GM Channel Stuffing Soars To Record

Tyler Durden's picture

For a few months there, we were worried that GM may have actually found a (government-funded) natural subprime buyer of its vehicles after the company managed to keep its channel stuffing in check for several months. Those fears ended today with the company's October car sales report, according to which GM sold 4.7% more cars, or 42,759 in absolute terms (from 153,005 to 195,764) in October than September, below expectations of a 7.8% increase. So far so good. What however will hardly get any mention from Government Motors cheerleaders is that GM auto inventory at dealers as of October 31 was a record 739,034 (a massive 98 days of supply), an increase of 49,700 from October's 689,334. In other words, the entire incremental rise in sales, and then some, was due to the firm stuffing dealers with even more inventory than they can possibly handle!

Spot the record number out:

And while the inventory certainly plugs into the beancounter definition of GDP, it merely adds to what will eventually be inventory for dumping at the dealer lever. The one hope, of course, is that following Hurricane Sandy there will be a flood of buyers who seek to replace their destroyed cars with brand new ones. Now if only the Fed's Magic Money Tree also grew in every back yard and consumers actually had the money to buy up all these cars flooding dealer lots...

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Jason T's picture

OT: Man, Cube is keeping it real!

pinching his pennies so hard, buger came out of lincoln.

Mr Pink's picture

That seals it! Im writing in Ice Cube! Seriously. Great video

semperfi's picture

If GM was smart they would have parked that entire dealer inventory on the Jersey shore last week for a little "channel flushing"

Quinvarius's picture

Yeah.  Dump thoses losses off on Uncle Warren's insurance companies so we can get this QE4 bailout going. 

Cognitive Dissonance's picture

Actually I think they did lose some autos in the "flood". While trolling through some Hurricane Sandy images yesterday I came across one with a caption that indicated that some new cars had been flooded.

They were Chevy's.

Quinvarius's picture

When you think about the actions the Fed took after 9/11, or after one bank failed, it is not hard to imagine the amount of free money give aways that might be taking place now.  I thought we would get a lump sum QE4 within 6 months.  This is the perfect excuse to do it, do it in secret, and do it big for your buddies.

redpill's picture

Chevy Default Swaps?  General Motors Backed Securities?

GetZeeGold's picture



That's just a liitle water default declared.

Cognitive Dissonance's picture

The water only reached to the top of the dashboard. Just run a hair dryer over the speedo for a few minutes, sprinkle some baking soda on the carpets to get that sewage smell out, and you'll be fine.


Almost Solvent's picture

About 6 years ago I test drove a used Pilot that had an interesting interior smell under the massive amount of "new car" scent that had obviously been poured all over the inside.

Mentioned it to the salesman and made him a lowball offer. He quickly pulled out the "CarFax" and pointed to it that there was no water damage indicated on the "CarFax". I let him know that if it wasn't a flood salvage, it wouldn't be on the "CarFax" anyway - But that doesn't mean the prior owner didn't somehow get it full of water one way or another.

Salesman basically said some other person would buy it as is at that price based on the "CarFax" and wouldn't lower the price. I walked away to let some other fool put their trust in "CarFax"

(BTW - this was at a Honda lot, this Pilot was not "certified" though)

Cognitive Dissonance's picture

Contrary to popular belief in the car business the best thing to do with lemons is to sell them to someone else.

SafelyGraze's picture

"About 6 years ago I test drove a used Pilot that had an interesting interior smell under the massive amount of "new car" scent that had obviously been poured all over the inside."

I noticed the very same thing flying Delta to Miami.

LongSoupLine's picture

it should be called union vote stuffing.

zuuma's picture

This channel stuffing crap is EXACTLY why gubmint shouldn't be in the car business.

All the "reported" numbers of GM recovery are fake.

Sure. They're buliding lotsa cars & paying fat union paychecks -but at a loss. GM's huge marketing problem - which they acknowledge - is the government's (and, by extension, Obama) ownership. Many people in what was once their market segment absolutely refuse to even consider a GM product at new car time. Why? Because they do shit like this to their dealers and because Obama gets a cut from every car sold. The obvious cut is the masses of money that the Autoworkers Union gives him.

Where do you suppose THAT comes from?

Then, just imagine all the filthy, dirty, secret ways that the company is siphoning money off the books for Obama in little payments here & there. Don't wanna help out, Mr. junior accountant? You're FIRED. Or, "if you turn us in, YOU'LL be spending some time as Bubba's prison bitch, too." Not much of a stretch to imagine that scenario, is it?

I wouldn't be surprised if there's an office building in Detroit filled by FSA/ EBT troops. Their job(non-union, $8/hour, of course) is to spend 8 hours a day sending thousands of $180 donations from railroad cars full of prepaid Visa/MCs under fake names to Obama's websites. No verification or checking, naturally.

The money for the pile of debit cards coming out of some sketchy, smokey GM "Diversity Promotions" account. Then... "Aw dang! GM had a multi-billion loss last quarter. Darn. Costs just got too high". Right.

Well played UAW. Well played. I don't blame them a bit. They're doing what comes natural.

I've bought lots of GM cars in the past. I like(ed) 'em. There are several products that they offer today which interest me. Until the government and, ideally, the union get's out of GM, The best way not to play is not to buy their cars.

Mr Pink's picture

Has anyone ever wondered if this is how ol' Hopey Changey was elected?

insanelysane's picture

Or put the dealer inventory on Russian freighters.

Antifaschistische's picture, watch out on the used car market for all the swamped cars hitting the lots.

Time for another cash for swamper program.

epwpixieq-1's picture

and add a cool advertising, something going like: "Even with Sandy, you can eat your candy, only in the GM's most grandy*"

*Oversized coke can be dangerous for your health ( and your wealth too ). As oversized car IS dangerous for you wallet and security (if there is such a concept) of the nation .

ilovefreedom's picture

HEADLINE: GM to the rescue; sends tens of thousands of cars to hurricane victims!

STORY: GM put thousands of cars on planes and ships headed for the east coast for some much needed relief for hurricane victims left without transportation. Who could have known that those same ships and planes woudn't survive the trip and were lost at sea and the planes crashed. GM stock is up 5% in afterhours trading on news of both their philantrophy and modest sales numbers increase.

Footnote: aAcouple of GM dealers who went bankrupt via overstuffed inventories although GM contradicts these statements saying, "Osama Bin Laden is dead, GM is alive!"

yogibear's picture

It doesn't matter. Obama motors has another 4 years to be bailed out. The government can buy all the backlog. If it gets worse Bernanke says he can buy everything with his magic Keynesian  money.

MiltonFriedmansNightmare's picture

The Feds Magic Money Tree does grow in the backyard of every underpriviliged GM buyer; it's otherwise known as the sub-prime auto loan.

Who needs cash?

Housing bubble redux.....

RopeADope's picture

It is easier to sell inventory to insurance carriers than to actual customers.

JailBank's picture

Ah working for the government. GM will keep cranking out cars to show numbers to beaurocrats that don't really know or care what is going on. They can show final production numbers in a sweet powerpoint to the boss, and that is all that counts. Success for the government is not about profit margins but if you are showing that numbers are up.

youngman's picture

The Russians were great at that with their central planning.....the factory numbers always beat

SmoothCoolSmoke's picture

Stick a fork in Romney.

JPM Hater001's picture

What if all I have is a bayonet?

Cpl Hicks's picture

Then ram it up Barry's poop chute.

Spastica Rex's picture

If I only had a Volt.


GetZeeGold's picture



At least the fire would keep us warm.

Cognitive Dissonance's picture

Yeah.....but Christmas is coming. So rush on out and buy ( your favorite Chevy product and put a big fat red bow on top.

Buy banana America.


hedgeless_horseman's picture



THank God Obama bailed out GM so it could build the cars Americans want!

Got Church's Chicken?

Got 64 oz Dr. Pepper?

Got Zoloft RX from CVS?

Got GM Suburban?



There has never been a better time
to buy or lease a new GM!

Hurry now to your nearest GM dealer
before inventories increase even more!


2013 GM Yukon Denali AWD
403 HP
13 CTY / 18 HWY

Nicely equipped for only


Easy credit available through Ally Bank!

On*Star tracking and cabin recording included free for 6 months,
then you pay to be tracked and recorded.


Spastica Rex's picture

What a small car. Or giant man. Can't tell.

hedgeless_horseman's picture



Neither is the case.  Both are about average size around these parts, as is the corn syrup drink.

Abitdodgie's picture

Hedgeless , do you have a good recipe for duck. ( a coon riped the head of one of my duck's so , time for duck soup) thanks.

hedgeless_horseman's picture



I love to stir-fry duck in a wok with those little red chinese peppers (or habaneros) and molasses.  Top with some fresh chopped scallions and serve with steamed rice.

Orly's picture

Bourdain has a different way to cook duck rather than heat the heck out of it.  You may try this:


irie1029's picture

smoke it with cherry wood.  dry marinade with salt and brown sugar litttle garlic powder hmmm

JPM Hater001's picture

I remember when 67k bought a new house

adr's picture

You can still go to Detroit and buy a house for the same price as a nice dinner in NYC.

semperfi's picture

My parents bought their 1200 sq ft house in Bellflower Calif (12 miles from beach in metro LA) in '54 for 11k.  In '07 it peaked at 505K at which point I sold it.

Dan Conway's picture

That was a very move and excellent timing as well as a nice 7.5% annualized return over those 53 years!  In the best real estate market period that this country will ever see and to think most public pension plans assume an 8% return on their investments.  Hopefully you left the "golden" state. 

azzhatter's picture

I was on the fence until I saw that free Onstar tracking device for 6 months. I think I'll pick me one up today. I have a call in to Bernanke to print me up $67,000

GetZeeGold's picture



Nicely equipped for only $67,185


What can I get for $1.53 and a barely used whistle?