In GM's boardroom, kicking tires and taking names

(NPR.org) - Apparently, General Motors wasn't too big to fail. Once the largest automaker in the world, GM filed for bankruptcy in 2009. It remains uncertain when or whether the company, propped
up by $50 billion in government loans, will stage a comeback.
In "Sixty to Zero" (Amazon.com: http://xrl.us/60Zero ), Alex Taylor III, a senior editor at Fortune magazine, uses "fly on the wall reporting," including in-depth interviews with a half-dozen GM CEOs with whom he got pretty chummy, to provide a cogent kick-the-tires account of a disaster that was 40 years in the making...
Continued: http://xrl.us/Sixty0
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On 10/05/2010 9:46 AM, snipped-for-privacy@rip.ax.lt wrote:

When you work out how much GM is losing for each vehicle sold, GM is inevitably doomed even with the bailout and NHTSA favors.
Posting a $4.3 billion dollar loss after all that bailout money and after all that $120++ billion of bond/loan/preferred shares were litterally burned.... (GMAC extra)
GM is doomed. And the real cost to us is far higher.
If Obama had the balls, he would not allow companies like GM to operate so long in a bankrupt state. Really, the crime was allowing GM to operate so long and cause so much defunct debt in the first place.
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wrote:

I don't think GM is actually losing money on the cars they build now, if you only include current expenses. And since they have dumped a lot of the overhead, they probably will be profitable soon (not that that does much for the former owners or creditors)

The 4.3B loss was relating to accounting requirements to cover the restructuring of the company. GM's cash on hand actually increased during the fourth quarter of 2009 (mostly thanks to the US Government). Accounting is such a murky art I am not sure anyone knows how much GM actually lost during the period.

Well that remains to be seen. I am not a betting man, but at best I give them a 70% chance of staying out of bankruptcy for a second time. I contend things would have been better if the US Government had not nationalized GM. GM should have been allowed to go through the normal bankruptcy process. This would have allowed them to dump the UAW contracts, the pension obligations, and much of the "old" overhead that is dragging down the current company. But the US Government was not willing to let the UAW get hung out to dry and the Government defiitely didn't want to have the pension obligations dumped on the Pension Gaurantee Agency.

I don't think Obama allowed GM to operate in a bankrupt state. It was not his call. The creditors (supplier, bond holders, etc.) did not press the issue until things were really bad. If the suppliers had called GMs bluff earlier by refusing to keep shipping parts until they were paid, GM would have been forced into bankruptcy sooner. The Government was negligent in letting GMAC make bad loans etc. just like many other finacial institutions, but since GM dumped most of GMAC a few years back, that is an unrelated problem. If anything, you should blame the Bush administration for ignoring the ridiculous loans practices of financial institutions like GMAC.
GM almost went bankrupt before early in it's history. They were saved back then by the DuPonts.
Ed
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On 11/05/2010 1:18 PM, C. E. White wrote:

There was a civil suit judgements against GM for fraulent financials in 2007 and another in 2008.
Funny how SOX was never excecised on Wagoner and crew.
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Once again our friend Canuck57 is telling us the sky is falling. LOL
wrote:

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As I said before you obviously haven't a clue about the automobile business. GM earns a nice profit on every vehicle it sells. The build cost is only a bit over 1/3 of the invoice price, dummy

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Subsidised of course from taxpayers coast to coast.
Cost per vehicle sold to the taxpayer was $60,000 of added DC debt per vehicle in 2009.
On 11/05/2010 2:52 PM, Mike Hunter wrote:

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What leads you to that goofy conclusion?

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The biggest criminals are often friends with powerful rich people and they do not like to have been involved with prosecuted and convicted criminals so those kind of criminals are most often just paid off and told to leave.
The whole culture of CM is full of rich laid back people who just want money poring in and when the customer do not want to buy the product they turn to the politicians and ask for taxpayer bailout.
There were a lot of clever people working for GM but they were not allowed to do good job.
Those people have left or are leaving but they go away from areas were there are a lot of ordinary people and they have no hope for the future, uneducated and they turn in many cases to drugs and crime and turn former prosperous areas to slums as we have seen in many documentaries.
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