Auto bailout has already helped GMAC and GM sales

Emptywheel has looked closely at the numbers for December auto sales, and reaches a startling conclusion:

While GM and Ford still lost more sales across the year than Toyota and Honda (because they also tanked during the gas price crash of the summer), their performance against Toyota and Honda more recently demonstrates the degree to which recent sales are a credit driven issue, and not what Richard Shelby likes to claim is a failed business model. . . .

Both the Prius and the Tundra had worse than average declines last month, with the Tundra down 52% and the Prius down 45%. This isn't about gas prices anymore--it's about money.

Emptywheel also notes that Ford has managed to gain market share for three consecutive months now - for the first time since 2001 - again giving the lie to Shelby the Republicans.

But here's the really amazing thing, down in one of the updates:

Part of GM's less-bad-than-forecast sales were due to the GMAC deal put together at the end of the month.

"GM said its December sales were helped by a zero-interest financing offer that its GMAC finance unit was able to make during the last few days of the month after GMAC was granted status as a bank holding company by the Federal Reserve.

"This allowed GMAC to access money from the federal government aimed at helping banks and Wall Street firms. GMAC had essentially run out of cash to make auto loans earlier in the fall."

Shockers!! BushCo actually managed to free up credit somewhere!! And the entity involved actually offered that credit!!!

Zounds! That means that if you give money to companies that actually, you know, produce something, rather than like, Goldman Sachs, there is a positive result! Amazing! I say take back all the $350 billion already given to Wall Street and the banks, and give it to the auto industry instead!

Emptyhwheel ends with an update on Hyundai, which has a U.S. plant in Alabama: the numbers are as bad as the other companies,

which explains why they're doing the offer where they'll take your car back if you lose your job


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I'm sure that zero financing

I'm sure that zero financing environment in addition to the absurd deals many of the dealers cut to move these cars is sustainable. I'm sure they can profitably continue to offer buy one get one free. Without such an absurdly low interest rate and without basement prices (probably below profitability) these cars do not sell. Nevermind this does not address the bedrock issue here: can the big 3 automakers produce cars that sell at a profit. The answer, appears to be a resounding "NO!" I'll be watching in the quarters ahead to see if these sales continue.

What you are forgetting is that our entire crisis predicates on the issue of financing. The consumer has tapped out her ability to finance and no longer has an asset bubble to sustain the overconsumption that maintained growth over the past 10 years. The automakers must respond to this new environment accordingly by cutting excess production, and sadly, jobs that ran that production. There is no other option.