Is GM done?

[Speed_Racer]

Judging by the way GM goes through cash, I'm wondering if they heat their offices with a furnace that only burns $100 bills.

[Nethead]

Just when you thought even the dumbest of the dumbasses had surely caught on:

GM Reminds Investors Its Stock's Completely Worthless
By Ray Wert, 6:23 PM on Wed Jun 10 2009

The now-bankrupt GM's stock price is up almost 100% (Is one hundred percent of nothing twice as much nothing as fifty percent of nothing?   I guess some greedy Wall Street suits want to have a monopoly of nothing so they can jack up the price of nothing...) this week from speculators and short-sellers, forcing the automaker to make a statement reminding people it's, essentially, a worthless piece of paper and shouldn't be bought. Sad, sad press release below.

GM Statement re: recent changes in GM stock price and volume

GM management has noticed a recent elevation in the volume and price of its common stock. While GM does not control the market or its stock price, GM management strongly believes that any recovery for the common stockholders in the chapter 11 bankruptcy process is highly unlikely, even under the most optimistic of scenarios. Stockholders of a company in chapter 11 generally receive value only if all claims of the secured and unsecured creditors are fully satisfied.

[Secret Chimp]

Why the fuck are they still on the exchange?

[Nethead]

From www.leftlanenews.com:

President Obama?s auto task force says no more funding for Chrysler, GM
06/12/2009, 10:10 AM By Drew Johnson

The Obama administration has poured nearly $80 billion into the domestic automakers, their financial institutions and suppliers, but the President?s auto task force says both General Motors and Chrysler are cut off from additional federal funds.

The President?s auto task force went before the Senate Banking, Housing and Urban Affairs Committee earlier this week, facing law makers for the first time. ?We strongly believe this is the last money that GM will require. I cannot make a promise about the future but I can assure you that it has been a vigorously debated and thought about question,? Ron Bloom, a senior adviser to the task force, told the committee.

Bloom also said there is a ?reasonable probability? that the U.S. taxpayers will recoup their investments in GM and Chrysler, according to the Associated Press. However, when latter pressed about repayment, Bloom added ?by no means would I say I am highly confident that that would occur.?

Chrysler successfully emerged from Chapter 11 protection earlier this month after filing for bankruptcy on April 30th. GM is currently under Chapter 11 protection, but could emerge as early as August 1st.

The question is:  Is this the stake through the heart?

[SVT666]

At least he isn't in a Lexus like Mulally is/was (though I bet he has dumped it for a Fusion Hybrid or will replace it when the new Taurus comes out).

Mullaly hasn't been in a Lexus since about Day 3 of his tenure.  He got himself a Ford Five Hundred.  Whether he still has that car is another question.

[Byteme]

Why the fuck are they still on the exchange?

GM common stock isn't listed on the NYSE. It's traded on what called "the pinks".

[TBR]

Mullaly hasn't been in a Lexus since about Day 3 of his tenure.  He got himself a Ford Five Hundred.  Whether he still has that car is another question.

I thought he said he was going to keep his LS430 until Ford built a car just as good.

[Raza]

I thought he said he was going to keep his LS430 until Ford built a car just as good.

Then he can safely get rid of it.  The LS430 was a floaty pig of a car.

[Morris Minor]

I think a good car company should:

• Listen to its engineers
• Go racing
• Set its integrity & excellence by the low-end vehicles it produces. If your cloth-seated, four cylinder family sedans are good to drive, built properly,and decently priced, chances are the more upscale models will be excellent too.
• Be non union
• Refuse to take money from anyone except customers, investors and commercial lenders
• Not be boring
• Listen to its engineers

[TBR]

I think a good car company should:

• Listen to its engineers
• Go racing
• Set its integrity & excellence by the low-end vehicles it produces. If your cloth-seated, four cylinder family sedans are good to drive, built properly,and decently priced, chances are the more upscale models will be excellent too.
• Be non union
• Refuse to take money from anyone except customers, investors and commercial lenders
• Not be boring
• Listen to its engineers

It's interesting to think where GM would be now if only the Cavalier had been better.

[Morris Minor]

It's interesting to think where GM would be now if only the Cavalier had been better.

I remember renting a stripper Honda Accord it was really good fun to drive, nicely finished and did a fantastic job of what it was designed to do. There was no cynicism in any aspect of the car's design; it was all honest with no crappy finish lines, sharp edges or cheap plastic.

[Submariner]

Then he can safely get rid of it.  The LS430 was a floaty pig of a car.

I would assume he isn't part of the Fusion/mustang crowd, in which case, yes, the LS 430 Blows away anything Ford has to offer.

[Nethead]

On November 26th, Fritz Henderson said he would never support the sale of General Motors to a Chinese corporation.  On December 1st, Fritz Henderson lost his job .

(Fritz:  "Hey, Ed, I was only jokin'!  Sheesh!")
(Big Ed:  "Pass the chopsticks, Fritz, and don't let the door hit you in the ass on your way out.")

A Chinese-owned GM, it could happen
As Chinese automakers eye bargains around the world, some think they could make a play for GM once it goes public.

NEW YORK (CNNMoney.com) -- GM could one day be Chinese owned.

A shocking concept for the ultimate all-American company, but one some auto industry experts say isn't too far-fetched.

"I can tell you right now the Chinese are shopping heavily in the U.S. auto sector," said David Cole, chairman of the Center for Automotive Research, a Michigan think tank.

Cole said such a deal isn't imminent and wouldn't happen until GM starts selling shares to the public, likely a year or more from now. But he says buying GM would be a major opportunity for the nascent Chinese auto industry.

"The Chinese have a lot of our money and they're looking to invest it," he said.

The Chinese have already shown an eagerness to buy some of the damaged brands being cut loose by U.S. automakers. GM is in the process of finalizing the sale of its Hummer unit to Sichuan Tengzhong Heavy Industrial Machinery. Ford Motor (F, Fortune 500) is in talks to sell its Swedish car unit Volvo to Chinese automaker Geely.

Consolidating power in China

The Chinese industry is extremely splintered, with more than 100 automakers, some no more than regional players. But the Chinese government is pushing the industry to consolidate; something experts think will greatly reshape the industry in the next few years. And the new larger players will become even better positioned to make a play for troubled automakers around the globe.

Cole isn't saying that GM would be China's top purchase target in the near term. Other experts see it as more likely for the Chinese to buy a second-tier Asian or European manufacturer, or perhaps even Chrysler if its combination with Fiat Group doesn't go as well as planned.

But a Chinese-owned GM wouldn't be a shock to Bob Schulz, the top automotive credit analyst at Standard & Poor's, not after all the other changes the company and the industry have seen in recent years.

"Assuming there's no government restrictions on something like that, anything is possible," said Schulz.

It wouldn't be a cheap purchase, despite all the company's losses in recent years. Rod Lache, auto analyst for Deutsche Bank, recently estimated that based on the company's bond prices, the market is now valuing it at about $42 billion. That price could rise assuming sales improve and the company returns to profitability before it sells shares.

Michael Robinet, VP, global vehicle forecasts, CSM Worldwide, wouldn't comment on which global automakers the Chinese might be interested in buying, but he agreed there's a lot of interest within the industry for such purchases beyond the few small damaged brands purchased so far.

Such purchases would give the Chinese access to needed technology, as well as auto plants around the globe to serve various markets. He said the dealership and other distribution networks are also very important for China's hopes to eventually become a global player.

"It's all about ease of entry into new markets," he said. "It's much easier if they buy an established distribution channel rather than introduce their cars into the U.S. or European market."

China: World's biggest market

China has moved ahead of the United States this year as the world's largest market for sales of cars and light trucks. Even if there is a rebound in U.S. sales in coming years that puts American car buyers back in the lead, no expert thinks they'll be able to stay ahead of Chinese buyers for very long, especially with so many Chinese still without cars.

"The potential for U.S. auto sales is dwarfed by the growth potential of China," said Kim Corth, president of auto consultant IRN.

China is arguably already the most important market for GM, in terms of both growth and profits.

The company has sold 1.5 million vehicles in China through the first 10 months of the year, up 60% from a year earlier. By some measures GM and its joint ventures have the largest market share in China, and its China sales now trail U.S. sales by only 14%.

While GM officials say they expect Chinese sales growth to slow and U.S. sales to rebound in the coming years, it's not tough to see GM selling more vehicles in China than in its home U.S. market, perhaps as soon as the next decade. Already the company sells far more vehicles overseas than it does in North America.

More importantly, China is already in the lead for GM in terms of profits. While it does not break off earnings from China specifically, the country was the major driver of the $429 million it made in the Asia-Pacific region in the third quarter, which ran from its emergence from bankruptcy July 10 through Sept. 30.

The rest of GM's overseas auto operations lost a combined $192 million in the same period, while its North American losses came to $651 million during that period.

All that strength in China could leave GM's U.S. ownership somewhat vulnerable. If GM's major Chinese partner, SIAC, wanted to buy a controlling stake in GM, the company would have a difficult time saying no, given its importance to the company's future.

The federal government took a 61% stake in GM in return for the $50 billion in pumped into the company to keep it operating late last year and through its bankruptcy reorganization earlier this year.

Officials from both the Obama administration and GM have said the intention is for GM to have an initial public offering as soon as the second half of 2010 in order to let shareholders, including the Treasury Department, sell their shares as soon as possible. But it is also unlikely that even those eager sellers would dump all their shares at once, so it could take some time after the IPO for a majority of GM to be available on the open market.

GM spokeswoman Renee Rashid-Merem wouldn't comment directly on the idea of a Chinese-owned GM.

"Clearly we've had successful partnerships with the Chinese joint ventures and we're looking to that market for growth," she said. "But relative to an IPO and who might buy into the company, we're not going to comment on any of those particulars."

Of course there are plenty of hurdles to a Chinese purchase of a company as large and symbolically important as GM. One would be political.

"I think there would be a national outcry in that regard," said IRN's Corth, who points out the backlash when Chinese oil company CNOOC tried to buy Unocal in 2005. GM, despite its troubles, is far more of a U.S. icon than Unocal.

But when the China-Unocal deal was blocked, there was a U.S. buyer, Chevron, ready to step in and buy the company. There's not likely any U.S. company that would be interested in buying control of GM.

The Treasury Department, the union-controlled trust funds and the former GM bondholders who got stock in company in the bankruptcy process are all on record wanting to sell their stakes in the automaker as soon as possible. Those three groups hold almost all the GM shares.

Beyond those political considerations though would be the question of whether any Chinese automaker feels it is ready to take on a challenge the size of GM.

"They're a little ways away from a purchase of that size," said Tim Dunne, an expert on the Chinese auto industry at J.D. Power & Associates. "They're still getting their own feet wet in terms of being automakers. They know how tough it is to manage a company the size and complexity of GM."

[2o6]

That's quite farfetched.



None of the Chinese automakers have the money.


If they do have the money, then they shouldn't be spending it on GM.

[dazzleman]

That's quite farfetched.



None of the Chinese automakers have the money.


If they do have the money, then they shouldn't be spending it on GM.

We can only hope the Chinese buy that lemon.  It will swallow them up.

[2o6]

We can only hope the Chinese buy that lemon.  It will swallow them up.

As well as a large part of the economy.