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Ford, GM Close Business Day With Biggest Stock Loss In Decades

Posted in auto industry, Ford, General, GM, Newsworthy, Toyota by Suzanne Denbow | October 9th, 2008 | 2 Responses |

[Stock footage of perpetually panicking investors courtesy of TIME.com]

At the close of the business day on Wall Street today, the Dow industrial average had dropped a total of 678.91 points, taking the auto industry with it on its downward spiral. Posting the biggest loss since 1950, GM closed today with shares at $4.76, measuring a 31% drop in value. Ford, which hit a 25-year low on Wednesday, today posted a 22% lost with shares closing at $2.08. In the wake of the staggering devaluation, the combined stock market value of two-thirds of the powerful Detroit 3 has sunk to well under $10 billion. To put that in perspective: Toyota Motor Corps was worth an estimated $106 billion dollars as of Wednesday, despite posting a 40% loss during the last year.

Essentially, the gaps that were present in Detroit’s model line-up are now leaking the most revenue, it’s not exactly surprising that the Prius’ mother ship is managing to tread water in the midst of the market downturn. Bottom line: once you hit rock bottom, there’s no where to go but up. Just sit tight guys – we will get through this.

[News Source: Auto News]

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2 Responses

  1. Geoff says:

    Guy on the right-“Why does this hand smell like shrimp? I haven’t had shrimp for a week.”

  2. Once investors get scared, it’s hard to make them believe again. That’s what President Franklin Roosevelt probably alluded to, when he famously said, “The only thing we have to fear is fear itself.”

    The management of the American auto companies marched the troops into the box they’re in, aided in part – but just in part – by the tremendous costs of pensions and health care, the former being those “legacy” costs we hear about from time to time.

    Key amongst those in management who led the profit picture into the land of SUVs and pickup trucks was Bob Lutz, who now seems to have had an almost religious conversion to plug-in hybrids and electric vehicles. But when the man some people consider the ultimate car guy came to Seattle, yours truly was not amongst the invited; and so, I’ll have to just give my best guess on how sincere he might be. Does the term “cheap opportunist” mean anything to you?

    The reason Toyota is in the position it is, despite the Japanese economy itself, still struggling to survive their bank crisis of the mid-1990s, is because the people who run Toyota – and Honda, too – think five to 10 years ahead, not just two to four (business) quarters, down the road (pun intended).

    Congressman Ron Paul, interviewed recently on CNN about the so-called bail-out, said he felt it might do some good, but only for a while, before things got worse. He also said, “I hope I’m wrong.

    My hunch is that even with the monies Congress and the Department of Energy recently gave what were once called “the Big Three,” one or two of them might be gone, in as few years as three to five. As an American who grew up when Detroit ruled the automotive firmament, I too hope I am wrong.

    It might have helped, if the Big Three had given up on making most of their profits from what Mitt Romney’s dad – once head of a company called American Motors – correctly, it seems, called “gas-guzzling dinosaurs.”

    In George Romney’s time, those “dinosaurs” were called the standard sized American automobiles. Even the elder Romney might not have seen that with the rise of CAFE (Corporate Average Fuel Economy) standards, the market would just shift from big cars, to big trucks and sport utilties; even to the point where today, most folks driving them, incorrectly their rides call “cars.”

    Maybe they should call it changing the deck chairs on the Titanic.