R.I.P. General Motors (1931-2006)

[Dave Kelsen]

The auto dealer franchise laws prevent the manufacturer from competing with
dealerships so fleet sales are all delivered through dealerships. That
said, there are some exceptions in some states like MA and CA where the
manufacturer can sell some vehicles directly to employees and qualified
vendors. In other states like Illinois, automakers cannot do a retail
delivery even to an employee and so employee purchases must go through a
dealership.

Fellas, laws are enacted by governments. There may be rules that
dealerships agree to adhere to in order to represent a manufacturer;
likewise, the manufacturer may, in such a contract, make certain
promises to entice the dealership to do business with them. If a dealer
has signed a contract and reneges on the promise therein, he's broken a
civil law. Similarly, the manufacturer can be held to statements they
have agreed to in a contract, because the contract has the force of law.

There's no such thing as 'franchise law', in any of the fifty states.

I know this is usenet, and I certainly acknowledge everyone's right to
do whatever you want, but I ask again that you quit trying to argue with
this Mike guy. Surely you can see by now that it's not useful...


RFT!!!
Dave Kelsen

 

[Dave Kelsen]

Fellas, laws are enacted by governments. There may be rules that
dealerships agree to adhere to in order to represent a manufacturer;
likewise, the manufacturer may, in such a contract, make certain
promises to entice the dealership to do business with them. If a dealer
has signed a contract and reneges on the promise therein, he's broken a
civil law. Similarly, the manufacturer can be held to statements they
have agreed to in a contract, because the contract has the force of law.

There's no such thing as 'franchise law', in any of the fifty states.

This is incorrect. I apologize. In many cases, laws labeled 'franchise
laws' in individual states are not particularly relevant to franchise
operations, but in many others, they are. I was simply wrong. And
somewhat ashamed to be an American. I consider such *laws* to be
illegal - specifically, unconstitutional. But they *do* exist. Mea culpa.

I know this is usenet, and I certainly acknowledge everyone's right to
do whatever you want, but I ask again that you quit trying to argue with
this Mike guy. Surely you can see by now that it's not useful...

This still applies...


RFT!!!
Dave Kelsen
--
"Rightful liberty is unobstructed action according to our will within
limits drawn around us by the equal rights of others. I do not add
"within the limits of the law," because law is often but the tyrant's
will, and always so when it violates the rights of the individual." --
Thomas Jefferson

 

[Gordon McGrew]

That may be what you believe but it is not factual. EVERY manufacture offers
discounts to fleets and rental car companies. The current rate is around
$600 per vehicle, if you buy five or more. To rental car companies the cars
are their product, that they dispose of in a year or less. Most corporate
fleets whose vehicles, far more trucks than cars, are just one more tool
used in their business keep them in service for five years of 300K, on
average, because of federal tax deprecation laws. They
prefer domestics because they are more concerned about the overall costs of
ownership then whose name is on the hood.

....or whether they are enjoyable to operate or how they will hold up
after 3 - 5 years.

If you read the recent news stories, it is clear that the automakers
have considerable control over the number of fleet sales they make.
The most logical way to do this is by adjusting the discount.

Yes, imports do have some fleet sales. For Toyota it is 7%. The Big
3 have been running about 34% so far this year.

Fleet sales are a relief valve that allows the automaker to dump
excess production at little profit or even a loss.The pressure relief
valve is wide open at the Big 3 and their market share is still
dropping.

Ignoring fleet sales, GM and Ford combined sell about as many vehicles
as Toyota, Honda and Nissan.

 

[Gordon McGrew]

If one follows the market they would know GMs share prices are going up, not
down. I bought shares of GM in 1960 at 40 1/8. When the share price
reached 90 1/2 it split two for one. When the share price reached 92 1/4 it
split again two for one. The current total values of those 40,000 shares is
around four times what I paid, not counting the excellent dividends GM paid
for 45 years.


mike hunt

That is interesting since GM shares are trading for less now than
they were in 1962. Even including dividends the rate of return since
then has been less than 6%, barely better than inflation.

http://finance.yahoo.com/q/bc?s=GM&t=my

 

[Gordon McGrew]

Ever hear of the adage, Figures lie and liars figure? 5% returns? Did you
forget the years when the returns were in double digits? What did

What about the years when it dropped by 50%? Years like, oh I don't
know, 2005?

Studebaker and Toyota do over those samee 45 years?

I don't know about Studebaker (you might own DC stock now) but if you
had invested $1000 in both GM and Toyota 13 years ago, your GM stock
would be worth $1169 (with dividend reinvestment) and your Toyota
stock would be worth $4979. Invested in Honda it would be worth
$6098.

Desides who buys only
one stock or invests in one source? I am closing on a property on the
fifteenth that a bought in 1960 for $45,000 that sold at 1.8 million,
without a broker or realtor

Good for you. That should offset the GM turd in your portfolio.

 

[Lee Florack]

The auto dealer franchise laws prevent the manufacturer from competing with
dealerships so fleet sales are all delivered through dealerships. That
said, there are some exceptions in some states like MA and CA where the
manufacturer can sell some vehicles directly to employees and qualified
vendors. In other states like Illinois, automakers cannot do a retail
delivery even to an employee and so employee purchases must go through a
dealership.

But just because the automakers have to use the dealers as an outlet
does not mean they cannot dictate cheaper prices for fleet sales --
which they do. Automakers use fleet sales as a way to get rid of
excess cars -- GM and Ford have had a very large problem with too
many cars for years.

....and to Mike's point that all car manufacturers do this, to an
extent he's correct. however, GM and Ford are increasing their
sales through fleet sales to a much, much larger extent than anybody
else.

 

[Lee Florack]

I don't know about Studebaker (you might own DC stock now) but if you
had invested $1000 in both GM and Toyota 13 years ago, your GM stock
would be worth $1169 (with dividend reinvestment) and your Toyota
stock would be worth $4979. Invested in Honda it would be worth
$6098.

I guess that kinda clearly shows what the better investment is.

 

[Guest]

The unfortunate part is the average person has no idea that the reason our
manufacturing jobs are leaving the county is because of US consumer greed
and that THEY are ONE of the greedy consumers sending their own jobs off
shore LOL


mike hunt

Not quite, IMHO.
It isn't consumer greed, but CORPORATE greed that is doing it. Outsourcing
is the buzzword right now. Dump your employees, avoid the frustration, have
slave labor in Asia make the product, anb then sell the crap in the USA..

Why do you think the middle class has all but disappeared. There are now
37,000,000 living below the defined poverty level.

People buy at WalMart because that is the cheapest place in town (to the
eye of the public) and most people have to count their pennies.

This concept has been lauded by Republicans as free trade, and free trade
equals 'democracy', doncha know?

The Democrats are too disordered to laud anything.

 

[Lee Florack]

Not quite, IMHO.
It isn't consumer greed, but CORPORATE greed that is doing it.

...... and who are corporations made up of? People! That includes
stockholders

Outsourcing
is the buzzword right now. Dump your employees, avoid the frustration, have
slave labor in Asia make the product, anb then sell the crap in the USA..

Why do you think the middle class has all but disappeared. There are now
37,000,000 living below the defined poverty level.

People buy at WalMart because that is the cheapest place in town (to the
eye of the public) and most people have to count their pennies.

I find it interesting that you say people buy at Wal-Mart because
the need to save money but when talking about Corporations you don't
acknowledge that they need to save money too -- to be competitive or
go out of business. So, why is it OK for consumers to be concerned
about their bottom line but it's not OK for corporations (and the
PEOPLE that run them and the PEOPLE that own stock in them) to also
worry about saving money? Corporate officers have a responsibility
to their shareholders to stay competitive. I don't disagree that
they've not been successful all the time but you are ignoring the
need for corporate competitiveness and fiscal responsibility (i.e.,
the bottom line) while complaining about the need for similar traits
in 'people'.

This concept has been lauded by Republicans as free trade, and free trade
equals 'democracy', doncha know?

The Democrats are too disordered to laud anything.

Fairly wide, sweeping generalizations don't you think?

 

[Jason]

I agree.

However, I don't see why another company couldn't buy parts of GM and leave
the pension and healthcare costs to GM. For example, a different company
could buy say Hummer or Saab and leave GM stuck with pensions and health
care costs.

Alternatively, GM could do what the airlines have done and declare
bancruptcy, and shift the cost of the pension to a government agency and
dump the health care altogether.

GM has said it won't do that, but in a few years, they might not have a
choice.

Jeff

Jeff,
You are probably correct. Only time will tell.
If I had stock in GM, I would sell it ASAP.
Jason

 

[Jason]

Not quite, IMHO.
It isn't consumer greed, but CORPORATE greed that is doing it. Outsourcing
is the buzzword right now. Dump your employees, avoid the frustration, have
slave labor in Asia make the product, anb then sell the crap in the USA..

Why do you think the middle class has all but disappeared. There are now
37,000,000 living below the defined poverty level.

People buy at WalMart because that is the cheapest place in town (to the
eye of the public) and most people have to count their pennies.

This concept has been lauded by Republicans as free trade, and free trade
equals 'democracy', doncha know?

The Democrats are too disordered to laud anything.

You may not be aware of the fact that most all foreign car companies
(including Honda and Toyota) assembly thousands of vehicles in America. I
believe that all car companies (including GM and Ford) have many of the
car parts made in foreign countries. They do this since they would have to
pay American workers twice as much to make those same products. They
assembly cars in America so they won't have to pay to ship the cars to
America or pay import fees.
Jason

 

[Jason]

...or whether they are enjoyable to operate or how they will hold up
after 3 - 5 years.

If you read the recent news stories, it is clear that the automakers
have considerable control over the number of fleet sales they make.
The most logical way to do this is by adjusting the discount.

Yes, imports do have some fleet sales. For Toyota it is 7%. The Big
3 have been running about 34% so far this year.

Fleet sales are a relief valve that allows the automaker to dump
excess production at little profit or even a loss.The pressure relief
valve is wide open at the Big 3 and their market share is still
dropping.

Ignoring fleet sales, GM and Ford combined sell about as many vehicles
as Toyota, Honda and Nissan.

It's my guess that Ford and GM make less money per vehicle than Toyota,
Honda and Nissan. The exception would be the full sized pickups made by
Ford and GM since they have very little competition in regard to full
sized pickups.
Jason

 

[Edwin Pawlowski]

You are probably correct. Only time will tell.
If I had stock in GM, I would sell it ASAP.
Jason

May be a great time to buy! time will tell.

 

[Jeff]

What about the years when it dropped by 50%? Years like, oh I don't
know, 2005?


I don't know about Studebaker (you might own DC stock now) but if you
had invested $1000 in both GM and Toyota 13 years ago, your GM stock
would be worth $1169 (with dividend reinvestment) and your Toyota
stock would be worth $4979. Invested in Honda it would be worth
$6098.

Where did you get the numbers?

Jeff

 

[Jeff]

It's my guess that Ford and GM make less money per vehicle than Toyota,
Honda and Nissan. The exception would be the full sized pickups made by
Ford and GM since they have very little competition in regard to full
sized pickups.

Dodge makes full-size pickups. Honda recently entered the market. I think
Toyota is going to enter the market too.

With Toyota's participation in NASCAR (now in trucks, in Nextel Cup next
year), I suspect that Toyota's sales will go up.

I am not suggesting that Dodge, Honda and Toyota offer that much
competition. But they will.

Jeff

 

[Jeff]

Did you factor in the fact that ~25 - 30% of domestic vehicles are
sold to fleet purchasers at deep, deep discounts? Accountants like
them because they are cheap and generally they don't have to drive
them. Then they sell them in three years which is one reason that the
resale value of your GM car sucks.

Among people buying cars for their own personal use, import brands
have been taking market share away form the Big 3 for decades now.
You keep including Chrysler in the Big 3 but they aren't really a US
company anymore and Toyota will likely pass them in US sales this
year. There really are only two domestic companies now and both are
in a world of hurt.

And world-wide sales of Toyotas is expected to exceed GM's by next year.

Jeff

 

[Ray O]

But just because the automakers have to use the dealers as an outlet does
not mean they cannot dictate cheaper prices for fleet sales --
which they do. Automakers use fleet sales as a way to get rid of excess
cars -- GM and Ford have had a very large problem with too many cars for
years.

There are numerous laws in place to prevent price-fixing by manufacturers,
which is why the Monroney label lists manufacturer's *sugested* retail
price. I do not know how Saturn division is able to enforce a no-haggle
policy.

Automakers cannot dictate cheaper prices for fleet sales but they can offer
fleet incentives to fleet purchasers of 5 or more vehicles.

...and to Mike's point that all car manufacturers do this, to an extent
he's correct. however, GM and Ford are increasing their sales through
fleet sales to a much, much larger extent than anybody else.

The main reason that Toyota has not been as active in fleet sales as GM and
Ford is that Toyota has not had the production capacity to support to
compete with GM and Ford's volume. As Mike has correctly pointed out, there
are basically 2 categories of fleet purchasers - rental companies that
change every year so that their fleet remains current, and users that keep
vehicles based on tax depreciation and utility. Mike is also correct that
fleet buyers base their decisions on overall cost of ownership, including
acquisition, maintenance, repair, operation, resale, and suitability for
intended use. In some cases, origin is important - most government
purchasers buy U.S. nameplates. I disagree with Mike that Toyotas are more
costly to service and repair. My experience is mostly with Toyota, and some
domestic brand parts are less expensive and some Toyota brand parts are less
expensive so that overall, assuming the same overall vehicle reliability,
neither has a distinct advantage. Of course, that invites the discussion of
whether one brand is more reliable or durable than another, based on which
study one wishes to believe and one's anecdotal experience. From my
experience dealing with fleet operators, especially those with in-house or
contracted maintenance and repair facilities, the cost difference during
their ownership period is not large enough to turn them overwhelmingly
towards imports and in the end, acquisition price is the determining factor.

 

[Ray O]

Dodge makes full-size pickups. Honda recently entered the market. I think
Toyota is going to enter the market too.

Honda does not make full-sized pickups. The only imports with full-sized
pickups for sale in the U.S. are Toyota and Nissan. Toyota has been in the
market for over 10 years with the T100 and first generation Tundra, with the
second generation Tundra going on sale in the fall.

 

[Jason]

Dodge makes full-size pickups. Honda recently entered the market. I think
Toyota is going to enter the market too.

With Toyota's participation in NASCAR (now in trucks, in Nextel Cup next
year), I suspect that Toyota's sales will go up.

I am not suggesting that Dodge, Honda and Toyota offer that much
competition. But they will.

Jeff

Jeff,
It's my guess that in the year 2010, the foreign car companies that you
mentioned will be sell as many pickups as Ford and GM sold in 2005.
Do you agree or disagree?
Jason

 

[Jason]

There are numerous laws in place to prevent price-fixing by manufacturers,
which is why the Monroney label lists manufacturer's *sugested* retail
price. I do not know how Saturn division is able to enforce a no-haggle
policy.

Automakers cannot dictate cheaper prices for fleet sales but they can offer
fleet incentives to fleet purchasers of 5 or more vehicles.


The main reason that Toyota has not been as active in fleet sales as GM and
Ford is that Toyota has not had the production capacity to support to
compete with GM and Ford's volume. As Mike has correctly pointed out, there
are basically 2 categories of fleet purchasers - rental companies that
change every year so that their fleet remains current, and users that keep
vehicles based on tax depreciation and utility. Mike is also correct that
fleet buyers base their decisions on overall cost of ownership, including
acquisition, maintenance, repair, operation, resale, and suitability for
intended use. In some cases, origin is important - most government
purchasers buy U.S. nameplates. I disagree with Mike that Toyotas are more
costly to service and repair. My experience is mostly with Toyota, and some
domestic brand parts are less expensive and some Toyota brand parts are less
expensive so that overall, assuming the same overall vehicle reliability,
neither has a distinct advantage. Of course, that invites the discussion of
whether one brand is more reliable or durable than another, based on which
study one wishes to believe and one's anecdotal experience. From my
experience dealing with fleet operators, especially those with in-house or
contracted maintenance and repair facilities, the cost difference during
their ownership period is not large enough to turn them overwhelmingly
towards imports and in the end, acquisition price is the determining factor.

Ray,
The most important thing that you stated was:

Automakers cannot dictate cheaper prices for fleet sales but they can offer
fleet incentives to fleet purchasers of 5 or more vehicles.

American car companies or dealers probably make sure they sell at least 5
or more vehicles so they can't grant special deals and discounts. One of
the other posters mentioned that GM and Ford own lots of stock in Avis.
These two factors could explain why you will find more GM and Ford cars on
the Avis rental lots than foreign cars. When I rented a car from Avis,
almost every car on the lot was a GM or Ford car. They did not have any
Honda cars and only two Toyota cars. I rented one of the the Toyota cars.
I should note that they had one BMW but the rental rate on that one was
twice as much than the Toyota car that I rented.
Jason