General Motors Faces a Bumpy Road, And Reverberations Could Be Wide
What's bad for General Motors could turn out to be bad for the country.
These should be salad days for General Motors Corp. Interest rates are abnormally low, so buying cars on credit is cheap. The American savings rate has plunged, suggesting that consumers are hardly averse to spending. And the dollar has tumbled, making American-made vehicles much more competitive with foreign makes.
Yet GM last year warned of disappointing profits, lost market share and cut production. If it couldn't make big bucks last year, when will it? Apparently not any time soon. Its chief executive officer, Rick Wagoner, began this week's Detroit auto show on a pessimistic note, telling reporters that "it's not going to be an easy year."
Indeed, GM faces big long-term health care and pension liabilities, as investors have recognized. Last year, the stock fell 25% and the shares are down more than 40% since the heady spring of 2002, when GM's revival was the talk of Wall Street. Ratings companies raised red flags about GM's debt, with Standard & Poor's now saying the company's bonds are just a notch less risky than junk bonds.
If GM took a turn for the worse and was downgraded again, it could have reverberations beyond the car industry. GM's debt load would amount to about 10% of regularly traded junk bonds, according to Morgan Stanley. That means that GM isn't only too big to fail, it could even be too big for the junk-bond market. A flood of GM junk bonds could hurt junk-bond prices across the board.
GM management has demonstrated a pattern of denial and short-term thinking. The company had inventory at dealer lots of just over 1.2 million units at the end of last year. Looking at retail sales rates, this was higher than normal December levels and higher than what is typical year-round. In a piece in Automotive News in early December, the CEO of AutoNation Inc., the largest auto dealer in the country, complained about irrational industry practices: "Our inventories remain astronomically high, and the incentives are starting to sound desperate. We are not going to sell our way out of this mess."
Overloading suppliers with too much inventory to boost profits can be an illegal practice known as channel stuffing, and nobody's suggesting that GM is doing that. But it is worth noting the upside of high dealer inventories for an auto company. Auto makers book sales and earnings based on sales to dealers, which then must sell the vehicles to real people. GM management's compensation is based in part on earnings that were helped by vehicles now sitting on lots.
"The suggestion that somehow we are trying to carry inventory in order to maintain profitability in order to pay executive bonuses is absurd," says a GM spokesman. He points out that companywide, inventories finished 2004 around where they were a year earlier and that high inventories are an industrywide problem. Further, he says, GM's management isn't simply compensated on net-income measures, but also on cash flow, market share, quality measurements and return on net assets.
GM has also hooked its customers on incentives (no-interest loans, rebates and the like), thereby accelerating demand rather than expanding it. While all the auto makers have been offering aggressive incentives, GM has led the way. The result: Customers have been trained to wait until the auto makers get desperate enough to rev up the incentives once again.
Auto-sector investors have soured on this practice, but they haven't grasped that GM isn't the only misguided Pavlov. It's a retail-wide phenomenon. Look at Christmas sales, notably Wal-Mart Stores Inc.'s. The end-of-the-year pattern keeps getting more pronounced. First, early holiday season sales are weak. Retailers get nervous and respond by discounting. Their sales end up OK, but profits suffer.
In other words, other companies and sectors all too soon could end up with the same sort of self-inflicted wounds now afflicting GM.
通用汽车前路坎坷
通用汽车(General Motors)面临的困境可能也是整个美国面临的困境。
去年可谓是通用汽车面临的最佳时期了。利率位于历史低点，贷款买车非常划算。美国人的存款率不断下降，表明投资者仍然非常乐于支出。美元贬值也使得美国生产的汽车与国外生产的汽车相比更具竞争力。
然而，通用汽车去年却发布预警称，利润将低于预期，市场占有率不断萎缩，并被迫减产。如果在去年这样的大好形势下都无法赚取丰厚利润，真不知道还有什么时候才可以？显然好日子近期是不会出现了。通用汽车的首席执行长里克?瓦格纳(Rick Wagoner)在本周的底特律汽车博览会上就发出了悲观论调，他向记者表示，2005年将会是艰难的一年。
的确，通用汽车背负著沉重的长期医疗保健和退休金债务负担，投资者也意识到了这点。去年，该股下跌了25%，而从2002年春季的辉煌时期算起，该股更是下跌了40%以上。当时，通用汽车的复兴计划成为华尔街关注的焦点。评级公司纷纷对通用汽车的债务亮起了红灯，标准普尔(Standard & Poor's)现在称，通用汽车的债券目前仅比垃圾债券的评级高出一级。
如果通用汽车的情况继续恶化，债券基本被再次下调，则其影响可能波及到整个轿车行业之外。根据摩根士丹利(Morgan Stanley)的数据，通用汽车的债券余额大概是垃圾债券日均成交额的10%。这意味著，不但通用汽车太大，而不能失败，甚至它对垃圾债券市场来说也太大了。通用汽车垃圾债券的大量涌入可能会打击整个垃圾债券市场的价格。
事实证明，通用汽车的管理层固执而且短视。截至去年底，该公司在经销商处的库存超过120万辆。从零售数据中可以看出，这高于12月份的正常水平，也高于全年的正常水平。在《Automotive News》12月初的一篇文章中，美国最大的汽车经销商AutoNation Inc.的首席执行长就抱怨过不合理的行业规范。他说：“我们的库存量仍然非常之高，厂商的让利措施颇有孤注一掷的意味。我们很难走出目前这种混乱局面。”
给经销商过分加压，让其囤集过多库存以提高利润是被称为渠道填充的违法做法，没有人认为通用汽车正在如法炮制。但一家汽车公司在经销商那里的库存不断上升时，就需要引起注意了。汽车制造商是根据销售到经销商那里的数据计算销售额和收益的，而经销商必须把汽车销售给真正的用户。通用汽车管理层的补偿收入在某种程度上就得益于靠目前停放在经销商那里的汽车而换来的收益。
通用汽车的发言人称，认为公司希望通过转嫁库存保持利润率，进而向管理人员发放奖金的想法荒谬之至。他指出，2004年底全公司的库存同上一年基本接近，库存过高同样也是整个行业普遍面临的问题。而且，他还表示，通用汽车的管理层并不是仅靠净利润获得补偿收入的，还要考虑现金流、市场占有率、质量情况和□资产回报率。
通用汽车也在用刺激措施（零息贷款、现金返还等）吸引客户，从而加快了需求而不是扩大了需求。尽管所有汽车制造商都推出了大量优惠措施，但通用汽车却是最为积极的。结果是，客户已经学会了等待，直到汽车厂商因感到绝望而再次加大优惠的力度。
汽车行业的投资者已经深受其害，但他们还没有意识到通用汽车并不是唯一陷入恶性循环的企业。这是整个零售业普遍面临的问题。圣诞节期间沃尔玛连锁公司(Wal-Mart Stores Inc.)的表现就是再好不过的例子。这种年底促销模式的副作用变得越来越明显。一开始，假日季节初期的销售状况不佳。零售商感到紧张，进而开始打折。销售额最终上去了，但利润却下降了。
换言之，其他公司及行业可能很快也会像目前饱受伤害的通用汽车一样自食其果。
