Is the smell of death keeping customers away from General Motors showrooms?
You bet, says Mark LaNeve, GMs vice president of North American sales, service and marketing.
Theres not a doubt in my mind that it has affected business, LaNeve said yesterday in a conference call with reporters and analysts.
Thats consistent with experts who say that filing for bankruptcy protection would doom an automaker. The experts say consumers are wary of brands that might not be around to handle service and repairs over the long haul.
LaNeve cited a report by CNW Marketing Research Inc., of Bandon, Ore., that 20 to 30 percent of new-car buyers are avoiding Detroit 3 brands because of negative news about the brands financial health.
It could be higher," LeNeve said of the CNW report.
GM sales plunged 41 percent in November from the same month in 2007.
As the automaker presses Congress for a multibillion-dollar loan to stay afloat, some legislators and industry observers say filing for bankruptcy protection would be a better way, allowing GM to slip out of past contracts and labor agreements.
Theres not a plan in the company that I know of that deals with bankruptcy, LaNeve said. We don't think any plan in that regard is viable.
LaNeve blamed the November sales crash largely on the nationwide credit squeeze.
GM did not lease any vehicles in November, he said. And GMAC Financial Services, which is controlled by Cerberus Capital Management, financed very few of the vehicles GM dealers did sell during the month, he added.
With each passing day, it is less able to finance the sale of GM vehicles, either for dealers or for the public, according to the restructuring plan GM gave Congress today. One year ago, GMAC was able to provide either installment or lease financing for nearly half of GM retail sales. That number has fallen to 6 percent today.
LaNeve said dealers are asking GM for two things: to get back into leasing and help the retailers get access to credit.
"We are trying to figure out how to do that, he said.
LaNeve said GM will not use advertising to convince buyers that it will be around. GM will change the message in its current year-end Red Tag sale campaign, he revealed, but there will be no mention of GMs financial situation.
He said: We are not going to use bankruptcy as a foundation for an ad campaign.