Is GM done?

[CALL_911]

Realistically, where would they get a decent line from? 

Yeah, that's what I was thinking.

[dazzleman]

I haven't read the thread, but here are my two cents:
According to an article I read on somewhere on the internet, GM is claiming bankruptcy would cost around $100B. This way, the $16B they're asking for looks like nothing in comparison.

I can't help but think that bankruptcy would not cost this much, and now that the market has settled to some degree, a fast and efficient bankruptcy would work best for everyone--they could layoff a solid portion of their workforce (and not have to offer them buyouts!) which would negatively impact the general economy, but would not affect it as much as a full-blown complete liquidation of the company. I am naive of many details in this department, but if GM could procure some funds to stay afloat for another month or two, they could hire some super-experts and work out a plan for bankruptcy during this time to ensure it can execute the plan with haste. GM would want the seriously minimize litigation because anything involving the courts takes a lot of time and it's pricey.

This way they have the benefits of bankruptcy, yet can remain in business. For example, GM has FAR too many dealers (something like 5x the number of dealers as Toyota in the US) and it could use the bankruptcy to force a few thousand dealers out of the market. It could also rid itself of various obligations to the UAW. With the money they get from liquidating all the assets from brands like Pontiac, Saturn, Hummer (if that Chinese company does not buy it...which brings me to another question, where will the US get Humvees?...but that is off-topic), and Saab, I assume they can certainly pay off a fair amount of their debt  (maybe $10B worth?) and the government can chip in some as well.

They would then be left with a reasonable dealer network with GMC, Chevy, Cadillac, and Buick that can turn profitable within a relatively short period of time I am guessing. Then, if they do not get too cocky and favor mild growth or no growth until the demand exists again, they can slowly repay more of their debt over the next 15-20 years.

Also, I think GM having 4 brands may still be too many and they need to deal with the fact that Buick and Cadillac compete against each other. What I would suggest is some sort of merger where the name Buick can be used in China and the regions where it does well and the name Cadillac in North America and Europe (how is Cadillac doing in Europe?). Cadillac's current objective is to be BMW-like and Buick's objective is to be more like Lexus. What I would suggest is for the two companies (as one) completely re-badge and re-engineer the platforms for their prospective markets, but use very similar technology.

If any of you have read this far, I would also call for a new strategy for GMC--with gas prices inevitably rising and fuel economy standards rising as well, they could maybe shift their focus to more specifically commercial vehicles and letting Chevy pick up the remaining slack with the civilian trucks and SUV's.

Comparing $16 billion for a bailout to $100 billion for bankruptcy is comparing apples to oranges.  The $16 billion is enough to get them through the next couple of months, after which they'll be back for more.  We could burn up $100 million easily before very long, without resolving the fundamental problems that are causing GM to lose so much money.

I don't see why the government should kick in money to pay GM's debt in a bankruptcy.  The government can't even pay its own debt.

I think your idea about reserving Buick for China is worth considering, rather than having Buick compete against Cadillac in the US.

[Vinsanity]

I like the idea where each brand only carries a few vehicles to minimize overlap:

Chevrolet:
Spark
Cruze
Volt
Orlando
Malibu
Camaro
Corvette
Equinox
Traverse

Cadillac:
CTS
STS/DTS replacement
Escalade
SRX, provided it's significantly more upscale than the Equinox
Converj (eventually)

Buick:
Lacrosse
Enclave

Pontiac:
G8
Solstice (although I do like the Saturn Sky better)

GMC:
Sierra
Yukon/XL
Colorado
allow Chevy to retain twins if it makes sense

IIRC, this shouldn't have that large of an effect on the dealer network since after Saturn is spun off, there will just be 3 groups of dealers anyways: Chevy, Cadillac, and Buick/Pontiac/GMC

[Catman]

I like the idea where each brand only carries a few vehicles to minimize overlap:

Chevrolet:
Spark
Cruze
Volt
Orlando
Malibu
Camaro
Corvette
Equinox
Traverse

Cadillac:
CTS
STS/DTS replacement
Escalade
SRX, provided it's significantly more upscale than the Equinox
Converj (eventually)

Buick:
Lacrosse
Enclave

Pontiac:
G8
Solstice (although I do like the Saturn Sky better)

GMC:
Sierra
Yukon/XL
Colorado
allow Chevy to retain twins if it makes sense

IIRC, this shouldn't have that large of an effect on the dealer network since after Saturn is spun off, there will just be 3 groups of dealers anyways: Chevy, Cadillac, and Buick/Pontiac/GMC

Buick and Pontiac look even more pointless now.

[sandertheshark]

If GM stop selling trucks with bowties on 'em, all sorts of flying hell is gonna break lose.

[the Teuton]

GMC is the Lexus to Chevy's Toyota when it comes to pickup trucks.  It doesn't matter if they're really the same thing.  GMC buyers don't usually buy Chevys,

[Vinsanity]

Buick and Pontiac look even more pointless now.

Those are probably the most relevant cars in each of their lineups

The Lacrosse would be the Malibu's upscale counterpart, as the Enclave would be to the Traverse. The G8 and Solstice are the only Pontiacs that have remotely sporty pretentions; the rest are Chevy's with kidney grilles.

Trust me, I would love nothing more than to see a Pontiac Firebird built on the Camaro's chassis with non-retro (think Solstice-derived) styling, but I know fully well that there's no place for it at this time.

[MX793]

Those are probably the most relevant cars in each of their lineups

The Lacrosse would be the Malibu's upscale counterpart, as the Enclave would be to the Traverse. The G8 and Solstice are the only Pontiacs that have remotely sporty pretentions; the rest are Chevy's with kidney grilles.

Trust me, I would love nothing more than to see a Pontiac Firebird built on the Camaro's chassis with non-retro (think Solstice-derived) styling, but I know fully well that there's no place for it at this time.

The G6 coupe and convertible would be worth keeping.  The only other midsize coupe GM has is the dated Monte Carlo, and they don't offer any other affordable 4/5 seat convertibles.

[Nethead]

It Gets Worse!

Just yesterday I posted conjecture that the bail-out would eventually reach a staggering $30,000,000,000.00.  God am I dumb!  That was only the  appetizer  in this feeding at the public trough!!

Check out the latest taxpayer tab from www.autoblog.com:

Total Bailout Bill: $97.4 Billion, with a 'B'
by Jeremy Korzeniewski on Feb 20th, 2009 at 10:58AM

With all the rescue/bailout talk going on here at Autoblog and, oh, just about everywhere else, you may find that it's tough to keep up with it all. Thankfully, the scribes over at  Detroit Free Press  have consolidated the discussion down to one easy-to-read but tough-to-comprehend figure: $97.4 billion. That's the total you get when adding up the initial $25.4 billion that automakers were promised to help retool their plants to build more fuel efficient cars; the $25.5 billion that auto suppliers have banded together to seek from the Feds and the $39 billion in loans that General Motors and Chrysler have requested from the feds to stave off a worst case scenario.

Of that $97.4 billion, a total of $24.9 billion has already been paid out to General Motors, GMAC, Chrysler and Chrysler Financial. If the entire amount were paid out, every American would then have contributed $874 to the auto rescue/bailout.

[CALL_911]

You know what I don't get? Why wouldn't they do away with Buick instead of Pontiac? Buick's main audience is gonna bite the dust shortly, and Buick itself is overshadowed by Cadillac. I don't know, I see Pontiac as being more lucrative in the future than Buick.

[the Teuton]

If we're all going to be poor as a result of this bailout, why doing we just incur poverty naturally and have done with it?  All this bailout is doing is distributing moderate poverty to everyone rather than extreme poverty to the underskilled and undereducated while those people with an inkling of skill will be able to stay afloat to some degree wisdom.

This thing seems to be supporting the principles of stupidity.

[Nethead]

You know what I don't get? Why wouldn't they do away with Buick instead of Pontiac? Buick's main audience is gonna bite the dust shortly, and Buick itself is overshadowed by Cadillac. I don't know, I see Pontiac as being more lucrative in the future than Buick.

CALL_911:  Exactly!  Unless they're thinkin' Baby Boomers will continue to drive deep into their nineties!  Dear God, noooooooooooooooooo...

Pontiac is a brand that's worth saving and worth promoting vigorously, despite having been relegated to re-badger status by GM Corporate for the last umpty-dozen years.  Buick leaves me meh--the only mainstream Buick anyone younger than a relic can truly get hard for was the '63 Riviera.  The Grand Nationals were just too few and too niche to show up on the long-term-relevance radar.  But the dramatically-styled '63 Riviera is the most glamorous full-sized two-door in US history. 

But that was 1963, and this is now:  Save Pontiac, sell Buick to the Chinese...

[Nethead]

www.leftlanenews.com released this today:

GM?s Opel seeking 2.6b euros from German government

General Motors? Opel division has announced it is seeking billions in aid from the German government as the U.S.? largest automaker continues to teeter on the verge of bankruptcy. The announcement comes on the heels of the news that one of GM?s other European brands, Saab, has filed for reorganization in a Swedish court.

According to Automotive News Europe, Opel is looking to secure $3.3 billion euros ($4.15 billion) in financing, with the majority of that sum coming from the German government. Under Opel?s plan, it would receive 2.6 billion euros from the German government and make up the remaining 700 million euros through further job cuts.

Opel was previously seeking between 1 billion and 2 billion euros from the German government, but GM?s worsening financial situation means the German automaker needs more outside help.

?On the basis of these changed conditions, we assume that Opel will need more than the 1.8 billion euros in guarantees originally discussed in Europe,? Opel?s finance chief said Marco Molinari told Reuters.

GM hasn?t announced any plans to sell its Opel brand

I'll repeat this:  Don't pay any deposit on ANY GM vehicle, domestic or foreign, that isn't sitting on the showroom floor!  No matter what chapter of bankruptcy GM files, you as a deposit maker instantly becomes a creditor, and the courts will decide what, if anything, you will get back if the vehicle cannot be delivered.

The dig for you is GM has no operating capital other than the bail-out bucks, so there isn't gonna be "business as usual" manufacturing going on while the courts resolve the issues--all production will cease just days after this happens since there is no money to buy parts, pay the employees, pay the utility companies, or even to ship completed vehicles.  GM is now behind on payments to suppliers, so the attorneys for the suppliers would probably block efforts to ship the completed vehicles anyway in order to have maximum assets on hand for settling of claims by the suppliers.  GM's suppliers have alerted their attorneys to act immediately to protect their (the suppliers) interests.  Do you have an attorney on retainer to protect yours?  It's a royal mess, so don't get involved or you may wind up getting the royal shaft.

Oh, yeah, don't buy any GM car that can't be titled and registered on the day of purchase!  You want that car titled to you and registered in your name in the least possible time in case orders come down to cease all operations pending further notice from HQ.  For that reason, don't buy any GM vehicle in the evenings or on the week-ends as the offices that can register your vehicle legally may not be open for business on evenings/week-ends.

The same self-defense techniques should probably be applied to the purchase of any domestic or foreign Cerberus/Chrysler vehicle, too, but the stuff coming over the teletypes doesn't sound as dire.

[SVT666]

Report: Chrysler still interested in GM merger

Chrysler and General Motors called off their merger talks in November of last year, but a new report indicates Chrysler could once again be entertaining a GM tie-up. Both Chrysler and GM are in difficult financial situations, relying on the U.S. government to provide enough funding to keep their operations up and running.

Per a Bloomberg report, Chrysler has identified a GM merger as its ?best option? for survival. Although GM is still opposed to an alliance with its cross-town rival, it remains possible that the Obama administration could force the two into a ?shotgun marriage?.

?We knew we would get asked questions about our earlier discussions related to proposed alliances, so we decided to be very upfront and put it all in the presentation,? Chrysler spokesman Stuart Schorr told Bloomberg.

Although it would seem to reason that adding two negatives would result in an even bigger deficit, there is actually a fairly positive upside to a Chrysler-GM merger. According to Chrysler, a merger with GM would likely bear more fruit than a Chrysler-Fiat alliance. Early estimates suggest a Chrysler-Fiat alliance would improve annual earnings by $7.4 billion, where as a Chrysler-GM alliance would result in an improvement of about $8.3 billion. Annual cash flow would also improve by about $1 billion in a Chrysler-GM scenario.

Moreover, a Chrysler-GM tie-up could also benefit Ford as it would create the Big Two ? leaving a bigger piece of the market for the Blue Oval.

However, a Chrysler-GM alliance is still far from a sure bet. Chrysler says it is still committed to its recently announced tie-up with Italy?s Fiat, and GM still opposes such a merger. But with options running out on both sides, anything is still possible.

[SVT666]

WTF???

[2o6]

Huh?


Chrysler is in quite a few places. FIAT, GM, Nissan, The Chinese (Most notably, Chery) and a few other companys.

[Vinsanity]

The G6 coupe and convertible would be worth keeping.  The only other midsize coupe GM has is the dated Monte Carlo, and they don't offer any other affordable 4/5 seat convertibles.

the G6 coupe/convertible are okay, but I don't see them as big sellers. And they'll be made less relevant with the debut of the Camaro (which hopefully will eventually get the chop-top treatment). Although I would love for a Firebird (as aforementioned) to have a drop top or a sliding glass roof, maybe Pontiac can make do with exclusive coupe and convertible versions of the Chevy Cruze.

And while I'm thinking wishfully, a CTS convertible would be near the top of my imaginary shopping list

[MX793]

the G6 coupe/convertible are okay, but I don't see them as big sellers. And they'll be made less relevant with the debut of the Camaro (which hopefully will eventually get the chop-top treatment). Although I would love for a Firebird (as aforementioned) to have a drop top or a sliding glass roof, maybe Pontiac can make do with exclusive coupe and convertible versions of the Chevy Cruze.

And while I'm thinking wishfully, a CTS convertible would be near the top of my imaginary shopping list

A Camaro Vert, if it is ever made, might not appeal to as broad an audience.  For one, it'll likely be more expensive, and for another, I doubt it will have the rear seat space (or the retractible hardtop).

[CALL_911]

CALL_911:  Exactly!  Unless they're thinkin' Baby Boomers will continue to drive deep into their nineties!  Dear God, noooooooooooooooooo...

Pontiac is a brand that's worth saving and worth promoting vigorously, despite having been relegated to re-badger status by GM Corporate for the last umpty-dozen years.  Buick leaves me meh--the only mainstream Buick anyone younger than a relic can truly get hard for was the '63 Riviera.  The Grand Nationals were just too few and too niche to show up on the long-term-relevance radar.  But the dramatically-styled '63 Riviera is the most glamorous full-sized two-door in US history. 

But that was 1963, and this is now:  Save Pontiac, sell Buick to the Chinese...

Looks like GM hasn't wised up any. 

Saturn, I can understand. Pontiac, I really cannot.

[Byteme]

GM's stock tanked today and their market capitalization is now under 1 billion dollars.
Is GM stock worthless?

FROM CNBC's web site:

Halfway through the trading day, GM shares hit levels not seen since 1938.

Shortly after 1 pm, they dropped under $1.60 a share (down 19% for the day) and GM's market cap slipped below $1 Billion. To put this fall into some perspective, consider that GM's market cap in 1929 was $4 Billion. At this level, according to Global Financial Data, GM should probably be moved to the S & P 600 Small Cap Index.

Why the sell off today?

There is a growing concern among investors that GM shares will eventually be worth $0 because the stock will be diluted if GM successfully converts a sizable chunk of it's debt into equity stock. Buckingham Research estimates GM's current 732 Million outstanding shares could balloon to more than 15 billion if GM completes a debt for stock exchange. 15 Billion shares! Would you want to own a 100 or 1000 shares of company with 15 Billion outstanding shares?

Bottom line: A lot investors are starting to wonder if GM stock is worthless.

[Vinsanity]

A Camaro Vert, if it is ever made, might not appeal to as broad an audience.  For one, it'll likely be more expensive, and for another, I doubt it will have the rear seat space (or the retractible hardtop).

One thing's for sure, if they're going to keep the G6 around, they can't let the old design linger for too much longer. I maintain that they would be better served with exclusive coupe and convertible versions of the Chevy Cruze.

[Nethead]

"Bottom line: A lot investors are starting to wonder if GM stock is worthless."

What exactly is there to wonder about?

[SVT666]

High-performance Camaro, Corvette models safe despite death of HPVO

General Motors recently announced that it has killed its High Performance Vehicle Operations, but that doesn?t necessarily spell the end of performance-minded GM vehicles. In fact, a number of GM performance vehicles could completely sidestep the ax.

GM spokesman Vince Muniga revealed to Edmunds that a number of GM vehicles won?t be affected by the death of HPVO. Cars like the Chevrolet Camaro SS, Corvette ZR1 and Z06 were actually engineered as standard vehicles, with no affiliation whatsoever to GM?s HPVO.

?Camaro SS, Corvette ZR1 and Corvette Z06 are all regularly engineered cars,? Muniga told Edmunds. ?They did not go through HPVO. Most people did not realize that. They are safe.?

However, Cadillac?s V-Series cars and other high-performance models ? such as the Chevrolet Cobalt SS and HHR SS and Pontiac G8 GXP ? were developed through HPOV. Those vehicles will continue as planned for the time being, but likely won?t be replaced after their current lifecycle is up.

But all hope might not be lost as Muniga compared GM?s HPOV to Ford?s SVT. Ford?s Special Vehicle Team stopped production in 2004, but has reformed to create the Ford Raptor. ?This is an indefinite hiatus,? he added.

[SVT666]

But all hope might not be lost as Muniga compared GM?s HPOV to Ford?s SVT. Ford?s Special Vehicle Team stopped production in 2004, but has reformed to create the Ford Raptor. ?This is an indefinite hiatus,? he added.

Actually SVT never went away.  SVT developed the Ford GT and then started work on the Shelby GT500.

[FlatBlackCaddy]

Gm's done, the first round of bailouts was enough to  buy GM at today MC 9 time over. Wagoneer is looking for more tax payer money to burn.

[JWC]

GM and Sweden refused to save Saab...Saab division has declared bankruptcy.  It will try to go back to being independent....hopefully.

[2o6]

GM and Sweden refused to save Saab...Saab division has declared bankruptcy.  It will try to go back to being independent....hopefully.

It seems like GM never fully carries out and maintain it's good Ideas.


Saturn SL: Even with it's faults, it was a strong seller and had a loyal fan base. Updated to the horrible ION which was just a GM parts bin car.

Saab: The NG 900/9-3 was a great car, and so was the 9-5. Yet, no updates. Then when they were updated, they became parts bin cars.

Pontiac: Even if you didn't like the cladding, it was much more differentiated from their Chevrolet siblings. They drove differently (I didn't say better!) than their chevrolet siblings. Lack of updates, then when updated, like Saab and Saturn they were turned into parts bin cars.

[JWC]

I've always had a "thing" for Saab.  A neighbor in my apartment complex (back in Cali) had a Sonett that I drooled over. Probably because I enjoyed reading about Satch Carlson's Sonett rally car in the old days of Autoweek.

I had a 9/5.  I still miss the car, but the electronics were becoming a pain in the ass, so it had to go. 

[dazzleman]

I've always had a "thing" for Saab.  A neighbor in my apartment complex (back in Cali) had a Sonett that I drooled over. Probably because I enjoyed reading about Satch Carlson's Sonett rally car in the old days of Autoweek.

I had a 9/5.  I still miss the car, but the electronics were becoming a pain in the ass, so it had to go. 

I've liked Saab ever since they made their design more mainstream in the late 1990s.  Before that, I thought they were an egghead, college professor car.

[JWC]

Who can argue with a V4?