Is GM really in better shape?

[01IntrigueGX]

If you want to comment on bankruptcy procedure at least do a wiki search first on the basics. I went to law school to learn, so a little bit better than wiki, so let me enlighten you...

Stockholder and ordinary bondholders are NEVER secured creditors. You got that 100% wrong.

There was nothing new or unusual about the GM BK other than it's size. You got that 100% wrong.

The judge did nothing other judges would not have been expected to do, you are getting really bad info from somewhere - probably Fox News.

The stockholders got zero, which is all they would have got under any BK procedure. The bondholders got more than they deserved because the government gave them taxpayer money that they were not entitled to...

BTW, the government paid from memory something like 25 billion for the assets of old GM (that money then went to the BK court for bondholders and other creditors + as a free gift bondholders were given a 10% share in the assets the government just used taxpayer money to purchase), and the government gave the UAW a share in those assets in exchange for not paying them cash for debts owed to the UAW benefits, which the UAW had a right to claim from the GM BK.

Furthermore, the GM BK did take years to litigate. The 30 days was for a 363 assets sale (only part of the years of litigation), and 363 sales are not new and they are usually fast because their point is to sell off functional business assets that have an inherent value due to being viable operating businesses that could lose value if allowed to wallow for years mired in BK. Also, any other person or company in the world, foreign car companies included - Bain Capital included, could have bid more for those assets and got them for a higher bid as the bidding was open for all to participate. Nobody wanted old GM or it's assets other than the government.

Facts always scare the trolls.

[theamcguy]

Facts always scare the trolls.

No troll, in fact I bought a new 2011 CTS-V awesome car. I have 7 GM products right now, so I don't hate GM. What I am saying is that GM continues to make the same mistakes today that got them into bankruptcy in 2009. I see no change. They continue to put accountants, PR people, and high priced executives in charge, when they need engineers and manufacturing people in charge (see the Ford recovery for an example) In sports if you want to beat the competition, you become better than the competition, you hire better coaches with a proven record, you get the competitions free agents. Sure some of the execs have had successes but not in the Auto Industry, do you think a good winning baseball manager would be able to turn around a football team? It's not only me look at GM's IPO it went for $33 a share, now it is trading at around $27 a share, investors are staying away. Again my question why is GM's best product always in the future? Even as the new pickups and SUVs are being released we are being told the really good ones are 3 years away. Why didn't they release the really good ones now? What they didn't need the really good product and the sales they would generate? They have had one whole design cycle to get it right and didn't. Why have they not learned to match production with sales? Why do they have a 200 day supply of most models? Why do they continue to need rebates up to $9K to sell vehicles. These are the questions, again I do not see them learning. I see a company sorely in need of someone at the top that understands the business and can lead GM forward. Again where are the Alfred Sloans, Bunkie Knudsons, Harley Earls, Bill Mitchells, John Z DeLoreans.

[zl-1]

A lot of product development pre-baknruptcy was not class-leading due to program financing restrictions: Old GM was a walking corpse. Now that the company is generating cash from its operating activities it will be in a good position to properly fund its product development needs, but that will take time.

[bballr4567]

Give me a model besides the trucks that have over a 200 day supply?

IIRC, the Volt is on course to sell over 30k worldwide this year. Not bad to me. Way more than the false 13.5k you posted up.

[nsap]

There are two aspects of GM that continue to hold the company back:

* Broken corporate culture (fear, individualism, risk-adverse)
* Sales/service/marketing organization

Fix those two components and GM would be on the road to long-term viability.

[BigAls87Z28]

No troll, in fact I bought a new 2011 CTS-V awesome car. I have 7 GM products right now, so I don't hate GM. What I am saying is that GM continues to make the same mistakes today that got them into bankruptcy in 2009. I see no change. They continue to put accountants, PR people, and high priced executives in charge, when they need engineers and manufacturing people in charge (see the Ford recovery for an example) In sports if you want to beat the competition, you become better than the competition, you hire better coaches with a proven record, you get the competitions free agents. Sure some of the execs have had successes but not in the Auto Industry, do you think a good winning baseball manager would be able to turn around a football team? It's not only me look at GM's IPO it went for $33 a share, now it is trading at around $27 a share, investors are staying away. Again my question why is GM's best product always in the future? Even as the new pickups and SUVs are being released we are being told the really good ones are 3 years away. Why didn't they release the really good ones now? What they didn't need the really good product and the sales they would generate? They have had one whole design cycle to get it right and didn't. Why have they not learned to match production with sales? Why do they have a 200 day supply of most models? Why do they continue to need rebates up to $9K to sell vehicles. These are the questions, again I do not see them learning. I see a company sorely in need of someone at the top that understands the business and can lead GM forward. Again where are the Alfred Sloans, Bunkie Knudsons, Harley Earls, Bill Mitchells, John Z DeLoreans.

First off...Ford has no engineers in control of anything. Mulally is the lone engineer, but that would be it. Everyone else is a marketing guy or a numbers guy. And with all of Ford's "return to greatness" they haven't had any success in any segment that they didn't already dominate. Your baseball/football analogy also has relevance in the fact that Mulally came from aerospace.
GM is making the best products they ever have...right now. Right now. Will they be better in 3 years? uhhh...YEAH! Who can't say that? Maybe Toyota, but that's it. That's like saying that today's smart phones suck compared to what we will see in 3 years. DUHHH!!
The cars that have the rebates are because they are at the end of their life cycle and they must be purged before the new ones come on line. If not, you have a problem like we have with Malibu where people can pick up a decent car for 10k cheaper than the new one.

There are two aspects of GM that continue to hold the company back:

* Broken corporate culture (fear, individualism, risk-adverse)
* Sales/service/marketing organization

Fix those two components and GM would be on the road to long-term viability.

This. Is everything inside GM better? No, there is still a lot of problems inside that hinder GM and trip them up. Once you get a taste of the inside, you would be amazed that some cars come out with the options they have, or even were created at all. We aren't here to tell you that all is well. Some things are better, some things are worse, and a lot of it is the same.

[erasmus]

If you want to comment on bankruptcy procedure at least do a wiki search first on the basics. I went to law school to learn, so a little bit better than wiki, so let me enlighten you...

Stockholder and ordinary bondholders are NEVER secured creditors. You got that 100% wrong.

There was nothing new or unusual about the GM BK other than it's size. You got that 100% wrong.

The judge did nothing other judges would not have been expected to do, you are getting really bad info from somewhere - probably Fox News.

The stockholders got zero, which is all they would have got under any BK procedure. The bondholders got more than they deserved because the government gave them taxpayer money that they were not entitled to...

BTW, the government paid from memory something like 25 billion for the assets of old GM (that money then went to the BK court for bondholders and other creditors + as a free gift bondholders were given a 10% share in the assets the government just used taxpayer money to purchase), and the government gave the UAW a share in those assets in exchange for not paying them cash for debts owed to the UAW benefits, which the UAW had a right to claim from the GM BK.

Furthermore, the GM BK did take years to litigate. The 30 days was for a 363 assets sale (only part of the years of litigation), and 363 sales are not new and they are usually fast because their point is to sell off functional business assets that have an inherent value due to being viable operating businesses that could lose value if allowed to wallow for years mired in BK. Also, any other person or company in the world, foreign car companies included - Bain Capital included, could have bid more for those assets and got them for a higher bid as the bidding was open for all to participate. Nobody wanted old GM or it's assets other than the government.

I think there are only two things unusual about the GM bankruptcy.

1) the uaw got more then the were entitled to.
2) the new GM got to use tax breaks generated from the old GM. I don't think they have paid any taxes yet.

[BlackGTP]

No troll, in fact I bought a new 2011 CTS-V awesome car. I have 7 GM products right now, so I don't hate GM. What I am saying is that GM continues to make the same mistakes today that got them into bankruptcy in 2009. I see no change. They continue to put accountants, PR people, and high priced executives in charge, when they need engineers and manufacturing people in charge (see the Ford recovery for an example) In sports if you want to beat the competition, you become better than the competition, you hire better coaches with a proven record, you get the competitions free agents. Sure some of the execs have had successes but not in the Auto Industry, do you think a good winning baseball manager would be able to turn around a football team? It's not only me look at GM's IPO it went for $33 a share, now it is trading at around $27 a share, investors are staying away. Again my question why is GM's best product always in the future? Even as the new pickups and SUVs are being released we are being told the really good ones are 3 years away. Why didn't they release the really good ones now? What they didn't need the really good product and the sales they would generate? They have had one whole design cycle to get it right and didn't. Why have they not learned to match production with sales? Why do they have a 200 day supply of most models? Why do they continue to need rebates up to $9K to sell vehicles. These are the questions, again I do not see them learning. I see a company sorely in need of someone at the top that understands the business and can lead GM forward. Again where are the Alfred Sloans, Bunkie Knudsons, Harley Earls, Bill Mitchells, John Z DeLoreans.

While I think you have a valid argument (to an extent), your argument is easier said than done. Don't all football teams want to be the winning team? So they should all go out there and just get a better manager, etc? Piece of cake? That's the problem - that level of brilliance of a Steve Jobs, Jack Welch, Alfred Sloan, etc are very few and hard to come by. And you have to have the right person in the right place - I bet a Steve Jobs would not be well suited for a company like GM, but maybe a Jack Welch could do it. GM needs that level of brilliance to be THE dominant force in the auto industry, but so does every other company out there.

Plus, I don't think investors are staying away. Look at what the stock price has done since the summer - increased by roughly 50%. In August they were under $18 and now they are above $27. Yes, the people who bought in at $33 are hurting, which means that the IPO price may have been overvalued.

[MonaroSS]

I think there are only two things unusual about the GM bankruptcy.

1) the uaw got more then the were entitled to.
2) the new GM got to use tax breaks generated from the old GM. I don't think they have paid any taxes yet.

Yes the UAW got more than they were entitled to under strict BK rules (so too did the bondholders get more than they were entitled to), but neither got more at the expence of other creditors, as is often portrayed. The UAW had a good negotiating position in that without them on board they could have capsized the 363 deal with industrial action if they did not get what they wanted. That was not going to happen though because they had a friendly government they had just helped get elected in power. Payback for political favours is simple reality, and that's why all manner of people and corporations support candidates and/or fund them or bribe them with lobby money. The bondholders got more because they bitched very loudly and media like Fox News made it a political issue; and so it was easier for the feds just to throw taxpayer money at them to shut them up. That 10% of new GM, which the bondholders got given, is now worth about $5 Billion that the taxpayers won't get back.

The tax breaks are actually not a BK issue but an IRS issue. Again, just the government giving itself a tax break - because they are the government. Technically one could argue that when the government owns and runs things, they normally pay no income tax anyway...

[John Franklin Mason]

. Harley Earl and Bill Mitchell kept GM at forefront of styling for 50 years (they had 50% of the market not bad)...

Yeah, heh heh heh, Bill Mitchell even went so far as to steal my designs to keep General Motors at the forefront of styling eh?

[swagled]

Yes, the people who bought in at $33 are hurting, which means that the IPO price may have been overvalued.

IPOs commonly do dip below the opening. Shares were placed with institutional investors and syndicates that were allowed in *below* the IPO price subject to holding restrictions. They also are not surprised to see the price sag, they just don't want their "premium" to disappear. The people actually paying the IPO price, are the retail investors.