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Journal tomhudson's Journal: GM - what a difference a year makes. 11

Journal by tomhudson

This was written last December - how GM could take on the world, how it had to keep its' 8 different divisions, how it could gain market share by making their cars all a bit larger than the competitions' comparative offerings ...

The people who dreamed up these tactics as the way to compete with Toyota, Nissan, and BMW are the same people who now want $34 Billion.

GM says they have no Plan B. Every competent manager has a Plan B - even if it's Chapter 11. Ron Wagoner is, by his own admission, grossly incompetent. Only bankruptcy, like a good fire in an infested building, will get all the cockroaches out.

A bailout of GM won't save jobs. Those production lines that are currently idled because nobody wants to buy a GM car aren't going to suddenly be viable again, as we head deeper into the worst recession since the Great Depression, and anyone who says otherwise is lying. Lying either to you, or to themselves.

The $34 Billion is only going to last until next summer. Do the math - in 3 weeks, they upped their estimate from $25 billion to $34 billion ... 3 WEEKS. TTheir forecasts depend on car sales increasing, by a couple of million, in the next two years. Not going to happen, and if it does, it won't be Chevy Volts that will be selling ... that car is an overpriced ($40,000 a pop AFTER government credits) con.

GM and Chrysler are like the dinosaurs - dead, but the message hasn't reached the pea that passes for a brain center yet.

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GM - what a difference a year makes. More

GM - what a difference a year makes.

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  • Just after I finished reading an anecdote about Steve Jobs [computershopper.com]. Luck and psychopathy and mismanagement always seem to drive companies into being successful. too bad I never invested in Enron. I would have been rich for a while.

    I need a Learjet to do business with the big boys. I'm looking for investors...

  • I don't get why the US government should give a company whose stock is worth under US$2.5B a handout of $12B (I think the $25B number I've heard the last few days is for all of the "Big (snicker) Three").
    Why shouldn't the government BUY the damn company for less than $3B and then IMPOSE whatever rules it wants on the products GM makes, instead of giving GM several times its market cap in handouts and then politely suggesting that GM might want to make some cars that people, y'know, actually want?

    • GM stock is worthless ... people still holding it are doing so either out of desperation ("I'll lose too much") or as a "lottery ticket."

      The company should be broken up under a Chapter 7 filing. Nothing else will work, long-term. The bail-out won't save jobs. All it will do is add to piling inventories, and allow some dead-wood to continue to collect paychecks.

      Wh would want to own GM? Their products are the wrong ones, their monthly cash burn rate exceeds their entire net worth, their management su

  • about the Big/Little Three.

    The other problem is that the US has now exported ALL of it's industries, if the car companies go, there will be nothing left. There won't even be toolmakers to make guns and weapons should the US ever be attacked. It has ripped it's industrial heart right out and is now desperately staving off collapse.

    If the big three do go down, and should by any measurement, it will be the effective end of the US economy and of the US world power. Congress has now got itself into the position

    • This past Monday was the first day when no one showed up for work and apparently everything has ground to a halt. So the looters have now destroyed Chrysler, the other two are following.

      That is scary. Unfortunately, it's also reality - with the minivan and suv markets devastated, what DOES Chrysler make that anyone would buy?

      Cerebus Capital wanted to get back their ill-advised investment in Chrysler, which explains why they were pushing so hard for it. GM wanted it, because GM is in an even worse posit

  • Ain't going to help. The organizations are fundamentally flawed. That's why there's bankruptcy. It gives them protection whilst they reorganize. Propping them up artificially will only make their fall all the worse.

    Like paying your alcoholic brother-in-laws rent because you can't bear the thought of being homeless. Change rarely happens until the intersection of rock and bottom. Or at least when you can see its only a block away!
    • Comment removed based on user account deletion
      • Save the people, not the building. GM is the building. It's burning down. It's a total loss anyway - don't bother trying to save it - concentrate on what MATTERS - the people. Bloomberg recently published estimates that GM will require a total infusion of over $125 billion before all is said and done. And a lot of that "all is said and done" includes axing a lot more jobs, so the bailout won't be saving jobs anyway.

        Forget GM - it's not worth saving. Saving it won't "create" jobs - those jobs are gone,

      • Re: (Score:2)

        by Talinom ( 243100 ) *
        Three articles relevant to reviving FDRs "New Deal."

        http://mises.org/story/1623 [mises.org]

        http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx [ucla.edu]

        http://online.wsj.com/article/SB122455099434052597.html">http://online.wsj.com/article/SB122455099434052597.html [wsj.com]

        Let the building burn to the ground. It is not structurally sound. A new contractor may build a new building there and learn from the failure of the previous owners and builders.

        If the building is not rebuilt for a simila
        • It makes sense. You can't stimulate an economy by artificially keeping prices at bubble levels. It will take years for inflation to bring all that under-water housing back to its' proper price. As for GM and Chrysler, it's the same thing. We had a glut of glutton-mobiles that was a secondary bubble created by the "impression of wealth" of the housing bubble. That bubble is also now popped, and the production capacity just isn't needed, and won't be for years.

          It's the same for AIG, and now Citi. Both

          • Tom, let me clear up a misconception.

            Citi (along with some other banks) tried to refuse the bailout money. The steps they're taking internally would keep them afloat just fine - and they're still taking those steps.

            The MSM is seriously twisting up everything Citi releases in a press release.

            Are things bad at Citi? Yeah. Someone told me it was the worst he'd seen it in 15 years (that includes the last recession that was pretty bad to Citi). Is it dire to the point of complete failure? No. Citi has WAY

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