If GM FAILS

[sparky216]

guess I should read the entire thread before my response....sorry for the redundant posts that other members already made.

[dogbert]

guess I should read the entire thread before my response....sorry for the redundant posts that other members already made.

We'll just chalk it up as a senior moment

[mtnsmith]

Too expensive for who? Each dealer must presale 30. From what I hear back in Detroit, orders are full.
Price is realitive. Look at ski boats. Way over priced.
If you want one, you'll find a way to get one.

Too expensive to compete with the mustang and challenger. It's not a corvette and not near the performance. You can get a few year old vette of the c5 body style for the less $ and have a much better performing vehicle. Like you said, someone that wants one will get it, somehow. But it is not going to appeal to the number of people that it needs to in order to be successful.

[MoneyPity]

Actually, chapter 11 doesn't mean they go away. It could actually help them to start over.

That is one of the top reasons many companies go for protection under chapter 11. It is not a confidence builder when buying boat or car. Cars you still have many viable choices but with boats in our size ran the major supplier supplying engine blocks is GM so it would be time for the top marinizers to find a new block to work with for new boats and hope that there is a spares inventory for Vortec blocks setup before MP, PCM and Indmar marinize them.

[illiniboarder88]

I honestly believe that the automakers are exagerating the severity of their problems. I'm sure they aren't in good shape, but it appears that everyone out there is seeing this as an opportunity to get rid of bad investments that have plagued them for years. The automakers are doing the same thing. I think a lot of people miss a serious part of the union problem. A big part of what is plaguing the automakers involves legacy costs. Benefits owed to retired workers and workers with serious seniority ad insane cost to the automakers' labor costs. The new people that are being hired do not get close to the same level of compensation, and I don't think the changes for 2010 are going to be retroactive. I seriously doubt those changes actually cut the benefits of retired workers. I find it to be an interesting situation because it is obvious that the contracts negotiated in the past are killing the automakers. Those contracts were made during the good times when money was growing on trees. I'm not pro-union, but I will acknowledge that union workers helped in generating those huge profits years ago, and they deserved to be rewarded for it. The problem is, they shouldn't be rewarded now that those profits are gone. It will be interesting to see what a democratic congress will do, given that they are dealing with a big part of their voting base.

[TeamAllen]

I guess some engines are still made in the U.S.

Toyota 5.7 liter V8 Engine Production begins in Alabama

02/02/2007 Hunstville, Alabama
February 2, 2007 – Huntsville, Alabama - State and local officials joined Toyota officials and team members today to mark the production of the first 5.7 liter V8 engine at Toyota Motor Manufacturing, Alabama (TMMAL).
TMMAL employs 950 team members, has the capacity to produce 130,000 4.0 liter V6 engines, 120,000 4.7 liter V8 engines, 150,000 new 5.7 liter V8 engines annually. The total investment is $490 million.

TMMAL, which opened in 2003, supplies V8 engines for the Tundra full-size pickup and Sequoia full-size sport utility vehicle produced in Indiana. The plant also supplies V6 engines for Tacoma pickups produced in California and Mexico as well as the Tundra. The new 5.7 liter V8 engines will be used for the all new Tundra built in San Antonio, Texas and Princeton, Indiana.

Toyota Motor Corporation Executive Senior Managing Director Shoji Ikawa congratulated team members and addressed the significance of the new engine. "This is the most powerful pickup truck engine Toyota has ever manufactured not only in North America, but in the world," Ikawa said. "The engine is the heart of any vehicle. Engine performance and quality are major considerations for today’s truck customer. We know we can count on these team members to continue to deliver the high quality engines our customers expect from Toyota."

As part of the celebration, Toyota donated $50,000 to Boys and Girls Clubs of Greater Huntsville for technology and reading programs and $50,000 to the National Children’s Advocacy Center.

Kunihiko Ogura, president of TMMAL, expressed appreciation to the Huntsville community for their support.

"We are proud to be part of this wonderful community," Ogura said. "I am proud of the culture of this Toyota Alabama team. The power of teamwork is alive and well and will ensure a bright future for Toyota in Alabama."

Toyota (NYSE:TM) established operations in North America in 1957. By 2008, Toyota will have the annual capacity to build about 2 million cars and trucks in 14 plants across North America. There are more than 1,700 Toyota, Lexus and Scion dealerships in North America, which sell more than 2.8 million vehicles a year. Toyota directly employs nearly 40,000 people in North America. Toyota's investment in North America is valued at more than $17.6 billion.

Toyota produces 11 vehicles in North America, including the Avalon, Camry, Camry Hybrid, Corolla, Matrix, Sienna, Solara, Sequoia, Tacoma, Tundra and the Lexus RX350. By 2008, Toyota will have the annual capacity to build about 2 million cars and trucks, 1.44 million engines and 600,000 automatic transmissions in North America.

[spenchey2]

I guess some engines are still made in the U.S.

Toyota 5.7 liter V8 Engine Production begins in Alabama

02/02/2007 Hunstville, Alabama
February 2, 2007 – Huntsville, Alabama - State and local officials joined Toyota officials and team members today to mark the production of the first 5.7 liter V8 engine at Toyota Motor Manufacturing, Alabama (TMMAL).
TMMAL employs 950 team members, has the capacity to produce 130,000 4.0 liter V6 engines, 120,000 4.7 liter V8 engines, 150,000 new 5.7 liter V8 engines annually. The total investment is $490 million.

TMMAL, which opened in 2003, supplies V8 engines for the Tundra full-size pickup and Sequoia full-size sport utility vehicle produced in Indiana. The plant also supplies V6 engines for Tacoma pickups produced in California and Mexico as well as the Tundra. The new 5.7 liter V8 engines will be used for the all new Tundra built in San Antonio, Texas and Princeton, Indiana.

Toyota Motor Corporation Executive Senior Managing Director Shoji Ikawa congratulated team members and addressed the significance of the new engine. "This is the most powerful pickup truck engine Toyota has ever manufactured not only in North America, but in the world," Ikawa said. "The engine is the heart of any vehicle. Engine performance and quality are major considerations for today’s truck customer. We know we can count on these team members to continue to deliver the high quality engines our customers expect from Toyota."

As part of the celebration, Toyota donated $50,000 to Boys and Girls Clubs of Greater Huntsville for technology and reading programs and $50,000 to the National Children’s Advocacy Center.

Kunihiko Ogura, president of TMMAL, expressed appreciation to the Huntsville community for their support.

"We are proud to be part of this wonderful community," Ogura said. "I am proud of the culture of this Toyota Alabama team. The power of teamwork is alive and well and will ensure a bright future for Toyota in Alabama."

Toyota (NYSE:TM) established operations in North America in 1957. By 2008, Toyota will have the annual capacity to build about 2 million cars and trucks in 14 plants across North America. There are more than 1,700 Toyota, Lexus and Scion dealerships in North America, which sell more than 2.8 million vehicles a year. Toyota directly employs nearly 40,000 people in North America. Toyota's investment in North America is valued at more than $17.6 billion.

Toyota produces 11 vehicles in North America, including the Avalon, Camry, Camry Hybrid, Corolla, Matrix, Sienna, Solara, Sequoia, Tacoma, Tundra and the Lexus RX350. By 2008, Toyota will have the annual capacity to build about 2 million cars and trucks, 1.44 million engines and 600,000 automatic transmissions in North America.

And look how well Toyota did with putting that 5.7 in their Tundra. Both plants were temporally closed all summer. One close is permeant, the other is being delayed again. As for the stock piles of Tundras and Sequoias, the majority of left overs will be sent to the middle east.

[TeamAllen]

I didn't know that spenchey 2. Bad timing I guess?

I was looking for a Dyno chart for a comparison between the GM and Toyota 5.7. I found that article I posted, as well as a magazine comparison between the Chevy and Toyota trucks, but no dyno charts to explain what the OP, FIC, is saying about no torque. Can anyone else find some of that info.?

If GM fails what will the marine industry do for power plants ? The last year for Ford was 2002 and those were left overs from 1997, and havent see a chrysler marine engine in years, and the Epics with the lexus v8 was a dud, no torque, I was exhausted by the time a got on to plane , so whats left?

I'm not starting a Chevy vs. Toyota discussion. I don't care. Buy what ever you want. I am just trying to understand why the Toyota engines would be inferior.
http://www.trucktrend.com/roadtests/...g_pricing.html

[dogbert]

I ran across this article. It's a pretty interesting commentary:

http://money.cnn.com/2008/11/21/maga...tune/index.htm

GM's problem is not unlike many other companies. There's been a 59% increase in the CEO turnover rate between 1995 and 2006. By 2006, nearly 1 in 3 were forced out. CEO's are responsible for company strategy that translates to results. What's very clear is that they are increasingly unable to get it done. The current generation of CEOs at large companies operate largely by gut feel and experience. These are largely out of touch with reality and don't spend enough introspection time to tackle the really tough problems and fix them. There's a newer breed of CEO on the horizon who's much more process oriented and uses data to drive results, but they are largely in the SMB space for the time being. So, you can't just really blame it on the union, offshoring, etc. Rather, the real problem is that they make these decisions without determining the full financial impact because it's either too hard to do (or so they think) or they don't really understand the business in the first place (out of touch).

You saw many examples of this as the Jack Welch (GE) disciples gradually left GE and went to other companies. Many chose to replicate exactly what they did at GE and they largely failed or didn't achieve the same dramatic results that GE did. Some, however, analyzed the differences between GE and their current situation before adapting their strategy to their new company. These guys were largely successful and a few knocked it out of the park.

My company is largely in the business of helping companies make better decisions, so I've got a little background in this area. I will tell you that the bar is pretty low so there's obviously lots of room for improvement. I only hope the shock is bad enough where those that haven't already, will realize that it can't be business as usual.

I encourage all of you to read this article because it provides the best perspective of what these companies are dealing with and why I don't think a bailout will ever fix their problems. The shock to the system has been in the works for a long time and it really amounts is an unwillingness to let go of an old way of doing things. Like it or not, we are in a rather fluid global economy where the borders are melting away and the forces that are driving a global equalization are unstoppable. It's this friction that's largely creating the extremist reactions that we know as terrorism today (because largely tribal societies are being thrown into the modern world mixer at an alarming rate) as well as the nationalistic rhetoric from the politicians who prefer a more protectionist society here in the US.

Sorry for going so deep here, but the article really is worth reading.

[spenchey2]

I didn't know that spenchey 2.
I was looking for a Dyno chart for a comparison between the GM and Toyota 5.7. I found that article I posted, as well as a magazine comparison between the Chevy and Toyota trucks, but no dyno charts to explain what the OP, FIC, is saying about no torque. Can anyone else find some of that info.? ]

My family has 6 dealerships, so i've done a little research on this. GM half tons have 5.3s, and best mpg for half ton market. The Tundras 5.7 gets really bad mpg (don't remember number), and pull less than almost everything that i've looked at. Be skeptical of the Toyotas advertising, they tend to stretch the truth. Example, the commercial with the Tundra demonstrating stopping power with trailer, the trailer has trailer brakes.

[Surfdad]

I second dog's comments.

I think the manufacturers are accurate that a BK isn't an option, they technically aren't insolvent! If you look at GM's latest 10-Q with the SEC they show 16 BILLION in cash and cash equivalents. While they do show a deficit stockholder's equity, that is based on historical cost. The balance sheet is showing property at 42 billion, that probably has a current FMV significantly greater than that. The BK courts would, no doubt, boot them out.

As mentioned earlier they do book a liability for unfunded pension costs, as well as, other post retirement benefits - those are things like medical insurance for employees for life. It's the current value of PROJECTED future costs. So they are certainly much healthier than they appear on paper.

The real issue to me, is they are retarded in terms of production costs. The most recent P&L shows that they have sales of 117 billion for the last 9 months (way down from prior years) but that the cost to manufacture those units was 116 billion. The gross margin is something stupid like 0.93% A significantly higher ratio than in the past. I'd love to see the detail of the cost of sales compared to prior years.

What is that old saying? We lose money on each unit, but we make up for it in volume.

[dogbert]

What is that old saying? We lose money on each unit, but we make up for it in volume.

This is what happens when you listen to sales and focus only on gross margins. You're counting on the fact that the company will cover it's overhead (all your other costs above and beyond cost of goods sold, aka COGS) beyond a certain threshold in volume (i.e., the net margin after taking into account all your other costs). The only problem is that most companies have absolutely no idea what that threshold is. In GM's case, the net margin is far smaller than they think and most probably is below zero. For some products, it's entirely possible that even your net margins will never be above zero. In this case, pumping up volume only further accelerates your decline (we call it the death spiral...think of it like a floating object that gets sucked down the little whirlpool in a bathtub that's draining). While I'm not in favor of a bailout, I could be persuaded IF they were forced to figure out what their net margins actually are AND they were required to present a plan that included a detailed strategy to make them self-sufficient at a not too distant point in the future. The concern I have is not only with the management team's ability to actually pull this off, but the Board of Director's willingness and patience to let them do this. Unfortunately, we're in this vicious cycle of focus on short-term results instead of long-term economic value creation.

[mtnsmith]

FICs comment about no torque was referring to the toyota epic boat that had the lexus ls400 v8 4 liter and 265 hp. Not the 5.7.

[FIC]

As pertaining to my comment about the Epic boats and the lexus v8 being a dud, I didnt mean that toyota builds a bad product, what I was refering to is the japanese engines normally are short stroke , which will show good hp but poor torque ,which is needed to get a good pull for skiing. The Epic that I used to ski behind was 300hp but I had to work to get my 200lbs on plane, and even after being up at 32mph when I would cut I could bring the power down which isnt comfortable going through the slalomn course.

[noworries]

If GM goes bust then work out a deal with Cummins. Ready made ballast and all the torque you could want for hole shots. Not many diesel pumps at the lake, however.