New-vehicle sales were down again in March for a 17th consecutive month. However, recently sales were generally better than expected, even for General Motors and Chrysler. GM’s sales increased 23% from February and Chrysler posted its highest sales total for the last 6 months. Even with this good news announced, questions of bankruptcy still continue to rise significantly.
This previous Monday, President Obama has given GM their final chance, with a decision to force GM’s chief executive to resign and seek bankruptcy protection, if they are unable to reduce its $63 billion debt. Deadline? 60 days – June 1st. Pressure falls on GM as they’re down to their last two choices: immediate, effective, and an aggressive restructure or file Chapter 11 bankruptcy. Right after this announcement, the next day on Tuesday, GM announced that their sales increased. The pending question: Will GM be able to keep their sales up and attract customers or will they have to file for bankruptcy? Things are looking tough as customers are still reluctant to even consider hope and trust in a near-bankrupt industry. Many consumers are waiting until at least the flood of bad news begin to subside before they take action and build confidence.
And what about Ford Motor Company? The only Detroit automaker not taking federal aid has reported a 41% decline. And the other companies? Sales fell at Toyota, Nissan and Honda. As you can see, Japanese automakers are struggling as well. Honda announced that it would reduce pay for North American workers and cut production by 62,000 vehicles!
