Is GM finished?

[Just thinking]

There is plenty of stock, it just happens to be worthless at the moment.

And that is because those misery stockholders cant look out over their noses and contribute some money to save the company.

Huh? Didn't the original purchasers of the company's stock do exactly that? The company is owned by shareholders ... they have already paid for the company, so-to-speak. Now, I'll agree that those shares have changed hands over time, but that doesn't alter the fact that selling stock (putting them up for sale by the company) got the company a good deal of money.

As good investers it should be obvius to them that with all the changes GM have made over the last 3 years it is only a question of throwing a bit of good money at it to recoop their investment.

There's no such thing as good investors ... they are merely investors, and like any investment, if it goes south you sell it off. Loyalty here will get you nowhere ... well, it might get you broke, I'll give you that.

So stop bothering the workers and direct your attention at the stockholders.

And just how many workers are investors themselves? ... and just don't count shares of stock.

 

[WildCat]

So stop bothering the workers and direct your attention at the stockholders.

The workers have a much, much bigger stake in GM than the stockholders do at the moment.

If they don't give a damn, why should the stockholders?

 

[Toke]

As good investers it should be obvius to them that with all the changes GM have made over the last 3 years it is only a question of throwing a bit of good money at it to recoop their investment.

Try read it again.

GM could issue some more stock, giving current stockholder an opportunity to refloat the company and make their currenly worthless stock good again.

If you have $100 of stock you get the opportunity to by another $20, and when your $100 rise again from where ever it is now you will be ahead again.
How can they say no to that ?
Don´t they belive in the company?

 

[drkitten]

GM could issue some more stock, giving current stockholder an opportunity to refloat the company and make their currenly worthless stock good again.

Why on earth would they WANT to do that? It simply dilutes their ownership.

There's a better way of getting more money into the company; GM can simply issue bonds and use the capital from the bonds to make their company good again.

And right there you see the problem. GM couldn't give bonds away, because no one thinks that the company is likely to become profitable over any reasonable time frame. But if it's not worth giving my money to the company in the form of a bond, it's certainly not worth giving my money to the company in the form of a stock purchase.

 

[Just thinking]

President Bush approved this morning of giving $17 Billion to the auto industries ... tapped from the TARP.

Goodbye $17B ... it was nice knowing you, even though we never got to meet in person.

 

[Just thinking]

Try read it again.

GM could issue some more stock, giving current stockholder an opportunity to refloat the company and make their currenly worthless stock good again.

If you have $100 of stock you get the opportunity to by another $20, and when your $100 rise again from where ever it is now you will be ahead again.
How can they say no to that ?
Don´t they belive in the company?

Try reading what I said at the top of this page again.

(Please)

 

[WildCat]

President Bush approved this morning of giving $17 Billion to the auto industries ... tapped from the TARP.

Goodbye $17B ... it was nice knowing you, even though we never got to meet in person.

We should start a prediction thread for the date they ask for more money.

My guess is January 20, for obvious reasons.

 

[Just thinking]

My feeling ... they won't even have to ask.

 

[Toke]

Try reading what I said at the top of this page again.

(Please)

I AM trying.

I get as far as the stockholder being sensible people with no particular loyalty to GM, and no desire to put more money in a sinking company. That is they don´t belive it will help

I can´t get from there to why the workers should waiver their wages to keep the company afloat a few months more, especially without pay.

 

[Furcifer]

OK, this is the second time you've said something like this. I guess you believe it even if it's nonsense.

There is no law that says that a contract must be enforced when the parties don't want it enforced. So if the unions want to make concessions all they need to do is ask GM to agree to those concessions and they can make them and the sanctity of contract law is retained.

As a practical matter the union has the contract with itself and the bond holders. Management and the shareholders don't have a significant stake left in GM. Management looks to be skimming what it can off the carcass before they're kicked out.

The only reason the union hasn't made any concessions up to now is that the union thinks that with the appropriate political pressure it can get the government to fund what has previously been funded with GM capital. And the truth is they might succeed at that, except that ridiculous work rules and wage rates are far from all of GM's problems and transferring tax payer dollars to the union at this time to fix that problem is likely to only keep GM out of bankruptcy for a very short time if other core problems aren't dealt with.

The problem that the union faces is that the other significant stake holders are not going to cooperate with it in bankruptcy court without major concessions. Bond holders might get 10 cents on the dollar when GM collapses but that's 10 cents more than they'll get if GM continues to be operated in an unsustainable way.

What I find annoying about your views 3bodyproblem is how you propose to give the GM and management a pass at this time when people all over this country are experiencing exactly the same kind of problem and they are having to deal with their situation by making difficult choices, by working harder, by working for less and by scrambling to figure out what works. GM just keeps draining away its resources hoping that the government will make a special case of it and give it money before it needs to deal with reality. I don't have any sympathy for the guy that's in the sinking boat and refuses to bail. And I don't have any sympathy for GM or its unions that propose to take a portion of my money so they don't have to bail.

Any new contract would have to be ratified by the members. Your obviously not familiar with the Union or it's current contract. Consessions have already been made, you forget that or probably have no idea as it was only recently brought to light by the current situation. A situation that has much more to due with the current economy than Union wages. Further, the UAW represents more than just workers at GM, Ford and Chrysler. Tier 1 and Tier 2 suppliers and their employees make far less already. What are they expected to do? They are a large part of the Union as well and their voice has to be heard in any discussion about making further consessions.

I'm not giving management a pass, changes need to be made throughout the company. I'm just being realistic, TARP gave away $335 Billion (so far) to the businesses that caused the collapse of the automotive sector. Gave away, not loaned. Instead of focussing in on where that money went and what is being done with it we're going to bust the Union over a loan to keep the biggest industry in the US afloat? Please, the wool has been pulled over your eyes.

 

[Just thinking]

I AM trying.

I get as far as the stockholder being sensible people with no particular loyalty to GM, and no desire to put more money in a sinking company. That is they don´t belive it will help

I can´t get from there to why the workers should waiver their wages to keep the company afloat a few months more, especially without pay.

This is most odd. On the one hand, you believe it wise for shareholders to put up more money so that they don't lose what they have already invested, yet you feel it unwise (or unnecessary) for the workers to put up any effort to keep their incomes viable, which includes for many a good amount of future earnings.

And what's more odd is that I think you have something major backwards; it's the company that owes solvency to its shareholders, not the other way around. (Notice here I didn't use the word investors, as you might try and include workers in the mix. Not so, as they have already been fairly compensated through wages. How have shareholders been fairly compensated?)

Let's say that you want to invest a good deal of money and you use a broker giving him free reign; this is not unusual. He places a large percentage into the big 3 US automakers --- after all, they've been good performers in the past. Now the stock values go down --- and when you get back to your broker (after shares lost over 80% of their value) you find out he never sold the stocks of the automakers. He let you ride them down to peanuts. And what's better, in his defense he claims he believes in being a loyal supporter of the big 3 --- and asks you for more money. What do you do? Do you ...

a) give him more money with a smile on your face?

b) wring his neck for him?

c) sue the pants off of him for not being loyal to you?

 

[WildCat]

Any new contract would have to be ratified by the members.

Not if GM goes into bankruptcy and a judge decides what the contract will be, and the UAW can shove off if they don't like it.

 

[Just thinking]

Hey WildCat ... good call!

It seems the UAW is already seeking out Obama to remove some of what they claim is unfair to workers in the fine print of the $17B bailout.

Source ... CNBC (just heard on the tube)

 

[Roadtoad]

Let's minimize certain names and organizations for a moment. Let's get back to some very basic truths regarding this debacle...

First, GM did not keep pace with where the marketplace was going. At one point, according to Micheline Maynard, GM was so strong, so powerful, they could actually dictate the market. William Durant's genius was in setting up a sort of staircase for GM and its products, so that you started out in life with a Chevy, and in the end, when you had "made it," you ended up with an Olds or Caddy. The key to that working, however, was that you had some idea what customers wanted in cars. It meant you built a variety of cars. The choices may have been limited to a certain extent, but in the end, GM generally produced something you wanted, something you could drive.

However, most GM cars were traded in after about five years. The IRS encouraged this to a certain extent. But the bottom line is, GM focused on a five year trade-in policy, from what I could see, (though I might be wrong on this), operated inefficiently, and chose to ignore the reality that instead of buying Chevies as starter cars, a lot of folks in the '60s were beginning to buy Toyota Coronas, which lasted 10+ years and could be fixed in the backyard with average hand tools and some common sense, and failed to appreciate the reality that the market was expanding.

My uncle, Melvin Ethington, (name mentioned for good reason), a bus driver for Greyhound, bought a Corona for my Aunt Ginger. Small, maneuverable, solid. They had that car forever, and for the life of me, I don't know why they chose to trade it in. If it needed work, he pulled it into the car port, broke out the tools and fixed it. No sweat. He'd run a dairy farm in Northern California, so this took next to no effort.

They also had an older Ford F150. Same deal with that truck, though from what I understand, Ford's "Twin I-Beam Suspension" was a genuine pain in the ass. (Actually, I had an E100 van. It had the same suspension. It was.) They weren't just built to run, but to be maintained. One clue here, folks: If you can't fix it, it ain't worth buying.

Let's get a clue, kids. GM built cars that were so complicated, so poorly engineered, they were destined to fail. Maybe they ARE building better cars now, but for a long time, they didn't.

This is but one part of the whole chain of failure in this. GM betrayed their customers. They chose to continue with a business model that had long ago passed them by.

More on this later. No, I'm not finished. Not by a long shot.

 

[Just thinking]

... a lot of folks in the '60s were beginning to buy Toyota Coronas, which lasted 10+ years and could be fixed in the backyard with average hand tools and some common sense, and failed to appreciate the reality that the market was expanding.

After watching this, go on to part 2.

 

[balrog666]

Not if GM goes into bankruptcy and a judge decides what the contract will be, and the UAW can shove off if they don't like it.

Going into bankruptcy instantly voids the UAW contract. Job Bank loafers would be kicked out, extra payments to laid off workers would cease instantly, everything in the benefits package would be on the table, including pensions and other promises to ex-workers. Priority for payments would automatically go to paying for ongoing production, if any.

But, if the current GM management had the guts to do what needed to be done, they would have done it already.

Bye-bye, GM.

 

[timhau]

After watching this, go on to part 2.

After watching that, I wonder why we've bothered to pay for regular maintenance for our Yaris.

 

[Furcifer]

Let's get a clue, kids. GM built cars that were so complicated, so poorly engineered, they were destined to fail. Maybe they ARE building better cars now, but for a long time, they didn't.

This is but one part of the whole chain of failure in this. GM betrayed their customers. They chose to continue with a business model that had long ago passed them by.

More on this later. No, I'm not finished. Not by a long shot.

All of the cars I have ever owned I serviced myself. Accords, Concord, Caprice, SX 2.0, Dodge Sportman Wagon (a van to some), Shadows, 240, 270 Turbo Wagon, Altima, Fox, Jetta, Cutlass Supreme and I think that's it.

They all had their strengths and weaknesses when it came to design, part costs etc. The worst was the Nissan, terrible car, electrical nightmare. The Honda ran forever but cost a fortune to fix brakes, bearnings and ball joints. Wearable items that cost next to nothing to fix on my American made cars (although the calipers for a Cutlass are like $250 from the junkyard) But the Olds was laid out better in the engine compartment. My dodge van was a dream to work on, so much room and so cheap to fix.

Anyways, to say one manufacturer is better or worse in these regards is almost impossible to do. It subjective plain and simple. Even if you found a mechanic with 25 years experience spread out over several dealers, Ford, GM Chrysler, Nissan, Honda, Toyota, Mercedes, Lexus, Hyundai etc. his or her limited exposure to certain models and years wouldn't be enough to make a sound decision on who was better or worse. I'm not sure why your limited experience qualifies you to say GM built their cars so poorly. The only one I owned was easy to work on, ran like a top, had ever creature feature you could want in a car for its time and was laid out very well both in the engine compartment and the passenger compartment. I got it for a grand off the lot, a trade in by the original owner for another Olds. The gas tank had to be replaced because it rusted out around the straps. The rear caliper I soaked in WD40 for a day and the e-brake lever free'd up, saved me $250 and a trip to the junk yard. Would I buy a GM because of this experience? No. But I would consider another Olds or Buick or Pontiac (lol, yes the badging of the low end Pontiac to the high end Buick may be confusing to some)

 

[Roadtoad]

After watching this, go on to part 2.

I did. Also saw Part 3.

I've always enjoyed Top Gear when I could watch it. They did a piece on the Ultima GTR which was actually a lot of fun to watch, (and left me dreaming of the day I could assemble $200,000 so I could assemble an Ultima GTR, given that it's a kit). They also did one on the Ronart. I enjoy the cheekiness, the spirit of fun that goes along with their efforts.

Back to the original point, though: I could see a '63 Chevy pickup withstanding that. A '93? Good luck.

 

[Roadtoad]

All of the cars I have ever owned I serviced myself. Accords, Concord, Caprice, SX 2.0, Dodge Sportman Wagon (a van to some), Shadows, 240, 270 Turbo Wagon, Altima, Fox, Jetta, Cutlass Supreme and I think that's it.

They all had their strengths and weaknesses when it came to design, part costs etc. The worst was the Nissan, terrible car, electrical nightmare. The Honda ran forever but cost a fortune to fix brakes, bearnings and ball joints. Wearable items that cost next to nothing to fix on my American made cars (although the calipers for a Cutlass are like $250 from the junkyard) But the Olds was laid out better in the engine compartment. My dodge van was a dream to work on, so much room and so cheap to fix.

Anyways, to say one manufacturer is better or worse in these regards is almost impossible to do. It subjective plain and simple. Even if you found a mechanic with 25 years experience spread out over several dealers, Ford, GM Chrysler, Nissan, Honda, Toyota, Mercedes, Lexus, Hyundai etc. his or her limited exposure to certain models and years wouldn't be enough to make a sound decision on who was better or worse. I'm not sure why your limited experience qualifies you to say GM built their cars so poorly. The only one I owned was easy to work on, ran like a top, had ever creature feature you could want in a car for its time and was laid out very well both in the engine compartment and the passenger compartment. I got it for a grand off the lot, a trade in by the original owner for another Olds. The gas tank had to be replaced because it rusted out around the straps. The rear caliper I soaked in WD40 for a day and the e-brake lever free'd up, saved me $250 and a trip to the junk yard. Would I buy a GM because of this experience? No. But I would consider another Olds or Buick or Pontiac (lol, yes the badging of the low end Pontiac to the high end Buick may be confusing to some)

When I can do the work myself, I do. But, we're driving a '96 Corsica right now. It's not designed to be fixed. It's set up to run for about five years, then junked. That's a betrayal.

Would I buy another Chevy? Or another Olds? Buick? Pontiac? Maybe something built in '66. I'd consider a '74 Monte Carlo. Maybe even a '69 Impala. Anything after '75? Bite me.