GM cuts sticker prices, dealer discount

[zoom]

The price cuts take effect on Wednesday, Jan. 11, and will affect vehicles that account for 80 percent of GM’s total sales volume, said Mark LaNeve, vice president of North America Vehicle Sales, Service and Marketing.

 

LaNeve said GM is not eliminating incentives. "They are a part of the automotive landscape and, frankly, part of what makes this business fun," he said.

 

http://tinyurl.com/929p6

[68Cougar]

LaNeve said GM is not eliminating incentives. "They are a part of the automotive landscape and, frankly, part of what makes this business fun," he said.

 

http://tinyurl.com/929p6

What a stupid thing for him to say. Incentives are part of the problem...how is that fun?

[RichardJensen]

 

I nominate Alfred E. Neuman to succeed Rick Wagoner as CEO of GM.

 

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[PolarBear]

Sometimes I think the lights are on, but no one's home.

[mrgto]

http://news.yahoo.com/s/ap/20060111/ap_on_...d_credit_rating

 

Moody's Lowers Ford's Credit Ratings By DEE-ANN DURBIN, AP Auto Writer

2 hours, 31 minutes ago

 

 

 

Moody's Investors Service lowered Ford Motor Co.'s credit rating further into junk status Wednesday, predicting the company will remain under considerable financial stress through 2007 even with a pending restructuring.

 

Moody's cut Ford's rank two levels to Ba3 from Ba1. Moody's also lowered the long-term rating of Ford's credit arm, Ford Motor Credit Co., two levels to Ba2 from its lowest investment-grade rating of Baa3. The moves will make it more difficult for Ford and Ford Credit to borrow money.

 

Moody's action comes a week after Standard & Poor's Ratings Services also lowered Ford's corporate credit rating further into junk territory. S&P also cited concerns about the No. 2 U.S. automaker's ability to turn around its North American operations.

 

Ford lost more than $1.4 billion in its North American operations in the first nine months of 2005. But at the North American International Auto Show this week, Ford Chairman and Chief Executive Bill Ford said the company is making a profit in other regions. Ford plans to announce 2005 earnings on Jan. 23.

 

Also on Jan. 23, Ford plans to announce details of a restructuring that is expected to include plant closures and job cuts.

 

The automaker typically doesn't comment on ratings actions, but when asked about the S&P downgrade this week, Bill Ford said it was disappointing.

 

"Nobody likes to be downgraded," he said. "It's up to us to prove their analysis wrong."

 

Moody's said Ford will have trouble sustaining market share in its core markets. Ford's U.S. sales fell 4 percent in 2005. Moody's also said Ford's cost structure isn't competitive because of high labor rates and too much plant capacity.

 

Moody's said some bright spots for Ford are the upcoming restructuring and strong sales of its mid- and full-size cars, including the Ford Fusion.

 

Ford and Ford Credit have approximately $130 billion in debt, Moody's said.

 

Ford shares rose 16 cents to close at $8.93 in trading on the New York Stock Exchange.

 

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On the Net:

 

Ford Motor Co.: http://www.ford.com

[RichardJensen]

The moves will make it more difficult for Ford and Ford Credit to borrow money.

Yeah. Except Ford Motor doesn't borrow money, and Ford Credit has gotten around this by securing its short term loans. The actual impact of these downgrades is minimal. Ford Motor hasn't issued a bond in going on three years.

 

And, where it counts, Ford Credit's asset backed securities carry sterling credit ratings, enabling them to enjoy a wide spread between the rate of return on the portfolio, and the yield rate paid by the SPEs.

 

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