闖蕩華爾街

有多少愛可以重來 有多少人值得等待 因我自橫刀向天笑 故我自立馬冷眼瞧
個人資料
正文

More Misery Ahead for GM, Ford, and Chrysler

(2008-07-01 15:57:47) 下一個

U.S.News & World Report
More Misery Ahead for GM, Ford, and Chrysler
Tuesday July 1, 3:57 pm ET
By Rick Newman

For a while, it was a long, slow decline. Now, the plight of General Motors, Ford, and Chrysler appears to be a rout.

The shift away from trucks and SUVs--and from vehicles built by the Detroit 3 in general--became dramatic earlier this year. And this summer, it's only intensifying. For the first six months of the year, the domestic automakers have seen staggering sales declines of nearly 20 percent, compared with 2007. Their combined share of the U.S. market has fallen below 50 percent for the first time ever. And if gas prices stay near $4 per gallon, it's likely to keep falling. "We see meaningful revenue declines in 2008 and 2009," says Mark Oline of Fitch Ratings. "Market share losses will accelerate through year-end."

The Detroit 3 share many of the same problems, which by now are quite familiar. For years they've been overdependent on big pickup trucks and SUVs, which were highly profitable when gas was $2 per gallon but are unwanted now. The factories of the domestics tend to be older than those of competitors like Honda and Toyota, which makes it harder and much more costly to shift from big vehicles to smaller ones on a given assembly line. A unionized workforce with generous benefits represents another cost disadvantage, compared with the Asians and Europeans.

Each of the Detroit 3 has a "transformation" plan in place to fix its problems, which are largely confined to the key North American market. They've cut billions in costs and negotiated deals with labor unions that make it easier to close underperforming plants and downsize their workforces. By 2010, those deals will also help pare soaring healthcare cases. And each company has plans to revamp its product lineup for more thrifty times.

But it takes years for an automaker to retool its industrial footprint and develop new products good enough to compete with Honda and Toyota. And Detroit is simply running out of time, as the market for cars changes much faster than the automakers envisioned. For each of the Detroit 3, it now looks as if conditions won't improve until 2010, at the earliest. A brief dossier on each:

Chrysler. The smallest domestic automaker seems to be in the most precarious shape, with sales of Chrysler, Dodge, and Jeep brand vehicles down about 30 percent so far this year. That's the worst showing of any major automaker. Chrysler, famous of late for the hulking 300 sedan and the Hemi V-8 engine, desperately needs more small vehicles to round out its lineup. Within a couple of years, Chrysler plans to import some vehicles built by Chinese automaker Chery, which could provide a toehold at the lowest end of the market--if the quality is good enough. But profit margins on Chinese imports are likely to be small, and Chrysler also needs more mainstream family vehicles that can compete with best-in-class cars like the Honda Civic, Toyota Camry, and Nissan Murano.

Since Chrysler was bought by a private equity group last year, it doesn't have to report on its finances the way public companies do. But its corporate bonds are rated as junk, and the company may already be seeking additional cash from its private equity parent. Of the Detroit 3, Chrysler seems like the best candidate to form a global alliance with another automaker, such as Nissan, which would expand the range of vehicles that could be sold under the Chrysler name (and vice versa). In fact, Chrysler has already licensed the diminutive Nissan Versa for sale as a Dodge or Chrysler vehicle sometime next year. But Chrysler just went through a divorce with Daimler-Benz, and it's not clear another automaker would want to take on Chrysler's liabilities in a more formal pact.

General Motors. With sales off about 17 percent so far this year--and steeper drops possible--GM has tried to reassure investors by saying it has enough cash to ride out a 2008 downturn. But it stopped there, making no projections for 2009--indirectly raising the possibility of a Chapter 11 bankruptcy filing if market conditions get much worse. "If 2009 stays flat," says Oline, "late 2009 is where there's a liquidity concern." The worries have battered GM's share price, which has hit the lowest level since the 1950s. And GM's market capitalization--the total dollar market value of all its shares--has fallen to about $6.5 billion, a mere 4 percent of Toyota's $147 billion market cap.

GM's turnaround plan has included popular new cars like the Chevy Malibu and Cadillac CTS, but plunging truck and SUV sales have swamped modest gains elsewhere. Many analysts think GM's eight U.S. brands are far too many; GM has said it may sell the nose-diving Hummer division, but that still leaves Saab, Pontiac, Buick, and Saturn with mediocre performance and uncertain prospects. GM is also placing a big bet on the battery-powered Chevy Volt, due late in 2010, hoping the car brings some breakthrough technology that helps GM recapture market muscle. But even if it succeeds, the Volt will be a niche product at first, almost certain to cost more in R&D than it brings in in its early years.

To survive until then, GM might have to slash truck and SUV production even more than the planned shuttering of four plants. It also needs to charge higher prices for the cars it does sell--no easy task in a weak economy. And recent come-ons like zero-percent financing sales won't help much. Credit Suisse analyst Chris Ceraso predicts they'll only cut into future sales, generating "some pretty severe payback over the coming month or two."

Ford. Ford recently said it won't return to profitability in 2009 as it had previously promised, for a number of reasons. One of the biggest is a startling shift away from pickup trucks, which appears to be permanent. Ford took the unusual step of delaying the launch of its next version of the F-150 pickup--a core product for Ford--because of a glut of old models. And longtime hits like the Explorer and Expedition SUVs are stumbling badly, too.

But the second-largest domestic automaker is in slightly better shape than its crosstown rivals. Ford has enough cash to ride out a bear market through 2009, and new vehicles like the Focus economy car, the Fusion sedan, the Edge crossover, and the mid-size Escape SUV hit the sweet spots in a reluctant market. A new small car from Europe, the Fiesta, will arrive soon, challenging the Asians' dominance of that segment. Ford still has several hurdles to leap--such as phasing out its moribund Mercury brand. And by the time it rebounds, Ford may have lost the No. 3 position in the U.S. market to Honda. But falling to No. 4 might be a pretty good outcome, considering the alternatives.

[ 打印 ]
閱讀 ()評論 (0)
評論
目前還沒有任何評論
登錄後才可評論.