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Blogging Stocks pulls no punches. The site leaves GM with a black eye, calling the company a “portfolio killer.”
This is a ridiculous company with an even more ridiculous management group. General Motors'(NYSE: GM) cars are mediocre, its union contracts are incredibly extravagant in a brutally competitive industry, and management seems to think we are still in the 1950s.
Recently, the company’s auditors raised even more concerns about the automaker’s ability to survive without more loans from the government.
GM’s own forecast assumes survival based on a car market that is larger in 2013 than it was in 2006. Yeah, right.
True shareholder value: zero
12 Comments on “Blogging Stocks: GM Worth $0...”
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In other news,The UAW/CAW are seen as greedy, for refusing company shares in liew of contractual
obligations.
the only value in GM (and Chrysler) is the outlook for more tax money. Everything else is either worthless (most factories, most designs), or negated by the amount of debt (Cadillac). Every month they lose more money than all their stocks are worth…. there is just no discussion anymore… chapter 7!
mikey,
I agree with your implied comment, that it’s crappy that GM is offering totally valueless stock in lieu of supporting its obligations. The current UAW/CAW heel-dragging is only rational.
On the other hand… why did you guys let the situation become untenable? You had to know GM was filling up your accounts with air.
I think the article is a touch harsh.
Some of GM’s cars aren’t mediocre (CTS, Acadia, Malibu, Enclave etc) they do have some good cars. In fact, if they were to get rid of all the crud and excess and concentrate on the good cars (like the ones I mentioned) GM might be in a stronger position.
I won’t comment too heavy on the UAW/CAW contracts as to whether they are “extravagant” nor not.
What the key problem of GM is its management. Pure and simple.
Look at at every problem which has plagued GM and back track a few steps and you’ll find management as the root cause of the problem.
Quality issues. You can’t blame the rank and file staff (i.e UAW) because they didn’t design the cars. So you blame the designers? No, because who approved these designs? Management!
UAW contracts. OK, let’s say that they are extravagant and excessive (Please, Mikey, I’m just playing Devil’s Avocado), who allowed them? GM Management! If GM was in trouble and couldn’t afford the contract, it should have been the job of management to say “no”.
My theory with GM management is that they are a group of people who love the idea and notion of being the manager of something, including the money and perks that come with it, but don’t quite get the responsibility that comes with it.
But to say that GM is worthless is harsh. It does have some equity left in its brands, it does have some good cars and a half decent infrastructure left. All it would take it is a Carlos Ghosn, Fujio Cho or Sergio Marchionne and GM could come back, smaller, but healthier.
In other news,The UAW/CAW are seen as greedy, for refusing company shares in liew of contractual
obligations.
Yes, but if they take the worthless shares and go back and make the company a success, the shares will be worth a lot of money. Right? Or do they think it’s a lost cause?
KatiePuckrik :
My theory with GM management is that they are a group of people who love the idea and notion of being the manager of something, including the money and perks that come with it, but don’t quite get the responsibility that comes with it.
Bingo! Give the lady a prize!
But to say that GM is worthless is harsh. It does have some equity left in its brands, it does have some good cars and a half decent infrastructure left. All it would take it is a Carlos Ghosn, Fujio Cho or Sergio Marchionne and GM could come back, smaller, but healthier.
Wrongo! GM is bankrupt. Their future is in the hands of the American electorate. To survive they must play in the arena of national politics. It is unlikely they can ramp up their skills fast enough to be effective. (Witness corporate jets, full page “Thank you” ads, etc.) Bill Clinton would make a good CEO of GM in their present situation. (I kid you not.)
Katie Puckrick,
Blogging Stocks is making an estimate of GM as an investment.
Companies on welfare are bad investments. Among other things, the Feds could pull the rug out from under the shareholders at any time (and, given the value of GM, this wouldn’t be much of a loss… at least not much more than the long-term holders have already taken).
Anybody who bought in recently… too bad. This was speculation-grade stock.
Why did we let them fill our accounts with air?
I could type all day.I guess we fell under the “too big to fail” bunch.Maybe blind faith,or just plain ignorance.We as the rank and file give the union leadership too much power.Apathy,something myself and many others were guilty of.
In hindsight,sending High school dropouts into thr ring,with MBAs Lawyers and spin doctors,perhaps wasn’t such a good plan.
Us oldtimers remember the oil crisis,the early eightys and ninetys.It got tough then,but we bounced back.
GM shares?They were gold.I grew up in a GM town salary guys retired on thier GM shares!Everybody had a relative or friend who cashed in big.So GM financed pension plans with company stock.What could go wrong?
KatieP mentions a few valid points Management does in fact manage.Management and decision making
is one area that management has not given an inch to the unions.
Some of us,that “took the money and ran”are painfully aware that our future is basicaly a toss of the dice.
In the American corporate model the corporation is run by the executives and the board of directors for the benefit of shareholders. It may be that people who lose money in their shares will come around to the idea that every time they didn’t turn up to the annual meeting, or threw away their proxy ballots for the BoD, they countenanced what the corporation was doing.
The ultimate responsibility for these meltdowns was irresponsibility, all right, because the shareholders believed the “don’t worry, be happy” noises coming from mahogany row.
I wonder whether we shall now have more activism by shareholders who realize that an investment is not free money.
mikey: “Us oldtimers remember the oil crisis,the early eightys and ninetys.It got tough then,but we bounced back.”
The Original Oil Crisis, spurred by the Arab Oil Embargo, was in 1973. I believe there was a second around 1978 or so. By the time of the oil crises you recall, GM had already lost two rounds without giving any thought to the third.
mikey: “In hindsight,sending High school dropouts into thr ring,with MBAs Lawyers and spin doctors,perhaps wasn’t such a good plan.”
You should read “October Sky,” which was also titled “Rocket Boys” in some printings. The author was Homer Hickam.
Investors have already written off GM. Its stock price gives it a market cap bouncing around $1 billion. That’s effectively zero.
Buyers and sellers of GM stock are bottom feeders who try to make money off the ups and downs. Get the timing right, and you can double your money in a week. Get the timing wrong, and you can lose it all.
That kind of froth lends no substance to GM’s stock. Buyers who buy it as a long-term investment would signal some worth there. Don’t seem to be any of those.
With GM stock at effectively zero worth, GM is in one way effectively in bankruptcy already. Too bad it does not take that step to get the tools that bankruptcy brings.
# mikey :
March 16th, 2009 at 6:23 am
In other news,The UAW/CAW are seen as greedy, for refusing company shares in liew of contractual
obligations.
Yes, of course. UAW and management have been destroying share holders’ values.
You think you deserved all that salary? The truth is that kind work is worth $5/hour tops. Plenty of Chinese are willing to take that for $3 I guess.
It’s a brilliant idea to let UAW members become share holders as well, so that they cannot blame the company for exploiting their hard work.
Better yet, if they have over 50% shares and voting power, they don’t even need to negotiate. Just simple set the new wage standards. Union negotiator can now work on a production line to increase productivity.