GM no longer owns Hughes.

But as far as where the profits are counted, you're correct that it's tough for an outsider to figure out where the real money is being made.

 

Big Al's bias against anything with "Ford" on it never ceases to amaze me.

I believe it does affect his better judgment very much though.

 

Make no mistake, Ford is in deep trouble. The product better get competitive quickly or all they're going to sell are Mustangs and pickups... and that ain't enough.

 

a little clarification.....the division that 'sells' the car (in fact the individual brand) gets charged the costs to finance a car at zero percent finance. That is not moving money around. It's simply good accounting procedure. (accounting 101) GMAC does not have a vault full of money....contrary to popular belief. In fact, GMAC raises money on the open market everyday to finance cars and trucks. Cash incentives (and any other incentive, such as the GM card ) are also charged to the individual brand.

I agree with a few in this thread that no one bothered to post Chevrolet's sales for September......and no, they were not all due to fleet. Last week, I believe, someone posted that it was sad that on a Camaro website, there was no article on the first page of this section about GM.

I've tried getting into some intelligent conversations here, but it seems that some people do not want to learn anything. (I learned long ago that I don't know everything.....I may not like my computer...or the software programs on it, but because I don't know the computer business, I'm not going to take shots at IBM or Dell or Microsoft...and I'm not going to get into public discourse over computers.)

a bit of wisdom that perhaps some should write on the wall......."rarely, if ever, is there a single reason for why something happens. Inevitably, it is very very complicated...and it would be wise to discover those many and varied reasons, rather than make a false declaration."

One thing I've never yet seen anyone bring up on this board when talking about new product plans: The staggering number of Divisions within GM that must have fresh product versus the other manufacturers......anyone want to take a guess at what the real costs of differentiating vehicles cost?

 

Amen to that comment right there

 

WRONGO!!
I have brought this up many times. Even devoted a thread to it. I'll bring it up again:
Ford and Chrysler are going to make more money selling fewer cars than GM, period!

While Chrysler and Ford spend money on a particular chassis, they at most will design only one other variation of the car. GM typically has to design at least 3. Not only is that added costs to design & machinery to make these different parts, there is also the additional costs of marketing, maintaining different sales networks, and then there's the variety of employees doing the same jobs in multiple divisions.

Take the Taurus-Sable for example. It typically sells around 300,000+ per year. GM's W-bodies run far less. Yet GM is selling the W body through 3 entirely different brands (4 before Oldsmobile died). That's 3 marketing divisions, 3 times the support personnel, 3 separate stampings, interiors, etc. To make matters worse, Ford has far fewer dealers selling the car (Chrysler even less) meaning that dealers are making far more money per car & selling far more cars per dealer. This doesn't even include GM's pension and employee healthcare costs.

To put it bluntly, GM NEEDS volume to survive. Ford and Chrysler are smaller companies with far smaller budgets and much smaller operating costs. The mind numbing irony is that these smaller companies can better afford cars like the Viper, or the Ford GT, or an SVT or SRT division making specialty cars than GM.

From a stock standpoint and an enthusiasts standpoint, Ford & Chrysler tend to look better. But they aren't perfect. Both are far more prone to sudden changes in the market than GM is. GM has a better ability to throw it's weight around in incentives and in dealing with subcontractors.

So, Ford is going to make money. The only way Ford isn't going to make alot of money is if someone screws up phenominally bad (even blown gaskets and the Firestone-Explorer episode didn't kill them!).

Chrysler is also set up to make serious bank. In the late 90s "little" Chrysler had enough money in their warchest, and had enough money pouring in each year, they could have actually made a serious run in buying up a controling intrest in GM, let alone buying Mercedes Benz.

I bash on GM's beancounters alot, and how GM's management setup moves about as fast as maple syrup going uphill in the winter. But in reality, those people are keeping GM going despite the odds against it. Products don't see the light of day unless they KNOW it's going to sell. New risky ideas are all but banned till someone else with money (ie, the other 2 guys) proves it works 1st.

GM isn't going to be a stellar money maker without large volume & market share.

 

Welp, then here's an interesting question...

Is GMAC selling the money to the divisions at the same or a higher rate of interest than on the open market?


If I remember my Automotive News correctly, Chevrolet was up something like 40%... maybe it was just Impala... regardless, it's a whole boatload of cars and trucks.


Easy big guy...

Passion sometimes interferes with judgement, which is why you are so valued around here.

Passion is an important thing to have... in measured amounts. It needs the voice of reason to temper it.

George Patton once said:

"Untutored courage is useless in the face of educated bullets."

Consider this your classroom, and some of us pupils are a little more unruly than others...


I have on a number of occasions brought up the fact that GM has tremendous economy of scale behind it. One offshoot of that economy of scale is the ability to bring multiple cars off of a platform and share costs.

Unfortunately, in some cases, this then involves the danger of two cars off of a platform that should honestly have only one... The other danger is that one gets the wrong division leading the charge on a vehicle platform... say... having a stodgy old division that doesn't sell a whole lot of cars in the first place having the ability to dictate terms on vehicle design and particular (and HUGELY IMPORTANT) features to a volume sales division... that'll sell the car at the rate of 2 to 1 anyway.