Home Forums Hunting & Shooting Hunter's Campfire GM to shutter plants for up to 9 weeks ?

So says "a source"

a good time to go bankrupt, perhaps ?

any scoop from the employees ?

Not a doubt in my mind that they will end up in bankruptcy court - just when is the question.

Maybe, just maybe, had the bammer bailed out the over-tax(ed) payer, some of that money would end up in GM's pockets. Cars sold means continued production. But what do I know? I was raised in Tx.

BP...

No scoop, just some insights.

Each car has between $15,000 and $25,000 of parts in them. The carrying cost of those parts are borne by the value chain from the moment the unit is scheduled until the moment the unit is delivered to the retail customer.

The entire value chain is staggering under the cost of carrying that inventory.

The hoary, time-honored "ideal" inventory is 60 days inventory.

Our hot sellers have between 90 days and 120 days inventory. That suggests that 30-to-60 days of downtime before model change over would be a no-brainer.

A customer walks onto a lot. "Show me what you have in Cadillac CTSs" he/she says. He/she wants to see a minimum of three different colors, two different engines and two different trim levels (3 time 2 times 2 = 12 Cadillac CTSs)

That 60 day hoary, time-honored "ideal" presumes those units must be on the dealer lot, even the tiniest dealership, before the customer shows up. Today, you can have one, not twelve, of each model and use your computer and network of dealerships to get the one with the color/engine/trim the customer says he wants THE NEXT DAY. In a very real sense, all inventory within 90 miles is available to you...so why does each dealership need one example of everything?

Another factor is that the number of dealerships is being reduced. The little ones will founder. The big, successful ones will flourish. The little ones tend to have a higher ratio of $ tied up in inventory relative to sales...their carrying costs per unit tends to be higher. That high inventory is boiled into the 60 day inventory bogey.

Both of these arguments are regression-to-the-mean arguments. Larger samples (dealerships, in this case) tend to be more stable, are more likely to have the unit a customer will want in stock for the same-day sale. Faster turnover means less inventory.

So the mean shift toward large and mega dealers coupled with the cheap information via the internet means that the new ideal inventory will be WAY less than 60 days supply.

-Joe

how do they get around the state "franchise" laws when trying to reduce dealer #s outside a bankruptcy? (I've read they have 50% too many)


why can't they be "made to order", more or less ?

have a 2 "demos" on the lot, yours shows up 10days (?) later?
premium pricing on the demo?

Bam Bam won't let them go full bankrupt like they actually already are because now his presidency is tied to their success. He'll bleed the country dry (or even more dry) to keep them afloat so that it doesn't go down on his resume that GM went belly up during his administration.

I think you mean premium pricing on the made to order. I wish you could order it how you want and get it for a good price. The moment you say you want it in a particular config, well, then the price goes ridiculous, unless they can do a quick dealer trade.

no, I really mean why can't they be made to order in a reasonable timeframe?

if you wanna take the model off the lot (leaving the dealer "short"), pay more for drive-it-home....


the system as it currently is set up, doesn't seem to work well for anyone involved. there's gotta be a better way.

(I'd sure prefer to order and take delivery in a couple weeks of less money)

I've often wondered the same thing.

With control comes responsibility. If firing their CEO isn't control, I don't know what is.
GM can't go out, cause Obama can control them and needs them to make "Green Cars" that no-one wants.
I bet they are just fuming that Ford has stayed out of it. That would have given him the trifecta, and then we could only buy the cars he wants us to.
This bailout has never been about restoring the economy. It is about social engineering. Helping those of us that just don't know any better to enjoy the utopian socialist state.

Someone needs to kick GM upper management right in the teeth. Instead of telling the employees first we have to find out about our schedule from CNN

Don't know how true it is, we hadn't heard anything until it was broadcasted on the news. I expected it, too many 2009 cars on the lot and 2010 models are produced starting July.

If you'd like to pay UPS freight I bet they could get a car to you quicker.

Transportation cost would be higher to ship single units across the country. They wait until they have enough vehicles to fill a train before they ship.

I think GM couldn't come up with the sponsorship cash for the traditional July 4th NASCAR race as it's been a Camaro that has paced the field forever at the Coca Cola 600. It was announced today - which seems to come up pretty late in the grand scheme of things that are planned out a year ahead - that GM won't be involved but a Toyota hybrid will pace the field.

A percentage of them are.

One bottleneck involves wiring harnesses. Wiring harnesses are high labor content parts. They are typically made in places like Mexico or Asia. They are VERY specific to option content. That is one of the checks-and-balances for error-proofing to ensure you get the radio, seats, speakers, etc that you ordered and paid for.

A certain mix of option content is pre-ordered and always in the pipeline. If your order matches up with an unassigned harness you get your car quicker. If your order does not match up, then the harness starts out on the wrong end of a slow boat ride from a long ways away.

There are probably other issues, but I am pretty sure wiring harnesses are one of the bigger ones.

Somebody already mentioned the shipping.

-Joe

I believe that the 9 weeks will indeed be the timing of the "managed bankruptcy" fillings. Odds seem to favor mid to late June. GM stays in business but do you union folks have any sense as to if GM intends to force major concessions on the unions before entering the 2010 vehicle production season?

Harry M.

AJ, my speculation was in regard to Joe Mamma's first post.

It seems there is a great deal of holding cost built into the chain. I was speculating that increased shipping costs might be somewhat offset by decreased inventory costs later in the chain.

Also, since there are going to be fewer dealerships (and larger too), would some sort of regional distribution work for some of these pre-ordered option packages ?
(they have to have data on the most common packages, and if you want something oddball waiting doesn't seem out of line)

Yeah, they are all atwitter about that here in Cleveland.

get rid of the damn UNIONS!

Just goes to show you how well the "just in time" system works.

Sounds like a great opportunity for the UAW workers to take a 95% paid holiday.

There have been way too many options available. I know Ford is stream lining the list of options and going to a fast turn driven order system. The factory is taking more control of what can be ordered and when. You are going to see a lot of the same car in fewer different colors, with much the same equipment on the lots. I believe this is a good thing. Years ago the cars made over seas were the same way, if you wanted one you took what was sitting there, or didn't get one. The number of options X the number of colors X the models makes the job of building and stocking the cars and the parts etc. hugely expensive. RustyL