Quote:
Originally Posted by Lynn A McCarty
Alan,
You are totally missing the point. Just because someone does things you can criticize in hindsight, doesnt make you correct. Rick Waggoner himself said GM was making a profit on capital hill during the senate hearings before the current economic crises. So were a lot of companies.
It is credit driven. I would say well over 1/2 the people reading this thread dont have a credit score 750 or above. Doesnt matter if they build a ZL1 Camaros, if you cant finance it. How many have $30k to pay cash for a car? Not many.
Watch the credit loosen, and watch sales go back up. The liberal agenda to force the auto industry to build hybrids and left wing agenda products doesnt fly no matter how you prop it up. Surely you know that manufacturing can make a profit even though the company is writing it down?
If your wife is spending all your money doesnt mean your engine building business isnt making money. GM is undergoing global restructuring. It would take a book to write explanations. When I was working for Ford financial in 1999 they were making $10,500 on a Navagator and $5500 on a F150 pick up average. They lost money on every car. Want to know why they built SUV's and trucks?
Below is an explanation of what I am talking about.
http://www.gm.com/corporate/investor...r/letter1.html |
Lynn,
I'm not missing the point at all. If GM had been on solid operating ground and turning a good profit a year ago they would not be effectively bankrupt. And they are bankrupt, the only thing keeping them afloat is tax payers dollars, plain and simple. You know that the guy I race with is an automotive industry insider, and has been for a long time. The business model GM and Chrysler have been operating on is fundamentally flawed. Ford saw it coming and made more radical adjustments far sooner. That is why Ford is not bankrupt and GM is. Actual inside information about what is really happening shows the differences. Just operating differences, never mind the poor market decisions.
You can call it "hindsight" if you like, but when GM made the moves they made, or failed to make the moves it should have made, I called it then, it's just that you personally weren't standing there listening. That does not mean I'm not correct, and neither does calling it "hindsight." GM has screwed the pooch so many times in the last 2-3 decades it is no wonder they are in the shape they are in. I'm a die hard GM supporter, I do not now own anything that is not GM, and I haven't for 30 years. But I'm not so blinded by my loyalty as to not see pure stupidity when it is staring me in the face.
GM failed to make the necessary cuts and restructure when everyone saw this coming, and Ford did not. And it takes two hands to count the major market errors GM has made just in the last decade and a half. And they continue to make those blunders.
If GM was REALLY making such a solid profit, they'd have been in a solid financial position when the latest economic crisis hit, and they wouldn't be bankrupt and begging the government for tax payer's money to pay their bills and their employees.
Considering the position GM has gotten themselves into, I certainly wouldn't take their advice on whether or not to invest, and I wouldn't be looking at what they post on their website to see how they were doing. They evidently thought they were doing well enough they wouldn't end up bankrupt. Turns out what they were thinking wasn't working out too well.
By the way, eventually the automotive crash was bound to happen. Anyone could see it coming. Go back to 1970, we (my family) bought the biggest and best truck Chevy had brand new, and paid a staggering $3500. We had just bought a 3 bedroom two story brick home in a nice neighborhood on 1.5 acres, for about $30K. So the truck barely cost over 1/10 what a house cost. Fast forward to 1994, my wife and I bought a brand new 3 bedroom house on right at an acre, and paid $72K, counting every penny cost. We looked at a new truck, in 1995, and did not buy it because they wanted $32K. So the truck would have cost almost 1/2 what the house cost. And five years ago our house was worth about $100K, and we looked at a new truck, it was almost $44K. When a new truck costs damned near 1/2 what a house costs, you don't have to guess as to why new vehicles aren't selling like fast food.
And those new vehicle prices are WHY you need a credit score of 750 to buy one. Because if you don't make a lot of money and have killer credit, you can't afford the payments. You can buy a NICE House and pay $650 a month with decent credit. And if you buy a nice 1 ton truck, your payments will be about the same, for 5-7 years. When you get the truck paid for, it's worth 1/3 what you paid for it, at best, if you drive it.
And if they don't do something about the prices, it won't matter if you've got excellent credit, if you don't make a ton of money, you won't be able to afford to make the payments.
Like I said, even people with excellent credit are not buying cars right now. Why? Not because they can't get a loan. Because they're concerned about having a job.
I didn't bring the "gloom and doom" here. But I certainly will not hide my head in the sand and say "everything is fine" and "all we need is credit" to fix this absurd fiasco that our economy has become.
With regards to NHRA, I'm not about to abandon it, nor am I proposing that as an idea. But I do not think it is a good idea to just sit by and say nothing when things don't look right. To say the SRAC is "working like it should" is either saying it shouldn't work well at all, or being very generous. When a guy like Woodro resigns from the SRAC, because of how it is working, or how it is not working, and he is not the only one, that should really tell us something. And when NHRA takes control of the AHFS away from the two people who know Stock and Super Stock best, and they don't bother to tell us about that, well, that should tell us something, too. I'm doubting either of those two moves is a real major cost saver for NHRA.
I'm not predicting the end of the world here, not the automotive world, or the NHRA drag racing world. I still plan to go to the races this year, and I'm still working towards another ride. I sent in my renewal, and that includes my competition license renewal.
In any event, I doubt anything is going to happen here, short of some of us agreeing to disagree with others. At least the 1st Amendment still covers that, and so long as we're civil and intelligent, no harm is done. And thanks to Kenny for allowing us to do it here. It is greatly appreciated.