AND 
GM Submits 2009 – 2014 Restructuring Plan to the US Government
GM tonight along with Chrysler submitted plans to the newly formed Government Auto Task Force explaining how they will achieve viability. GM’s 117-page plan spells out in detail the methods they plan on using to achieve viability, or net positive value, that they promised they would in exchange for $13.4 billion in loans they’ve already received. The last $4 billion payment from that in fact came today.
The Auto Task Force will have 6 weeks, until March 31st, to decide if the methods described by GM are adequate to allow the company to continue to operate or if the loans will be called back and the company forced into bankruptcy.
GM has broken their plan down into the following areas, and bases it on a projected 11.5 -12 million units of vehicles sold per year:
1. Dealerships and brands will be reduced. It was noted that Hummer and Saturn will either be sold or phased out, with Hummer potentially gone by March 31, and Saturn by the end of 2011. Saab will be sold with support from the Swedish government. Pontiac will become a niche brand. Total dealerships will be reduced from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014
2. Every car and crossover GM will produce from 2009 to 2012 will be fuel efficient. Building the Volt pack assembly plant and advanced battery lab are also part of the plan.
3. They will close an additional 14 assembly plants by 2012. 47,000 jobs will be eliminated in 2009.
4. The Jobs Bank has been eliminated and additional agreements have been achieved and will be ongoing in negotiations with the UAW.
5. Debt reduction from $28 billion to $9 billion will be achieved, with bondholders by the end of March and with the UAW by the end of May. At this point however a deal has not yet been struck.
6. GM is requesting an additional $16.6 billion in government loans by 2011 in addition to the $13.4 they have already received, for a grand total of $30 billion in government loans. Additional funds will be sought from Canada, Germany, and Sweden.
7. Bankruptcy is considered as an option per the government’s request but GM considers it to be a “too risky costly, and time-consuming” alternative per CEO Rick Wagoner. It was suggested that bankruptcy would cost $100 billion.
GM said it needs $2 billion in March, $2.6 billion in April, $4.5 billion to replace a credit line by 2011, and if conditions worsen, a $7.5-billion credit line.
96 Responses to “GM Submits 2009 – 2014 Restructuring Plan to the US Government”
Leave a Reply
Recent Posts
- GM Will Not Create a Line of Volt-Branded Vehicles
- Video: GM’s Rough Road Chevy Volt Testing
- Chevy Volt is the Centerpiece for Many Rapidly Emerging Industries
- GM Wins* October Sales Race; Decides to Keep Opel Citing Improved Financial Health
- One-Year Left to Volt Launch: Has the Date Slipped?
- GM’s Expectations for the Chevy Volt
- 7 Questions for Site Founder/Neurologist/NYC Marathon Runner Lyle Dennis
- Volt Chief Frank Weber Going to Opel
- GM Delays Launch of Volt’s ‘Sister’ Car, the Chevrolet Cruze
- GM CEO Says Help Needed to Achieve Mass Adoption of Electric Cars
Recent GM-Volt Forum Posts
- Embrace technology to turn nuclear energy into environmental solution November 6, 2009From the Seattle Times: "STEWART Brand, author of "The Whole Earth Catalog," visited Seattle last week, promoting his latest environmental manifesto... […]misslexi
- Lutz to Head Opel November 6, 2009Der Spiegel reports that Lutz is going to head up Opel: Spiegel Online(link)... […]dagwood55
- Do home chargers include meters? November 6, 2009I conduct a real-world fuel economy survey (http://www.truedelta.com/fuel_economy.php), and will want to adapt it for electric and range-extended... […]mkaresh
- HHSE (Hybrid-Hybrid-Serial-Electric) vehicle invented November 5, 2009A HHSE is a cross between using a lower efficiency but more functional serial hybrid drivetrain for city driving and using a mechanical drivetrain to... […]Texas
- Renault, Nissan to build $892 million battery factory outside Paris November 5, 2009“This will be the center of our lithium battery production for all of our assembly plants and for other carmakers,” Ghosn said. “It’s a major... […]Texas
- GM to cut 10,000 Jobs Across Europe After Sudden U-Turn on Opel Deal November 5, 2009Max Keiser on Russia Today. " ... General Motors cut ten thousand jobs across Europe at its Opel unit in favor of Christmas bonuses." -Max... […]Guy Incognito
- Nissan Releases Concept Sketch Of Light Commercial Electric Vehicle November 5, 2009NISSAN RELEASES CONCEPT SKETCH OF LIGHT COMMERCIAL ELECTRIC VEHICLE _Link_... […]Jason M. Hendler
GM-Volt.com is not affiliated with General Motors Company
All contents copyright 2007-2009 GM-Volt.com, LLC - All Rights Reserved
Home | Contact | Privacy Policy | About | Back to Top
February 17th, 2009 at 7:12 pm
Whose got a spare 16 billion on them? Anyone?
That minimum level of 12.5 million for viability GM gave a couple months ago, they estimate it down to 10.5 now (Chrysler has it at 10.1)…the rest of the world, around 9. They do not explain how ‘new math’ works.
(Quote)
February 17th, 2009 at 7:17 pm
Anyone? anyone? Going once. Going twice…..
(Quote)
February 17th, 2009 at 7:18 pm
I’m glad the Volt was mentioned early on. I should be GM’s top priority.
(Quote)
February 17th, 2009 at 7:19 pm
I think I’m going to be sick! I have been driving Saturn for 12 years.
(Quote)
February 17th, 2009 at 7:21 pm
“5. Debt reduction from $28 billion to $9 billion will be achieved, with bondholders by the end of March”
I’ll paraphrase Wagoner in the telecast on this subject, “Hopefully this will be achieved my osmosis or possibly woodland fairies.”
As FYI, in the plan it just says talks have been ‘intiated’
(Quote)
February 17th, 2009 at 7:23 pm
This situation reminds me of a South Park episode about the Loch Ness monster legend…
THOMAS
-and I yelled. I said, “What do you want from us, monster?!” And the monster bent down and said, “…Uh I need about tree-fitty.”
KYLE
What’s tree-fitty?
THOMAS
Three dollars and fifty cents.
NELLIE
Tree-fitty.
STAN
He wanted money?
THOMAS
That’s right. I said “I ain’t giving you no tree-fitty you goddamn Loch Ness monster! Get your own goddamn money!”
NELLIE
I gave him a dollar.
THOMAS
She gave him a dollar.
NELLIE
I thought he’d go away if I gave him a dollar.
THOMAS
Well of course he’s not gonna go away, Nellie! You gave him a dollar, he’s gonna assume you got more!
(Quote)
February 17th, 2009 at 7:35 pm
I hate to say it, but GM needs to go bankrupt before it can be saved.
(Quote)
February 17th, 2009 at 7:36 pm
Plan based on 11.5 to 12 million, but a realistic estimate puts vehicle sales at 9 to 10 million. So the obvious response is too little too late.
(Quote)
February 17th, 2009 at 7:36 pm
Don’t worry, Obama has lots of money, and he’s looking for things to throw his money at. Heck, he just signed a $787 spending bill that will cost over a $trillion with interest. Even includes billions for things like climate change research, whatever that is.
Seems like he should be able to spare a little for a loan to Detroit.
(Quote)
February 17th, 2009 at 7:40 pm
The estimated vehicles sold per year are probably averaged over a number of years (they state they will repay the loans in 2017). No one can predict that, but would it stay as low as 9 million for 5 years?
The loan requests are staged. Could it be less than $30 billion? I suppose it is possible.
From the AP
GM predicted it could run out of money next month and said it wants to receive an additional $2 billion in March and an additional $2.6 billion in April.
The company has a $4.5 billion revolving line of credit that must be refinanced in 2011 but now believes that private funding won’t be available, so the automaker is asking the government to lend the money.
If market conditions deteriorate, GM says it may also need an additional $7.5 billion revolving line of credit to stay afloat, for a total potential request of $30 billion.
(Quote)
February 17th, 2009 at 7:42 pm
#8 Van,
Didn’t Obama just say that on Friday? That whatever plan was presented needed to take into account REAL sales probabilities? In my opinion sales have been at a unsustainable level for some time, and a correction is going to be an over-correction for a while, until well made used cars are simply too old to be perfectly viable alternatives.
IMHO 9 million should be the aggressive target, with everything on top of that as gravy.
(Quote)
February 17th, 2009 at 7:54 pm
I think this is GM’s way of begging the govt to send them into bankruptsy.
(Quote)
February 17th, 2009 at 7:55 pm
Has anyone else noticed that when Saturn first came out that it was a whole line of small efficient cars. Now there is 2 Suv’s, 2 Sports cars and a good sized sedan!! what the heck happened?! Sounds like they shot them selfs in the foot there, and its real sad too see.
I really hope we get our volts and they just dont end up being suv’s
(Quote)
February 17th, 2009 at 7:55 pm
So the live conference is over. I’ll nutsell the situation as I see it:
UAW:
—We have a tenative deal, you can’t see it, or evaluate it….until we work out VEBA
VEBA:
—We are too afraid to even talk about it with them…can you give us until the end of May on that one?
Bondholders:
—We phoned up the 10 member committee and had some coffees, we reiterated the ridiculous 30% debt/equity swap, unfortunately two of them choked on their coffee and the meeting had to end. We got a fax later saying they wanted 50% (10% cash now, 40% gov’t backed)…we then choked on our coffee, but decided to just mark that down as, ‘talks intiated’ in ‘the plan’…looks better
More money:
—If the SAAR goes below the 10.5 we just estimated, say, down to 9.5 we will requesting a full 30 billion in total. (We would like you to ignore that the fact the SAAR for the first 6 weeks of the year is at about 8-8.5 million…so we are basically saying, we are already tapped and need more money)
What will we do with this gov’t money?
–We are going to fire 47,000 more employees directly…and probably release another 200,000 indirectly through dealership shut downs. We will are also hinting at selling off some valuable foreign assets, mainly with the German gov’t.
So whats new in this ‘plan’ over the last?
–Nothing. But we are ‘re-talking’ about all the stuff we already said we would do, and rounding up a couple numbers.
Is there actually anything in here other than cutting brands and reducing capacity?
—What you mean like using a portion of the money to actually make cars people want to buy, or take GM in a new direction? Nah. But this extra money will be handy to buy out all the HUMMER/Saturn dealers.
Delphi?
–this revised plan includes near term support and some other stuff, but it is pretty deep in our ‘viability plan’ so no one will see that
AC Delco aftermarket parts sale?
–yeah, we said we can sell it for 1.5 billion, but no so much luck so far…if it doesn’t go through, we will be needing more ‘liquidity’
HUMMER sale?
We got no one, but we have finally decided to has to go…like now.
Is there any word on Q4/annual reports coming?
–Hehe, too funny
(Quote)
February 17th, 2009 at 7:57 pm
@Scott Casteel 4
“I think I’m going to be sick! I have been driving Saturn for 12 years.”
Yeah same here due. I have a 97 SL2, still runs. Don’t worry though, there are mechanics/techs that can work on these cars everywhere.
Just build my Volt Dangit!
(Quote)
February 17th, 2009 at 7:59 pm
Closing 14 plants and laying off 47,000 AND divesting Saturn! Whew! Is that 47,000 worldwide or just the US?
What is the total GM workforce? Is 47K a drop in the bucket or a major percentage?
So much for saving jobs….
BUT better than the whole company going belly up. The lesser of two evils as they say.
(Quote)
February 17th, 2009 at 8:03 pm
They also have a half-a**ed attempt at spelling out a bankruptcy plan.
Of interest the quantify what the really feel the volume loss would be from the process…and the approximate time of the process
Pre-packaged C11: 3-4% 60-65 days
Cram down C11: 5-9% 90 days
Traditional C11: 10-13% 18-24 months
Is it just me, or is this a lot more optimistic than the company line as been. Those numbers don’t sound ‘catastrophic’ or ‘not a option’
The ‘bankruptcy analysis’ is a good read, starts on page 103 if anyone is interested:
http://media.gm.com/us/gm/en/news/govt/docs/plan.pdf
(Quote)
February 17th, 2009 at 8:03 pm
Did they agree to Obama’s $500K Salary Cap too?
(Quote)
February 17th, 2009 at 8:11 pm
As FYI, I think I just realized why their Q4 2008 is delayed:
The attachments at the end of the plan are all financial numbers from Q3 September 30th, 2008…and therefore form the base for calculations throughout the ‘new plan’
(Quote)
February 17th, 2009 at 8:19 pm
Black Gold is trading at $34.89 at 7:21pm EST.
Do we really need a Volt at this time ???
I think we need a 40+ MPG Cruze more than a Volt.
(Quote)
February 17th, 2009 at 8:22 pm
What they need is a brilliant TV ad campaign to get people interested in GM products again.
“Save the USA – Buy a Chevrolet!”
(Quote)
February 17th, 2009 at 8:43 pm
Texas Tea #20 Says’
Black Gold is trading at $34.89 at 7:21pm EST
________________________
Well can you tell your pal’s at the refinery down there in texas to stop gauging at the pumps AGAIN. And pass the Real price of oil on to us, please.
Thank you
I friggin hate OIL.Were alway’s getting gauged. If it’s not the Saudi’s, it’s the Garage owner and now it’s the friggin refinery’s.LOL.
GIVE ME MY PLUG..
(Quote)
February 17th, 2009 at 8:44 pm
TEXAS, your correct it will be cars like the Cruze that will save GM, unfortunately it will take Americans like the ones that fought died on the beaches of France and Iwo Jima to buy them, too bad Americans like that are in short supply.
God bless the USSA. God help them!
(Quote)
February 17th, 2009 at 8:48 pm
For the people in the “Gosh, this is costing more than I thought when I first supported using tax money for 2 car manufacture bail outs”.
It’s like a poker game. Each player starts with the minimum bet added to the pot. Then, if you feel you have a chance at eventually winning, you add a little more to the pot at each of four opportunities.
You finally realize it looks like the money won’t be coming your way at the end. But you STILL add one more bet to the pot because you have put in so much already that one more injection is cheap.
____________________________
So the money is now all in. The union worker health benefits will be payed. The executives will continue waiting for the big reversal in the economic slow down. Consumers will keep wondering if the $30,000+ Volt, 40mpg Cruze, plug-in Vue, and retro Camaro will ever be available to buy.
Economists keep the fear furnace stoked by saying, “If you don’t keep bailing the car companies out, it will cost you all $100,000,000,000 in tax money, you want that to happen?!”
___________________________
OK, we’ve now spent $13,000,000,000 on a GM which could have reorganized in January. In January 2009, the Government could have offered a $4000 instant stimulus rebate on all cars sold in America which are manufactured by GM, Chrysler, or Ford.
$13,000,000,000 / $4000 = 3.25 million cheap cars for people to buy. This is money back into the economy.
Sales would be going crazy. All of the Big 3 would be rushing to fill inventories. Insurance companies would have waiting lines. Wheel, seat, stereo, tire, knob, battery, glass suppliers would be flushed with orders.
example: A new Cobalt $14,000 less $1000 at dealer haggle less $4000 instant stimulus rebate. Equals a new Cobalt in your garage for $9000.
A comfortable new Malibu $23,000 less $1500 less $4000 = $17,500
This is not an idea just brought up today. This simple effective stimulus plan was mentioned in prior posts in this forum. I am not an economist. I am an American who doesn’t take America of granted. I support good pay for a good days work. I do not support welfare bail outs for illegal or misguided behavior. Even in a “perfect storm”. Give me a break. That’s so lame.
Am I right or am I crazy?
=D~
(Quote)
February 17th, 2009 at 8:51 pm
#17 Statik
“The ‘bankruptcy analysis’ is a good read, starts on page 103 if anyone is interested:”
—————————————-
Well I took a look at what all those accountants GM hired had to say, and I got to say that it is an easier read than the government’s package. Interestingly I think the ultimate price to the taxpayer is about the same too. A Billion dollars a page…
I think I have got to learn how to write…
Red HHR ( Searching for that outlaw quill )
(Quote)
February 17th, 2009 at 8:59 pm
To address the Nissan 100 mile EV to soon be available for $20,000.
OK, you bought your new foreign car. It’s has a 100 mile battery only power source.
First you need a consistent power supply to plug into. Then you need to buy fecal resistant seat covers because if you drive more than 35 miles from your house, you may be short on charge and stuck on the side of the road at 9PM at night. There’s always AAA.
=D~
(Quote)
February 17th, 2009 at 9:11 pm
The reason AIG / Citi etc were saved- “They are too big to fail”. I guess so is GM.
# 9
–
Even includes billions for things like climate change research, whatever that is.
–
Let us see. We have thousands of scientists including so many nobel laureates on the one side. On the other we have Dick Cheney and Rush Limbaugh. I wonder who do we beleive …. hmmm very difficult indeed
(Quote)
February 17th, 2009 at 9:20 pm
@ Texas Tea
Yes, consumers want them some Chevy Volt something fierce, regardless of the price of oil, although it has nowhere but up to go once we start coming out of the GLOBAL recession (those are very rare – didn’t even happen in the First Great Depression). Consumers are sick of being dependent babies on foreign oil and the massive costs (pollution, worse health, military, oil $ to enemies, etc., etc.) that go along with it. Get it now?
Tall Pall’s got it about backwards. Independent refineries are being squeezed hard (see Flying J and EIA’s reports of negative or very low refinery margins in the last few months) as Standard Oil reintegrates itself while anti-trust law looks the other way. With no price incentive in the short run to do more exploration, discovery and extraction investment (and a credit crunch to prevent it even if the incentive was there), new oil sources needing to have a base retail price of around $70-75 a barrel to produce, what do you think is going to happen to gasoline (and diesel and natural gas) prices after the world climbs out the current global recession by hanging onto China’s butt as they poop out vanilla boring but inexpensive and useful BYD F3DM plug in hybrids, coming to a new dealer near you soon, thanks to Warren Buffet’s business acumen?
GM – better start marketing that Volt properly (that alone would be a first in GM history – effective marketing that drove long term demand and market share) pretty d- quick (knowing them, they’ll have huge campaign for the Volt start on April 1). Buick is HUGE in China. Get a clue – make a Buick Voltec electric drive with turbo diesel (surely you must have a diesel source in Europe – Germany?) range extender paired with BYD for various configurations at various price points and GM could dominate market share globally. Sigh – I guess the little start ups really are toppling the sluggish giants – It’s getting harder to root for Goliath GM when they don’t deliver and don’t deliver and don’t deliver….
(Quote)
February 17th, 2009 at 9:25 pm
The young political novelist Benjamin Disraeli, in his 1826 “Vivian Grey,” took aim at the drastic change in the writing by one of his characters: “it is the same tale, the same refacimento of lies, and treachery, and cowardice doled out with diplomatic politesse.”
————————————–
The GM statement is a refacimento, a nice word I had not previously known. I learned it from the above quotation, given Wm Safire in last Sunday’s NYT magazine. “Refacimento” means something like a repurposing, a restating of some older information for a new purpose. In the GM statement, one hears various earlier items, now tied together with a new prolog, for a new amount of money. My thoughts are not so harsh about the GM document as the quote above is about Disraeli’s character, but I think GM’s statement is indeed a retelling, notably different from what they said even a short time ago.
(Quote)
February 17th, 2009 at 9:30 pm
Caught only the last part of the broadcast, but afterward went to the Chevrolet link. I think this is the page:
http://gmtv.feedroom.com/?fr_story=0f989aeb092a6410b7160fe2169cabde5c97e097
Has some footage from Transformers II with a blue Volt in driving sequences. Nice looking car!! It looks much nicer in color and actually driving down the road.
I think the link only takes you to the GM site, so on the left click on Chevrolet, then click on “Chevy Transformers Vehicles Premiere” video.
(Quote)
February 17th, 2009 at 9:33 pm
@ Dave K
Re: Nissan EV.
There are hundreds of millions of electrical outlets all over the US, way more than gasoline stations. My daily commute is a little under 30 miles and I can do all my errands along the way, either direction. For long trips or touring, I rent (a hybrid) or fly and use public transit anyway (have for decades, pretty normal). That range has me more than covered with no thumb sucking “range-anxiety”. If more people on this site spent more time encouraging GM to get this Volt baby birthed already, instead of bashing non-direct competition alternatives, like the Nissan EV, GM wouldn’t be lost in the crowd with the Chevy Volt, as I fear they will be by the end of 2010 (oh, now it’s big fleet orders and leasing, testing for 5 years, maybe a few to retail consumers by 2012 for the Volt?). Oh, wait, it needs more, more infrastructure and more consumer add-ons in advance? Maybe 2013? GM is lame, always was, they’d be nothing without stealing Buick back in the day (read your history books) and that’s all that can take them forward now.
Having said that, I’m still rooting for GM. Get the Volt out to retail consumers already. It’s ready. As a sales incentive, maybe throw in a 2008 Q3 full size SUV as a flower planter box?
(Quote)
February 17th, 2009 at 9:33 pm
Anyone else think it’s time for Rick to be thrown out with the bath water?
(Quote)
February 17th, 2009 at 9:38 pm
hi Zero X Owner #31,
I stand with post #26. Best of luck with your new Nissan.
=D~
(Quote)
February 17th, 2009 at 10:11 pm
Nataraj Wrote
Let us see. We have thousands of scientists including so many nobel laureates on the one side. On the other we have Dick Cheney and Rush Limbaugh. I wonder who do we beleive …. hmmm very difficult indeed
I believe these 30,000 + scientists over yours.
http://www.petitionproject.org/
Most Liberals are just too CLOSE MINDED to realize their is a legitimate argument against this global warming myth.
(Quote)
February 17th, 2009 at 10:19 pm
Oh wait I forgot. It’s not global warming anymore. They changed it to climate change because the Earth has gotten cooler over the last 10 years.
http://wattsupwiththat.com/2009/01/06/ncdc-updates-database-for-dec08-ncdcs-own-graphic-shows-10-year-cooling-trend/
http://www.isthereglobalcooling.com/
(Quote)
February 17th, 2009 at 10:23 pm
It’s going to get more difficult for the Establishment media and the left to continue this lie.
(Quote)
February 17th, 2009 at 10:34 pm
Saturn and Pontiac vehicles are pretty much mostly just a name plate swap with Chevy. I don’t think I’ll lose any sleep if they phase them out. You’ll still be able to get parts for them, you can still get parts for Geo and Oldsmobile etc years after they’ve been gone.
(Quote)
February 17th, 2009 at 11:01 pm
So the bondholder negotiation should be finished right when the gov’t decides if the plan will work, and the UAW will be 2 months after this. Hmmmm. Sounds like someone is putting the cart before the horse. Any takers on the likelihood of an agreement with the bondholders by then? Reminds me of the poor greyhounds at the track. If they just run a little faster, maybe they’ll finally get the rabbit.
So the total will be somewhere around 30-40 billion down the hole, and thank you America we cut 25,000 MORE jobs. I think we could do without another bargain economic plan like this. How much worse could the CH11 option be. I mean really. Someone is getting scammed here, and it sure feels like the taxpayer.
JUST RIP THE BAND-AID OFF ALREADY!!!!!
(Quote)
February 17th, 2009 at 11:06 pm
#17 Statik
Great link. Thanks.
http://media.gm.com/us/gm/en/news/govt/docs/plan.pdf
(Quote)
February 17th, 2009 at 11:14 pm
#34 BigCityCat
Are you still clinging to that petition project? If you want people to be open-minded, set an example. Open your mind and vet the petition project. I’ve mentioned this to you before. It is hard to take you seriously if your work is so superficial. Please perform due diligence before you bring up that propaganda again. You’ve got the internet. Go to work.
(Quote)
February 17th, 2009 at 11:19 pm
By GM’s own estimate, a 60 day bankruptcy (prepackaged) would suffer
1) 35% sales drop during the 60 days
2) 10% sales drop form 60 – 120 days
3) 5% long term sales hit
And those are number for the North American market. Globally, the bankrupcy has less of an impact on demand
DOES BANKRUPCY NOT SEEM SO MUCH EASIER THEN THIS MESS!!!
The challenge with a prepackaged bankruptcy is getting the UAW and bondholder to actually agree to it. If I were them, no way. I’ll keep my place at the public trough. Far more scrumptious.
(Quote)
February 17th, 2009 at 11:25 pm
#35 BigCityCat Says: They changed it to climate change because the Earth has gotten cooler over the last 10 years.
http://wattsupwiththat.com/2009/01/06/ncdc-updates-database-for-dec08-ncdcs-own-graphic-shows-10-year-cooling-trend/
————————————————————————————–
WRONG! Follow the link. Its says “Annual North American temperature since 1998 (11 years of data) is falling”.
To be clear, the earth as a whole is warming. Warming is most dramatic at high elevations, in the polar regions, and in the oceans. This is changing ocean currents. These changes in ocean currents are affecting weather patterns on land. Some land areas are getting warmer, some cooler, and some are about the same. But all land areas are getting more rain during the rainy season, and less rain during the dry season. The number of tropical storms is about the same, but many more of them turn into high category hurricanes. Less snow pack for drinking water, more floods, more droughts, more hurricanes, more tornadoes, but land temperatures across most of North America stay about the same or actually fall a little.
So that’s why they’re calling it climate change, because that’s what will affect people the most. The earth as a whole is warming, but what we’ll notice the most is the climate change.
(Quote)
February 17th, 2009 at 11:30 pm
#16 Kent
Closing 14 plants and laying off 47,000 AND divesting Saturn! Whew! Is that 47,000 worldwide or just the US?
____________________________________________________
U.S. numbers are 5 plants and 26,000 workers.
(Quote)
February 17th, 2009 at 11:37 pm
The only thing you really need to know out of all of this, is that they are bleeding money like they have been severed in half. There is not even the remotest chance any accountant/analyst in the known universe putting his name behind saying they even have a 2% chance of being a success out of this plan.
Here it is…cut and dry:
GM got its first check just after Christmas…it has now gotten 13.4 billion dollars in two months. Yet today, they say they need a ADDITIONAL 2 billion BY MARCH, and another 2.6 billion in April to prevent them from running out of cash again.
The burn rate is off the charts, they are trying to service larger and larger debt amounts from revenues (with negative margins) that are now dropping at about a 50% clip.
I don’t know how the Obama administration can even attempt to pretend that GM is even close to being viable, they are really painted into a cornor. There is no UAW deal, no bondholder swap, no plan for the future at all, all they are doing is taking taxpayer money to shutter plants and fire people. They don’t even have a plan to get to the end of the each month…other than to ask for more money.
I don’t like to deal in absolutes, but it is absolutely impossible for GM to be viable now, 6 months from now, or 5 years from now in this situation. You just can’t make a case that says they will be.
The way I see it, the gov’t has a couple options:
A) Have GM file C11-then bankroll them out, making them lean and mean
B) Stop with the installment 4 and 5 billion dollar loans, stop the circus bailout hearings and the ridiculous requests for ‘plans’ and impossible benchmarks. Just cut GM a check for what they really need…100 billion dollars (and not a loan, take a 90% equity stake if you like, GM can’t even service the payments on $10). They take that money and flat buy their debt, pay-off the VEBA, payoff their loser dealerships, shutter the brands that have failed, and package out all the ’senior’ hourly employess and reset them with the new hires.
C) Keep making the little payments to punt the ball down the field for a few more months, then do A, B or D anyway
D) Let them go into the night.
(Quote)
February 17th, 2009 at 11:43 pm
#44 statik Says: A) Have GM file C11-then bankroll them out, making them lean and mean
————————————————————————————–
C11 will inevitably lead to C7 – bye bye GM!
(Quote)
February 17th, 2009 at 11:50 pm
Price of oil will eventually go up again. Therefore hybrid and electrics may not be viable now, but chances are they will become viable again at anytime. It is hard to say for sure because things are unstable and it changes in a matter of few months. So my point is that electric cars are still a good alternative.
The problem I have is that let’s face it, the vast majority of car makers have experienced serious downturn. Car sales are unlikely to improve enough to bring GM or Chrysler to profitability in 2009. How far can GM request loans to keep surviving? I think it makes no sense.
(Quote)
February 17th, 2009 at 11:51 pm
@4 Scott Casteel,
>> I think I’m going to be sick! I have been driving Saturn
>> for 12 years.
I had a ‘92 SL2 and then a ‘97. Loved ‘em both. But you have to admit, Saturn has been sliding out of sight for years (I blame GM). The replacement of the SL/SL2/SC1/SC2 lines with the Ion may not have been the end of the world, but replacing the Ion with the Astra was an appalling development. GM should have left Saturn be Saturn. They decided to make it just another rebadged line instead. What a shame.
I miss my plastic body panels most of all. I still see TONS of SL- and SC- line Saturns driving around that look darn near as good as they did new. And -NO- rust on their body panels. *sigh*
(Quote)
February 17th, 2009 at 11:58 pm
#44 Statik
I think option B is really the best, let the government take the majority stake and I would bet in the matter of a decade or so the bulk of that money could be recovered by the government selling it’s stake.
(Quote)
February 18th, 2009 at 12:33 am
I have read the links and they are legit. Your the ones who haven’t vetted them. You do not have scientific consensus so you can’t call it fact. There are millions out here who think it is complete bull and you think we are all crazy. Those signatures are all legit. It’s a lie and you will remember me in 20 years and wonder how you bought into it.
http://www.petitionproject.org/gwdatabase/GWPP/Frequently_Asked_Questions.html
You have the internet go read some opposing positions if you have the guts. Open minded liberialism does not exist.
(Quote)
February 18th, 2009 at 12:34 am
Brace yourself Statik, but I think that in at least this instance you’ve struck a reasonably well-balanced description of the situation (please don’t look for another instance too soon where I use the terms “well balanced” and Statik” in the same sentence – at least not soon. You’ve taken a step or two beyond the “this ain’t gonna work, and here’s why” to at least speculate on some of the info (probably readings gathered from fresh sheep entrails) that have a possibility do exist in this particular time-space continuum.
n:.
Slightly off topic, but did anyone catch Pres O make the statement at the Kansas signing show that :“THIS IS THE BEGINNING OF THE END.” Personally, I think that he’s 100% accurate. It’s just that noone right now knows which end of the stick we’ll end uo
(Quote)
February 18th, 2009 at 1:06 am
#4, #15, #47 Regarding Saturn. You are right that it is a shame. Saturn was the “import fighter” when they birthed it in the Roger Smith / Bob Stemple era. They just let it wither, and now, unfortunately, as #37 says, they are no different than the rest of the lineup. It breaks my heart to say it, but since GM declined to invest in it and actually try to fight imports, then it has became redundant. To bad it’s not the other way around, if they had been investing in it, they could be divesting of GMC and Buick today.
(Quote)
February 18th, 2009 at 1:11 am
My favorite part from the “pre-packaged” bankruptcy option. (the one GM prefers)
“Existing shareholders would be almost entirely diluted”
One line, in the whole 170 whatever paged doc saying anybody that stuck with us your beat!
(Quote)
February 18th, 2009 at 1:34 am
I said last year I thought (IMHO) chapter 11 was the only option, but it won’t matter anyway, Obama will not let the unions go down. They will get all the bailouts, loans or what ever you want to call them.
We will never get our tax dollars back, GM will never sell 12 million cars a year again,
NO PLUG, NO SALE, JGTVWOTR, DBNGCMEMEV, (my house) =D~~~(my volt)————————-STOP THE BAILOUTS———————-oooops too late
(Quote)
February 18th, 2009 at 1:50 am
hi JonP #52,
“bankruptcy option … Existing shareholders would be almost entirely diluted.”
___________________________________
GM stock would be at about $6 now if they had stayed on course with their first reported release dates for the Cruze, Camaro, and plug-in Vue. I bought at $9.40 and sold at $11.80 just before the change in projected release was announced.
=D~
(Quote)
February 18th, 2009 at 1:56 am
#50 Tagamet says “Slightly off topic, but did anyone catch Pres O make the statement at the Kansas signing show”
Kansas?
#44 Statik
You’re light on the options. There are many other alternatives. As for what they’ll do: They just spent $750B to save/produce 3M jobs. Do the math. Let’s be very conservative and say that GM and its supply chain count for 2M jobs. Let’s say each worker on average makes $80K (I know some say they make $150K but let’s get real). We know how many jobs are at stake. But now here’s the tricky math part. How much payroll would that be? And with a 25% tax rate how much revenue would that be?
So of course they will spend it. How the specifics work out is anyone’s guess. For the next while not much of anything would be my guess. The task force hasn’t yet been set up. After that we’ll see. My guess is that Wagoner is a Wa–>goner. That the UAW loses health benefits for retirees. That the work rules get simplified. That shareholders get wiped out. And that bondholders take a 70% haircut.
(Quote)
February 18th, 2009 at 2:09 am
Here’s an interesting part of the plan which discusses the product mix: “The Chevrolet Volt is included in this count, as are two additional models sharing the Volt‘s extended range electric vehicle (EREV) technology.”
So GM has plans to release two other E-REV vehicles. One is probably the Caddy. Wonder what the other one is?
(Quote)
February 18th, 2009 at 2:28 am
To be true , after reading the plans, It looks Chrysler is going to repay the loan and GM looks sink because GM plan looks to me like an accountants plan (talking more on money aspects ) where Chrysler one talks on the products, Quality initiatives,EVs. 2mode hybrids,innovations etc
I liked to 200C part and even i think they are also getting GM platform because i see the same T battery (page 128 -129 )
http://www.media.chrysler.com/dcxms/assets/attachments/Restructuring_Plan_for_LongTerm_Viability.pdf
I don’t know if they ask GM, what is the difference between a Gen2 hybrid and Gen3 hybrid in the plan when they don’t even have a strong hybrid sedan. It looks to me like a document written to just fool people.
The savior cruze (page 67) in a 1.4 L turbocharged engine with manual gear. I bet fiat have far better cars than that. The other offers are cadi ones and in a recession i don’t know how many are going to buy them. No hints on how they improve fuel efficiencies, Quality,new technologies,security initiatives etc. I think they still don’t know what people want.
(Quote)
February 18th, 2009 at 3:12 am
#57. I’m no expert in the auto industry, but even I know that GM’s in better shape than Chrysler! Until very recently, GM was profitable in Europe, Russia, South America, etc. I believe it’s still profitable in China. Chrysler is profitable nowhere.
GM’s plan is more detailed and specific than Chrysler’s. They have a much larger market share. They have unique technology. According to consumer reports, GM and Ford have improved their line-ups, and they actually recommended some of their cars. They recommend nothing from Chrysler.
I don’t blame Chrysler for its predicament. I think Daimler took everything of value before they sold a hollow shell to Cerberus. And the financial crisis hit before they could even attempt to turn it around. But right now, we’re stuck with tough choices. And GM is potentially salvageable. Chrysler is not. And the sooner they cut Chrysler loose, the more likely they are to get the necessary concessions from GM’s bondholders. Not to mention how much money it would save the US taxpayer…
(Quote)
February 18th, 2009 at 3:51 am
Anyone else notice that there was no mention of pure-EV models in near or even in distant future? Makes me think that Volt was not a sign of GM jumping in the pure electric car race after all but a boon succesfully dongled to get rescued by present government. Keep in mind that suggested future Voltec models will feature smaller battery packs so the trend will be not to increase the pure electric range.
(Quote)
February 18th, 2009 at 4:17 am
The dumbest move ever. Selling Hummer? The icon of the american cars? This guy is making me sick!
(Quote)
February 18th, 2009 at 6:28 am
The national government has no choice but to save the domestic auto industry, be it through loans, or some sort of guarantee to see GM et al through a Chapter 11 restructuring.
It’s a matter of saving what little is left of our national industrial base. We’ve already lost all but a fraction of our shipbuilding and aviation base. During WWII we had a vast manufacturing base that was put to work for the war effort. What would we do now?
If McCain had won, he’d be in the same position as Obama on this one. There’s no other choice.
(Quote)
February 18th, 2009 at 6:48 am
GM’s end started early 21th century when they scrapped their EV1 for the Hummer & all other big gaz guzzler, they traded their long term vision for quick and “easy money”, by the fact, almost lost their technology advantage breakout they had from R&D investment.
Saturn (maybe more than other division) destiny is a sad story by itself and I agree with #47 “They decided to make it just another rebadged line instead. What a shame.” (My son still use my ‘95 SW1 and it still look in good shape outside for such aged car). They had a vision with Saturn but when you went only half way of the path, it may lead you to nowhere. That is where GM stands now. Between future E-REV vehicle like the Volt and their financial collapse. “The number projected 11.5 -12 million units of vehicles sold per year” seem unrealistic (to me at least) to be set as part of calculation for a recovery plan, these days are gone by now.
Only time will tell us if GM (and others car mfg) final destiny deserved or not, public funds help with their lack of vision and run for short term $ (quarter) result.
(Quote)
February 18th, 2009 at 8:17 am
49. BigCityCat,
It is interesting to me how the same group of people that tend to question global warming are the same people that tend to believe the bible unquestioningly.
I think it is good to question.
I guess we will see about climate change. The good news is that we know the bible is largely myth… at least on the points that actually matter.
(Quote)
February 18th, 2009 at 8:20 am
My question is, can GM survive a Chapter 11 Bankruptcy? As I far as I know, no Auto Company ever has.
(Quote)
February 18th, 2009 at 8:21 am
how can govt agree to sell hummer .the us defence of usa buys hummer . if it is sold to a foreign maker then the defence should buy from foreign company , trusting a foreign company for the defense of usa is dangerous
(Quote)
February 18th, 2009 at 8:39 am
#50 Tagament said:
Brace yourself Statik, but I think that in at least this instance you’ve struck a reasonably well-balanced description of the situation (please don’t look for another instance too soon where I use the terms “well balanced” and Statik” in the same sentence – at least not soon. You’ve taken a step or two beyond the “this ain’t gonna work, and here’s why” to at least speculate on some of the info (probably readings gathered from fresh sheep entrails) that have a possibility do exist in this particular time-space continuum
——————————
Thanks…I think. I can’t tell without your, “Be Well” tag line, hehe. Just for the record I think GM can be viable in the future and I think it should survive (shocker, I know). What I detest is where and what it is right now.
It should have died last October. The unions, debtholders, obligations, executives, board of directors and contracts should long have left the building….and we should be now be talking about gov’t assistance money to bring them back into the last of the living. Instead, we have money just being thrown into a fire pit to keep everyone’s hand warm…which is not the most efficient return on taxpayer cash. GM is like a wandering hobo right now, just waiting for its next check to buy more booze.
(Quote)
February 18th, 2009 at 8:39 am
#61 FME III said
The national government has no choice but to save the domestic auto industry, be it through loans, or some sort of guarantee to see GM et al through a Chapter 11 restructuring. It’s a matter of saving what little is left of our national industrial base. We’ve already lost all but a fraction of our shipbuilding and aviation base. During WWII we had a vast manufacturing base that was put to work for the war effort. What would we do now?
——————————————————————–
It is an argument that requires some revision, as WWII was a long time ago. Now the more critical manufacturing industries involve aircraft, computing, satellites, data communication, and medicine, along with modern automated construction methods for everything from the huge (buildings) to the tiny (nanoscale). The USA remains at the forefront of all these fields. Even if there was another major conflict, the USA would no longer need GM to do what it did in WWII, and the tasks that now are critical can still be done in the USA’s (huge) manufacturing sector outside of automotive.
Trucks and tanks remain significant, but one keeps in mind the battles where tanks have been quickly destroyed by small laser guided (or wire guided) missiles. Trucks remain critically important to the USA economy, and those can be made by a much smaller and leaner GMC, or purchased from another supplier, such as Ford.
This argument is not to minimize the historical importance of GM in a different era, but things have moved on. The USA cannot maintain the past by wishful thinking and the continuing infusions of billions of tax dollars into an enterprise that, sadly, now has failed. The company has to be reorganized (”major-ly” reorganized, my children would say).
(Quote)
February 18th, 2009 at 9:00 am
sudhaman #65 says,
how can govt agree to sell hummer .the us defence of usa buys hummer . if it is sold to a foreign maker then the defence should buy from foreign company , trusting a foreign company for the defense of usa is dangerous
———–
Sudhaman, the Hummer is made by General Motors and is not a military vehicle. It is for the upper class civilian population who have to compensate for something small.
Humvee is the Military version, and is made by AM General.
(Quote)
February 18th, 2009 at 9:00 am
#44 statik gives us alternatives for GM. Without repeating everything there, there are 3:
A) Reorganize through bankruptcy
B) Reorganize through nationalization
C) Continue to make monthly payments indefinitely.
Commentary in reverse order:
C (keep paying): In my opinion, trying to proceed with C) will not go on very long. The political will is not there in the population as a whole. The Obama administration is nothing if not acutely tuned to the way the political wind is blowing, so they will shift.
B (nationalization): In principle it can be done, and there are a few European examples where it seems to have been done well. I do not know of any US examples, but maybe I forget. It is tremendously uphill to make nationalization of a complex industrial enterprise actually work. Whatever the nationalized company does will quickly become infused with and affected by national politics, which often run at cross currents with sound business management. Although nationalization seems “nicer” than bankruptcy, it is only in the sound of it. In fact, many of the stakeholders affected likely will be treated far more arbitrarily by the new management, whoever they may be.
A (bankruptcy): Painful, but it is the only plan where there is expertise, a suitable legal structure to allow all parties to be heard, and the power to bring minority dissidents into compliance (such as bondholders who hold out). GM is such a large and complex organization, and these powers are necessary. [A part of the pain of bankruptcy is the word itself. Maybe what congress should do is simply renaming "bankruptcy" something itself "organizational calming" but keep how it works the same (smile)].
None of these plans (other than dissolution) are going to go anywhere unless GM can (is allowed to) get re-focused on making cars that people want to buy, with their own money. That is what is destroying the parts makers now — just not enough cars being sold to keep them making parts. Possibly that might be done with alternatives A or B, but not with C. It has to happen quickly.
(Quote)
February 18th, 2009 at 9:08 am
#67, R.B.
Your kids talk about the restructuring of a Fortune 500 company? Wow…you should shop them around to Colleges already haha. Future Economists!
(Quote)
February 18th, 2009 at 9:24 am
Texas… you trying to pick a fight here? The aveage person can’t afford to buy a new car anyway without going into debt for the whole price minus trade in. But I agree somewhat with you. A Cruze (or two phase hybrid) has built in profit where as the Volt concept as of today has built loses. I do agree with Motorweek (The PBS show) that the clean diesel from VW is the most eco-friendly vehicle out there. Go diesel!
Saturn is (was) a great company that hasn’t always had the greatest cars but had the best dealerships period. Tesla should look into joining forces with Saturn dealerships.
(Quote)
February 18th, 2009 at 9:27 am
#68
Hummer is a upper class car made for people who happen to have money to spend on exotic cars. Your argument about ’something small’ is grade school in childishness and smacks of class envy. Why don’t you come out and say ‘I would love to have that kind of money but since I don’t I will make fun of them to make me feel better’.
(Quote)
February 18th, 2009 at 9:31 am
Well, I think I’m gonna wade slightly into politics to pick out an option from the 4 statik descrived in post #44. In all honesty, Mr. Pres. O probably wants to be the prez for full 8 years. So, he cannot and must not alienate the unions that backed him into presidency. We think we’ve seen bad times so far, but if GM goes through C-11 and does NOT survive, think just how much worse the economy will be…I shudder at the thought. I don’t think they can survive…I know as a consumer in these hard economic times, I’d shrink away from buying GM if they are bankrupt.
I think the best option for GM and taxpayers would be option B, but option B with a short leash to force GM to restructure. The gov’t can cut them a check for $110 Billion, take 90% equity, have GM write-off all the debt, etc. While giving GM the money it needs, it should also be conditional with salary caps (at least until they reach a reasonable viability point where they seem to be out of the hole for good), the type of vehicles they can & MUST produce (e.g. 90% of their new vehicles should be 40mpg or better; the other 10% like camaro, corvette, etc should be at least 30 MPG all within next 5 years), ETC.
To those of you who think Gov’t should NOT interfere with free market and that the gov’t will mess everything up if they intervene too much; do you honestly believe that they can mismanage the GM worse they Wagoner & his boys? GM has broken down completely…there is no where else but UP from now on, but only if they are kept in-line with strict rules enforced on them.
Just my 2 cents =)
(Quote)
February 18th, 2009 at 9:42 am
I try not to throw around religion, but Gluttony is a sin. Then again so is theft and forcing others into debt even if you think it is for the “right reasons”.
Here’s a good, if somewhat “dry” book on the subject:
LIBERALISM IS A SIN
Englished and Adapted from the Spanish of Roman Catholic Priest,
Dr. Don Felix Sarda Y Salvany
By Conde B. Pallen, Ph.D., LL.D.
http://www.liberalismisasin.com/index.htm
Look at when the book was written!
(Yes, I realize that most of you are very narrow minded and only care about the socialist-statist agenda and dogma so you won’t read it and probably lack the ability to understand it anyway but I have to try.)
By the way, the NeoCons in the Republican party in congress have NOTHING to do with true conservatism except for Dr. Paul.
Don’t worry, GM will get their redistribution. They will then go bankrupt and you will be paying $10.00 (or more) for a loaf of bread after waiting an hour in line just like the Soviet’s did when they collapsed their fiat currency with social(ist) programs and a huge military empire. (Afghanistan/Iraq is a dangerous sandbox for nations to play soldier in.)
Apparently, repeating the mistakes of others is “progressive”.
What a shame…
(Quote)
February 18th, 2009 at 9:46 am
#72 Adrian says,
Your argument about ’something small’ is grade school in childishness and smacks of class envy. Why don’t you come out and say ‘I would love to have that kind of money but since I don’t I will make fun of them to make me feel better’.
———
You know nothing about me.
I’m upper middle class and was making a joke.
Sorry if I offended your tender feelings.
I don’t own a Hummer because I don’t want one, not because I can’t afford one. They are a waste of money and contribute to terrorism.
You like them, feel free to own as many as you want. I will stick with a small, less gas guzzling vehicle and support terrorism a little as possible.
(Quote)
February 18th, 2009 at 9:50 am
#73 Sam Y
do you honestly believe that they can mismanage the GM worse they Wagoner & his boys?
________________________________________________________
YES. FAR WORSE. The state controlling means of production is grossly inefficient compared to people doing it freely
(Quote)
February 18th, 2009 at 9:56 am
“#20 Black Gold is trading at $34.89 at 7:21pm EST.
Do we really need a Volt at this time ???
I think we need a 40+ MPG Cruze more than a Volt”
The problem with this thinking is oil WILL NOT stay at this level for long and secondly, the Cruze will not be here for a couple years and Honda already has a real world 45-50mpg sub $20k Insight for sale this spring. Always a day late and a dollar short.
(Quote)
February 18th, 2009 at 10:02 am
This is interesting regarding biomass fuels:
Two-step chemical process turns raw biomass into biofuel
Feb. 10, 2009
by Nicole Miller
http://www.news.wisc.edu/16250
“This solvent system can dissolve cotton balls, which are pure cellulose,” says Raines. “And it’s a simple system-not corrosive, dangerous, expensive or stinky.”
(Quote)
February 18th, 2009 at 10:08 am
Don’t be surprised to hear about layoffs of people from Toyota, Honda, and Nissan. Japan, Inc. is hurting pretty bad now too.
http://www.businessweek.com/globalbiz/content/feb2009/gb20090216_659920.htm?chan=top+news_top+news+index+-+temp_dialogue+with+readers
The greed and stupidity of these bankers on Wall Street just boggles the mind doesn’t it? It feels like the whole world is having to pay for the high stakes gambling of the idiots on Wall Street who somehow thought that the laws of gravity don’t apply to the real estate markets.
(Quote)
February 18th, 2009 at 10:20 am
Anyone else wonder why oil prices have dropped and gas prices have risen. NPR has a nice story on it.
http://www.npr.org/templates/story/story.php?storyId=100733852
(Quote)
February 18th, 2009 at 10:22 am
#76 Cautious Fan Says: ,
The state controlling means of production is grossly inefficient compared to people doing it freely
———
Too be honest, I don’t get a warm fuzzy with government running things either.
(Quote)
February 18th, 2009 at 10:27 am
GM Volt Fan (#79) said:
“The greed and stupidity of these bankers on Wall Street just boggles the mind doesn’t it?”
GM Volt Fan stated a statist half-truth which is the blackest of lies because it can be partially defended. This half-lie is used to deflect criticism of “progressive” statist central planning.
The REAL fact is: Who’s more to blame for burglary, the drug addict (wall street) or the pawn broker (fanny & freddy) who pays cash for the stolen merchandise?
It was Barney Fwank and the “Progressives” in Congress who forced Fanny & Freddy to back “sub prime” mortgages with a gov’t AAA bond rating so Wall Street would buy that trash and more people could qualify for the American Dream”. This created the atmosphere for Wall Street greed and malfeasance.
In a nutshell:
Statists in Gov’t started the fire by overriding the free market and forcing Freddy and Fanny to go into the “sub prime pawn shop business”. Statists then intentionally encouraged greedy bankers and Wall Street to take advantage of their central planning by creating the crazy mortgage products in effect throwing gasoline on the fire. Banks around the world joined in the American sub prime market CREATED by the Statists in our Gov’t.
The gasoline would have NEVER been thrown or ignited if the Socialists/Statists didn’t FIRST light the match while trying to “help” someone buy something they could not afford to pay for by taking advantage of inherent greed.
If there is no market for stolen merchandise, there is no theft.
Here’s a VERY good article on the subject:
Roots of the Banking Crisis
By Michael Beitler Ph.D., CPA
http://www.campaignforliberty.com/article.php?view=12
“Banking has been heavily regulated, controlled, and manipulated for political purposes for many years. Creeping socialism has existed in the banking industry for decades. Occasionally, the “creeping” aspect has been replaced by giant leaps toward a socialist state. The Community Reinvestment Act (CRA) was more a “leap” than “creep.”
The road to hell is paved in good intentions with unintended consequences or “Blow-Back”.
When you tell a story, please include the whole thing.
(Quote)
February 18th, 2009 at 10:52 am
82. Tim
Have you seen CNBC’s documentary called “House of Cards” yet?
http://www.cnbc.com/id/28993790
It’s an eye opener. It talks about how corrupt mortgage broker companies were the main ones who were giving anyone with a pulse a mortgage and Wall Street banks like Bear Stearns were stupidly financing it all. Fannie and Freddie got into subprime later to a certain extent but these mortgage brokers were the main bad guys. They bypassed Fannie and Freddie and worked directly with the Wall Street banks.
The “securitization” process didn’t have many regulations. Just like a house of cards, everyone was happy and making money on the way up. Nobody seemed to care about the downside if the house of cards collapsed. A lot of Wall Street guys wrongly ASSUMED they could get out before it all “hit the fan”.
Ooops. It looks like not many people are going to avoid taking a hit for this one. GM and all the auto companies are sure taking a HUGE hit for it. Like everyone else, I’ve been going back and forth between disgust, anger, and being bummed about the whole thing. You should see Alan Greenspan in this CNBC documentary. He feels the same way. He can’t believe Wall Street and the rest of the financial services industry allowed this to happen.
(Quote)
February 18th, 2009 at 10:56 am
Off topic –
Message Board, especially Alejandro,
I’ve been reading this GM – Volt site for a couple of months now (don’t know much about cars, but I’m interested in the business and technology that is going to save the environment), maybe more, and what has impressed has been the quality of the conversation -informed, thoughtful and respectful. Well, my contribution to the thread yesterday was anything but. I’m the new guy here and I crashed this party with confused thoughts, aggressive style, personal attack. Completely out of line, a little bit out of control. (Message was heartfelt, though I doubt if many waded through through the nonsense to get to it.) Sorry about that. Very.
sincerely, D (David)
(Quote)
February 18th, 2009 at 11:02 am
I blame Bob Lutz…
(Quote)
February 18th, 2009 at 11:24 am
GM Volt Fan (#83) said:
“Have you seen CNBC’s documentary…”
He said “CNBC” and “Alan Greenspan… feels the same way” HAHAHAHAHAHOHOHOHOHOHEHEHEHEHE.
(sorry, I couldn’t help myself)
Don’t be fooled by the media. Go read a book!
(Quote)
February 18th, 2009 at 11:33 am
86. Tim
If you go to just about any Wall Street firm you’ll notice that CNBC is on TVs everywhere. It doesn’t matter what political party you prefer, they all watch it. CNBC is the #1 business network on the planet. They have it in Europe, Japan, etc.
Obviously, they pay attention to the CNBC reporters who cover the news. The same people made this “House of Cards” documentary. A lot of them like Larry Kudlow are Republican conservatives. Alan Greenspan and other VIPs were interviewed in this documentary. It sure looks credible to me.
(Quote)
February 18th, 2009 at 11:37 am
#70 Chris said
#67, R.B.
Your kids talk about the restructuring of a Fortune 500 company? Wow…you should shop them around to Colleges already haha. Future Economists!
————————————————————————
I realize you are making a light-hearted comment and I respond just FYI. I wish my kids were still little, but they have all grown up and left home, as everyone’s kids eventually do. (For me, they are still my children.) It happens that two of my four kids are involved with the financials of Fortune 50 companies. So I guess you might say they have already been drafted.
And, for better or worse, they still say “major-ly”, loosely meaning “a lot.”
(Quote)
February 18th, 2009 at 11:46 am
“Debt reduction from $28 billion to $9 billion will be achieved”
This is called screwing the investors and burning all your bridges behind you. Nobody will be foolish enough to ever buy GM bonds in
the future. That pretty much eliminates any chances of GM ever coming back. This plan is a death sentence for next generation GM. It is incredibly short sighted and makes all-or-nothing bets that gas prices will recover and remain high. It is more Wagoner, a male Pollyanna. Ad just when GM needed a fighter, they got Wagoner, a man who prizes good vibes from those UAW pirates who are eating his company and sucking its very last drops of blood. Wagoner, what has GM done to deserve a “leader” like you?
(Quote)
February 18th, 2009 at 12:27 pm
It would seem GM is really banking heavily on a resurgent auto market around the world. I hope it does. Pent-up demand is there and will only increase each month. But, in my estimate, which is strictly by the gut, I believe asking for an additional 16.6 billion in 2011 is one year too late. I suspect they will need it by 2010 unless the auto market really does rebound and GM can capture a goodly portion of those sales. I just don’t see them capturing a large percentage of the auto sales with their current line-up. Maybe if fuel prices continues to fall and the truck and SUV markets buys up all the big vehicles sitting in the lots ready to ship to dealers. We can only hope GM knows something we do not. But, I have my doubts.
(Quote)
February 18th, 2009 at 3:47 pm
I really wonder what the rate of U.S. car sales is sustainable. We were at 16 million just a couple years ago. Now the car makers think the market will be 9 to 12 million, depending on who you talk to and when you talk to them.
I think the LONG term sales potential is still near 16 million once the unemployment rate recovers. The difference is the 16 million cars will be smaller with less profit margins.
Going from 16 million to 10 million implies there was about a 38% purchase rate of unneeded vehicles. Thats’s a pretty high percentage for a high dollar purchase.
Where are these 6 million vehicles going? I don’t think they are being junked early, most cars get scrapped when the next repair bill is more expensive than the car is worth for the final owner. Short term you can hold on to a car you bought new for 100,000 miles instead of 36 or 50 thousand miles but sooner or later, unless the number of miles driven in the country drops DRAMATICALLY, you gotta replace the fleet as the oldest cars in the fleet become completely worn out.
When gas hit $4.00 a gallon the miles driven only dropped by a maximum of 5%. This indicates to me there just isn’t a lot of wasted driving going on, you gotta go to work, and you gotta get grocries. You can be more effecient and plan trips better, but you need a car and you need the gas. Public transportation only works for a small percentage of the urban population. I really think car sales will sky rocket when the economy improves. The big difference will be the type of cars people buy, (more effecient) not the numbers of them.
Am I wrong??????
(Quote)
February 18th, 2009 at 4:20 pm
#91 solo2500nt says
I really think car sales will sky rocket when the economy improves. Am I wrong?
—————————————————
I agree. The big questions are when that rebound comes, how rapid is the rise in sales, and what kind of car is purchased. As to when, cars can be pushed on up to 200K or more, with maintenance, so it could be a while. When it comes, one can imagine a big market share for GM, or hardly any share. From initial indications, the latent interest lies more with big vehicles than with smaller ones, though preferences can change rapidly, as we have seen.
(Quote)
February 18th, 2009 at 7:39 pm
The plan has so may varibles that could go wrong that is doomed – the sales goals are too generous because the recession will be protacted when the tax increases desend on the consumer class along with inevitable inflation and sky rocketing interest rates. Also, the UAW and bondholders may not capituate their postion. Plus who is going to buy Hummer and Saturn? Well maybe the Iranians will buy Hummer so they can develop better explosive penetrators to kill more of our solders.
(Quote)
February 18th, 2009 at 8:17 pm
I really like the fact that GM will be forming four brands. There is something called “managerial span of control” which, over the course of the “good times” tends to become over-extended with too many offerings. I am really impressed that there will be a very tight “managerial span of control” with four GM divisions. The reason why this is impressive to me is that the executive board of directors can far more easily keep tabs on the extremely important details of day-to-day executive governance.
‘Way back in the ’60’s GM had exceptional “managerial span of control” since there were not was many (necessary) different safety, efficiency, emissions, and other mandates which were directives on what GM was required to do to sell cars and trucks.
Now, with an entirely new and extremely “*CLEAN*” “sheet of (design) piece of paper” (Voltec vehicles), and, with the *****HELP***** of directives to downsize to what GM execs believe would work best for the greater good for the greater number (given the economic demands and realities of the times), I am really impressed that what will come out of all this is that GM will again be in total economic control of the future in providing us the Voltec-based products which we demand and are positioning our finances for. We are putting our future economics ***here****, and, if any competing OEM does not believe this , it is at their peril, ****not GM’s****
Dan Petit Austin TX.
(Quote)
February 18th, 2009 at 10:10 pm
Static #5 “I’ll paraphrase Wagoner in the telecast on this subject, “Hopefully this will be achieved my osmosis or possibly woodland fairies.” ”
________________________________
No way buddy you blew it!
Static I think you’re quite wrong on this one. It would clearly be better accomplished at gunpoint by the minions of Doctor No using a fast filling indoor pool/tank with no means of escape for BONDholders.
I thought years ago that there would be a day of reckoning when car makers kept pushing the SAAR higher and higher with one round of incentives after another. Then when I thought it was impossible to be repeated another year the incentives got sweeter and it went even higher for a few more years. Of course I didn’t realize that lenders were tossing out money to anybody, liars loans for example, and dumping the paper in opaque tranches to investors backed by opaque instruments sold by AIG, until near the end. I can’t believe I wasted my time actually working for a living, he he.
In any case they made sure that most people who really need a car already have one. With the NA population at this level some car maker will reap huge benefits from pent-up demand if SAAR stays at this level for much longer
GM Volt Fan 79
Greedy yes, but stupid, I don’t know. If you lose a job and tank the world economy but still have $5 million in the bank in a world of lowered expectations and even lower luxury goods prices then maybe you’re not that stupid after all. Wall streeters just made choices from the options they were given. They may of thought the game would continue and they’d cash out with billions at the top of the pyramid, but a few million in the bank is better than most ordinary folks.
(Quote)
February 24th, 2009 at 2:02 pm
Currently GM has an insurmountable challenge and a stable of brands that have lost their identity, Toyota is more successful with three brands than GM is with their 12 different brands, a clear sign of the times that change and consolidation is inevitable, below listed are the American/international brands owned by GM as well as a strategy to consolidate and help the company to survive in a rapidly changing business market. Below suggestions for merging entire brands into one entity, and reinvigorating certain brands under an international moniker could stave off bankruptcy and give gm the jolt it needs to become relevant in the auto market once again.
Daewoo/Holden/Pontiac merge into Holden Brand (3 Brands become 1 brand) These three brands currently sell similar products. Take three regional players and merge them together under the strongest brand which is Holden. This would introduce a new player to the U.S. market and give the former Pontiac brand more vehicles and a new purpose. The internationalization of the auto market requires that these type of brand-mergers become a reality.
GMC and Chevrolet merge into Chevrolet Brand (2 brands become 1 brand) most GMC and Chevrolet Vehicles overlap and are essentially rebadged copies, make it easier and consolidate into the stronger Chevrolet Brand.
Hummer and Saab sold either jointly or separately to a private equity firm or other automaker. (2 brands divested) Hummer and Saab both require huge sums of investment in their product lines, it makes the most sense to sell these two brands either together or separately at market value.
Opel/Vauxhall/Saturn merge to form Opel (3 brands become 1 brand) All of these brands essentially sell similar products. Take these three regional brands and form a strong international player under the Opel brand name. Saturn as a brand in the U.S. has no relevance but the opel logo and insignia could reinvigorate the entire company and product line.
* Possible that Buick as a brand could also be dissolved as they only sell three different vehicles and do not have a strong presence in their operating market. I could see this brand being totally phased out by 2020, the other GM brands would more than make up for the loss in product/branding. This would also allow GM to focus on the core Cadillac/Chevrolet brands and their newly minted international brands of Holden and Opel
Goals:
Reduce duplicative brand management
Reduce duplicative factories producing the same cars under different brand names.
Create strong global players in the automotive business, no more regional brands for GM
Realize economies of scale from consolidation of brand management, advertising, dealership networks.
The above mentioned steps seek to consolidate the GM brand network and dealer network into a more nimble organization. These mergers of core brands eliminate costly dealer-lawsuits from shuttering a brand, while being able to invest in our core surviving brands. The steps outlined above are far overdue and could be the jolt GM needs in order to reinvigorate their core business. The above outlined plan takes 10 brands and marketing strategies and whittles them down to 3 global brands.
The surviving names will be able to receive more attention and investment from GM and will be able to produce more relevant products. By merging brands and product lines the cost to GM can be drastically slashed since most brands carry similar products under different brand names.
The surviving corporate brands would be Buick,Chevrolet, Holden, Opel, and Cadillac, a drastic and necessary shift in response to market realities. I believe the plan put forth is the best way forward for GM and allows it to realize its many core strengths and keep their most prestigious brands. By cutting the brand and dealership network and merging divisions significant synergies and cost savings can be formed it also allows GM to better respond to market shifts and changes in consumer tastes. This way forward plan seems as though the least harsh and one that could provide the quickest results to the company.
This brand consolidation will streamline the entire company allow GM to get rid of non-core factories and duplicative management for its stable of 12 brands and allow the company to better focus on core brands. Toyota does with three brands, what GM attempts to do with 12. GM needs to keep 4 to 5 core brands and then heavily invest in creating a full line up for each of their strength brands. 2-4 good cars per brand does not do well anymore. This is not the 1950’s and GM’s dated brand strategy must go.
There will be immediate and long terms savings goals from factory/management consolidation of these many brands. Since a lot of the brand consolidation mentioned revolves around brands that each sell the same products under different brand name banners the consolidation should be common sense and is long overdue.
In addition to those mentioned steps GM must go through its line up and cut underperformers from production, do you really need 5 types of GMC Yukon’s to choose from? A faster switch to flex fuel automobiles and hybrid power trains will lift the company and boost sales, but GM must also cut most of its behemoth SUVs from the lineup to focus on fuel efficient crossovers. The changes we have experienced with gas prices and the automotive market are here to stay, it is time GM realized that.
I believe if all of the consolidation steps above are taken and GM invests in those core brands and introduces new products while streamlining factories and duplicative management that they will ultimately become a stronger corporation than even Toyota is today.
(Quote)