Is The Worst Yet To Come For GM?

[I-Love-Pontiac]

I don't think it matters that they will lose money on the Volt. Especially since it's only going to sell 10,000 units it's first full year.

What does matter though is if they can't make a profit on their regular small cars. That's going to be a huge problem if small cars are going to be the hot new thing like everyone is saying.

[kenman923]

No Beat/Groove/Trax because they don't meet U.S. standards? Somehow, Daimler got the Smart car to U.S. Specs. It even got a five star crash test safety rating.

[windvale]

Originally Posted by fp115

The Prius loses money, whats your point? Its only an image thing.

My understanding was that Toyota was now turning a profit on the Prius.

I'll bet the Volt is going to be a big hit - even at 30K. I think GM will make a profit off of the Volt in short order. When the technology get's ported to other platforms (i.e. mid-size, full-size, trucks, etc.) the profits will really increase.

The big question is - what will GM look like by 2010 ? Will it be the same GM ? Will it be foreign owned ? Will it be in Chapter 11 ?

[vam29]

Chrysler might be the canary in the mine, but lease residuals are definitely the elephant in the room for the Big 3. GM can still make it, though, if it adapts fast enough to a new Business Plan which will include some trucks, some fuel- efficient small cars, some dealers, some white-collar workers and all the Brands under one GM nameplate in the same facility. Time is of the essence for survival.

[fp115]

Originally Posted by windvale

My understanding was that Toyota was now turning a profit on the Prius.

I'll bet the Volt is going to be a big hit - even at 30K. I think GM will make a profit off of the Volt in short order. When the technology get's ported to other platforms (i.e. mid-size, full-size, trucks, etc.) the profits will really increase.

The big question is - what will GM look like by 2010 ? Will it be the same GM ? Will it be foreign owned ? Will it be in Chapter 11 ?

They aren't turning to profit yet, maybe the next generation will, but even with getting $15k from the Japanese government. As of yet there is not one hybrid on the market that makes any money. The cost of having additional motor and batteries is too great to carry onto customers, which is why the hybrid models are usually a higher trim. The batteries are the only great cost of the Volt, once batteries can be massed produced all hybrids will be cheaper, especially the Volt.

Foreign owned, I doubt it. Chapter 11, doubt it. So far GM has been planning through the worse all the way up to 2010. By 2010 the Union contracts kick in and all other savings kick in. The road will be very bumpy at best, but its up to the leaders within GM to kick in. Employees must keep positive and the public positive through tough times, which is certainly not easy to do.

[mpsrent]

The worst is yet to come. For all the Chrysler shots, GM isn't any better. In fact, given GM's presence in the marketplace, GM is perhaps worse.

Put all the financial comparisions aside, GM's issue is public perception. The non auto enthusiast general public views GM as a dying car company. Each and every media announcement of plant closures, layoffs, declining sales and financial losses does nothing to instill consumer confidence.

Next to your home, you vehicle is often your second largest investment. Who wants to invest in a vehicle from a failing car company? There is only one thing that will convince the general public that GM is a company to buy from - a series of profitable quarters and monthly sales increases. Neither item is on the horizon today.

A large loss announcement tomorrow will have even a greater impact on GM.

[sags]

I was told yesterday that GM is selling their National Distribution Center in Canada, located in Woodstock, Ontario

They are also selling their Edmonton warehouse which serves a large portion of western Canada.

There hasn't been anything in the news yet, but the employees have been told the properties will be sold and GM will "lease" the buildings from a new owner.

The only way this makes sense is if GM is cash starved.

Perhaps they feel it is better to sell their assets, rather than borrowing against them, due to their low credit rating and high interest payments.

[Buickman]

GM has lost over $50 Billion since I first called for Wagoner''s resignation. the man is a crook. the UAW has been bought and paid for. the dealers are an endangered species. and Wall Street banks are succeeding in their quest to relocate an industry and rape the middle class. too many blind followers and sound asleep fools. how much worse does it have to get before people wake up and realize there is a reason GM management refuses to listen to their best salesman of all time? the American public just doesn't get it. wouldn't listen to Ron Paul about the value of US currency and foolishness of a war that can't be won by a greedy military/industrial complex hell bent on feeding off an out of control, privately owned, printing press called the Federal Reserve. GM's Board of Bystanders doesn't want to win anywhere near the present time frame. they could never get away with this crap if cars were selling. WAKE UP PEOPLE! It's time for a revolution and I'm in the mood to lead one.

more soon from your friendly neighborhood Buickman...

[Blair1955]

I notice that the media is all over GM while they are down but they never seem to be around when there is something positive to report. This just makes matters worse than ever. I do believe GM has what it takes to turn around, it just takes too long. The Camaro is a good example. Had this car already been out it could be a great seller. I am going to post the information below also for those of you that want to listen in.

Roger Simmermaker will be a guest on the Fox Business Network (FBN) on Friday, August 1, 2008 between 3pm and 4pm EST defending GM and the U.S. auto industry. The previously scheduled Tuesday interview was cancelled. Roger will be debating John Tamny, senior economist with H.C. Wainwright Economics and editor of RealClearMarkets. Mr. Tamny believes General Motors is irrelevant to the health of the U.S. economy and deserves to fail.

I don't have Fox Business Network with my cable company but I think they broadcast on XM. I don’t know if FBN can be viewed online or not?

[Chevy Ryan]

I am very fearful of GM's future. Sure GM has lots of enthusiasts that will support it through rough times. But GM is not Ferrari. It is way too big with way too many obligations to survive on enthusiasts alone. If they file for chapter 11, they are finished. That recent poll said 80% of people would not even consider a product from a company in chapter 11. I'll support GM until they are no more, but I'm beginning to think about plan B and who I will support if/when the unthinkable happens.

[fp115]

Originally Posted by sags

I was told yesterday that GM is selling their National Distribution Center in Canada, located in Woodstock, Ontario

They are also selling their Edmonton warehouse which serves a large portion of western Canada.

There hasn't been anything in the news yet, but the employees have been told the properties will be sold and GM will "lease" the buildings from a new owner.

The only way this makes sense is if GM is cash starved.

Perhaps they feel it is better to sell their assets, rather than borrowing against them, due to their low credit rating and high interest payments.

Read the July 15th press release. GM said they were going to do that to raise 2-5b dollars.

Originally Posted by Blair1955

I notice that the media is all over GM while they are down but they never seem to be around when there is something positive to report. This just makes matters worse than ever. I do believe GM has what it takes to turn around, it just takes too long. The Camaro is a good example. Had this car already been out it could be a great seller. I am going to post the information below also for those of you that want to listen in.

Roger Simmermaker will be a guest on the Fox Business Network (FBN) on Friday, August 1, 2008 between 3pm and 4pm EST defending GM and the U.S. auto industry. The previously scheduled Tuesday interview was cancelled. Roger will be debating John Tamny, senior economist with H.C. Wainwright Economics and editor of RealClearMarkets. Mr. Tamny believes General Motors is irrelevant to the health of the U.S. economy and deserves to fail.

I don't have Fox Business Network with my cable company but I think they broadcast on XM. I don’t know if FBN can be viewed online or not?

Due to CAW contracts that GM signed while terminating the Ste Therese plant, the Camaro was not allowed to be sold as a product till 5 years after the plant closed. GM will begin to sell the Camaro 5 years and a coupe of months after the plant closure.

Originally Posted by Chevy Ryan

I am very fearful of GM's future. Sure GM has lots of enthusiasts that will support it through rough times. But GM is not Ferrari. It is way too big with way too many obligations to survive on enthusiasts alone. If they file for chapter 11, they are finished. That recent poll said 80% of people would not even consider a product from a company in chapter 11. I'll support GM until they are no more, but I'm beginning to think about plan B and who I will support if/when the unthinkable happens.

If they file Chapter 11 they are NOT finished. No company ever is, unless they give up on the market. If anything it may be a good thing and would allow them to cut a lot of excess in order to give it a good kick back to life. Certainly that is not the best recourse but GM has more than enough ability to raise cash in order to continue until all the cuts come to life, especially UAW.

[Buickman]

Originally Posted by fp115

Read the July 15th press release. GM said they were going to do that to raise 2-5b dollars.

Due to CAW contracts that GM signed while terminating the Ste Therese plant, the Camaro was not allowed to be sold as a product till 5 years after the plant closed. GM will begin to sell the Camaro 5 years and a coupe of months after the plant closure.

If they file Chapter 11 they are NOT finished. No company ever is, unless they give up on the market. If anything it may be a good thing and would allow them to cut a lot of excess in order to give it a good kick back to life. Certainly that is not the best recourse but GM has more than enough ability to raise cash in order to continue until all the cuts come to life, especially UAW.

bankruptcy is good? here's something for you to consider, not that it will do any good....afraid you've delved too far into the dark side...

Dark Shadows
Jim Dollinger
Monday, December 12, 2005

WAKE UP

On a sweltering summer day, an old man went down into a cool cellar for some relief. The moment he entered, he was blinded by the darkness. Don't Worry, said another man in the cellar, it is natural that when you go from light to darkness, you're unable to see. But soon enough, your eyes will grow accustomed to it, and you will hardly notice that it is dark.

My dear friend, replied the old man, turning to leave, that is exactly what I am afraid of. Darkness is darkness, the danger is convincing your self that it is light.


As I said everyone should wake up as each day goes by Wagoner is piling dirt on the exit from the cellar. I.E. everyone is in they dark, they just think it's light.

[BuickBoy]

Half of this is GM's own inept management and the other half is the state of the economy. Many people (myself included) are not buying much of anything these days - cash is king - and unless I need it I don't buy it. I've put off TVs and new golf clubs to name a few. The only money I'm spending is going into my house. Add to this the $4 gas, credit problems, mortgages/house values and it all is a ton of economic stuff for any company to work through. I'm still cheering the General on but it may be a real slippery slope. If people think GM is in the tank they won't invest some $30,40K on a vehicle no matter how good it is.

A sign of the times ... had my oil changed at my Buick dealer - there must have been 20 Enclaves in stock. Last time I had my oil changed you could not find one.

[PAULSTS1]

Unfortunately Buickman is right...he is on his Paul Revere ride, the Midnight is Coming, when no man can work! GM is playing a game, one that top management is aware of and has made concessions to. However by the time the information is general knowledge it will be too late, the middle class will be gone. The Unions already know it, because the baby-boomer's are beginning to retire, the Unions will have to begin to make good on their promises, and where's the money...spent by the Mob and their cohorts the large Banks, on sub-prime deals to rake in record profits!

I don't know GM bottom line, but if the losses reported tomorrow are under $10 Billion GM is doing much better than expected.

Stay tuned....

[stormwatcher]

Well, watching GM, I think people should be prepared for a loss of $8 to $12 billion.

Lease residual losses (whole year amount) $2.5 billion
Shuttering 4 factories in next few years: $3 billion
Early retiring all those employees: $3.5 billion
Losses due to slow sales: $0.5 billion
Money to GMAC for something: $0.5 billion

Those are just my guesstimates but I'm betting GM will make it a big loss to try and get a lot of these future costs out of the way.