General Motors (GM): "No Panic" About Bankruptcy, But There Should Be

General Motors (GM): "No Panic" About Bankruptcy, But There Should Be http://tinyurl.com/6dl3ye
General Motors (GM) has ridiculed talk of bankruptcy. Specifically, it
has asserted that, first, it has enough money to last through the end of the year, and, second, that after its latest reorganization plan is complete, it will have enough to last through the end of 2009.
This is not as reassuring as the company seems to believes. The end of 2009 is only eighteen months away. The company's business, moreover, continues to get worse at a shocking rate. If GM hasn't made huge progress toward turning cash-flow positive again in the next 6-12 months, raising capital to last beyond the end of next year will get increasingly difficult (and expensive).
The company could presumably sell or spin off its international division, but this would mean parting with a crown jewel. Given the rate at which the European economy is deteriorating, moreover, the international division--now barely profitable--could soon plunge into the red. GM's North American business generated $1 billion of operating profit last year and lost $3.6 billion this year, so performance can go south in a hurry.
GM's $21 billion of cash and marketable securities, moreover, is not as impressive as it sounds. The company's cash balance has shrunk by $3 billion in each of the past two quarters, but short-term borrowings and payables have also increased, especially as a percentage of revenue. Short-term debt is up $2 billion from the start of the year and payables are up another $500 million (on a smaller revenue base). Assuming payables and short-term credit soon max out--a reasonable assumption, given the decline of the business--cash burn in future quarters is likely to accelerate.
If nothing changes, GM has enough cash on hand to last 7 quarters: $21 billion divided by $3 billion a quarter. The company's North American revenue dropped a mind-blowing 33% year over year in Q2, however, and the way the economy is heading, this drop could even get worse. If Europe follows the US into the tank, GM Europe will start burning cash instead of generating it, that $3 billion a quarter could rapidly swell.
GM says it has access to another $5 billion on committed credit lines, which will help. Possession is nine-tenths of the law, however, and it wouldn't be shocking to see the banks who agreed to this argue "material adverse change" or some other excuse that would tie up the funds just long enough for it to be too late.
GM's CFO Ray Young told the New York Times that he does "not see any panic here."
Not seeing panic is good: Employee morale would not be helped by seeing the company's senior team wander around the halls in a cold sweat. Feeling panic is another matter, and at this point, it's probably an appropriate response.
--
Civis Romanus Sum

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If you hate GM so much why do you bother posting in a GM group. The executives really have no reason to panic. Their income and savings are set in stone. The people who should be panicking are the unions as all this means is more of their jobs will be exported to foreign countries. As long as the unions keep bleeding the company instead of working with them for a long term solution the company keep going down hill. This is a world economy and everyone has to be able to compete on a level playing ground. How many more jobs have to be exported before the American public learns they can't bleed their company dry and still have a job.

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Woody wrote:

Execs bear fault for very poor business decisions year after year and for buying labor "peace" at any price. The UAW is also guilty of greed. Now the chickens have come home to roost with a vengeance.
--
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<Snip Jimmy's usual Troll Shit>

And yet you (and your pal Gosi) still can't answer the question asked. "If you hate GM so much why do you bother posting in a GM group?" Why not leave us the hell alone with your endless shitty posts. We are all smarter then you, Jimmy, so if we want to find news about GM, we too can search the Internet. Why don't you do us all a favor, and go out and get a job? We all know the reason you hate GM, and the union's (and McDonalds, for that matter) so much is because they make much more money then you do, but please. If you were to take half the time you spend every day bashing GM, and go look for a decent job, you too could make some money.
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Anybody can post here, on a variety of matters pertaining to GM. I dont see these as being Jim's concoctions as much as they are news releases (although I didnt see a link or source for the last one).
Most of us WANT to see GM get its head out of its ass.
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Mostly the main ass needs to get out if its head
I guess most of the asses in headquarters need to get out
It is really amazing to see in slow motion one silly stupid mistake being made after another.
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HLS wrote:

http://tinyurl.com/6dl3ye or http://www.clusterstock.com/2008/8/general-motors-gm-no-panic-about-bankruptcy-but-there-should-be
--
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http://www.clusterstock.com/2008/8/general-motors-gm-no-panic-about-bankruptcy-but-there-should-be I think Jimmy just proved my point, HLS.
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80 Knight wrote:

You failed to get the point of the article, that being that GM must get its house in order to avoid being relegated to the sidelines. Proper fear makes for survival in a highly competitive environment.
--
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Other people's dogs can, and do, shit on my front lawn. That doesn't mean I encourage it.

They don't. That's the difference. Their only purpose here is to irritate.
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