Camaro stillborn???

[Payman]

I just got home from visiting family in Oshawa... home of the new Camaro assembly line. 2 of my uncle's friends were at his place, they were discussing the closure of their plant. When the plant re-opens in February, presumably to start Camaro production, they're not confident that the car will actually see production, and the line will be dismantled and the plant closed down for good. I refused to believe them, but they are genuinely worried. Holy shit I hope it's not true.

[the Teuton]

It's probably not true.  They'd lose more money not making the car right now than they would selling it at a loss.

[Raza]

With gas coming down, and the sheer amount of Challengers I'm seeing (like two or three a day now), I'm sure they'll still sell a couple. 

Still, whether they do or don't make, it doesn't really matter to me.  I wasn't going to buy one anyway.

[280Z Turbo]

It's probably not true.  They'd lose more money not making the car right now than they would selling it at a loss.

I don't know. GM seems to do stupid things quite often.

[GoCougs]

It's possible. With GM as cash-strapped as it is, it may be a simple matter of practical finance - that GM just doesn't have the cash to keep the plant running, as after all, GM has to spend money to make cars before it gets money from selling them ("float"). A lot of what GM needs a lot of cash for (as most manufacturers in any industry) is this float between spending money and earning money. If things get this bad, it's better not to take chances on a new products - just do all you can to keep the current selling product moving out the door.

[BimmerM3]

With gas coming down, and the sheer amount of Challengers I'm seeing (like two or three a day now), I'm sure they'll still sell a couple. 

Really? I've only seen two or three on the street total.

[Rich]

GM sues supplier to keep Camaro production on schedule
http://www.leftlanenews.com/gm-sues-supplier-to-keep-camaro-production-on-schedule.html

And on a totally separate issue:

Also, the ambient lighting, a part of the 2SS with leather package, is uncertain to be ready in time for production.  So now something that has been a part of hundreds of Camaro orders might not make it in time. It's got a lot of people pissed off

I couldn't care less anymore.  Scott Settlemire is an overpaid redneck

[sportyaccordy]

GM has like 12 months worth of cars waiting to be sold... they should get those off the lots before worrying about bringing a Camaro out.

I wonder how SUV sales are doing now with these artifically low prices...

[Onslaught]

Really? I've only seen two or three on the street total.

I see them all the time now.

[SVT666]

GM has like 12 months worth of cars waiting to be sold... they should get those off the lots before worrying about bringing a Camaro out.

I wonder how SUV sales are doing now with these artifically low prices...

GM needs a car that sells, so bringing the Camaro out sooner would be better.

[Gotta-Qik-C7]

And the Camaro soap opera continues.......

[GoCougs]

And the Camaro soap opera continues.......

It's a shame - IMO it is(was) looking to be one GM's best cars in quite some time.

[FlatBlackCaddy]

I wouldn't be surprised, in fact i've kind of been waiting to hear something like this. Never underestimate GM, they are the biggest screw up of the modern auto industry.

Don't put it past them either, they cancelled the northstar replacements right at the end of development. By scraping that they wasted millions.

[Laconian]

http://online.wsj.com/article/SB123032162988835835.html

GM Sues for Access to Parts for Camaro
The auto maker, struggling to stay afloat amid a crippling liquidity crisis, said it stands to lose millions of dollars if the parts and tooling aren't returned immediately by Cadence Innovation LLC, of Troy, Mich.

Without the equipment, GM says, production could be interrupted at several assembly plants, with a ripple effect hitting suppliers and dealers. The damages, GM said in a bankruptcy-court filing, "would be substantial, but difficult, if not impossible to calculate."

Cadence, which makes consoles, door panels and other parts, filed for Chapter 11 bankruptcy in August and entered liquidation proceedings earlier this month. GM, in a court filing on Wednesday, said it wants the parts and tooling returned immediately so it can have a new supplier in place by Jan. 12.

"Even one day's disruption in supply of certain component parts could cause a shutdown of GM assembly operations, disrupting not only GM's business, but the operations of countless suppliers, dealers, customers and other stakeholders," the auto maker said in the lawsuit filing with U.S. Bankruptcy Court in Delaware.

A lawyer for Cadence declined to comment on the case.

Access to company-owned equipment is an ongoing battle for auto makers when suppliers file for Chapter 11 bankruptcy protection. Chrysler LLC sought and was denied access to equipment when Plastech Corp. filed for bankruptcy earlier this year.

Auto makers provide suppliers with special machinery to build exclusive parts for their vehicles. The suppliers use the machines in their plants but traditionally sign agreements dictating that ownership of the machines belongs to the auto makers.

GM can ill afford another costly glitch as it scrambles to reduce costs and restructure its money-losing operations. GM last week was granted access to $9.4 billion in federal aid that the company said it needed to survive into 2009. Even with the injection, GM is running perilously low on cash it needs to run the business.
?Jeff Bennett contributed to this article.

Write to Sharon Terlep at sharon.terlep@dowjones.com

[r0tor]

^ I wonder how the GM brass feel about their cut throat bidding process when it comes to their suppliers now...

[sportyaccordy]

GM needs a car that sells, so bringing the Camaro out sooner would be better.

What happens to all the Aveos

[TBR]

^ I wonder how the GM brass feel about their cut throat bidding process when it comes to their suppliers now...

Somehow I doubt GM is any more cut throat than Toyota is.

[Rich]

I'm going to guess that the ambient lighting issue is due to this supplier.  Who knows?

Anyway, test fleet Camaros have been built and are in the corporate fleet for employees to drive...

V6 sound clip:

http://www.youtube.com/watch?v=qIoZ3fIMrk4&e

[SVT666]

What happens to all the Aveos

What's that got to with the Camaro?

[Gotta-Qik-C7]

What's that got to with the Camaro?

Shit! 

[r0tor]

Somehow I doubt GM is any more cut throat than Toyota is.

actually the german and japanese car manufacturers tend to stick with one supplier for an item and help them to produce things for a better price as time goes along.  The big 3 bid everything and award to the lowest bidder.... its one of the rather large differences between automaker philosophies

[the Teuton]

Your friendly neighborhood r0tor is right.  The Japanese, especially, try to build long-lasting relationships with their suppliers in order to get a personal, reciprocal relationship between their companies. 

[Laconian]

Let's make industrial robots to replace the Big 3 management. It'll save tons of money and the businesses will remain at status quo (maybe it'll be a little more efficient, since robots are perfectly happy to fly coach.) I'll write the software.

Supplier& Big3CEO::sourceParts(Supplier& s1, Supplier& s2) {
    if (s1.getEstimate() <= s2.getEstimate())
         return s1;
    else
         return s2;
}

The system is perfectly failsafe. All catastrophic exceptions are handled just like their flesh in blood counterparts would.

try {
   // main event loop:
   while (!this->business.isRunIntoGround()) {
       this->mismanage(business);
   }
} catch (...) {
    this->blame(economy);
    this->blame(government);
    this->blame(consumers);
} finally {
     throw new GoldenParachute(UINT_MAX);
}

Roger Smith would be proud.

[FlatBlackCaddy]

GM sucks, penny pinching old timers.

screw quality, screw stability, save me 10 cents on a 5 dollar part.

[MrH]

It's probably not true.  They'd lose more money not making the car right now than they would selling it at a loss.

That doesn't make any sense.  Re-read what you just said.  You're saying they'd lose more money cutting their losses now and stopping everything on the Camaro than if they sold them at a loss?  If each car is sold at a loss, that just adds to the growing money pit the Camaro already is.  I highly doubt each car will be sold for a loss, so they will probably proceed, but I doubt this car will make them money in the long run when you consider the money spent to develop the thing.

[the Teuton]

MrH, I know what I said, and yes, if the car sold and was still losing money, it'd probably be a better move than not selling the car at all.  Do I need to dig up my managerial economics notes?

[MX793]

MrH, I know what I said, and yes, if the car sold and was still losing money, it'd probably be a better move than not selling the car at all.  Do I need to dig up my managerial economics notes?

I'm sorry, but that logic escapes me as well.

Let's say you drop $10 million into developing a car.  That car costs you $20K per unit to produce.  In order to recoup your development costs, you would have to sell each unit at some amount higher than the production cost and you'd have to sell enough of them such that it added up to your initial $10 million investment (e.g. 10,000 units at a 1,000 dollar profit per).  Now lets say you sell each unit at a $1000 loss per ($19K per unit).  If you sell 10,000 of them, you lost 10 million dollars on top of the 10 million you spent developing the thing.  How are you better off?

[Laconian]

Do I need to dig up my managerial economics notes?

yes

[the Teuton]

I'm sorry, but that logic escapes me as well.

Let's say you drop $10 million into developing a car.  That car costs you $20K per unit to produce.  In order to recoup your development costs, you would have to sell each unit at some amount higher than the production cost and you'd have to sell enough of them such that it added up to your initial $10 million investment (e.g. 10,000 units at a 1,000 dollar profit per).  Now lets say you sell each unit at a $1000 loss per ($19K per unit).  If you sell 10,000 of them, you lost 10 million dollars on top of the 10 million you spent developing the thing.  How are you better off?

You forget about all of the fun things like training employees, the (unionized) staff they've already hired that will be paid no matter what, and the molds, presses, and casts they've already set up for this car.  Everything costs money, and they need to pay for it somehow.

Sure, we shouldn't consider sunk costs, but there's an awful lot of investment that could be paid off rather than losing all of it if no cars were to be made at all.

[MX793]

You forget about all of the fun things like training employees, the (unionized) staff they've already hired that will be paid no matter what, and the molds, presses, and casts they've already set up for this car.  Everything costs money, and they need to pay for it somehow.

Sure, we shouldn't consider sunk costs, but there's an awful lot of investment that could be paid off rather than losing all of it if no cars were to be made at all.

I would consider tooling, training, etc all part of development costs.  These are the up-front costs that you'll spend whether you build 1 or 1 million units.  Production costs would be the costs of the labor and material used building each unit.

Again, if you drop $10 million in engineering/design, tooling, personnel training for a product that costs $20K per unit to build (materials and labor) and then sell each unit at $19000 (a $1000 loss per), how do you recoup any of your development costs?