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So, Where Is This All Going?

1580 Views 15 Replies 12 Participants Last post by  ZO-6
The story that GM is telling now is that liquidity isn't a problem, they can raise $41B and that will hold them until 3rd. quarter 2010, at which time the UAW agreements kick in, they will be able to make many small cars at a profit, and surely the economy will be much improved by then. Sorry, but that sounds a bit like a fairy tale to me. How about the cash burn rate accelerates because cars sales remain flat, GMAC and Delphi won't go away, there are too many brands to support, cash is gone, can't get a loan, and Chapter 11. Wall Street gives GM an 80-85% likelyhood of loan default within the next 5 years. How does that grab you? No sense in debating how GM got into this mess, the debate is how does GM get out. Unless the fairy tale comes true, I think Chapter 11 is an eventuality. And though Chapter 11 in this economy is uncharted territory for sure (just ask Delphi), it may be GM's only hope to survive as an independent auto manufacturer. Chapter 11 could give GM a much freer hand to do what is neccessary at much less cost. GM really needs to start all over again in the U.S. with 50% fewer dealers and at maximum 4 brands. That way advertising dollars can be much more effectively spent, the remaining dealers would be much healthier, and GM would need far less redundant management. All that is needed are 4 divisions:
Chevrolet (Toyota)
Cadillac (Lexus)
Saturn (Scion)
GMC (Hino, commercial trucks ONLY)
Buick, Pontiac and Saab (at least in this country) have no brand equity anymore. They are obsolete and only take resources away from the potentially successful divisions. My greatest fear is that GM muddles trough this current crisis, broken business model more or less intact. Rick's endless restructuring is in danger of becoming just more of the same shell game started by Roger Smith back in the 80's. Drastic measure need to be taken now while there is still something to work with.
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I don't think GM needs to, or will, file for Chapter 11. Once they sell Hummer off, the cash from that sale will easily be enough to get them through 2010.
market share -

like a flight of stairs. stupidity isn't that sequential, it's all over the place. there must be a reason.

Wagoner's Goal
Jim Dollinger
Friday, January 6, 2006

How will you feel when they take your pension? GM employees/retirees specifically, and Americans in general, had better wake up and stand up before the elitist international bankers take most everything. I am firmly convinced Wagoner is nothing more than a puppet. He was fast tracked to the top without any merit and has been dismantling GM since he got there.

No one loses so much money, market share and capitalization without having a plan and purpose. In my opinion, this is what "Red Ink Rick" is up to. This is why he refuses to listen to common sense, and allows GM to decline steadily year after year. Trust me, he's not that stupid.

you need to rewatch the movie.
I think Rick was hired by the Illumanati to drive GM into the ground. so they can bring back Yugo and dominate the world!
I suspect GM will not get much for Hummer. When you are desparate to sell buyers can wait you out. I hope some plants are included in the sale, GM has too much capacity as it is.
I don't think they are desperate to sell. Also they have 5 or more potential buyers, which will only increase the sale price.
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