[Absolut Speed]

Last fall, GM announced a reduction in GTO production and had to offer large rebates on this brand new model to sell off inventory

In December, GM had a 301 day supply of SSR's on hand.

Then the XLR gets a production cut from 23 to 12 a day. There's a 200 day supply of them out there. Cadillac hoped to sell 6,000 annually, but through 18 months, sold just 4,744.

February, GM decides to cut $1500-$2000 off the sticker mid-year on Trailblazers/Envoys/Rainiers and currently has 0% for 60 months to get them selling again. TrailBlazer sales fell 46% compared with January 2004. Envoy sales were off 52% and Rainier 27% according to Autodata reports.

Then for March, the factory that produces the LaCrosse & Grand Prix is shutting down for a week.

Then the earnings forecast for 2005 drops 80%. Stocks drop to 8 year low.

I think this goes back to cutting the Camaro and Firebird out of the lineup.

[94bird]

Regardless of what many of you seem to think the profit margin for a OE is not very high at all on most of their vehicles (except Escalades and the like  (IMG:http://www.frrax.com/rrforum/style_emoticons/default/wink.gif) )

Mike, I don't disagree with you. My point earlier is that if they can run a $5,000 rebate, the general public will assume there is that much profit in each car and they don't want the manufacturers making $5k on them alone. It's a perception, even if it's wrong. Redneck logic or something like that. People don't believe that companies will sell things under cost, so it must have $5k profit in it, right? (IMG:http://www.frrax.com/rrforum/style_emoticons/default/rant.gif)

I know where you're coming from Kevin. I just wanted to make it absolutely clear that there are many cars out there now being sold for a loss. You'd almost think they believe in the saying, "we may lose a little on each car, but we'll make it up with volume." (IMG:http://www.frrax.com/rrforum/style_emoticons/default/blink.gif) The reality is however that many times the financial guys seem to justify that it's better to just keep on cranking out the cars and losing a little money on each car than it is to idle plants and still pay the workers (due to union contracts, etc.), get hit with cancellation charges from suppliers, etc. However, Toyota's approach would be to just better predict an accurate sales volume in the first place and plan for less volume. Of course, Toyota doesn't have such a huge workforce in the US that they have to keep busy. The UAW has done an amazing job tying the Big 3's hands behind their back to make sure they can't dynamically change their company quickly in the face of changes in the marketplace.

I guess this subject is a little sore with me because it's my career that's being messed with.

Next thing you know someone will bring up the question of why so many jobs are being outsourced outside the US. I've been learning Spanish using CDs in my car lately because I've given up after so many trips to Mexico. Things aren't changing. I bet in a couple of years I'll have Chinese CDs in my car.