Going down a Hybrid Tube

[tw]

Few if anyone saw it coming, in part, because their spread sheets are so complex and almost unreadable. But in 1991(?), General Motors was only hours away from total bankruptcy. Could it eventually happen? There are some very ominous clouds. For example, much of GMs profits once came from the financing of their cars. But to maintain sales of unspectacular products, GM has all but given away cars with 0% financing. IOW they made sales in years past by destroying future profits from that financing. It has to catchup with them.

Previously, GM uses about $1billion profits from Opel to mask their losses in North America. When Opel needed capital to redesign an aging product line, instead, GM said no. Now there are no massive profits from Opel. So where to suck money from to cover up losses on their product line?

GM recently announced many new models (as if many new design will solve a no spectaculor design problem) to revive their N American product line. But reviews have been mostly mediocre. IOW where are these monstrous profits to come from? 500 Hp Corvette? Not likely. Hybrids? GM still has none. In fact GM is again hyping Hydrogen as if it has any hope of being a new product. Simple engineering numbers say, "Give me a break".

from The Economist of 15 Jan 2005
David Cole, the respected head of the Center of Automotive Research, suggest that one of the "big three" American carmakers could go bust. Even after a year of strong vehicle sales, relentless price-cutting has sapped Detroit's profitability. Health care costs are mounting. Over capacity is growing. That Mr Cole, usually a Detroit booster (and son of a former GM president to boot), could evoke such a sombre scenario was chilling.