Word: gm
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Some analysts have been heartened by GM's November sales results and believe they offer a glimmer of hope for the future - if the government can help the automaker overcome its current cash crunch with a $12 billion loan...
After all, while GM was down 41.3% for the month, Ford Motor, Toyota and Honda - healthier companies all - also reported U.S. sales drops of 30% or more. (Read "Why the Big Three Should Fly Corporate Jets...
...addition, GM had several strikes against it going into November. Its financial problems were well known, so customers may have been worried about a potential bankruptcy and stayed away. Also, GMAC, GM's finance arm that provides credit to car buyers and dealers is practically out of money itself. It has stopped financing leases and lends money only to the most creditworthy customers. A year ago, GMAC provided financing for nearly half of GM's retail sales. Today that figure...
...closer look at the numbers reveals some systemic problems that aren't related to the current credit crunch and that GM will have a hard time overcoming. (Read "GM: Death of an American Dream...
Unlike its Japanese rivals, GM saw its sales decline begin way back at the beginning of the year, when its truck-heavy product lineup began to sag in the face of higher gasoline prices. So for the first 11 months of 2008, GM's sales have fallen 21.9%. While that is comparable to Ford and Chrysler (down 20.6% and 27.7% respectively), it's far worse than Asian competitors. Toyota is down 13.4% this year, Honda has declined just 5.4%, and Nissan has shrunk by 9.1%. They will be far better positioned to rebound once the market recovers...