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Well, duh. I mean, there could always be a planet killing meteor strike or something. But I wouldn’t count on it. Anyway, GM CEO Fritz Henderson left little doubt that May 31 is all she wrote in terms of GM’s ability to forestall the end of its glide-path into bankruptcy. “It is probable,” Fritz told Bloomberg. “Any trip through bankruptcy court must be fast, Henderson said today. It’s also important for GM to be able to make speedier decisions,” he said. What IS IT with this guy and speedy decisions? More haste, less speed, Mr. Henderson. Alternatively and inevitably, step aside and let the Big Boys git ‘er done. Meanwhile, how long before GM is de-listed from the stock exchange?
“It’s also important for GM to be able to make speedier decisions, he said.”
Deeper, too.
Wow, Fritz, this is so Unexpected!!!
If I knew you were coming, I’d have baked a cake!!!:
http://allrecipes.com/Recipe/Black-Magic-Cake/Detail.aspx
With a little Black Magic we can turn this thing around, honeychile.
“It is probable,” Fritz told Bloomberg.
In other news, Rick Wagoner reported that bankruptcy is not an option, that GM is putting the finishing touches on its global recovery plan, and that profits, unicorns and rainbows can be expected to appear any day now.
Leave the speed for the cars (what little speed Uncle Sugar will let you make) and keep the haste for getting those cars produced.
I think that one of the worst things that GM has done to their overall health is the slow,tortuous dragging out of this whole process. Every day in the news we read more about a GM bankruptcy is another day that it becomes burned into the psyche of the potential buyers. Not good and not smart.
Conversely, if they had kept up a brave face and said ‘no way’ to bankruptcy right up to the last possible moment and then announced that they were confident that they could emerge out of C11 within 30-90 days, I think people would have taken it better and their reputation would be better off.
But…I could be wrong.
Delisting a company’s stock usually becomes a topic of discussion when its value drops well below a dollar a share. But with Chapter 11 happening in two weeks, why bother? It will be delisted on June 1 anyway.
As for a speedy trip through Chapter 11, I have said it before here and I’ll say it again. Chapter 11 ain’t no quickie behind the barn. United Airlines operated under C11 protection for three years.
Should we start a pool on when the stock is delisted? I say Monday.
Do you all think that if the banks didn’t have the swine flu that we would be in this situation now?
Isn’t it the choking off of credit by the banks that accelerated this mess?
Let me put it another way…who has $37.5K in liquid cash to walk into a Caddy dealership and buy a new car?
MikeyDee,
There are two problems- each a major problem in their own right.
1) GM sucks. Period. End of discussion- they’ve had 30 years to get their act together.
2) Consumers relying upon banks. Yes, I can do what you described. It takes a lot of self-discipline, …discipline which people by-and-large do not have. There is a small minority of us out there who pay for their cars in cash. Relying upon banks and leveraging ones future earnings to me is crazy. But our educational system teaches just the opposite…”buy now, pay later…live the EASY life”. A great deal of the macro-economic situation we are dealing with today stems from this attitude. Stop relying upon the banks and instead rely upon yourself!!
I will NEVER buy a Cadillac. I’d rather pay cash for a Hyundai Sonata. At least Hyundai has something to show for the past 20 years in the way of turning their company and product around. These are the type of companies I respect.
Mikey Dee: if it was the banks/financial crisis fault that GM goes C11… then all manufacturers should be affected, shouldn’t they?
Sure, the crisis accelerated the decline, but those 2 companies never made a profit over the last few years in good economic times.
Plenty of people do MikeyDee but then again many of them generally have that money because they don’t squander their money on whims. My late brother had a million dollars and drove a 10 yr old Chrysler minivan, my mom a millionaire drove a Toyota corolla, ny other brother who is multi multi millionare use to drive a Honda Civic. Its not the banks fault its that people got the notion that they could have lifestyles of the rich and famous when they were in fact not.
If I had $37.5K and wanted to be pampered with luxury, I’d be walking into a Hyundai dealership and getting a Genesis sedan.
Better car and I don’t drive away feeling like I was just violated harder/faster/deeper/etc.
GM won’t likely be delisted until after the BK is filed. So that means trading will probably be halted on Monday, June 1, most likely before the market opens, which will make Friday, May 29 your last day to get out.
It may be removed from the Dow before that. On June 1 at the latest, there should be some other company in its place.
With all respect folks, I’ll stand by my statements. If the banks were healthy and lending like crazy as they did several years ago, GM and Chrysler sales wouldn’t be great, but they would still be running the assembly lines.
That being said, I also agree that Americans had a love affair with easy credit that got us into this mess.
I just got my Civic a month ago and I have a pile of rejection letters from banks that would not give me a loan, even with a good credit rating. Finally, TD bank came through, but the dealership had to beg them.
If they had that much trouble with me, then how would I get a $40K loan for a shiny new GMC Suburban or Dodge Ram truck?
Time to start a betting pool for which company will replace GM on the Dow 30.
And poor suckers with S&P index funds keep plowing money into this turd. I dont see how the SEC can allow GM to still be listed knowing full well bankruptcy is imminent.
Its not the banks fault its that people got the notion that they could have lifestyles of the rich and famous when they were in fact not.
Regardless of fault or of one’s political or economic inclinations, there is a basic truism at work here — tighter credit leads to less borrowing, which means lower sales. Tighten credit drastically, and the market is bound to fall apart.
That’s just how it is. Not right, left, prudent or imprudent, just an economic fact of life. We can debate whether the outcome is good, bad or indifferent, but the relationship between credit and consumption is a function of calculus, not wisdom or moral decency.
Delisting a company’s stock usually becomes a topic of discussion when its value drops well below a dollar a share. But with Chapter 11 happening in two weeks, why bother? It will be delisted on June 1 anyway.
The bigger question is why is this pig still a component of the Dow 30. I wonder what company will replace it when GM is moved to the pinks and is trading for .01.
MickeyDee-
Try on this idea-if the economy wasn’t in the tank perhaps the Gov’t wouldn’t feel the need to prop up these sorry institutions and they’d be C7 instead as no private money would finance C11.
Just a thought.
Cheerio,
Bunter
Verbal:
“Time to start a betting pool for which company will replace GM on the Dow 30.”
ShamWow gets my bet.
Wagoner was a piss-poor CEO, but I think that Fritz Henderson has been pretty straightforward in his comments.
Of course it is probable that GM is going to file, and it is probably a good thing to allow GM to prepare everyone for C11.
Just imagine if Chrysler and GM declared it 6 months ago (even though it would have cost US taxpayers a lot less). There would have been mayhem.
Now, at least, these automakers can prepare for it, declare it, and get out in 60 days or so during what is usually a downtime for manufacturing anyway.
Mikeydee:
Based on your statements, I don’t think you understand the full breadth of the current financial crisis.
Either way, whether or not banks are lending or even if there was a financial crisis or not, the mark of a well-run business is the ability to go with the flow. ‘Agility’ is the keyword, my friend.
GM’s management, as the leaders of this business have failed miserably time and time again that it took something of this magnitude to finally expose the lack of proper business practices.
True, this is an extraordinary time in our economy, however this has been a long time coming for GM – and unfortunately its time has come.
Also, they were losing money, though at a less torrid rate, long before all this stuff.
They were doomed. Are doomed. We can fiddle with this or that date of someone had done this or gas prices had done that, but the alternate histories of GM from 2004 all end up in the same place, just different times.
If the banks were healthy and lending like crazy as they did several years ago, GM and Chrysler sales wouldn’t be great, but they would still be running the assembly lines.
They might still be selling cars, but they’d still be on their way to bankruptcy. One might even say the current economic climate was beneficial for them. Without it, the government may never have lent them money and instead would have just let them file for bankruptcy.
Let me put it another way…who has $37.5K in liquid cash to walk into a Caddy dealership and buy a new car?
Well, actually I do. But being a tightwad and tree hugger I paid cash for a Prius which I use twice a week to volunteer at the local food bank where I help give out food to people who believed those ads that said, “no money down”, “zero interest”, “you qualify”, and “no payments until the year 2057”.
The other 5 days a week I ride a bicycle.
Mikeydee is 100% right. Credit deep freeze made it a whole lot worse. This is true.
The rest is true too.
I think Mikeydee can be happy he only could get credit for a Civic and not for a $ 40,000 Suburban that will depreciate like hell, have twice the payments and sucks gas like crazy. In a few years he will be happy about not being stuck with $ 700 truck payments and no gas money left and a truck that is unsellable at $8/gallon of gas.
And most people buying those trucks don’t really NEED them unlike contractors.
Of course banks are a bit overreacting now. But there needed to be a correction since anyone with a pulse could buy a 4,000 ft² home, boat and Suburban (at least while it lasted). Most good companies will survive, many bad companies will die. unfortunately some bad companies get subsidized at the expense of the good ones.
Well, I appreciate the “value for money” American cars provide (ps: i am not from the US), however, there is a problem you can’t ignore.
During the last 20 years, Detroit has being reducing quality in it’s small and mid size sector after reduced quality which was result of even more reduced quality. Just compare a GM car from the 70’s to a car from 2006 of the same brand (2006 was probably the worst era for GM when it comes from quality).
It wasn’t the banks that stopped lending people money. GM has been losing money since 2003, when the economy was booming. For god’s sake, GM was doing piss poor in year 2007, when Hummers where selling like hotcakes!
The reason: The perceived quality of a car is very different for people buying big cars than people buying small and mid sized, crazy as it sounds.
-People who buy small and midsize are expecting decent quality in all parts, because they need the car for work. Providing that kind of thing was probably too hard for Wanoger, GM’s horrible supplies and lazy workers. So they quit. Just ask any American what small car he/she would buy, and he/she will say Toyota or Honda. Simple as that.
-People who buy big cars, SUVs or muscle cars usually don’t care about all the parts. Just give them the big V8 or the tall ride height and they are happy with it. They don’t care if the air condition isn’t working (300C), the suspension sucks (Trailblazer), or the plastics are cheap (Corvette). They are happy just with the size and speed, because they are petrolheads (and well they do)
-> WELL, this is what the problem is! A company cannot survive by selling vehicles only to petrolheads! No matter how many Hummers, Corvettes and Camaros you sell, you want make it if the crucial midsize and small car division of yours is doing absurdly. Period.
So, unless these lazy guys at GM Chrysler and Ford fix these much crucial divisions, they are not going to make it even after a 6 trillion dollars bailout.
The problem is, GM CANNOT fix this division buy itself. Just look at them… They are spending a gazillion of dollars in a technology showcase car like the Volt, while their small and midsize sector is suffering, and they are doing nothing to fix it. Do they think it’s boring or not so important or what? (ps: the malibu is too little too late)
–>So, THE ONLY SOLLUTION to save GM is not to play with economic witchcraft (like bonds and bankruptcy fillings), but for the government to take over the two companies. Then, it should:
1)Remove all current cars from the production lines (but keep the production lines)
2)Design new cars with quality in mind and put these cars in the production lines instead
3)Find some new suppliers that don’t make garbage or even better make everything in house
4)Fire the lazy people that don’t know how to glue a dash together.
Fiddling with bankruptcy fillings and making plans on how to get smaller but not better will only make you die in shame.
@kurkosdr,
I agree with your comments but disagree with your solution.
1. The current designes are not “bad” (I of course don’t like them but I am not the target audience). What they need to do is to isolate the problem areas AND FIX THEM. If that means demanding better parts, so be it. GM can not afford to repair/replace poor products from it’s suppliers. It can’t afford the “bad press”. It must produce better quality even if it must raise costs (or lower exec saleries) to do so.
2. Planned obsolesence is a fact of life, however I think Sloan’s idea was to make customers WANT the new model, not NEED it. You want people to buy GM becasue they make the best cars. You use your advantage in technology to produce something NEW to entice customers to upgrade or purchase new. Those that can’t do so, you want to have upgrade to one of your products used. “I may only be able to buy a used Corvette now, but someday I’ll own a NEW ONE!”
3. Concur, however GM’s suppliers have been scrimped and cheated to the point they can barely stay in buisness. GM will have to pay it’s suppliers more if it expects quality products. That raises the cost of cars or reduces profit margins.
4. Concur…but good luck with that one.
By the way, I get flak from my father all the time, because he’s a GM retiree (over 35 years at the Tech Center) and I’m a Honda lover. I’ve had bad luck with GM products and good luck with Hondas, so I’m brand loyal. And Howie Long is right, Honda makes a fantastic lawnmower too!
@mikeydee:
I love the accord, hate the design of the Civics. One time, they are so boring that you want to kill youself once inside. The next year, they are all too ricey. Can’t these guys get the design right, like they did in the accord?
So, it’s honda for me when it comes to big cars, and italians for small (can’t ignore the alfa mito).
PS: When I meant throw the old designs, I never meant the comsetic or the nameplates. This is all GM’s got!! I meant an overhaul in the whole engineering department, from engine to interior