OK, the credit analyst presenting the timeline works for gimmecredit.com. Take that as you will. But Shelly Lombard has done the math (for BusinessWeek): “GM had $21 billion in cash at the end of June. The company has a further $5 billion in available credit and cash and plans to save $10 billion from cost cuts. Assuming GM can also tap $5 billion to $7 billion in federal loans that the federal government has approved, GM has up to $21 billion in excess liquidity on top of the $14 billion it needs to run the company… Given GM’s cash-burn rate of more than $3 billion a quarter, the company has five to seven quarters before it gets down below the bare minimum it needs to buy parts and keep factories humming, Lombard says. GM’s best bet is to tap the government’s loan program and hope the market turns up.” Not to mention hunkering down. Oh wait, that too. “Several sources inside the company say GM is looking at product delays to save cash, hoping the company can weather the weak economy and liquidity crisis and make it through to 2010. All but essential programs are at least getting a review, the sources said. Even the next-generation Chevrolet Malibu could be on the table. GM wants each of its cars to get a makeover every 5½ years, but it may have to stretch that to 7½ years for some models to stay in the black. A GM spokesman says the company is delaying some product programs but that nothing major has been held up yet.” Stay in the black? What black? Anyway, that’s not exactly how I remember it…
Find Reviews by Make:
Read all comments
Malibu will be obsolete in three years. They need to have a substantially revised product in place if they want any sort of momentum whatsoever. A wagon wouldn’t be the worst idea in the world either…it’s the cheapest hedge against CUV’s tanking, as one might expect given that class of vehicles’ dubious merits.
But they will still be frittering away time and money on the *expletive* Camaro.
and a camaro wagon, with the 1.4 (naturally aspirated, of course).
Isn’t that Fed money earmarked for plant improvements? Not for keeping GM afloat.
Yeah, but all the money they spend on “re-tooling” frees up cash for other stuff.
And frankly, its not out of the question to just spend the damn money wherever they want. What is the government going to do?
I don’t want to be a dick about the Malibu, but the one I test drove was vastly overpriced (29k sticker), and had random mystery vibrations running through it every 15 seconds or so when idling. If it gets the PT Cruiser treatment GM’s vaunted product revival will die like every other renaissance.
You’re so cynical…
Yes, GM should have spent the Volt and Camaro (and ZR1) money on developing existing models. I wonder how much the Lutzring cost…
7.5 years before introduction of major change for any car line is suicide.
A 3 year time frame for change moving toward lighter cars, improved functionality/utility in space and comfort, improved electronics and engine design.
A major change in materials and fuel.
Sell your stock if anybody is willing to buy it.
eh_political
I agree wholeheartedly that a Malibu wagon would be the perfect next step for that model’s shelf-life. And I bet it would look a lot better than the current back-end, which doesn’t quite gel with the rest of the design.
7th of October GM is reviewing product nothing is safe nothing is off the table in being considered.
What a mess. I say they’re cooked. They don’t have a single redeeming model that will soldier on and generate interest. Most of them need a redesign right about now – the Camaro feels like it’s been out for 4 years already, given the constant hype and teaser strategy. Good riddance GM, godspeed to oblivion.
It’s a shame. A company without a single car that I would buy. I wanted to like the Malibu but it looked cheap. The Auro, well, looked like a blinged-down caddy. The 9-3 has too many little buttons. Even the American Astra is ugly.
GM should announce right now they are suspending all vehicle manufacture in the US. That will bring out the federal dollars…..
(The ford 500, Taurus X, various Volvos all impress me. Thought the new jags looked cheap. I’m just saying that at least Ford can produce a car)
Is the Volt an “essential product”? Given all the hoopla about it, it almost has to be. But I would bet that it’s development costs are much, much higher than other vehicles. On top of this, the Volt will be a very low volume car for the first few years of it’s availability. So it’s release will come at the expense of their other vehicles. Could the Volt be the car that killed GM?
Is the Volt an “essential product”?
As Sarah would say, “you betcha”. Well, rather than an essential product, it’s really an essential fantasy. It’s essential to support the Wagoner/Lutz fantasy of having a plan. Unless these $25B bailouts are strung together ad infinitum though, it’ll never hit the road.
Shouldn’t this be Death Watch 203?
7.5 years between product updates? That’s what VW used to do. As a result, they almost left North America because no one was buying their ancient products. GM is so screwed and so clueless, it’s not even close to funny anymore.
I have been saying this for over a month now. They are scrounging for every penny than can get just to last a little longer and it’s down to cutting future products(that they so desperately need) to save a few bucks to keep the lights on a little longer. Next they are going to start to shut down production that makes everyone go WTF to save on material costs they can’t afford to buy. That will be the sign that death is right around the corner. I’m not talking about SUV’s, I mean like the Impala taking a several month break from production, the Camaro getting pushed back 4-6 months, etc.
7.5 years between updates is a joke, they already do that now, and they said they were going to stop that and do more frequent updates. These guys have no recovery plan, they are just reacting and panicing, they are f*cked. Who on earth will be buying such out of date cars, they are barely competative now, what will they look like compared to the Japanese in 6 years. I guess they plan to continue the cash on the hood sales and 50% to fleet sales. Well if they are around long enough to do it, and they wont be, the Volt isn’t going to see the light of day.
I hope the EPA stalls so they don’t get the money, it will just be flushed down the GM toilet right before they flush themselves.