Bad news tomorrow?...

[Nickdago]

Forget about the old adage cash is king. Right now at GM, cash is critical to its very survival. And there is growing concern about how much GM has and is burning through.

How bad is it at GM [GM 4.80 -0.76 (-13.67%) ] ? Today Chairman and CEO Rick Wagoner, along with UAW president Ron Gettlefinger and the CEO's from Ford [F 1.98 -0.11 (-5.26%) ] and Chrysler, will meet with house speaker Nancy Pelosi to request $25 Billion in bridge loans for the industry. Wagoner then flies back to Detroit where tomorrow, he will announce a big loss for the third quarter, a greater than expected cash burn rate, and steps the company is taking to conserve cash. In short, GM is wrestling with a major cash crunch.

So GM will announce on Friday that it's suspending product development for many future models in an effort to save money NOW! Those models close to rolling out, like the Chevy Camaro, and the Chevy Volt will not be put on hold. Wagoner will also announce other changes the company is taking with suppliers and dealers as it rushes to cut it's cash burn.



How much time does GM have? It's not going bankrupt this month or by the end of the year, but if it does not conserve its cash, and sales remain as depressed as they were in October, 2009 will be dicey.

To call this crisis one of the toughest GM has faced would not be an overstatement. Now more than ever, Cash is the key to GM's future.

[Nickdago]

Shares in Toyota Motor tumbled down 12.6 percent when its stock resumed trade on Friday after the world's biggest automaker shocked investors with a warning that profits this year would hit a 13-year low.


David Zalubowski / AP
Toyota.
--------------------------------------------------------------------------------


Toyota [TM 67.09 -13.28 (-16.52%) ] was untraded with sell orders at 3,310 yen in the morning, after falling 16.5 percent on Wall Street amid big problems for American automakers who are lobbying for government assistance as sales slide.

The broader market declined sharply on Toyota's surprise outlook cut, with many likening it to the "Sony shock" in April 2003, when a huge quarterly loss by Sony sparked a two-day sell-off.

But some investors said the situation was even worse for Toyota, given the deterioration in the global economy.

"The Sony shock came when the overall economy was on the rise, so it was taken as the end of the bad news, but this time, it is in the middle of an economic slowdown," said Tomomi Yamashita, fund manager of Shinkin Asset Management.

"Compared with the Sony shock, it will probably take Toyota's share price longer to return to a solid recovery path," he said.

In Tokyo, Toyota shares fell 10 percent on Thursday ahead of the profit warning after a newspaper reported that its operating profit could fall below 1 trillion yen ($10 billion) in the year to March 2009, less than half the profit seen last year.

But the damage was much greater, with Toyota announcing after the Tokyo market close that it expected an annual operating profit of 600 billion yen -- the lowest since 1995/96 and down 60 percent from its previous forecast.

For the year to March 31, the world's biggest automaker now expects operating profit of 600 billion yen ($6.1 billion) versus a previous forecast of 1.6 trillion yen. A poll of 17 brokerages had forecast 1.34 trillion yen.

The maker of the Camry sedan, Prius gas-electric hybrid and Tundra pickup truck now expects net profit of 550 billion yen instead of 1.25 trillion yen.

Toyota , until recently the envy of the industry with eight straight years of profit growth, has had to put factories on hold, release temporary staff and offer buyers unprecedented incentives as sales in the crucial U.S. market slumped further than it expected.

With two months remaining this year, Toyota's U.S. sales are down 12 percent to date, forcing it to lower its forecast there this week for the second time in four months.

Toyota's July-September operating profit fell 72 percent to 169.5 billion yen, while net profit sank 69 percent to 139.8 billion yen. Shares in Toyota have lost 37 percent in the year to date, better than the 43 percent decline in Tokyo's transport sub-index.

The company reported a record 2.27 trillion yen profit last year, but the industry's woes have seen its shares slide by a third this year, to 3,870 on Thursday -- in line with a similar fall in Tokyo's transport sector subindex.

The Tokyo Shimbun reported last month that Toyota's operating profit would be 1-1.2 trillion yen, but said growing woes in the sector would mean a further downgrade to below 1 trillion yen ($10 billion).


U.S. Blues

Toyota, the maker of the Camry sedan, Prius gas-electric hybrid and Tundra pickup truck, has previously forecast a 30 percent fall in operating profit to 1.6 trillion yen this year.

Toyota's U.S. sales have fallen 12 percent so far this year, prompting the top Japanese automaker to lower its forecast there this week -- the second cut in four months.



Its October U.S. sales slid 26 percent from last year, while its non-minicar sales in Japan fell 13 percent.

Detroit's General Motors [GM 4.80 -0.76 (-13.67%) ], Ford Motor [F 1.98 -0.11 (-5.26%) ] and Chrysler LLC are faring worse, suffering sharper sales drops and struggling to return to profit.
The slump is also prompting talk of mergers between GM and Chrysler as sales plunge and they face deep losses.

The impact of the global credit crisis has spread to emerging markets such as China and India, throwing a wrench in automakers' plans to seek strong growth there to offset slumping sales in the big U.S. and European markets.

Toyota's announcement will complete a brutal earnings season for Japanese carmakers. Of the eight, only Fuji Heavy Industries did not lower its annual forecasts. Nissan Motor [NSANY 8.57 -1.10 (-11.38%) ] shocked investors last week by more than halving its operating profit forecast.

[Mr. Wyndham]

This isn't a matter of whether or not the Camaro is safe. It's only ~3 months from the factory (which, btw, is BRAND NEW)...it's not getting canceled or delayed or whathaveyou. Ironically, history has shown that the Camaro has been relatively immune to a bad economy and high fuel prices, etc. (see: 1979 gas 'crisis' and Camaro's still-highest sales year ever at 280,000 cars) So if it continues that trend, it may be a bright spot in an otherwise very dark time for GM.

Right now, I think we can all agree that GM has some pretty badass products out in all its brands right now. Vehicles that aren't much older than 3/4 years, and in the current environment, people aren't gonna be too picky....So updating these cars isn't as high a priority as surviving to upgrade those cars later...hence delays.

I'm worried...but optimistic...and tired, what a week........

[storm79]

i think gm needs to cut some vehicles from it's lineup and quit rebadging vehicles so dang much, just my $.02

[playhard67]

Ford posts $3B operating loss
Automaker announces further job cuts, other cost savings as it tries to stem losses.


http://money.cnn.com/2008/11/07/news...ults/index.htm

among details on Ford's situation:

"The chief executives of GM, Ford and privately-held Chrysler LLC, as well as the president of the United Auto Workers union, met with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid on Thursday to seek support for a wide-ranging bailout package for the industry. Both leaders voiced support for additional help for the sector following their meetings.

Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers' balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals.

The discussions also touched upon allowing the automakers to tap into the $700 billion bailout of Wall Street firms and the nation's banks that was passed by Congress last month. Treasury has so far rejected auto-industry inquiries about accessing that pool of money.

The automakers also renewed their pre-election request to double the $25 billion low-interest loan program approved by Congress, as part of energy legislation, to help automakers convert to making more fuel-efficient vehicles in an effort to meet the demands of car buyers and new federal rules"

[Scott@Bjorn3D]

The do need to downsize. Kill of Buick. Get back to an econo car, family sedan, performance car, luxuary car, highed performance car, regular truck, heavy duty truck and 1 SUV.

That simplicty may save them.

[kdbolt70]

What I don't understand, and perhaps its a bit naive of me, is why we can drop $700b+ on banks and financial institutions that knowingly made subprime loans, and not give a fraction of that sum to some of America's largest employers in their time of need. I don't think anyone doubts that these companies did not operate perfectly over the last 15 years, but to turn the cold shoulder and watch these companies fail will result in the job loss of millions. I can't imagine the government, or even private investors, will watch as the US auto market sinks like the Titanic. Perhaps I'm biased, but I feel a bailout of GM is much more deserving than a bailout of wallstreet. I mean AIG alone got some $100B+ to stay afloat. The entire auto industry is asking for a quarter of that.

Just my thoughts.

[playhard67]

I believe our government should provide the big three with funds to help them more competitive. The Japanese government did with the Prius.

Did the Japanese Government Fund the Toyota Prius?

That someone is none other than James Press (pictured), now the vice-chairman and president of Chrysler. But, before that job, he spent 37 years at Toyota, and ended up running their United States operations and sitting on the Japanese car maker’s board of directors.

According to comments made by Press to Business Week magazine, the Prius development costs were paid for by the Japanese government, in their entirety. Press is quoted by BW as saying, “The Japanese government paid for 100 percent of the development of the battery and hybrid system that went into the Toyota Pirus.”

http://forums.streetfire.net/showthread.php?t=27721

[Muscle Master]

This ought to slow down theses merger talks with Chrysler

So Chrysler can get its shit together

[radz28]

Originally Posted by camaropete

While we are all worried about the Camaro and the affect of these announcements on its production, let us not forget all the GM employees who will be impacted by whatever happens. Please think of them and their families while they go through these difficult times. I really want my Camaro and I hope that its re-emergence helps to re-invigorate the company.

We shouldn't forget those people - the engineers to designed, the people who manufacture, and those that kept it alive.

Originally Posted by Scott@Bjorn3D

The do need to downsize. Kill of Buick. Get back to an econo car, family sedan, performance car, luxuary car, highed performance car, regular truck, heavy duty truck and 1 SUV.

That simplicty may save them.

I don't want to sound cold, particularly toward those whos jobs may be/are at risk, but I agree with this statement. Get Tiger and whoever else advertises for Buick over to Cadillac and let them go. And although I prefer the way GMCs look over the Chevy pickups, maybe either of them could go too (Chevys out-sell the GMCs though if I understand correctly.) Perhaps streamlining the pickup lineup might help too. I love all the choices that are out there, but is an Avalanche and Suburban really necessary? I love both of them, and like the unique diversity of the Avalanche, but do they sell that many to justify them? I see a whole lot more Tahoes and Yukons than I see Subs' or Avalanches.

Again, I don't mean to minimize the loss of any employees, and love all these vehicles (okay, not the Buicks...) but I think there are some places they could make improvements. JMVHO

Originally Posted by kdbolt70

What I don't understand, and perhaps its a bit naive of me, is why we can drop $700b+ on banks and financial institutions that knowingly made subprime loans, and not give a fraction of that sum to some of America's largest employers in their time of need. I don't think anyone doubts that these companies did not operate perfectly over the last 15 years, but to turn the cold shoulder and watch these companies fail will result in the job loss of millions. I can't imagine the government, or even private investors, will watch as the US auto market sinks like the Titanic. Perhaps I'm biased, but I feel a bailout of GM is much more deserving than a bailout of wallstreet. I mean AIG alone got some $100B+ to stay afloat. The entire auto industry is asking for a quarter of that.

Just my thoughts.

My thing is if I screw-up financially, no one is bailing me out, so why them? I agree though, that if these giants get help, what's a little more to our auto' makers so all those people can keep their jobs? I'm sure that money would do more good than on Wall Street. I don't know anything about economics though

[Speedy1975]

The announcement is in a few minutes. Does anyone know where we can see it or hear it online?

[playhard67]

I read it would be here????

http://media.gm.com

see: http://www.forbes.com/prnewswire/fee...___CLM136.html

for more info. there will also be a 90 minute conference call.

[Inspector 17]

Here:

http://www.gm.com/corporate/investor...ings/index.jsp

But I don't see it posted yet.

[kdbolt70]

looks like you can get a webcast of the conference call at 12:15 here: http://phx.corporate-ir.net/phoenix....ventId=2017286