GM, Ford at Risk if Bailout Fails

[steinravnik]

GM, Ford at Risk if Bailout Fails

A funny thing happened on the way to the bailout: Stocks tumbled, credit markets seized further, and the dollar rallied Thursday in the wake of Senate passage of the $700 billion bill.

Of course, crisis breeds opportunity, and many traders are seeking them amid the ongoing upheaval. It's what they do.

But Minyanville.com CEO Todd Harrison is keeping his powder dry -- and not just his long-term investment portfolio, which remains in cash.

"There's going to be opportunities, but we need to see the game plan first" in terms of what bailout plan the government ultimately does (or doesn't) pass, and how the market reacts, he says. The risk of not passing a bill is "GM and Ford could be sucked into the vortex" because of their derivatives exposure, he says, calling the automakers "banks that happen to sell cars."

Video at link:
http://finance.yahoo.com/tech-ticker...OO,GE,IBM,GM,F

[fp115]

Have they forgotten about Chrysler? Cerberus will be in much more trouble than GM or Ford.

[Ming]

I think most people have just written off Chrysler.

[megeebee]

Cerberus is privately held and funded. Ford and GM are publicly traded. Cerberus may or may not have gobs of money. But unlike the other 2 domestics, they don't need to tell anyone what their finances are if they don't want to.

.

[63GrandSport001]

Considering that they passed the 25 billion in loans I dont think its going to effect GM and Ford as much as people may think. Even better about these loans is that they are of a lower interest then what they could have gotten on their own in their current condition.

[RamJet502]

I doubt 25 billion will help anything. Until either company can turn a profit on passenger cars they're screwed.

[mikesright]

Originally Posted by megeebee

Cerberus is privately held and funded. Ford and GM are publicly traded. Cerberus may or may not have gobs of money. But unlike the other 2 domestics, they don't need to tell anyone what their finances are if they don't want to.

.

True.

Unlike Ford and GM though, Chrysler has a lot less cash, their sales have declined more precipitously than them, and it's abundantly clear that Chrysler simply hasn't been investing in new, class-leading products and platforms. The new stuff coming out, like the Dodge Ram, is the only product Dodge has coming this year, and it's going to make them no money because it is the worst possible time to launch a pickup truck.

['Vette Dude]

Originally Posted by mikesright

True.

Unlike Ford and GM though, Chrysler has a lot less cash, their sales have declined more precipitously than them, and it's abundantly clear that Chrysler simply hasn't been investing in new, class-leading products and platforms. The new stuff coming out, like the Dodge Ram, is the only product Dodge has coming this year, and it's going to make them no money because it is the worst possible time to launch a pickup truck.

Chrysler=Crap

[jbernie]

In a market like this people might skip over Chrysler first, with them not being publicly traded company you may not know about any failure concern until after they announce it.

Same could be said for GM & Ford but with them being listed they have to file reports etc so you at least can see trends etc. Of course, I don't know anyone who reviews company filings before they buy a car

At least with the loans we know the companies have cash on hand to restructure, make plant changes etc which is a positive amongst all the negative.

[vam29]

GM, Ford and Chrysler may be playing poker and because they're a private company, Chrysler has the advantage of holding the only down cards at the table which no one else can see. It doesn't mean they have any aces, though, or that they can successfully play out the hand they've been dealt and win the game!

[kenman923]

Chrysler would be the most at risk.

[ChevroletRevived]

Originally Posted by vam29

GM, Ford and Chrysler may be playing poker and because they're a private company, Chrysler has the advantage of holding the only down cards at the table which no one else can see. It doesn't mean they have any aces, though, or that they can successfully play out the hand they've been dealt and win the game!

How's that for metaphors! Certainly though it's easier for Chrysler to do what it needs to being a private company. Lots of advantages and it's pretty interesting given that almost every major car company is public.

[samkung]

Originally Posted by fp115

Have they forgotten about Chrysler? Cerberus will be in much more trouble than GM or Ford.

Private equity fund with rich people, they dont need help

[escapen]

I mean GM has alot riding on the Volt and extended range tech, and even chrysler comes out of nowhere with new electric tech. But id still have to say Chrysler LLC is most at risk to collapse just looking down the product pipeline into 2011. They dont have anything ground breaking or all that desirable to entice buyers.

The automotive market is changing globally, and now with this economic crisis, the big detroit 3 need to prove they're in it to win with...

-exciting new or better existing nameplates
Fiesta, Volt, 2010 Taurus, Alpha platform, Euro Focus, and a slew of new hybrid models from Ford and GM

-appealing style
which we know GM has done a 360 in the last 2 1/2 years especially with their interiors
And Ford has continued to improve in quality and safety and its buzzed about Kinetic design language

The future of the car business esp. for Americans is scary, but at the same time exciting because they are finally getting their acts together and will bring USA decent product offerings (sorry Chrysler, you may be privately owned, but you have SO much more work to do just to cling to survival)

[mrgto]

It isn't that it will have a MAJOR impact on GM, it will have a HUGE impact on their suppliers. Our CEO urged congress to pass it because if they don't, it affects our business because our suppliers won't be able to buy what they need.