Quote:
Originally Posted by Homeslice
No matter how much of a rebate they give, I still bet they make money on them. Remember, all an Escalade is is a Chevy truck with an enclosed body and fancy trim. Same as a Navigator is just an F150. That's a hell of a cost efficiency. Now, most of their passenger cars I'm sure they're losing money on.
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Quote:
Originally Posted by 101lifts2
It costs GM about 15-18K to produce most of its vehicles...A 40K Cad. Escalade is around the 18k figure, so they could discount it 20 grand and still make coin.
The problem is selling Cobalts where they loose on every one.
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The other problem is while Escalades, Silverados, Rams, etc. may theoretically be profitable, they have to be sold first. They could cost a dollar each to build but they don't have a positive impact on the company when they are sitting in lots by the tens of thousands not being sold.
Even if they are profitable though, it only strengthens my original point. The government doesn't want GM building cars that can apparently still be profitable. They want GM building cars that have historically lost money. GM certainly did plenty to bring this on themselves. Management placed the company in a position where they are dependent on government aid for their survival.
When Chrysler was given government aid in 1979 in the form of $1.5 billion in loan guarantees (over $4 billion today) the government didn't tell them what they should be building. Even without the now indispensable hand of government, Chrysler was able to repay the loans in 4 years. That apparently isn't the case as far as the current administration is concerned.
This brings me back to my original point. The government is trying to force these companies to build historically unprofitable cars, essentially guaranteeing the failure of these companies. The executives now have to work for stock, which will be worthless once the companies fail. Under these conditions how are GM and Chrysler supposed to attract any talent at all?