GM stock soon to be available at your local 7-11
Rick Wagoner's "inspired" leadership made a big contribution
GM’s share price tumbles to a 70-year low
updated 2:30 p.m. ET, Fri., Feb. 20, 2009
NEW YORK - Shares of General Motors sank to their lowest point in more
than 70 years Friday, as speculation continued to swirl about the future
of the struggling automaker.
General Motors Corp. shares hit a low of $1.57 in afternoon trading
Friday, matching a low set on March 31, 1938. That’s according to the
Center for Research in Security Prices at the University of Chicago. The
price is adjusted for splits and other changes.
Shares of the Detroit-based automaker have tumbled in recent weeks,
falling from $3.50 a month ago. On Tuesday, GM said it would need a
total of $30 billion in federal aid in order to avoid filing for
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The broader markets also tumbled on worries over the health of the
Earlier, GM’s Swedish-based subsidiary Saab filed for bankruptcy
protection Friday so the unit can be spun off or sold by its struggling
U.S. parent, officials said.
The move comes after Sweden turned down GM’s request for government help
An application to reorganize the brand was filed at a district court in
Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom
The Swedish government on Wednesday rejected a request from loss-making
GM to inject money into the carmaker. GM, which is seeking help from the
U.S. government to avoid bankruptcy at home, has been looking for buyers
for Saab but said it needs more funding to spin off or sell the division.
“We explored and will continue to explore all available options for
funding and/or selling Saab and it was determined a formal restructuring
would be the best way to create a truly independent entity that is ready
for investment,” Saab’s managing director, Jan Ake Jonsson, said in a
The move would give Saab protection from creditors while it restructures
in a process similar to a Chapter 11 bankruptcy in the U.S.
“Pending court approval, the reorganization will be executed over a
three-month period and will require independent funding to succeed,”
Saab said, adding it would seek funding “from both public and private
However, government officials seemed to rule out financial assistance.
“I’m not sure what they’re referring to, because support in the form of
money is not on the agenda,” Industry Ministry spokesman Hakan Lind said.
Industry Minister Maud Olofsson told Swedish news agency TT it was “very
hard to say what our role will be.”
On Wednesday, Olofsson rejected GM’s plea for state funding for Saab,
saying it was up to the U.S. automaker to save the brand.
In its own restructuring plan, GM said Tuesday it would need up to $30
billion from the U.S. Treasury Department, up from a previous estimate
of $18 billion and including $13.4 billion it has already received. It
also said it would need to cut 47,000 jobs worldwide and close five more
GM said it needed about $6 billion in support from the governments of
Canada, Germany, Britain, Sweden and Thailand to provide liquidity for
its overseas operations in those countries.
The Detroit automaker said it had developed a proposal that would cap
its financial support of Saab with the Trollhattan-based automaker’s
operations “effectively becoming an independent business entity” by Jan.
Saab has around 4,500 workers in more than 50 countries. Its main
markets include the U.S. Britain, Sweden, Germany, Italy, Australia,
France, the Netherlands, and Norway, with most of its production located
With three new models ready for launch in the next 18 months — the 9-5,
9-3X and 9-4X — managing director Jonsson said Saab has “an excellent
foundation” to grow, assuming it can get funding for engineering,
tooling and launch costs.
“Reorganization will give us time and means that help these products to
market while minimizing the liquidity impact of Saab on GM,” Jonsson said.
But analysts questioned whether Saab could survive on its own since it
is a small player in the battered global auto industry.
“It doesn’t have the economies of scale or the deep pockets,” said
Stephen Pope, chief global markets strategist for Cantor Fitzgerald.
“Perhaps they’re just trying dress it up for buyers.”
Originally an aircraft maker, Saab started manufacturing cars after
World War II. General Motors bought a 50 percent stake and management
control of Saab Automobile in 1989 and gained full ownership in 2000.
The aircraft division remains a different company.