…pronto.”
January 30th, 2008 at 9:48 am
Interesting that Henderson cited, “less manufacturing capacity” as a cause of potential price increases.
Let me give you a different take: When the Fed lowers interest rates, it weakens the U.S. dollar. Now that our U.S. companies have shifted well over 50% of parts manufacturing to over-seas suppliers, a weaker U.S. dollar will necessarily cause a price increase for cars, AND EVERYTHING ELSE THAT YOU BUY. Seriously, how many of your families’ Christmas gifts this year were made in the U.S.? GM: when looking for parts suppliers for unique Volt parts, please look at “home” first. It may even allow you to produce a cheaper and better car.
January 30th, 2008 at 10:00 am
“I wonder what Wagoner is really saying to Henderson?”
Thats easy, he’s telling him how many more GM assembly line workers took the buy-out for early retirement.
January 30th, 2008 at 10:02 am
I left this rant on a different thread yesterday but it seems even more timely here. My only question is when does a recession become a collapse……………………………………………………………………………….
Are there 110,000 auto workers left in the US?
I’ll tell you gang, I love the idea of the US beating the rest of the world to the Volt/E-REV mass production concept, BUT…
The idea of having this vehicle produced across the globe and delivered to us with an US corporation’s (GM) name on it leaves a VERY bitter taste in my mouth. it’s great that our design engineers will have played a major role in the vehicle’s development but that is a very small number of jobs compared to the production line. Those of us that signed Lyle’s list are interested in the volt for one of a few reasons. Among them would be the environment, terminating our dependance on fossil fuels, the possibility of combining this vehicle with home photovoltaics in order to drive on sun power, WHATEVER! I think we should all also factor in the importance that this product could have on our nation’s economy. Remember, “It’s the economy stupid” (sorry, not you). Thousands of manufacturing jobs could be brought home to keep some of our nation’s remaining dollars here at home. We can’t survive as a consumer/service economy for much longer. We HAVE to PRODUCE SOMETHING to bring funds back into our economy!!! Employing thousands of US auto workers would go a long way toward revitalizing a number of hard hit areas in our country.
Government incentives, Tax breaks, union concessions, and a couple thousand extra dollars from the consumer would all be worth it. Lyle, is there a way to begin a “Build It Here” campaign on the site?
It’s been said that the GM big wigs check in on this site every now and then. If you (the reader) happen to be one consider this. There will be very few of us left who can afford vehicles like this if the economy collapses from our massive trade deficit. Picture the add campaign you could create waving that flag and flying that eagle if you can taut this vehicle as nearly all US made (have to be realistic with electronics and what not). Advertise that the car costs 32k instead of 29k because your employing US auto workers in an effort to save our country. Tell the potential buyers about the teamwork you will have created between GM, the UAW and the US govenment in order to make this happen. This type of campaign worked for Saturn when they came out. Take it further. Subaru, Toyota, etc are all telling us how they are employing US auto workers. Lets see you bring it home.
My bottom line is this. I’m waiting for the Volt for now but, when it comes to crunch time, I will factor in who is getting my dollars. If it comes down to a foreign nameplate assembled/built here vs a GM (or other US nameplate) shipped here by cargo freighter you will lose out. MY DOLLAR IS GOING BACK TO US WORKERS WHENEVER POSSIBLE! Corporations are so internationally entangled that I could care less who’s name is on the bumper.
All right… Enough preaching… Now, back to techs, specs, and dreams…
January 30th, 2008 at 10:22 am
I’m still waiting for my 1/32 Volt in the mail. My card was charged on the 24th so I’m thinking it should be here any day now.
In the meantime, I think there should be an update about what’s going on with A123/Conti. They’re overdue and an important potential contributor to the Volt.
January 30th, 2008 at 11:08 am
I read car prices going up huh since the volt not out yet it has no price to raise because a price has not been determined yet this article talking about current cars.
January 30th, 2008 at 11:33 am
Here’s a first for you. I started to comment on this but it just came out so negative that I decided to shut up.
As the late, great, Jim Healy used to say:
“Comment………No comment!”
January 30th, 2008 at 11:48 am
those folks can’t wait to hike their prices when they shutdown and layoff more people, and then they gave themselves bonus worth $2,496,2940,394 in the next 6 month and Bob Lutz retire with $6,239,373,183 in his pocket. Bad, bad, bad, I will never buy a GM product. Maybe Ford if they are ethical and prove themselves. GM Volt probably will never be a reality because of stupid GM managers.
January 30th, 2008 at 11:53 am
you people amaze me sometimes. do you often find yourself looking at your kid’s report card, seeing a B, and exclaiming, “Oh my God, he’s going to be homeless when he grows up!”
January 30th, 2008 at 12:14 pm
Brian M says at 11:53AM
“you people amaze me sometimes. do you often find yourself looking at your kid’s report card, seeing a B, and exclaiming, “Oh my God, he’s going to be homeless when he grows up!””
Brian M, no offense, but what the heck are you talking about?
———————————————-
Reply to GM Sucks at 11:48 AM
Although I agree with you, I have to rephrase it.
Most big American companies act this way. It is a shame when
the Presidents and CEOs get millions of bonus dollars while they are laying off works and watching the company crumble. This type of behavior is in no way limited to GM.
January 30th, 2008 at 1:11 pm
re: Hermie’s rant:
“There will be very few of us left who can afford vehicles like this if the economy collapses from our massive trade deficit.”
Have you stopped to consider that the value of the petroleum we
(the US) import is about 3/4ths of the trade deficit? Can you imagine if Americans buy these cars in droves what will happen to it?
Are big corporations standing in the way of the electrification of transportation because they fear a loss of profits in a changing world? I so wish I could buy a 3rd generation 2008 rav4-ev and I still don’t understand why they aren’t being made. It has NOTHING to do with batteries or technology. Don’t you think that 10 years’ worth of R&D would be sufficient to solve the tech hurdles?
January 30th, 2008 at 2:15 pm
“I’m still waiting for my 1/32 Volt in the mail. My card was charged on the 24th so I’m thinking it should be here any day now.”
… didnt you hear….its been delayed until 2012, and increased in price to $40!
January 30th, 2008 at 2:16 pm
Oh, and you have to provide your own battery….
January 30th, 2008 at 2:28 pm
I think that it’s just another marketing message being sent to government to “soften up” money for [1] research and development, [2] rebates for EV’s (like the Volt), and [3] other government funding opportunities.
Call me a cynic - but I just think that these comments by senior GM board members are mostly political …
January 30th, 2008 at 3:45 pm
Numbers! Hooray!
21DavidL:
I would not call you a cynic. I would call you very generous.
Clearly, if the Feds could afford to subsidize the first 60,000 plus Priuses and Civic Hybrids to the tune of $3400+ each, they can afford to do a lot better for the home grown, much higher average mileage, Volt. How about $6500? $10,000?
Cheap if it helps with the balance of payments issue so correctly raised by 21Glenn, preserves US jobs, lessens air pollution, lessens the perceived need for oil based wars, etc, etc, etc.
Glenn, you have really got me going. GM has a strong PR capability. So does the UAW. How about if they help us to most effectively lobby for the tax credits? Everybody wins, in my opinion.
How about a GM-Volt.com based petition, for starters. Could they dream up some sort of a link we could use to e-mail our US Reps and Senators? How about showing us who the power players on this issue are in Congress so we can lobby them? State government?
January 30th, 2008 at 3:52 pm
good luck on getting yours I ordered mine two weeks ago and also ordered some other things at the same time. Well the other goodies came in around 3days … no volt yet
sent response with no response back >:(.
I’ll give them another week then it’s phone call to them, wait 2 days, then phone call to my CC friends to get back my money for item not received. I figure this
#1 They have already sold 7500 (there are almost 10k people waiting for volt so if 75% of them beat you and I to the punch.. well there ya go).
#2 The die cast is a prototype which only Lyle and a couple other people close to GM got in which to make them feel confident about the Volt being a production car.
OK OK I’m tired of waiting give me my Volt .. and yes I mean the one I can drive …. LOL
January 30th, 2008 at 4:33 pm
Hang in there. Mine was ordered about 2 weeks ago as well and my card registered the pmt on the 24th, so it should be here soon.
These things are probably coming directly from China
.
January 30th, 2008 at 5:05 pm
“I wonder what Wagoner is really saying to Henderson?”
I wish Lutz would shut up about the wipers!!!!
January 30th, 2008 at 6:01 pm
And in other news…. I got my 1:32 scale toy Volt in the mail Yesterday!!!!!
At least I can afford the little one :-b
January 30th, 2008 at 6:14 pm
Lyle -
The new numbers followed by user names at the top left of each post are perfectly located. But I notice on longer threads (>99 posts) the 3rd digit is superimposed over the 1st letter of the name, making both hard to read.
Keep up the great work!
January 30th, 2008 at 6:22 pm
25 Jim I -
….and on a lighter note, regarding your question, “I wonder what Wagoner is really saying to Henderson?”
….Wagoner’s saying, “DAMN, the 1st shipment of 1:32 scale Volts sold like lightning! We should have priced them at $139.50!!!!!”
January 30th, 2008 at 8:08 pm
Rashiid @ 12:14 pm:
I was trying to convey how people on this site seem to overreact to every little bit of news; it wasn’t that great of an analogy I guess.
January 30th, 2008 at 8:55 pm
Noel Park:
“Glenn, you have really got me going. GM has a strong PR capability. So does the UAW. How about if they help us to most effectively lobby for the tax credits? Everybody wins, in my opinion.
How about a GM-Volt.com based petition, for starters. Could they dream up some sort of a link we could use to e-mail our US Reps and Senators? How about showing us who the power players on this issue are in Congress so we can lobby them? State government?”
The California Air Resources Board has a public meeting on February 28th. I guess I would be just another ranting jerk if I didn’t get off my a** and participate. I plan on going. Maybe there will be something worth reporting back on.
I also signed the petition:
http://pluginpartners.com/whatYouCanDo/onlinePetition.cfm
January 30th, 2008 at 9:30 pm
Dave B January 30th, 2008 at 9:27 am
“Tim, why isn’t it reasonable to assume car prices act like computers? Technology improves, prices should drop.”
I’ll probably go to hell for saying this but… Computers aren’t assembled by the UAW.
January 30th, 2008 at 9:52 pm
I would hope that the folks in the highest places at GM would look to history as a cue to decisions for the future.
Henry Ford raised his workers wages to the unheard of $5 a day in the early 1920’s. He knew that putting more money in their pockets would allow them to have the ability to purchase one of his cars and other consumer products (the other reason was to keep them from leaving the production lines as the work was tedious and many left for other jobs).
There is a direct connection between Americans’ ability to purchase cars and other items here in 2008 as there was in the 1920’s. As American’s incomes increased in the 1920’s the economy boomed. Americans purchased more and more of the new products coming out at this time. In fact, the radio benefited from American’s new purchasing power. The radio became the number one selling consumer electronics device of all time. So many were sold in such a short period of time that its record wasn’t busted until the DVD player was introduced in the mid 1990’s.
Anyway I digress, corporations here in America have been so hell-bent on laying off workers to boost profits that they are cutting off the very consumers that purchase their products.
I would hope that our corporations would get a clue that their very survival long-term depends on good wages, secure jobs, and adequate profits for themselves. Obscene profits is unreasonable and unsustainable. This practice of doing the work here at home, investing in the cities and states in which they reside, and offering good, middle class wages is guaranteed to make their products available to vast numbers of Americans, most of whom would prefer to purchase products produced here in the states.
If our corporations do not take on this stance and continue to move production off shore, their very existence is certainly not guaranteed as few Americans will be able to purchase their products.
I am buying a Volt in its first production run. I want one for several reasons; to break our dependence on foreign oil, put more money in my pocket, help clean up our air and environment, and support GM, a Michigan and U.S. corporation.
January 30th, 2008 at 10:54 pm
If the price is above $30,000 then it is aready dead. If GM is really seriouse about being the leader in this area it must strive to even lower the price if they really wish to sell to the world.
My yearly income is $27,000/yr therefor I have more wealth then 75% of the world.
January 31st, 2008 at 6:31 am
The long term solution to the dependence on foreign oil and the deficit is a national energy policy of nuclear electric power generation and electric automobiles. But you will never see this happen as long as the oil lobby owns all the politicians.
January 31st, 2008 at 8:06 am
You will see a change when we the voters make the change. It ALL rests with us. The problem is that only 18% of the American public votes and of those many fall into the top tier of income earners.
When we as voters get energized enough and no longer complacent, things can change. Push your friends and others to vote.
“Don’t complain about the way things are running in this country if you didn’t vote or don’t plan to. If you don’t vote, you get what you deserve in your political leaders and their policies. Vote. It’s that important!” Kevin R
January 31st, 2008 at 11:43 am
Glenn, #30:
Thank you. I signed the petition too.
Kevin R., #32:
Well said. God’s honest truth.
January 31st, 2008 at 1:20 pm
30 Glenn:
Thanks! I also signed the petition!
http://pluginpartners.com/whatYouCanDo/onlinePetition.cfm
January 31st, 2008 at 2:22 pm
Brian M - I hear you man.
February 4th, 2008 at 10:46 am
My volt (1:32) came in!!!
Now I’m just waiting for Bob to drop off the mule for me to get some test miles on it ;).. yeah I wish.