Let's see here, $19 billion in ready cash and assets worth in the $100's of billions. Yep, sounds like "gross mismanagement" to me. Really sucks to be GM doesn't it?
The market is tough compitition and rightly so. Too bad the playing field isn't level though. Most other auto companies in far off lands don't have to pay for health care as they have nationalized health care. Then there is the pension thing, well most of the other overseas auto companies are too young to have aquired many retirees yet. Give them another 30 years and see how they react.
As far as wages and bonus payments, good people demand good wages and other benefits. You just wish you had half the benefits the 'Big Three" pay out.
You are free to believe shat ever you wish but many economist disagree with your opinion. I'll repost the part of my post that you chose to deleted. Read it again ;)
move, that lead the other US car and other US manufacture to get with the effort to restart the economy. The Japanese and other import manufactures did next to nothing, except to take more and more money out of the US tax free.
the future, for your children and grand children, you better start looking at the labels on the things you buy and buy more American good before it is too late. Don't be one of the people out sourcing your own offsprings jobs
If your opinion is correct imagine how many more vehicles GM will sell than Toyota, if they follow your advice. Even if they where actually doing all the bad things you say they are doing GM still sells more than twice as many vehicles as Toyota does today. So does Ford LOL
In Japan, they pay their asses off in taxes. And it all goes to pay for healthcare and such, so the net effect is that they end up spending as much if not more per worker.
Japanese companies have excellent compensation for retirees as well. Also, if a company in Japan hires a citizen, it is understood that the offer is good for lifetime employment or until the company goes out of business, if the employee wishes it. (though not so if you aren't a citizen)
They also need some customer (and competitor's customer) focus groups...find out what customers (and potential customers) want and what they don't want (or like) about GM the current vehicles. Then build the cars accordingly.
That's because there IS bad news. I'm not making this stuff up. I believe that I included with the post referencing this event that it was a sad day for us GM lovers. It will be even more difficult now for GM to service it's debt with the junk rating on it's bonds. :-(
I most certaintly have. Buick winning the overal quality award a year or so back is one that comes to mind. I either started that post or added to it. What was interesting is that winning the award didn't make any difference in Buick sales (that I noticed, anyway). That tells me that there is something other than product quality concerns keeping people away.
On the flip side, there have been few good items to report lately...unless you count GM's so-called recent initiative to add a GM badge and chrome tail pipes to boost sales (which doesn't dererve "positive" comment, frankly. It's damn idiotic and embarrasing!) As GM customers, we should do our part and take the time to tell them so too!! Write their management and tell them to get some good focus groups going...get some feedback from people not buying their cars. Do SOMETHING becides chrome tailpipes, for pete sake!
And perhaps it's GM management that should be the ones focused on the failures. To do otherwise is a form of denial (management, stockholder or customer alike). Seems, moast in each category is in denial.
I'll try to look for good news...hard to find lately. ;-) I would love to have a good reason to feel good about buying the GM stock I once owned back...AND buy a GM car again. Apparently I have plenty of company at the moment. I'm just one of the few willing to invest the time to speak up about it. Once I see movement, I'll invest some other things. But, not until then.
Nice try. You left out the part that GM has ~$300 Billion in debt. With a junk rating on their bonds now, as current bonds come due, they will need to issue new "Junk" bonds to "cover" at 3-4 times the the interest of the bonds they replaced (or dip into some of the cash you speak of...which will dry up REAL FAST if they do that). Servicing that much debt with junk bonds will become quite difficult in their current financial and cash-flow situation for any length of time. GM has some very real and freightening financial challenges at the moment.
These are good points. Not sure of the relivance of them though. These are known realities that can (and must) be managed to if one wants to stay in business since that is the environment.
You mean "Big Two". Chrysler is German owned now. They don't count.
Question. If the industry today simply can't support the salaries/benefits/etc., then what? Take for example the retail and banking industries. Salaries there are typically below average because the profits attainable in those industries simply can't support "average" salaries. Been that way in those industries for decades. IF the reality you speak of is that the current auto industry "environment" won't allow the profits that it once did (for all the reasons you state) and can not support the current employee costs here in the US, then what is the solution? It may well be that the "gravy train" is over for generous employee packages in this industry. The dollars simply may no longer be there to keep it going (or so it seems). Auto workers may have no choice but to get used to what most of the rest of the people that work in the US have in the way of salaries, pensions (most people don't have pensions these days, by the way), etc.
actually, they can easily afford them. They choose not to because of the insane regulations and fees surrounding registering anything with over a 2.0L engine.
What can be so bad? Take a look at GMs first quarter dividend. More buyers by more GM cars than any other, more buyers by more GM trucks than any other. You make it look like GM is going out of business because they lost money in the first quarter. With all the vehicle manufacturer from all over the world focusing on the US market, where they can make much higher profits than anywhere else in the world, it is no wonder GM has a smaller piece of the ever growing market in the US. The US market is averaging 17,000,000 vehicles. Back when GM owned around 50% of the market the sales were around 7,000,0000. At its current share, GM is selling more vehicle than when ti ahd that 50% share
You'd might want to take a look at the balance sheet and the P&L statements over the last several quarters....you know, the actual finances of the company. The numbers there don't work long term, even with the most optimistic forward-looking financial forecasts. It will take some drastic changes to get the finances back in balance.
While everything you say may be true, it matters not if all the income earned by all those sales you speak of is insufficient to service the interest on their debt (and that is before paying "junk' interest on the new bonds they will need to issue) and pay current expenses.
Hopefully they will find a way.
By the way...GM can't afford to pay the dividend they are paying. What they paid out in dividends this quarter was borrowed money. I think the dividend is basically paying a equilivant of 7% (or more) to stock price. Even profitable companies can't generally sustain a dividend level that high for very long. Next quarter if GM has to float a junk bond at 8% to cover the dividend, they may decide otherwise. It will be interesting to see if the dividend remains at the level it is at for very much longer.
You're right...there are a lot of IF's. IF none of the IF's happen, GM will be out of money in a few months, based on the current financial statements and future income projections. The IF's range from either selling assets to reducing costs to filing bankruptcy (which some financial analysts believe GM will have no choice but to do at some point). But they will likely have to do some or all of the If to pull it out. I guess we'll see over time. Maybe their hydrogen technology will pull them out soon...GM is leading everyone in that area!
You must have a crystal ball. How in the world can you pretend to know what goes on inside of GM's boardroom or it's financial department or it's manufacturing divisions( unless you happen to sweep the floor there). They may very well sell some assets as they have done in the past(EDS, Hughs-Directv, Raytheon, Bank of Detroit, Detroit Diesel, Electromotive to name a few) but thats what huge corporations do in lean times. In good times they buy.
Look into your crystal ball and tell me whats next and give me a time line for these events.
Simple...GM is a public traded company. As such, their financial information is public information and is required to be by SEC rule. You can go to EDGAR, your broker or many other sources (even Yahoo) for the information. Look it up.
Regarding selling assets. I don't know if they will sell assets or not...only that it's very likely that will need to at the very least. I believe that is what I stated before based on the financials. Specifically what will they sell...beats me! ;-)
The Crystal Ball response needed some more analysis time. How about this:
GM spins off the GMAC piece of the business as a separate company. Naturally the GM stock holders will automatically get stock in that new company, which would probably be a pretty good deal, actually! That leaves the car business completely insolvent since it is the GMAC piece of the business that has been keeping the whole GM afloat for quite a while now. As a result, the car piece of the business (now separate and unaffiliated with the GMAC piece) goes into bankruptcy protection (no other option). What happens then is up to the bankruptcy judge, but there won't be much to work with without the GMAC piece any longer. The current GM bond holders will likely be left with useless paper, union contracts will likely be in dire jeopardy. The government pension insurance may need to pick up some or all of the GM pension obligations. Stock in the car piece of the business will be worthless, but the stock in the new spinoff company will probably offset most or all of that. The car piece of the business re-emerges from bankruptcy after 2-3 years a mere shell of what it once was, but alive and renewed. Hmmm...it may not be too bad of a deal to be a stockholder if it goes down this way.
How was that for a crystal ball analysis? Of course, anything could really happen, naturally. Just thought of having a little fun with scenarios! Any other crystal balls out there saying something different?
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