Thread regarding General Motors layoffs

Auto sales will plummet; mass layoffs are coming in 2024

To get a good idea of where auto sales are headed, you can look to several metrics but the ones that are key are inflation, consumer debt and the current sales data for cars.

Consumer Debt
Mortgage Rates Jump to the Highest Level in 23 Years
https://mishtalk.com/economics/mortgage-rates-jump-to-the-highest-level-in-23-years/

If you take a really good look at this data, you can see that home owners are getting crushed, with the highest debt to income levels in history. Wages, are not even close to keeping up with house prices. Then consider higher insurance, tax and interest rates. The housing collapse will greatly eclipse the GFC.

Consumer Debt
According the Federal Reserve, consumer debt is $17.06 TRILLION!!!
Total Household Debt Reaches $17.06 Trillion in Q2 2023; Credit Card Debt Exceeds $1 Trillion
https://www.newyorkfed.org/newsevents/news/research/2023/20230808

Credit card interest rates are 22%!
Paying credit card debt down is getting harder
https://www.msn.com/en-us/money/personalfinance/paying-credit-card-debt-down-is-getting-harder/ar-AA1h9EES#image=1

Inflation
The fallacy of Year-over-year inflation reporting is EXTREMELY misleading. First of all, energy and food is not in the data. Second, the number is year over year rather than accumulated inflation. The real, accumulated inflation could be something like 22%, but it's reported as "CPI for all items rises 0.6% in August" (see bls.gov). Do you pay 0.6% more for items on Amazon.com or at the grocery store? When people are paying 2x for goods and services, they are not going to have money for a new car. Which brings us back to that record level of consumer debt.

Current auto sales and the sales trend
If you look at current sales, the picture is rosy. "U.S. new vehicle sales of 1,341,169 units for the month of August represented an increase of 2.0% from July 2023, and an increase of 16.2% from one year ago in August 2022 when supply chains continued to restrain production."
https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-usa-by-month

Consumer Outlook
"The University of Michigan's preliminary reading of its Consumer Sentiment Index dropped to 67.7 this month from a final reading of 69.5 in August. That was below the median forecast of 69.1 among economists polled by Reuters."
https://www.msn.com/en-us/money/markets/us-consumer-sentiment-slips-again-but-inflation-outlook-improves/ar-AA1gM8WS

The consumer debt picture is grim and when combined with "sticky inflation", you will see auto sales drop considerably. This is especially true when you consider the cost of groceries and gasoline, which isn't counted in the CPI data. Both of which have doubled in many cases and continue to escalate. If we have another housing collapse (the data supports this) and student loan borrowers can't keep up (wages will be garnished!) it will only add fuel to the plummeting auto sales data. The auto sales data paints a rosy picture but I believe it will turn on a dime by January once those student loans and 22% credit card start to harm people as they get hit with higher and higher food and energy costs. This of course will lead to MASS LAYOFFS in the auto industry!

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| 4151 views | | 17 replies (last October 9, 2023) | Reply
Post ID: @OP+1oLx7QkP

17 replies (most recent on top)

Bought my usual (every three year) New pickup truck the day before the strike.
Had I waited a day , most of the discounts that were applied to that sale were gone .

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Post ID: @fdyq+1oLx7QkP

Oil is surging. Finance charges are the highest in decades. Consumers are maxed out.
All very bad signs for car sales.
I'm noticing lots of toys for sale in my area in Metro Detroit. Lots of properties for sale and many are cutting prices.
The desperation is obvious.

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Post ID: @4dod+1oLx7QkP

Extreme fuel and grocery prices are like pre-rumblings of an earthquake dead ahead, right before it hits. It would be no surprise if a 2008 fall is a repeat soon. But that does not affect a new union contract. Economies go up and down thru the years of active contracts . Exception example would be the old teamster's contract for UPS. That contract was not prepared for 2020-2023 surprise medical world event that bumped up business to the sky but had no writing in contract to equally bump workers' pay if a whirl wind event like that happened. Likely the new UAW contract will not make the same mistake as teamsters.

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Post ID: @2tcl+1oLx7QkP

A gut feeling, I'm convinced

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Post ID: @2kqd+1oLx7QkP

Don't know why but getting weird vibes. Don't think soft landing - but a really hard nasty landing of a recession. Maybe starting christmas to maybe apr of next year. Something coming. Not sure if one can buckle up.

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Post ID: @2non+1oLx7QkP

Like Tesla

There are lots of corrupt state laws designed to keep dealers part of the sales process and make sure they get a piece of the pie, but Tesla seems to have gotten around them

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Post ID: @1djy+1oLx7QkP

Good factory, good parts, good workers, good product TIL product rolls off factory lot and gets smeared by car dealership with horrible prices, and deceptive sales pitches. Ruins all that honest good work by UAW and the company. Sell these vehicles directly from the factory (customer pick up or have it shipped) and keep the car dealerships open only for auto repairs in each local town. Cut out the middleman. Sell more cars at cheaper price, create more Union jobs.

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Post ID: @1mey+1oLx7QkP

@1syh+1oLx7QkP
I didn’t write it for people like you.
Get back to your cat videos.

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Post ID: @1jck+1oLx7QkP

Long and boring.

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Post ID: @1syh+1oLx7QkP

@ttn+1oLx7QkP

So you're saying greedflation.

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Post ID: @1zvp+1oLx7QkP

@1ojc+1oLx7QkP
Reads like a socialist bot.
Your fair share???... Are you not compensated with industry leading wages, benefits and profit sharing checks?
Sickening greed and entitlement.

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Post ID: @1htx+1oLx7QkP

The strike ensures the fact autoworkers can and will receive their fair piece of the pie. No AI, no pretend numbers, no guilt, no lay off rumblings, just pure simple truth in standing together to get what was already theirs but had to assemble together to get it.

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Post ID: @1ojc+1oLx7QkP
  1. 5% of all Michigan drivers have no auto insurance.

The economy is doing great. There's nothing to see here. Move along.
https://www.valuepenguin.com/auto-insurance/uninsured-motorist-statistics

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Post ID: @1bno+1oLx7QkP

Don't you get it!!? The auto makers are purposely producing less vehicles to cause a shortage. In this way, they keep demand high on purpose, this inflates pricing. The dealers are also part of this plot. Now, it's going to backfire really bad. 😂😂😂😂

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Post ID: @ttn+1oLx7QkP

The workers were under the same contract in 2020 as 2023.

So that price hike isn't because of them.

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Post ID: @qhr+1oLx7QkP

The biggest drag on car sales is the price.

The average new car transaction price is $50k.

In 2020, it was $37k.

Where's all the money going? Definitely not to the workers.

Greedflation? Executive pay?

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Post ID: @ugf+1oLx7QkP

Couldn't agree more. Strike will only accelerate the huge correction coming in shut downs and production numbers. My 2 cents, this is the end of the "good" times.

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Post ID: @idl+1oLx7QkP

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