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Toyota (NYSE: TM) has already said that 2008 will be a bad year. Now it has revised down its sales numbers for 2009. The cut is about 7% and takes the company's estimate to 9.7 million vehicles sales orldwide.

The news may be bad for Toyota, but the company has a good balance sheet and has maintained a low cost base for years. Europe and North American is where the Japanese company said it is sustaining the most damage. According to The Wall Street Journal, the firm is "bracing for a long slowdown as robust sales to developing markets are failing to offset huge losses in the crumbling U.S. market."

For General Motors (NYSE: GM) and Ford (NYSE: F) the news could not be worse. Both rely on the U.S. market for the lion's share of their sales. Both are counting on some recovery in 2009 to allow them to stop the bleeding out of cash that threatens their abilities to remain independent and solvent.

The two U.S. car companies were going to go to the capital markets to raise money. Whether debt or equity investors would give them money becomes more problematic as each month of poor sales goes into the record book.

The government is talking about a $50 billion bail-out for U.S. car companies. That may be the only capital they can get.

Douglas A. McIntyre is an editor at 247wallst.com.

Sometimes, it's hard to determine if major investors are being overly optimistic, outright daffy, or are simply seeing something that the rest of us just don't see.

In my view, the current course of events at Chrysler Corp. is one of those difficult to determine situations. On its face, it looks like it could be a case of basic business logic in action. But on closer examination, it just doesn't make sense, at least not to me.

Declaring a payoff horizon of ten years, Cerberus Capital Management has placed a great deal of faith in Chrysler, the American auto manufacturer which is best described these days as an also ran. The kicker is, the Cerberus ten year plan is being initiated at a time when auto industry profitability is near impossible. Consider also the fact that current Chrysler management openly admits that the company isn't in any condition to go it alone.

And there's more trouble in the mix. Cerberus said in a New York Times story that Chrysler is meeting "every financial metric." But Cerberus considers the world's current economic turmoil to be a temporary problem, not the economic world change that it actually is. Meanwhile, Chrysler CEO Bob Nardelli is smiling because Cerberus has given Chrysler lots of money, and he gets to cut heads.

The auto industry is deep in the weeds right now, particularly in the United States. American manufacturers are hemorrhaging money -- General Motors (NYSE: GM) alone has lost $30 billion in the last three years -- as high gas prices and an (unofficial but very real) recession forces consumers to abandon their American-made trucks and SUVs by the millions.

Even with the pronounced shift toward smaller and more efficient cars, the overall auto market in the U.S. is shrinking thanks to the poor economy, and most manufacturers are selling fewer vehicles. But one company stands out as an exception to the rule of declining sales: Honda Motor Ltd. (NYSE: HMC). In the first seven months of 2008, Honda increased its sales by over 3%. By comparison, Chrysler lost 22%, GM fell 17%, Ford (NYSE: F) lost 14% and even mighty Toyota (NYSE: TM) saw a decline of 7%.

An interesting quote in The New York Times from Tetsuo Iwamura, the president of Honda's North American operations, sheds light on how Honda has managed this impressive feat. Honda, Iwamura said, "is a philosophy-driven company." And what is Honda's philosophy? According to Iwamura, "we want to make Honda the company that society wants to exist."

From an American perspective, this is an extraordinary statement. American automakers have followed a very different philosophy for many years, one in which fat and easy profits from poorly designed and hopelessly wasteful SUVs take precedence over the long term health of both the auto industry and society as a whole. But Detroit is suffering now for its short-term approach, while Honda is showing both consumers and investors the value of planning for the long run. And at $32 a share and a P/E of 10, Honda looks like a good long-term buy.

Will the Volt provide the jolt that turns General Motors' (NYSE: GM) around?

In the interpretation of one critic, Chevrolet's Volt plug-in hybrid may end up being not so much a game-changer as an ice-breaker.

Stock Analyst C. Leonard Bauer, whose ownership of high-performance sports cars through the years has been exceeded only by, perhaps, Mario Andretti, says he doesn't expect the Volt, Chevrolet's extended-range electric vehicle, to overwhelm the public or generate rave reviews from critics, but those two conclusions still won't blot out Volt's positives.

"The key point, and one many have overlooked, is not the Volt, but the infrastructure behind the Volt," Bauer said. "The Volt as a model will most likely underwhelm, but the processes GM has put in place will pay dividends when advances occur." Bauer added that he does not own shares in or have a rating on any auto manufacturer.

Amped-up R & D

GM, Bauer says, has now committed a large amount of resources to electric and hybrid technologies, whereas previous commitments were modest. Moreover, "it would take an act of idiocy or $10 a barrel oil" for GM to dismantle its current research platform. Bauer expects neither, and as a result, he expects the 2nd, 3rd and 4th generations of Volt and its companions to achieve both battery power storage and power delivery advances not possible during GM's previous electric vehicle projects.

TheStreet.com's Jim Cramer says that even in lousy markets -- and this is one of them -- you can find stocks to buy.

When nothing's working, something's working. I know sounds counterintuitive. but there is simply no reason to think, as bad as this market is -- and it is really, really bad -- that there isn't something to buy.

We are gripped by the fear of the remaining black holes -- Ford (NYSE: F) (Cramer's Take), GM (NYSE: GM) (Cramer's Take), Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take), AIG (NYSE: AIG) (Cramer's Take), Lehman (NYSE: LEH) (Cramer's Take), WaMu (NYSE: WM) (Cramer's Take) and Citigroup (NYSE: C) (Cramer's Take) -- and we all know it. They are not convenient whipping boys. They are the Seven Deadly Stocks, and they aren't going away.

But are they really hurting General Mills (NYSE: GIS) (Cramer's Take)? Can I see selling Procter & Gamble (NYSE: PG) (Cramer's Take) because of them? After we know the price increases are all baked in? And don't hit me with that strong-dollar stuff, because GIS doesn't have that much overseas exposure. Same with Pepsi (NYSE: PEP) (Cramer's Take): This is a national company with an international arm that is generating oodles of cash and doesn't have as much bad commodity exposure as it did a few months ago.

U.S. stock futures were mixed on Tuesday. Following Monday's broad sell-off and volatile session, which was also marked by low volume, today might not be different -- volatile and low volume. Several reports are in focus today, specifically some housing data that could shine more light on the sector, and consumer confidence, which could also move stocks. Meantime, oil prices declined and the dollar strengthened against major currencies.

Rio Tinto (NYSE: RTP) shares are down over 3% in premarket trading after the mining giant reported fiscal first-half profit more than doubled. RTP's acquisition of Alcan and soaring commodity prices helped Rio achieve the results. RTP shares have been declining due to worldwide slower growth.

Meanwhile, Anadarko Petroleum (NYSE: APC) shares were 2.4% higher in after-hours after it announced a plan to buy back up to $5 billion of stock.

Staying with share buybacks, Coach (NYSE: COH) are also 1.7% higher in premarket trading after announcing a buyback program of up to $1 billion, which follows the completion of a similar repurchase.

And of course, Lehman Brothers (NYSE: LEH). Shares of the embattled banker are rising this morning following speculation that Kohlberg Kravis Roberts may be interested in buying Neuberger Berman, according to CNBC, while Blackstone Group backed away.

'Tis the election season of 2008 and any industry in a mess has exactly two months to make its case and claims to a beneficent US Congress. Who, after all, wants to harm or neglect the already struggling US auto industry.? With General Motors (NYSE: GM) and Ford (NYSE: F) having reached their lowest market valuation in more than a generation, why not ask for the bailout...ah, sorry, assistance...ah, sorry again...low interest loans to re-tool their respective factories for future fuel efficient vehicles.

What's the deal here? The energy bill from 2007 allows for low interest loans to create next generation technologies for energy efficiency. The auto makers want to press Congress hard for their share when the summer recess is over...and certainly before the election. The auto makers say they need $50 billion to be competitive again.The rub as some see it is the desire of the auto makers asking for twice the amount that has been earmarked for such projects. Why not, asking for twice the amount right now is opportunistic as politicians are running for re-election and want to hang their hats on any good issue that will save jobs and create goodwill.

August is expected to be another troubling month for domestic cars sales. U.S.-based car companies have seen sales off over 20% in some recent months. If August does not show some minor improvement, the rest of the year could be more of a disaster than expected.

General Motors (NYSE: GM) has offered amazingly attractive incentives on its vehicle line including "employee pricing," cash back and low interest rates. With all of those in play, the largest U.S. car company should have a reasonably good month. Or, that is what the market is hoping for.

The Wall Street Journal writes that J.D. Power & Associates expect August sales to be a modest improvement from July. If that does not happen, it will be a catastrophe. It would say that even aggressive pricing cannot bring wary consumers back into the car market; that falling consumer income cannot overcome the allure of even the best deals.

The potential car customer may be so broke that he can't even afford to take a car for free. The gas will cost too much.

Douglas A. McIntyre is an editor at 247wallst.com.

General Motors (NYSE: GM) and Ford (NYSE: F) want you to pick up their tab for their decades of excess and managerial incompetence.

The Associated Press reports that the Detroit automakers are likely to ask Congress for $50 billion in low-interest loans to fund modernization efforts, and help them build more fuel-efficient vehicles.

What a load of crap. In 2007, Ford paid cash-burning CEO Alan Mulally $21 million, and GM's Richard Wagoner got a 41% raise to over $14 million for the same year. In effect, our tax dollars will be subsidizing this pay for pulse orgy of bad governance. GM also paid out more than half a billion in dividends in 2007 -- if the company needs billions to invest in modernization, why didn't it cut the dividend a long time ago?

It appears that the auto industry has been counting on a bailout all along, and why not? It looks like they'll be getting it.

The Big Three seem to think that they are troubled money center banks. They want Washington to get them out of their financial problems. According to The Wall Street Journal, "Battered by high gasoline prices and weakened earnings, the Big Three auto makers and their suppliers are now seeking significantly more help from Washington in the form of government-backed loans than the $25 billion they had previously been authorized to receive."

While the auto companies are important to the U.S. economy, they can be "replaced." If General Motors (NYSE: GM) or Ford (NYSE: F) fail, their brands and manufacturing facilities will almost certainly be bought by an overseas car company. VW has said it would like a larger market share in the U.S. So has Nissan. Both have the balance sheet to buy assets from a failed U.S. car company.

There is a sort of cruel reality to the thought that companies considered pillars of the U.S. economy could be gone sometime soon. It is certainly an indication that manufacturing is become less and less critical to the overall GDP of America. It is also a sign the the inefficiency of Detroit's habits have finally gotten so severe that it needs to turn to the government and not the capital markets for aid.

If the car companies cannot make it and cannot raise money on their own, they should be allowed to fail. That may mean that Toyota (NYSE: TM) will become the largest seller of cars in the U.S., but there was never any rule that said bad management would continually be rewarded.

Douglas A. McIntyre is an editor at 247wallst.com.

I know, I know: forecasting the imminent demise of America's car companies is nothing new, but recent events have highlighted the kind of shortsighted planning that has plagued Ford Motor Company (NYSE: F) and General Motors Corporation (NYSE: GM) for years. While the gas crisis has exacerbated the shortcomings of the automakers, the companies' failures to understand their core audience, invest in R&D, and ensure the quality of their finished product are long-term, endemic problems that make them a very questionable bet.

Recently, for example, General Motors' decided to offer incentives, extended protection plans, and employee pricing to draw buyers to the line; these innovations, however, have had the added impact of massively undercutting revenues. As Williams-Sonoma could now point out, slashing your profit margin is not really the best way to make a profit. While their decision to get rid of Hummer should help GM shed a pricey and currently unpopular line, by the time the sale is finished, gas prices will be back down and everybody will be driving hydrogen-powered cars.

Ford, meanwhile, has decided to focus its attention on cars, a long-term plan that doesn't seem very well thought out. While the Mustang is, perhaps, Ford's most famous model, their trucks have long been an iconic symbol of the company. Rather than invest in making their strongest sellers more fuel-efficient and thus more attractive to consumers, Ford seems to be placing its eggs in a somewhat unreliable basket.

U.S. stock futures were higher this morning, pointing to a potential positive start on Wall Street. Investors this morning await Federal Reserve Chairman Ben Bernanke speech on financial stability scheduled for 10:00 a.m. from the Fed's annual retreat at Jackson Hole. In the face of recent financial turmoil, namely talk of a government bailout for Fannie and Freddie, as well as troubles at Lehman, Bernanke's speech will likely be today's highlight. Meanwhile, oil dropped a little from Thursday's advance.

Indeed, the Wall Street Journal reports that Freddie Mac (NYSE: FRE) "executives are sounding out private-equity firms and other investors about the possibility of buying new common or preferred shares in the mortgage company." But of course, investors are worries their investments in Freddie or Fannie Mae (NYSE: FNM) may be lost in case of a government bailout. Even Warren Buffett opined on the matter on CNBC this morning, saying he expects the government to take action to support troubled mortgage financiers.

Lehman Brothers (NYSE: LEH) is rebounding this morning after an analyst at Ladenburg Thalmann upgraded LEH to Buy Thursday, saying it is vulnerable to a hostile takeover.

Verizon Communications (NYSE: VZ) is close to an agreement with Google (NASDAQ: GOOG), according to the Wall Street Journal. Conceding they need help with search, the deal could make Google the default search provider on Verizon devices.

With great fanfare, General Motors Co. (NYSE: GM) announced it was spending $500 million developing the Chevrolet Cruze, a so-called next generation compact car. Investors, who have seen the value of GM's stock slip 60 percent this year, could not have cared less. Shares of the company, which for now is the largest automaker, closed down for the day.

Granted one car is not going to revive General Motors' fortunes, but the Chevrolet Cruze clearly is a step in the right direction. For one thing, it's got a nice design though it certainly did not blow me away. The automaker clearly is trying to build on the popularity of the Chevrolet Cobalt whose sales are up 16 percent year to date. It aso underscores how General Motors is trying to be more efficient.

"The Chevrolet Cruze was designed and engineered by our global teams in Europe and Asia Pacific and will be manufactured in those regions in addition to the assembly plant here in Lordstown, Ohio," said Chief Executive Rick Wagoner in a press release. "Our goal for the Chevrolet Cruze is to lead in fuel economy in this very competitive car segment.

But it's also taking a gamble here.

As the Wall Street Journal points out, "The auto maker believes growing demand for nicer, well-equipped small cars coupled with a dramatic redesign for the Cruze will be enough to command sticker prices well beyond the $15,000 base price of a compact Chevrolet Cobalt."

For Wagoner to keep his job, he's going to have to sell lots of them along with the company's pick-ups and SUVs, which the company and consumers are less enthused about.

General Motors Corp. (NYSE: GM) is in such dire straights that it said Tuesday it is bringing back "employee pricing" to almost its entire 2008 auto lineup. We're not talking a few Chevy models here, but all GM models save a few truck ones. Like Doug mentioned this morning, the automaker is in a deep funk and it's doubtful that any incentive like the previous employee pricing ruse will help.

So, what's an alternative? If it costs the automaker more to have bloated, non-moving inventory sitting on dealer lots, how about forgoing the employee pricing schtick and giving away slow-selling models at cost? Not invoice, but cost? Sounds audacious, but these are audacious times in the auto industry. GM is even giving away employee pricing on a handful of 2009 models. That's great, but 2008 models need more extreme measures. Customers, after all, don't exactly have the best perception of U.S.-made cars this year.

In general, employee pricing is 10% less than the invoice price of a vehicle. GM will need to cut deeper than that to reach out and get its glut out of dealer hands and into the hands of customers. Nothing speaks to the average American consumer like a cheap price -- nothing. The employee pricing incentive was very popular in 2005 when it was offered to all consumers, and it even caused the competition to roll out similar pricing. This time, GM needs to get innovative and unveil a new, better concept if it's serious about moving inventory -- even SUV inventory.

General Motors (NYSE: GM) has just announced that it will extend warranties on may of it used cars. According to Reuters, "GM said it would begin offering a 12-month, 12,000-mile "bumper-to-bumper" warranty on all used cars and trucks certified as eligible for the repair coverage by participating GM dealers." The firm has already said it will return to the extensive use of incentives to clear out new car inventory.

GM should have a better solution than to lose more money on each new car it sells and add costs to market its used products. It turns out that is not the case. Vehicle sales in the U.S. are just too awful and Toyota (NYSE: TM) and Honda (NYSE: HMC) take more market share each month.The talk of GM doing into Chapter 11 rings a bit more true as the time passes.

GM is now out of options. It still makes money overseas, but that is overwhelmed but its North American deficit. GM says it will stick to supporting all of its brands except the Hummer. That may end up not being true. GM did say it was moving away from incentives. It did not work out terribly well.

GM has a couple of brands that still sell only a modest number of cars. Saab is one. Saturn in another. Saab could be sold. Saturn could be closed. Saturn might not even be missed.

If GM has to continue using incentives, it will get to the point where it cannot support the marketing and product development costs of all of its brands. That point is probably coming in the next quarter.

Douglas A. McIntyre is an editor at 247wallst.com.