Sure is a tough call. The two automakers you mention don't even make the bulk of what profits they have from metal, it comes from their financing arms. As for the metal, 'forward looking management' has resulted in a product line that is 'profit slanted' towards the larger SUV's, which, as you say, is in some danger here. They have no cars to compete (IMO) in the bread and butter Camry/Accord big volume sedan market. Look at the history, it's not on your side from a market share perspective. GM has been losing market share since not long after I was born, and I was born in the 1950's <ggg>... Couple that with the whining about those giant healthcare costs (more than the steel in each unit), and it's a tough situation. Made especially tough because the competition (like Toyota) has LOTS of cash, better quality product, and apparently does not have the same health care overhead, although I'm not familiar with how health care is handled in Japan.
Best regards,
John
PS - It would be ironic if the troubles of these admittedly large firms might be the catalyst for the government to finally push some serious health care reform. I'd sure like to see it, I'm a full time trader that has had all kinds of problems obtaining health care insurance for myself and my wife in NYS... |
