Auto Sales Plummet, GM and Ford Meet Demand Destruction
"Frightening" Says a GM Exec
According to a business survey released today by the National Association for Business Economics (NABE), respondents were "considerably more negative" than they were in July when the last report was taken.
All told, a full 90% of the 102 members were more pessimistic about the economy than they were during the summer months.
According to the group, the survey's measure of demand growth fell by the largest amount in its history, and for the first time since 2001, more respondents reported declining demand than rising demand.
That doesn't exactly bode well for the future since every time this indicator has turned negative since 1982 the economy has later proved to be in a recession.
Moreover, for the first time since 2003, more panelists' firms cut jobs rather than added them, and the employment outlook for the next six months turned even more negative.
Those gloomy sentiments were closely mirrored in another report today by the Institute for Supply Management. Its manufacturing index fell to 38.9, the lowest reading since September 1982 when the country was in a deep recession.
Any reading below 50 signals contraction.
But of course, in a lot of ways those numbers were just telling us what we already knew-it's bad out there and it's getting worse.
Meanwhile, anybody that doubts that ought to take a look at auto sales. They have now reached a level that is "frightening" according to a General Motors executive.
Take a look:
From AP by Tom Krisher and Bree Fowler entitled: GM Oct. sales fall nearly half; Ford drops 30 pct.
"General Motors' October U.S. sales plunged 45 percent and Ford's dropped 30 percent, as low consumer confidence and tight credit combined to scare customers away from showrooms.
The results released Monday — along with a 23 percent drop at Toyota and a 25 percent decline at Honda — are strong indications that sales for the industry as a whole may perhaps be the worst in 25 years.
Detroit-based General Motors Corp. said its light trucks sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.
The results were less severe at Ford Motor Co., which said its Ford, Lincoln and Mercury car sales were off 27 percent, while light truck sales for the three brands were down more than 30 percent.
Overall, GM sold 168,719 vehicles, down from 307,408 in the same month last year, while Ford, including its Volvo brand, sold 132,278 light vehicles last month down from 189,515 in the same month last year.
Mike DiGiovanni, GM's executive director of global market and industry analysis, said the credit crisis and financial market turmoil are affecting the industry to a "frightening" level.
If GM's sales were adjusted for population growth, October would be the worst month of the post-World War II era, he said.
"Clearly we're in a very dire situation," he said."
By the way, if that's not enough, Circuit City announced today it is closing 155 stores.
That will leave a full 17% of its current workforce without jobs by the end of the year.
The sales at those stores start on Wednesday.
Here's the list.
Ho. Ho. Ho.
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