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Honda posts first quarterly loss in 15 years
- Thread starter MikeMike
- Start date
This is something that should actually show that there is no automotive company safe... The drastic reduction in car purchases has thrown the entire industry into peril... Everybody has been building more and more vehicles, it was a bubble produced by the over consumption throughout the US and the world... the bubble has burst, but we will just go right back to it....
soccerballtux
Lifer
They and Toyota would be doing great if GM et al had failed. There's oversupply in the economy. Too many car makers and not enough buyers.
Any sales GM has picked up would have gone to Toyota and Honda; and they'd be doing better now.
Government is basically penalizing Toyota and Honda for out-innovating GM and the Detroit guys.
Any sales GM has picked up would have gone to Toyota and Honda; and they'd be doing better now.
Government is basically penalizing Toyota and Honda for out-innovating GM and the Detroit guys.
soccerballtux
Lifer
Suppliers....blah blah...this issue has been brought up and million times and been disproven a million times...people really need to stop mentioning it.
WhipperSnapper
Lifer
If GM and Chrysler went under, further damaging the American economy, then fewer Americans would be able to afford to purchase new cars of any nameplate, including Honda and Toyota.
I didn't think it was possible that Honda in its current form and overall health could ever post a loss.
This is not a bubble, this is a temperary hit on automobile demand. When the economy is tough, big ticket item like cars get hit first. People will hold on to their old cars longer or buy cheap used car instead of new cars. I don't think anyone expect this tough economy to last forever, so the auto demand should recover as the economy recovers.
And no, not everybody have been building more and more cars. If you know anything about production management, you'd know that car manufacturers, especially Japanese have adapted things like Just in time manufacturing to adjust production according to demand on the fly. The only problem is fix cost like plants and administrative expenses are hard to cut. But good auto companies like Honda can still deal with it using flexible production management techniques, and come up with profit somehow for the year.
Companies like GM and Chryslers are just F'ed. They have been losing money before the bad economy, and the bad economy just make it worse. Their production management is not as good as Japanese, and they are bond by bunch of UAW agreements from having a flexible and efficient production/manufacturing control and management.
This tough economy is just gonna kill off auto companies with bad management and baggages like UAW. There will be consolidation, good companies will come out of this in a better position with less competition.
Engineer
Elite Member
Why? I work for a supplier that supplies every car manufacturer that you can name and we're not doing to well, and we're much better off than the competition. Suppliers are bleeding badly and are very close to filing bankruptcy. While many car companies typically use multiple suppliers (just in case one shuts down), the problem that all suppliers are in terrible shape throws that right out the window.
Show me something that disproves it (since it's been shown a million times). My CEO has shown us enough company charts as well as competitions numbers to disagree with you.
Side note: It's interesting to note that the scrap rate of cars (wrecks, wearing out, etc) is rapidly approaching the yearly sales of cars (converging on each other). Something will eventually give. Going from 16 million units per year to 8.5 million units per year does that for you.
boomerang
Lifer
Engineer, I don't really know what it is that fuels their attitudes towards this. Like you, I have seen nothing that disproved the relationship between car makers going down and suppliers falling also. To the contrary, I've posted in the Garage before that so many suppliers have closed their doors or gone bankrupt, that GM is having an extremely difficult time sourcing right now. Those that want to take on the work can't get financing for the expenditures needed, and those that are capable of taking on the work are hesitant to do so due to fears that GM will go under.
Delphi, one of GM's most critical suppliers has patents on a small number of components that are used in every car GM builds. If they go under (I believe they will based on rumblings in the area) they will bring down GM within days.
I think that some of the people in the country are so entrenched in their favorite car maker, that they are truly in denial regarding the shared relationships between suppliers and car makers. I might as well spell it out. They think that Honda and Toyota quality is so superior that there is no way possible they could share suppliers with Ford and GM. Perceived notions die hard I guess. Car makers have got suppliers running at such slim profit margins, that the sudden loss of work from one major manufacturer can instantly throw them into bankruptcy.
Foreign automakers have expressed their concerns several times in the press, but I can only assume it's denial on the part of their most ardent fans that keeps these mistaken impressions alive.
imported_Lothar
Diamond Member
Who gives a crap about quarterly profits? :roll:
They still expect to post a profit for the year, and they still posted a profit last year.
If you're going to care about quarterly profits, then you better start caring about hourly, daily, weekly, and monthly profits as well.
They still expect to post a profit for the year, and they still posted a profit last year.
If you're going to care about quarterly profits, then you better start caring about hourly, daily, weekly, and monthly profits as well.
i still dont get why propping up gm or chrysler is going to result in a healthier auto market.
if demand really is down, and people are holding onto their cars longer, then no amount of money or types of cars is going to change that. it seems to me that unfortunate truth is that there is simply too many players in the game. something has to give.
if the argument is that gm or chrystler simply cannot fail because then suppliers would go under and take the other auto makers with them, then the alternative seems to be that drastic cuts have to be made. The market is smaller, that means auto makers, suppliers, etc all have to get smaller to react. obviously this cant happen overnight, but its obvious that is what will have to happen. you cant expect the suppliers or auto makers to stay as big as they are now, that would be stupid to try and sustain through bailouts, etc.
even if you were worried about suppliers going out of business people are still going to be laid off in large numbers, its already happening. the market must shrink, that means people will lose there jobs and companies will get smaller until something spurs an expansion and we do the whole cycle all over again.
my feeling is that either one of gm or chrysler probably needs to go. maybe its not feasible to let them just vanish, but i dont see how the market can support two companies in such dire straits. Ford may not be in great shape either, but they are working through this and seem to be the stronger company that deserve to make it out of this and prosper becuase of sound management.
if demand really is down, and people are holding onto their cars longer, then no amount of money or types of cars is going to change that. it seems to me that unfortunate truth is that there is simply too many players in the game. something has to give.
if the argument is that gm or chrystler simply cannot fail because then suppliers would go under and take the other auto makers with them, then the alternative seems to be that drastic cuts have to be made. The market is smaller, that means auto makers, suppliers, etc all have to get smaller to react. obviously this cant happen overnight, but its obvious that is what will have to happen. you cant expect the suppliers or auto makers to stay as big as they are now, that would be stupid to try and sustain through bailouts, etc.
even if you were worried about suppliers going out of business people are still going to be laid off in large numbers, its already happening. the market must shrink, that means people will lose there jobs and companies will get smaller until something spurs an expansion and we do the whole cycle all over again.
my feeling is that either one of gm or chrysler probably needs to go. maybe its not feasible to let them just vanish, but i dont see how the market can support two companies in such dire straits. Ford may not be in great shape either, but they are working through this and seem to be the stronger company that deserve to make it out of this and prosper becuase of sound management.
Shareholders do 😉
But seriously, this just shows how bad things are right now. Honda, for the most part, has been one of those safe companies. They don't really stretch themselves out, nor do they go for rapid expansion. They're more about consistency.
They're still pretty healthy overall though, as they said they'll still remain profitable. Honda also hasn't had to make pretty drastic cuts compared to other companies.
It will be interesting to see what Toyota posts though.
BlahBlahYouToo
Lifer
y'all should consolidate then.
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