Stocks: (GM)(F)(DCX)(TM)
GM says it has cut $9 billion in annual costs. Ford is working on lowering expenses by over $5 billion a year. Daimler has sent German executives to the US to try to take $1,000 in expenses out of every Chysler vehicle. Inventories for The Big Three are so high that dealers do not want to take new cars, even the 2007 models.
Now, industry analysts are worried that 2007 annual car sales could fall well below estimates from GM and Toyota. The two big car companies are forecasting US sales next year at 16.5 million.
Trouble in the US housing market, especially in big states like Californian, could cut sales to 16.2 million units, according to some industry experts.
Toyota may be effected because California is a key sales territory in the US. But, the Japanese car giant has the financial resources to weather the trouble.
If sales slow, the company that may be hurt the most is Ford. There is already talk of its bankruptcy. The company itself is saying market share in the US could drop as low as 14%. But, what if that share is of a shrinking market.
Ford execs may have to go back to the drawing board once again.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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