Transportation

General Motors: Calling Dr. Kevorkian

Toronto, May 25, 2009—“GM will soon stand for “Government Motors” inasmuch as its Chapter 11 bankruptcy filing and partial purchase by the U. S. government are inevitable,” says best-selling Lemon-Aid car guide author, Phil Edmonston. “Selling barely half as many cars as last year, shutting down its four divisions last month, draining GMAC financing, and capriciously firing 1,200 dealers last week, were the equivalent of pouring sugar into its gas tank.” he says.

“The ailing General Motors Corporation now needs a Dr. Kevorkian more than additional Washington and Ottawa handouts.”

“Unfortunately, the American and Canadian federal governments will continue to throw good money after bad and will buy up parts of GM as they get more deeply mired in Motor City quicksand. As a former member of the federal Parliament in the 1990s, I railed against throwing money into this swamp, yet Ottawa and Quebec gave GM’s now defunct factory in Boisbriand, Quebec $220 million to stay open. History is repeating itself.” adds the former NDP MP from Quebec.

Don’t believe the auto analysts that this downturn is only temporary. Auto sales are toxic and will worsen as already-bankrupt Chrysler gets nibbled to death by its creditors and fired car dealers prepare to testify on Capitol Hill.

Talk to your neighbours. Who do you know that plans to buy a new Detroit-made car or truck?

In effect, a recent study from automotive market research firm CNW surveyed 6,000 American shoppers intending to buy a new car within six months, and discovered that at least 80 percent of them would switch brands rather than buy from a bankrupt carmaker.

Let’s see, that means Chrysler and GM could lose four out of five potential clients while their sales are barely half of last year’s total. 

The poll showed that customers were more likely to abandon Detroit automakers than foreign ones, with Chrysler faring the worst— a full 91 percent of buyers wouldn’t buy a Chrysler product if the company went bankrupt. Ford and GM didn’t do much better, with eight out of ten buyers saying they would go elsewhere if the company closed its doors.

Recession-proof’ Buys in a Bad Economy

Edmonston says ironically, now is the time to buy a new or used vehicle, if you are careful and follow Lemon-Aid’s advice on how to spot a ‘recession-proof’ car or truck.

 

“Bad news for Detroit is good news for car buyers. Three-year-old large trucks and SUVs now cost less than half their original list price because of soaring fuel costs and poor sales. Now that fuel prices have dropped, vehicle prices have remained in the basement and many cars are selling at a 30 percent discount. Prices will remain low through the first quarter of 2010.”

 

Says one terminated car dealer: “If new is sold at auction for cheap, that inventory can be remarketed for far less than whatever the factory sends along. Prices will be depressed for some time—at least until the distressed inventory can be cleared.”

To schedule an interview with Phil Edmonston on the above topic or any other automotive concern, contact him directly at lemonaid@earthlink.net or call 416-628-2821.

To receive a review copy of the Lemon-Aid 2009-10 Used Car and Truck Guide and for further information, contact:  Ali Pennels, Dundurn Press, apennels@dundurn.com or call 416-214-5544, ext. 222.

© 2009 Defining Canada.