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GM lost $1,227 per vehicle through June, Harbour says

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http://today.reuters.com/news/newsArtic...-Aug-2005+RTRS&srch=GM+lost+%241%2c227

GM lost $1,227 per vehicle through June, Harbour says

Reuters / August 29, 2005

DETROIT General Motors lost an average of $1,227 per vehicle in the first half of this year in North America, while cross-town rival Ford Motor Co. lost $139, according to new research from Harbour Consulting.

"GM has two to three people sitting at home for every single person working today, and that has a huge legacy cost impact on them," Laurie Felax, vice president of Harbour Consulting, told an automotive conference on Monday. "It wipes away any profit that they have."

Both GM and Ford are struggling with multibillion-dollar "legacy costs," including generous retiree health care and pension benefits awarded under their restrictive contracts with the United Auto Workers union.

In June, GM also launched its big employee pricing discount program in which any consumer pays the same lower price a GM employee would pay for new cars and trucks. The discounts resulted in blockbuster sales for GM, but some Wall Street analysts said the incentives, which continue through September, are squeezing already low or nonexistent profit margins.

The employee pricing program was matched by Ford and DaimlerChrysler's Chrysler arm in July.

Through the first six months of this year, Chrysler was the only Detroit automaker to make a profit per vehicle, Felax said. It averaged a meager $186 per vehicle, she said.

In sharp contrast, the big three Japanese automakers -- Toyota Motor Corp., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd. -- all earned well over $1,000 per vehicle in North America.

Nissan earned an average of $1,826, Toyota $1,488 and Honda $1,203 per vehicle in the first half of their fiscal 2005, Felax said.

Japanese automakers, relentlessly gaining U.S. market share, have very high profits per vehicle because they have more efficient manufacturing operations and lower legacy costs, Felax said.

The relatively new plants of Japanese automakers in North America have younger workers and a mostly non-unionized work force.

Toyota, Nissan and Honda are also stepping up production capacity in North America, particularly for high-margin pickups, Felax said.

"The (profit numbers) are going to continue to grow as that mix of trucks grow for the Big Three Japanese companies," Felax said.
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Originally posted by: zainali
anyone know whats the profit per car for mercedes/lexus/bmw/luxury vehicles?
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Not sure, but I'm pretty sure that Porche makes the most per car (not sure if that is $$ or a percent of retail) of any mass production vehicle manf.
 
Originally posted by: vi_edit
Originally posted by: zainali
anyone know whats the profit per car for mercedes/lexus/bmw/luxury vehicles?
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Not sure, but I'm pretty sure that Porche makes the most per car (not sure if that is $$ or a percent of retail) of any mass production vehicle manf.
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Yep. Porsche makes more $$$ per car than anyone else...last time I checked. BMW was #2 back in 2001 or so.
 
"GM has two to three people sitting at home for every single person working today, and that has a huge legacy cost impact on them," Laurie Felax, vice president of Harbour Consulting, told an automotive conference on Monday. "It wipes away any profit that they have."
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This is exactly what's killing GM
 
http://www.freep.com/money/autonews/gm26e_20050826.htm

Rebecca Lindland, an automotive analyst with Global Insight Inc., a Massachusetts-based auto research firm, called the extension of employee pricing a kiss of death for GM.

Selling lots of vehicles doesn't necessarily translate into higher profits unless the cars and trucks are sold at the right price. Through June, for example, GM sales were up 2.1% in the United States, but the automaker lost $1.4 billion through the same period.
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Originally posted by: Viper GTS
To all Detroit autoworkers:

What good is your union going to do you when your employer doesn't exist?

Viper GTS
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It does seem painfully obvious, doesn't it? Like who is going to pay all those retirement funds once they've been driven out of business?
 
Originally posted by: dartworth
yes, it's all the unions fault...:roll:

idiots...
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Uh, it really is a large pecentage of their problems. Their union employees are paid a premium, have some of the best health benefits in the nation, and some of the best retirement and health care packages for retired employees in the nation.

Their healthcare commitments and retirement accounts are snowballing into a disastrously large number. One that eclipses sales. By a large volume.

GM needs to trim the fat on union benefits.
 
Originally posted by: nakedfrog
Originally posted by: Viper GTS
To all Detroit autoworkers:

What good is your union going to do you when your employer doesn't exist?

Viper GTS
Click to expand...

It does seem painfully obvious, doesn't it? Like who is going to pay all those retirement funds once they've been driven out of business?
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The workers. Where do you think the retirement comes from? A smaller percentage of the "dues" that they pay out of each paycheck.
 
Yup just like HP cut a lot of the retirement gravy, and some of it for the working stiffs too
I know their service guys have new vehicle mileage plans.
 
yes, it's all the union's fault... idiots...
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The American automobile industry still relies on antiquated technologies and processes for manufacturing vehicles...and the corporate structure of the American automotive industry is still very much a management vs. union mentality...corporate management is part of the problem...unions are no less part of the problem.

Ironic that Japanese car companies have established production facilities in America, are not unionized, and are able to squeeze out larger profits due to their streamlined production processes.

Unions once served a noble purpose in this country in response to a problem...now they are part of the problem.
 
GM, Ford, and DC negotiate these contracts with the UAW. If anyone is to blame, start at the top. Start with all the mismanagement that is going on with the big 3.

It's TOO easy just to say it's the "union's fault".
 
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