GM Tidbits

[articsteve]

Worked for UPS   

[barrie1]

I have had the pleasure of seeing Inco's vehicle in the Brown colour and its really is a sharp looking Truck in that particular shade. I would consider for me as well. Artic you should read more often as learn that GM already had over 23 Billion in their cash box long before the sale of Allison. They are selling off anything that is not car related. The Locomotive division which was extremely profitable as long with the armoured vehicle section went a few years ago. They were not desperate for money at all but just didn't need these products lines any longer. Just more BS from you as usual. 

[sirAQUAMAN64]

GM to cut jobs building pickups, add jobs for crossovers

Automotive News
July 25, 2007 - 11:40 am   

DETROIT (Reuters) -- General Motors said today it plans to cut production of full-sized pickups at its Pontiac, Mich., plant in yet another indication of the weakness in that segment.

A source familiar with the matter said as many as 500 jobs will be eliminated at the plant, which which makes the Chevrolet Silverado and GMC Sierra pickups.

Sales of the Silverado fell more than 26 percent in June while Sierra sales fell more than 29 percent.

"The reason behind (the production cuts) is that the full-sized pickup market has softened," GM spokesman Tom Wickham said.

High gasoline prices and weak housing starts have hurt demand for pickups, many of which are bought by construction workers.

About 300 temporary workers would leave the company with no pay or benefits, the source said. An additional 100 to 200 full-time workers would likely be laid off, adding that they could be relocated to another plant in a few months.

Separately, GM's Wickham said the company also plans to add 500 temporary workers to its Delta Township plant near Lansing, Mich., as demand increases for its crossover vehicles -- car-based SUVs that are roomier than cars but more fuel-efficient than traditional SUVs.

The Lansing plant makes the Saturn Outlook, GMC Acadia and Buick Enclave crossovers.

Demand for crossovers overtook sales of traditional SUVs in the United States last year and have been the fastest-growing segment in the U.S. auto industry.

Wickham said the automaker would add a third shift to the Lansing plant in September, bringing back 500 temporary workers who were associated with the plant.

"Market conditions have been reviewed and it appears the CUV (crossover utility vehicle) segment is continuing to grow at a rapid pace, and there is a lot of demand for the products we are making in Lansing," Wickham said.

[Mitlov]

My understanding is that the Acadia and the Outlook are selling as fast as they can get them to dealers, at least in this part of the country.  I think this is a good move.

[Julie]

My understanding is that the Acadia and the Outlook are selling as fast as they can get them to dealers, at least in this part of the country.  I think this is a good move.

I see a lot of them here already too! Looks like a winner for GM.

[articsteve]

I have had the pleasure of seeing Inco's vehicle in the Brown colour and its really is a sharp looking Truck in that particular shade. I would consider for me as well. Artic you should read more often as learn that GM already had over 23 Billion in their cash box long before the sale of Allison. They are selling off anything that is not car related. The Locomotive division which was extremely profitable as long with the armoured vehicle section went a few years ago. They were not desperate for money at all but just didn't need these products lines any longer. Just more BS from you as usual. 

Artic you should read more often as learn that GM already had over 23 Billion in their cash box

The WSJ shows us the "secret" that GM plays a similar game with cash. Again, all that Wall Street cares about, it seems, is the EOQ number.

"The company's cash position is more precarious than some investors and analysts think. It is something of an open industry secret that GM has structured its bill-paying so it ends quarters with close to its peak levels of cash. But at most points during the quarter, it has much less. Toni Simonetti, a GM spokeswoman, said GM pays suppliers on the second day of the second month after delivery, meaning there is a cash outflow early each month. The cash then builds throughout the month, she says. The balance can swing by $5 billion to $7 billion in the quarter. It is a longtime practice and 'well known certainly among the supplier and investment communities,' she said."

Instead of paying bills with a set cycle time (which big companies drag out from 30 days to 60 days to 90 days or longer as they grow more desperate), they batch them and send payments out right at the start of the month. That way, cash is highest at the end of month and EOQ. Does this add cost to GM's procurement organization? It would be hard to quantify, but I'm sure there are internal costs incurred to make this batching happen.

It's sad when companies have to game the numbers. That's not providing value to customers. It's not lean. Gaming the numbers, the last resort of a scoundrel.   

[sirAQUAMAN64]

GM seeks more suppliers for small cars
Jack Herman
Automotive News
July 30, 2007 - 12:01 am   

DETROIT -- Korean suppliers provide about 80 percent of the components used by GM Daewoo Auto & Technology Co. But suppliers in other regions will get more of the business in the future, says GM Daewoo President Michael Grimaldi.

"We need suppliers who are capable of not just supplying Korea but also GM's global needs as we go forward," Grimaldi said at a Society of Automotive Analysts event here last week.

Sources have said GM Daewoo is designing two small-car platforms, called Gamma and Mini, for General Motors' global operations.

Production of the Gamma is scheduled to start in late 2009.
 
In the United States, a Gamma would replace the Chevrolet Aveo, which also is produced by GM Daewoo.

With the new platforms, GM will look for suppliers that can provide higher volumes, Grimaldi said. Although some Korean suppliers will expand, opportunities still will be created for outside suppliers to jump in.

Grimaldi also said that although GM Daewoo is running at full capacity, it has no plans for new plants. Instead, the company will use overtime and retooled manufacturing systems to meet increased demand.

GM Daewoo has a straight-time capacity of 915,000 vehicles and 1.3 million engines.

[sirAQUAMAN64]

I think it would be a serious mistake to abandon the full-sized/larger sedan market - some reports are claiming they will, this one does not. The new CTS is plain dinky to me, and a lot of GM's vehicles keep getting smaller inside (Acadia/Outlook/Enclave exempted) which I just don't get.

FUTURE PRODUCTS -- GENERAL MOTORS

Cadillac to add small rwd sedan

Automotive News
July 30, 2007 - 12:01 am

Cadillac is convinced it has found a winning formula: sporty handling rear-wheel-drive cars that can compete with European luxury sedans. Gone are the luxo-barges of old - at least in Cadillac's car lineup.

The bigger-is-better crowd can always buy an Escalade, a vehicle that has brought new meaning to the word "bling."

Small Cadillac: Expanding the rear-drive lineup is a key to boosting sales in North America and abroad. GM executives have said Cadillac will get more products, but sources inside the automaker say the front-

drive BLS sedan sold in Europe is not destined for the United States. The BLS shares parts with the Saab 9-3.

A small rwd sedan built on GM's new Alpha architecture will join Cadillac's U.S. and global lineup. That car probably will debut in the 2011 model year, at the earliest.

CTS: GM is getting serious about competing against BMW and Mercedes-Benz and may take on the Germans with a family of CTS-based Cadillacs.

The restyled, re-engineered 2008 CTS sedan will be in dealerships by year end. Styling and performance are greatly refined. The bold exterior has dramatic lines, a large grille, sculpted fenders and a wider track. Inside, an all-new interior mimics European luxury models.

The high-performance CTS-V will skip the 2008 model year. When it returns as a 2009, expect a big horsepower boost tied to GM's six-speed automatic transmission.

Also for the 2009 model year, a wagon variant is being considered. For the 2010 model year, a coupe variant, called the CTC, is expected to debut. And GM likely will freshen the CTS sedan.

DTS: The current generation will be the last fwd Cadillac.

New sedan: With the eventual demise of the DTS, Cadillac likely will develop a large sedan on a premium version of GM's global rwd architecture. The car could arrive as early as the 2011 model year; it will be priced to attract DTS and DeVille owners.

STS: Sales have been sluggish, and the more stylish 2008 CTS won't help. GM insiders say the STS probably will be dropped. But the final decision has not been made, and no time frame was available.

For the short term, the 2008 STS will be freshened. Its grille, inspired by that of the 2007 Escalade and adopted for the 2008 CTS, features a detailed chrome treatment that includes subdued mesh housed within individual grille slats.

Flagship sedan/coupe: This 2011 vehicle has been on GM's wish list for a few years. Given the success of the BMW 7 series, the Mercedes-Benz S class and the considerably more expensive Bentley Continental GT, GM continues to study developing an ultraluxury rwd sedan or coupe for Cadillac, priced around $120,000.

Production is penciled in for April 2010, but GM executives admit the vehicle is a low priority because the automaker's engineers and money have been refocused on achieving the expected boost in corporate average fuel economy standards.

XLR: A freshening is scheduled for the 2009 model year; a redesign is planned for the 2012 or 2013 model year.

BRX: Cadillac plans to market a small, five-passenger crossover, probably as a 2009 model. GM plans to develop the BRX on a blend of GM's next-generation Theta and Epsilon vehicle architectures.

SRX: GM insiders say Cadillac has delayed plans to re-engineer and restyle the SRX, blaming disappointing sales.

Three options for the crossover are being considered:

1. Restyle and re-engineer it for the 2011 model year.

2. Redesign it using GM's global rwd architecture, called Zeta.

3. Keep the current SRX until the BRX debuts, then drop it.

Escalade, Escalade ESV, Escalade EXT: The vehicles will be restyled and re-engineered for the 2012 model year.

[sirAQUAMAN64]

No more barges in Caddy car fleet
Jamie LaReau
Automotive News
July 30, 2007 - 12:01 am   

DETROIT -- Cadillac is getting ready to kill its luxo-barge image once and for all.

General Motors has delayed plans to re-engineer the SRX, a mid-sized crossover that competes with the Lexus RX and BMW X5.

In 2009, the automaker likely will replace it with the BRX, a smaller five-passenger crossover. Insiders say the BRX likely will be built on a new platform and have a V-6 engine.

SRX sales have been disappointing. Through June, sales totaled 11,597 units, down 1 percent.

Cadillac will take additional steps to enhance its image as a producer of sporty luxury cars:


The CTS sedan will expand into a family with the addition of a wagon and coupe. These vehicles will compete with BMW's popular 3 series, the benchmark for sporty luxury cars.


The slow-selling STS sedan will be killed, as will the venerable DTS sedan, once known as the Deville. Cadillac will replace them with a high-performance rear-wheel-drive sedan aimed at the segment dominated by the BMW 5 series.


A new small entry-level sedan will expand the brand's range. This might create some corporate controversy; Cadillac General Manager Jim Taylor has argued that he doesn't need a smaller car.

[sirAQUAMAN64]

FUTURE PRODUCTS -- GENERAL MOTORS

Saturn becomes GM's Euro brand

Automotive News
July 30, 2007 - 12:01 am
 
It might be a slight exaggeration to say that Saturn is Opel's U.S. brand.

But GM is clearly sticking with its strategy to give Saturn a European flavor.

Astra: GM will replace the Ion with an imported model, a rebadged Opel Astra. Essentially, most Opels and Saturns are identical vehicles.

The 2008 Saturn Astra will go on sale at the end of the year for about $16,000. That's a $3,500 jump from the 2007 Saturn Ion 2 sedan, the base model. Three- and five-door models are expected and possibly a four-door sedan.

GM wants to assemble the next-generation Astra in Lordstown, Ohio. GM wants to begin producion in 2009 for the 2010 model year.

Aura: Executives hope a hybrid Aura debuting for the 2008 model year stimulates sales. Saturn sold only 27,229 Auras from January through June. It is supposed to be one of Saturn's core vehicles.

But other than a hybrid, no significant changes are planned until the next-generation Aura arrives for the 2010 model year. The car will be restyled and developed on GM's re-engineered Epsilon 2 front-wheel-drive architecture. The 2010 Aura will be longer and wider than today's car.

Despite the high praise that journalists gave the Opel GTC concept unveiled this year at the Geneva auto show, GM has no plans to offer an Aura coupe based on the concept. Some journalists viewed a potential Saturn version as a serious competitor to the Nissan Altima and possibly the Infiniti G37 coupes. An Aura wagon aimed at the Subaru Legacy Outback is no longer planned, either.

Sky: While the Pontiac Solstice adds a fastback coupe, the Sky will continue with one model, a two-passenger convertible. GM will likely re-engineer and reskin or restyle the Sky for the 2011 model year.

Vue: The restyled, re-engineered 2008 Vue went on sale this past spring.

Outlook: A freshening is scheduled for the 2010 model year.

Relay: Saturn drops its minivan during the 2008 model year.

[sirAQUAMAN64]

FUTURE PRODUCTS -- GENERAL MOTORS

GM expands its green lineup
Richard Truett
Automotive News
July 30, 2007 - 12:01 am

High-tech rollout
GM will rely on several powertrains in the coming years.
Hybrids
Fuel cells
Diesel engines
High-tech gasoline engines

General Motors is poised to meet growing consumer demand for cleaner engines with better fuel economy.

Under Tom Stephens, group vice president of global powertrain, GM has been working on several hybrid powertrains; a number of clean-running, fuel-saving diesel engines; fuel cells; six-speed transmissions, and other advanced technologies.

GM starts rolling out the new products this year. Here's a look at GM's upcoming powertrains.

Hybrids

By this time next year, GM says, it will have eight hybrid models on the road using three systems. GM also aims to put a plug-in hybrid on the road in 2010. Here's what GM has announced so far.
The 2008 Saturn Vue and Aura and Chevrolet Malibu will be available with a mild hybrid belt-alternator system that yields a fuel economy gain of 15 to 20 percent. The system likely will add $2,000 to the sticker price.

A mild hybrid turns off the gasoline engine when the vehicle is not moving, as happens at a stoplight. The engine quickly restarts when the driver releases the brake pedal. The electric motor provides a slight boost under heavy acceleration but does not drive the vehicle at low speeds.
The 2008 Vue also will be available with a front-drive version of GM's Two Mode hybrid powertrain. Fuel economy of 40 mpg on the highway is expected; the Two Mode hybrid Vue will debut later in the model year. GM is expected to deploy the Two Mode hybrid a year or so later in mid-sized fwd vehicles with V-6 engines.
This fall, GM will offer the 2008 Chevrolet Tahoe and GMC Yukon with what many experts consider one of the industry's most advanced hybrid systems. A 25 percent boost in fuel economy is expected, along with an industry first for a hybrid: The vehicle will be able to tow heavy loads. The 2009 Cadillac Escalade will offer the same feature.

The hybrid system has a 320-hp, 6.0-liter V-8 and a four-speed automatic transmission that has two electric motors. The motors propel the vehicle from a stop to 20 mph. The engine incorporates cylinder deactivation, and the vehicle body has aluminum panels to reduce weight.
If lithium ion batteries are ready for production in three years, look for GM to roll out plug-in hybrid versions of the Saturn Vue and Aura and possibly the Chevrolet Volt. It is unclear whether GM will use the Volt name for a specific model or incorporate the new technology into an existing model, such as the Malibu.
This powertrain uses an electric motor and a gasoline engine; the electric motor drives the wheels. A turbocharged, 1.0-liter, three-cylinder engine recharges the batteries when needed.

Also, the battery pack can be plugged into a conventional wall outlet for recharging. GM expects a six-hour recharge time.

The system is intended to propel a vehicle 40 miles on a single charge, meaning it could function as a pure electric vehicle for some commuters, using no gasoline.

During a drive longer than 40 miles, the gasoline engine cycles on and off to keep the battery pack charged.

GM estimates the Volt would deliver the equivalent of about 150 mpg during a 60-mile daily commute.

Diesel engines

GM plans a range of diesel engines for its U.S. cars and trucks.

This month, GM announced the purchase of a 50 percent stake in Italian diesel maker VM Motori from Penske Corp., giving the automaker more diesel technology and new engine-manufacturing capacity.

Cadillac and Saturn will lead the way for GM's return to diesels in cars. GM Vice Chairman Bob Lutz says that the 2.9-liter V-6 GM is developing with VM Motori for the European version of the Cadillac CTS also will be offered in several U.S. vehicles. A GM source says that engine will be available in the next-generation Aura and in the CTS, probably for the 2010 model year.

GM will offer its new 310-hp, 4.5-liter, turbodiesel V-8 in the Hummer H2 and in light-duty versions of the Chevrolet Silverado and GMC Sierra pickups in the 2010 calendar year. The engine should deliver a fuel economy gain of 25 to 30 percent over the current 5.7-liter gasoline engine.

Fuel cells

The latest fuel cell stack that GM is preparing for production fits in the same space as a four-cylinder engine.

In May, GM, transferred 500 engineers from its fuel cell research center near Rochester, N.Y., to the company's tech center near Detroit.

These engineers are responsible for developing the technology that will enable GM to mass produce fuel cell vehicles.

This fall, GM will test its fuel cell technology in a fleet of 100 hydrogen-powered Chevrolet Equinox cross-overs. GM hopes to have its fuel cell powertrain ready for mass production by 2010.

The key advantage of a fuel cell is emissions. It takes the automobile out of the emissions debate - the

fuel cell emits warm air and water vapor.

High-tech features

Variable valve timing, turbocharging and direct injection are starting to appear in GM vehicles. These features boost performance, reduce emissions and can improve fuel economy.

Engines such as the one in the Pontiac Solstice GXP point the way to the future for GM. That engine is a 260-hp, turbocharged 2.0-liter with direct fuel injection that gets 22 mpg city/31 mpg highway compared with the Solstice's 177-hp, 2.4-liter base engine, which is rated at 20 mpg city/28 highway.

GM's next gasoline direct-injection engine is scheduled for production this fall in the 2008 Cadillac CTS and STS.

The 3.6-liter V-6 cranks out 300 hp and is expected to deliver around 27 mpg on the highway. Direct injection improves performance and reduces emissions, especially on cold starts, according to Ameer Haider, GM's assistant chief engineer for the engine.

GM expects to be producing as many as 200,000 direct-injection engines by the 2010 model year.

6-speed automatics

This year, GM launched the six-speed, fwd automatic transmission it co-developed with Ford Motor Co. Last year, GM rolled out its new six-speed rear-drive transmission in SUVs and other trucks. Both transmissions contribute to a 5 percent increase in fuel economy over the four-speed transmissions they replaced.

[sirAQUAMAN64]

GM posts Q2 profit, shares surge

Reuters |
July 31, 2007 - 7:40 am
UPDATED: 7/31/07 10:24 a.m.
 
DETROIT (Reuters) -- General Motors today said it posted a quarterly profit that trounced Wall Street estimates as it benefited from cost-cutting and growing sales overseas, sending shares up as much as 6 percent.

GM, which posted a second quarter profit of $891 million against a massive $3.4 billion loss a year ago, also said its loss narrowed at its North American operations. But GM expects to keep the pressure on costs, a key factor in what are likely to be contentious labor talks throughout the summer.

Excluding such one-time items as charges related to parts supplier Delphi's bankruptcy, the company earned $2.48 a share.

Analysts, on average, had been expecting adjusted earnings of $1.08 a share, according to Reuters Estimates. Forecasts on that basis had ranged from 50 cents to $1.64 per share.

Lehman Brothers analyst Brian Johnson said GM beat estimates largely due to better performance at GMAC -- its former finance arm in which it retains a 49-percent stake -- and strong earnings in markets outside North America.

Overseas sales accounted for 58 percent of auto revenue in the second quarter. GM also reported $139 million in net income attributable to GMAC for the quarter.

Revenue from auto operations rose to $45.9 billion from $44.8 billion a year earlier.

Total revenue fell to $46.8 billion from $53.9 billion, including results from the GMAC financing arm, which was taken over last year by a group led by private equity firm Cerberus Capital Management. GM realized net income of $139 million from the 49-percent share it still holds in GMAC.

"It's true that our North America team has made huge improvements, and we appreciate everyone's hard work," CEO Rick Wagoner said in a statement. "But our current earnings clearly demonstrate we've got more to do."

GM, which had lost more than $12 billion in the past two years, is in the middle of a sweeping restructuring that includes slashing more than 34,000 jobs and closing 12 plants in North America.

GM's North American automotive net losses narrowed sharply to $39 million from $3.95 billion a year earlier, when the automaker took charges for its attrition plan.

On an adjusted basis, the largest U.S. automaker reported income from continuing operations in North America of $78 million, compared with a loss of $39 million a year earlier.

"Much of that was really a function of cost," CFO Fritz Henderson told reporters shortly after the company announced results.

CFO: KEEP THE 'PRESSURE' ON COST-CUTTING

Henderson said GM needed to keep up the "pressure" on cost-cutting efforts, including cutting its $4.8 billion annual health care bill.

All three Detroit automakers -- GM, Ford Motor and DaimlerChrysler AG's soon-to-be private Chrysler group -- have begun talks with the United Auto Workers union to replace a contract that expires Sept. 14. The companies are seeking major concessions, particularly in health care, to cut their operating costs.

JP Morgan analyst Himanshu Patel reiterated his "overweight" rating on GM shares, citing "potential for sizable labor concessions, particularly a Goodyear-style healthcare deal."

Goodyear Tire & Rubber Co. in December agreed to set up a health-care trust fund with a one-time $1 billion payment in cash and stock that was meant to free the company from future health-care obligations.

GM's Henderson declined to comment on the prospects for such a deal for GM or other aspects of the company's ongoing talks with the UAW.

GM took charges of $374 million for costs associated with helping supplier Delphi Corp. restructure in bankruptcy.

The automaker had estimated its total exposure to helping Delphi emerge from bankruptcy with lower labor costs at $7 billion.

Ford, which reported results last week, also surprised Wall Street analysts with its first profit in two years as it cut costs and also benefited from strong overseas sales.

GM shares rose 3.7 percent, or $1.16, to $33.79 in early trading on the New York Stock Exchange, after touching as high as $34.65 shortly after the opening bell.

Including today's pre-market gains, GM shares were up almost 13 percent since the start of the year, although they remained 9 percent below their high above $38 from late June.

Buoyed by in part by expectations for a ground-breaking deal with the UAW that could reduce health care costs, GM shares have outperformed the S&P 500 index, which is up about 4 percent since the start of the year.

The cost to insure GM's bonds against default fell sharply today on the second-quarter profit news, market sources said.

The cost to insure GM's bonds with credit default swaps fell about 75 basis points to 615 basis points, which means it costs $615,000 annually to protect $10 million of debt for five years.

GM's 8.375 percent bonds maturing in 2033 rose almost 4 cents on the dollar to 85.19 cents, according to MarketAxess.

[sirAQUAMAN64]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070731/AUTO01/707310335/1148
GM offers new truck incentives

John Stoll / Dow Jones

DETROIT -- General Motors Corp. has launched a new incentive campaign on its full-size Chevrolet and GMC brand pickup trucks, offering customers zero percent financing on loans lasting as long as 60 months.

The offer, which is available on extended-cab and crew-cab editions of the trucks, began Saturday and will remain in place until Sept. 4. GM spokesman John McDonald said the offer is an effort to "be competitive in an already very competitive marketplace."

Regular cab models, which represent a minority of the lineup, are excluded from the offer.

GM is offering deals that are designed to better compete with incentives from rivals Ford Motor Co., DaimlerChrysler AG's Chrysler Group, and Toyota Motor Corp. Ford is offering zero percent financing and $2,007 cash back on pickups and SUVs. Toyota is offering zero percent financing, or at least $3,000 cash back on its Tundra pickup.

The new GM sales incentive took effect at dealerships on Saturday and runs through Sept. 4, McDonald said.

[sirAQUAMAN64]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070731/UPDATE/707310405/1148/AUTO01
General Motors earns $891 million in second quarter; says U.S. sales still soft

Sharon Terlep / The Detroit News

General Motors Corp. turned a profit for the third straight quarter, the company announced Tuesday, signaling some steady progress in its turnaround plan.

The automaker posted an $891 million profit for the second three months of the year, a marked improvement from a year ago when GM lost $3.4 billion in the same period.

Savings from last year's plant closings and job cuts along with a better-than-expected performance from its former financial arm helped GM turn a profit even with a reduction in overall revenue.

Tuesday's financial results were affected by certain special charges such as $375 million spent on the bailout of former subsidiary Delphi Corp. and $888 million in restructuring costs. But for those charges, GM said, its earnings would have been more than $1.4 billion.

Despite the gains, the automaker is still losing money on its critical North American operations, though not as much as a year ago. GM North America lost $39 million in the second quarter, compared to a $3.95 billion loss a year ago.

"In North America we continue to make progress with our focus on great new products, a disciplined sales and marketing strategy, and structural cost reduction, although profitability remains close to breakeven," GM Chief Executive Officer Rick Wagoner said in a statement. "But our current earnings clearly demonstrate we've got more to do."

GM's overall revenue was $46.8 billion, down from $53.9 billion a year ago. Global sales volume was more than 2.4 million units in the quarter, the automaker said.

Through the first half of the year, GM has made $953 million. Last year, the automaker had lost $2.8 billion through June.

Outside North America, GM's market share increased to 9.4 percent, from 9.2 percent in the second quarter of 2006.

Slower-than-expected sales GM's new full-size pickup have hurt GM, which still relies heavily on sales of highly profitable trucks and SUV. A slowdown in the housing market and rising fuel prices are keeping keep buyers away, and competitors foreign and domestic have piled on incentives to move their trucks.

The setback with trucks has been offset in part by GM's strategies to pare back incentive spending and low-profit sales to fleet companies. By commanding more for each car and truck it sells, GM is able to pair losses amid falling sales.

Even with the progress, GM and Wall Street continued to emphasize the importance of reaching a favorable deal with the United Autoworkers Union this summer. GM, like Ford Motor Co. and the Chrysler Group, is looking to get a four-year contract with the union that will significantly reduce health care and labor costs at its North American plants.

"Everything looks very good -- North America was probably a little bit shy of where we had hoped, but the rest of the world did fantastic," said analyst Brad Rubin of BNP Paribus. "It's still going to be difficult and they're going to need a lot of concessions to consistently be profitable."

GM continues to lose market share to foreign rivals. For the first time, GM ceded the No. 1 spot in global auto sales to Japan's Toyota Motor Corp. in the first quarter of the year.

And while GM remains the top automaker in the United States, its sales are down 6.8 percent through June compared to a year ago, and it has lost more than a percentage point of its U.S. market share, which slipped to 22.8 percent

GM, at least, didn't have to deal with a loss at its former finance arm. GMAC reported a surprising second-quarter profit of $239 million, less than last year's $787 second-quarter second million profit, but an improvement from last quarter's $305 million loss. GM last year sold 51 percent of its stake in GMAC.

GM has managed to pare losses in the last year. The automaker improved significantly in 2006, posting a $2 billion loss compared to $10.5 billion in 2005.

GM performed well in regions outside North America.


GM Europe made $217 million, up from a $39 million loss last year. The results are the strongest for the region since 1996.


GM Asia Pacific made $227 million, down from $376 million a year ago. Last year's profit included $212 million from the sale of GM's interest in Isuzu.


GM Latin America, Africa and Middle East posted its best quarterly net income in a decade. The region made $213 million, compared to $139 million a year ago.

[sirAQUAMAN64]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070730/AUTO01/707300326/1148

Rivals test GM rebate strategy

Wall St. favors plan, but foreign brands add discounts, sales to rental companies

Sharon Terlep / The Detroit News

After finally kicking the habit of moving slow-selling vehicles through deep discounts and sales to rental car fleets, General Motors Corp.'s resolve to avoid the tempting tactics is being tested more than ever.

Rival car companies are slashing prices and gobbling up the rental business -- leaving GM with an increasingly smaller share of the U.S. auto market.

The assault is coming from all sides.

Last month, Toyota Motor Co. spent more than $5,000 per vehicle on incentives for the new Tundra pickup, its first true offering in a full-size pickup segment long dominated by the domestics.

Overall, incentive spending among Japanese automakers is up 18 percent this year, led by Honda Motor Co.'s 49 percent hike.

Meanwhile, foreign nameplates, from Kia to Hyundai, are selling more cars to daily rental companies as Detroit's automakers try to scale those sales back.

"I am assuming that our competitors will continue to spend heavily on incentives to maintain their volume," GM marketing Chief Mark LaNeve said Friday. "In our case, we will continue our stated strategy of tactical, targeted incentives, combined with attractive (suggested retail prices), content, warranties and fuel econ to provide our customers with the best overall value."

GM's situation will come into better focus this week, with second-quarter earnings due out Tuesday and July sales results set for release Wednesday.

GM this year has lost more than a percentage point of the U.S. market share as well as its claim of being the world's top-selling automaker. Toyota Motor Corp. outsold GM worldwide in the first quarter.

The automaker's shares on the New York Stock Exchange have fallen 18 percent since the beginning of the month, a steeper decline than the rest of the market.

Despite some ominous signs, GM's strategy has garnered wide support on Wall Street, with analysts urging the automaker to stick to its plan despite industry pressures.

"Offering large spiffs could unwind the company's efforts to improve its brands' image," Bear Sterns analyst Peter Nesvold wrote in a research note. "However, we think smaller manufacturers may show limited discipline on the incentive front … we expect the Japanese 3 to remain relatively aggressive with incentives."

Heavy incentive spending and overselling to rental fleets tarnishes an automaker's image and cuts into resale values in the long run.

Both tactics, however, have been popular with domestic automakers to boost monthly sales numbers and keep plant lines running, even as demand in the retail market dwindles.

Already this year, GM has pared sales to daily rental companies by 96,000 vehicles. Incentive spending in June was down 10 percent from a year earlier, according to Edmunds.com.

LaNeve said the efforts are producing results, if not increased sales. Customer surveys have shown that discounts are no longer the chief reason people purchase GM vehicles, he said. Instead, more people appreciate GM's reliability and styling. Resale values are up as well across almost every segment.

GM will continue to practice restraint, LaNeve said, but will still compete in the incentive battle, especially when it comes to moving trucks and clearing out older models.

"We have inventory and we have to do whatever is necessary to keep our dealers competitive and protect our position," he said.

Finding the right balance is a challenge, said David Healy, an analyst at Burnham Securities.

"It's a choice they have to make," he said. "They have lost market share because of the unwillingness to cut prices with the competition."

[Snowman]

Great news….where is my G8? 

[airbalancer]

Great news….where is my G8? 

It is here http://www.pontiac.com/g8/
early 08
will 6 speed auto has stranded equipment
still want it?

[safristi]

GM is TOO BUSY puting OUR PRESS RELEASES.........!!!??? ..seems like a blizzard (wif Kit Kat please) of JAW JAW and  no WAR WAR.... ..WHO SAID THAT...i jusr did...

[UmroAyyar]

Lets see if they equip the same way as the Charger.  Charger has been done right, there is dissatisfaction with the Auto-only transmission.

[G0dspd]

Great news….where is my G8? 

It is here http://www.pontiac.com/g8/
early 08
will 6 speed auto has stranded equipment
still want it?

Great intro!    I want one too!