Breaking News: GM Responds To Bankruptcy Talk

[Perian]

Source: Automotive News Email Alert

October 10, 2008 - 8:30 am ET

DETROIT (Reuters) -- General Motors, whose shares have plunged to a 58-year low amid the market turmoil, said in a formal statement this morning that bankruptcy protection is not an option the automaker is considering.

"Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets," GM said.

"But bankruptcy protection is not an option GM is considering. Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."

The statement was released after Standard & Poor's analyst Robert Schulz told Bloomberg Television this morning the automaker may be forced to seek protection from creditors.

Risk of being 'overwhelmed'

``Macro factors could overwhelm them at some point'' even with the three biggest U.S. automakers committed to turnarounds, Schulz said in the interview.

S&P said yesterday it would considering cutting the credit ratings of GM and Ford Motor Co. deeper into junk status.

"We believe GM currently has adequate liquidity for at least the rest of 2008 as measured by cash balances and available bank facilities, but the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009," S&P said in yesterday's statement.

[Perian]

GM stock: 4.31

[lam]

GM stock........$4.91

[johnny smallblock]

We believe GM currently has adequate liquidity for at least the rest of 2008

Unfortunately, that runs out in two and a half months. In all seriousness, and without trying to flame or start a fight, I expect GM will sell Hummer (obviously), Saab, and Saturn. Selling the Ren Cen seems like a forgone conclusion to me (though who would buy it?) I also wouldn't be surprised if they also sold some of their holdings in Europe (Vauxhall?). I also expect they'll license the technology underlying the 2-modes and the Volt to other companies. Maybe they'll sell last gen models to 3rd world companies like Audi just did with the A4.

They're simply running out of money. It has nothing to do with loyalty or leverage or brand strategy. They're running out of money. They need to sell what they can to keep going, and hope they can make it to a better day.

It's sad and tragic and unfortunate. But it's no one person's fault, and no one thing can fix it.

[mrgto]

They should just file, restructure and hope to come out of it in a year or so.

[tgagneguam]

Originally Posted by mrgto

They should just file, restructure and hope to come out of it in a year or so.

They should start operating their business appropriately-if it were, they wouldn't be in their present predicament-and not rely on government protection to cover them.

[vintagez]

It is funny that we have heard no word from the unions stepping up and saying what will it take from us to help solve this problem. What if all workers ( head office and assembly workers, top right on down ) were to suddenly make $15/hour, or whatever, till the finances improve, it is better to have a job than lose a company. Everyone seems to be waiting for some sort of package to save them, what about stepping up and saying what will it take from us the workers? I do not care if you are a manager or director, everyone must buy in and do something, don't just sit and wait. Just my 2 cents....

[windvale]

I miss the good old days of Roger Smith and Bob Stempel...

[Greg Burr]

Originally Posted by mrgto

They should just file, restructure and hope to come out of it in a year or so.

I agree. The union contracts have to go: they put us at a severe disadvantage. BK can be a good thing.

[mrgto]

Originally Posted by tgagneguam

They should start operating their business appropriately-if it were, they wouldn't be in their present predicament-and not rely on government protection to cover them.

That would mean getting rid of ALL pensions and retirement money and union contracts. Can't do that unless they file....They have TOO MUCH money going out on those things alone.

[bigbillsfan]

Originally Posted by Greg Burr

I agree. The union contracts have to go: they put us at a severe disadvantage. BK can be a good thing.

here we go again. how's about the product planners, PR guys, bloated management system, CEO, and short sighted stock holders.

[zete]

What needs to be examined is not stock price. Stock price is immaterial to whether or not GM is viable. It's all about profitable sales.

Now, the real question is, if the US market for cars drops to 13M and GM retains approximately 25% of that, can GM at least break even? The same question holds worldwide. Thus, overall, if the market shrinks can GM get to break even?

Is there any hope? Yes. And it all depends on the savings GM negotiated over the last few years. Are those billions in savings enough to offset the lost sales? This is the question no one truly knows.

And since we don't know what will happen next year in terms of sales, sales mix, etc. for GM or anyone else we won't know how things will turn out. This is truly going to be a wait and see type of proposition.

[fp115]

Originally Posted by windvale

I miss the good old days of Roger Smith and Bob Stempel...

Please tell me it was sarcasm...

[mrgto]

Originally Posted by bigbillsfan

here we go again. how's about the product planners, PR guys, bloated management system, CEO, and short sighted stock holders.

That $ pales in comparison to Union/retirement $$ being doled out.

[drew770]

So GM's spin doctor batted down the bankruptcy rumors. Well, what's next GM? How are you going to stablize in today's market place?
No answers just spin!!!