by Calculated Risk on 2/17/2009 07:02:00 PM
Tuesday, February 17, 2009
Here is the GM Restructuring Plan.
And the Chrysler Plan.
The following chart shows the GM baseline U.S. auto sales forecast and a comparison with J.D. Power and Global Insight forecasts.
Click on graph for larger image in new window.
I believe this forecast is conservative. GM is estimating replacement demand is 12.5 million units per year, and that sales will be below replacement demand for the next 6 quarters or so.
I've noted before that the current level of auto sales is unsustainable, and that sales had to increase.
An increase in auto sales is one of the few economic "rays of sunshine" that I expect in 2009, see: Looking for the Sun
I believe the GM plan is a starting point for negotiations with Bloom, Summers, Geithner and the rest of the Obama auto team. I expect some concessions from the unions and the bondholders, but this plan is a start.
However, I think the Chrysler plan is a joke and my guess is a bankruptcy is imminent.