FULFILLING DEMAND: GM to boost output of its large SUVs (WTF?)

[Bozita]

Gas prices keep climbing. National average is now in the $2.60/$2.70 range.

And GM is gonna build more of its jumbo SUVs.

This makes no damned sense. Maybe 9/11 really did change EVERYTHING.



http://freep.com/apps/pbcs.dll/article?AID=/20060322/BUSINESS01/603220415

Auto news
FULFILLING DEMAND: GM to boost output of its large SUVs

March 22, 2006

BY MICHAEL ELLIS
FREE PRESS BUSINESS WRITER

With the new Chevrolet Tahoe selling briskly, General Motors Corp. told workers at three assembly plants that it will increase production of its family of new full-size SUVs by about 11,000 to 12,000 a year, a GM spokesman said Tuesday.

Despite high gas prices, GM expects strong demand for its new large SUVs coming to market, including the new Cadillac Escalade, Chevrolet Suburban and GMC Yukon XL. They are among the company's most profitable vehicles.

GM will increase the number of large SUVs coming off the production lines at plants in Janesville, Wis., and Arlington, Texas, in June and at Silao, Mexico, in July, GM spokesman Dan Flores said.

Earlier this month, GM said it pulled ahead production of the Suburban and Yukon XL by two to three weeks.
Wall Street analysts expect the automaker to partly rebound from last year's losses of $10.6 billion with sales of large SUVs

[nascar55]

1. GM in

Bed with big OIL? :think:

[Coastie for Truth]

26. An interesting internet experiment (VICE IS NICE - INCEST IS BEST)

Start from the Securities and Exchange Commission's "EDGAR" database - http://www.sec.gov/edgar.shtml - or one of the commercial versions -- http://www.edgar-online.com/ or http://freeedgar.com/.

Take the GM, Ford, and Daimler-Chrysler directors, outside law firms, and outside auditors. Search on them.

NOW TAKE THE MAJOR OIL COMPANIES - ExxonMobil and TexacoChevron. Search on their directors, outside law firms, and outside auditors.

Yahoo or Google a few of the people.

"Nobody is six clicks away from anybody else."

A tight little oligarchy -- like I said
VICE IS NICE - BUT INCEST IS BEST
especially between the auto industry and the oil industry.

[physioex]

2. Twinks...

Imagine at $3/gal and a 30 gal tank. That is $360/month on gasoline alone.

[nascar55]

7. make em

sell em why you can I guess......one day we will wake up I hope...:bounce:

[physioex]

24. I hate to this but....

In some ways the demise of GM might be all the better. If they can't get their act togethor and build a better product then it's time to make way for those that can. Look around now days how many chevrolet, pontiac, and buick cars do you see? Growing up, I would mostly see domestic cars only...

[Coastie for Truth]

28. 8 out of 10 cars on the streets here (CA) have foreign name plates

Camry and Accord are the biggies - and enough hybrids that you no longer look twice.

[AndyTiedye]

41. A Hummer that Used to be Parked Down the Road Seems to Have Been Replaced…

…with a Prius.

[Tight_rope]

43. Wow they jump from total imbecile to genius!

[AndyTiedye]

50. I Think the Prius May be the #1 New Car in Northern California

I see more of them every day.

[physioex]

53. They have lots of benefits.....

You can drive on the commuter lane even with one person, exculsive parking spots, and some tax incentives (all of which I am for) probably drive sales....

[wordpix2]

16. That's if you fill once/wk. If you fill twice, it's $720.

[physioex]

21. Lots of wasted money....

You wonder how people afford that much....

[teknomanzer]

64. My car is worth $720...

maybe not even that... where are peoples priorities. Where the hell did americans get this great sense of entitlement. Why do we deserve to comsume so much while others go without? Does anyone even ask themselves that question. I sometimes think about how rich I am compared to some poor villager in Africa who can barely afford the clothes on his back... while I bitch about not having the latest and greatest bit of high tech... it puts it all back into perspective.

[ET Awful]

3. Hey GM . . . those big SUV's are the reason you're in so much

financial trouble as it is.

Or did you forget that SUV sales were down last year? http://seattletimes.nwsource.com/html/businesstechnology/2002261963_autosales04.html

[DUHandle]

4. Makes sense to me

If GM's biggest seller is a money maker, they will make more of them. Nothing wrong with that.

From what I've read, the future demand will be for more energy efficient vehicles, so their gain will be short term. Nothing wrong with that either.

[O.M.B.inOhio]

14. It is wrong

It is wrong that SUVs exists because of a loophole meant for farmers, contractors, etc.
It's wong that SUV drivers are the most arrogant and dangerous drivers out there (from my nonscientific observations). They're also an added danger because they're so damed hard to see through or around, and drivers get important visual cues through the cars ahead of them. Crashes involving SUVs and smaller cars are more often deadly for the small car's occupants than between like-sized vehicles. Doesn't it resemble a kind of class warfare?
It's wrong that SUVs use more fuel and cause more pollution to do the same job as a more efficient vehicle.
It's wrong because the impact of gas guzzling vehicles lasts as long as the vehicles themselves and doesn't vanish when better cars appear.
It's wrong because SUVs represent Red State arrogance and a sense of American entitlement.

But IF they make money for the company, then it's OK from a business perspective. So is failing to recall vans with defective latches if the cost of recall is less than the cost of wrongful death suits.

[DUHandle]

27. Market Realities...

If you’re referring to the M.P.G. exemption that car manufactures can get by claiming that a vehicle is a truck (the Neon, for example) as the loophole, sure, it’s sleazy.

SUV’s and all those other big vehicles are trucks, if you want to consider construction, engine, power and all those other things.

I’ll be the last person to jump on the, “It’s my RIGHT to buy whatever car I want“, but the simple fact is that people can buy any car they choose.

[AndyTiedye]

49. THIS SUV Doesn't Need Any MPG Exemption. And It's Union-Made in the USA

Ford Escape Hybrid
EPA 29/34 MPG (for the 4WD, the 2WD is 31/36)
and it actually gets it.

The RAV4 we traded only got around 22.
We live in the mountains.
Regenerative braking ROCKS!

[Coastie for Truth]

29. Remember the Checker Marathon?

<>

Checker tried to market a 4wd station wagon - but the EPA would not certify it as an SUV. Folklore is that after losing that battle Checker closed up.

[DUHandle]

31. The Checker is

so cool!

[wordpix2]

17. doesn't to me. Last time gas price went up, lots of people sold SUVs

and there was a glut of good newer used ones at lower-than-usual prices. That will cut into new SUV sales as gas prices rise again.

[Bridget Burke]

30. There's a Cadillac dealership near one of the downtown Metro stops.

(Yes, there's mass transit in Houston!)

Their used car lot is FULL of Escalades.

[Tight_rope]

44. Tell me about it!

I live in Houston and I'm trying to buy a new car. I really want an Altima. But damn the prices of all the foreign 4 door cars is ridiculous. I can't believe the cheap prices of the gas guzzling SUV's. They are giving them away damn near free.

[musiclawyer]

51. google Hyundai Sonata + edmunds

excellect, affordable 4 door

[DUHandle]

34. It’s what people buy

and not what they sell that trips the car manufacturer’s triggers.

The glut of used Escalades means that a bunch of new Escalades were sold.

[RaleighNCDUer]

38. Well, of course they're going to sell them

when they're practically giving them away. With the 0% financing, huge rebates, etc., that are designed to move the product an SUV comes out being cheaper than a hybrid, and then they push the safety -- not talking about roll-over, but about collision between a massive truck and a Japanese import "which one makes you feel safer?"

Most people are very poor shoppers and lack the anylitical skills to see through the bullshit the auto makers spend millions on putting out. But the nearly-new previously owned SUVs on the market are a clear indication of one thing.

Buyers' remorse. Big time.

The company that gets ahead of that wave is the company that will survive. GM and the other dinosaurs are going down.

[AndyTiedye]

42. They Are Reacting to the Price Drop from Several Months Ago

So all those SUVs will hit the market just as the gas prices go back over $3
and they will sell about as well as 8-day-old fish.

[bullwinkle428]

55. They could have been trading them in for a CTS -

CTS gets 27 highway mpg.

[leesa]

35. Guess what. They're going under...this will allow them to go under so

that they can fulfill their dream of bankruptcy, pension slashes and wage cuts. Make sense to you? They re-org and they have low paid workers without benefits...the Republican dream.

[RaleighNCDUer]

39. You may be on to something there.

There's more than one way to break a union.

[Tight_rope]

45. Ding! Ding! Ding!....We have a win! You are on to something big!

[DUHandle]

58. GM, at least,

has been ‘going under’ for years.

From the largest manufacturer of vehicle in the world and in the U.S., they became an average player in the U.S. market.

To get there and meet their short term need for profit, they sold EMD, their locomotive division, once the largest in the U.S. and their profitable financing arm, GMAC to keep their losses minimal.

A few months ago, Delphi’s financials had to be revised over a questionable sale of electronic equipment in a Mexican plant.

While all of this has been going on, GM has been building their retirements costs which are ‘paid’ by the sales of vehicles.

Today’s buyout announcement is more of the same: early retirement for a huge amount of baby boomer's. Figure health care costs to rise and this new group of pensioners to live another 20 to 30 years, and you’re at one the next milestones of financial ineptitude.

The UAW isn’t killing GM; it’s job is provide the best possible contracts for it’s members, and the union is going its job. If the contracts are toxic for GM, well, GM shouldn’t have signed them.

GM is going down because they never adjusted their culture to their lessened role in the market.

Cheap labor might be a goal of the GOP, but it’s not as important to the GOP as keeping the campaign donations coming in.

[ChairmanAgnostic]

5. but large vehicle sales are eroding. So say indie reports

They are NUTS.
but we knew that already.

[NoPasaran]

6. They wouldn't be building them

If no one was buying them.

[Daphne08]

8. This is true.

So many in this country are in denial however.

[NoPasaran]

22. True

But reading some of the other replies on this thread makes me think that SUV buyers aren't the only ones.

[xultar]

10. Ding Ding Ding. Southerners and Fundies with these mammoth families

love those big suvs. It doesn't mean they aren't doing some in hybrid and with better energy engines.

[Tight_rope]

46. I just don't get it....Mom had 5 kids...

5 kids and 2 adults fit in a Ford Thunderbid back in the 70's. But I have friends with no kids and they have SUV's. Oh well stupid is as stupid does. It's not my money!

[xultar]

54. Seatbelts. You can still do 5 kids and 2 adults in a car. Just that some

won't have seatbets is all. You can actually seat 8 adults in a car or maybe 10. Hell let's just do a old Volkswagen crammin and see how many we can get.

[susanna]

67. GM is not producing any meaningful amount of full hybrids...

...at the moment, as far as I know.

By full hybrids I mean something that can run off of 1) battery power, 2) combustion engine power, or 3) a combination thereof. Full hybrid systems usually contain very large battery packs. As far as I am aware, GM does not use those extensively as of yet.

[TommyO]

9. And they cut production of their largest car

the Impala which carries five people and their luggage just like the trucks mentioned, but gets up to 31mpg on the highway in base trim.

Autoweek: More from Less

DETROIT -- How do you make more profit while selling fewer vehicles? By controlling inventory and squeezing more revenue out of each transaction.

General Motors is capping production of the Chevrolet Impala sedan at 250,000 units for sale in the United States and Canada this year, a knowledgeable source says. That means GM is sacrificing about 60,000 sales of its best-selling car. GM also will emphasize higher trim levels to increase transaction prices.

They still don't get it!

[xultar]

11. Have you seen the Impala? IT is as ugly as a clusterfuck...they

designed it into a grave. Just cuz people want energy efficient stuff doesn't mean they want a damn fugly ass car. IT is a great fleet car but other than that I don't see a lot of people driving it into their personal garages.

[wordpix2]

18. I had to rent one last summer (no other choice) and it's NOT good on gas

[high density]

66. Yeah they destroyed it

I wasn't a huge fan with the previous Impala design, but it grew a bit on me. Unfortunately they certainly have, as you said, "designed it into a grave" with a continuation of the "let's have cars with front ends that look kinda like an ugly minivan" style that started with the redesigned Malibu.

[sarcasmo]

12. GM is DEAD and still doesn't get it. Gas climbing, build more SUVS.

Repeat until company is Bankrupt.

[AlCzervik]

13. i was at Costco on Sunday and they had a new Yukon out front

it's pretty large and it's morphing into a Ford Explorer, it was also $43,000 and got 15 mpg.

[wordpix2]

19. $43K and 15 mpg? chump change for * cronies

[AlCzervik]

20. 43K and it wasn't even 4 wheel drive.

[KittyWampus]

15. This might be false. A PR attempt to manage public perception-

how to get people to buy the SUV's that are sitting on the lot and increase sales when demand is starting to drop?

say the demand for larger SUV's is strong... put out bogus info that they are increasing output to satisfy non-existent demand.

People don't want to buy SUV's that already are on the lots if they think they are out of fashion.

[mn9driver]

23. SUV's are high-profit vehicles.

This is just another example of GM management trying to maximize short term revenue at the expense of the long term health of the company. They will tank within a few years.

[Gin]

25. this reminds me of ENRON and Kenny Boy......I wonder if this is true..

color me suspicious.

[DUHandle]

32. GM Delphi UAW News

http://www.msnbc.msn.com/id/11957866/

[donkeyotay]

33. These are just the jumbo gas hogs for the really rich and stupid

Buy one of these babies and you get a special tax break from the crime administration.

[wordpix2]

61. 'Come get yer Big &Stupid SUVs for the rich & stupid buyer!'

[BiggJawn]

36. I think it's propaganda, like soviet-era production figures.

If you believed what R. Moscow said, every farmer in the Ukraine owned 6 tractors.

[Sapere aude]

37. Damn, GM forgot to check with DUers! SUV's owners deserve the finger and

more! Anyway that's what I read everytime there is a SUV post.

[RaleighNCDUer]

40. Naw. SUVs just get derisive laughter.

I save the finger for the Hummers.

[wordpix2]

62. you wouldn't be defending SUVs if there were gas rationing--you'd be

jettisoning it.

Maybe if things get really bad in future, they will be retrofitted as homes for singles and couples.

[goforit]

65. The way I see it let the SUV's digg their own grave!!

[Jack Rabbit]

47. I repeat: The world would be a better place without GM

Those who say that we need well-educated elites to run businesses and government must really have a hard time defending their thesis nowadays. It's not just that people like Bush (Yale graduate and Harvard MBA) run the government, but look at decision like this one from the private sector.

Can you really convince me or any one else that the assembly line blue collar workers with their high school diplomas and a year or two of college couldn't make a better decision than this? That they would even consider making a bonehead decision like this?

I'm not a socialismo o muerte kind of guy, but if this is capitalism, let's try something else. This kind of thing doesn't help either consumers or workers. It's just stupid and the problem looks to be systemic.

[BrightKnight]

59. 45 year old retreads

American auto makers have been retreading their designs for the past 40 to 50 years. The 1960 Ford F100 is not fundamentally different from a 2006 Ford F150. The 1960 Suburban has not fundamentally change either. We have the most backward looking car companies in the world.

I do not have a problem with tradition but this is incestuous.

--------------

Making huge SUVs is like speaking really loudly when you have nothing to say. They are desperately hoping that nobody will notice that their vehicles are uninspired.

--------------

I support the UAW and like most people I really want to buy an American car.

Some of the retro cars are inspired. I love the new Mustang.

I want world class, inspired, all foreword looking design and engineering. I want a car that is moving foreword. I have seen some very positive changes in the past couple of years.

[BigMcLargehuge]

48. If you wonder why their profits are in the shitter?

Here's your answer...

[sakabatou]

52. Doesn't GM realize that SUVs are dwindling in demand

while small, high mpg cars are in?

[ImNotBuying]

57. what about the foreign Jumbo trucks?

If it's dwindling so bad why is nissan and toyota creating those monsters like the "Armada" for the US market. WTF? Like we need battleship imports too? I think the american consumer is living in a live now pay later fog. Deficits? No problem, it's the American way I guess.

[bullwinkle428]

56. If they wanted to insure some kind of long-term strategy for

"SUV survival", they would push for the implementation of clean (ultra-low sulfur content) diesel, so they could put the much more fuel-efficient diesel engines into the SUVs. But the problem is, these frigging (* administration) morons have delayed this EPA initiative for the last 5 years! Tell me there's not an unholy alliance between GM and big oil...

[madmark]

60. if they have a market for the vehicle fine; but it seems to me that GMs

product line is not diversified, weighted heavily on the large suv gas guzzlers, and they are getting killed by being so exposed to the price oil without products such as the Prius to take advantage of gas price spikes. Its just stupid business.

[B3Nut]

63. Granted, the '07 Tahoe can run E85

And has a 15 city/21 highway EPA rating which is a lot better than the previous Tahoe's 13/15 (oiks!). But there's limited call for such huge vehicles in reality. At least the huge thing can run mostly-renewable E85 fuel if the owner desires (and my boss, who's looking at one and is a DUer too, would burn the E85 in it). But Detroit needs to get on the stick for efficient cars, especially handy, small hatchbacks. I needed to replace my Escort ZX2 with an automatic (wife can't drive stick), and I wanted the most mpg I could afford. Closest thing Detroit offered was a Ford Focus (26/32), and the Korean-made Chevy Aveo (26/34) hatch. The Scion xA (31/38) and Kia Rio5 (29/38) offered better mpg and were frankly tighter cars. My wife didn't like the Scion's looks so I got the '06 Kia Rio5 (redesigned for 06, based on the 06 Hyundai Accent). Superb car. Detroit doesn't have anything quite like it.

Unless you go to Europe. But Detroit's best designs stay in Europe. We get the leftovers. Japan and South Korea get it. Detroit doesn't get it. And now it's showing.

Todd in Beerbratistan