LAST AUTO NEWS – SURVIVOR DETROIT: WILL ANYONE MAKE IT?
Last Auto Account – Survivor Detroit: Will Anyone Accomplish It? 
Just if we anticipation the austere times in Detroit couldn’t becloud any more, Thursday happened. GM and Ford stocks fell to dramatic, amazement lows appropriate forth with the Dow, freefalling into the 8,600 ambit for the aboriginal time in 5 years. GM shares are sitting at levels not apparent back the Korean War. Ford is about a penny stock. Inside ..Last Auto account – Just if we anticipation the austere times in Detroit couldn’t becloud any more, Thursday happened.
GM and Ford stocks fell to dramatic, amazement lows appropriate forth with the Dow, freefalling into the 8,600 ambit for the aboriginal time in 5 years. GM shares are sitting at levels not apparent back the Korean War. Ford is about a penny stock.
Inside the industry, it’s axis into a bad division of Survivor (and who watches Survivor anymore, anyway?). It’s about to get worse. The letters are acute this morning, with the achievability of addition 500-point bead in the Dow. Geraldo Rivera’s on morning TV, talking about how GM and Ford are trading at $4 and $2 a share, and the $25 billion in loans ability be acclimated just to “keep the lights on.”
When Geraldo shows up in your backstory, it’s like Jim Cantore assuming up at your beach property. Not good.
But is it a game-ending scenario? Yesterday, I talked with CBS Marketwatch, which asked advisedly if GM was in crisis of traveling bankrupt. With the banknote on hand, GM says it will acclimate the blow of the year, and they apperceive their wallet bigger than the press. I alternate adage annihilation like the B-word because there are added levers yet to cull at both of the publicly-owned domestics.
But like John McCain’s campaign, the options are accepting beneath and added esoteric. GM is aggravating to unload its address to the awfully well-funded city-limits of Detroit. That’s how acute the solutions accept become. Ford already mortgaged everything, including the blue-oval logo–and its best new vehicle, the 2009 Ford Flex, isn’t affairs well.
If there were any signs of recovery, the domestics ability be able to ataxia through this year and barrier their bets on the federal $25 billion in loans, which appear with affluence of strings. The botheration is, analysts are admiration a bloodbath next year. Car sales in 2009 could hit a three-decade low of 13.2 actor vehicles. Off contempo highs of about 17 actor car sales, that’s like wiping GM, Toyota and Ford off the sales archive entirely.
We’re in freefall, and there’s not even a glint of a recovery. The absolute U.S. auto industry will be aggressive artlessly to survive. They’ll accept to do it for 18 to 24 months. And some of them will not accomplish it, the headwinds are just too strong.
Think of the postwar abortion of car brands afterwards World War II, if the bazaar went from dozens of brands to a handful. Could we go from three U.S. makers to one–or none?
What’s your yield on the survivors? Who’s traveling to accomplish it through this Marianas trench?
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