General Motors stock drops 14%

[altiain]

LInk to news article.

GM's stock dropped 14% on the Dow today, after they revised their revised their 1st quarter earnings report to expect a loss of about $1.50 per share.

Things don't look so hot for the General, and I can't say that I see much in their current (or upcoming) product lines that could help pull their irons out of the fire.

[POS Racing]

DETROIT - Ford Motor Co on Wednesday said it expects profit for 2005 to be at the lower end of its previous forecast, soon after rival General Motors Corp dramatically slashed its earnings outlook.

posted Feb 8, 2005

General Motors Corp. has shut down production of Saturn vehicles this week while Ford Motor Co. has temporarily closed a plant in Ontario that builds cars for police departments across north America.

The temporary shutdown of a total of four GM and Ford assembly plants is part of an ongoing effort by both companies to reduce inventories of unsold vehicles now crowding dealers' lots.

It's not just a GM thing.

[black roadster]

Things don't look so hot for the General, and I can't say that I see much in their current (or upcoming) product lines that could help pull their irons out of the fire.

The Soltice and Sky twins look promising even if they are over weight. I predict good sales.

[channelmaniac]

Yeah,

But I predict they won't sell enough of those cars to pull their arse out of the hole it's in.

I always was more of a Ford/Mazda guy than a GM guy so it doen't break my heart about GM's stock sucking wind.

It's funny, you take a big company and when they lose money out the arse they start downsizing... And as they start downsizing they start making a profit again... then they start growing again... Then they screw up and start losing money again... It's a cycle. Granted, it's a cycle you have to be 'so big' to survive... but still... it's a cycle...

RJ

[altiain]

Things don't look so hot for the General, and I can't say that I see much in their current (or upcoming) product lines that could help pull their irons out of the fire.

The Soltice and Sky twins look promising even if they are over weight. I predict good sales.

Yeah, but the Skystice is a boutique car. The problem is, the interesting boutique products that the General makes (like the Skystice and Corvette) won't survive if they can't figure out a way to be profitable with their bread & butter products.

Unfortunately, their bread & butter products are crap. GM spent the bulk of the late '90s and '00s investing heavily in trucks and SUVs, and suprise! Those sales are now tapering off as crossovers mature, the market becomes saturated, and energy costs rise. As a result, their investment in bread & butter products has suffered. Do you know anyone who would seriously cross-shop a GM product against a Camry or Accord? How about a Civic or Corolla?

[POS Racing]

Actually if you take a look at GM they are coming out with a bunch of new vehicles, Buick and Cadillac are leading the way. Car & Driver actually had a favorable article on the new Cobalt which was directly compared against the Civic & Corolla.

Most analysts would tell you that GM initial forecast for '05 was overly inflated.

[altiain]

Most analysts would tell you that GM initial forecast for '05 was overly inflated.

Generally if the analysts think that a forecast is that overly inflated, the stock doesn't drop 14% when the forecast is revised to meet the analyst's original expectations.

[black roadster]

I am definitely more of a FoMoCo/Mazda guy too. Never did care for most GMs.

Exceptions:

C5-C6 Corvette
the "new" edgier Cadillacs
that's about it...

You're right about GM's lack of producing anything worth while.

It seems the only one's buying GM (Cars) are tried and true GMers, people under the mistaken assumption they only buy American and want an American car, and old Chinese people (who still hate the Japanese from what they did in WWII to the Chinese people)

With the exception of the Vette, Caddys, and their SUV/Trucks GM always seems to drop the ball.

Case in point:

The Pontiac GTO is a plain vanilla travesty that doesn't deserve the GTO name.

The Pontiac ASStek is, well, uglier than ASS.

Other American car companies have "built excitement" into their cars.

Ford has the new Mustang, the T-Bird, the 500, Freestyle and nay even the Focus. All attractive cars in their own way.

Chrysler has been even more adventurous with the Viper, Prowler, PT Cruiser, Neon and Magnum and it has turned that company around. I remember when the most exciting thing they had was that piece of crap Daytona and the Eagle Talon/Plymouth Laser rebadged Mitsus.

It seems GM is either afraid to take chances or their designers all suck.

GM also made a BIG mistake in killing the Firebird/Camaro which were huge brand identifiers. I'd love to see a retro themed 67 Camaro on the new car showroom floor or a Smokey and the Bandit new Firebird.

Pipe dreams I suppose...

[POS Racing]

Most analysts would tell you that GM initial forecast for '05 was overly inflated.

Generally if the analysts think that a forecast is that overly inflated, the stock doesn't drop 14% when the forecast is revised to meet the analyst's original expectations.

True but along with Chrsler, Ford, and GM they all took a tumble this week. Anytime a corporations issues a negative forcast revision there will be an inital dip in the stock.

Last year GM earned $3.6 billion, or $6.40 a share, from continuing operations, including $2.9 billion from its financial services unit GMAC.

Try not to belive all the hype you read on the internet.

[Titus]

Most analysts would tell you that GM initial forecast for '05 was overly inflated.

Generally if the analysts think that a forecast is that overly inflated, the stock doesn't drop 14% when the forecast is revised to meet the analyst's original expectations.

True but along with Chrsler, Ford, and GM they all took a tumble this week. Anytime a corporations issues a negative forcast revision there will be an inital dip in the stock.

Last year GM earned $3.6 billion, or $6.40 a share, from continuing operations, including $2.9 billion from its financial services unit GMAC.

Try not to belive all the hype you read on the internet.

Very true. The banking industry has been known to regard GM as a major threat in the financial industry to be watched closely. The fact that they have to build and sell cars is only holding them back.

[Mathews2004]

Last week on Wheels with Ed Wallace (AM 570, Saturday mornings) he mentioned if GM went below $30 he was a buyer. OT, but any other Wheels listeners? I like the historical and industry info, but don't always agree with his car reviews. Example: he recommends the RX8 with an automatic.

[altiain]

Last week on Wheels with Ed Wallace (AM 570, Saturday mornings) he mentioned if GM went below $30 he was a buyer. OT, but any other Wheels listeners? I like the historical and industry info, but don't always agree with his car reviews. Example: he recommends the RX8 with an automatic.

This guy?


Personally, I think Ed Wallace would have trouble finding his ass with both hands, a map, and a flashlight. I've read better automotive journalism on the back of box of brake pads.

[ccage]

Iain, I don't really know anything about Ed Wallace, but this:

he recommends the RX8 with an automatic

...is enough to convince me.

Chuck