GM, Ford sales nosedive again in February
Filed under: Company News, Economy
Just call it MOTS: more of the same. General Motors' (GM) and Ford's (F) February sales came in at abysmal levels, as expected, as the Big Three attempt to make their case for additional federal assistance.GM's February light vehicle sales (cars and light trucks) fell 53% to 126,170 from 268,737 a year ago. Ford's fell 48.2% to 96,044 cars and trucks from 185,294 a year ago. GM and Ford's shares were essentially unchanged on the news, but investors should keep that in perspective: the pair's shares have fallen so much, they're now at levels that reflect little investor confidence in their operations. GM's shares rose seven cents to $2.08, while Ford rose one cent to $1.89.
GM's car sales nosedived 50% to 53,813, and light truck sales plunged 55% to 72,357.
Ford's truck sales, which include the popular F-Series pick-up, plummeted 51.6% to 61,366. Ford's car sales fell 40.8% to 34,678.
Auto Sector Analysis: The February unit sales totals were not a surprise -- and they reflect the U.S. recession, consumers' concerns about potential, additional lay-offs, and of course uncertainty regarding the operational fate of the Big Three.
Bottom Line: The February sales statistics are not game changing, for or against, regarding potential future Congressional assistance for the Big Three.
The argument in favor of the package: idling the huge assets and number of employees involved in the auto sector would further hurt a weak U.S. economy. It's hard to envision Congress not allocating more loans and related assistance.
The argument against the package: Fed Chair Bernanke was up on Capitol Hill again Tuesday indicating that more bank bailout money will be needed, in addition to aid for insurance giant and credit default swap king AIG (AIG). Significance? Congress is getting bills left and right -- the U.S. government has allocated more money and issued more guarantees in the last two years than at any time since, perhaps, World War II funding.
The view from here argues GM, Ford and Chrysler will get more funds, but Congress will want a large equity stake, other taxpayer protections and other performance results for the taxpayers' money.
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Reader Comments (Page 1 of 1)
3-03-2009 @ 6:17PM
Sanbornbob said...
You see People Power is stronger than Union Power (UAW)- WE will not buy to support your high living standards. Why should we who make as little as $10. or $5. an hour support you who make over $60. with benefits. PEOPLE POWER, baby- lets stick it to the UAW.
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3-03-2009 @ 6:42PM
bobby said...
Good article better than the dow at 14000
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3-03-2009 @ 6:58PM
Wes Jones said...
You are implying that somebody somewhere actually believed the politico from Chicago. No one is that stupid!!
Reply
3-03-2009 @ 7:26PM
Ryan said...
With such disappointing sales numbers, perhaps the Big Three should drastically slash car prices, and merely sell them at cost. They would still generate revenue from servicing the vehicles, states would benefit from sales tax revenue, and car plants could maintain production to avoid layoffs. I believe that consumers are contracting more quickly than producers. Firms need to be proactive during these troubled times, and not focus on government handouts.
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3-03-2009 @ 8:26PM
spectre said...
Auto sales will never be the same again... People are still suffering from the just recent NIGHTMARISH $147 barrel oil and the $5 gallon gasoline. The world has gone SCARED, too SCARED of buying any new primitive internal combustion engine vehicles RELIANT on the byproducts of the Wall Street manipulative fossil fuel called "oil". They know should they purchase a new gasoline fueled vehicles, they're buying a gasoline-hog, money eating monster to only burden them financially... Keep the old car! Why create and bury oneself with monthly debts to only burdens one's life; when the existing vehicles works just fine to get from point A to point B... The Auto industry will continue to sink, unless they mass produce and start selling a suitable vehicles not requiring the manipulative Wall Street oil product...
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3-06-2009 @ 4:27PM
doug said...
i agree that why should the average american making half of what gm union members get. get the unoin out of the picture first but we do need to help the auto makers why not we are giving billions to the banks for their stupidity
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