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In case it wasn't already clear, here's another reason why Obama bailed out GM and bought so much of its stock when private individuals and groups didn't want to risk their own money.
Now GM has been building far more cars than it can sell, in an effort to fill up dealers' lots and pretend the cars are sold when they're not.
Why would they do this, when such inflated sales claims today, will inevitably harm sales reports later?
Answer: Because "later" comes after the November elections.
So much for the claims that Obama is "saving" GM. In fact, all he is doing, is using GM to save himself... with no regard for what this will do to GM later.
GM ‘turnaround’ reports rely on ‘overbuilding,’ jam-packed dealer lots
Published: 1:33 PM 07/19/2012
By Ryan Lovelace
President Obama’s campaign claim that he rejuvenated the ailing General Motors depends on practices called “overbuilding” and “channel stuffing,” critics say. Car dealerships’ lots are filling up with unsold trucks and SUVs because GM built more vehicles than it can sell in order to inflate sales claims and artificially boost its profits, The Daily Caller has learned.
The Detroit automotive giant records sales for vehicles in dealers’ inventories before car buyers make their purchases, said Mark Modica, a National Legal and Policy Center associate fellow.
GM’s overbuilding “probably helped [GM] in the second quarter, but will hurt in the third quarter,” a Standard and Poor’s Capital IQ analyst added.
Third quarter results won’t be made public until after the November election, allowing Obama to tout the company’s short-term success while masking troubles that are not yet apparent to voters.
Sorry, but that article is stupid. GM is a publicly traded company. The government still owns 26% of the stock. Even a big shareholder doesn't get to force decisions on the board.
There are plenty of good industry publications for the auto industry and it's also heavily covered in places like the WSJ. Feel free at some point to read any of those so you can get a better idea of what is going on than you do by reading the daily baller.
In the Bay Area here, typically this time of year there are as many or more trade-ins on the various car lots as there are new vehicles, as they are waiting for the next years cars to arrive in a couple of months. The GM dealers here seem to have a rather large inventory of new cars as opposed to the other dealerships. My wife and I went car shopping both here and in Roseville, and found that to be the case in every instance.
Either the story is on point, or they aren't moving them out at a normal rate.
It wouldn't surprise me at all though. I learned awhile ago not to believe a damn thing our Govt spews forth.
Yes, GM is back to "channel stuffing". This was reported back in Feb 2012.
Here's the Zerohedge Feb article on it:
http://www.zerohedge.com/news/gm-cha...d-highest-ever
Just as we thought GM's channel stuffing days may be coming to an end, and the company may finally be normalizing its inventory management, here come January numbers, where we learn that in addition to car sales declining by 6% compared to a year ago, at 167,962 vehicles sold (of note: "Retail deliveries declined 15 percent compared with the same month a year ago and accounted for 70 percent of GM sales"), it was the all critical month end dealer inventory that caught our attention.
What GM is doing has been done for many years by all vehicle makers.
As I drive around town, I see every car dealer with overflowing vehicles and wonder who in this town is going to buy all these vehicles.
A local Cadillac dealer has so many cars that they have had to rent space from the shopping mall across the road to store vehicles. They have hundreds of unsold cars but GM can advertise a 'turnaround'.
A few days ago, GM bragged about selling a paultry 1750 Volts as their best sales month for the $41,000 vehicle. But they also admitted that they are losing hundreds of thousands of dollars on the Volt vehicle.
GM has improved their product quality. The upswing in quality had begun prior to the bailout. But they're beginning to backslide a bit with badge engineering. Buick Lacross is now being copied in Caddy as the XLS and in Chevy as the upcoming Impala. The Buick Regal is being copied as the 2013 Chevy Malibu. The Chevy Cruze shares it's platform with the Buick Verano. The cuts to GM should have gone further. They should have also eliminated Buick and GMC. That would have left them with volume affordable brand Chevrolet and high end brand Caddy, each with different vehicles. Their European brand, Opel, makes good FWD vehicles and efficient diesel engines. Their Aussie brand, Holden, is still a RWD brand. With such mass production, look for lower prices and rebates. I'm sure corporate and rental fleets will be flooded with these vehicles.
Go to a GM dealer and offer a low ball offer on a car and see what they say. Not a ridiculous low ball offer, but one just within reasonability. I was just reading how Chevy Volt sales are in the toilet.
Same thread by the same user ID on Hannity forums and Freepers, spread the BS far and wide Little Nut!
Well hot damn! I'm sure glad you cleared this all up for us.
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