Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
http://www.detnews.com/apps/pbcs.dll/article?AID=/20061102/AUTO01/611020375/1148

Helped by new models and falling gas prices that sparked truck sales, General Motors Corp. and Ford Motor Co. sprang back last month from dismal year-earlier sales, but Chrysler posted a small retreat.

GM bolstered claims that its recovery is on track, reporting a 16.8 percent sales gain even though it was the only major automaker to scale back on incentives last month.

...

"GM did have a great month, there's no denying it, but they're still down 9 percent for the year to date," said Rebecca Lindland, analyst at forecasting firm Global Insight.


- Jeff

Print the post Back To Top
No. of Recommendations: 1
Jeff - how much of that is EASY comps?

"Last October was not the strongest month for the industry," Ford sales analyst George Pipas said Wednesday. "Sales were down double-digit for the industry. Sales were down double-digit for Ford."

"GM did have a great month, there's no denying it, but they're still down 9 percent for the year to date," said Rebecca Lindland, analyst at forecasting firm Global Insight.

As far as I am concerned this is BS.
I said the same thing going into hard comps.

Let's see what GM does from here.
I suggest they will suck.
BUT...
The Suckiness is a relative number.
Compared to who?

GM put its plan into place far better than Ford did.
There is no denial on that.
The question is: is that good enough?
On that there is no real data.

I remain steadfast a recession is coming.
In fact I will now say it will be here within 6 months.

Let's see how autos do in that environment now that all the tough comparisons and all the weak comparisons have been wiped out.

GM will rise or sink on that.

Mish
Print the post Back To Top
No. of Recommendations: 0
Jeff - how much of that is EASY comps?

I don't really know; milligram probably has an idea. I know that last October was relatively weak.

The more relevant data to me is the fact that sales are down 9% YTD, part of which is due to reduced fleet sales, and that their market share is at 24.5%.

If GM can restructure themselves into a company that is profitable with a 20% market share, they will be just fine. When (if) that will happen, is hard to say.

A few other considerations;
1) GM has UAW negotiations coming up in September 2007. A contract that acknowledges reality will go a long way to help GM.

2) Delphi has UAW negotiations coming up as well. I don't think GM really know yet how mch Delphi will cost them yet.

3) Kirk Kerkorian remains an issue. Who knows what his next move is?

- Jeff
Print the post Back To Top
No. of Recommendations: 1
I remain steadfast a recession is coming.
In fact I will now say it will be here within 6 months.


Just to be clear, a recession is defined as 2 straight quarters of negative GDP growth. For it to be here within 6 months, Q4 of 06 and Q1 of 07 have to be a negative GDP growth quarters, correct?
Print the post Back To Top
No. of Recommendations: 0
"I remain steadfast a recession is coming.
In fact I will now say it will be here within 6 months."

"Just to be clear, a recession is defined as 2 straight quarters of negative GDP growth. For it to be here within 6 months, Q4 of 06 and Q1 of 07 have to be a negative GDP growth quarters, correct?"

I would quibble here. Your definition would result in it being officially *recognized* in six months.

A recession could start in six months as Mish suggests (May 1, for example), but then not be "officially recognized" until Nov 1, 2007 after those two quarters have passed.

Rob
Print the post Back To Top
No. of Recommendations: 1
1) Mish has been calling a recession is six months away for the better part of two years. I can predict the sun will rise or set with the same accruacy, it WILL eventually happen.

2) Looking at housing, manufacturing, a continued job market that isn't great, declining auto sales, and overall consumer confidence, this holiday season is very, VERY critical to the US economy. I'm not quite on board with Mish yet, but there are a lot of technical signs pointing to a pending recession. The two classic signs? A sharp spike in energy costs followed by a spike in the stock market six to nine months later while consumer spending is tailing off and manufacturing down. These aren't good signs.

3) Ford in particular would be brutalized in a downturn, I think GM is far better positioned through their product mix and the nature of the planning. Remember, GM isn't only selling trucks well, models like the Cobalt and Impala are in the top ten selling vehicles for the year list - and I seriously cannot remember when GM had two best sellers that were cars and only one truck on there. Also remember, those sales are not be driving by fleet sales, by real consumer purchases - also a good thing. Ford's car line up in particular is weak, and Chrysler's car line up is way to thirsty. The slap a HEMI into anything with four wheels strategy has not been a good thing.
Print the post Back To Top
No. of Recommendations: 1
"1) Mish has been calling a recession is six months away for the better
part of two years. I can predict the sun will rise or set with the same
accruacy, it WILL eventually happen."

Just clarifying what *I* think Mish meant in his most recent post.

"3)...Ford's car line up in particular is weak..."

I would note the following calendar year car market shares (from Ward's
Auto for Jan-Oct):

           2005    2006    Delta

Chrysler    6.9     6.5     -0.4
Ford       13.8    14.6      0.8
GM         23.0    21.0     -2.0

I would suggest that the facts support a contention that Ford's car
line-up is showing the most strength among the "Detroit 3" (not Big 3
any longer....).

Rob
Print the post Back To Top
No. of Recommendations: 1
Just to be clear, a recession is defined as 2 straight quarters of negative GDP growth. For it to be here within 6 months, Q4 of 06 and Q1 of 07 have to be a negative GDP growth quarters, correct?

Of course I know what the definition is.
There are problems however.
Govt manipulation of figures is one.
Hedonics and imputations is another.

My personal belief (not that it will matter to anyone here) is that we started 1Q of negative growth this Q.

As for reported numbers Who the F knows.
We might know 2 years from now when numbers are backward adjusted to suit someone else's political needs.

That said there is a very good chance of .5% GDP or less for a long time coming.

Make no mistake about it.
That will be a recession.

Mish
Print the post Back To Top
No. of Recommendations: 1
I would note the following calendar year car market shares (from Ward's
Auto for Jan-Oct):

2005 2006 Delta

Chrysler 6.9 6.5 -0.4
Ford 13.8 14.6 0.8
GM 23.0 21.0 -2.0

I would suggest that the facts support a contention that Ford's car
line-up is showing the most strength among the "Detroit 3" (not Big 3
any longer....).

Rob


But remember Rob, GM is walking away from unprofitable fleet sales. Remember, it's not just he who sells the most car wins, its he who sells the most cars and can make money doing it wins. Fords losses are mammoth in that same period, while GM had a palty loss given the economy of scale in Q3, and a profit in Q2 of this year (believe they had a loss of about 1/2 a billion in Q1, and are down about 300 million for the year - a huge turn around from 2005). A loss is a loss so don't get me wrong - but you can show "growth" if you're giving them away. GM tried that strategy for a while, it doesn't work.

Milligram46
Just sayin' Ward's marketshare numbers are not the end all be all
Print the post Back To Top
No. of Recommendations: 0
Make no mistake about it.
That will be a recession.

Mish


So you are predicting a much weaker than projected holiday shopping season.
Print the post Back To Top
No. of Recommendations: 1
Mish,

Again, I do not know what you are saying. If you can produce better numbers than the government, then please start your own GDP reports.

Is the 0.5% GDP growth you suggest using the government's numbers? and if so, how does that go with this quarter being negative growth?

I believe you're saying that Q4 will be negative GDP growth, Q1 is negative GDP growth, and after that it is likely to be modestly positive at best, is this correct? Using the government's numbers?

Or are you saying that positive growth at 0.5% is close enough to the recession you've been calling for for a long time and there won't need to be negative GDP growth for the Mish Recession?
Print the post Back To Top
No. of Recommendations: 1
How much skill does it take, when EVERYONE knows that the economy is cyclical....to predict that after years of white-hot growth, the economy will slow?

Sorry, but Forrest Gump and Beaver Cleaver could predict that to me.

I don't discount Mish's knowledge on things macro-economic. I feel he's very well read on these matters. But to predict a slowdown after years of prosperity is no biggie in my opinion.

I predict that after 7 days in a row of rain, the sun's gonna come out.

Jedi
Print the post Back To Top
No. of Recommendations: 1
I am saying the GDP numbers are full of ****
Easily 1% of it if not 2% of it is total horse hockey

Please read
Grossly Distorted Procedures
http://globaleconomicanalysis.blogspot.com/2005/05/grossly-distorted-procedures.html

I believe the US is unique about how these numbers are calculated.
If we computed numbers the way Europe did we would still be better most of the time but nowhere near as good as what shows. If one just stripped out total nonsense (imputed rent and the "value" of free checking accounts) the numbers would be way way lower. If I am not mistaken we did not always do that. Hedonics is another BS measure.

Numbers Game
http://globaleconomicanalysis.blogspot.com/2006/10/numbers-game.html

Mish
Print the post Back To Top