General Motors has announced it will reduce prices and continue the heavy discounting to increase sales all this after very poor quarters for both Ford, GM and the bankruptcy filing by Delphi. General Motors needs to retake their market percentage losses, which were earned by Japanese Automakers, with their more fuel-efficient cars. Some say the slight pull back in fuel prices will help GM retake some of the recently lost market share.
GM has negotiated reduced health care with it’s union as that was an intense cost and spiraling out of control. Financially speaking most financial analysts say that GM is strong and can weather the storm, but that indeed, it is a serious crisis. Some are asking is a price war instigated by General Motors is a smart move when the company is losing money.
The Airline Industry may also continue to bleed. Delta Airlines lost 1 Billion Dollars in the third quarter and it is already in bankruptcy, some ask will it ever emerge? There answer was to cut costs and the smaller feeder airlines synchronized to its larger flights are also in bankruptcy. The airline says it has gotten some pay concessions from its unions, including the pilot’s union. Now it wants to do more international routes such as to Europe and Asia, yet with Bird Flu travel maybe hampered. Additionally fuel costs are still too high and the airline is still bleeding money. Meanwhile the final death nail is that the discount airlines are increasing the pressure to lower price.
Something has to give in these industries or they cannot survive as they have before. It maybe too late for some players in these sectors and there may need to be complete overhauls and deep cost cutting. That means job losses, more bankruptcies and problems for our Nation’s economic engine. Think on this.
New GM Incentives May Cause Car Price War General Motors is taking the lead in what may become the next new car price war
GM has announced a new incentives program of "Red Tag" prices on cars and light trucks through Jan. 3. GM has been suffering billion-dollar losses and a declining North American market share. Under the program, dealers will post fixed maximum prices on most models of 2005-2006 Buick, Chevrolet, GMC and Pontiac nameplates, knocking up to $3,000 off the list price. GM said the prices will be consistent across the country, excluding taxes, title costs and dealer fees. The company said its round of incentives combines features of its recent "GM Employee Discount for Everyone" program and last December's Red Tag program. An analyst in Tokyo said the move will likely trigger a new round of price cuts across the car industry, even by Asian producers.
GM said its North American division continues to suffer from high health care costs and falling sales of sport utility vehicles. The automaker said it was launching a nationwide advertising campaign on network television, on radio, in print and in other media to promote the incentives. The company announced separate incentives for its Cadillac, Saturn, Saab and Hummer nameplates. It said Cadillac, Saturn and Saab will offer $500 rebates, while Hummer will have special pricing for a rear entertainment system.
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Written By: Lance Winslow
