Gm headed for bankruptcy again WTF

[shadowstang03gt]

General Motors Is Headed For Bankruptcy -- Again - Forbes


President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.



Leadership, Not Another Bailout, Will Fix GM (And No, It Is Not Going Bankrupt) Joann MullerForbes Staff

For GM, Bankruptcy Talk Is Its Own Fault Micheline MaynardContributor

Chicken Little's Second GM Bankruptcy: The Gold Medal For Silly Op-Ed Pieces Bob LutzContributor

Play That Tax Hike Music, Euro Boy Louis WoodhillContributor

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.

To help understand why GM keeps losing market share, let’s look at the saga of the Chevy Malibu.

The Malibu is GM’s entry in the automobile market’s “D-Segment”. The D-Segment comprises mid-size, popularly priced, family sedans, like the Toyota Camry and the Honda Accord. The D-Segment accounted for 14.7% of the total U.S. vehicle market in 2011, and 21.3% during the first 7 months of 2012.

Because the D-Segment is the highest volume single vehicle class in the U.S., and the U.S. is GM’s home market, it is difficult to imagine how GM could survive long term unless it can profitably develop, manufacture, and market a vehicle that can hold its own in the D-Segment. This is true not only because of the revenue potential of the D-Segment, but also because of what an also-ran Malibu would say about GM’s ability to execute at this time in its history.

GM is in the process of introducing a totally redesigned 2013 Chevy Malibu. It will compete in the D-Segment with, among others, the following: the Ford Fusion (totally redesigned for 2013); the Honda Accord (totally redesigned for 2013); the Hyundai Sonata (totally redesigned for 2011); the Nissan Altima (totally redesigned for 2013); the Toyota Camry (refreshed for 2013); and the Volkswagen Passat (totally redesigned for 2012).

Automobile technology is progressing so fast that the best vehicle in a given segment is usually just the newest design in that segment. Accordingly, if a car company comes out with a new, completely redesigned vehicle, it had better be superior to the older models being offered by its competitors. If it is not, the company will spend the next five years (the usual time between major redesigns in this segment) losing market share and/or offering costly “incentives” to “move the metal”.

 

[Camaro_94]

**** those little econobox piece of shit cars. If it doesn't have a V8 then GM should no longer produce it. Tahoe/Yukon, Camaro, Corvette, Silverado/Sierra and then call it a day. With those worthless overpaid UAW workers they're never going to win this battle. They're getting paid way more than they're worth. I kinda hope they get replaced by machines and the nonunion workers don't.

 

[TorchMach]

Bailout's should be illegal in my opinion...this is or should be as it was designed to be a free market. If your business fails big or small well guess what your out..no one bailed out my family business..

 

[Jroc]

Repost of a repost.

http://www.svtperformance.com/forums/politics-forum-329/872310-gm-going-bankrupt-again.html

http://www.svtperformance.com/forum...4-general-motors-headed-bankruptcy-again.html

 

[Vicious805cobra]

I doubt he would bail them out again. If he does I think the obama would receive huge backlash from the public.

 

[Mr. Mach-ete]

GM, just like every other corporation, should have go through the bankruptcy process the first time. They would have come out leaner and meaner, more competitive, or not come out at all. We, the Amrican people were forced to invest our taxable income in a company that was bankrupt, now we're going to loose our forced investment thanks to our glorious socialist President Barack Obama.

 

[Mach1USMC]

GM, just like every other corporation, should have go through the bankruptcy process the first time. They would have come out leaner and meaner, more competitive, or not come out at all. We, the Amrican people were forced to invest our taxable income in a company that was bankrupt, now we're going to loose our forced investment thanks to our glorious socialist President Barack Obama.

This EXACTLY.... what's even more scary to me is the Idiot in Chief running around saying we should have MORE bail outs like this. The auto industry still owes us BILLIONS of dollars that they will likely NEVER pay back and this moron wants more of this? People need to wake up. This jerkoff needs to find employment elsewhere!!:nonono:

 

[VenomousDSG]

Not a single **** is given by me.

They should have been gobbled up by another auto company the last time around. That's how a FREE market works, not giving billions of dollars to a company who fails to stay afloat by selling inferior products.

 

[93 347 Cobra]

That article is clearly more political in nature and very oversimplified. The over-emphasis on the comparison between GM and VW can easily fool the uneducated but for those who actually like to read and keep up with economics it's inaccurate. The euro-zone banking crisis is a huge issue for any multi-national company that does substantial business in the EU and until Europe figures that one out any executive for any company that has facilities there won't be sleeping very well. I heard first-hand from a CEO of a multi-billion dollar multi-national corporation that the Euro zone will likely be in trouble for the next couple of years while the US economy keeps slowly plugging along (not great growth but not recession or zero growth).

I'm not saying that GM makes all around good cars, some of them suck. I drive a company Impala and just got done spending five days in a rented Malibu while on vacation and I won't defend GM. I do like the 300 hp V6 in my 2012 Impala (more hp than Taurus) but the interior is archaic and the 4-cylinder Malibu couldn't even get out of its own way. However, GM does have a few products which are much more promising and with more re-designs on the way so I think the jury is still out. Ford's organization and products are clearly superior but let's not write GM off quite yet. As much as this author worships Europe America still can put out some damn good products.

Not bailing out GM and Chrysler would have caused Ford to lose many of its suppliers and would have meant many millions of job losses across the country as the plant closures for the mfr's and their suppliers compounded. So take the recession and add many millions more in job losses and see where that would have put the economy. The bailout was worth doing and both of the last two administrations had a hand in it, not just Obama.

 

[big dad]

That article is clearly more political in nature and very oversimplified. The over-emphasis on the comparison between GM and VW can easily fool the uneducated but for those who actually like to read and keep up with economics it's inaccurate. The euro-zone banking crisis is a huge issue for any multi-national company that does substantial business in the EU and until Europe figures that one out any executive for any company that has facilities there won't be sleeping very well. I heard first-hand from a CEO of a multi-billion dollar multi-national corporation that the Euro zone will likely be in trouble for the next couple of years while the US economy keeps slowly plugging along (not great growth but not recession or zero growth).

I'm not saying that GM makes all around good cars, some of them suck. I drive a company Impala and just got done spending five days in a rented Malibu while on vacation and I won't defend GM. I do like the 300 hp V6 in my 2012 Impala (more hp than Taurus) but the interior is archaic and the 4-cylinder Malibu couldn't even get out of its own way. However, GM does have a few products which are much more promising and with more re-designs on the way so I think the jury is still out. Ford's organization and products are clearly superior but let's not write GM off quite yet. As much as this author worships Europe America still can put out some damn good products.

Not bailing out GM and Chrysler would have caused Ford to lose many of its suppliers and would have meant many millions of job losses across the country as the plant closures for the mfr's and their suppliers compounded. So take the recession and add many millions more in job losses and see where that would have put the economy. The bailout was worth doing and both of the last two administrations had a hand in it, not just Obama.

Someone on here who finally gets it. Good post.:beer:

 

[shadowstang03gt]

google GM going to go bankrupt again

 

[railroad]

I think the real danger is GM is in line to become a Chinese owned company. 7 out of 10 of GMs cars are made off US property. GM has transferred state of the art machinery, technology and ownership to the communist country of China. How can any American sell out their country, so easily. I know, I know, billions of dollars to individuals that have control. This will make it easier for the sitting president to lower the USA to the level of a third world country. You did not think he meant spread the wealth only inside the U.S. did you.

 

[thepizz]

Repost of a repost.

http://www.svtperformance.com/forums/politics-forum-329/872310-gm-going-bankrupt-again.html

http://www.svtperformance.com/forum...4-general-motors-headed-bankruptcy-again.html

This. Old news is boring.

 

[Fuerza]

I think the real danger is GM is in line to become a Chinese owned company. 7 out of 10 of GMs cars are made off US property. GM has transferred state of the art machinery, technology and ownership to the communist country of China. How can any American sell out their country, so easily. I know, I know, billions of dollars to individuals that have control. This will make it easier for the sitting president to lower the USA to the level of a third world country. You did not think he meant spread the wealth only inside the U.S. did you.

The I'talian's own Chrysler, the Belgian's own anheuser-Busch. GM is just another acquisition.

 

[EMC9]

Each day of Obama's reign America's "free market" becomes less and less free.

 

[Mach1USMC]

Someone on here who finally gets it. Good post.:beer:

So what's wrong with the regular bankruptcy process that DOESN'T involve millions of TAXPAYER dollars.

Not only that the premise of last part "93 347 Cobra" argument makes no sense. You two are ASSUMING that GM and Chrysler wouldn't have continued post bankruptcy, but you have ZERO facts or info to back that up. In fact Fiat ended up buying Chrysler did they not? Some conglomerate would have purchased all or part of GM just like they did Chrysler. Car companies do this all the time and will continue to do it. So no- the American auto industry would have been just fine after a normal bankruptcy. The biggest reason Slobama did what he did is to secure union support plain and simple. Under bankruptcy secured debt gets paid first and union contracts get restructured so the company can afford the contract. Under the bail out all that was avoided, investors lost their asses, the idiot contracts stayed in place and NOW look where we are at. GM STILL owes us (the taxpayers) BILLIONS of dollars and they still might go bankrupt. So please- do tell, what was REALLY accomplished by the bailout?:rollseyes

 

[usnfenix]

 

[Mach1USMC]

I want that T-Shirt!!!

 

[usnfenix]

I want that T-Shirt!!!

you can find it on google now. also funny side story i first saw it at duval ford the dealership i bought my 2013 5.0 at. i lol'd they had em on a huge display

 

[LSWon00]

Not bailing out GM and Chrysler would have caused Ford to lose many of its suppliers and would have meant many millions of job losses across the country as the plant closures for the mfr's and their suppliers compounded. So take the recession and add many millions more in job losses and see where that would have put the economy. The bailout was worth doing and both of the last two administrations had a hand in it, not just Obama.

Thank you for stating this. Its hard for people to grasp that if a company the size of GM fail what the impact would be. Rarely does anyone think about the Tier I, II, III suppliers who are contracted by GM to produce parts for their cars. The fallout would be massive and the job loss would be tenfold what it was had GM failed. People tend to think that it would just be GM failing and being bought out or closed down. Its not like an individual going bankrupt its a whole different scale.