http://news.moneycentral.msn.com/bre...414&ID=4370082

What is going on?

 

Market jitters. I think these "analysts" don't realize how the market reacts to their newsmaking ability. Like how nuts the oil market went 2 weeks ago when Sachs said they could envision $105/barrel oil. Totally irresponsible.

GM's probababy a good buy right now since they are at an 18 yr low. Pays a good dividend too. I've considered buying some.

 

This has to do with a possible link to the accounting scandal over at Delphi. Word is beginning to spread.

 

Check this out. Could this have caused some of those jitters?

http://news.moneycentral.msn.com/tic...3&Symbol=US:GM

 

Ditto. GM is certainly one to watch for a strong uptick if things get better.

 

I agree, if you can hold out until 2008 once all the new RWD cars and full size trucks come out and GM's autobrands can make a turn around the stock could recover back to the levels of a few years ago which would make for some nice gains.

 

i'd wait a good 6 months first, every market anaylst predicts GM's venture into "junk bond" status within 3 - 6 months, at which the stock will really tank. THEN it will be a good buy.

 

Not to kick GM while it's down, but I'm wondering where all of these people were that were telling me that right about now GM would be surpassing Toyota.

Toyota hit an all time record sales and profit last quarter (just as they have been doing pretty consistantly for years now)... and GM is headed in the opposite direction.

GM's main problem is its image and its willingness to build its cars right, cost be damned. And as a result the money they saved half-assing some car parts is doing nothing more than being absorbed into warranty claims, retirement and healthcare costs, high union labor charges, and worst of all, the general public's perception of the value of their vehicles is currently marred. Putting giant rebates on the cars isn't really helping either, IMO... take that money and invest it into the quality of the cars and marketing and I think people would be willing to pay more!

I know a lot of you guys are baffled because GM truely does have some cars that are competetive in terms of performance for the dollar, etc... but unfortunately all of that is just playing to a niche market. They need to appeal to the average joe.

IMO, they really need to hit a home run with their ground-up 1/2-ton truck/SUV redesign coming up.

 

I'd agree that the GMT900 trucks and SUVs are the make-or-break products. However, I haven't seen any solid proof that GMT900 is going to be a "ground-up" redesign. From what I've actually seen, we're talking about an evolution of the current GMT800. Too little? Too late? Time will tell.

 

If the economy enters a slowdown that end up turning into a recession in 2006 not only will GM be going to junk status but the entire auto sector (even NISSAN too ) will be taken down as well in a sympathy sell-off in the automotive sector.

This sell-off will effect everyone including the Japanese, Europeans, Koreans, and etc since the American consumer basically props-up many other countries export-only economies. Many countries around the world depend on the US to buy their goods to keep their economies afloat (they don't have a large enough middle class to sustain themselves) and if the American consumer slows down everyone will be effected since many of the worlds economies are directly tied to the US dollar and our economy in one way or another.

Dow tumbles 198 points on economic worries- http://businessweek.com/ap/financial...=apn_home_down

The US economy usually lags about 6-12 months behind the direction of the Dow. So if the Dow continues to tank then don't be surprise to see the US economy follow suit by early 2006.

 

http://news.moneycentral.msn.com/bre...415&ID=4372961

GM Expected to Post Steep Quarterly Loss
April 15, 2005 4:36:00 PM ET

By Michael Ellis

DETROIT (Reuters) - General Motors Corp. (GM) next week will post its steepest quarterly loss since 1992, when the industrial icon tipped close to bankruptcy, with its core automotive unit expected to lose more than $1 billion, analysts said.

The Detroit automaker shocked the markets last month when it slashed its earnings outlook to a loss of $1.50 per share, down sharply from a previous forecast of break-even or better. In the year-ago quarter, GM had a profit of $2.25 per share.

The earnings warning from the world's largest automaker, due to falling sales and rising health-care costs, sent GM shares down to their lowest levels in more than a decade and spurred debt ratings agencies to warn that they could downgrade GM's bond ratings to ``junk'' status at any time.

``Earnings disasters are the order of the day, and they're apparently as much of a surprise to management as they are to the analysts,'' Burnham Securities analyst David Healy said in a research report this week.

Ford Motor Co. (F) chopped its 2005 earnings forecast last week, the second time in less than a month that the third-largest automaker revised its outlook, due to weaker sales and soaring costs.

Healy said he expects GM's North American automotive operations to lose about $1.35 billion before taxes in the first quarter, down from a pretax profit of $586 million a year earlier.

GM is scheduled to report its earnings on Tuesday, April 19, a day before Ford releases results.

RESTRUCTURING CHARGES

Restructuring of GM's European operations, including the buyout of up to 12,000 jobs, and the costs of idling a vehicle assembly plant in Michigan are expected to result in a one-time charge to earnings of up to $1 billion, analysts said.

The results will be closely scrutinized for any risks to 2005 earnings targets, and for strategic changes by GM Chief Executive Rick Wagoner, who took direct control of the North American automotive operations last month, analysts said.

This week, the head of the United Auto Workers union questioned why it would renegotiate its contract with GM, but added that it would work with the automaker within the framework of the pact to help cut health-care costs.

The comments, following a closed-door meeting with Wagoner and other GM executives, curtailed some speculation that the automaker could reopen its UAW contract to make some significant cost-cutting moves.

``In our view, the deterioration in GM's financial condition is not yet serious enough to scare the rank-and-file at the union,'' Merrill Lynch analyst John Casesa wrote in a report on Friday.

GM's falling U.S. sales led it to slash its first-quarter production by 12 percent in North America, hurting profit by about $1 billion, Healy said.

Particularly troubling is the drop in sales and production of large sport utility vehicles, GM's cash cows, which the automaker blamed on an aging lineup rather than higher gas prices.

The costly first-quarter production cuts for the big SUVs have only kept pace with a drop in sales, and GM may have to cut production further later this year, Lehman Brothers said.

On the other hand, GM and investors can look forward to next year, when the automaker will roll out its new large SUVs.

``2005 is likely to be the worst GM will see for a while,'' Prudential Securities said in a report on Thursday. Prudential upgraded its recommendation on GM's stock to ``overweight'' from ``neutral weight.''

© 2005 Reuters

 

Over 1 Billion in a single quarter?!!!

 

Considering that the German economy has retracted 25% in the last 5 years and Germany now has the highest unemployement since before Hitler I think GM's needs to dump OPEL ASAP!!

I like the idea of OPEL designed Saturns in the US but OPEL as a money losing European brand needs to go. Gm at least needs to kill-off all OPEL and Saab European manufacturing and bring it to the US since the deflated US dollar makes American products cheaper then many euopean-made ones.

 

I'd argue that Saab enjoys a far healthier image than the Opel and Vauxhall brands. Of course, half-hearted cars like the "Saabaru" 9-2X and the "Saablazer" 9-7X will soon destroy any credibility Saab once had in North America.

Still, while GM needs to "do something" about Europe, I doubt the answer is to launch both the Cadillac and Chevrolet brands simultaneous in the EU. European consumers are too bright to be fooled by rebadged Daewoos and I can't believe that the Cadillac BLS will convince very many people to take a huge risk with an unknown brand, with uncertain resale value.

Maybe GM Europe lacks the clout to perform a turnaround. Maybe it's too late for Opel/Vauxhall and soon there won't be enough left of Saab to sell to anyone.

Does anyone hear the ghost of MG-Rover barking? Woof! Woof!

 

Oh man........I so hope they go to junk status........I want to buy a ton.