LGN News Headlines - -
Wed, Jul 2nd - 11:53PM
General Motors is going bankrupt...
It is the beginning of the end for General Motors.
Car, truck and SUV sales for the company have slumped so bad in recent years that the company that was first founded in 1908 now needs $15 billion in new investment just to stay afloat.
And if it does somehow raise or borrow $15 billion, I seriously doubt General Motors will manage to churn a profit and pay back its loans and investors. Let alone a profit large enough to pay back that sum.
Here is the root of the problem: General Motors workers in America and Canada are unionized and are paid two, three and sometimes 5 times what workers in other countries are paid. That means other countries can make cars at less expense, sell them for roughly the same amount, and investors end up making more money. Non-unionized companies like Toyota (which is now bigger than Ford) are making huge profits importing cars and building cars at non-unionized plants in North America.
Unionized workers are dragging the company down in a time when the
global economy is shifting its focus to Asia. In a global market being
unionized isn't such a good idea any more.
In addition General Motors is still promoting its SUV sales during a time when the market is shifting to small cars and hybrid cars due to high gasoline prices. Global warming was NEVER going to get people to stop driving their big SUVs, but oil prices of $143 is making new car buyers think twice about buying a vehicle when prices might skyrocket to $200 per barrel of oil in the not-too-distant future. Oil prices over a hundred is going to stay. So people are buying a lot less SUVs and the GM car salesmen can't seem to get rid of them, lowering their prices to the point that they're either not making a profit or selling them at a loss.
I'd argue that the North American market is now over-saturated with SUVs. Their resale values are crap, which means consumers are selling their SUVs for cheap or they keep driving a vehicle that guzzles gas. Or they could let it rust in the driveway, but that is not very promising either.
Ever tried to fill up the gas tank on a SUV? It gets very expensive. Better to sell it and get rid of it.
Compare that to the people who drive small cars and hybrids and hone their hypermiling techniques for fun, you start to feel a bit bonkers driving around in a vehicle that costs more to fill up than you earn in a day.
As for General Motors? If they do survive they will need to do something radical, like finally finishing their new hydrogen car that they invested millions on and putting it into production. America doesn't have hydrogen fuel stations yet, but someone has to build them so it might as well be General Motors.
It may be the one thing that saves General Motor's bacon, but I don't think they would ever do it. Its too radical and risky, and business executives and board members tend to be very conservative and don't like risk.
The problem is that being conservative and not taking risks is two reasons why General Motors is going down the drain. Toyota took a risk when they decided to build and sell hybrid cars and that risk has paid off tremendously. Taking a risk on hydrogen power is exactly what General Motors needs to do in order to boost its sales. And its not just hydrogen cars... its also hydrogen trucks and hydrogen SUVs. If they push the envelope and capture the public's attention the mass media will do most of the advertising.
Unfortunately General Motors isn't the only company seeking to push the hydrogen car envelope. The hydrogen car market is turning into an Eco-Car Battleground.
Learn more at:
The Automotive eZine
Wed, Jul 2nd - 8:04PM
Canadian Fashion and Chic
Canadian Style and Fashion
When you think of iconic Canadian style,
the Hudson's Bay blanket, toque, mukluks and plaid shirt come to mind.
As classic and enduring as they are, we propose a stylish new Group of Seven, consisting of brands and items that have the hallmark of quintessential Canadiana.
The Fashion eZine - Canada