GM stock

[CMG]

Is GM stock worth a little more than $3 now? Somebody just posted it on another forum, I thought it was 4 bucks...?

Amazing how bad the automakers are doing for that to be thinkable IMO. What the heck is going on?

[ZL-1]

They are not profitable, they do not generate cah flow... as an investment they're useless unless someone needs some losses for tax planning purposes...

Edited November 10, 2008 by ZL-1

[ellives]

What the heck is going on? They're heading for bankrupcy.... quick...

Is GM stock worth a little more than $3 now? Somebody just posted it on another forum, I thought it was 4 bucks...?

Amazing how bad the automakers are doing for that to be thinkable IMO. What the heck is going on?

[GXT]

Is GM stock worth a little more than $3 now? Somebody just posted it on another forum, I thought it was 4 bucks...?

Amazing how bad the automakers are doing for that to be thinkable IMO. What the heck is going on?

GM is worth negative 60 Billion and it sounds like they have just a few months left without a government bailout.

[smk4565]

$3.42 a share as of 2:30 pm. Down 21% today. Analysts today released a price target of $0-1. I predict bankruptcy in January.

If there is a government bailout it will have strings attached, like new management, new business model, and lots of restructuring, part of which may be bankruptcy.

[CARBIZ]

GM is not going bankrupt. They are too big to fail. They have too many government contracts, too many ties to Washington, etc.

I guess the vultures who drove oil to $147 a barrel have moved their money and are now trying to find another way to screw over consumers.

[smk4565]

$3.27 a share now.

Even if the government gives them $25 billion, they will burn through that cash in 1 year and be in exactly the same situation this time next year. Congress knows this and won't just give them $25 billion without some proof that GM can reorganize their business to make profit. They haven't made profit in 4 years, the 8 brand strategy is killing them, are are the union and dealer network.

[ZL-1]

$3.42 a share as of 2:30 pm. Down 21% today. Analysts today released a price target of $0-1. I predict bankruptcy in January.

If there is a government bailout it will have strings attached, like new management, new business model, and lots of restructuring, part of which may be bankruptcy.

I did a little Valuation exercise of GM stock before I moved South and it was between $0 (with not-so-pessimistic assumptions) and $20-something (with a fairly rosy macro/car market scenario). It all depends on the cash burn rate (which GM is unable to change at this point), and restructuring its NA operations (which takes cash that GM doesn't have). To a lesser degree, Western Europe operations would need adjustment as well since demand growth is mostly in Eastern Europe...

Basically, GM cannot generate cash and does not have the cash it needs to restructure... Not pretty...

[Chicagoland]

GM should get Russia and China to help with bail out too! The UK govt is even offering assistance, so should other countries with large GM presence.

[Northstar]

GM should declare bankruptcy right now, because it's bound to happen. Might as well start to try to turn things around right now instead of waiting. It's quite possible that the union will be gone or at least won't give GM such an unfair advantage... I think GM needs probably $50 billion from the government to really turn things around after declaring bankruptcy. That will give them enough money to run for a while and at the same time develop some very competitive vehicles.

[regfootball]

$3.27 a share now.

Even if the government gives them $25 billion, they will burn through that cash in 1 year and be in exactly the same situation this time next year. Congress knows this and won't just give them $25 billion without some proof that GM can reorganize their business to make profit. They haven't made profit in 4 years, the 8 brand strategy is killing them, are are the union and dealer network.

the government is well aware that if they let GM file bankruptcy it gives them the ability. the ability to restructure and still lose lots of dealer and supplier jobs.

everyone likes to moan about GM having 'too many brands' but that is not the case. Like Mark LaNeve said, there are too many other brands, why should GM's brands be the ones to go? Why should Mitsubishi be here if Buick can't?

there ARE too many dealers. But here is the thing. A mass termination of brands and dealers even with bankruptcy will have a terrible ripple ripple effect. Going bankrupt for the purpose of trimming brands makes no sense and look at all the immediate impact of severe dealer termination.

The brands are an asset if the product is there and unique between each other, i still feel that. The government helping them out to get them to critical mass point where they can benefit from that will help us all.

I think the main thing is a gradual reduction in dealers and consolidation. Myself, I see no reason why Buick/Pontiac?GMC can't be folded into a dealer network with Chevy. Saab/Caddy/Hummer. Saturn is GME in NA, and could even be folded into Cadillac dealer network as well.

I don't see proctor and gamble or general mills having to trim brands. likewise, a brand is an asset and Gm does not need to trim brands. They need to get leaner and meaner, but triimming brands is not how you do it. Trimming dealers may need to happen but don't cut half of them at one time.

If the economy was good and gas and mortgages hadn't bankrupted families, and sales were at 15mill anual rate or 16 mill, GM would be doing ok.

Another reason the govt needs to think hard. 60% of GM sales is overseas. GM goes under and now the US has lost a major presence in one of the biggest trade markets in the world. Not good for economic strategy long term, much less for military strategy.

Edited November 10, 2008 by regfootball

[haypops]

The solution to GM's problem is simple. Kill to birds with one stone. No one likes the cruise name to rename the new Chevy compact as the "AIG". This will allow for a government bailout "big time".

[cletus8269]

The solution to GM's problem is simple. Kill to birds with one stone. No one likes the cruise name to rename the new Chevy compact as the "AIG". This will allow for a government bailout "big time".

They are up to 150 billion now right?

Edited November 10, 2008 by cletus8269

[A Horse With No Name]

GM is not going bankrupt. They are too big to fail. They have too many government contracts, too many ties to Washington, etc.

I guess the vultures who drove oil to $147 a barrel have moved their money and are now trying to find another way to screw over consumers.

+1

Chris

[GXT]

They are up to 150 billion now right?

It is insane, isn't it? $700 Billion seemed like so much and now over 1/5 of it is earmarked for one company.

[smk4565]

everyone likes to moan about GM having 'too many brands' but that is not the case. Like Mark LaNeve said, there are too many other brands, why should GM's brands be the ones to go? Why should Mitsubishi be here if Buick can't?

there ARE too many dealers. But here is the thing. A mass termination of brands and dealers even with bankruptcy will have a terrible ripple ripple effect. Going bankrupt for the purpose of trimming brands makes no sense and look at all the immediate impact of severe dealer termination.

The brands are an asset if the product is there and unique between each other, i still feel that. The government helping them out to get them to critical mass point where they can benefit from that will help us all.

I don't see proctor and gamble or general mills having to trim brands. likewise, a brand is an asset and Gm does not need to trim brands. They need to get leaner and meaner, but triimming brands is not how you do it. Trimming dealers may need to happen but don't cut half of them at one time.

If the economy was good and gas and mortgages hadn't bankrupted families, and sales were at 15mill anual rate or 16 mill, GM would be doing ok.

GM's brands have to go because they can't afford to fund them or provide them with competitive product. It would take over $10 billion a year in R&D to do so and they spend close to 5. Mitsubishi is terrible, but they aren't about to go bankrupt. GM's brands aren't an asset, they are a liability at this point, because they are redundant and underfunded and compete against each other.

Procter and Gamble and General Mills aren't going bankrupt either, so they get to keep their brands.

The economy was not this bad in 2005 and GM lost money, wasn't this bad in 2006, GM lost money, was bad, but not this bad in 2007, GM lost money. Toyota in this economy will make at least $5 billion in profit this year. They don't need a bailout.

If GM can't make money in a down economy, they shouldn't exist. They need a radical change to change their business model, probably 30% of their workforce and dealers will lose their jobs, but 30% loss is better than 100% loss.

[cletus8269]

The economy was not this bad in 2005 and GM lost money, wasn't this bad in 2006, GM lost money, was bad, but not this bad in 2007, GM lost money. Toyota in this economy will make at least $5 billion in profit this year. They don't need a bailout.

has toyota become the new bmw or something? the last time i checked it looked like toyota was having just as much trouble as everyone else in the car business. everyone including TOYOTA posted losses this go round. i may be dumb as a rock when it comes to math but bad economy = less spending in my book so if you spend less those that you normally buy from will post a loss. its like blaming subway for losing money and sales when everyone was on that stupid no carb atkins diet trip.

[daves87rs]

GM is not going bankrupt. They are too big to fail. They have too many government contracts, too many ties to Washington, etc.

I guess the vultures who drove oil to $147 a barrel have moved their money and are now trying to find another way to screw over consumers.

+2

[biff]

I can't believe how low GM's market cap is.

With W and Paulson's blank checks and tax breaks to banks who will waste your tax dollars on CEO bonuses and dividends for stock holders it's easy to see where their priorities or shall I say 'buddies' are. The auto industry indirectly supports so much other industry in this country and they're doing nothing to fix the mess they've helped create. They don't care. Paulson's already scammed his millions from Wall St and myself and thousands of others are wondering if we have a job next month. Guess they don't have any buddies in the auto industry.

[smk4565]

has toyota become the new bmw or something? the last time i checked it looked like toyota was having just as much trouble as everyone else in the car business. everyone including TOYOTA posted losses this go round. i may be dumb as a rock when it comes to math but bad economy = less spending in my book so if you spend less those that you normally buy from will post a loss. its like blaming subway for losing money and sales when everyone was on that stupid no carb atkins diet trip.

Toyota posted a $200 million or so North American loss, but made profit worldwide. Toyota is having a bad year like everyone else, but at the end of it they will have turned a profit. That is the difference between them and the Detroit 3, they can ride out the storm of a bad economy, stay in the black, and wait for the market to rebound.

I want to see GM come up with a plan in case the government turns them down. If the government bails them out, then airlines want a bailout, then retailers like circuit city will, and on and on. At some point the government (which also has no money) is going to stop giving bail outs.

I am not a fan of the gov't giving $150 billion to AIG either. Although if the stock rebounds they could make that back, but I don't like rewarding failed management. Wagoner makes $14.4 million a year, giving him a $25 billion check for his incompetence is no different. I suspect that there will be some government bailout but only once GM files chapter 11 and reorganizes and meets some stipulations from Congress.

Edited November 11, 2008 by smk4565

[thegriffon]

GM is too big to fail, but unfortunately too many people don't understand that. That includes congressmen on both sides. GM sells as many cars as Toyota, but has many fewer models. They need to spend just as much to stay competitive, but can't. Cutting the brands they have doesn't solve anything. They've been cutting models for years and all it does is cost them sales, reducing their development budget even further. You think more of the same taken to an even greater extreme will turn things around? What GM needs to do is not cut brands, or cut models. They need to restore margins. They need to cut production costs and increase transaction prices so they can fund the same level of development that Toyota does. Cutting a brand such as Pontiac or Buick robs them of billions of dollars they do not have, and does not improve their situation. They can keep cutting brands and models until they have only Chevrolet left and cannot finance a single new engine, transmission or replacement model. If they can restore margins, then they don't need to cut brands, and if they can't, cutting brands will not help. On that front they have been doing the right thing, not fast enough, and not consistently enough, but they have been doing it. Restoring resale by keeping inventory in control and cutting sales to daily rental. Increasing transaction prices across the board. Improving perceived value by new interiors and better design. Negotiating new contracts to slash healthcare and wage costs to match Toyota. Cutting redundant model investment by selling the same models in different markets. Even if you don't count the Japanese dealer channels (which add Toyopet, Netz and Corolla as addition brands) or medium trucks (Hino), Toyota still has 5 brands in different markets (Toyota, Scion, Daihatsu, Perodua and Lexus—4 in the same European markets), and will probably add a 6th. It's all about profitability, and nothing about the cost of running so many brands. If they made just $3000 on every Pontiac (closer to what Honda and Toyota do), they could finance a new model program, from scratch (new unique architecture and body), every year, even selling just 300,000 a year. Even this year they would come close to that and they have no such totally unique models. At that level Pontiac could sustain 5 unique models (more than they need), with almost no carryover from one generation to the next, and no model or platform sharing at all (engines and powertrain are another matter).

[regfootball]

GM's brands have to go because they can't afford to fund them or provide them with competitive product. It would take over $10 billion a year in R&D to do so and they spend close to 5. Mitsubishi is terrible, but they aren't about to go bankrupt. GM's brands aren't an asset, they are a liability at this point, because they are redundant and underfunded and compete against each other.

Procter and Gamble and General Mills aren't going bankrupt either, so they get to keep their brands.

The economy was not this bad in 2005 and GM lost money, wasn't this bad in 2006, GM lost money, was bad, but not this bad in 2007, GM lost money. Toyota in this economy will make at least $5 billion in profit this year. They don't need a bailout.

If GM can't make money in a down economy, they shouldn't exist. They need a radical change to change their business model, probably 30% of their workforce and dealers will lose their jobs, but 30% loss is better than 100% loss.

well how do you figure GM avoiding paying all that healthcare and such for the last how many years?

[thegriffon]

BTW, Toyota's NA loss in the quarter was not $200 million. It was $353 million. That figure is misleading however. Toyota's losses in NA actually include a reduction in export income for the Japanese operations of an additional $461 million, due entirely to the appreciation of the yen. In effect the Japanese unit is absorbing the cost increases the NA unit should face. If that cost was passed on, the NA loss would be more like $US814 million. Say it with me: OUCH!!!

[smk4565]

GM is too big to fail, but unfortunately too many people don't understand that. That includes congressmen on both sides. GM sells as many cars as Toyota, but has many fewer models. They need to spend just as much to stay competitive, but can't. Cutting the brands they have doesn't solve anything. They've been cutting models for years and all it does is cost them sales, reducing their development budget even further. You think more of the same taken to an even greater extreme will turn things around? What GM needs to do is not cut brands, or cut models. They need to restore margins. They need to cut production costs and increase transaction prices so they can fund the same level of development that Toyota does. Cutting a brand such as Pontiac or Buick robs them of billions of dollars they do not have, and does not improve their situation. They can keep cutting brands and models until they have only Chevrolet left and cannot finance a single new engine, transmission or replacement model. If they can restore margins, then they don't need to cut brands, and if they can't, cutting brands will not help. O

GM's brands prevent them from getting high margins. The Malibu competes with the Aura and G6 to drive down transaction prices of all 3. Same with the Enclave-Acadia. If you put a $2500 rebate on an Acadia, then Buick dealers want an incentive to sell more Enclaves, so the Enclave gets $2500 off.

GM had to cut or rename models because so many were dated or uncompetitive. Cutting brands reduces white collar employees and marketing budgets. GM has tried layoffs and cost cutting for 15 years and it hasn't worked. They need Fewer brands and MORE R&D spending, essentially doubling R&D on each car.

Toyota profit first 9 months of 2008 is $7.2 billion. Never in my life will I buy a Toyota, but the company is fine and will continue to be fine.

Edited November 11, 2008 by smk4565

[BuddyP]

stock at $2.87 as of 10:15 am EST

[CARBIZ]

GM's brands prevent them from getting high margins. The Malibu competes with the Aura and G6 to drive down transaction prices of all 3. Same with the Enclave-Acadia. If you put a $2500 rebate on an Acadia, then Buick dealers want an incentive to sell more Enclaves, so the Enclave gets $2500 off.

GM had to cut or rename models because so many were dated or uncompetitive. Cutting brands reduces white collar employees and marketing budgets. GM has tried layoffs and cost cutting for 15 years and it hasn't worked. They need Fewer brands and MORE R&D spending, essentially doubling R&D on each car.

Toyota profit first 9 months of 2008 is $7.2 billion. Never in my life will I buy a Toyota, but the company is fine and will continue to be fine.

The G-6 and Malibu don't really compete. 90% of the buying public wouldn't recognize them as the same platform. They are about the same size, but that is where the similarity ends. They are a good example of platform sharing; however, the Aura and Malibu are horrid rebadges, but Saturn barely exists so it isn't a huge competitor either.

[smk4565]

The G-6 and Malibu don't really compete. 90% of the buying public wouldn't recognize them as the same platform. They are about the same size, but that is where the similarity ends. They are a good example of platform sharing; however, the Aura and Malibu are horrid rebadges, but Saturn barely exists so it isn't a huge competitor either.

The rebadges kill them because if the Chevy dealer offers $16,000 for a Cobalt, the consumer can go to the Pontiac dealer to see if they get $15,000 on a G5, then back to Chevy to see if they can get $14,500. People that primarily shop GM products can drive down the price by pitting Chevy dealers against Pontiac, Saturn or Buick, etc. The Lambdas are awfully similar, so they must compete with each other, as well as the imports and Ford.

Stock is at $2.92, a 65 year low. The company has lost $60 billion over the past 5 years and for some reason Wagoner isn't taking any blame and the company seems that "stay the course" and business as usual is the way to go.