October 2, 2009

September Vehicle Sales: Press Still Won’t Concede Possibility of GM, Chrysler Bailout Backlash

NoToGMandChrysler0109Reviewing September’s detailed sales results in the car business carried at the Wall Street Journal, three things stick out immediately:

  • The awful performance at General Motors — down 45% from September 2008.
  • Chrysler’s even worse performance — down “only” 42% from September 2008, but a mind-boggling 61% from September 2007 (62,197 in 2009, 156,799 in 2007)
  • Ford’s tiny decline of only 6% from a year ago, despite the end of the Cash For Clunkers program in August.

No other major maker had a year-over-year September decline that was even half of that seen at GM or Chrysler.

Yet the press, while beginning to acknowledge serious problems at the companies, both of which were first bailed out by the government  and then taken through government-orchestrated, contract law-violating, UAW-favoring bankruptcies (GM discussed here, Chrysler here), still will not entertain the possibility, despite the evidence, that consumers are shunning them because of their bailed-out status and their heavy-handed tactics in bankruptcy.

What follows are excerpts from three reports that covered September’s industry results.

At the Associated Press, Tom Krisher and Dan Strumpf even went so far as to try to get a comment out of Uncle Sam’s Treasury Department (bolds are mine):

A Cash for Clunkers hangover hit every major automaker except Hyundai last month, pushing down sales and leaving the industry searching for signs of a recovery in October.

U.S. sales of cars and light trucks fell to just under 746,000 in September, down 41 percent from August.

Both GM and Chrysler were the biggest losers last month, while Ford, the healthiest of the Detroit Three, reported the smallest drop of major automakers. Of the top companies, only Hyundai posted higher sales, up 27 percent from September 2008.

…. General Motors Co.’s sales plunged 45 percent while Chrysler Group LLC’s fell 42 percent. The weak results continued a string of monthly sales drops for the troubled pair. Now the question is whether their government-funded recovery plans are working.

…. A spokeswoman for the U.S. Treasury Department, which has provided roughly $65 billion to keep GM and Chrysler going, would not comment on the sales figures.

Including equity that was in effect expropriated from the two companies’ disfavored lenders, the total amount of aid provided to GM and Chrysler is significantly higher than the already huge figure the AP pair cited.

An unbylined Reuters report acted as if the two companies were innocent victims of last fall’s TARP debacle, got a “the sky is not falling” denial out of Chrysler, and noted that GM is significantly increasing production (you read that right; bolds are mine):

Sales in September 2008 were rocked by the collapse of Lehman Brothers and the financial crisis, events that pushed both GM and Chrysler to seek a federal bailout. With consumer uncertainty rising, sales in September a year earlier had dropped to a 12.2 million unit rate.

…. “In the short term, I don’t see much of change for GM and Chrysler in terms of sales declines. The No. 1 reason really is their product lineup,” said Jesse Toprak, an analyst at Truecar.com.

“The bigger question is whether they can restructure themselves to make money at lower sales levels — it’s going to be tough, obviously,” he said.

Fiat SpA Chief Executive Sergio Marchionne, who has taken charge of Chrysler’s turnaround plan after the Italian automaker took management control at the U.S. automaker, said reduced incentive spending had contributed to the depressed sales result for September.

“We are not bleeding like people think we are,” Marchionne told reporters.

…. GM said it was sticking with plans to increase production in North America by 20 percent in the fourth quarter compared with the third quarter.

…. “Clearly, the economy is starting to gain some momentum,” said GM sales analyst Mike DiGiovanni. “But we know it’s still going to be bumpy and clearly the economy is still dependent on policy stimulus.”

That would be the same “policy stimulus” that Noel Sheppard at NewsBusters noted earlier today was the subject of derisive laughter from CNBC’s Melissa Francis and Lawrence Kudlow when Former Clinton Labor Secretary and current Obama economic advisor Robert Reich tried to claim that “the stimulus package is the thing that is actually keeping the economy up, keeping people employed.”

As to “restructuring to make money at lower sales leves” — uh, I thought that’s among the reasons they went through bankruptcies. Only a few months out, they have to restructure yet again if they’re ever going to make money?

At the New York Times, Nick Bunkley quoted a Chrysler spokesman whining about allegedly tight credit, and noted that GM’s core brands fared almost as poorly as the ones that are going away:

“We believe the remainder of 2009 will continue to be a challenge for the U.S. automotive market,” said Peter Fong, the head of Chrysler’s sales organization. “Credit markets have thawed slightly but still remain tight, and consumer confidence, as we saw in September, is tenuous.”

…. At G.M., which is eliminating four of its eight brands as part of its postbankruptcy restructuring, sales for the four brands that will remain — Buick, Cadillac, Chevrolet and GMC — were down 41 percent in September.

But as usual, there wasn’t a word in any of the three reports about what I noted over a month ago at the end of the Cash for Clunkers program:

The big story in vehicle sales ever since the bailouts of GM and Chrysler commenced in December of last year has been how those two companies have consistently lost market share ever since. The press has almost dogmatically refused to consider the possibility that consumers continue to shun now state-controlled GM and shotgun-wedded Chrysler because they refuse to do business with bailed-out companies that gobbled up tens of billions of dollars of taxpayer money, running roughshod over disfavored classes of creditors and violating long-established principles of contract law in the process. Even if the avoidance in some cases isn’t ideologically based, but instead revolves around warranty and other concerns, lost sales are lost sales.

One has to wonder why the government and its car czars and onsite management at the two companies have never entertained the idea that a backlash might occur, and why it never tried to do anything about it once its presence was apparent in the marketplace. It may be that the establishment media’s refusal to take the shunning seriously is contributing to their complacency. If so, they are not doing the companies any favors.

Cross-posted at NewsBusters.org.

GM Sold 155,195 Vehicles in September

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 11:45 am

That’s according to this Wall Street Journal chart.

Chrysler sold 62,197.

I’m educated-guessing that those are the lowest monthly numbers in decades.

Even AP, which has mostly downplayed the historic swoons at the two bailed-out companies, noted the existence of serious problems yesterday:

General Motors Co.’s sales plunged 45 percent while Chrysler Group LLC’s fell 42 percent. The weak results continued a string of monthly sales drops for the troubled pair. Now the question is whether their government-funded recovery plans are working.

A spokeswoman for the U.S. Treasury Department, which has provided roughly $65 billion to keep GM and Chrysler going, would not comment on the sales figures.

Just wait until the financial loss results are compiled. I wonder if we’ll be allowed to see them?

On the 2016 Olympic Bid

I guess I’d better put up my take before it’s announced.

There’s an important rule in diplomacy that basically says, “You never bring the big guy into a situation unless and until you know what the result will be.”

In other words, almost all real negotiations take place before the head of state shows up. The supposed “breakthrough” or “victory” announcements credited to heads of state are almost entirely based on what’s already in place when he or she arrives.

That brings us to the Olympics bid. If Barack Obama’s handlers are smart, they’ve already been tipped that Chicago is going to get the bid. If that is the result, I will assume it’s because they followed that rule of diplomacy, pretty much regardless of the post-announcement hype, because that is how the world works.

If Team Obama is really going into this without knowing the result, they’re taking a risk they should not be taking, regardless of the ultimate outcome. The downside of losing the bid is a needless loss of prestige, and that’s the first thing the handlers should be working to prevent.

The pathetic thing about all of the pre-announcement histrionics is that most of the press knows or should know what I’ve noted here. If the media is orchestrating a golden moment for Dear Leader based on being themselves tipped off to the result, shame on them. Even if they haven’t been tipped, how it’s playing out should tell them that a winning bid should be virtually assured, again unless Team Obama is messing up royally. The meme, based on how it’s playing out and the president’s visible presence, should be that Chicago’s selection is “expected.” Instead, they’re acting as if the magic of Barack and Michelle is what will have won the day. Gag me.

So, let the should-be-preordained games begin.

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UPDATE (thanks to commenters): From the BBC, which in its last sentence shows that it understands the points I just made above —

BBC News’ Adam Brookes in Chicago: The shock of Chicago’s elimination was greater for the fact that it came in the first round. And greater for the fact that President Obama had taken valuable hours from his packed and tense political schedule to travel to Copenhagen. His legendary powers of persuasion will be said to have failed him, though in reality it will be Chicago’s bid that failed him. Nonetheless, this is a moment which allows the president’s detractors to allege waning prestige on the part of his presidency. And it will raise questions about the political advice that he is receiving.

Headline at Drudge: “The Ego Has Landed.”

UPDATE 2, Oct. 3, 12:15 a.m.: I want to be crystal clear about this. Though I really thought Rio would get the bid because the Games have never been held in South America, and in a sense are overdue to appear there, I wanted Chicago to get the bid. I had business reasons to want Chicago to get the bid. I thought Obama’s appearance signaled its inevitability. I badly overestimated him, his handlers moreso.

I’m a bit miffed at the Obamas because I think their arrogant presence may have alienated may of the balloters. I don’t know what else explains moving from perceived front-runner (overhyped, yes, but still perceived as on top; again, as explained above, he shouldn’t have gone unless this was the case) to first city eliminated.

UPDATE 3, 12:45 a.m.: Maybe Rush cribs BizzyBlog (/absurdity) —

So here he is, president of the world traveling to Copenhagen to give this big presentation and he gets turned down. How could he possibly go over there without knowing this thing was in the bag? This is foolish. Presidents don’t do this kind of thing. You do not go unless you know you have it in the bag. Unless you owe Mayor Daley. I know the ego’s landed, though, Snerdley, got that big ego. I’m sure that he and Michelle thought they were going to pull this off just by showing up over there. Is he such a fool that he doesn’t realize that these people over there hate America more than they like him? Does he not realize that they are delighted to make him look foolish in order to take a swipe at this country?

This is the greatest teaching moment for Obama and he won’t get it.

The Employment Situation Report (100209)

Filed under: Economy,Taxes & Government — Tom @ 8:45 am

Well, the prediction as of Wednesday was for 180,000 seasonally adjusted jobs lost, and the result was 263,000.

The unemployment rate went to 9.8%.

If this is a “recovery,” what’s a “boom”? Breaking even? More to come.

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UPDATE: Actually, not that it’s particularly impressive, but there was an improvement over last year in the not seasonally adjusted figures:

BLSseasAdjJobChanges1999ti092009

That’s the first year-over-year improvement since October 2007. But we’re heading into a period where last year’s comparables are terribly skewed by the impact of the full force of the POR (Pelosi-Obama-Reid) Economy, the further meltdown in confidence caused by the TARP bailout/sellout, and the intensely negative job-market reaction to Barack Obama’s election.

So of course the next few months on the ground are going to look better than last year. That shouldn’t impress anyone.

This is probably as good a time as any to update the POR Economy job losses vs. the supposedly recessionary previous seven months:

BLSseasAdjJobs1999to0909

As a reminder, the supposedly recessionary months of December 2007 through June 2008:

  • Were marked by average job monthly job losses of 97,000, including December 2007, which shows +120.000.
  • Showed combined growth of an annualized +0.8% after the comprehensive revision of Gross Domestic Product (-0.7% in the first quarter of 2008, +1.5% in the second). Also, December, the month when the recession allegedly began, according to the National Bureau of Economic Research (NBER), was the last month of a quarter where revised economic growth was an annualized 2.1%.
  • Were characterized, as the pinheads at the NBER themselves said, as a period where “estimated monthly real GDP reached one peak in January 2008 and another, higher peak in June 2008.” Yet it was supposedly a recessionary period. Give me a break.

In the 15 months of the POR (Pelosi-Obama-Reid) Economy, which is now the POR Recession/”Repression” As Normal People Define It, seasonally adjusted job losses have totaled over 6.4 million, averaging 427,000 monthly.

Thanks Ford, We Needed This

Filed under: Positivity,US & Allied Military — Tom @ 12:02 am

Hanky alert. Just watch: