Is GM headed toward bankruptcy?

[BSRL]

Article on MSN...

GM's bankruptcy worries - MSN Money

[Bogie]

What happens to all the buy out annuities and pensions if GM goes belly up?

[SKYtime]

Annuities would be safe since they are purchased at issue.

Pensions would be f'ed.

[ASKY]

My impression from various reads is their burn rate is to high to allow them to survive long enought to get the new models out in force. I was looking forward to seeing/getting a Volt, but at $45k its a non-go for me.
The labor contracts, credit markets and missing the gas crisis is going to cook them (all three). Maybe they can re-org with out the $$ contracts and with new/better management.
Tought times.

[SKYtime]

It's not really the current labor costs that are the economic problem. Rather, it's the legacy costs of the employees of the past.....

[xmicro_Redline]

Originally Posted by SKYtime

It's not really the current labor costs that are the economic problem. Rather, it's the legacy costs of the employees of the past.....

I think it is more of the way the whole countries economics are structured that would cause a complete collapse of the big 3. I mean they have been failing for years. They just do not understand the principle of building a solid car from the beginning and you spend less in the long run with warrantee repairs and your dealers ripping you off fro those repairs. The other problem is too many MANAGERS and those managers MAKING TOO MUCH SCRATCH!

But the Economy will push them over the edge. From housing prices, to the massive cost of living period. Let's face it, if a couple does not pull down $125,000 to $150,000 a year in a City Area, like NY you can not live and own a house and car. How little can you pay your workers and expect a good product to come off the line. Then of course with gas prices they are losing their biggest profit center (Trucks and SUV's). On top of the fact that nobody is spending as much as they usually do on anything.

But all Manufacturers are sending production over seas to CHINA. This is the big catch 22 of this countries economy, causing the separation of classes. It is all about the big wigs being greedy and getting rich off the Chinese crap they sell us. If everything was produced here, it would cost more, lower to middle class would make a better living. By sending everything out to CHINA, we screw ourselves. Middle to lower middle class jobs are disappearing. So in 20 years, more than likely, you will ether be rich or poor... where do you fall??

[GreenDevil]

Originally Posted by xmicro_Redline

I think it is more of the way the whole countries economics are structured that would cause a complete collapse of the big 3. I mean they have been failing for years. They just do not understand the principle of building a solid car from the beginning and you spend less in the long run with warrantee repairs and your dealers ripping you off fro those repairs. The other problem is too many MANAGERS and those managers MAKING TOO MUCH SCRATCH!

But the Economy will push them over the edge. From housing prices, to the massive cost of living period. Let's face it, if a couple does not pull down $125,000 to $150,000 a year in a City Area, like NY you can not live and own a house and car. How little can you pay your workers and expect a good product to come off the line. Then of course with gas prices they are losing their biggest profit center (Trucks and SUV's). On top of the fact that nobody is spending as much as they usually do on anything.

But all Manufacturers are sending production over seas to CHINA. This is the big catch 22 of this countries economy, causing the separation of classes. It is all about the big wigs being greedy and getting rich off the Chinese crap they sell us. If everything was produced here, it would cost more, lower to middle class would make a better living. By sending everything out to CHINA, we screw ourselves. Middle to lower middle class jobs are disappearing. So in 20 years, more than likely, you will ether be rich or poor... where do you fall??

Thank you for mentioning the overseas job movement. People don't seem to pay attention to where things they buy are made, or they just don't care. "If I have a job, why should I care about any other American?" That seems to be the mindset nowadays. Patriotism is dead. Nationalism is dead. The government needs to start imposing tariffs on imported products. With the money made from tariffs, subsidize companies who create jobs in the U.S. That could increase the price of imported products and lower the cost of domestic products.

[wj3a]

The first thing that occurred to me was that the recent 2nd quarter/end of the month 0% Saturn promotion was an attempt to put some cash back into the system. Granted this line of cars is probably less that 10% of the total car inventory of GM but when you retrench financially all groups are required to come up with programs to contribute to the goal of reducing inventory and increasing cash flow.

The second thought was that I may soon be the proud owner of a Collector's Edition car that is out of production and may become costly to service and maintain.

My last roadster was an Austin Healey 3000 Mk III. Deja vu all over again?

[gadget]

Originally Posted by SKYtime

It's not really the current labor costs that are the economic problem. Rather, it's the legacy costs of the employees of the past.....

I think it's more because the morons in upper management insisted on building big huge gashog trucks as theyr'e main inventory eventhough they new there was a gas crunch coming.
Now they will do the american corporate thing and screw theyr'e employees out of theyr'e pensions.

Originally Posted by wj3a

The first thing that occurred to me was that the recent 2nd quarter/end of the month 0% Saturn promotion was an attempt to put some cash back into the system. Granted this line of cars is probably less that 10% of the total car inventory of GM but when you retrench financially all groups are required to come up with programs to contribute to the goal of reducing inventory and increasing cash flow.

The second thought was that I may soon be the proud owner of a Collector's Edition car that is out of production and may become costly to service and maintain.

My last roadster was an Austin Healey 3000 Mk III. Deja vu all over again?

My last roadster was a Austin Healey 100-4. Built it from a rolling shell. boy did I have to do a lot of scraping to find parts.
Wish I still had it.

[Jay_Sin]

The problem is that they didn't realize the fact that there trucks and SUVs were there biggest seller, is because their cars were of lower quality. That and import SUVs and trucks really didn't compare to the ones produced here. Now that imports have started producing powerful pickups and more luxurious SUVs, the this is yet another thing that was becoming a problem for sale.

So I think they finally realize that they need to step up their quality. It's been a long time since any car has dazzled me. At the moment though, pretty much every car on the upcoming GM lineup (including some cars already being bult, like the sky) has a better look to it and much better performance.

If GM can make it for a few more years, I think they will become top dog again. The new Malibu is a wonderful car. The new Saturns are VERY nice. Then the upcoming Pontiac lineup is a car enthusiasts dream. G8 GXP, please. All of these cars really do seem to be a step above the rest with overall design and performance. Not to mention the impressive technology they are sticking into engines now.

[gadget]

Originally Posted by Jay_Sin

The problem is that they didn't realize the fact that there trucks and SUVs were there biggest seller, is because their cars were of lower quality. That and import SUVs and trucks really didn't compare to the ones produced here. Now that imports have started producing powerful pickups and more luxurious SUVs, the this is yet another thing that was becoming a problem for sale.

So I think they finally realize that they need to step up their quality. It's been a long time since any car has dazzled me. At the moment though, pretty much every car on the upcoming GM lineup (including some cars already being bult, like the sky) has a better look to it and much better performance.

If GM can make it for a few more years, I think they will become top dog again. The new Malibu is a wonderful car. The new Saturns are VERY nice. Then the upcoming Pontiac lineup is a car enthusiasts dream. G8 GXP, please. All of these cars really do seem to be a step above the rest with overall design and performance. Not to mention the impressive technology they are sticking into engines now.

I've owned toyotas,hondas,chevys,chryslers and I don't see quality as the issue. If it was I'd own all american cars because I have had the least problems with them. This is the third saturn I've owned the SC2 is still in my garadge not one problem. the SL2 I had for a driver went over 200,000 miles with minor work before an unlicenced uninsured driver drove into the back of it at 30MPH with no injuries.

The problem with american auto makers is they think they can just ignore the market. Building big giant trucks putting another coat of lipstick on the same 1970's pig year after year and now they are not selling and neither are the large toyotas the lots are full of them.
Admitedly part of this is the consumers fault because they forgot what happened back in the 70's with fuel and thought they were just going to drive the biggest gas hog they could find and to hell with the rest of the world. Well Welcome to Reality!

The Asian makers are still very far ahead on alternative fuels.
E85 ain't gonna get it! Unless you never want to eat anything with grain in it again.

Don't worry GM is going nowhere they will simply file bankruptcy reorganize and the government will use your tax dollars to bail them out. Same as Chrysler in the 70's and United Airlines a couple of years ago.

Crappy managed companys never die they just steal their workers pensions and reorganize into another Crappy managed company.

[RedHeaded RedLine]

Originally Posted by xmicro_Redline

I think it is more of the way the whole countries economics are structured that would cause a complete collapse of the big 3. But the Economy will push them over the edge. From housing prices, to the massive cost of living period. Let's face it, if a couple does not pull down $125,000 to $150,000 a year in a City Area, like NY you can not live and own a house and car.

Your entire thesis is based on living in cities like NYC.
We take in less than $50k/annum (9 years teaching - masters degree) but have a 17 year old, 1,800 sqft house, in a desirable subdivision. We drive an ’06 Volvo V70R and an ’08 Sky RedLine. Our streets are clean, our roads are smooth, our neighbors friendly & concerned, our taxes low (~$400 on a $200,000 home), our weather is great, our air is fresh - even if humid, our energy is cheap ($.06/kw, $4.01 Sunoco 93), our nights are safe. I can’t remember the last time I heard a car alarm. The state does not forbid us from having a gun in the house, yet need it so much less than in NY. Every morning, the first thing we would do in NY, is look out the window to see if we were still car owners, or insurance claimants.
Grand Prix SJ – broken into.
Buick Grand National - broken into/wheels stolen 8 times before they finally got it on the 9th. (3 years)
Minivan - stolen.
New minivan attempted stolen in first 2 weeks.
Minivan hit in the snow 3x…never a note! (3 years)
Corolla mirrors stolen
We lived in a great neighborhood with good people, but its proximity to the Bronx River Parkway allowed the savages from the south Bronx to come and feed on our block like piranha. After too much, we escaped.
If the cost of living is too high…if you do not think you are being compensated sufficiently to live the life you want to live in NYC, try getting out and living in America. -J

[xmicro_Redline]

Originally Posted by RedHeaded RedLine

Your entire thesis is based on living in cities like NYC.
We take in less than $50k/annum (9 years teaching - masters degree) but have a 17 year old, 1,800 sqft house, in a desirable subdivision. We drive an ’06 Volvo V70R and an ’08 Sky RedLine. Our streets are clean, our roads are smooth, our neighbors friendly & concerned, our taxes low (~$400 on a $200,000 home), our weather is great, our air is fresh - even if humid, our energy is cheap ($.06/kw, $4.01 Sunoco 93), our nights are safe. I can’t remember the last time I heard a car alarm. The state does not forbid us from having a gun in the house, yet need it so much less than in NY. Every morning, the first thing we would do in NY, is look out the window to see if we were still car owners, or insurance claimants.
Grand Prix SJ – broken into.
Buick Grand National - broken into/wheels stolen 8 times before they finally got it on the 9th. (3 years)
Minivan - stolen.
New minivan attempted stolen in first 2 weeks.
Minivan hit in the snow 3x…never a note! (3 years)
Corolla mirrors stolen
We lived in a great neighborhood with good, people but its proximity to the Bronx River Parkway allowed the savages from the south Bronx to come and feed on our block like piranha. After too much, we escaped.
If the cost of living is too high…if you do not think you are being compensated sufficiently to live the life you want to live in NYC, try getting out and living in America. -J

Good Advise........You sound like X-NYer's

It is in my near future plans...believe me!

[Bogie]

Originally Posted by RedHeaded RedLine

Our streets are clean...
our roads are smooth....
our neighbors friendly & concerned...
our taxes low

A tax increase should fix all those problems you're having.

[RedHeaded RedLine]

Originally Posted by xmicro_Redline

Good Advise........You sound like X-NYer's
It is in my near future plans...believe me!

He did 36 years in the Bronx, I did 29 in White Plains. -J

[SKYtime]

Originally Posted by Bogie

A tax increase should fix all those problems you're having.

I hope not!

[Bogie]

An additional observation on GM's solvency.

I see this time and time again.....history does indeed repeat itself. You have a business doing "business" in a market segment, and along comes an "investment" opportunity in another segment....and away they go to the new investment. Now, I'm not against investing in a wide segment (which can reduce risks that any one segment will kill you), but you gotta be careful that you don't focus on a peripheral segment to the point it puts your core at risk.

GM had some hands in the mortgage industry. Although they reduced their risk by selling off a good piece in 2006 (in retrospect, a good decision), they still held a stake in the mortgage industry. A stake which went bust in the midst of the mortgage fiasco. I'm not a financial guru, but I wonder how much those loses are contributing to their current financial woes. Not only is there a downturn in the market vehicle segment, the investment area that is designed to bolster the company over such slumps is not only failing to hold the line but has/is sucking hundreds of millions of dollars out of the GM coffers.

[SKYtime]

The finance segments of its business gave GM much-needed cash flow and profit for years. While that segment may have gone south in the recent past, it helped (if not propped up) the company for many years.

[Bogie]

Doesn't look good.