View Full Version : GM going bankrupt, AGAIN???
General Motors Is Headed For Bankruptcy -- Again (http://www.forbes.com/sites/louiswoodhill/2012/08/15/general-motors-is-headed-for-bankruptcy-again/4/) Now before sofla or gayle starts ranting about this being some right-wing rag just stuff it. Try talking to the numbers. I certainly am a bit surprised to be honest because I simply have not been following GM. I have heard so much about how they were bailed out I figured they were doing fine. Apparently that is not happening. As it turns out they are quickly becoming an even bigger money trap than all those advisors were telling Obama. This is interesting to me because last night I heard Biden talking about "that man" or whatever he kept calling Obama and how he was ignoring every single advisor in the WH and others. How he did not want to hear from experience. He did not care what the cost as long as he could save some overpaid jobs. All those overpaid jobs were sitting there in the stands waving their UAW signs. Probably getting paid to be there.
Anyways, what Biden failed to tell Americans was that yes Obama did ignore all the people with experience and that now it is coming back to bite the US in the butt. At this point the money we have in GM stock is so low that it doesn't even make sense to pull it out and sell it. As the article points out Obama wouldn't want the egg on his face and will ride it to zero if allowed. The article gives one example of the failing business and it is a great example of why GM should never have been saved. The eco-version of the Malibu gets worse gas mileage than a standard gas Altima. Pretty sad.
The similarities between Obama and the GM CEO are quite funny especially considering how poorly GM is being run and how poor Obama handled his first term. A great quote from the article...<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Uh-oh. While Dan Akerson is busy rearranging the deck chairs on GM’s Titanic, Martin Winterkorn is leading VW to world domination via technical excellence.</div></div>
Just another example of the Dems telling truths in such a way to hide the fact that they are really lying through their teeth.
For GM, Bankruptcy Talk Is Its Own Fault (http://www.forbes.com/sites/michelinemaynard/2012/08/17/for-gm-bankruptcy-talk-is-its-own-fault/) So this is definitely a different take but still worth the read.<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Unlike Woodhill, I don’t think GM is in danger of a bankruptcy filing. I covered the auto bailout and many airline industry bankruptcies. At the moment, there are none of the classic signs of a bankruptcy filing, such as low cash (GM has plenty), an inability to borrow (GM just announced a 5-year bond issue) and executives who can’t keep a grip on the company. Okay, two out of three.
But because GM went through Chapter 11 once, the possibility of a second Chapter 11 filing will hover over the company until it proves, conclusively, that it isn’t going to happen again. There are only two things that will lessen the chatter: prosperity, and time.
GM has had a measure of prosperity, but it hasn’t been decisive. Europe is an enormous barrier to GM’s overall success, and because it’s taking so long and will take so long to fix it, GM can’t be declared to have uninterrupted prosperity, to borrow a line from the band Cake.
Likewise, GM’s U.S. market share is falling. Never mind the fact that it’s selling small cars for more than its bean counters probably ever dreamed they could sell small cars. It is losing share at a time when it by rights ought to be gaining share, if its turnaround was indeed as successful as the company declares it to be.
On the time front, the bailout is simply too fresh in our memories. Blame the media if you want, but you can also blame President Obama, who is using GM as a campaign talking point. Our polarized political environment means that for every political statement, there is an equal and opposite political statement. If Obama declares GM to be a success, somebody else, like Mitt Romney, has to declare it to be a failure. And truth squad-ers have to dive in to figure out who’s right.
09-07-2012, 02:25 PM
<span style='font-size: 17pt'>Chicken Little's Second GM Bankruptcy: The Gold Medal For Silly Op-Ed Pieces</span>
Bob Lutz -- AUTOS -- 8/17/2012
Forbes contributor Louis Woodhill must deserve some sort of special recognition for his thinly-argued op-ed contribution forecasting an early second demise of GM.
As rationale, Mr. Woodhill cites a list of alleged GM ills, from the 2013 Malibu (last reported to be off to a very fast start and winning wide praise from the professional media) to declining market share in the US market.
The fact that he would focus on GM’s admittedly-lower US market share as a harbinger of impending doom demonstrates the most profound lack of understanding of the vehicle business. Product strength is only one component in the market share equation. Other elements affecting share are transaction prices, marketing spend, and propensity to make share-enhancing, low-profit sales to daily rental fleets.
The “Old GM”, following a strategy that myopically-market share focused observers would endorse, drove the volume numbers above all else: substantial discounting, low transaction prices, heavily-subsidized lease rates, and massive daily-rental sales. (The latter two are addictive and damaging to the brand’s health: rapid turnover creates too many late-model vehicles at auction, depressing used vehicle prices and making depreciation rates for 2- and 3-year old vehicles of the make uncompetitive).
The new GM enjoys high transaction prices, among the highest in each vehicle class. The lease percentage is carefully monitored. Sales to daily-rental companies are rationed, and increasingly left to Asian competitors who formerly eschewed them. In short, the strategy is to make money, rather than buy market share: GM is now doing exactly what critics, for decades, said it should be doing: making money in the car business. And that business is being well led: the compact Chevrolet “Cruze”, at last check, was selling roughly one million units globally and in the running for the world’s best selling compact title. The small Chevrolet “Sonic” leads its segment, and the new Cadillac ATS has been widely praised as being at least on a par with the best of the teutonic offerings.
And all of this US-centric analysis completely misses the point that GM’s strength is in its global reach, demonstrated foremost by its huge, and profitable, success in China, a market that is in the process of dwarfing the US in size. GM is very well positioned in Latin America and the former Eastern Block. (Western Europe, its economy slumping, is admittedly an anvil around GM’s neck, but it is for every other producer, as well).
GM is profitable and enjoys a positive cash flow. Its products are very well accepted around the globe. No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt”, arguably the most technologically-advanced car on the planet. No other company can match the performance of the Corvette ZR-1 at anywhere near the price. No other company can challenge GM’s dominance in full-size SUVs, nor does any other maker offer the advanced hybrid system that makes these large vehicles economically and environmentally acceptable.
GM is not without its challenges and problems: name me a company where you can’t make that statement. But GM is a design, engineering, manufacturing and marketing powerhouse. The company is gaining strength. It remembers the lessons of the past. It does not shy from its well-documented problems, such as GM Europe; instead, it addresses them head-on.
To suggest that a cash-rich, profitable company with these characteristics is about to go under is, to me, “fatuous twaddle”. Mr. Woodhill should have done better.
09-07-2012, 02:33 PM
<span style='font-size: 17pt'>Leadership, Not Another Bailout, Will Fix GM (And No, It Is Not Going Bankrupt)</span>
Joann Muller, Forbes Staff
The U.S. Treasury Department’s tally of what the government might lose on its $85 billion auto bailout keeps rising as GM’s stock price sinks. Earlier this week, it put the number at $25 billion, about 15 percent higher than its previous forecast.
Somehow, Forbes contributor Louis Woodhill uses this fact as proof that GM is headed for bankruptcy again. His self-described “unconventional logic” escapes me (“uninformed” might be a better word). But the basis of his argument seems to be that he doesn’t like GM’s Chevrolet Malibu as much as the Volkswagen Passat.
Far be it from me to defend General Motors, which is a company still in need of serious work, but let’s not toss around such incendiary words as “bankruptcy” without putting a little effort into understanding the situation, OK? GM is a global company with a strong balance sheet, and not in any danger of going bankrupt again. It has $33 billion in cash and $5 billion in debt on its balance sheet; posted $2.5 billion in net income so far this year, and generated $1.7 billion in automotive free cash flow in the second quarter.
That said, anyone who looks at the summary slide GM provided to investors during its second quarter earnings call can see this is not a company headed in the right direction. GM sold more cars, but revenue, profits and cash are down across the globe. GM has serious problems, but they are fixable, with strong leadership. Chief Executive Daniel Akerson is trying hard, but so far he hasn’t produced convincing results.
Let’s review the problem areas:
Europe: GM lost $400 million in the second quarter, $1.6 billion in the past four quarters. European auto sales have shriveled up amid economic uncertainty and the sovereign debt crisis. Like Ford, which recently said it will lose $1 billion this year in Europe, GM needs a massive restructuring to reduce factory capacity and eliminate jobs to meet the new realities there. GM is no doubt kicking itself for hanging on to its Opel unit back in 2009 when it had a chance to sell controlling interest to Canada’s Magna International. Back then, the board feared GM would lose critical engineering expertise in passenger cars, but lately it’s relying more and more on its Korean subsidiary for that. That’s all water under the bridge now, of course, so Akerson has to do what he can to fix it. Frustrated with the pace of change, he recently ousted GM’s European boss. It’s fitting, perhaps, that the man who convinced the board to keep Opel, Vice Chairman Steve Girsky, is now assigned to fix it. GM says a plan is coming this fall.
North America: GM lost 1.7 points of market share in the second quarter, but that’s largely due to the recovery of Toyota and other Japanese makers from the disasters in 2011. Its market share in 2010 and 2011 was artificially inflated because its competitors were on the ropes. Remember, after bankruptcy, GM got rid of four brands so comparing its pre-bankruptcy share to current share is unfair. Basing an argument for bankruptcy on U.S. market share trends is not logical anyway. Ford Motor has lost market share, too. What matters in both cases is whether the companies can match their production to current demand and generate solid profits while doing it. GM’s EBIT margin in North America for the second quarter was 8.6%. Ford’s was 10.2%.
Clearly, it still has some room for improvement.
Pensions: This has been a noose around GM’s neck for years, but the company is finally taking real steps to address it. In June, GM said it will offer 42,000 white-collar retirees in the U.S. a lump-sum payment in lieu of their monthly pension check and will transfer pension responsibility for 76,000 others to a group annuity plan managed by Prudential Insurance. The company has yet to announce the results of the offer, but this is at least a step in the right direction.
Global costs: GM has been trying for years to knit together its vast, disjointed engineering operations into an efficient global operation so that it can become more efficient. Akerson named a relative unknown, Mary Barra, as senior vice president of global vehicle development, to tackle that bureaucracy. She believes there’s still at least $1 billion worth of waste that can be squeezed out of GM’s global engineering operations.
But there’s also a lot going right at GM, and that’s worth acknowledging.
GM is in an enviable position in China, where it has 13.8 percent market share and continues to invest for a market that is expected to sell 30 million cars and trucks a year, twice what the U.S. sells.
In the U.S., GM and the UAW have a strong relationship where they tackle problems together rather than butting heads as in the past. Today, GM’s labor costs are just about on par with its Japanese competitors in America.
GM’s vehicles are more competitive than in the past. Cadillac, GMC and Chevrolet quality all ranked above average on the recent J.D. Power Initial Quality Study.
Clearly, Akerson still has a lot of work to do in turning GM around. But I get angry when people use the GM bailout as a political football and ignore the facts.
09-07-2012, 05:37 PM
News just to hand. Bain Capital iz mooving in to take over GM. Thank God, things will be ok now.
09-07-2012, 06:02 PM
Forbes itself may be this or that, or not be this or that, but its CONTRIBUTORS? Yes, they ARE all that, at least in some cases.
Take this one for example. Please.
If you read to the end of the piece, did you not see a clear indication of a rebuttal piece there, and did you then not read it at all?
Yes, rebuttals in afore-said Forbes.
Gayle in MD
09-07-2012, 06:39 PM
Wow, I thought that scam article had been exposed as a scam, a week ago!
I could be wrong about the time, because I am mixed up on my days. All day today I thhought it was Saturday. But thenn, I'm suffering from jet lag, you know, from flyng from Maryland to Washington D.C. to Tampa to North Carolna, and staying up all night for two weeks!
I did drift in and out a few times on Thusday night, but every time I did, people kept yelling, HELLOOOOO CHARLOTTE, and I kept jumping up to see who was greeting me. /forums/images/%%GRAEMLIN_URL%%/grin.gif
(Some of the less informed really do end up showing their arses though, don't they?)
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Leadership, Not Another Bailout, Will Fix GM</div></div>LOL, definitely not the leadership that is there.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Yes, rebuttals in afore-said Forbes. </div></div>LOL, do you mean one of the ones that I quoted here?
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">(last reported to be off to a very fast start and winning wide praise from the professional media)</div></div>
Hmm, since the author expects you to believe this I guess we can just check a few of the more popular opinions...
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: car and driver aka professional media</div><div class="ubbcode-body">In certain aspects, and for undiscerning buyers, the Malibu 2.5 can satisfy. It’s quiet in everyday use and offers decent power, but its handling doesn’t inspire driver confidence, and the interior packaging is disappointing. Substituting a different engine does not address most of the issues that pushed the Malibu Eco down the scorecard in its comparison test. Unfortunately, fixing the Malibu’s shortcomings would take more than a stack of coasters.</div></div>Doesn't sound so good.
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: motortrend</div><div class="ubbcode-body">Overall, it’s an improvement over the 2008-12 Malibu, which was the first of the model (since it went front-wheel-drive) that we could say is a credible competitor for the creme of the midsize segment, which used to be Toyota Camry and Honda Accord. It’s still in the hunt, though this major update doesn’t do enough to make it a surefire contender for the top of its class.
Road and Track did not really have anything bad to say and thought it might be a contender in the group. I am sure there are plenty of others that think it is great. Just wondering where they are.
Marginally better than previously but all still note the same problems as the original author in my first quote. There are no indications that I have seen in a quick search that this car is skyrocketing at all but then again I am sure they are out there.
09-07-2012, 08:51 PM
BANKS GO BANKRUPT.
SHIPPING KOMPANYS GET A BAILOUT.
DRUG KOMPANYS GET A FIX.
KAR KOMPANYS GET JACKED UP.
Just 4 days ago.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> DETROIT – General Motors Co. (NYSE: GM) today reported August sales of 240,520 vehicles in the United States, up 10 percent compared with a year ago. GM increased its sales to retail customers by 11 percent, making August its best retail month of the year. Sales to fleet customers were up 6 percent compared with a year ago. All four GM brands posted higher total and retail sales.
Thanks in part to extensive national advertising during the Olympic Games, Chevrolet passenger car sales were up 25 percent, with the Spark, Sonic, Cruze and Volt all posting their best-ever monthly sales. In addition, the Chevrolet Equinox set an August record behind its 22 percent year-over-year sales increase.
“The single message Chevrolet communicated this summer was ‘confidence’ and it rang true with customers when they saw how our product lineup is being transformed,” said Kurt McNeil, vice president of U.S. sales operations. “All four of our brands are building momentum behind new products so we’re very well positioned as the economy continues to slowly improve.”
Other sales highlights for August include an 11 percent year over year increase in Cadillac sales driven by strong demand for the SRX crossover, the Escalade and the new XTS large sedan. Buick sales increased 12 percent on the strength of the Verano, which has seen nine back-to-back monthly sales increases. Buick recorded its best retail sales since September 2007. GMC sales were up 4 percent, following a 35 percent reduction in fleet sales. GMC Acadia sales rose 26 percent in August and GMC Terrain sales were up 16 percent.</div></div>
Q.......BTW, the author describes himself like this,
"I apply <u>unconventional</u> logic to economic issues."
GM is simply a jobs program.
If you want to know where this is heading just research British Leyland before the Thatcher regime sold it off.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">GM is simply a jobs program. </div></div>
What, they don't produce anything, like Wall St?
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