More trouble for Detroit
 

Good grief! Even Chrysler will post a decline.

More trouble for Detroit

Modest rise at GM falls short of forecasts; big drop in truck sales slams Ford; Toyota keeps gaining.
By Chris Isidore, CNNMoney.com senior writer
September 1 2006: 5:00 PM EDT
NEW YORK (CNNMoney.com) -- Pickup and SUV sales struggled last month as Americans turned to more fuel-efficient cars - a shift that spelled more troubled for Detroit's Big Three automakers.

General Motors (Charts) reported about a 4 percent gain in U.S. sales last month from a year earlier. But when adjusted for an extra sales day in the most recent month, sales were essentially flat.

The 4 percent gain in sales was below the 10 percent rise forecast by sales tracker Edmunds.com. And the gain was attributable mostly to the comparison to weak August 2005 sales, after GM's June and July sales got a big lift from its popular "employee pricing" incentive.

GM did see about the same gain in sales in both its car and its truck models. And the company said its retail sales, which excludes fleet sales to businesses, rose 8 percent in August.

GM also said it would cut its North American production target by 12 percent, or 150,000 units. It said the reduction comes as it ramps up assembly lines for new versions of its full-size pickups and in the midst of an ongoing reduction in sales to rental car companies, rather than being prompted by any reduced sales outlook.

GM shares rose about 2 percent in afternoon trading.

Further sales slide at Ford
No. 2 U.S. automaker Ford Motor (Charts) reported that U.S. sales of its key light truck models plunged 20 percent in August. But car models rose 8.5 percent from a year earlier.

High gasoline prices hit sales of pickups and SUVs, leaving total sales off nearly 12 percent at 255,122 vehicles, about in line with the forecast of sales tracker Edmunds.com. For the year to date, U.S. sales are down nearly 10 percent.

George Pipas, Ford's U.S. sales analysis manager, said that year-over-year sales comparison should be much easier in the coming months because, unlike GM, Ford was still seeing strong August sales a year ago thanks to its own employee pricing offer.

But he said that the sales of large truck and SUV models will likely continue to be hurt by high gasoline prices.

"I think there is still more fallout to occur in that category," he said when asked about the future of SUV sales. "Many consumers have either opted out or decided they will opt out over the next 12 to 18 months."

Ford stock sank about 2 percent in midday trading. The stock jumped 25 percent last month as Ford said it would announce new restructuring plans in September to try to stem ongoing losses.

In July Ford (Charts) saw U.S. sales fall behind Toyota Motor (Charts) for the first time. Even with the decline in Ford sales and another gain in Toyota sales, Ford was at least able to edge back into the No. 2 sales position in August.

Toyota reported a 12.6 percent gain in August sales when adjusted for an extra sales day. Overall sales rose 17 percent to 240,178. Light truck sales rose an adjusted 8.6 percent, while car sales jumped 15.5 percent.

The Toyota sales total was just a touch weaker than the Edmunds forecasts, although it was enough to stay ahead of DaimlerChrysler for the No. 3 position in U.S. sales.

DaimlerChrysler (Charts) reported a 7 percent rise in U.S. sales for its luxury Mercedes brand, but its core Chrysler Group unit saw a 4 percent drop, leading to a 3 percent drop in sales overall. Edmunds had expected Chrysler to post a 12 percent decline in sales in the month.

Honda Motor seemed to buck the trend of other automakers, reporting a gain in sales of its truck models, led by a 15 percent gain for its large SUV, the Pilot, coupled with a 10 percent drop in sales of its car models. Its overall sales decline came to 3.2 percent,

RE: More trouble for Detroit
 

My dad gets the Kiplinger letter and they said it isn't a matter of if, it's a matter of when Ford goes under. They need 4 billion for reviving their line-up. This guy is good at predicting from what I have seen.

RE: More trouble for Detroit
 

Very sad indeed! I just hate to see American lose their jobs and American companies being hurt by foreign competition and I am not referring to our Canadian or Mexican friends but the Asian companies.

RE: More trouble for Detroit
 

I know. I'm concerned about my uncle. He works for Ford and he has a lot of stock and he swears he isn't going to sell it until it goes much higher. I'll try to talk him into selling. I hate to see his retirement go down the drain. I found a few articles that I will add.

RE: More trouble for Detroit
 

If it is in his 401K have him diversify in the other mutual funds that he probably has in the 401k program.


Remember the old saying "never put all of your eggs in one basket". Diversity, diversity, diversity......enough said.

Tell him he needs to weigh the risks on both sides and make a business decision and not an emotional one.

Sometimes we get caught in the blood, sweat, and tears in our company and it becomes emotional and unfortunately
in our global economy you can't be these days.

RE: More trouble for Detroit
 

I'll check with him. I'm going to see him tomorrow (techincally today).

Your right about diversity. If I would have put all my money in GM and not in the various other companies I have invested in, I would have lost a lot.

I think the attachment to his company is a problem.

RE: More trouble for Detroit
 

Details about Ford factories status

Ford to Cut 4Q Production By 21 Percent, Partially Shutter Some Factories
Friday , August 18, 2006

Fox News

DETROIT — In another indication of the struggling American auto industry, Ford Motor Co. (F) on Friday announced plans to slash production in the fourth quarter by 21 percent to accelerate its "Way Forward" turnaround plan.

Ford said it will begin lowering output in the third quarter, and will partially close several plants in the United States and Canada. The announcement, which marks a major downshift for the automaker, means that production for the full year will fall about 9 percent from a year earlier.

"We know this decision will have a dramatic impact on our employees, as well as our suppliers," Chief Executive Bill Ford told employees, but he said it was the "right call."

The automaker said it would cut North American production in the fourth quarter by 168,000 units and reduce third-quarter production by 20,000 vehicles.

He said full details of the accelerated plan would be announced in September.

Ford, which is battling shrinking U.S. market share and rising costs, had said it would accelerate its turnaround plan to respond to the weakening demand for fuel-hungry trucks and sport utility vehicles in the U.S. market as gasoline prices have remained high.

For the full year, Ford now plans to make 3.048 million vehicles in North America.

"We are determined to match production and inventories with consumer demand," said Ford's president of the Americas, Mark Fields.

"We'll reduce incentive spending and inventory carrying costs for our dealers — with the intent to improve residual values for our customers."

Ford, which posted a second-quarter loss of $254 million and has hired an outside financial adviser, has said it will close 14 plants and cut up to 30,000 factory jobs to return its North American unit to profitability by 2008.

The Associated Press and Reuters contributed to this report.

http://www.foxnews.com/story/0,2933,209207,00.html

RE: More trouble for Detroit
 

detroit is one big "trouble"...[:'(]

RE: More trouble for Detroit
 

I was hearing in the Detroit area, the unimployement rate was around 7 percent. It doesn't sound good for Detroit peroid.

RE: More trouble for Detroit
 

yeah...this area sucks..its one big toilet.