Timely

I’ve been listening to NPR this morning, Talk of the Nation, and the discussion is centered on automobiles and fuel…how timely!

One view holds that fuel prices will rise to over $3 very soon. (That is already true at one station in Malibu) Now factor in the possibility of another terrorist attack that places the petroleum supply in jeopardy and the price will be over $4 in a hurry. And with that increase, everything else will increase in price.

Also brought out in the discussion was the fact that General Motors stock is in deep trouble.

“GM shares had plunged almost 14 percent last Wednesday, when GM cut its outlook for the year and warned that it would likely post a substantial loss in the first quarter. The stock fell a total of 17.1 percent for the week”.

Also noted was the fact that GM has shifted all of their marketing and development money to the promotion of more trucks and SUV’s… (contrary to the advise of most industry analysts.) SUV and truck sales gave GM a boost in the 90’s and they seem to think they can do it again.

“Chief Executive Rick Wagoner said last week that the automaker is making changes to allow new versions of its largest pickups to be introduced sooner than planned.”

I am going to go out on a limb here and predict that GM will have to re-invent itself by the end of the year or suffer a breakup. A “fire sale”.

The SUV is on its way out…At this time, no American automobile company is making money, so look for Ford and Daimler-Chrysler to make changes soon. The industry leader continues to be Toyota.