Another Month, Another GM Channel Stuffing Record

Tyler Durden's picture


Moments ago GM, battered by a recall scandal, reported that in April when public attention to its disgraced executives and business practices was greatest, it managed to beat sellside estimates of 251K units, or a 5.7% increase from a year earlier, and instead sales rose a consensus-beating 6.9%, to 254,076, if still down from the 256,047 sold in March.

And yet, as usual, there was the now traditional book-cooking going on at GM, which only managed to "beat" estimates thanks to the tried and true gimmick of channel stuffing. Indeed: after hitting an all time high of 815K cars parked at dealer lots last month, or 83 days of supply, in April GM's channel stuffing rose to a fresh all time high of 826K, at 85 days, in effect suggesting that had it not been for the extra 11K parked but "sold" cars, GM sales would really have been up just 2.3% Y/Y, missing estimates, and down 13K from March. Hardly the picture of health the fudged data makes it out to be.

But, like the market, like stock earnings, like the economy, why bother with real unadjusted, "non-GAAP", ex-Fed and HFT reality when one can just manipulate their way to 100% confidence and complete prosperity.

As for GM, don't worry - any minute now some Russian oligarch (cause ordinary Americans are once again out of money since their saving cratered in March) will swoop in and buy that almost one million of GM cars parked, and rusting pleasantly, with GM dealers.

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Thu, 05/01/2014 - 09:56 | 4715723 Citxmech
Citxmech's picture

How long can dealers endure this?


Thu, 05/01/2014 - 09:59 | 4715743 Van Halen
Van Halen's picture

How long can dealers endure this?

As long as they want to keep their dealerships, and as long as they keep donations to Republican political candidates to a minimum.  .

Thu, 05/01/2014 - 10:06 | 4715775 Dr. Engali
Dr. Engali's picture

Yeah too bad Zero forced them to close all the dealers who contributed to the "opposition" party. They would have a lot more lots to park cars on.

Thu, 05/01/2014 - 10:37 | 4715895 F.A. Hayek
F.A. Hayek's picture



but the academics insisted this would be good for the economy! George Bush's fault!

Thu, 05/01/2014 - 10:39 | 4715898 NoDebt
NoDebt's picture

Right on, Doc.  (That whole damned GM bankruptcy still amazes me)  

Shut PRIVATELY OWNED dealerships and then channel-stuff the remaining ones with more unsold product than EVER EXISTED EVEN BEFORE THEY SLASHED THE DEALER COUNT.  Wasn't the jetisoning of those delerships supposed to prevent this exact kind of massive unsold inventory build situation from happening in the future??

Anywho.... they're now stacking them up like cordwood in the parking lots of vacant shopping malls round my way.  No doubt just waiting for the replacement ignition switches to show up.... then they'll go flying out the doors and all this hand-wringing will be yesterdays news.  Yeah.

Thu, 05/01/2014 - 11:00 | 4715972 nope-1004
nope-1004's picture

Exactly, smoke and mirrors with the whole "dealership" definition.  Problem is this bullshit will keep going on until the gov't collapses, which could happen quickly or be a long drawn out painful thing.


Thu, 05/01/2014 - 17:25 | 4717760 MisterMousePotato
MisterMousePotato's picture

The Chinese build ghost cities. America builds ghost cars. Well, after the soon to come nuclear war, all the dead will be able to drive to their condos.

Thu, 05/01/2014 - 10:13 | 4715810 tarsubil
tarsubil's picture

If only we had another Bush in office instead of a Bush puppet with a tan, if only...

Thu, 05/01/2014 - 10:15 | 4715823 tarsubil
tarsubil's picture

It's a credit bubble. Car companies make money off credit not selling cars. Sooner or later, the huge debts that are paying so well for the masters will realize the inherent risk when life happens and the whole thing will go *pfffttt*.

Thu, 05/01/2014 - 10:33 | 4715877 Bunga Bunga
Bunga Bunga's picture

Feds have plenty of land. I heard, they are clearing some more up in Nevada right now.

Thu, 05/01/2014 - 09:57 | 4715726 El Hosel
El Hosel's picture

GM overtakes John Holmes.... RIP Johnny Wad and GM

Thu, 05/01/2014 - 09:57 | 4715731 q99x2
q99x2's picture

My 1992 Toyota Corolla is running much better this year than last. It is older than my classmates.

Thu, 05/01/2014 - 09:57 | 4715737 Spungo
Spungo's picture

Bullish for repo companies

Thu, 05/01/2014 - 09:59 | 4715740 the not so migh...
the not so mighty maximiza's picture

if they dropped the price 50% they might move some of them

Thu, 05/01/2014 - 10:30 | 4715865 Bunga Bunga
Bunga Bunga's picture

I would rather walk.

Thu, 05/01/2014 - 12:45 | 4716542 walküre
walküre's picture

same here.. no GM product with a 10 ft barge pole

Thu, 05/01/2014 - 09:59 | 4715741 Ribeye
Ribeye's picture

they should start making snowmobiles, 

Thu, 05/01/2014 - 10:15 | 4715818 aVileRat
aVileRat's picture

Yeah, and single isle airplanes. Boy howdy, with a motivated and well managed workforce like GM they could be a workshop for the world and really show the soviets what we are upto.~


Thu, 05/01/2014 - 10:28 | 4715859 _ConanTheLibert...
_ConanTheLibertarian_'s picture

What about drones? Should be big business.

Thu, 05/01/2014 - 09:59 | 4715744 Chippewa Partners
Chippewa Partners's picture

Drove from Atlanta to Billings and back last month.   Every single GM car lot was jam packed with new cars.  It looked like some lots couldn't get another car parked on them.   

Thu, 05/01/2014 - 10:03 | 4715763 Ribeye
Ribeye's picture

next up, Channel Stacking,

Thu, 05/01/2014 - 10:09 | 4715788 Tinky
Tinky's picture

Some of them can't. For several years now, local dealers have been stashing excess inventory in a vast, ancillary parking lot on the Belmont Park (racetrack) property on Long Island. Rows and rows and rows of 'em.

Not sure what they do with them on Belmont Stakes day, as they disappear to make room for patrons' cars, only to reappear soon after.

Thu, 05/01/2014 - 10:35 | 4715884 Emergency Ward
Emergency Ward's picture

The next sales pitch: "Hurry, Limited Supply, Buy Now"

Thu, 05/01/2014 - 09:59 | 4715746 TheFreeLance
TheFreeLance's picture

If GM made something I wanted, as I'd find some out of the way, semi-rural dealer stuffed to the gills and offer them 50% of sticker in cash. Sooner or later those GM "rebate" checks from corp are gonna run out and he's gonna have to make payroll with something.

Thu, 05/01/2014 - 10:03 | 4715759 Seasmoke
Seasmoke's picture

I think every car made in 2013 is sitting in the Freehold Raceway parking lot !!!!.....just Google map it and look at that. 

Thu, 05/01/2014 - 10:03 | 4715761 yogibear
yogibear's picture

Maybe Obama can offer Obama Government Motor (GM)  autos to those with Obama phones and Food Stamps.

Ride in style to use your food stamps.

Thu, 05/01/2014 - 10:04 | 4715767 replaceme
replaceme's picture

Local bike trail goes behind a line of dealers on the edge of town - it's amazing and sad to see how many full size trucks they have sitting out of sight of the dealers' lots.   Next step should be opening them up as homeless camps, let the out of work live out of them.  Maybe keep them charged so they can listen to music.

Thu, 05/01/2014 - 10:05 | 4715769 yogibear
yogibear's picture

Cash for Clunkers #2 in the wings.

Thu, 05/01/2014 - 10:05 | 4715771 FieldingMellish
FieldingMellish's picture

Death Traps will be selling real cheap soon.

Thu, 05/01/2014 - 10:06 | 4715779 wmbz
wmbz's picture

Cars have been a hobby of mine for more than 30 years and I can tell you the quality of all cars has gone down. More bells and whistles to be sure. Which lead to bigger problems down the road.

GM leads the U.S. pack in my opinion in sliding into the garbage pit of poor build quality.

The how much a month crowd don't care about that though.

Thu, 05/01/2014 - 10:11 | 4715805 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

My buddy's NEW 2014 camaro ss has already seen his paint starting to bubble after 1 week.

Thu, 05/01/2014 - 10:33 | 4715878 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I stopped at the 90s. The (European) cars from that era are built properly. Rust under control, not too much electrical shit, just right. Costs next too nothing now.

Thu, 05/01/2014 - 10:07 | 4715782 the not so migh...
the not so mighty maximiza's picture

Gm salesman - hey you wanna buy a GM?

Joe Six pack - I don't know, do i have a death wish?

Thu, 05/01/2014 - 10:07 | 4715784 yogibear
yogibear's picture

Now that all those sub-prime auto loans have saturated we are ready for some real deals.

Thu, 05/01/2014 - 10:09 | 4715787 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Only gm worth a shit is the new corvette, the rest of their lineup is batting 0-20....fucking trash.

Thu, 05/01/2014 - 10:19 | 4715830 TheFreeLance
TheFreeLance's picture

Yeah, that about sums it up. Even the full-size truck line is garbage these days, according to my work-a-day associates.

Thu, 05/01/2014 - 10:32 | 4715871 Freewheelin Franklin
Freewheelin Franklin's picture

The vettes are made in a completly different factory, aren't they? 

Thu, 05/01/2014 - 10:49 | 4715924 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Yep, bowling green kentucky.

Thu, 05/01/2014 - 10:09 | 4715792 B2u
B2u's picture

Are these cars with or without ignitions?

Thu, 05/01/2014 - 10:29 | 4715862 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Teslas now have fire ignitors.

Thu, 05/01/2014 - 10:32 | 4715872 Bunga Bunga
Bunga Bunga's picture

The use the technology from Musk's SpaceX.

Thu, 05/01/2014 - 10:31 | 4715868 Freewheelin Franklin
Freewheelin Franklin's picture

Did someone say, "Thanksgiving Day turkey"?


Thu, 05/01/2014 - 10:32 | 4715874 F.A. Hayek
F.A. Hayek's picture

It's time to re-supply every police, fire, first responder and school in the country with a new fleet of GM automobiles.

(Aside - did anyone else notice this really happen in the heady days of the shovel-ready stimulus package? All neighboring towns plus my own suddenly had brand new police cars, school buses and so on. I'm sure we weren't the only lucky ones...)

Mon, 05/05/2014 - 13:01 | 4728726 Lead Balloon
Lead Balloon's picture

Talk about a bell going off in my head.  I have seen a spate of new police cars in my town.  They were hard to miss, being larger SUV type vehicles.  After reading your post, I went on the local police website.  The make?  Chevy Tahoe.  So the governement used money it didn't have (via the stimulus) to prop up an otherwise unviable car company.  Then they claim that the car company is thriving.  It's a goddamned house of cards, it is.


Thu, 05/01/2014 - 10:50 | 4715928 F.A. Hayek
F.A. Hayek's picture

If you like your GM car dealership, you can keep your GM car dealership. Period.

Thu, 05/01/2014 - 11:14 | 4716029 Pintail
Pintail's picture

GM appears to be cutting back on its level of disclosure just as things are getting worse. As seen below, its June 30 financial statement went into great detail about the credit scores of its North American borrowers:

In its report for the quarter ended Sept. 30, GM removed these details, replacing them with the terse "under 620" sentence cited earlier.
Industry experience shows that 51 percent of borrowers with credit scores between 550 and 599 will go 90 days or more delinquent. With scores from 500 to 549, that chance increases to 71 percent.
Almost 76 percent of GM's consumer loan portfolio at the end of June, up from 65 percent at the end of 2011, consisted of borrowers who are more likely than not to go seriously delinquent. Though the company's reduced disclosure prevents us from knowing for certain, that percentage was probably higher in September.

Thu, 05/01/2014 - 11:42 | 4716182 tahoebumsmith
tahoebumsmith's picture

It's not just GM either. Check out every other new car lot out there...Stuffed to the gills.

Thu, 05/01/2014 - 11:48 | 4716222 Snoopy the Economist
Snoopy the Economist's picture

This chart would look great with the subprime car loans superimposed on it. I'm sure this is hitting all time highs as well again.

Thu, 05/01/2014 - 12:48 | 4716552 walküre
walküre's picture

They can't build cars. When are they going to close shop for good? There are good products on the market and several even built in the US. Not a single car built by GM is worth the tires they're parked on. GM trucks is another story but with gas >$4/gallon the truck driving days for the average American family are OVER.

Fri, 05/02/2014 - 01:23 | 4718958 pparalegal
pparalegal's picture

Why does my head keep remembering rhyming chapters from Atlas Shrugged?

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