General Motors CEO - Rick Wagoner Resigns..

[zed]

I have been told that every Honda RC51 that was sold, lost Honda money. don't know for sure thats the truth either but the guy has been in the business for a long time.

[Homeslice]

Originally Posted by zed

I have been told that every Honda RC51 that was sold, lost Honda money. don't know for sure thats the truth either but the guy has been in the business for a long time.

Wouldn't doubt it.

Believe it or not there was a time when Ford lost money on every Escort, simply because they couldn't sell them for what they wanted to sell them for.

[goof2]

Originally Posted by Homeslice

Wouldn't doubt it.

Believe it or not there was a time when Ford lost money on every Escort, simply because they couldn't sell them for what they wanted to sell them for.

That seems to be the case with about every GM and Chrysler full size truck and SUV right now.

[Homeslice]

Originally Posted by goof2

That seems to be the case with about every GM and Chrysler full size truck and SUV right now.

Maybe, but 2 years ago those same models were making bank. I know Ford used to make $18K after manufacturing costs on every Navigator.

[goof2]

Originally Posted by Homeslice

Maybe, but 2 years ago those same models were making bank. I know Ford used to make $18K after manufacturing costs on every Navigator.

Maybe that is why Ford wants nothing to do with the government bailout. While GM might have been doing as well on Escalades they are now essentially paying people to remove them from the lots.

It reminds me of a story I heard about Aston Martin, but the veracity of it I do not know. At some point during one of the company's less successful periods the friend of one of the owners asked, since they were buddies, if he could purchase an Aston at cost. The answer was "Sure!" and the price was raised by a few thousand pounds.

[bmblebee]

perhaps an understanding of cost accounting is needed. If an airline sends a plane on a flight, where every seat but one is full, they can claim they lost money on the flight. It has nothing to do with revenue vs expenses.

If you accept the rebate, or zero percent financing when you purchase a car they finance in house, the manufacturer claims a loss on the sale

[goof2]

Originally Posted by bmblebee

perhaps an understanding of cost accounting is needed. If an airline sends a plane on a flight, where every seat but one is full, they can claim they lost money on the flight. It has nothing to do with revenue vs expenses.

If you accept the rebate, or zero percent financing when you purchase a car they finance in house, the manufacturer claims a loss on the sale

That is fine for a discussion of individual cars, but doesn't tell the story of GM as a whole. GM's EBIT for 2008 was negative $30 billion. That has everything to do with revenue vs. expenses. With GM selling just under 8.5 million cars worldwide in 08 it also tells me, by loosing around $3,500 per car sold, it isn't just claimed losses.

[Homeslice]

Originally Posted by goof2

Maybe that is why Ford wants nothing to do with the government bailout. While GM might have been doing as well on Escalades they are now essentially paying people to remove them from the lots.
.

No matter how much of a rebate they give, I still bet they make money on them. Remember, all an Escalade is is a Chevy truck with an enclosed body and fancy trim. Same as a Navigator is just an F150. That's a hell of a cost efficiency. Now, most of their passenger cars I'm sure they're losing money on.

[101lifts2]

It costs GM about 15-18K to produce most of its vehicles...A 40K Cad. Escalade is around the 18k figure, so they could discount it 20 grand and still make coin.

The problem is selling Cobalts where they loose on every one.

[goof2]

Originally Posted by Homeslice

No matter how much of a rebate they give, I still bet they make money on them. Remember, all an Escalade is is a Chevy truck with an enclosed body and fancy trim. Same as a Navigator is just an F150. That's a hell of a cost efficiency. Now, most of their passenger cars I'm sure they're losing money on.

Originally Posted by 101lifts2

It costs GM about 15-18K to produce most of its vehicles...A 40K Cad. Escalade is around the 18k figure, so they could discount it 20 grand and still make coin.

The problem is selling Cobalts where they loose on every one.

The other problem is while Escalades, Silverados, Rams, etc. may theoretically be profitable, they have to be sold first. They could cost a dollar each to build but they don't have a positive impact on the company when they are sitting in lots by the tens of thousands not being sold.

Even if they are profitable though, it only strengthens my original point. The government doesn't want GM building cars that can apparently still be profitable. They want GM building cars that have historically lost money. GM certainly did plenty to bring this on themselves. Management placed the company in a position where they are dependent on government aid for their survival.

When Chrysler was given government aid in 1979 in the form of $1.5 billion in loan guarantees (over $4 billion today) the government didn't tell them what they should be building. Even without the now indispensable hand of government, Chrysler was able to repay the loans in 4 years. That apparently isn't the case as far as the current administration is concerned.

This brings me back to my original point. The government is trying to force these companies to build historically unprofitable cars, essentially guaranteeing the failure of these companies. The executives now have to work for stock, which will be worthless once the companies fail. Under these conditions how are GM and Chrysler supposed to attract any talent at all?