GM Headed For Bankruptcy Again?

Hmmm, I'm not sure I totally agree w/the author's thesis, but time will tell.

Do note that the article contains a link to Bob Lutz's reply. I'm sure you can imagine what he thought of it...

 

The new GM is the old GM, less some of its pension obligations and now with a cheaper labor force. The root problems of a moribund executive and pitiful workforce remain. Unfortunately GM is far from alone.

 

can't be, they just had their best year ever!

 

agreed, there are plenty of profitable companies without a car in the d segment top ten.

 

The Fed is GM & GM is the Fed. Maybe time for a rename . . . how does Fed-Em sound. With such nepotistic relations (and closed ties to the Fed Reserve) and the legal right to demand more fake paper money be printed, I don't see how they can fail . . . . at least not until we grasp that there is no more real money.

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i'd say the most remarkable is vdub. an amazing turn around since my experience with the rabbit. they were pretty similar to american products in those days.

 

Forbes has two replies itself

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

and
For GM, Bankruptcy Talk Is Its Own Fault - Forbes

 

It is said here that GM is bleeding their European operation dry. They use their ideas and ship them across the pond such as the Insignia which became the latest Malibu, but don't give the European arm the investment they need.

Car sales are on the up over here. All manufacturers are selling significantly more vehicles than last year. Well, all manufacturers bar one. Any guesses? Yep, Vauxhall which is the UK version of GM. Why? Because their cars are dreadful. They're unreliable, they're not finished off in that you can see they've been made to a much reduced budget. Reliability is heading southwards year after year. Vauxhall even offer a lifetime warranty on their vehicles! but still people avoid the cars! Car Makers Premier League June 2012

Ford and Vauxhall were the two big sellers here 20 years ago, in the same way it's Ford and Holden in Australia. But Ford are going from strength to strength, Vauxhall just seem to be losing the plot year after year after year. Is it the workers? Doubt it, the Japanese plants here are all renowned for quality and are expanding at an alarming rate, so I guess it must be the management of Vauxhall? Why are they poor? Maybe GM use the Pyramid of Sh*t technique?

 

The european car market is a mess. GM should have sold opel as part of the bankrupcy, even at a huge loss it would have been better than this
http://www.nytimes.com/2012/07/26/business/global/europes-auto-industry-has-reached-day-of-reckoning.html?pagewanted=all

 

I guess it's difficult for me to class the UK within Europe as we're so different and I often forget that whilst things are bad here, they're much worse over the Channel.

Think it's all the workers rights and protectionist practices they have that brings us down with them?

 

TTAC had this response and brings up a lot of good points:
Ur-turn: GM Not Going Bankrupt – For Now | The Truth About Cars

 

After reading all the comments from the same topic on the big GM forum... Forbes Commentary: General Motors Is Headed For Bankruptcy -- Again ...I added mine below to my blog. Long story short, watching this unfold hasn't been much of a surprise. It hasn't been the "recovery" that had been hoped for.

For continuing to point out the efficiency product-gap and slower than planned plug-in progress, there some here that choose to shot me as a messenger, rather than actually address the financial situation. Fortunately, the dismissal of goals and blatant effort to shift focus won't change the message.

The requirements of business are often claimed as pencil-pushing efforts that undermine the spirit of automotive enjoyment. But reality is, there's still a major business burden to deal with. Those outstanding 500 million shares of stock should make that obvious. The unclear plans for the future should confirm it.

We're seeing some of the same problems from before the bankruptcy emerge again. The biggest was the heavy emphasis on monthly sales, rather than judging from an annual perspective. The next was the disconnect between need & want, basing success on hope without regard to the market itself.

Remember the mess Two-Mode became? What a massive waste of resources. All that time, money, and talent devoted to something few would benefit from. Volt fell into that same trap. Had there also been a lower-capacity choice or a no-plug offering, things would be different. Instead, there's a major dependency on tax-credits for a limited audience. What happens when those expire? What happens if cost cannot be reduced enough to be competitive? What about the rest of product-line? For that matter, how will further research & development be funded? That's a lot of risk during a time when risk cannot be afforded.

 

oops - double post

SGH-I717R ? 2 .

 

I suspect that a 'boat load' in this context means enough money to underwrite subprime loans again.

Sound familiar ?

 

GM is a dead man walking. GM has no hybrids. Volt is a limited production car to meet regulatory formula.

GM would need to look like Ford or Toyota with a solid core of hybrid and EV vehicles and technology and plants to build them. GM has none of that.

 

It just doesn't make any sense hill. You do a LBO if your stock is undervalued and some bank is willing to put up the cash, to pay off shareholders. After that you raid the cash and pension plan. GM just came out of bankrupcy, and the pension plan has been suitably raided. It needs cash to handle the rivers of red ink coming from european operations, and to develop new cars. Plenty of cash to not go bankrupt, but definitely not a LBO candidate.

Now if they had gotten rid of opel in the bankruptcy, the balance sheet and income statement would look much better.

 

Sure they have hybrids, albeit not many good ones that people want to buy though (eAssist is pretty lame and Two-Mode is too expensive on too bloated a vehicle in the first place). Per July 2012 Dashboard | Hybrid Cars, from a quick glance, they appear to be #2 in hybrid sales and have passed Honda.

BTW, you should try telling the above to some of the GM fanboys (mostly anti-hybrid, based on myths, FUD and misinformation or excluding depreciation when it comes to TCO) at places like Cruzetalk...