Chevrolet Corvette Stingray C7 Forum - View Single Post - MERGED: Has anyone read this (bankruptcy) about GM?

bigralph · 11-13-2008, 02:41 PM

Things like this piss me off!!!

http://money.cnn.com/news/newsfeeds/...2_FORTUNE5.htm

Lending Crackdown Creates New Disadvantage For US Auto Makers
November 13, 2008: 02:24 PM EST

DETROIT -(Dow Jones)- Getting a lease deal on a Chevrolet or Buick is all but impossible these days. And car buyers can forget about getting free financing on a Ford.

But anyone in the market for a Honda, Toyota or Nissan is getting wooed with unprecedented deals, from no-interest loans to cheap leases on popular models like the Honda Civic.

Detroit's Big Three auto makers, strapped for cash and unable to extend generous deals touted by many of their foreign-based rivals, face a growing competitive disadvantage. It's the latest setback in Detroit's fight to hang on to its fast-shrinking corner of the U.S auto market.

"These import companies are hitting the domestics where it hurts most and offering financing where the others can't," said Jessica Caldwell, industry analyst at Edmunds.com. "If they, the domestics, lose people to Toyota, Honda and Nissan, and these customers realize, 'Hey, these are good cars,' they may be lost forever."

Domestic auto makers had hoped to at least maintain their share of the market in the face of a widespread industry slump. Success on that front would have put the companies in a better position to recover when the market rebounded.

Instead, domestic companies' market share through October fell 4 percentage points to 47% compared to a year ago, a massive drop by auto industry standards, where every tenth-of-a-point earned is cause to brag. Asian brands, meanwhile, accounted for 45% of U.S. auto sales, up from 42% a year ago.

General Motors Corp. (GM), especially, has emphasized hanging onto to market share as a key goal in the face of sinking sales. A well-received employee- pricing-for-all sale in September pushed GM's share to 27%, the highest of 2008. But in October, after the sale ended, GM's share sank to 20%, just one percentage point above Toyota Motor Corp. (TM) on the home turf GM has long dominated.

While economic turmoil has pushed the entire U.S. market to lows unseen in decades, U.S. auto makers are bearing the brunt of the loss, a trend that will likely accelerate as credit and cash flow troubles impede their ability to woo jittery consumers.

Consumers rattled by the crashing housing market and meltdown on Wall Street are putting off big-ticket purchases such as new vehicles. Those who are willing to buy are having a tough time securing credit as lenders clamp down on loans, requiring high credit scores and big down payments.

GM has been hit especially hard because its finance arm, GMAC Financial Services, has clamped down on auto loans in the face of massive losses. Unlike Ford Motor Co.'s (F) Ford Motor Credit, GM doesn't have a controlling stake in GMAC, which is also reeling from losses in its mortgage lending business. The auto maker sold 51% of the lender to Cerberus Capital Management LP in 2006.

Toyota, Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY), are hurting from the same factors, but those auto makers and their finance arms have much stronger balance sheets to help them weather the downturn.

New Yorker Meredith Rackoff, who works for a Manhattan bank, epitomizes Detroit's dilemma.

For three years, she has leased a compact Chevrolet Cobalt, never missing a monthly payment. The lease runs out in December and Rackoff, happy with the car and looking to stick with a domestic model, asked GMAC if she could extend the lease six months to keep the Cobalt.

Instead, she says, she was told she could get no more than a month extension - unless she had already purchased a new GM vehicle - and that her rate would go up by $25 a month.

"They told me policy is policy and there are no exceptions," said Rackoff, who is now considering buying a car from another auto maker. "All they would have to do is take my check and cash it instead of just having my car sitting on a lot somewhere.

"To me, it just defied logic."

In rolling out financing and discount deals, the Japanese auto makers are undercutting a key tool domestic manufacturers have used to compete.

The shift comes after years of work by the Detroit auto makers to level the playing field on vehicle quality and labor costs. Domestic companies have made major strides - from improved quality rankings by publications such as Consumer Reports to a landmark cost-cutting labor deal with the United Auto Workers.

Now, hamstrung by their inability to offer cheap loans, they face a new hurdle.

"A lot of people have been turned off by what the domestics are offering, with no leasing and requiring high credit scores," Edmunds' Caldwell said. "On the other hand you have Toyota out there with national commercials saying, 'Financing is not a problem. We will work with you.' "

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@ dowjones.com.

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http:// http://www.djnewsplus.com/al?rnd=1bP...tNaEuUZQ%3D%3D. You can use this link on the day this article is published and the following day.

11-13-2008, 02:41 PM	#307
bigralph Drives: 2001 v6 Camaro Join Date: Dec 2007 Location: Northborough, MA Posts: 267	Things like this piss me off!!! http://money.cnn.com/news/newsfeeds/...2_FORTUNE5.htm Lending Crackdown Creates New Disadvantage For US Auto Makers November 13, 2008: 02:24 PM EST DETROIT -(Dow Jones)- Getting a lease deal on a Chevrolet or Buick is all but impossible these days. And car buyers can forget about getting free financing on a Ford. But anyone in the market for a Honda, Toyota or Nissan is getting wooed with unprecedented deals, from no-interest loans to cheap leases on popular models like the Honda Civic. Detroit's Big Three auto makers, strapped for cash and unable to extend generous deals touted by many of their foreign-based rivals, face a growing competitive disadvantage. It's the latest setback in Detroit's fight to hang on to its fast-shrinking corner of the U.S auto market. "These import companies are hitting the domestics where it hurts most and offering financing where the others can't," said Jessica Caldwell, industry analyst at Edmunds.com. "If they, the domestics, lose people to Toyota, Honda and Nissan, and these customers realize, 'Hey, these are good cars,' they may be lost forever." Domestic auto makers had hoped to at least maintain their share of the market in the face of a widespread industry slump. Success on that front would have put the companies in a better position to recover when the market rebounded. Instead, domestic companies' market share through October fell 4 percentage points to 47% compared to a year ago, a massive drop by auto industry standards, where every tenth-of-a-point earned is cause to brag. Asian brands, meanwhile, accounted for 45% of U.S. auto sales, up from 42% a year ago. General Motors Corp. (GM), especially, has emphasized hanging onto to market share as a key goal in the face of sinking sales. A well-received employee- pricing-for-all sale in September pushed GM's share to 27%, the highest of 2008. But in October, after the sale ended, GM's share sank to 20%, just one percentage point above Toyota Motor Corp. (TM) on the home turf GM has long dominated. While economic turmoil has pushed the entire U.S. market to lows unseen in decades, U.S. auto makers are bearing the brunt of the loss, a trend that will likely accelerate as credit and cash flow troubles impede their ability to woo jittery consumers. Consumers rattled by the crashing housing market and meltdown on Wall Street are putting off big-ticket purchases such as new vehicles. Those who are willing to buy are having a tough time securing credit as lenders clamp down on loans, requiring high credit scores and big down payments. GM has been hit especially hard because its finance arm, GMAC Financial Services, has clamped down on auto loans in the face of massive losses. Unlike Ford Motor Co.'s (F) Ford Motor Credit, GM doesn't have a controlling stake in GMAC, which is also reeling from losses in its mortgage lending business. The auto maker sold 51% of the lender to Cerberus Capital Management LP in 2006. Toyota, Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY), are hurting from the same factors, but those auto makers and their finance arms have much stronger balance sheets to help them weather the downturn. New Yorker Meredith Rackoff, who works for a Manhattan bank, epitomizes Detroit's dilemma. For three years, she has leased a compact Chevrolet Cobalt, never missing a monthly payment. The lease runs out in December and Rackoff, happy with the car and looking to stick with a domestic model, asked GMAC if she could extend the lease six months to keep the Cobalt. Instead, she says, she was told she could get no more than a month extension - unless she had already purchased a new GM vehicle - and that her rate would go up by $25 a month. "They told me policy is policy and there are no exceptions," said Rackoff, who is now considering buying a car from another auto maker. "All they would have to do is take my check and cash it instead of just having my car sitting on a lot somewhere. "To me, it just defied logic." In rolling out financing and discount deals, the Japanese auto makers are undercutting a key tool domestic manufacturers have used to compete. The shift comes after years of work by the Detroit auto makers to level the playing field on vehicle quality and labor costs. Domestic companies have made major strides - from improved quality rankings by publications such as Consumer Reports to a landmark cost-cutting labor deal with the United Auto Workers. Now, hamstrung by their inability to offer cheap loans, they face a new hurdle. "A lot of people have been turned off by what the domestics are offering, with no leasing and requiring high credit scores," Edmunds' Caldwell said. "On the other hand you have Toyota out there with national commercials saying, 'Financing is not a problem. We will work with you.' " -By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@ dowjones.com. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http:// http://www.djnewsplus.com/al?rnd=1bP...tNaEuUZQ%3D%3D. You can use this link on the day this article is published and the following day.