GM says new SUVs wont help sales
09-20-2005, 11:20 PM
#1
The sizzle in the Steak
Thread Starter
GM says new SUVs wont help sales
Report: GM says new SUVs wont help sales
At GM the inmates run the asylum.
Industry trade publication says that company sees flat sales given record gasoline prices.
September 20, 2005: 10:04 PM EDT
Industry watchers say the new Chevy Tahoe won't boost flagging sales.
DETROIT (CNN/Money) - General Motors rolled out its next generation of sport utility vehicles, saying that they will debut with "significant gains in fuel efficiency, safety, sophistication and design," but a report quotes a GM executive saying that even with the new vehicle's fuel efficiency the segment's sales will be flat.
GM, which unveiled Tuesday its 2007 Chevrolet Suburban and Tahoe as well as the GMC Yukon and Cadillac Escalade, is projecting sales to maintain current levels, according to report by the trade publication Automotive News.
"It is realistic to assume the segment won't grow," said Robert Lutz, GM's vice chairman of global development, was quoted by the trade publication as saying.
GM (down $0.23 to $31.08, Research) did not return CNN/Money's calls seeking comment.
GM says it currently sells 60 to 62 percent of the 750,000 large SUVs sold in America annually and leads in certain sales categories, including the large-luxury market, the report said.
Lutz blamed record gasoline prices for the lack of growth in the SUV market, and said that GM's market share and the segment volume should hold steady, according to Automotive News.
"People are still going to buy full-sized sport-utilities at $3 a gallon. But even at $3 a gallon, it's 750,000 people a year. It's not going to go to a million," Lutz was quoted as saying. "Two years ago we would have told you the segment is going to go to a million vehicles. It's not going to do that. It's leveled off.
"We think 750,000 (units) is the best prediction based on today's fuel prices. I think we may maintain our volume at other people's expense, even if the segment shrinks a little bit," Lutz said according to the report.
In March, GM noted that sales of generally more fuel-efficient cars were showing strength due to rising gasoline prices and to the detriment of SUV sales.
That announcement came long before gasoline prices made their most recent record-breaking run in August and September.
GM says its new SUVs will offer a number of advantages, including, increased horsepower and better fuel economy and better handling.
The new Tahoe, Yukon and Escalade will be available in the first quarter next year, according to a statement from GM. The Suburban and Avalanche, Yukon XL Denali, Escalade ESV and EXT will be available in the second quarter.
September 20, 2005: 10:04 PM EDT
Industry watchers say the new Chevy Tahoe won't boost flagging sales.
DETROIT (CNN/Money) - General Motors rolled out its next generation of sport utility vehicles, saying that they will debut with "significant gains in fuel efficiency, safety, sophistication and design," but a report quotes a GM executive saying that even with the new vehicle's fuel efficiency the segment's sales will be flat.
GM, which unveiled Tuesday its 2007 Chevrolet Suburban and Tahoe as well as the GMC Yukon and Cadillac Escalade, is projecting sales to maintain current levels, according to report by the trade publication Automotive News.
"It is realistic to assume the segment won't grow," said Robert Lutz, GM's vice chairman of global development, was quoted by the trade publication as saying.
GM (down $0.23 to $31.08, Research) did not return CNN/Money's calls seeking comment.
GM says it currently sells 60 to 62 percent of the 750,000 large SUVs sold in America annually and leads in certain sales categories, including the large-luxury market, the report said.
Lutz blamed record gasoline prices for the lack of growth in the SUV market, and said that GM's market share and the segment volume should hold steady, according to Automotive News.
"People are still going to buy full-sized sport-utilities at $3 a gallon. But even at $3 a gallon, it's 750,000 people a year. It's not going to go to a million," Lutz was quoted as saying. "Two years ago we would have told you the segment is going to go to a million vehicles. It's not going to do that. It's leveled off.
"We think 750,000 (units) is the best prediction based on today's fuel prices. I think we may maintain our volume at other people's expense, even if the segment shrinks a little bit," Lutz said according to the report.
In March, GM noted that sales of generally more fuel-efficient cars were showing strength due to rising gasoline prices and to the detriment of SUV sales.
That announcement came long before gasoline prices made their most recent record-breaking run in August and September.
GM says its new SUVs will offer a number of advantages, including, increased horsepower and better fuel economy and better handling.
The new Tahoe, Yukon and Escalade will be available in the first quarter next year, according to a statement from GM. The Suburban and Avalanche, Yukon XL Denali, Escalade ESV and EXT will be available in the second quarter.
At GM the inmates run the asylum.
09-24-2005, 10:38 AM
#4
Suzuka Master
But even at $3 a gallon, it's 750,000 people a year. It's not going to go to a million," Lutz was quoted as saying. "Two years ago we would have told you the segment is going to go to a million vehicles. It's not going to do that. It's leveled off.
09-24-2005, 11:23 AM
#6
Suzuka Master
G.M. Reports Progress in Returning to Profitability but Also Sees Problems
August 31, 2005
G.M. Reports Progress in Returning to Profitability but Also Sees Problems
By DANNY HAKIM and JEREMY W. PETERS
General Motors executives told financial analysts yesterday that they were making progress in their efforts to become profitable again, but that rising gas prices and continuing negotiations over labor costs were complicating the company's comeback bid.
The executives said that sales of G.M.'s large sport utility vehicles, which have been a crucial profit center, will not return to their past levels. The company is also shifting its view on gas prices. After saying for months that rising prices were not a factor in softening demand for such vehicles, they now say the prices are having an effect.
Executives at the briefing offered few details about G.M.'s talks with the United Auto Workers union. G.M. has been pressing the union to agree to concessions in health care benefits, but talks between the two sides have been complicated by the emergence of a third party, Delphi, a supply giant that is a former division of G.M.
Delphi's new chief executive, Robert S. Miller, has threatened to file for bankruptcy protection unless G.M. and the union agree to what could amount to a costly bailout. A bankruptcy declaration by Delphi could be devastating for G.M. because the company would have to assume billions of dollars in costs for many of its former workers. And any disruption in Delphi's parts production could halt production of any number of G.M. vehicles.
"Delphi is very important to us and we obviously want to be as constructive as we can," said John M. Devine, G.M.'s chief financial officer, in the briefing with financial analysts in Detroit yesterday. "That said, we obviously are going to do what's best for General Motors."
Both G.M. and Delphi are also seeking concessions on labor costs from the union, particularly regarding health care. A newsletter this week, published by a union local in the Detroit suburb of Warren, Mich., shed new light on the talks. G.M. has sought as much as $20 billion in cuts to its future medical liability of more than $60 billion for retirees. The newsletter said that top union leaders have told both G.M. and Delphi "that the union cannot and will not meet their demands."
But several union officials have said that the union and G.M. have progressed beyond G.M.'s initial demands after a few months of discussions and said a strike was less likely than a settlement.
The newsletter also quotes the union's top negotiator, Richard Shoemaker, as saying, "It would not be in our best interest to walk away if there is something we can do that would help G.M. through this difficult period and prevent a larger problem down the road."
Details from the newsletter were previously reported by Bloomberg News and The Detroit Free Press. Officials at the union, G.M. and Delphi declined to comment on its contents.
In addition to pressuring G.M., Delphi seeks sweeping wage and health benefit cuts from the union, including an end to medical benefits for retirees who are eligible for Medicare. They also want the ability to close plants without union approval, the newsletter said. As part of the three-way talks, the union wants 7,000 Delphi workers to be able to return to G.M., which would hinder G.M.'s plans to cut its labor force.
John A. Casesa, an analyst at Merrill Lynch who attended the briefing yesterday, said he believed that the three companies would work out a settlement. Part of his rationale is that G.M. is motivated to avoid disruptions because it has a wave of redesigned large S.U.V.'s and pickup trucks coming to market next year and its large inventory has been slimmed down by its employee discount offers.
"I don't rule out a strike, it's possible, but I think there's a lot of motivation to avoid a strike," he said, adding, "If they have a strike, there will be lots of lost sales and lots of lost market share."
That said, the negotiations are unusual and unpredictable, because they come halfway into the union's four-year contract with G.M. and Delphi, and the union has said it will only offer concessions that are allowable within the framework of its contract. G.M. has lost $1.4 billion in the first half of the year and is facing challenges on several fronts at home.
Among its challenges is weakening demand for large S.U.V.'s.
Paul Ballew, G.M.'s chief industry sales analyst, said the company expected oil prices to decline from their current highs, but to remain over $50 a barrel for a couple years, adding that it was a "fact we're wrestling with each and every day."
"Large utility buyers, from an income standpoint, certainly have the wherewithal to weather that increase," he said. "Having said that, there are other things that go beyond just the cold hard financial facts, such as the image associated with those higher price points and what that means in terms of the attitudes of our customers."
http://www.nytimes.com/2005/08/31/au...6351b3&ei=5070
G.M. Reports Progress in Returning to Profitability but Also Sees Problems
By DANNY HAKIM and JEREMY W. PETERS
General Motors executives told financial analysts yesterday that they were making progress in their efforts to become profitable again, but that rising gas prices and continuing negotiations over labor costs were complicating the company's comeback bid.
The executives said that sales of G.M.'s large sport utility vehicles, which have been a crucial profit center, will not return to their past levels. The company is also shifting its view on gas prices. After saying for months that rising prices were not a factor in softening demand for such vehicles, they now say the prices are having an effect.
Executives at the briefing offered few details about G.M.'s talks with the United Auto Workers union. G.M. has been pressing the union to agree to concessions in health care benefits, but talks between the two sides have been complicated by the emergence of a third party, Delphi, a supply giant that is a former division of G.M.
Delphi's new chief executive, Robert S. Miller, has threatened to file for bankruptcy protection unless G.M. and the union agree to what could amount to a costly bailout. A bankruptcy declaration by Delphi could be devastating for G.M. because the company would have to assume billions of dollars in costs for many of its former workers. And any disruption in Delphi's parts production could halt production of any number of G.M. vehicles.
"Delphi is very important to us and we obviously want to be as constructive as we can," said John M. Devine, G.M.'s chief financial officer, in the briefing with financial analysts in Detroit yesterday. "That said, we obviously are going to do what's best for General Motors."
Both G.M. and Delphi are also seeking concessions on labor costs from the union, particularly regarding health care. A newsletter this week, published by a union local in the Detroit suburb of Warren, Mich., shed new light on the talks. G.M. has sought as much as $20 billion in cuts to its future medical liability of more than $60 billion for retirees. The newsletter said that top union leaders have told both G.M. and Delphi "that the union cannot and will not meet their demands."
But several union officials have said that the union and G.M. have progressed beyond G.M.'s initial demands after a few months of discussions and said a strike was less likely than a settlement.
The newsletter also quotes the union's top negotiator, Richard Shoemaker, as saying, "It would not be in our best interest to walk away if there is something we can do that would help G.M. through this difficult period and prevent a larger problem down the road."
Details from the newsletter were previously reported by Bloomberg News and The Detroit Free Press. Officials at the union, G.M. and Delphi declined to comment on its contents.
In addition to pressuring G.M., Delphi seeks sweeping wage and health benefit cuts from the union, including an end to medical benefits for retirees who are eligible for Medicare. They also want the ability to close plants without union approval, the newsletter said. As part of the three-way talks, the union wants 7,000 Delphi workers to be able to return to G.M., which would hinder G.M.'s plans to cut its labor force.
John A. Casesa, an analyst at Merrill Lynch who attended the briefing yesterday, said he believed that the three companies would work out a settlement. Part of his rationale is that G.M. is motivated to avoid disruptions because it has a wave of redesigned large S.U.V.'s and pickup trucks coming to market next year and its large inventory has been slimmed down by its employee discount offers.
"I don't rule out a strike, it's possible, but I think there's a lot of motivation to avoid a strike," he said, adding, "If they have a strike, there will be lots of lost sales and lots of lost market share."
That said, the negotiations are unusual and unpredictable, because they come halfway into the union's four-year contract with G.M. and Delphi, and the union has said it will only offer concessions that are allowable within the framework of its contract. G.M. has lost $1.4 billion in the first half of the year and is facing challenges on several fronts at home.
Among its challenges is weakening demand for large S.U.V.'s.
Paul Ballew, G.M.'s chief industry sales analyst, said the company expected oil prices to decline from their current highs, but to remain over $50 a barrel for a couple years, adding that it was a "fact we're wrestling with each and every day."
"Large utility buyers, from an income standpoint, certainly have the wherewithal to weather that increase," he said. "Having said that, there are other things that go beyond just the cold hard financial facts, such as the image associated with those higher price points and what that means in terms of the attitudes of our customers."
http://www.nytimes.com/2005/08/31/au...6351b3&ei=5070
09-24-2005, 11:37 AM
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Although they did need to replace their Full size SUV line as their current models were highly outdated compared to the competition and it may help them somewhat in the long run, I think the move to cancel or delay other projects like Zeta was a big mistake
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09-24-2005, 01:54 PM
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The sizzle in the Steak
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Originally Posted by cusdaddy
Although they did need to replace their Full size SUV line as their current models were highly outdated compared to the competition and it may help them somewhat in the long run, I think the move to cancel or delay other projects like Zeta was a big mistake
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