Adrian_Thompson wrote:
We may be at below 9 million right now. But most people still see the economy picking up in the 4th Q. and early next year. We (Ford) can easily survive that, we're already mostly out of the low profit fleet market and have been offer less rebates than the competition (inc Foreign).
Supposedly the base demand of the market is 14 million units just to replace existing vehicles going off to the scrappy every year. Once credit opens up the latent demand will come back and vehicle sales WILL increase. You do the math, 10mil units for profitability and a 'market' of 14 mil units.
Note. I'm making no comments on the accuracy of the 10 mil units and I'm not making reference to anything that isn't in the public domain.
not throwing stones at you, because i know you're quoting some source somewhere, but really:
manufacturing is failing, businesses are closing up right and left, we don't produce anything anymore, yet somehow the economy is going to pick up in the 4th Q? Just how is that going to happen?
Base demand was 14M back when people could borrow against their future whether or not they had the present means to pay back. New base demand is significantly less, because whether or not someone wants somethign is no longer the deciding factor in whether or not someone else will accept their signature as a reasonable trade for whatever that something is. credit is the devil.
and like dave ramsey says, you can't borrow yourself out of debt.
AngryCorvair wrote:
Adrian_Thompson wrote:
We may be at below 9 million right now. But most people still see the economy picking up in the 4th Q. and early next year. We (Ford) can easily survive that, we're already mostly out of the low profit fleet market and have been offer less rebates than the competition (inc Foreign).
Supposedly the base demand of the market is 14 million units just to replace existing vehicles going off to the scrappy every year. Once credit opens up the latent demand will come back and vehicle sales WILL increase. You do the math, 10mil units for profitability and a 'market' of 14 mil units.
Note. I'm making no comments on the accuracy of the 10 mil units and I'm not making reference to anything that isn't in the public domain.
not throwing stones at you, because i know you're quoting some source somewhere, but really:
manufacturing is failing, businesses are closing up right and left, we don't produce anything anymore, yet somehow the economy is going to pick up in the 4th Q? Just how is that going to happen?
Base demand *was* 14M back when people could borrow against their future whether or not they had the present means to pay back. New base demand is significantly less, because whether or not someone *wants* somethign is no longer the deciding factor in whether or not someone else will accept their signature as a reasonable trade for whatever that something is. credit is the devil.
and like dave ramsey says, you can't borrow yourself out of debt.
I must say that I partially agree with your 4th Q pessimism. Mainly since our current economy isn't really manufacturing based, but at least enough of it is so that this won't last forever.
But I think the idea if 14M units is pretty close- won't happen this year, and may not next, but unless there's a pretty significant movement toward mass transportation, then when 14M cars are scrapped, they have to be replaced. Credit is a devil, but precieved need is pretty overwhelming of a driver.
E-
AngryCorvair wrote:
Base demand *was* 14M back when people could borrow against their future whether or not they had the present means to pay back. New base demand is significantly less, because whether or not someone *wants* somethign is no longer the deciding factor in whether or not someone else will accept their signature as a reasonable trade for whatever that something is. credit is the devil.
No, base demand was more like 16-17 million during the credit bubble. I think 14 is a reasonable number, but even if that's high, if Ford is preparing for 10 million, they have quite a bit of leeway.
I agree that you can't borrow your way out of debt, by the way. But the government (both parties) seems to disagree. I guess we'll see.....
Speaking of, "How should automakers, especially GM, save themselves?".
Um,
HOW ABOUT NOT KILLING THE VIBE OFF WITH PONTIAC YOU FOOLS!
I know, caps yelling is stupid, but gimme a break GM. I live smack dab in pickup country and my whole town is lousy with those things. My mom has one, fercryinoutloud. They're selling like hotcakes, and GM's gonna kill em. Yes I know they're Toyotas. They're Toyotas with style. They're also Domestics with Gas Mileage. You can haul some peeple in em, and they're small enough to go easy on the pump. Everyone knows it, and they've been flying off the lots.
So yes, let's kill that off, because we're GM, and we only make decisions that are blatantly bad, since we know what we're doing.
This is why I'm kinda mad that the guv owns most of GM now. That cockroach of a company won't EVER die now. A company that badly run desperately needs to die, so that someone can step in and buy up all thier capital for cheap and start over without the completely worthless management. Nope, it's just gonna leach off the taxpayer forever like a deadbeat uncle that noone has the spine to throw out into the streets.
Erg.
We can't borrow our way out of debt. However, the government with its ability to create money from nothing thinks it can by borrowing 100 2009 dollars, inflating the value of the dollar, then paying that $100 back with 2020(+) dollars that are worth about 1 to 10 2009 dollars. That's what the feds think they are doing. The bankers don't care as long as they have the ability to charge some percentage over the inflation rate, like they did in '79 when interest rates were 20%. I remember a friend of mine buying a house on a 20% interest rate in '79 or '80. That will catch up. Wait for it.
The problem comes in when we have to interact with other countries. That confuses things. Eventually, the Chinese, Europeans and Arabs are going to get pissed off about their dollar holdings being worthless. They are already grumbling and the talk has started on a new world currency to replace the dollar, and our foreign friends will insist that they be paid in that instead of the worth less every day dollar. When that happens, then anything we don't make here will instantly become priced to unobtainium levels. Oh, BTW, that would include, uh, everything thanks to policies started by Uncle Bill and continued on through W. But, we can always sell insurance to each other in our service based economy, right?
Anyway, that's how you borrow your way out of debt. The rest of us, without the ability to make money from nothing to pay back our debts, can't do that. We have to look around, see we're in a hole and (GOSH) stop digging.
Meanwhile, I recently came across an instrument called a TIPS, for Treasury Inflation Protected Security. The feds, knowing that no one in their right mind will lock in a 30 year bond at 2% while staring at a posibiltiy of hyperinflation, came up with this bond that will pay a percentage over the published inflation rate. So, if the official inflation rate is 30% and your TIPS is 2% over, you get 32% return. If inflation is 0 or even negative (deflation), you get 2% flat. The inflation rate is manipulated and not accurate since Reagan started fiddling with how it's calculated, but the TIPS are the closest thing we have to trying to stay even. You can buy them direct from the feds or there are some bond funds that invest heavily or solely in them.
GM to stop production of the Malibu Hybrid due to poor sales.
I actually see this is a good sign. It means that GM is going to make product decisions based on what is selling and not based on the whims of the green movement, as some have feared.
