Maybe it's because I grew up in a blue-collar mining town, but today's press coverage of GM's (NYSE:GM) layoffs seems a bit strange. Introducing today's news of approximately 500 white-collar layoffs, one news channel I saw called it "Black Tuesday." When everyone figured that the majority of the tens of thousands of cuts would be to blue-collar working stiffs at factories across the U.S., I don't remember the same degree of histrionics.
Perhaps the latent classism inherent in the coverage ("My goodness, guys with ties can lose their jobs, too?") is just another indication that people are finally coming to grips with the extent of the challenges at GM. The problem isn't just bloated factory payroll and benefits. The hard truth is that GM needs to drop the ax everywhere, and not just on the roughly 100,000 hourly workers who will get the recently announced $35,000 to $140,000 buyout offers. But the jury is still out on how much this will do to help shareholders.
When GM originally announced its reorganization, I was pretty skeptical about the sheer number of new models it planned to keep introducing. How many cars is enough? Consumers may be giving the answers.
Having gone to the well too many times on the big discounts, GM's bottom-line problems are increasingly compounded by what it is calling a "challenging" selling environment for the upcoming quarter, in which its market share will drop a point from the prior-year quarter. This is, of course, an old story. Ford (NYSE:F) is having some of the same difficulties, with its February U.S. sales down 4.2%. And no, the problem isn't just that people are buying fewer cars across the board.
According to the summary data at Autonews.com, DaimlerChrysler (NYSE:DCX) saw February sales rise 4.3% in the U.S., while Honda (NYSE:HMC) surged ahead 8.7%, Nissan (NASDAQ:NSANY) inched up 2.2%, and Toyota (NYSE:TM) increased 2.4%. Over 2005, it was a similar story.
Unfortunately for the GM faithful, it's tough to restructure yourself out of top-line woes, something more and more analysts seem to be telling the press these days. The tale of the tape tells a lot of the story. Go ahead and click. The stocks that go up in that chart improved their market share across 2005. The stocks that moved down lost share. Sometimes it really is as simple as sales. Until GM can move more product -- and do it without the crushing losses -- it's going to be tough going for shareholders.
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Seth Jayson drives a fine, 8-year-old Ford truck, which is probably part of Ford's problem (sorry). At the time of publication, he had no positions in any company mentioned here. View his stock holdings and Fool profile here . Fool rules are built to last.
