[Eli]

What it is going on at GM is inertia.

The one area where they were still beating the Japanese and others was in the full sized SUV segment.

GM was having big problems before the high oil prices because of their health care and pension liabilities, PO has just sent them over the edge.

The brilliant plan to get them higher cash flow was made before high fuel costs had set in back in early 2000. They spent billions re-tooling their assembly lines for their all new line up of large SUV's.

GM has so much momentum and energy invested in large SUV's they can not just walk away they have to try and get some of their investment back even though the landscape has changed.

Meanwhile the Japanese with their small efficient cars are poised to kick Detroit's butt once again.

[cheaplaughs2]

I think there also producing more suv's because there selling more suv's
you might want to blame the ''JUNKIE'' and not ''DEALER'' on this one!

[Dreamtwister]

Shh...listen...you guys hear that?

Sounds like more layoffs.

[NeoPeasant]

The accountants have just realized they will lose less money producing them at a loss than they will by simply walking away from the billions invested in the production facilities.

[Eli]

I bet it is something like that Peasant.

Small cars have a much smaller profit margin than a large SUV.

You can't get people to pay much more than 15,000 grand for a little 4 banger with a 5 speed manual transmission. Now on the other hand Joe Blow idiot will shell out 40 grand plus with out flinching on some monster truck that has a DVD player and brush-guards.

And if GM did decide to go head to head with the Japanese in the small car market GM is already far behind them in terms of both quality and brand loyalty. Going into the small car market would be up hill all the way for them, the profits are guaranteed to be less and the competition would be fierce.

No, if they are destined to loose money might as well just keep loosing with large SUV's, why go to all the trouble to start loosing money on small cars too?

They only have to sell one SUV to make as much profit as they would on 3 or 4 small cars.

[Zardoz]

Weak report by the Beeb. They made no mention of "why" GM is doing this. It defies logic and reason, yet there isn't a word in the story about the "thinking" behind it. They really should have gotten some sort of a statement from some GM spokesmouth, no matter how disengenous it might be.

Pretty sad to see mighty GM fading away before our eyes like this.

[Leanan]

I guess we'll be seeing a lot more of this:

GM, Delphi announce workforce reduction plan

[cheaplaughs2]

THEY ARE DOING THIS BECAUSE SALES IN LARGE SUV'S WENT UP!!!!

[veliger]

$this->bbcode_second_pass_quote('Eli', 'W')hat it is going on at GM is inertia.

The one area where they were still beating the Japanese and others was in the full sized SUV segment.

GM was having big problems before the high oil prices because of their health care and pension liabilities, PO has just sent them over the edge.

The brilliant plan to get them higher cash flow was made before high fuel costs had set in back in early 2000. They spent billions re-tooling their assembly lines for their all new line up of large SUV's.

GM has so much momentum and energy invested in large SUV's they can not just walk away they have to try and get some of their investment back even though the landscape has changed.

Meanwhile the Japanese with their small efficient cars are poised to kick Detroit's butt once again.

[Leanan]

$this->bbcode_second_pass_quote('', 'A')s much as most of you hate it, people have gotten used to higher fuel prices,

[Zardoz]

$this->bbcode_second_pass_quote('veliger', 'G')M is increasing production of the Tahoe because the brand new Tahoe is selling very well...people have gotten used to higher fuel prices...People who need (or just want) a Tahoe are buying them as fast a GM can make them, so GM is increasing supply to meet demand...The 2006 Tahoe is rated 16/22 C/H...

[Eli]

Well while that is technically true.

SUV sales went off a cliff after the employee discount promotions ended and Katrina and Rita hit.

The Tahoe sales doubled in January but the large SUV segment as whole is still way down. But the Tahoe sales are still not at the level they were prior to the free fall.

The fact is that gas at 2.39 plus gallon hurts large SUV sales the most and that is what GM makes, they are expected to see sales continue to decrease in the large SUV market.

[cube]

$this->bbcode_second_pass_quote('Dreamtwister', 'S')hh...listen...you guys hear that?

Sounds like more layoffs.

[Leanan]

Oh, boy. The fun never ends:

GM takes on Consumer Reports

$this->bbcode_second_pass_quote('', '[')b]A GM exec's hotheaded e-mail puts CEO Wagoner in the hot seat.

NEW YORK (FORTUNE) - Never pick a fight with someone who buys ink by the barrel. One General Motors executive is learning that the hard way.

Lori Queen, GM's vehicle line executive for small cars, found herself in a dispute with Consumer Reports magazine over the rating of GM vehicles.

...In an e-mail exchange with a staffer at Automotive News, a trade weekly, she blasted Consumer Report's staff as "the most unprofessional group of people I have ever worked with."

She went on: "They are totally nonobjective and go to great extremes to paint a picture for their paid subscription readers, who primarily buy Japanese cars. They don't consider price or price differences, they don't consider model mix or consumer preferences, they buy the cheapest car they can find (generally) and then base their opinions on a limited sample."

Consumer Reports' Champion says the magazine buys "the most popular model in a particular car."

Quotes from her e-mail were published in Automotive News, prompting Wagoner to placed a call to Champion to try to convince him that GM's senior management still respects Consumer Reports and that Queen's statement would not have been approved by the company. An official letter of apology is due to be published in Automotive News on Monday, March 20.

[cheaplaughs2]

Wait until you see how many cars they will sell in CHINA in the
next 10 years my guess is they will dwarf TOYOTA AND HONDA.They
will also produce those car's in china for a much lower cost.

[Eli]

Cheaplaughs, I would not hold my breath on that one.

Seems to me that the Chinese are gearing up to make their own cars for their own home market. And they are set to start selling very cheap cars in the US.

GM as a US auto producer is facing tough times any way you slice it.

[Leanan]

I don't think we'll see that big an increase in Chinese car ownership. China sees trouble coming; they just slapped a bunch of new taxes on consumer goods, including oil.

China to Raise Car Tax to 20% to Spur Fuel Efficiency

There isn't enough oil to support a big increase in Chinese car ownership, and China knows it. Of course, that may change with a recession...but during a recession, who can afford to buy a lot of new cars?

[killJOY]

$this->bbcode_second_pass_quote('veliger', 'I') really hate to burst your bubble, but your 1990 VW emits far more pollution than the 2006 Tahoe. Your VW emits less Carbon obviously due to its higher MPG. But, it emits far more acid rain forming NOx, and smog forming CO so it is far worse for air quality than any brand new SUV. The 2006 Tahoe is rated 16/22 C/H in 2WD, and 15/21 in the 4WD version. That's the best MPG in the class for both versions.

[MattSavinar]

$this->bbcode_second_pass_quote('', 'I')n fact, it's like money in the bank for me. I'm going to clap and dance and sing, "TOLD YA SO!"

---------

I really hate to burst your bubble, but your 1990 VW emits far more pollution than the 2006 Tahoe. Your VW emits less Carbon obviously due to its higher MPG. But, it emits far more acid rain forming NOx, and smog forming CO so it is far worse for air quality than any brand new SUV. The 2006 Tahoe is rated 16/22 C/H in 2WD, and 15/21 in the 4WD version. That's the best MPG in the class for both versions.

[MattSavinar]

$this->bbcode_second_pass_quote('Leanan', 'O')h, boy. The fun never ends:

GM takes on Consumer Reports

$this->bbcode_second_pass_quote('', '[')b]A GM exec's hotheaded e-mail puts CEO Wagoner in the hot seat.

NEW YORK (FORTUNE) - Never pick a fight with someone who buys ink by the barrel. One General Motors executive is learning that the hard way.

Lori Queen, GM's vehicle line executive for small cars, found herself in a dispute with Consumer Reports magazine over the rating of GM vehicles.

...In an e-mail exchange with a staffer at Automotive News, a trade weekly, she blasted Consumer Report's staff as "the most unprofessional group of people I have ever worked with."

She went on: "They are totally nonobjective and go to great extremes to paint a picture for their paid subscription readers, who primarily buy Japanese cars. They don't consider price or price differences, they don't consider model mix or consumer preferences, they buy the cheapest car they can find (generally) and then base their opinions on a limited sample."

Consumer Reports' Champion says the magazine buys "the most popular model in a particular car."

Quotes from her e-mail were published in Automotive News, prompting Wagoner to placed a call to Champion to try to convince him that GM's senior management still respects Consumer Reports and that Queen's statement would not have been approved by the company. An official letter of apology is due to be published in Automotive News on Monday, March 20.