Wednesday, March 16, 2005

GM pays the piper: sales slump, stock nears 13-year low

A week ago I posted on the way oil prices had begun to affect SUV sales. I prognosticated thusly:

When these chickens come home to roost, and they will, the effects will not be subtle. The 1973 oil crisis will look mild by comparison, and GM, Ford and Chrysler will be caught as flat-footed as they were 30 years ago.

Reuters reports:

General Motors Corp. (GM.N: Quote, Profile, Research) on Wednesday warned its 2005 earnings will be as much as 80 percent below its prior forecast due to slumping North American auto sales, sending its shares down 13 percent to a nearly 13-year low.

The warning from the world's largest carmaker, whose once dominant position in its key U.S. market has fallen to less than a 25 percent share on a steady loss to foreign automakers, spurred Standard & Poor's to caution that it could downgrade GM's debt to "junk" status at any time, which would likely raise its borrowing costs.

GM also said it will post a loss in the first quarter, compared with its prior forecast of breaking even or better, due to significant losses in North America.

The automaker's top money-makers in the United States, SUVs and pickup trucks, have been losing out to newer offerings from competitors.

But have no fear. ANWR will save us all. Consume, America. (Actually, there are a number of ways of punctuating that sentence. Take your pick.)


Blogger Jane Hamsher said...

I gave up my SUV for political reasons -- aside from the expense, I just couldn't get behind that kind of gross consumption. But as someone with three large dogs, I look every day for announcements of hybrid SUVs. I was pretty excited when I saw that they were going to be releasing a hybrid SUV of the Durango in 2007, until I saw it got 25% better gas mileage. Now, in city traffic the Durango probably gets, charitably, around 12 mpg. Which means it'll now be up around 15 mpg. What the hell are they thinking? I'm gonna get so excited about the word "hybrid" I'm gonna ignore the fact that it means shit at the gas pump?

I just stopped by to say hi, I like your blog and link to it on mine.

6:28 PM  
Blogger cookie jill said...

and they are smooshing the ev1's for what I think is no good reason...

9:47 PM  

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